/raid1/www/Hosts/bankrupt/TCRAP_Public/200610.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, June 10, 2020, Vol. 23, No. 116
Headlines
A U S T R A L I A
ARMA SECURITY: First Creditors' Meeting Set for June 18
ARMOUR LEGAL: Second Creditors' Meeting Set for June 16
BARATECH PTY: First Creditors' Meeting Set for June 17
ELITE MINING: Second Creditors' Meeting Set for June 16
EQUESTRIAN AUSTRALIA: First Creditors' Meeting Set for June 19
JONES 97: First Creditors' Meeting Set for June 18
PEPPER RESIDENTIAL No.26: S&P Assigns Prelim 'B' Rating to F Notes
C H I N A
HUAI'AN DEVELOPMENT: Fitch Affirms LT IDRs at BB-, Outlook Stable
RONSHINE CHINA: Fitch Rates Proposed Senior Notes BB-
SINIC HOLDINGS: Fitch Gives B+ LT IDR, Outlook Stable
[*] CHINA: Considers $28 Billion of Funding to Back Troubled Banks
H O N G K O N G
CATHAY PACIFIC: Plans US$5BB Government-Backed Recapitalization
I N D I A
AGRON LOGISTICS: ICRA Keeps D INR10cr Debt Rating in Not Coop.
APM INFRASTRUCTURE: ICRA Keeps B Debt Rating in Not Cooperating
BARAMATI TOLLWAYS: ICRA Keeps D INR36.17cr Debt Rating in Not Coop.
BASANTDEVI CHARITABLE: ICRA Keeps D INR15cr Debt Rating in Non-coop
BOURN HALL: Insolvency Resolution Process Case Summary
DAHYABHAI B: ICRA Keeps B+ Debt Rating in Not Cooperating
DWARKADHIS BUILDWELL: ICRA Keeps B INR15cr Debt Rating in Not Coop.
EMTEX ENGINEERING: Insolvency Resolution Process Case Summary
G R CONSTRUCTIONS: ICRA Cuts Rating on INR8.0cr LT Loan to B+
G. R. WEAVERS: ICRA Keeps B+ Debt Ratings in Not Cooperating
GIRIRAJ INDUSTRIES: ICRA Keeps D Debt Ratings in Not Cooperating
GSL NOVA: Insolvency Resolution Process Case Summary
HOMERA TANNING: ICRA Keeps B+ Debt Rating in Not Cooperating
HOTLINE GLASS: Insolvency Resolution Process Case Summary
J.R. FOODS: ICRA Keeps 'D' Debt Ratings in Not Cooperating
JAY ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating
KRISHNAIAH MOTORS: ICRA Cuts Rating on INR15cr LT Loan to B+
LENORA VITRIFIED: ICRA Hikes Rating on INR13cr Term Loan to B
MAHI FORMALINE: ICRA Keeps 'B' Debt Ratings in Not Cooperating
MAIL ORDER: ICRA Keeps 'D' Debt Ratings in Not Cooperating
MEP SANJOSE KANTE: ICRA Cuts Rating on INR371.83cr Loan to B-
MEP SANJOSE: ICRA Lowers Rating on INR266.84cr Loan to B-
NATH SOLVENT: Insolvency Resolution Process Case Summary
OUR CO: ICRA Lowers Rating on INR81cr Loan to 'D'
PANCHSHEEL SOLVENT: ICRA Keeps D Debt Ratings in Not Cooperating
S. P. JAISWAL: ICRA Keeps B+ Debt Ratings in Not Cooperating
SHALLOW CERAMIC: ICRA Moves B+ Debt Ratings to Not Cooperating
SHYAM COTTEX: ICRA Keeps 'B' Debt Ratings in Not Cooperating
SIDWIN FABRIC: ICRA Migrates B+ Debt Ratings to Not Cooperating
STABLE PACKAGING: ICRA Keeps B+ Debt Ratings in Not Cooperating
SUNSHINE EXPORTS: ICRA Keeps D Debt Rating in Not Cooperating
TRUFORM TECHNO: ICRA Keeps 'D' Debt Ratings in Not Cooperating
UNITED HOTELS: ICRA Keeps 'C' Debt Ratings in Not Cooperating
VIDYA PRASARINI: ICRA Keeps 'D' Debt Ratings in Not Cooperating
XS REAL: ICRA Lowers Rating on INR20.0cr LT Loan to B+
[*] INDIA: Lenders Need Capital to Face Virus, Banker Says
I N D O N E S I A
CIPUTRA DEVELOPMENT: Fitch Affirms LT IDR at BB-, Outlook Neg.
