/raid1/www/Hosts/bankrupt/TCRAP_Public/200601.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, June 1, 2020, Vol. 23, No. 109
Headlines
A U S T R A L I A
PAS GROUP: Enters Voluntary Administration
ULITHORNE WINES: Duncan Powell Appointed as Administrators
VALEO SCAFFOLD: Second Creditors' Meeting Set for June 5
VIRGIN AUSTRALIA: Canadian Fund Brookfield Makes 11th Hour Bid
VIRGIN AUSTRALIA: Co-founder and Owner Joins Creditors' Queue
C H I N A
HNA GROUP: Panama Shipper Seeks to Wind Up Debt-Ridden Group
REMARK HOLDINGS: Regains Compliance with Nasdaq Listing Rules
SICHUAN LANGUANG: S&P Assigns 'B' Rating to USD Sr. Unsec. Notes
YINCHENG INTERNATIONAL: Moody's Gives B2 CFR, Outlook Stable
ZHENENG JINJIANG: Moody's Places Ba3 CFR on Review for Downgrade
H O N G K O N G
CENTURY SUNSHINE: Moody's Withdraws B3 CFR for Business Reasons
I N D I A
AAACORP EXIM: CARE Keeps 'D' Debt Ratings in Not Cooperating
ADITYA FABRICATION: Insolvency Resolution Process Case Summary
AJEET AND COMPANY: CARE Keeps D Debt Ratings in Not Cooperating
ANAND IMPEX: CARE Keeps 'D' Debt Ratings in Not Cooperating
BHADRESHWAR VIDYUT: CARE Keeps D Debt Ratings in Not Cooperating
BIRBAL DASS: CARE Lowers Rating on INR21.00cr LT Loan to 'C'
BOSHAN DEVELOPERS: CARE Lowers Rating on INR16.40cr Loan to D
CAPITAL ENTERPRISES: CARE Keeps D INR5cr Debt Rating in Not Coop.
DAULATRAM INDUSTRIES: CARE Keeps 'D' LT Loan Rating in Not Coop.
DULLAT RESORT: CARE Keeps D INR7cr Debt Rating in Not Cooperating
GINGER INFRASTRUCTURE: CARE Keeps D INR15cr Debt Rating in Not Coop
H K LUMBERS: CARE Keeps 'D' Debt Ratings in Not Cooperating
H K TIMBERS: CARE Keeps 'D' Debt Ratings in Not Cooperating
INDIA BELT: CARE Lowers Rating on INR5.00cr LT Loan to 'C'
JALARAM INDUSTRIES: CARE Lowers Rating on INR6.90cr Loan to 'C'
LORD SHIVA: CARE Keeps 'D' Debt Ratings in Not Cooperating
MATIX FERTILISERS: CARE Keeps D INR4305cr Debt Rating in Not Coop.
OM BESCO: Insolvency Resolution Process Case Summary
PAE LIMITED: CARE Keeps 'D' Debt Ratings in Not Cooperating
PANYAM CEMENTS: Insolvency Resolution Process Case Summary
PRAKASH CORRUGATED: CARE Keeps D Debt Ratings in Not Cooperating
R.S. GREEN: CARE Keeps D INR12.47cr Debt Rating in Not Cooperating
S E TRANSSTADIA: CARE Keeps D INR335.65cr Debt Rating in Not Coop.
SHRI SAKTHI: CARE Keeps 'D' Debt Ratings in Not Cooperating
SHUBHGRAH METALS: CARE Lowers Rating on INR6.62cr Loan to C/A4
SIYARAM COTTON: CARE Lowers Rating on INR13.90cr Loan to 'C'
SPRAY ENGINEERING: CARE Reaffirms and Withdraws D Debt Rating
V. PONNUSAMY: CARE Lowers Rating on INR20.00cr LT Loan to 'C'
J A P A N
[*] JAPAN: Bankruptcies Likely to Rise to 7-Year High on Virus Hit
P H I L I P P I N E S
2GO GROUP: Net Loss Narrows to PHP108.92MM in Q1 Ended March 31
S O U T H K O R E A
DOOSAN HEAVY: Gov't, State-Run Creditors Discuss Self-Rescue Plan
- - - - -
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A U S T R A L I A
=================
PAS GROUP: Enters Voluntary Administration
------------------------------------------
Heather McIlvaine at Inside Retail reports that PAS Group, the
owner of several wholesale fashion brands including Review and
Jets, has entered voluntary administration, despite the board
believing the company is solvent.
The move is a last-ditch effort to restructure the company in a way
that will enable it to operate sustainably into the future, the
report says.
In a release sent to the ASX on May 29, the board said that Stephen
Longley, David McEvoy and Martin Ford -- the administrators from
PwC -- will undertake a preliminary review and assessment of group
operations, the report relates.
Mr. Longley told Inside Retail that while it's too early to be
definitive, "some of the fundamentals would suggest that under a
different model, the business could be more sustainable, noting the
challenges presented by COVID-19".
According to Inside Retail, the news comes roughly one month after
PAS Group said it was working with advisors to accelerate a review
of operations with the goal of reducing complexity and creating a
more focused business largely through the closure of unprofitable
stores.
Inside Retail says PAS Group's earnings in recent years have been
impacted by the shift away from wholesale and department stores,
the rise of online shopping and a challenging retail environment
more broadly. The company exited 42 stores in FY19 and said it
wanted to focus on more profitable locations and online.
But unfavorable market conditions and the COVID-19 crisis have made
it difficult to execute a restructure, according to CEO Eric
Morris, who deemed administration the best way to effect change
while protecting all stakeholders, the report relays.
"Against the backdrop of many retailers closing their doors, we
have taken proactive action to put PAS Group in the best possible
position to navigate through the pandemic and subsequent economic
challenges," Inside Retail quotes Mr. Morris as saying in a
statement on May 29.
The company's securities have been suspended from quotation, the
report notes.
PAS Group employs 1,300 people and operates 225 stores across
Australia and New Zealand. Its retail and wholesale brands include
Review, Black Pepper, Yarra Trail, Jets Swimwear and Designworks,
which supplies Everlast, Mooks and other brands to major retailers,
including Target.
Stores will continue to trade as normal, in line with current local
restrictions across Australia and New Zealand. All store credits
and vouchers will be honored, the report adds.
ULITHORNE WINES: Duncan Powell Appointed as Administrators
----------------------------------------------------------
Stephen Duncan and Andrew Langshaw of Duncan Powell were appointed
as administrators of Ulithorne Wines Pty Ltd on May 29, 2020.
VALEO SCAFFOLD: Second Creditors' Meeting Set for June 5
--------------------------------------------------------
A second meeting of creditors in the proceedings of Valeo Scaffold
Pty Ltd, formerly trading as Rizing Fast, has been set for June 5,
2020, at 11:00 a.m. via video conference or telephone.
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 June 4, 2020, at 4:00 p.m.
Nicarson Natkunarajah of Roger and Carson were appointed as
administrators of Valeo Scaffold on May 1, 2020.
VIRGIN AUSTRALIA: Canadian Fund Brookfield Makes 11th Hour Bid
--------------------------------------------------------------
Patrick Hatch at The Sydney Morning Herald reports that Canadian
asset manager Brookfield has made an 11th hour pitch to re-enter
the race to buy Virgin Australia ahead of administrators Deloitte
choosing a final shortlist of bidders over the weekend.
Four bidders -- private equity firm Bain Capital, Melbourne outfit
BGH Capital, American ultra-low cost airline specialist Indigo
Partners and the Richard Branson linked Cyrus Capital -- had until
2:00 p.m. May 29 to submit second-round offers for the collapsed
carrier, the report says.
According to SMH, Brookfield, which manages US$515 billion (AUD800
billion) of assets around the world, walked away from the sale
process on May 18 over concerns that Virgin could run out of cash
before a new owner was installed.
However, it has remained in contact with Deloitte over the past two
weeks and reaffirmed its interest in re-launching Virgin on May 29,
SMH says.
SMH relates that administrator Deloitte will now have to decide
whether to accept Brookfield's bid as a separate offer to put to
creditors, or whether it can reopen the formal sale process in
which there are four other bidders. Sources close to Brookfield
said the fund is confident Deloitte will take its proposal
seriously.
Any move by Deloitte to let Brookfield back into the formal sale
process would almost certainly be met with legal action by the
shortlisted bidders, who are spending millions of dollars working
on their bids, SMH reports citing a source close to one of the four
other bidders. "It would just be ridiculous," the source said.
The Canadian giant had concerns about Virgin's cash balance and
whether the complex sale process could be completed in time with
more than two parties allowed through to the second round of the
sale. These concerns still need to be addressed for it to fully
re-engage in the sale, sources, as cited by SMH, said.
Unions representing Virgin's workers have viewed Brookfield as a
favorable suitor, especially compared to the private equity groups
who they fear could be "cut-and-run" investors. "Brookfield is a
serious bidder and does have a track record around the world of
staying with infrastructure assets for a long period of time," the
report quotes Transport Workers Union national secretary Michael
Kaine as saying. "We think it's positive to have this serious
bidder in the mix."
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 on April
22, 2020, Bloomberg News related that Virgin Australia Holdings
Ltd. became Asia's first airline to fall to the coronavirus after
the outbreak deprived the debt-burdened company of almost all
income. Administrators at Deloitte, who have taken control of the
Brisbane-based carrier, aim to restructure the business and find
new owners within months.
According to Bloomberg, Virgin Australia, which has furloughed 80%
of its 10,000 workers, will continue to operate some flights for
essential workers, freight and the repatriation of Australians. The
airline's frequent flyer program is a separate company and is not
in administration.
Richard John Hughes, John Greig, Vaughan Strawbridge and Sal Algeri
of Deloitte were appointed as administrators of Virgin Australia,
et al., on April 20, 2020.
Virgin Australia owes AUD6.8 billion to lenders, bondholders,
aircraft lessors, trade creditors and employees.
On April 29, 2020, the company and certain affiliates filed
petitions pursuant to Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York.
VIRGIN AUSTRALIA: Co-founder and Owner Joins Creditors' Queue
-------------------------------------------------------------
Patrick Hatch at The Sydney Morning Herald reports that Virgin
Australia co-founder and owner of the Virgin brand Richard Branson
has joined the queue of creditors owed money following the
airline's collapse, as administrators Deloitte prepare to narrow
down the shortlist of bidders vying to relaunch the carrier.
SMH says a spokeswoman for Mr. Branson's Virgin Group confirmed it
had registered as a creditor for outstanding royalty payments to
use the Virgin brand, which are said to have been about AUD15
million a year.
"Virgin Enterprises was asked to lodge a proof of claim in respect
of accrued royalties under its trademark licence agreements with
Virgin Australia and it did so," SMH quotes the spokeswoman as
saying. "This is purely administrative."
According to the report, the Virgin Group owned 10 per cent of
Virgin Australia when it went into administration and is expected
to try to work with the winning bidder to maintain the Virgin
brand.
SMH relates that Mr. Branson has a close relationship with one of
the leading bidders, Cyrus Capital, having launched Virgin America
together in 2015 and jointly buying the British regional airline
Flybe in February 2019, which has since gone into administration.
The other shortlisted bidders are US private equity firm Bain
Capital, Melbourne-based fund BGH Capital and the American
ultra-low cost airline specialist Indigo Partners.
While Canadian asset manager Brookfield dropped out of the formal
contest due to concerns about how the administration was being run,
sources close to the group say it remains interested in owning
Virgin and could still make an offer for the airline, the report
states.
Second-round bids were due on May 29 and Deloitte is expected to
narrow the shortlist to two final bidders by Monday [June 1], who
will have until June 12 to submit binding bids. Creditors will vote
on any proposed rescue package in mid-August, which will likely
offer them cents in the dollar for what they are owed.