J A P A N
[*] JAPAN: 61 Firms Went Bankrupt in May Due to Coronavirus
N E W Z E A L A N D
MAX FASHIONS: May Have to Close 17 Stores, Cut Jobs
S O U T H K O R E A
ASIANA AIRLINES: HDC Wants to Renegotiate Acquisition Deal
X X X X X X X X
[*] Asian Companies at Higher Risk of Default This Year
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A U S T R A L I A
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ARMA SECURITY: First Creditors' Meeting Set for June 18
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Arma
Security Service Pty Ltd will be held on June 18, 2020, at 12:00
p.m. at Level 1, 255 Mary Street, in Richmond, Victoria.
Richard Rohrt of Hamilton Murphy was appointed as administrator of
Arma Security on June 5, 2020.
ARMOUR LEGAL: Second Creditors' Meeting Set for June 16
-------------------------------------------------------
A second meeting of creditors in the proceedings of Armour Legal
Pty Ltd has been set for June 16, 2020, at 11:00 a.m. via telephone
conference facilities.
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 15, 2020, at 5:00 p.m.
Peter Gountzos and Michael Carrafa of SV Partners were appointed as
administrators of Armour Legal on May 11, 2020.
BARATECH PTY: First Creditors' Meeting Set for June 17
------------------------------------------------------
A first meeting of the creditors in the proceedings of Baratech Pty
Ltd will be held on June 17, 2020, at 11:00 a.m. at Training Room
1, 377 Sussex Street, in Sydney, NSW.
Danny Vrkic and Daniel John O'Brien of DV Recovery Management were
appointed as administrators of Baratech Pty on June 4, 2020.
ELITE MINING: Second Creditors' Meeting Set for June 16
-------------------------------------------------------
A second meeting of creditors in the proceedings of Elite Mining
and Transport Services Pty Ltd formerly trading as "EMT Civil",
"EMT Rental" and "EMT Electrical WA" has been set for June 16,
2020, at 10:30 a.m. via teleconference only.
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 15, 2020, at 4:00 p.m.
Greg Prout and David Hurt of WA Insolvency Solutions were appointed
as administrators of Elite Mining on May 11, 2020.
EQUESTRIAN AUSTRALIA: First Creditors' Meeting Set for June 19
--------------------------------------------------------------
A first meeting of the creditors in the proceedings of Equestrian
Australia Limited will be held on June 19, 2020, at 10:30 a.m. via
videoconference on Microsoft Teams.
Craig Peter Shepard and Kate Conneely of KordaMentha were appointed
as administrators of Equestrian Australia on June 9, 2020.
JONES 97: First Creditors' Meeting Set for June 18
--------------------------------------------------
A first meeting of the creditors in the proceedings of Jones 97
Dairy Contracting Pty. Ltd. will be held on June 18, 2020, at 10:00
a.m. via teleconference.
Shelley-Maree Brooks of Rodgers Reidy was appointed as
administrator of Jones 97 on June 5, 2020.
PEPPER RESIDENTIAL No.26: S&P Assigns Prelim 'B' Rating to F Notes
------------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to eight
classes of nonconforming and prime residential mortgage-backed
securities (RMBS) issued by Permanent Custodians Ltd. as trustee of
Pepper Residential Securities Trust No.26. Pepper Residential
Securities Trust No.26 is a securitization of nonconforming and
prime residential mortgages originated by Pepper Homeloans Pty
Ltd.
The preliminary ratings reflect:
-- S&P views of the credit risk of the underlying collateral
portfolio, including its view that the credit support is sufficient
to withstand the stresses it applies. The credit support for the
rated notes comprises note subordination and excess spread. The
assessment of credit risk takes into account the underwriting
standard and centralized approval process of the seller, Pepper
Homeloans.
-- The availability of a retention amount, amortization amount,
and yield reserve, which will all be funded by excess spread, but
at various stages of the transaction's term. They will have
separate functions and timeframes, including reducing the balance
of senior notes, reducing the balance of the most subordinated
notes, and paying senior expenses and interest shortfalls on the
rated notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity facility
equal to 2.5% of the outstanding balance of the notes, and
principal draws, are sufficient under its stress assumptions to
ensure timely payment of interest.
-- The condition that a minimum margin will be maintained on the
assets.
-- That S&P also has factored into our ratings the legal structure
of the trust, which has been established as a special-purpose
entity and meets our criteria for insolvency remoteness.
-- That loss of income for borrowers in the coming months due to
the effects of COVID-19 will likely put upward pressure on mortgage
arrears. S&P said, "We have recently updated our outlook
assumptions for Australian RMBS in response to changing
macroeconomic conditions as a result of the COVID-19 outbreak. We
have also applied a range of additional stresses in our analysis to
assess the rated notes' sensitivity to liquidity stress and the
possibility of higher arrears." As of April 30, 2020, borrowers
with COVID-19 related hardship arrangements make up 6.99% of the
closing pool balance.