SMH adds that as the largest group of creditors, Virgin's workforce
will be crucial to the success of any deal and their unions have
said they will preference the bidder that maintains as many jobs as
possible, protects entitlements and has a long-term vision for the
airline.
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 on April
22, 2020, Bloomberg News related that Virgin Australia Holdings
Ltd. became Asia's first airline to fall to the coronavirus after
the outbreak deprived the debt-burdened company of almost all
income. Administrators at Deloitte, who have taken control of the
Brisbane-based carrier, aim to restructure the business and find
new owners within months.
According to Bloomberg, Virgin Australia, which has furloughed 80%
of its 10,000 workers, will continue to operate some flights for
essential workers, freight and the repatriation of Australians. The
airline's frequent flyer program is a separate company and is not
in administration.
Richard John Hughes, John Greig, Vaughan Strawbridge and Sal Algeri
of Deloitte were appointed as administrators of Virgin Australia,
et al., on April 20, 2020.
Virgin Australia owes AUD6.8 billion to lenders, bondholders,
aircraft lessors, trade creditors and employees.
On April 29, 2020, the company and certain affiliates filed
petitions pursuant to Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York.
=========
C H I N A
=========
HNA GROUP: Panama Shipper Seeks to Wind Up Debt-Ridden Group
------------------------------------------------------------
Wei Yiyang and Han Wei at Caixin Global report that Panama-based
shipping services provider China Joy Shipping Inc. filed a petition
in Hong Kong to liquidate debt-laden HNA Group Co. Ltd., renewing a
2012 attempt to wind up the Chinese conglomerate.
A Hong Kong court is set to hear the case Aug. 26, Caixin discloses
citing records on the Hong Kong Judiciary's website. No details of
the complaint were made public.
China Joy, which registered its business in Hong Kong in November
2010, terminated operations in the city in March, the report
recalls. The company filed for HNA's liquidation with Hong Kong's
High Court in 2012 after a debt default but later withdrew the case
as HNA promised to repay an outstanding debt of $400,000, recalls
Caixin.
According to Caixin, the incident is another blow to once
high-flying HNA, which is struggling to pay off a mountain of debt
built up during a multibillion yuan global spending spree in which
borrowings surged to as much as CNY700 billion ($99 billion).
Caixin relates that the company, whose businesses range from
aviation to real estate to financial services, is one of several
Chinese conglomerates that embarked on aggressive buying campaigns
in the 2010s, only to later struggle under huge debt loads. Others
include Anbang Insurance Group Co. Ltd. and Dalian Wanda Group Co.
Ltd. Since 2017 HNA has steadily pared back its assets, selling
stakes in hotel giant Hilton Worldwide Holdings Inc. and a number
of real estate holdings, the report says.
Caixin notes that the government of Hainan province in southern
China, where HNA is headquartered, set up a working group in
February to organize a rescue of the company, which faces a severe
cash crunch after its financial situation further deteriorated as a
result of the coronavirus pandemic.
As Covid-19 outbreak continues pummeling the global travel
industry, HNA's core business unit Hainan Airlines Holding Co. Ltd.
is being hit hard, the report notes. The carrier, China's
fourth-largest, posted a CNY6.3 billion net loss in the first
quarter, compared with a CNY1.1 billion profit a year earlier, its
worst result since at least 2003. Revenue slumped 63% to CNY6.9
billion, according to the company's financial report.
Last month, HNA enraged bondholders by calling a last-minute
meeting to approve a plan to delay repayment of a CNY390 million
($55.3 million) domestic bond to avoid immediate default, according
to Caixin. Some bondholders filed complaints with regulators
accusing the company of manipulating the vote.
HNA had as much as CNY1.2 trillion in assets in 2017 at the height
of its buying binge. But the total has declined steadily as the
company sells off assets, some of which have lost value since their
original purchase. Net assets dipped below CNY1 trillion to about
CNY980 billion in the middle of last year, Caixin discloses citing
the group's 2019 mid-year report.
About HNA Group
China-based HNA Group Co. Ltd. offers airlines services. The
Company provides domestic and international aviation
transportation, air travel, aviation maintenance, and aviation
logistics services. HNA Group also operates holding, capital,
tourism, logistics, and other business.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
17, 2018, the Financial Times related that HNA Group defaulted on a
CNY300 million (US$44 million) loan raised through Hunan Trust.
According to the FT, the company is already under strict
supervision by a group of bank creditors, led by China Development
Bank, following a liquidity crunch in the final quarter of 2017.
The default came despite an estimated $18 billion in asset sales by
HNA in 2018 that have done little to address its ability to meet
its domestic debts, the FT noted.
REMARK HOLDINGS: Regains Compliance with Nasdaq Listing Rules
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Remark Holdings received written notice on May 22, 2020 from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
notifying the Company that it regained compliance with the $1.00
per share minimum bid price requirement because its common stock
closed at or above $1.00 per share for a period of 10 consecutive
business days. The Notice of Compliance also stated that the
Company regained compliance with the minimum MVLS requirement of
$35 million because our MVLS had been at or above $35 million for a
period of 10 consecutive business days. Per the Notice of
Compliance, Nasdaq considers both matters closed.
On Nov. 20, 2019, Remark Holdings received written notice from
Nasdaq notifying the Company that it was not in compliance with the
$1.00 per share minimum bid price requirement for continued listing
on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule
5550(a)(2).
On Dec. 30, 2019, the Company received written notice from Nasdaq
notifying the Company that it was not in compliance with the
minimum Market Value of Listed Securities requirement of $35
million for continued listing on the Nasdaq Capital Market pursuant
to Nasdaq Listing Rule 5550(b)(2).
About Remark Holdings
Remark Holdings -- http://www.remarkholdings.com/-- delivers an
integrated suite of AI solutions that enable businesses and
organizations to solve problems, reduce risk and deliver positive
outcomes. The company's easy-to-install AI products are being
rolled out in a wide range of applications within the retail,
financial, public safety and workplace arenas. The Company also
owns and operates digital media properties that deliver relevant,
dynamic content and e-commerce solutions. The company is
headquartered in Las Vegas, Nevada, with additional operations in
Los Angeles, California and in Beijing, Shanghai, Chengdu and
Hangzhou, China.
Remark reported a net loss of $21.56 million for the year ended
Dec. 31, 2018, following a net loss of $106.73 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $21.48
million in total assets, $41.71 million in total liabilities, and a
total stockholders' deficit of $20.22 million.
Cherry Bekaert LLP, in Atlanta, Georgia, the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated April 1, 2019, citing that the Company has suffered recurring
losses from operations and negative cash flows from operating
activities and has a negative working capital and a stockholders'
deficit that raise substantial doubt about its ability to continue
as a going concern.
SICHUAN LANGUANG: S&P Assigns 'B' Rating to USD Sr. Unsec. Notes
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issue rating to a
proposed issuance of U.S.-dollar-denominated senior unsecured notes
by Hejun Shunze Investment Co. Ltd., an indirectly owned subsidiary
of Sichuan Languang Development Co. Ltd. (Languang: B+/Stable/--).
Languang unconditionally and irrevocably guarantees the notes. S&P
believes the company will use the proceeds to refinance its debts.
S&P said, "We rate Languang's senior unsecured notes one notch
below our issuer credit rating on the company because of
significant subordination risks from secured debt. In our
calculation, the proposed notes will rank below a sizable amount of
priority debt in Languang's capital structure. As of end-2019, the
company had Chinese renminbi (RMB) 25.9 billion of unsecured debt
or guarantees and RMB37.4 billion of secured debt issued by the
company and its subsidiaries. The secured debt has a priority ratio
of 59%, which is above our threshold of 50%. The issue rating is
subject to our review of the final issuance documentation.
"We do not expect the issuance to have a significant impact on
Languang's credit profile. The stable outlook on the issuer credit
rating reflects our view that the company will improve its cash
collection as well as maintain stable margins and leverage ratios
in the next 12 months. We also expect Languang to moderately grow
its scale and expand its geographical diversity."
YINCHENG INTERNATIONAL: Moody's Gives B2 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating to Yincheng International Holding Co., Ltd.
The outlook is stable.
RATINGS RATIONALE
"Yincheng's B2 CFR reflects the company's long track record and
well-recognized brand as a residential property developer in
Nanjing, Jiangsu Province," says Danny Chan, a Moody's Assistant
Vice President and Analyst. "Moody's expects that the company's
quality land bank in its core cities of Nanjing, Suzhou and
Hangzhou, and its mass market business model, will support its
contracted sales over the next 12-18 months."
"However, Yincheng's B2 CFR is constrained by its modest operating
scale, high geographic concentration and narrow funding access,
which will limit the company's financial flexibility," adds Chan.
As a Nanjing-based property developer, Yincheng has over 20 years
of property development experience in Jiangsu Province with an
established brand and track record in that market. These strengths
have supported the company in expanding to other major cities, such
as Wuxi and Suzhou in Jiangsu Province over the last decade, and
most recently to Hangzhou in Zhejiang Province in 2018.
Good economic fundamentals and infrastructure networks in these
cities will likely support housing demand and the company's sales
growth over the next 12-18 months. Yincheng's focus on mass market
housing will also partly mitigate its exposure to tight regulatory
controls targeted at property investments in these cities.
Although Yincheng's contracted sales fell about 38% to RMB2.4
billion in the first four months of 2020 compared to last year
because of the coronavirus outbreak, Moody's expects the company's
contracted sales will be flat in 2020 and increase by around 15% in
2021, supported by healthy housing demand in Yincheng's core
markets, sufficient saleable resources, and a demonstrated ability
to execute sales. The latter strength is reflected in its
contracted sales growth of 108% and 66% in 2019 and 2018
respectively.
Yincheng's operating scale is still developing, as indicated by its
gross contracted sales of RMB20 billion in 2019, and fast growth
over the last two years. The company's modest operating scale and
high geographic concentration in a few core cities expose it to
higher performance volatilities and regional economic and
regulatory risks than its larger and more geographically
diversified property peers. Nevertheless, this exposure is
comparable to its mid-B rated Chinese property peers.
Yincheng's total land bank is small at 5.22 million sqm in gross
floor area as of December 31, 2019, and supports only around two
years of the company's development. Of these land plots, around 73%
are in Nanjing, Hangzhou, Suzhou and Wuxi. The high land prices
will limit the company's ability to replenish its land parcels in
these cities, if the company is unable to strengthen its financial
capacity and funding access.
Yincheng has been developing its funding channels. Its reliance on
bank loans will limit its financing flexibility. Bank loans
accounted for 65% of the company's reported debt at the end of 2019
and 77% at the end of 2018.
Moody's expects that Yincheng's leverage, as measured by
revenue/adjusted debt, will weaken to 55%-60% over the next 12-18
months from 76% in 2019, because the company will have to increase
debt to fund its expansion.
Meanwhile, its EBIT/interest coverage will fall to about 1.5x-2.0x
from 2.3x over the same period because of rising interest expenses
- due to the increase in debt for expansion purposes. Nevertheless,
these metrics are considered appropriate for its B2 CFR.
Moody's expects Yincheng's gross margin to improve to around 20% in
the next 12-18 months from 16% in 2019, due to delivery of projects
with higher average selling price over the same period. However,
the 20% gross margin remains at the low end amongst its Chinese
property peers.
In assessing Yincheng's CFR, Moody's has taken into account the
risk stemming from its concentrated ownership by Mr. Qingping
Huang, the company's largest shareholder, who owned about a 37.26%
equity interest in Yincheng at the end of April 2020. This risk is
partly mitigated by the presence of three independent non-executive
directors out of a total of nine, with the audit and remuneration
committees chaired by independent non-executive directors, and the
presence of other internal governance structures and standards, as
required under the Corporate Governance Code for companies listed
on the Hong Kong Stock Exchange.