S&P Global Ratings acknowledges a high degree of uncertainty about
the rate of spread and peak of the coronavirus outbreak. S&P said,
"Some government authorities estimate the pandemic will peak about
midyear, and we are using this assumption in assessing the economic
and credit implications. We believe the measures adopted to contain
COVID-19 have pushed the global economy into recession. As the
situation evolves, we will update our assumptions and estimates
accordingly."
PRELIMINARY RATINGS ASSIGNED
Pepper Residential Securities Trust No.26
Class Rating Amount (mil. A$)
A1-s AAA (sf) 160.0
A1-a AAA (sf) 330.0
A2 AAA (sf) 108.5
B AA (sf) 38.5
C A (sf) 21.0
D BBB (sf) 15.4
E BB (sf) 9.1
F B (sf) 6.4
G NR 11.1
NR--Not rated.
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C H I N A
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HUAI'AN DEVELOPMENT: Fitch Affirms LT IDRs at BB-, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Huai'an Development Holdings Co., Ltd's
Long-Term Foreign- and Local-Currency Issuer Default Ratings at
'BB-' with a Stable Outlook. Fitch has also affirmed the 'BB-'
rating on the USD300 million 6.9% senior unsecured notes due 2022,
issued by Xiangyu Investment Co., Ltd., a wholly owned subsidiary
of HAD.
HAD is fully owned by Huai'an municipality in China's Jiangsu
province. It is responsible for infrastructure development,
primary-land financing, social and commercial property development,
industry promotion and SME support within the municipalities'
flagship economic and technology development zone.
Fitch assesses HAD's ratings under its Government-Related Entities
Rating Criteria, reflecting Huai'an municipality's ownership and
strong local-government control and support of HAD. Fitch also
factors in the strategic importance of HAD to the municipality.
KEY RATING DRIVERS
'Strong' Legal Status and Control: HAD is a fully municipality
owned limited liability company under China's company law. The
government monitors its financing plan and debt levels and it is
required to regularly report its operational and financial results.
Major decisions, including M&A, spin-offs, bankruptcy and
liquidation, require government verification and approval. However,
HAD's actual operation is more closely monitored and guided by
Huai'an's economic and technology development zone's management
committee, which represents the municipal government, as HAD
specialises in urban development within the zone. The government
had no plan to dilute its shareholding in HAD as of June 2020.
'Strong' Support Record: HAD has a solid, although irregular,
support record, which is based on the government's budget and
project progress. The government has provided frequent and
significant capital injections and subsidies and has purchased
services to monetarily support HAD's business. There are no
regulatory or policy restrictions that would prevent the government
from supporting HAD; the company received CNY245 million in capital
injections and CNY10.3 billion in assets injections in 2019.
'Moderate' Social-Political Impact of Default: HAD is one of
Huai'an municipality's urban-development companies and the sole
investment and financing platform of the municipal government's
flagship zone. The company develops large-scale urban
infrastructure projects in the zone and provides ancillary
services. Its failure could jeopardise the zone's policy duties and
services, although HAD may be substituted by other
government-related entities outside the zone.
'Strong' Financial Consequences of Default: HAD has substantial
government receivables due to its contracted works and provides
external guarantees to other state-owned enterprises under the
direction of Huai'an government. It also has various funding
channels and regularly issues bonds in the onshore market. As such,
its default would impair the government's credibility and
significantly affect its access to and the cost of domestic and
foreign financing. However, the direct financial implications for
Huai'an municipality could be slightly cushioned by its geographic
concentration within the zone, given that HAD's actual operation is
more closely guided by the zone's management committee and the
large account receivables are from the zone's finance department,
rather than the municipal government.
Standalone Credit Profile of 'b-': Fitch assesses HAD's revenue
defensibility as 'Weaker', as its primary-land development,
infrastructure and property-development businesses largely rely on
government plans for volume and pricing. HAD has weak price-setting
power in these businesses. Fitch assesses its operating risk as
'Midrange', based on its predictable cost structure. HAD's
financial profile has been characterised by high capex and leverage
in the previous three years. Fitch expects this to continue in the
medium term.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade of Fitch's internal credit view of Huai'an
municipality's ability to provide subsidies, grants or other
legitimate resources allowed under China's policies and
regulations, as well as an increase in the incentive for Huai'an
municipality to provide support to HAD, including stronger
socio-political and financial implications of a default and a
stronger support record.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
A downgrade of Fitch's internal credit view of Huai'an
municipality's ability to provide subsidies, grants or other
legitimate resources allowed under China's policies and
regulations, as well as a significant weakening in the
socio-political and financial implications of default, a weaker
support record or a dilution of the government's shareholding.
An improvement or deterioration of HAD's Standalone Credit Profile
or liquidity position would also affect the ratings.