Most of Yincheng's top management are also shareholders of the
company. Many of them have been with the company for more than 10
years, demonstrating management stability and enabling consistent
execution of business strategy.
In addition, Moody's has considered the coronavirus outbreak and
the potential impact on China's property sector in this assessment.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.
Yincheng's liquidity is adequate. While the company's cash balance
of RMB4.0 billion can only cover 82% of its short-term debt at the
end of 2019, Moody's expects that over the next 12-18 months, the
company's cash holdings, along with its contracted sales proceeds
after deducting basic operating cash flow items, will be sufficient
to cover its short-term debt, committed land premiums and dividend
payments.
Yincheng's stable outlook reflects Moody's expectation that the
company will maintain adequate liquidity and grow its scale as
planned.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Yincheng's rating if the company: (1)
executes its business plans and grows in scale; (2) strengthens its
financial profile, with revenue/adjusted debt staying above 70% and
EBIT/interest staying above 2.5x-3.0x on a consistent basis; (3)
maintains adequate liquidity, with cash/ short-term debt
consistently above 1.5x; and (4) diversifies its funding channels
and geographic coverage.
On the other hand, Moody's could downgrade the rating if (1)
Yincheng's contracted sales weaken; or (2) the company accelerates
land acquisitions beyond Moody's expectations, thereby weakening
its financial metrics and liquidity.
Financial metrics indicative of a rating downgrade includes: (1)
EBIT/interest below 1.5x; (2) revenue/adjusted debt below 50%-55%;
or (3) a weaker liquidity position or higher refinancing risk, such
that cash/short-term debt falls below 1.0x on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Yincheng International Holding Co., Ltd. is a Nanjing-based
residential property developer. As of December 31, 2019, its land
reserves totaled 5.22 million square meters in gross floor area.
Its key operating cities are in Nanjing, Wuxi, Suzhou and Hangzhou.
At April 30, 2020, Yincheng was 37.26% owned by its chairman, Mr.
Qingping Huang. The company listed on the Hong Kong Stock Exchange
in March 2019, raising net proceeds of RMB755 million.
ZHENENG JINJIANG: Moody's Places Ba3 CFR on Review for Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade
Zheneng Jinjiang Environment Holding Co Ltd's Ba3 corporate family
rating and the B1 senior unsecured debt rating on its US dollar
notes due in July 2020. The previous outlook on the company was
stable.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
"The review for downgrade reflects its concern over Zheneng
Jinjiang's heightened liquidity and refinancing risk, particularly
in relation to the USD200 million bond maturing July 2020," says
Ralph Ng, a Moody's Assistant Vice President and Analyst.
"The company does not have adequate internal financial resources to
meet the repayment and therefore must rely on refinancing
arrangements. The refinancing work is in progress, however, there
is no committed plan thus far," says Ng.
Zheneng Jinjiang's unaudited 2019 full year results show a
significant 71.3% decrease in comprehensive income mainly due to:
(1) losses on disposal of property, plant and equipment following
the upgrade of the group's waste-to-energy facilities; (2) an
impairment allowance of receivables and property, plant and
equipment; and (3) a decrease in revenue and profit contribution
from its energy management contracting and project technical and
management services business segment.
The company's weakened performance may further impair its
refinancing ability amid deteriorating economic conditions in China
and the coronavirus pandemic.
Zheneng Jinjiang may seek support from the Zhejiang Provincial
Energy Group Co. Ltd (Zhejiang Energy, A2 stable) for refinancing
arrangement of upcoming maturities. Zhejiang Energy has become
Zheneng Jinjiang's single largest shareholder since August 2019 and
is of much stronger credit profile with strong capability in
providing support. That said, Moody's believes the timely execution
of such support, if any, to resolve Zheneng Jinjiang's imminent
liquidity issue is uncertain.
In terms of environmental, social and governance factors, Moody's
has considered the company's focus on waste-to-energy, as well as
its business strategy, financial policy, regulatory risk and
corporate governance structure.
The senior unsecured debt rating is one notch lower than the CFR
due to subordination risk.
Moody's review will focus on: (1) the company's plan to refinance
its USD200 million bond due July 2020; (2) its liquidity position
and ability to repay or refinance all maturing debt; and (3) any
form of direct financing support from Zhejiang Energy.
The outlook could be stabilized if the company can meet all
maturing debt repayment, maintain a stable liquidity position with
its financial metrics remaining within its current Ba3 rating
parameters.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
Zheneng Jinjiang Environment Holding Co Ltd is a Singapore-listed
waste-to-energy (WTE) operator in China. Zhejiang Provincial Energy
Group, via its subsidiaries, is ZJE's single largest shareholder,
owning 29.57% of the company as of November 2019.
ZJE operates along the whole value chain in the WTE sector, from
planning and construction to the operation and management of WTE
facilities.
As of the end of 2019, ZJE had 21 operating WTE facilities and four
operating resource recycling projects, with a total waste treatment
capacity of 30,380 tons/day and electricity generation capacity of
632MW, covering 13 provinces in China.
=================
H O N G K O N G
=================
CENTURY SUNSHINE: Moody's Withdraws B3 CFR for Business Reasons
---------------------------------------------------------------
Moody's Investors Service has withdrawn Century Sunshine Group
Holdings Limited's B3 Corporate Family Rating. Prior to the
withdrawal, the outlook on the rating was negative.
RATINGS RATIONALE
Moody's has decided to withdraw the rating for its own business
reasons.
Listed in Hong Kong in 2004, Century Sunshine Group Holdings
Limited manufactures and sells fertilizers, including the general,
ecological and functional varieties. The company is also engaged in
magnesium mining and magnesium alloy production through Rare Earth
Magnesium Technology Group Holdings Limited, its Hong Kong
main-board listed, 72.4%-owned subsidiary as of the end of December
2019.
=========
I N D I A
=========
AAACORP EXIM: CARE Keeps 'D' Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of AAACorp
Exim India Private Limited (AEIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 3.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Long term Bank 19.40 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 13, 2019 placed the
rating of AEIPL under the 'issuer non-cooperating' category as
AEIPL had failed to provide information for monitoring of the
rating. TIISL continues to be non-cooperative despite repeated
requests for submission of information through e-mails dated
February 10, 2020, February 21, 2020 and March 4, 2020 and numerous
phone calls. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating review held on February 13, 2019,
following were the rating strengths and weaknesses (updated for the
information available from Registrar of Companies)
Key Rating Weaknesses
* Stressed Liquidity Position faced by the company and its group
companies: One of the group company has been classified as NPA by
the bankers and the group and the company faces liquidity
constraints.
* Moderate financial risk profile: Overall gearing of AEIPL
(Consolidated basis) was 1.79x as on March 31, 2019 (1.59x as on
March 31, 2018). AEIPL's PBILDT interest coverage remained below
unity in FY19 on consolidated basis.
* Thin profitability margins due to majority of operations in
trading segment: AEIPL's PBILDT margin remained thin at 1.21% for
FY19 on consolidated basis.
* Operating margins are susceptible to raw material price
fluctuation: The operating margins of the JJ group remain
susceptible to volatility in the cost of traded goods, that are
dependent on plastic granules and plastic scrap, which is a
derivative of crude oil. Thereby any adverse fluctuation in crude
oil prices is likely to impact the profitability margins of JJ
group. Furthermore, due to stiff competition any inability to pass
on the volatility may put pressure on the profit margins.
* Highly competitive and fragmented industry: The plastic bag
manufacturing industry is highly fragmented with the presence of a
large number of unorganized players in domestic market and faces
stiff competition from China in the international market. The
intense competition is also driven by low entry barriers in terms
of capital and technology requirements and limited product
differentiation.
* Foreign exchange fluctuation risk: The group hedges about 70% of
its creditors by way of entering into forward contracts, while the
remaining 30% remain exposed to forex fluctuation risk. Hence, any
adverse or favorable movements in forex rate and the economic
conditions could have an impact on the profitability of the group
as majority of the raw materials and traded goods are imported from
overseas suppliers.
Key Rating Strengths
* Established track record of promoters in the plastic business:
The JJ group's founder Mr Joseph Parakkott, is the chairman and
Managing director of AAACorp Exim India Private Limited. The
promoter of the company has rich and valuable experience of more
than two decades in the business of trading of plastic
raw-materials. JJ Group has been engaged in the business of trading
of Plastic Polymers – LLDPE, LDPE, HDPE, PP & Specialty Polymers
– PVC Resin & EVA for more than two decades.
* Geographically diversified customer base of the group: JJ group
has established a diversified customer base in different
geographies in the domestic markets, through its group company JJ
Poly Impex, while it caters to export markets of UK and other
countries through AAACorp Exim India Pvt Ltd. It caters to the
Western and Southern India by renting warehouses for storage of
imported polymers.
Analytical approach:
As AAACorp Exim India Pvt Ltd and JJ Poly Impex Private Limited and
have a similar line of business and are held by the same promoter
Joseph Parakkott of JJ Group and operations are supported by the
group companies, we have taken a combined view of the financials of
the two companies.
JJ Group has been engaged in the business of trading of Plastic
Polymers – LLDPE, LDPE, HDPE, PP & Specialty Polymers – PVC
Resin & EVA for more than two decades. The group has diversified
into trading of Specialty Polymers since 2005. The group is also
into manufacturing of plastic bags and polymer granules from
plastic waste imported from US, Europe, UK, Middle East etc. The
group has its marketing offices located with adequate
infrastructure at Mumbai, Delhi and Chennai for overseeing its
domestic trading operations. The group also exports its product
mainly plastic bags to UK.
ADITYA FABRICATION: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Aditya Fabrication Private Limited
Survey No. 168, Hissa No. 10
Sonale Village
Bhiwandi Bypass Road
NH-3 Bhiwandi
Thane 421302
Insolvency Commencement Date: May 15, 2020
Court: National Company Law Tribunal, Principal Bench, New Delhi
Estimated date of closure of
insolvency resolution process: November 11, 2020
Insolvency professional: Mr. Kshitiz Gupta
Interim Resolution
Professional: Mr. Kshitiz Gupta
Flat No. C/104
Lotus CHSL
Gundecha Valley of Flowers
Thakur Village
Kandivali East
Mumbai 400101
E-mail: kshitiz.ca@gmail.com
- and -
B-202, Sheraton Classic
Dr. Charat Singh Colony
Chakala, Andheri East
Mumbai 400069
E-mail: cirp.adityafabrication@gmail.com
Last date for
submission of claims: May 29, 2020
AJEET AND COMPANY: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ajeet and
Company (AC) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short 14.00 CARE D; Issuer Not Cooperating;
Term Bank based on best available
Facilities information
Short term Bank 3.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 28, 2019, placed
the rating(s) of AC under the 'issuer non-cooperating' category as
Ajeet and Company had failed to provide information for monitoring
of the rating. Ajeet and Company continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls and a letter dated April 17, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings take into account ongoing delays in debt servicing and
the account has been classified as NPA.
Detailed description of the key rating drivers
At the time of last rating on February 28, 2019 the following were
the rating strengths and weaknesses:
Key rating Weakness
* Ongoing delay in debt servicing: As per banker interaction, there
have been ongoing delays in debt servicing and the account has been
classified as NPA.
Key Rating Strengths:
* Wide experience of the partners' in the trading industry: Mr.
Sudhir Gosalia, the key partner, has over three decades of
experience in trading business and looks after the overall
operations of the firm. Further Mr. Kaushal and Puneet are other
partners having experience of around a decade and looks after sale
& purchase functions of the entity respectively.
Established in 1950 as proprietary concern & later converted into
partnership concern, Ajeet & Company (AC) is engaged in trading of
whey protein products and timber (teakwood/hardwood) products.