Any change in HAD's IDR will result in a similar change in the
rating of the notes.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
RONSHINE CHINA: Fitch Rates Proposed Senior Notes BB-
-----------------------------------------------------
Fitch Ratings has assigned homebuilder Ronshine China Holdings
Limited's (BB-/Stable) proposed senior notes a rating of 'BB-'. The
notes are rated at the same level as Ronshine's senior unsecured
rating because they are unconditionally and irrevocably guaranteed
by the company. Ronshine intends to use the net proceeds to
refinance existing debt.
Ronshine's ratings are supported by its stable attributable sales
scale and continued deleveraging in 2019, which are both within
Fitch's expectations. Its leverage, measured by net debt/ adjusted
inventory, improved to 38.5% by end-2019 from 43% at end-June 2019
on slowing land acquisitions. Fitch believes the company has the
ability to keep leverage at around 40%, supported by its quality
land bank that is sufficient for development over the next three to
four years and allows flexibility in land acquisition.
KEY RATING DRIVERS
Commitment to Deleveraging: Fitch expects leverage - measured by
net debt/adjusted inventory, including guarantees provided to and
net assets of joint ventures and associates - to stay at around 40%
over the next two years. Fitch assumes the company will spend
around 40% of attributable sales proceeds to acquire land, as it
has sufficient land bank to support its contracted sales scale with
a moderate sales growth target. Ronshine deleveraged in 2019 and
2018 and management is committed to optimising its debt structure
and lowering funding costs.
High Quality, Diversified Land Bank: Fitch expects Ronshine's
diversified land bank and focus on higher-tier cities to sustain
the company's sales scale over the next two years. Ronshine had
attributable land bank of 13.3 million square metres (sq m) at
end-2019, up from 12.9 million sq m at end-2018. Ronshine's 200
projects cover 44 cities across China, with a focus on Tier 1 and 2
cities, which accounted for 80% of its land bank by area at
end-2019.
Healthy Margin: Fitch sees Ronshine's land cost as competitive in
light of its high-quality land bank and believes it will maintain
an EBITDA margin of 25%-28%. Ronshine has been securing low-cost
primary and secondary co-development projects in the cities of
Zhengzhou in Henan province and Taiyuan in Shanxi province since
2016 and continues to co-operate with large developers to bid for
land in high-tier cities to limit competition and acquire land at
reasonable prices in auctions. Its EBITDA margin, after adding back
capitalised interest in cost of goods sold, was 29% in 2019. Its
average land bank cost of CNY6,897/sq m accounted for 32% of its
contracted average selling price in 2019.
Scale Constrains Rating: Ronshine's attributable contracted sales
scale of CNY64 billion in 2019 was slightly higher than that of
most of its 'BB-' peers but significantly lower than that of 'BB'
peers whose attributable contracted sales were around CNY90 billion
and above. Fitch estimates that Ronshine's attributable sales scale
will remain stable at CNY60 billion-70 billion in 2020 as Ronshine
has set its total sales target at CNY150 billion for 2020 in light
of its diversified and quality land bank as well as sellable
resources of CNY220 billion in 2020. Fitch believes the company's
moderate sales growth of 6% means that it will not need to
aggressively increase land reserves. The company's total contracted
sales rose 16% to CNY141.3 billion in 2019, mainly driven by an
increase in gross floor area sold.
Improved Debt Structure and Liquidity: Ronshine has improved its
debt structure by extending its debt maturity through a swap of
USD390 million in senior notes in February 2019, the early
redemption of a CNY1.8 billion private corporate bond and the
repurchase of its USD65 million 8.25% senior notes due 2021 in June
2019. Its cash/short-term debt ratio improved to 1.9x by end-2019
from 1.0x at end-2018.
High Non-Controlling Interest: Ronshine's non-controlling interest
accounted for about 60% of total equity, which is high among peers.
This reduces its financial flexibility as homebuilders with lower
NCI can potentially dispose of stakes in projects to reduce
leverage.
DERIVATION SUMMARY
Ronshine's attributable contracted sales scale of about CNY64
billion is slightly larger than that of most 'BB-' peers of around
CNY50 billion-60 billion. Its diversified and quality land bank is
comparable with that of Yuzhou Properties Company Limited
(BB-/Stable). Ronshine's leverage is slightly better than that of
'BB-' rated peers, as its leverage has continuously improved to
below 40%, but it has a higher ratio of NCI to total equity.
Ronshine's attributable sales of CNY64 billion in 2019 were less
than that of 'BB' peers, such as Logan Property Holdings Company
Limited (BB/Stable) whose attributable sales in 2019 were around
CNY90 billion.
Ronshine's business scale and asset quality are stronger than that
of 'B+' rated peers, such as Helenbergh China Holdings Limited
(B+/Stable) and Zhongliang Holdings Group Company Limited
(B+/Stable). Ronshine has stronger profitability and lower leverage
than Helenbergh and more sustainable and predictable financials
than Zhongliang.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
- Attributable contracted sales growth of 0% in 2020 and 3% in
2021-2022 (2019: 4%)
- EBITDA margin, after adding back capitalised interest in COGS,
of 25%-30% in 2020-2022 (2019: 29%)
- Land acquisitions to account for around 40% of contracted sales
proceeds in 2020-2022 (2019: 31%)
- Construction cash outflow to account for around 32%-35% of
contracted sales proceeds in 2020-2022. (2019: 27%)
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Leverage, measured by net debt/adjusted inventory, including
guaranteed debt for joint ventures and associates, sustained below
35% (2019: 38.5%)
- Significant increase in attributable contracted sales scale to
be in line with those of 'BB' rated peers
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage, measured by net debt/adjusted inventory, including
guaranteed debt for joint ventures and associates, above 45% for a
sustained period
- EBITDA margin, after adding back capitalised interest in COGS,
below 25% for a sustained period
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Ronshine had a cash balance of CNY34.3
billion at end-2019, including restricted cash of CNY3.3 billion,
sufficient to cover its short-term debt of CNY18.7 billion.
Ronshine in 2019 issued USD600 million of 11.25% senior unsecured
notes due 2021, a total of USD500 million of 10.5% senior notes due
2022, a total of USD435 million 8.75% senior notes due 2022 and
USD300 million 8.95% senior notes due 2023. All of the proceeds
were for refinancing purposes.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
SINIC HOLDINGS: Fitch Gives B+ LT IDR, Outlook Stable
-----------------------------------------------------
Fitch Ratings has assigned China-based homebuilder Sinic Holdings
Company Limited a Long-Term Foreign-Currency Issuer Default Rating
of 'B+' with a Stable Outlook. Fitch has also assigned Sinic a
senior unsecured rating of 'B+' with a Recovery Rating of 'RR4'.
Sinic's rating is supported by its diverse land bank, healthy
contracted sales growth, fast sales churn and good margin. Sinic's
leverage - defined by net debt (including guarantees to joint
ventures and associates)/adjusted inventory - of 57% in 2019 is
high for a 'B+' rating, which makes it a rating constraint. This is
mitigated by its quality land bank that is sufficient for
development over the next three-to-four years. This allows
flexibility in land acquisition in the next 24 months. Fitch
believes its leverage will fall gradually with its fast-churn
model, and stay below 55% in the forecast period to 2023. At the
same time, Sinic has a short operating history and a limited record
in a downcycle.
KEY RATING DRIVERS
Strong Position in Jiangxi: Sinic has strong brand recognition in
Jiangxi province and its capital, Nanchang, and was the province's
top-selling developer from 2017 to 2019. It was also the
third-largest developer in Guangdong province's Huizhou by
contracted sales in 2019. Sinic has been diversifying outside of
its home market in Jiangxi and has strengthened its presence in the
Greater Bay Area, the Yangtze River Delta and central-western
China.
It had 117 projects in 36 cities across China by end-2019, with 10%
of its land in Tier 1 cities and 55% in Tier 2 cities. Sinic's
attributable contracted sales rose by 30% in 2019 to CNY45.1
billion, with an average selling price of CNY13,083 per sq m,
mainly driven by gross floor area sold.
High Leverage: Sinic had CNY10.0 billion in net debt on its
consolidated balance sheet and also provided CNY8.6 billion in
guarantees for its JVs and associates as of end-2019. The
attributable aggregated leverage at the JVs is higher than that of
its consolidated accounts. Fitch has included the guarantees to JVs
in calculating Sinic's leverage of 57% at end-2019. (If Fitch was
to exclude the guarantees, Sinic's leverage would have been around
30% at end-2019, lower than that of many B+ peers). Fitch expects
its leverage to decline gradually and stay below 55% in the
forecast period, as the company plans to spend no more than 50% of
its sales proceeds on land acquisition and provide fewer debt
guarantees to its JVs.
Significant Minority Shareholders: Total non-controlling interest
in Sinic's balance sheet increased to CNY6.7 billion in 2019, from
CNY0.8 billion in 2018, as minority shareholders injected capital
into Sinic's projects. Non-controlling interest accounted for 45.2%
of total equity in 2019, which is relatively high among peers. This
reduces Sinic's financial flexibility compared with homebuilders
with lower non-controlling interest, which can potentially dispose
of stakes in projects to reduce leverage.
Short Operating History: Sinic only acquired its first piece of
land in 2010 and started to expand nationally from its home market,
Nanchang, in 2016, when the Chinese property sector was in an
upcycle. Its ability to weather a downturn is still untested. Its
recent effort to expand outside of its home market in Jiangxi is
also subject to execution risk. The company has operations in 21
cities with only one project each, which may lead to higher
operating costs.