Further ince FY15 the entity has started more concentrating towards
trading of whey protein products only (forming ~99% of the TOI in
FY17) which are imported directly from USA and timber trading
(forming remaining portion of TOI in FY17) wherein it imports
(teakwood / hardwood) from Myanmar, Southeast Asian countries,
African countries & Central & South American countries. AC in its
protein segment deals in brands such as Dymatize, Ronniee Colemen,
Bio Sports and Fitness Pro and is the authorized importer and
reseller in India of Dymatize and Ronnie Colemen Signature Series.
Further the entity sells through online portals, agents and other
local distributors.
ANAND IMPEX: CARE Keeps 'D' Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Anand Impex, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 1.75 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE BB-; Stable;
Issuer Not Cooperating
Short-term Bank 4.25 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE A4; Issuer
Not Cooperating
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 4, 2019, placed the
ratings of Anand Impex under the 'issuer noncooperating' category
as the firm had failed to provide information for monitoring of the
ratings. Anand Impex continues to be non-cooperative despite
repeated requests for submission of information through phone
calls, letter dated May 06, 2020 and e-mail dated May 11, 2020. In
line with the extant SEBI guidelines, CARE has reviewed the ratings
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at fair ratings. The
ratings on bank facilities of Anand Impex will now be denoted as
'CARE D / CARE D; ISSUER NOT CO-OPERATING'.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the ratings assigned to the bank facilities of
Anand Impex takes into account delay in its debt servicing as
reflected from the over-drawings in its working capital limits for
a period exceeding 30 days.
Key Rating Weaknesses
* Delays in debt servicing: Liquidity position of Anand Impex
remains stretched due to which its working capital limits remain
overdrawn for more than 30 days.
* Strong competition from large number of players in organized and
unorganized sector in the CPD industry; amidst subdued industry
scenario and impact of Covid-19: The cut and polished diamond
(CPD) industry is a fragmented industry with high level of
competition from both the organized and largely unorganized sector.
Moreover, the global macroeconomic environment continues to remain
uncertain and poses a major challenge for the sector, which is
mainly export-driven. Furthermore, in the wake of adverse global
macroeconomic developments, the CPD industry has witnessed a
prolonged slowdown in demand which has led to build-up of inventory
levels in the midstream segment of the diamond industry, adversely
impacting the profitability in the sector and players having to
offer higher credit period to its customers. Exports of CPD which
moderated by 6% and 12% in USD value and carat terms respectively
during H2FY19 vis-à-vis H2FY18 has continued to face strong
headwinds resulting in further decline by 19% to USD 17.70 billion
during 11MFY20 (refers to the period April 1 to February 29)
visà-vis 11MFY19. Further, increasing penetration of synthetic
diamonds (on account of drastic reduction in their production cost
due to technological innovations) and competition from other
competing fashion items/discretionary spends have also exerted
pressure on demand and profitability of the CPD sector. The sector
is also facing challenges on account of credit-tightening policies
implemented by the banks.
Furthermore, unprecedented measures taken by India as well as key
global markets to control the spread of the novel corona virus
(COVID-19) pandemic has significantly impacted the entire diamond
value chain with forced unit shutdowns.
While marginal relaxations have been given by the government, the
duration of lockdown related restrictions and its overall impact on
the industry remains a key monitorable. CARE believes that despite
these marginal relaxations to resume commercial operations, the
extension of lockdown beyond the anticipated period to control the
spread of the virus, may exert pressure on the firm's revenues and
profitability in the near to medium term.
Going forward, a sustained pick-up in consumer demand for diamond
jewellery across all the key markets along with steady rough
diamond prices would be critical for profitable operations for
entities operating in the cutting & polishing segment, considering
their limited bargaining power at both ends of the diamond value
chain (i.e. rough diamond mining companies as well as jewellery
retailers).
Surat (Gujarat) based, Anand Impex was established as a partnership
firm in the year 2006 by Mr. Dilip Kheni and Mr. Vinod Kheni along
with Dilip Godhani. Anand Impex is engaged in the business of
processing of rough diamonds into finished polished diamonds of
various sizes, shapes, purity and colour. The firm has its sales
office in Mumbai and its processing plant is located in Surat. The
firm imports rough diamonds from Belgium and sells CPD largely in
the domestic market.
BHADRESHWAR VIDYUT: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Bhadreshwar
Vidyut Private Limited (BVPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 1,632.40 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Short term 430.00 CARE D; Issuer Not Cooperating;
Bank Facilities Based on best available
information
Issuer Rating - CARE D (Is); Issuer not
cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 19, 2018, placed
the ratings of BVPL under the 'issuer non-cooperating' category as
BVPL had failed to provide information for monitoring of the
rating. BVPL continues to be non-cooperative despite requests for
submission of information through letter dated February 21, 2020.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on April 6, 2018 the following were the
rating strengths and weaknesses
Key rating weakness
* Instance of delays in servicing of debt obligation: As per the
auditor's report of for FY18 (taken from MCA website), BVPL had
defaulted on its servicing of its debt obligation.
Bhadreshwar Vidyut Private Limited comprises two units with a
capacity of 150MW each. One of the units was commissioned in April
2015 and the other plant started operations in January 2016 and
stabilized in June 2016.
BIRBAL DASS: CARE Lowers Rating on INR21.00cr LT Loan to 'C'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Birbal Dass Ritesh Kumar (BDRK), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 21.00 CARE C; Stable; Issuer not
Facilities cooperating, revised from
CARE B-; Stable; Issuer not
Cooperating on the basis of
Best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 21, 2020, placed the
ratings of BDRK under the 'issuer non-cooperating' category as BDRK
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. BDRK continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and an email dated May 6,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating.
The rating has been revised on account of non-availability of
requisite information. The rating continues to remain constrained
on account of its financial risk profile marked by thin
profitability, leveraged capital structure and working capital
intensive nature of operations, vulnerability of its margins to
fluctuations in the agriculture commodities due to seasonality and
constitution as proprietorship concern. The rating, further,
constrained on account of decline in Total Operating Income (TOI)
during FY16 (FY refers to the period from April 01 to March 31) in
a highly fragmented and competitive industry. The rating, however,
continues to draw strength from the experienced proprietor with
established track record of operations.
Detailed description of the key rating drivers
At the time of last rating on May 21, 2019, the following were the
rating strengths and weaknesses.
Key Rating Weaknesses
* Decline in TOI although improvement in profitability margins:
The revenue and profitability of the firm is exposed to fluctuation
in agriculture commodity prices as well as availability of
agriculture commodities in a highly fragmented and competitive
agriculture commodity trading industry. Due to this, TOI of the
firm has witnessed a fluctuating trend. In FY16, TOI has declined
by 28.49% over FY15 mainly on account of decline in prices of
barley and guar which are the two major products of the firm. The
PBILDT margin of the firm stood moderate at 6.40% in FY16 and PAT
margin remained thin and stood stagnant at 0.12%.
* Leveraged capital structure: The capital structure of the firm
stood highly leveraged and deteriorated from 15.11 times as on
March 31, 2015 to 23.56 times as on March 31, 2016 mainly due to
infusion of unsecured loans and higher utilization of its working
capital bank borrowings.
* Working Capital intensive nature of operations: The business of
the firm is working capital intensive in nature with 80-90% of its
working capital bank borrowings for the last 12 months ended
January 2017 and elongated operating cycle which deteriorated from
115 days in FY15 to 168 days in FY16 due to increase in inventory
holding.
Key Rating Strengths
* Experienced proprietor with established track record of
operations: Mr Ritesh Kumar Gupta is post graduate by
qualification and has a decade of experience in the trading of
agriculture commodities. He looks after overall affairs of the firm
and is assisted by his father, Mr Bhanwar Lal Gupta who has around
four decade of experience in the industry through proprietorship of
Bhanwar Lal Gupta.
Hanumangarh (Rajasthan) based Birbal Das Ritesh Kumar (BDRK) was
established in 2006 as a proprietorship concern by Mr Ritesh Kumar
Gupta. BDRK is engaged in the business of trading of agriculture
commodities and also provides commission agents services to its
customers. The firm mainly deals in barley, castor seeds,
coriander, cotton bales, mustard seeds and wheat etc. It procures
the agriculture commodities from the local mandis as well as from
farmers and sells those to different customers directly as well as
through distributors. BDRK is also engaged in the business of land
development business.
BOSHAN DEVELOPERS: CARE Lowers Rating on INR16.40cr Loan to D
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Boshan Developers Private Limited (BDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 16.40 CARE D; Issuer Not Cooperating;
Facilities Revised from CARE BB-; Stable
on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 22, 2019 placed the
rating of BDPL under the 'issuer non-cooperating' category as BDPL
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. BDPL continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and e-mails dated April 16, 2020
and April 27, 2020, April 29, 2020 and May 7, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of on-going delays in
servicing of debt obligations.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in debt servicing obligations: As per interaction with the
banker, there are on-going delays in servicing of interest and
principal portion of term loan account and the account has been
classified as NPA.
Established in the year 1996, BDPL is engaged in the business of
real estate development. Further from FY16, the company also
ventured into hospitality business and is managing a hotel at Goa.
The income from hotel business contributed around 15% of total
operating income in FY16 and remaining was contributed by real
estate business.
CAPITAL ENTERPRISES: CARE Keeps D INR5cr Debt Rating in Not Coop.
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Capital
Enterprises (CE) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.00 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Capital Enterprises to
monitor the rating vide e-mail communications/letters dated May 4,
2020, May 6, 2020, May 7, 2020 and numerous phone calls. However,
despite our repeated requests, the entity has not provided the
requisite information for monitoring the rating. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which, however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating of
entity's bank facilities will now be denoted as CARE D; Issuer Not
Cooperating. Further, the banker could not be contacted.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in March 11, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses:
The rating takes into account ongoing delay in the servicing of the
bank debt obligations on account of the stretch liquidity position
of the entity.
Capital Enterprises (CE) was established in 2000 as a
proprietorship entity by Mrs. Senbom Taipodia under the guidance of
Mr. Dayanand Thakur (Husband of Mrs. Senbom Taipodia) of Arunachal
Pradesh. Since inception; the entity has been engaged in
electrical, mechanical, infrastructural works and civil
construction in the state of Arunachal Pradesh. The dayto-day
affairs of the entity are looked after by Mrs. Senbom Taipodia with
adequate support from her husband Mr. Dayanand Thakur. Both are
having more than one and a half decade of experience in the
relevant line of business.
DAULATRAM INDUSTRIES: CARE Keeps 'D' LT Loan Rating in Not Coop.
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Daulatram
Industries (DI) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 16.97 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Detailed Rationale & Key rating Drivers
CARE had, vide its press release dated February 15, 2019, placed
the ratings of DI under the 'issuer non-cooperating' category as DI
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. DI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and an email dated May 5,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on February 15, 2019, the following were
the rating strengths and weaknesses.
Key Rating Weakness
* Delay in the debt servicing: There was on-going delay in debt
servicing in past owing to poor liquidity position.
Bhopal (Madhya Pradesh) based Daulatram Industries (DI) was
incorporated in 1973 as a partnership firm. The firm is a
manufacturer and supplier of dynamic braking systems for diesel and
electric locomotives and cooling systems (air conditioners) to
Indian Railways.
DULLAT RESORT: CARE Keeps D INR7cr Debt Rating in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Dullat
Resort (DRT) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.00 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Detailed Rationale and key rating drivers
CARE had, vide its press release dated March 27, 2019, placed the
rating of DRT under the 'issuer noncooperating' category as Dullat
Resort had failed to provide information for monitoring of the
rating. DR continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated May 7, 2020, May 6, 2020, May 5, 2020 and
May 4, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in March 27, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses
* Instances of delays in debt servicing: There have been instances
of delays in the servicing of the debt obligations.
Dullat Resort (DRT) was established as a partnership firm by Mr.
Avtar Singh and Mr. Rupinder Singh in October 2015 sharing profit
and losses equally. DRT is established with an aim to set up a
resort by the name of “Dullat Resort” in 2 phases – Phase I
and Phase II. Phase I consists of 8 rooms, 1 office room, 1 banquet
hall, 1 conference room, and parking space for 400 cars at Mohali,
Punjab. The average seating capacity of the banquet hall would be
of 2000 people. Phase –II will consist of 16 rooms, 1 mini hall
and a food court. Building plan approval for Phase II has also been
taken. However, Phase II will be taken up in the later years. The
firm's major income would include rentals from letting of banquet
halls and rooms on rent for the purpose of weddings, parties,
conferences and other social gatherings. The resort is located at
500 meters from Chandigarh airport. The project started in May 2017
and is expected to be completed by March 2018.
GINGER INFRASTRUCTURE: CARE Keeps D INR15cr Debt Rating in Not Coop
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ginger
Infrastructure Private Limited (GIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 2, 2019, placed the
ratings of GIPL under the 'issuer non-cooperating' category as GIPL
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. GIPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and emails dated
April 15, 2020, April 20, 2020 and April 27, 2020. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on January 2, 2019 the following were
the rating weaknesses (updated for the information available from
Registrar of Companies)
Key Rating Weaknesses
Delays in servicing of debt obligations: As per banker interaction
during last review, there were delays in the repayment of term loan
and the account had been classified under SMA-1 category.
Incorporated in December 19, 2012, GIPL is a Nagpur based special
purpose vehicle (SPV) formed by Diamant Infrastructure Limited
(DIL) for construction and development of commercial complex at
Jaripatka, Nagpur under the name and style of "Ginger Square" to be
operated on a built-operate-transfer (B-O-T) basis for a concession
period of 30 years commencing from August 2016 and ending in August
2046, with renewal of lease for further period of 30 years.
H K LUMBERS: CARE Keeps 'D' Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of H K Lumbers
LLP (HKLL) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short 1.35 CARE D; Issuer Not Cooperating;
Term Bank based on best available
Facilities information
Short term Bank 4.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 13, 2019, placed
the rating of HKLL under the 'issuer noncooperating' category as
HKLL had failed to provide information for monitoring of the rating
for the rating exercise as agreed to in its Rating Agreement. HKLL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated April 25, 2020, April 27, 2020 and April 28, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
ratings on DGI's bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING/ CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on February 13, 2019 the following was
the rating weakness.
Key Rating Weakness
* Ongoing delay in debt servicing: There has been irregularity in
servicing of debt obligation due to weak liquidity position of the
firm.
Gandhidham (Gujarat) based HKLL was incorporated in 2014 by Rudani
and Patel Family and currently managed by Mr. Rajeshkumar Rudani
and other family members. Mr. Rajeshbhai Rudani possesses 10 years
of experience in wood and wood products industry. HKLL is engaged
into saw milling and planning of wood. H K Timbers Private Limited
is the group entities of HKLL, which is engaged in manufacturing of
veneer sheets, manufacturing of plyboard, particle board and other
plyboard products.
H K TIMBERS: CARE Keeps 'D' Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of H K Timbers
Private Limited (HKTL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short 6.00 CARE D; Issuer Not Cooperating;
Term Bank based on best available
Facilities information
Short term Bank 7.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 13, 2019, placed
the rating of HKTL under the 'issuer non-cooperating' category as
HKTL had failed to provide information for monitoring of the rating
for the rating exercise as agreed to in its Rating Agreement. HKTL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated April 25, 2020, April 27, 2020 and
April 28, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The ratings on HKTL's bank facilities will now be
denoted as CARE D; ISSUER NOT COOPERATING/ CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on February 13, 2019 the following was
the rating weakness:
Key Rating Weaknesses
* Ongoing delay in debt servicing: There are on-going delays in
debt servicing on account of weak liquidity position of HTPL.
Gandhidham (Gujarat) based HTPL was incorporated in 2012 by Rudani
and PatelFamily and currently managed by Mr. RajeshkumarRudani and
other family members.Mr. RajeshbhaiRudani possesses 10 years of
experience in wood and wood products industry. HTPL is engaged into
manufacturing of veneer sheets, manufacturing of plyboard, particle
board and other plyboard products. H K Lumbers LLP Is the group
entities of HTPL, which is engaged in same line of business saw
miling and planning of wood.
INDIA BELT: CARE Lowers Rating on INR5.00cr LT Loan to 'C'
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
India Belt Company (IBC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.00 CARE C; Stable; Issuer not
Facilities cooperating; Revised from
CARE B; Stable; Issuer not
Cooperating on the basis of
Best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 25, 2019, placed the
ratings of IBC under the 'issuer noncooperating' category as IBC
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. IBC continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and an email dated May 4,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised on account of non-availability of
requisite information. The rating assigned to the bank facilities
of India Belt Company (IBC) continue to remain primarily
constrained on account of fluctuating scale of operations owing to
its presence in a highly regulated and fragmented industry, net
loss in FY17 (FY refer to the period April 1 to March 31), moderate
solvency position and working capital intensive nature of
operations. The rating, further, continue to remain constrained on
account of vulnerability of margins to fluctuations in raw material
prices and foreign exchange rate.
The rating, however, continues to derive strength from the
experienced management with established track record of operations
and renowned clientele base.
Detailed description of the key rating drivers
At the time of last rating on March 20, 2019, the following were
the rating strengths and weaknesses.
Key Rating Weakness
* Modest and fluctuating scale of operations owing to volume driven
based business along with moderate operating margin and net loss in
highly regulated, fragmented leather industry: The scale of
operations of the company as indicated by Total Operating Income
(TOI) has shown a fluctuating trend in the last three financial
years ended FY17 owing to fluctuation in sales volume as well as
foreign exchange rates. Further, the operating margins of the firm
remained moderate at 8.70% in FY17, however, declined from 14.09%
in FY16 on account of higher increase in labour charges, travelling
expenses and rent expenses. However, the firm has registered net
loss of INR0.02 crore in FY17. IBC operates in the regulated,
fragmented and competitive industry which affects the overall
affairs of the company.
* Moderate solvency position along with weak debt coverage
indicators and working capital intensive nature of operations: The
capital structure of the firm stood comfortable with an overall
gearing of 0.95 times as on March 31, 2017 while total debt to GCA
stood high at 22.04 times as on March 31, 2017. Being presence in
export business, the collection period of the firm remained high
between 150-180 days. Further, the key raw material of the firm is
leather which is a seasonal based product, thus the firm has to
hold high inventory. Due to high inventory and debtor collection
period, the operating cycle of the company stood elongated at 356
days in FY17, however improved from 384 days in FY16. Furthermore,
the firm has fully utilized its working capital bank borrowing
during the last twelve months ended in January 31, 2018.
* Vulnerability of margins to fluctuation in raw material prices
and foreign exchange rates: The profitability of the firm is
vulnerable to any adverse movement in raw material prices as the
firm will not be immediately able to pass on the increased price to
its customers, results in increase in raw material inventory
holding period. Further, IBC being an export-oriented unit is
generating its entire revenues through exports, thereby exposing
the company to foreign exchange fluctuations.
Key Rating Strengths
* Experienced and resourceful management with long track record of
operations: Mr Ranjeev Ved Malik and Mr Sanjeev Ved Malik,
Partners, have more than 3 decade of experience in the industry and
look after marketing and production functions of the firm
respectively. Further, they are assisted by 2nd tier management of
the firm. The partners are resourceful reflected by their net worth
of INR 21.02 crore and INR26.17 crore respectively as on March 31,
2016. Being presence in the industry for more than 3 decade, the
partners have established relationship with customers and
suppliers.
* Renowned clientele base: Being present in the industry since
1995, it has an established track record of operations in the
leather industry and has longstanding relationship with its
customer and suppliers base.
Mumbai based India Belt Company (IBC) was formed as a partnership
concern in 1995 by Mr Rajeev Dev Malik, Mr Sanjeev Ved Malik and Mr
Ashok Kumar Agarwal and agreed to share profit & loss in the ratio
of 36:36:28. The firm procures leather mainly from Kanpur and
manufactures leather belt at its manufacturing facility located in
Mulund (Maharashra) having installed capacity of 18 lakh belts per
annum. The firm also manufacturer leather belt for designer brands
such as Calvin Klien, Guess, Nautica and DKNY etc. It also supplies
leather belts to retail chains (like Walmart) abroad.
JALARAM INDUSTRIES: CARE Lowers Rating on INR6.90cr Loan to 'C'
---------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jalaram Industries (JI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.90 CARE C; Stable; Issuer not
Facilities cooperating, revised from
CARE B+; Stable; Issuer not
Cooperating on the basis of
Best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 17, 2019, placed the
rating of JI under the 'issuer noncooperating' category as JI had
failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. JI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and emails dated April 15,
2020, April 20, 2020 and April 28, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been revised by taking into account no due diligence
conducted and non-availability of information due to
non-cooperation by JI with CARE'S efforts to undertake a review of
the rating outstanding. CARE views information availability risk as
a key factor in its assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on January 17, 2019 the following were
the rating strengths and weaknesses
Key Rating Weaknesses
* Small scale of operations with low profitability margins: The
income from operations of the firm though improved remained small
at INR41.03 crore in FY17 and total capital employed of INR7.79
crore as on March 31, 2017, thus limiting financial flexibility of
the firm in times of stress. Moreover, the firm has achieved a
turnover of INR67.71 crore in FY18 (Provisional) showing a y-o-y
growth of 66%. With business operations of processing of pulses,
entailing low value additions, the entity's profit margins stood
low.
* Moderate capital structure and weak debt coverage indicators: The
capital structure of the firm remained moderate with overall
gearing ratio of 1.09x as on March 31, 2017 owing to dependence on
external borrowings. Moreover, with moderate gearing level and low
profit margins, the debt coverage indicators of the entity stood
weak.
* Working capital intensive nature of operation: The operations of
the firm are working capital intensive in nature with gross current
asset days of 89 days during FY17 with funds majorly blocked in
inventory. The working capital requirements are met by the cash
credit facility availed by the entity utilization of which remained
high.
* Vulnerability to fluctuation in raw material prices: Agro-based
industry is characterized by its seasonality, as it is dependent on
the availability of raw materials, which further varies with
different harvesting periods. Availability and prices of agro
commodities are highly dependent on the climatic conditions.
Adverse climatic conditions can affect their availability and
lead to volatility in raw material prices.
* Presence in a highly fragmented and regulated industry: The
competitive nature of agro-product processing industry due to low
entry barriers, high fragmentation and the presence of a large
number of players in the organized and unorganized sector translate
in inherent thin profitability margins. Further, the raw material
prices are regulated by government to safeguard the interest of
farmers, which in turn limits the bargaining power of the millers.
* Partnership nature of constitution: Being a partnership firm, JI
is exposed to the risk of withdrawal of capital by partners and
limited excess to financial market. This limits the financial
flexibility of the firm.
Key Rating Strengths
* Experienced partners with long track record of operations: Ji is
currently managed by Mr Jayesh H Chandrana, Mr Haribhai N Chandrana
and Mr Arunbhai N Chandrana, having an average experience of more
than three and a half decades in agro industries. The partners look
after the overall function of the firm with adequate support from a
team of experienced professionals. Long experience of the partners
has supported the business risk profile of the entity to a large
extent. Further, the firm is in the business since more than one
and a half decades, which resulted in establishing good
relationship with its customers and suppliers.
* Locational advantage emanating from proximity to raw material:
JI's unit has close proximity to local grain markets of Wardha,
major raw material procurement destinations for the entity. This
ensures easy raw material access and smooth supply of raw materials
at competitive prices and lower logistic expenditure for JI.