Adequate Land Bank: Sinic's attributable unsold land reserves of
10.4 million sq m at end-2019 are sufficient for development over
the next three-to-four years. This means the company is not under
immediate pressure to replenish its land bank to sustain contracted
sales growth, which gives it more room to lower its leverage and
control its land cost. Fitch believes cautious land acquisition
will help its EBITDA margin stay above 28% in 2020 and above 24% in
the forecast period.
Improved Access to Funding: Sinic's cost of funding has been
relatively high at more than 9%, but Fitch expects this to fall as
more expensive trust loans are replaced with lower-cost financing.
Its IPO in November 2019 also improved its access to funding. The
proportion of bank borrowings increased over the past 3 years and
as of end-2019, 57% of its debts are bank loans. The company
continues to replace onshore costly trust and asset management
company loans with onshore and offshore funding including bonds,
asset-backed securities and syndicated loans.
DERIVATION SUMMARY
Sinic's business profile is supported by its leading market
position in Jiangxi, healthy margins, and operating scale. Its
attributable contracted sales scale of CNY45 billion in 2019 is
larger than that of Fantasia Holdings Group Co., Limited
(B+/Stable) and Hopson Development Holdings Limited (B+/Stable).
Sinic's contracted sales scale is 15% larger than that of Hong Kong
JunFa Property Company Limited (B+/Stable). Sinic's better
land-bank quality is evident from its higher ASP in 4M20. Sinic's
land bank is also more widely spread across China compared with
Junfa's land bank, which is highly concentrated in Kunming. Sinic
has a higher churn rate in terms of contracted sales to total debt
but a lower EBITDA margin. Junfa has much stronger recurring income
interest coverage and lower leverage.
Sinic's ratings are mainly constrained by its financial profile.
The company's CNY8.6 billion in guarantees to its JVs and
associates accounted for 25% of total debt on its consolidated
balance sheet. Its leverage, including guarantees to JVs and
associates, of 57% at end-2019 is higher than that of most of its
'B+' rated peers, which have leverage below 50%.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
- Land-bank life will stay above three years in 2020-2023
- GFA acquired is 0.9x-1.0x of its GFA sold in 2020-2023
- ASP to rise 20% in 2020 and 2% per year in 2021-2023
- Development-property cost of goods sold kept at 71% of sales in
2020-2023
- Selling, general and administrative expenses at 4.3% of
contracted sales in 2020-2023
- Dividend payout ratio of 25% in 2020-2023
Recovery Assumptions:
- 25% haircut to net inventory and JV proportionate consolidated
adjusted inventory in light of Sinic's EBITDA margin of around
25%-30%
- 70% haircut to investment properties
- 30% haircut to account receivables
- 60% standard haircut to net property, plant and equipment
- No haircut on restricted cash
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Leverage (net debt/adjusted inventory) sustained below 45%
- EBITDA margin, after adding back capitalised interest in cost
of goods sold, above 25% for a sustained period
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage (net debt/adjusted inventory) above 55% for a
sustained period
- EBITDA margin, after adding back capitalised interest in cost
of goods sold, below 20% for a sustained period
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Sinic's short-term debt amounted to CNY11.6
billion, or 44% of its total debt, as of end-December 2019.
Available cash to short-term debt was 0.9x. Its total cash of
CNY16.6 billion, after taking into account restricted cash, was
enough to cover its short-term debt by a multiple of 1.4x. Sinic's
debt maturities are concentrated in 2020-2022 with 43% of its debt
maturing in 2021 and 13% in 2022.
The company is committed to improving its debt-maturity profile and
capital structure through broadening its financing channels to
support its long-term growth sustainably. Sinic's IPO in 2019
reduces its reliance on debt financing. It plans to lengthen its
debt-maturity profile through various funding options, such as both
onshore and offshore issuance, and refinancing trust loans with
bank syndicated loans.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
[*] CHINA: Considers $28 Billion of Funding to Back Troubled Banks
------------------------------------------------------------------
Bloomberg News reports that China is considering using about CNY200
billion ($28 billion) in proceeds from government bond sales to
help address risks in the banking sector, according to people
familiar with the matter.
Bloomberg says the debt will be part of the total issuance planned
by the central government in 2020, and it'll be used for measures
including re-capitalization for medium- and small-sized lenders,
the people said, asking not to be named as they're not authorized
to speak publicly. Normally, it would be the central government to
raise funds to finance such a purpose, they said, adding the plan
is still under discussion and subject to changes.
How exactly the funds will be used to help the troubled banks isn't
yet clear, the report states. The Ministry of Finance didn't
immediately respond to a request for comment on the topic,
Bloomberg says.
According to Bloomberg, China's central bank is trying to bring
down borrowing costs across the economy to stimulate demand and
help China grow out of the slump in the first quarter caused by the
pandemic. That combined with rising bad loans and policies to give
loan holidays to businesses will likely further squeeze the asset
quality of the banking sector, especially the smaller ones.