JI based out of Wardha, Maharashtra is a partnership concern was
established in January 2001. The entity is engaged in the business
of processing of pulses at its processing facility located at
Wardha, Maharashtra with an installed capacity of processing 50
tonnes of pulses per day.
LORD SHIVA: CARE Keeps 'D' Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Lord Shiva
Construction Co Private Limited (LSC) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 10.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Short term Bank 1.38 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Long term Bank 7.50 CARE D; Issuer not cooperating;
Facilities/Short Based on best available
term Bank Facilities Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 06, 2019, placed
the rating of LSC under the 'issuer non-cooperating' category as
LSC had failed to provide information for monitoring of the rating.
LSC continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated April 22, 2020, April 16, 2020, and April 14,
2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
At the time of last rating in February 6, 2019 the following were
the rating strengths and weaknesses:
Detailed description of the key rating drivers
Key Rating Weaknesses
Instances of delays in debt servicing: There have been instances of
delay in the servicing of debt on account of weak liquidity
position as the company is unable to generate sufficient funds in a
time manner.
Haryana-based Lord Shiva Construction Co. Pvt. Ltd. (LSC) was
incorporated in July 1992 and is currently being managed by Mr Anil
Jain and his wife Mrs Sunita Jain. The company is engaged in
construction works which involve construction of roads and civil
construction (buildings). In road segment, LSC executes contracts
mainly for PWD (Public Work Department), Haryana, and in civil
construction the company had constructed buildings for government
colleges based out of Haryana.
MATIX FERTILISERS: CARE Keeps D INR4305cr Debt Rating in Not Coop.
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Matix
Fertilisers and Chemicals Limited (MFCL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 4305.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 5, 2019 placed the
rating MFCL under the 'issuer non-cooperating' category as MFCL had
failed to provide information for monitoring of the rating. MFCL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails dated February 10, 2020,
February 21, 2020 and March 4, 2020 and numerous phone calls. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating review held on April 5, 2019, following
were the rating strengths and weaknesses.
Key Rating Weaknesses
* On-going delays in servicing of debt obligations: As per
interaction with the banker there are delays in servicing of
interest and principal.
Incorporated in July 2009, Matix Fertilizers and Chemicals Limited
(MFCL) is setting up a Greenfield Ammonia (capacity: 0.73 mtpa) and
Urea Plant (capacity: 1.27 mtpa) along with a combined gas fired
captive power plant, railway siding and other utilities in Panagarh
Industrial Park at Panagarh, West Bengal (WB). Matix is promoted by
Mr Yogendra S Kanodia and Mr Nishant Kanodia of the Datamatics
Group.
OM BESCO: Insolvency Resolution Process Case Summary
----------------------------------------------------
Debtor: Om Besco Rail Products Limited
Merlin Acropolis
Unit No. 9/3, 9th Floor
1858/1, Rajdanga Mail Road
Kolkata 700107
West Bengal
- and -
P.O. Mugma, P.S. Nirsa
District-Dhanbad
Jharkhand 828204
India
Insolvency Commencement Date: May 20, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: November 16, 2020
Insolvency professional: Amit Choraria
Interim Resolution
Professional: Amit Choraria
14/2 Old China Bazar Street
4th Floor, Room No. 401
Kolkata 700001
Email: hmcsamitchoraria@gmail.com
Last date for
submission of claims: June 3, 2020
PAE LIMITED: CARE Keeps 'D' Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of PAE Limited
(PAE) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Long term/ 5.00 CARE D; Issuer Not Cooperating;
Short term Based on best available
Bank Facilities Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 17, 2019, placed the
rating(s) of PAE Limited (PAE) under the 'issuer noncooperating'
category as PAE Limited had failed to provide information for
monitoring of the rating. PAE Limited continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated April
17, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings take into account the ongoing delay in debt servicing
and weak financial performance of the company.
Detailed description of the key rating drivers
At the time of last rating on May 17, 2019 the following were the
rating strengths and weaknesses: (updated for the information
available from MCA website):
Key Rating Weaknesses
* Ongoing delay in debt servicing: As per interaction with banker,
there have been ongoing delays in debt servicing and the account
has been classified as NPA.
* Weak financial performance: PAE's total operating income stood
at INR0.47 crore in FY19 and reported operating loss of INR4.47
crore, however company has reported net profit of INR3.36 crore on
account of exceptional income of INR8.95 crore received during
FY19. Further on account of carried forward losses the networth
base has been eroded to negative and capital structure remained
highly leveraged with weak debt coverage indicators.
Key Rating Strengths
* Experienced promoters: The promoters of the company have
experience of more than five decades of operations in automotive
and industrial battery segment and their close association with the
Premier group in the past.
Incorporated in 1950 as a distributor of auto electric components,
PAE Ltd. (PAE) is presently operational in two segments viz. Power
products and Auto components. In its power products segment, PAE is
engaged in marketing and distribution of lead storage batteries
(for automotive and industrial application) and power backup
systems; while in the Auto component segment it operates as a
distributor of automotive parts. Additionally, the company has
forayed into solar energy space through its various subsidiaries
which are engaged in developing, marketing and distribution of
solar panels and operates 2 solar power plants of 1 MW each.
PANYAM CEMENTS: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Panyam Cements and Mineral Industries Limited
C-1, Industrial Estate
Bommalasatram
Nandyal 518502
Kurnool Dist. (A.P.)
India
Insolvency Commencement Date: May 14, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: November 10, 2020
(180 days from commencement)
Insolvency professional: Bhrugesh Amin
Interim Resolution
Professional: Bhrugesh Amin
BDO Restructuring Advisory LLP
BDO India LLP, Level 9
The Ruby, North West Wing
Senapati Bapat Road
Dadar (W), Mumbai 400028
India
E-mail: bhrugeshamin@bdo.in
panyamclaims@bdo.in
Last date for
submission of claims: June 4, 2020
PRAKASH CORRUGATED: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Prakash
Corrugated Products (PCP) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 22.31 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Short term Bank
Facilities 0.02 CARE D; Issuer Not Cooperating;
based on best available
information
Detailed description of the key rating drivers
CARE had, vide its press release dated January 18, 2019, placed the
rating of PCP under the 'issuer non-cooperating' category as PCP
had failed to provide information for monitoring of the rating as
agreed to in its rating agreement. PCP continues to be
non-cooperative despite repeated requests for submission of
information through email dated April 17, 2020, April 21, 2020,
April 23, 2020 and numerous phone calls. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
At the time of last rating on January 18, 2019 the following were
the rating strengths and weaknesses:
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in debt servicing: As per the interaction with the banker
during last review, there have been delays in servicing of interest
and principal on long term debt and the account was classified as
NPA.
PCP was established in September 2001, as a proprietorship concern
and is involved in manufacturing of make to order corrugated boxes.
PCP's unit is located at Verna, Goa with the total installed
capacity of 10,000 metric tonnes of corrugated boxes per annum
(MTPA) of different sizes as per order. Moreover, PCP has in-house
'Flexo Printing' facility for printing on the boxes.
R.S. GREEN: CARE Keeps D INR12.47cr Debt Rating in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of R.S. Green
Foods Private Limited (RGF) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 12.47 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 4, 2019, placed the
rating of RGF under the 'issuer non-cooperating' category as R.S.
Green Foods Private Limited had failed to provide information for
monitoring of the rating. RGF continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls and a letter/email dated May 7, 2020, May 6,
2020, May 5, 2020 and May 4, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in February 4, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Ongoing delays in debt servicing: There are ongoing delays in
servicing the debt obligations. The delays are on account of weak
liquidity position as the company has incurred net losses in the
past leading to erosion of net worth base.
R.S. Green Foods Private Limited (RGF) was incorporated in December
2011 and the operations of the company are currently being managed
by Ms. Balwant Kaur and Mr Taman Raj. The company is engaged in
processing as well as trading of paddy at its manufacturing unit
located at Patiala, Punjab with total installed capacity of 36,000
metric ton per annum (MTPA), as on September 30, 2017. The company
also undertakes milling of rice for government and other private
entities.
S E TRANSSTADIA: CARE Keeps D INR335.65cr Debt Rating in Not Coop.
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of S E
Transstadia Private Limited (SETPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 335.65 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 13, 2019 placed the
rating SETPL under the 'issuer non-cooperating' category as SETPL
had failed to provide information for monitoring of the rating.
SETPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails dated February 10, 2020,
February 21, 2020 and March 4, 2020 and numerous phone calls. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating review held on March 15, 2019, following
were the rating strengths and weaknesses (updated for the
information available from Registrar of Companies)
Key Rating Weaknesses
* Continued default in debt servicing: As reported in Audit Report
2019, retrieved from Ministry of Corporate Affairs (MCA), SETPL has
defaulted in servicing of interest and principal due to banks.
S E TransStadia Pvt Ltd (SETPL) belongs to 'Setco group' and has
developed multipurpose convertible (indoor & outdoor) stadium along
with sports facility in the vicinity of Kankaria Lake, Maninagar,
Ahmedabad. The multipurpose sports arena consists of about 14.50
lakh sq. ft. build-up area with 2 basement, 1 ground and 6 floors.
SETPL has signed a concession agreement (CA) with Government of
Gujarat (GoG) on June 14, 2012 to develop and operate a stadium as
Public-Private Partnership project on a Design, Built, Finance,
Own, Operate and Transfer (DBFOOT) basis. The total concession
period is 35 years upto June 2047 which includes construction
period of 3 years.
SHRI SAKTHI: CARE Keeps 'D' Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shri Sakthi
Papers India Private Limited (SSP) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 49.50 CARE D; Issuer Not Cooperating;
Facilities based on best available
information
Short term 4.70 CARE D; Issuer Not Cooperating;
Bank Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 13, 2019, placed the
rating(s) of SSP under the 'Issuer non-cooperating' category as SSP
had failed to provide information for monitoring of the rating. SSP
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated April 28, 2020 and April 29, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Detailed description of the key rating drivers
At the time of last rating on March 13, 2019 the following were the
rating strengths and weaknesses.
Key Rating Weakness:
* Ongoing delays in meeting debt obligation: The company was
unable to generate sufficient cash flows leading to strained
liquidity position resulting in ongoing delays in meeting interest
and principal debt obligation.
* Decline in total operating income: The total operating income
declined from INR 68.42 crore in FY17 to INR 66.55 crore in FY18.
* Leveraged capital structure and weak debt-coverage indicators:
The capital structure marked by overall gearing continues to be
leveraged deteriorating from 3.07x as of March 31, 2017 to 3.26x as
of March 31, 2018. Furthermore, the debt equity also deteriorated
from 2.07x as of March 31, 20 17 to 2.19x as of March 31, 2018.
Debt coverage indicators stood weak marked by interest coverage
ratio of 1.60x in FY18 as against 1.68x in FY17. TD/GCA also stood
weak at 39.99x in FY18 as against 25.20x in FY17.
* Working capital intensive nature of operations: The working
capital cycle days elongated to 155 days in FY18 as against 145
days in FY17.
* Decline in profitability margins: The PBILDT margin declined
from 8.70% in FY17 to 6.94% in FY18, while the PAT margin also
declined from 1.17% in FY17 to 1.12% in FY18.
Key Rating Strengths
* Experienced promoters and long track record of operations:
Experienced promoters along with long track record of operations
SSP, having commenced operations in the year 1968 has a
track record of being engaged in the paper industry for more than
five decades. SSP is being promoted by Mr. P. Swaminathan, his
wife, Ms. S. Ruckmani, Mr. P. Balakrishnan (brother) and Mr. V.
Chandramouli based out of Tamilnadu. Mr. P. Swaminathan,
Undergraduate, aged 57 years, with an experience of more than three
decade in the paper industry manages the overall operations of the
company.
Shri Sakthi Papers (India) Private Limited (SSP) originally
incorporated as Sakthi Saradha Papers (India) Private Limited in
May 2004 by Mr. P. Swaminathan and family based out of Coimbatore,
Tamilnadu, is engaged in the manufacture of paper for newsprint,
writing paper for note books, white paper for printing and book
publication. The business was originally constituted as a
proprietorship entity in 1968 by Mr. P. Panchapakesaiyer (father of
Mr. P. Swaminthan) by name Shakthi Paper Mart (SPM), which was into
trading of imported paper. SSP has own sales depot in Tirupur,
Salem, Kolikode and in Ernakulum whereas sales in Chennai, Madurai
and Sivakasi are carried out through dealers.
SHUBHGRAH METALS: CARE Lowers Rating on INR6.62cr Loan to C/A4
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shubhgrah Metals Private Limited (SMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 6.62 CARE C; Stable/CARE A4;
Short Term Issuer not cooperating;
Bank Facilities Revised from CARE B;
Stable/CARE A4; Issuer
Not Cooperating on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 11, 2019, placed the
rating(s) of SMPL under the 'Issuer not Cooperating' category as
SMPL had failed to provide information for monitoring of the rating
and had not paid the surveillance fees for the rating exercise as
agreed to in its rating agreement. SMPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and an email dated April
28, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of significant decline in
its Total Operating Income (TOI) in FY19.
The ratings, further, continued to remain constrained on account of
moderate profitability, highly leverage capital structure, weak
debt coverage indicators and working capital intensive nature of
operations, vulnerability of margins to fluctuation in raw material
prices and foreign exchange rates coupled with presence in highly
fragmented and competitive industry. The ratings, however,
continued to remain favorable on account of long standing
experience of the promoters in the diversified line of business.
Detailed description of the key rating drivers
At the time of last rating on March 11, 2019, the following were
the rating strengths and weaknesses (Updated for the information
available from ROC).
Key Rating Weaknesses
* Weak financial profile marked by fluctuating scale of operations
and profitability: During FY19, TOI of the company declined
significantly by 87.87% and registered TOI of INR3.48 crore mainly
on account of no sales registered for aluminium scrap and coil
sheets and plates. The PBILDT margin stood at 45.93% in FY19 as
against 3.57% in FY18 mainly on account of lower purchases.
Further, the company reported net profit of INR 0.15 Crore as
against net loss of INR 0.15 Crore in FY18. The company also
registered cash profit of INR 0.17 crore in FY19 as against cash
loss of INR 0.11 crore in FY18.
* Highly leverage capital structure, weak debt coverage indicators
and working capital intensive nature of operations: Its capital
structure continued to remain highly leveraged with an overall
gearing of 5.34 times as on March 31, 2019 improved marginally from
5.84 times as on March 31, 2018, mainly on account of scheduled
repayment of rupee term loans. Further, the debt coverage indicator
stood weak at 69.08 times in FY19 (A). The operating cycle of the
company remained elongated at 482 days in FY19, deteriorated from
111 days in FY18. Further, the current ratio and quick ratio stood
at 1.66 times respectively as on March 31, 2019.
* Vulnerability of margins to fluctuation in raw material prices
and foreign exchange rates: The prices of aluminium scrape have
exhibited volatile trend in the past and same volatility is
expected to continue in future on account of domestic and
international demand scenario. Further, SMPL makes 100% imports of
aluminium scrap and does not employ any hedging technique for the
purchases made in foreign currency. Hence, profitability of the
company is exposed to foreign exchange risk.
* Highly fragmented and competitive nature of industry: The company
is engaged in the trading of aluminum scrap where many players are
operating in the same business with many unorganized players and
few organized players. Further, the profitability margins of the
company will remain lower due to trading nature of operations and
its inability to pass on rise in prices to its customers due to
highly fragmented and competitive nature of the industry.
Key rating Strengths
* Long standing experience of the promoters in the diversified line
of business: The promoters of the company, Mr. Babulal Motawat,
Mr. Rohit Motawat and Mr. Pankaj Kothari have wide experience of
more than a decade in the diversified business activities. The
promoters also manage other group concerns namely Shubh Mangal
Marbles and Granite Private Limited (SMGPL; formed in 1999) which
is engaged in the business of processing and trading of marbles and
Shubh Builders and Developers (SBD; formed in 2003) which is
engaged in real estate activities.
Udaipur (Rajasthan) based Shubhgrah Metals Private Limited (SMPL),
incorporated in October 2012, was promoted by Mr. Babulal Motawat,
Mr. Rohit Motawat and Mr. Pankaj Kothari. SMPL was set up to
primarily engage in the trading of aluminium scrap and commenced
its commercial operations from December 2012 onwards. The company
imports aluminium scrap from Gulf countries mainly Dubai, Kuwait
and Saudi Arab and sells it all over India with sales concentrated
predominantly in Gujarat, Maharashtra, Delhi and Rajasthan. It
sells scrap directly to end users all over India. Further, 'Motawat
family' have promoted other group concerns namely "Shubh Mangal
Marbles and Granite Private Limited, Shubh Builders and Developers
and Shubh Aluminum Private Limited having interest in mining and
processing of marbles, trading as well as real estate industry.
SIYARAM COTTON: CARE Lowers Rating on INR13.90cr Loan to 'C'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Siyaram Cotton Industries (SCI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 13.90 CARE C; Stable; Issuer Not
Facilities Cooperating; Revised from
CARE B+; Stable; Issuer not
Cooperating on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 11, 2019, placed the
ratings of SCI under the 'issuer non-cooperating' category as SCI
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. SCI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and an email dated May 4,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings assigned to the bank facilities of SCI have been
revised on account of non-availability of requisite information.
The rating assigned to the bank facilities of Siyaram Cotton
Industries (SCI) continue to remain primarily constrained on
account of project implementation risk associated with it and yet
to achieve financial closure. The rating, further, constrained on
account of its presence in the lowest segment of the textile value
chain coupled with highly competitive and fragmented cotton ginning
industry, vulnerability of its operating margins to fluctuation in
the cotton prices and constitution as a partnership concern.
The rating, however, favorably takes into account the vast
experience of the promoters in the cotton ginning industry and
established relations with customers and suppliers. The rating,
further, gets strength from location advantage being situated in
the cotton growing region.
Detailed description of the key rating drivers
At the time of last rating on March 6, 2019, the following were the
rating strengths and weaknesses.
Key Rating Weakness
* Project implementation risk with financial closure yet to
achieve: SCI undertook a green-field project to set up plant for
cotton ginning and processing. The firm had envisaged total project
cost of INR6 crore towards the project to be funded through term
loan of INR4.00 crore and remaining of INR2 crore through unsecured
loans and share capital. The firm is expecting to complete its
project by October, 2018. However, it has yet to achieve financial
closure. Till March 27, 2018, the firm has incurred total cost of
INR1.25 crore towards the project funded partner capital. The
overall gearing is expected to remain high due to debt taken for
project funding as well as availment of working capital bank
borrowing for working capital funding.
* Operating margins susceptible to cotton price fluctuation and
seasonality associated with the cotton industry: Operations of
cotton business are seasonal in nature, as sowing season is done
during March to July and harvesting cycle (peak season) is spread
from November to February every year. Prices of raw material i.e.
raw cotton are highly volatile in nature and depend upon factors
like monsoon condition, area under production, yield for the year,
international demand supply scenario, export policy decided by
government and inventory carried forward of the last year. Ginners
usually have to procure raw materials at significantly higher
volume to bargain bulk discount from suppliers. Furthermore, cotton
being a seasonal crop, the inventory levels of the entity generally
remains high at the end of the financial year. Thus, aggregate
effect of both the above factors results in exposure of ginners to
price volatility risk.
* Presence in the lowest segment of the textile value chain and in
a highly fragmented cotton ginning industry: High proportion of
small scale units operating in cotton ginning and pressing industry
has resulted in fragmented nature of industry leading to intense
competition amongst the players. As SKF operates in this highly
fragmented industry wherein large numbers of un-organised players
are also present, it has very low bargaining power against both its
customers as well as its suppliers. This coupled with limited value
addition in cotton ginning process results in the firm operating at
very thin profitability (PAT) margins.
Key Rating Strengths
* Experienced promoters in the textile and cotton ginning industry
and established relations with customers and suppliers through
group companies: Mr. Manoj Kumar Agrawal, Ms. Rekha Agarwal and Ms
Aarti Agarwal, Partners, have more than two decades of experience
in the industry and looks after purchase functions and
administration and management functions respectively of the firm.
Mr. D.L. Agrawal, Partner, has more than four decades of experience
in the industry and looks after selling functions of the firm.
Being present in the industry since long period of time, it has
established relationship with customers and suppliers.
* Strategically located in the cotton growing region: Gujarat,
Maharashtra, Andhra Pradesh, Haryana, Madhya Pradesh and Tamil Nadu
are the major cotton producer's states in India. The plant of SKF
is located in one of the cotton producing belt of Sendhwa (Madhya
Pradesh) in India. The presence of SKF in cotton producing region
results in benefit derived from lower logistics expenditure (both
on transportation and storage), easy availability and procurement
of raw materials at effective price.
Ratlam (Madhya Pradesh) based SCI was established in October, 2017
by Mr. Manoj Agrawal, Mr. DL Agrawal, Ms. Rekha Agrawal and Ms.
Aarti Agrawal as a partnership concern and share equal profit and
loss. The firm was formed with an objective to set up green field
project for cotton ginning and pressing at Ratlam, Madhya Pradesh.
SCI envisaged total project cost of INR6 crore towards the project
which envisaged to be funded through term loan of INR4.00 crore and
remaining of INR2.00 crore through unsecured loans and share
capital. The plant of the company will have installed capacity to
manufacture cotton bales of 400 Bales per Day (BPD).
SPRAY ENGINEERING: CARE Reaffirms and Withdraws D Debt Rating
-------------------------------------------------------------
CARE has reaffirmed and withdrawn the outstanding ratings of 'CARE
D; Issuer Not Cooperating' assigned to the bank facilities of Spray
Engineering Devices Limited (SEDL) with immediate effect. The above
action has been taken at the request of SEDL and 'No Objection'
from the banks that have extended the facilities rated by CARE.
The ratings assigned to the bank facilities of SEDL continue to be
constrained by the likelihood of default with a history of weak
liquidity position and delays.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Likelihood of default with a history of weak liquidity position
and delays: The likelihood of SEDL not being able to meet its debt
repayment obligations has increased because of the prevailing
economic and industry slowdown along with the historically tight
liquidity position of the company as well as history of defaults in
the past. SEDL's main products find application in the sugar
industry, which is highly cyclical in nature. The ongoing Covid-19
pandemic is likely to put further pressure on the liquidity
profiles of the sugar players since the consumption patterns are
expected to decline owing to curbs on social gatherings & outings.
The sugar industry is also facing reduced offtake from beverage &
other FMCG companies amid the lockdown. Economic slowdown along
with deteriorating liquidity profiles of the players majorly
catered to, is expected to put further pressure on the liquidity
profile of SEDL. In the past also, due to continued losses, leading
to tight liquidity position, the debt of the company was
restructured in March-2013. Further, there have historically been
instances of devolvement of the Letter of Credit (LC), which were
not settled for more than 30 days as well as instances of
overutilization in the past.
Spray Engineering Devices Limited (SEDL) was formed by merger of
two partnership firms, namely Spray Engineering Devices (started in
1992) and C&C Systems in FY05. SEDL is promoted by Mr. Vivek Verma
and Mr. Prateek Verma, having it's cooperate office at Mohali,
Punjab and three manufacturing units in Baddi, Himachal Pradesh,
with an installed capacity of processing 50 tonnes sheet metal per
day. The Company is engaged in the manufacturing of cooling and
condensing system, its automation and energy saving equipment
(majorly used in the Sugar Industry) and is also a turnkey supplier
for the sugar plants.