"It's inevitable that banks' asset quality will be affected when
the downward pressure in the economy is big," Bloomberg quotes
People's Bank of China Deputy Governor Pan Gongsheng as saying at a
press conference last week, adding the regulators have asked banks
to increase buffers and loan write-offs to prepare for a worsening
situation over the next few years.
Bloomberg adds that China's government plans to sell as much as
CNY8.51 trillion of new debt this year, including CNY3.76 trillion
of general bonds, CNY3.75 trillion of special infrastructure bonds
and CNY1 trillion of anti-virus bonds. China sold CNY270 billion of
special sovereign bonds in 1998 to re-capitalize the then four
state-owned banks.
Bloomberg relates that China's banking regulator said in January it
will implement a series of measures to shore up the nation's
troubled smaller banks and insurers, such as carving out bad loans
and promoting mergers, capital injections and the restructuring of
high risk institutions. Other steps include setting up a resolution
fund and bridge banks while introducing new investors and allowing
market-oriented exits.
Many of China's 3,000 small banks are coping with a mountain of bad
loans and capital shortage, Bloomberg notes. At least three
regional lenders were bailed out or rescued last year costing at
least $18 billion.
Bloomberg says Chinese banks are poised to post an unprecedented
drop in profits this year as they grapple with the fallout of the
coronavirus. Lenders face additional credit costs of almost CNY1.6
trillion, S&P Global forecast in April, warning the sharp increase
would pressure their profitability and capital strength, Bloomberg
adds.
=================
H O N G K O N G
=================
CATHAY PACIFIC: Plans US$5BB Government-Backed Recapitalization
---------------------------------------------------------------
Manuel Baigorri and Will Davies at Bloomberg News report that
Cathay Pacific Airways Ltd. became the latest global carrier to
seek a lifeline in the aftermath of Covid-19 travel restrictions,
outlining a plan to raise HK$39 billion ($5 billion) from the Hong
Kong government and shareholders after months of warnings about the
frailty of its business.
The rights issue proposal, reported earlier on June 9 by Bloomberg
News, is on the basis of seven rights shares for every 11 existing
shares held and would raise about HK$11.7 billion, Cathay said in a
statement to the Hong Kong stock exchange June 9. The preference
shares will be sold to the government for HK$19.5 billion along
with HK$1.95 billion of warrants, subject to adjustment.
Aviation 2020 Ltd., a Hong Kong government-connected entity, is
extending a HK$7.8 billion bridge loan. The government will own
6.08% of Cathay through Aviation 2020 after the deal, Bloomberg
notes.
"Cathay Pacific has explored available options and believes that a
recapitalisation is required to ensure it has sufficient liquidity
to weather this current crisis," the airline said in the statement,
Bloomberg relays.
Bloomberg says carriers around the world have been searching for
funds after the coronavirus wiped out passenger demand and grounded
fleets. Governments have devoted more than $85 billion to propping
up airlines, including the major U.S. carriers and Germany's
Deutsche Lufthansa AG, which secured about $10 billion in state
support. Even so, global air traffic may only get back to 50% to
60% of usual levels by year-end.
Cathay and main shareholders Swire Pacific Ltd. and Air China Ltd.
suspended trading June 9, pending the announcement, Bloomberg
notes.
Cathay and Swire Pacific applied to resume trading June 10. Shares
are expected to fall, said Kelvin Lau, an analyst at Daiwa Capital
Markets Hong Kong Ltd.
"The rights issue will have a dilution effect and that's going to
be reflected in share prices when trading resumes," Bloomberg
quotes Mr. Lau as saying.
Bloomberg relates that Cathay also will implement another round of
executive pay cuts and a second voluntary leave program for
employees. The airline is losing cash at a rate of as much as HK$3
billion a month since February.
"In the longer term, all aspects of the Cathay Pacific Group's
business model will be re-evaluated," the company, as cited by
Bloomberg, said.
Cathay isn't alone in seeking help, the report states. In Asia,
Singapore Airlines Ltd. raised SGD8.8 billion ($6.3 billion) in a
rights issue last week and has since secured new credit lines and
loans, while South Korean authorities are pumping another KRW1
trillion ($834 million) into Korean Air Lines Co., Yonhap News
said.
According to Bloomberg, the pandemic has hit Cathay particularly
hard because -- like Singapore Airlines -- it has no domestic
market to fall back on, whereas carriers in China are rebuilding
capacity on flights within the mainland. Passenger revenue is about
1% of prior year levels, Cathay said.
"These funds, along with other efforts like selling some of their
planes and possible job cuts, could help tide them over for about 2
years," Bloomberg qutes Shukor Yusof, founder of aviation
consulting firm Endau Analytics in Malaysia, as saying. "But the
long-term view of Cathay remains uncertain."