V. PONNUSAMY: CARE Lowers Rating on INR20.00cr LT Loan to 'C'
-------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
V. Ponnusamy Educational And Charitable Trust (VPCT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 20.00 CARE C; Stable; Issuer not
Facilities cooperating, revised from
CARE BB-; Stable; Issuer not
Cooperating on the basis of
Best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 22, 2019, placed the
rating(s) of VPCT under the 'Issuer non-cooperating' category as
VPCT had failed to provide information for monitoring of the
rating.
VPCT continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated April 28, 2020 and April 29, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the non-availability
of requisite information due to non- cooperation by VPCT with
CARE's efforts to undertake a review of the outstanding ratings as
CARE views information availability risk as key factor in its
assessment of credit risk profile.
Detailed description of the key rating drivers
At the time of last rating on March 22, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weakness
* Small scale of operations: The gross receipts stood small at
INR23.20 crores in FY18.
* Competition from established players: The VPCT schools &
colleges are located at Namakkal district in Tamil Nadu. The
Namakkal district, is known as the education hub of the state with
numerous schools and colleges. There are a number of institutions
with an established track record and brand recall among the
residents of the state. Many of these institutions have a pass
percentage of around 95% and have strength of more than 20,000
students. In view of tough competition from these players, ability
of VPCT to scale up its operations remains to be seen.
* Uneven cash flows associated with educational institutions: The
revenue stream of the society is skewed towards the beginning of
the academic year when the bulk of the tuition fees and other
related income is collected whereas the society incurs regular
stream of payments for meeting staff salary, maintenance activities
and interest expenses amongst others. The fees from school students
stands due during the academic year however the same was paid
before exams i.e April & May hence the sundry debtors as on
accounts closing date (i.e March) stands high additionally VPCT
provides free education to engineering students in and around
Namakkal who are mostly SC/ST students and fee has been claimed
from state government in the form of SC/ST Scholarship in two
instalments every academic year. Sundry creditors consist of
liabilities associated with group entity & other maintenance
activities, staff salaries etc. Hence the average collection period
& average creditors days stood high at 171 days and 272 days
respectively in FY18. The current ratio stood below unity on
account of higher outstanding amount of sundry creditors.
Key Rating Strengths
* Vast experience of the managing committee with established track
record of trust: VPCT is a family managed trust formed by Dr. P.
Selvaraj, Managing Trustee who is a Veterinary doctor by profession
and has more than two decades of experience in running educational
institutes and medical science practise. Dr. S. Babu is a doctor by
profession and takes care of the day to day affairs of VPCT and he
is one of trustees for Kalaimagal educational & charitable trust.
Mrs. Jayam (W/O Dr. P. Selvaraj) is trustee and has two decades of
experience in management of trust. Dr. B. Kaviethra Nandhini is the
Secretary of trust and hails from the family of SNS group of
institution which runs educational institution. She is a PHD degree
holder and holds management skills more than a decade in running
education institutions. All the members of the trust are well
qualified and have considerable experience in education service
provider field. The governing council of all the institutions are
well qualified and distinguished personalities in their respective
fields.
* Growth in Gross receipts: Gross receipts increased from INR21.71
crore in FY17 to INR23.20 crore in FY18.
* Satisfactory surplus margins: The SBID margin increased from
21.83% in FY17 to 22.88% in FY18. The surplus margin improved from
1.10% in FY17 to 1.81% in FY18.
* Comfortable capital structure with moderate debt coverage
indicators: The overall gearing stood comfortable, though
marginally deteriorated from 0.63x as on March 31, 2017 to 0.73x as
on March 31, 2018. The interest coverage ratio improved from 2.13x
in FY17 to 2.21x in FY18. The total debt/GCA improved from 3.38x in
FY17 to 3.56x in FY18.
* Presence across the spectrum of education: VPCT is involved in
providing education to the students in Namakkal, Tamil Nadu and has
a diverse presence across the education spectrum through
established schools and colleges offering varied pre-university,
degree & post-graduate courses. The group of institutions under
VPCT are well recognized by the name "Selvam institutions" schools
& colleges. VPCT presently runs two schools, a physical education
college, a teaching institution, an engineering college & an art &
science college. Most of the institutions under the trust are
located in prime locations and some of these institutes have been
in operation for more than two decades.
V. Ponnusamy Educational And Charitable Trust (VPCT) is a
Namakkal-based public charitable trust established in the year 1999
by Dr. P. Selvaraj & his family members. Commencing with a higher
secondary school in 1999, the trust expanded to establish Arts and
Science college, Teacher training institutes, Physical Education
college, and an Engineering College in the year 2006-07. VPCT
started its operation through running Schools namely Selvam Higher
Secondary School (SHSS) (affiliated to Tamil Nadu Board of Higher
Secondary Education (TNBHSE)) commenced from Academic Year (AY)
1999 -20 and Selvam Matric Higher Secondary School (SMHSC)
(affiliated to Tamil Nadu Board of Higher Secondary Education
(TNBHSE)) commenced from Academic year (AY) 2001 -02 and are
located in the same campus at Namakkal, Tamil Nadu.
=========
J A P A N
=========
[*] JAPAN: Bankruptcies Likely to Rise to 7-Year High on Virus Hit
------------------------------------------------------------------
Bloomberg News reports that companies declaring bankruptcy in Japan
will likely climb to the most in seven years in 2020, further
pressuring an economy hurt by the coronavirus pandemic.
That's the view of Tokyo-based Teikoku Databank Ltd., which is
forecasting that such cases may exceed 10,000 this year, the
highest since 2013. Bankruptcy protection filings jumped to 758 in
April, with 123 of those caused by factors related to the pandemic,
as the outbreak forced hotels and restaurants to close their doors,
according to the major credit research firm that compiles Japan
corporate failure data, Bloomberg relays.
"This feels worse than the global financial crisis," Bloomberg
quotes Yuya Akama, general manager of the information department at
Teikoku Databank's Tokyo head branch, as saying in an interview.
"There are concerns across sectors like department stores,
hospitals, airlines, hotels and tourism bus operators and
restaurants."
A global economic slowdown triggered by the COVID-19 pandemic is
causing companies to go out of business around the world,
threatening the livelihood of workers, Bloomberg notes. Prime
Minister Shinzo Abe doubled Japan's stimulus measures last week to
support the economy, which analysts forecast may shrink by more
than 20 percent this quarter.
Companies, and small to midsize firms in particular, should
accumulate funds not just to override the crisis for the time being
but to be prepared for a second wave, Mr. Akama said.
"It's possible that there may be another state of emergency from
the government if there is a second or a third wave," Akama said.
"Moreover, recovery may take longer than expected, and may stretch
through a second wave."
Among Japanese enterprises filing for bankruptcy linked to the
coronavirus outbreak, hotels and inns, restaurants and clothing
retailers were especially prevalent, according to Teikoku Databank
data cited by Bloomberg. Renown Inc., a Tokyo-listed apparel
company, filed for creditor protection this month after sales
plummeted due to the pandemic.
Many company owners may elect to go out of business without filing
for bankruptcy protection, and those cases may also climb in the
current environment to around 25,000 this year from less than
24,000 in 2019, Mr. Akama, as cited by Bloomberg, said.
=====================
P H I L I P P I N E S
=====================
2GO GROUP: Net Loss Narrows to PHP108.92MM in Q1 Ended March 31
---------------------------------------------------------------
BusinessWorld Online reports that 2GO Group, Inc. cut its net loss
attributable to equity holders by 70.5% in the first quarter after
it managed to reduce its expenses.
In a regulatory filing, the listed shipping and logistics provider
posted an attributable net loss of PHP108.92 million as of March,
from the net loss of PHP369.03 million in the same period last
year, BusinessWorld discloses.
According to the report, the company attributed its net loss in the
three-month period to reduced travel revenues, especially during
the last two weeks of March when the government placed the entire
island of Luzon under an enhanced community quarantine to contain
the coronavirus disease.
BusinessWorld relates that as for the decline in its attributable
net loss, 2GO Group said: "Total cost and expenses were lower in
the first quarter of 2020 compared to 2019, despite rising
transport costs for the logistics business and increased sales of
inventory from the distribution business."
It said fuel prices also decreased by 32% where the listed company
had a favorable price variance of P191 million for the quarter.
"All other costs and expenses were generally maintained or reduced
due to improvements in efficiencies and focus on controlling cost,"
2GO Group said.
According to BusinessWorld, 2GO Group reported a decline in
revenues by 6% to P5.16 billion during the three-month period.
Broken down, the company saw a slight improvement of 0.3% in its
shipping business. Sales of goods also grew by 15%, but revenues
from logistics and other services went down by 33%.
2GO has three core business units, namely, 2GO Freight, 2GO Travel,
and 2GO Supply Chain.
For the first quarter, shipping accounted for 34% and non-shipping
accounted for 66% of the group's total revenue, compared to 32% and
68%, respectively, in the same period in the previous year,
BusinessWorld relays.
The group said it expects a decline in sales or revenue volumes
during the subsequent months beyond the lifting of the modified
enhanced community quarantine.
It also said that it has already activated its business continuity
plan and "has taken steps to manage the risk of disruption in the
value chain both inbound and outbound, including the potential
overall economic impact and the effects of the business disruptions
in other business entities, some of which are integral to the
value-chain of the group," BusinessWorld adds.
2GO Group, Inc. provides passenger and freight transportation
services throughout the Philippines. The Company provides both
passenger and cargo ferry services which include container and
break bulk cargo services.
=====================
S O U T H K O R E A
=====================
DOOSAN HEAVY: Gov't, State-Run Creditors Discuss Self-Rescue Plan
-----------------------------------------------------------------
Yonhap News Agency reports that top economic policymakers and heads
of state-run creditor banks on May 29 discussed a self-rescue plan
submitted by cash-strapped Doosan Heavy Industries & Construction
Co., the finance ministry said May 29.
According to Yonhap, two state-run creditors -- the Korea
Development Bank and the Export-Import Bank of Korea -- have been
in talks with Doosan Group, the parent of Doosan Heavy, on a debt
restructuring plan for the builder of turbines, power plants and
roads.
During the meeting on May 29, the creditors briefed economic
policymakers, including Finance Minister Hong Nam-ki, on the debt
restructuring plan, the ministry said in a statement, Yonhap
relays.
Under the plan, Doosan Heavy will launch a "large-scale" rights
offering and sell non-core assets, according to the statement.
Doosan Heavy will also transform its business portfolio into
"eco-friendly" businesses, it said.
The creditors expected the debt restructuring plan to help Doosan
Heavy stand on its own feet, the statement, as cited by Yonhap,
said.
Yonhap notes that Doosan Group has put its affiliates and assets,
such as Doosan Solus Co., a copper foil maker for electric
vehicles, and Doosan Tower, the group's headquarters building in
Seoul, up for sale.
Yonhap relates that the sale of Doosan Solus is expected to fetch
between KRW700 billion (US$565.2 million) and KRW800 billion, but
Doosan Group wants at least KRW1 trillion from the asset sale.
It has been widely said that Doosan Heavy suffered setbacks in
business as the outbreak of the new coronavirus and the poor
performance of its construction affiliate, Doosan Engineering &
Construction Co., dented Doosan Heavy, Yonhap says.
Another reason for the setback has been reported to be the shift of
the country's energy policy from nuclear and fossil fuel-based
power generation to renewable energy sources, such as solar power,
adds Yonhap.
Based in South Korea, Doosan Heavy Industry & Construction Co.
(SEO:034020) -- http://www.doosanheavy.com-- is engaged in
supplying industrial facilities to both domestic and international
plant markets.
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S U B S C R I P T I O N I N F O R M A T I O N
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