Even before the pandemic, Cathay was under enormous financial and
political strains as it found itself caught up in the Hong Kong
anti-government protests, which affected traffic numbers and led to
the exit of the company's former chief executive officer, Bloomberg
relays. Cathay was criticized by China, protesters and its own
workers for its response to the demonstrations.
Air China has owned about 30% of Cathay for more than a decade,
while Swire, one of the last remaining British trading companies
based in Hong Kong, has a 45% stake. Qatar Airways has a 9.99%
holding, Bloomberg discloses.
Cathay and its Cathay Dragon unit posted an unaudited net loss of
HK$4.5 billion ($581 million) in the first four months of the year
as their route network shrank to just 14 destinations, Bloomberg
discloses. In April, the two carriers combined flew only 458
passengers a day, on average, and Cathay warned that international
travel demand will take a few years to recover. Cathay also owns
Hong Kong Express, a budget carrier that has grounded its fleet
since March.
More than 25,000 Cathay staff agreed to take part in an unpaid
leave program announced in February that required employees take
three weeks off between March 1 and June 30, Bloomberg recalls. The
acceptance rate was lower for crew and pilots, the most expensive
employees, a person familiar with the plans said at the time.
Cathay posted an unaudited loss of more than HK$2 billion in
February alone, Bloomberg discloses.
About Cathay Pacific
Cathay Pacific Airways Ltd., also known as Cathay Pacific or
Cathay, is the flag carrier of Hong Kong, with its head office and
main hub located at Hong Kong International Airport.
As reported in the Troubled Company Reporter-Asia Pacific on May
14, 2020, Egan-Jones Ratings Company, on April 29, 2020, downgraded
the foreign currency and local currency senior unsecured ratings on
debt issued by Cathay Pacific Airways Ltd to B- from B. EJR also
downgraded the rating on commercial paper issued by the Company to
C from B.
=========
I N D I A
=========
AGRON LOGISTICS: ICRA Keeps D INR10cr Debt Rating in Not Coop.
--------------------------------------------------------------
ICRA said the rating for the bank facilities of Agron Logistics
India Private Limited (ALIPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 10.00 [ICRA]D ISSUER NOT COOPERATING;
limits Rating continues to remain under
'Issuer Not Cooperating' category
Rationale
The rating for the INR10.00 crore bank facilities of Agron
Logistics India Private limited continue to remain under 'Issuer
Not Cooperating' category. The rating is denoted as "[ICRA]D;
ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Incorporated in 2006, Agron Logistics India Private Limited is
promoted by Mr. Sadanand Pandey. ALIPL is a logistic service
provider primarily engaged in providing full truck load bulk cargo
transportation services on an annual contract basis. The company
operates a fleet of around 500 trucks, out of which 63 trucks are
owned and the remaining are leased by the company. The company also
provides value added services like couriering, freight forwarding
and warehousing to its customers as per their requirements with its
warehouses located across the country.
APM INFRASTRUCTURE: ICRA Keeps B Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA said the rating for the bank facilities of APM Infrastructure
Private Limited (APM) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 8.50 [ICRA]B (Stable) ISSUER NOT
Fund based/ COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term/ 7.00 [ICRA] A4; ISSUER NOT
Bank Guarantee COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the INR15.50 crore bank facilities of APM continue
to remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]B (Stable)/A4; ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
APM, incorporated in 2005, was initially involved in construction
and renovation work, primarily for the Group companies. In FY2016
and FY2017, the company recorded a major portion of the revenue
from export–cargo handling services acting as a sub-contractor
for Celebi Delhi Cargo Terminal Management India Private Limited at
the airport in New Delhi. APM is a part of the Agarwal Movers
Group, which consists of a number of companies that are primarily
involved in the logistics sector, with the leading ones being
Agarwal Packers & Movers, DRS Logistics Private Limited and DRS
Warehousing (North) Private Limited.
BARAMATI TOLLWAYS: ICRA Keeps D INR36.17cr Debt Rating in Not Coop.
-------------------------------------------------------------------
ICRA said the rating for the bank facilities of Baramati Tollways
Private Limited (BTPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based– 36.17 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Rating continues to remain under
the 'Issuer Not Cooperating'
category
Rationale
The ratings for the INR36.17 crore term loans of BTPL remains under
the 'Issuer Not Cooperating' category. The rating is denoted as
'[ICRA]D ISSUER NOT COOPERATING'.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA, basis the best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Baramati Tollways Private Limited (BTPL), is a Special Purpose
Vehicle (SPV) set up by the MEP Infrastructure Group for the
purpose of toll collection, construction of a bridge on Build
Operate Transfer (BOT) basis and maintenance of roads at Baramati
City, Maharashtra, along with the development of a land piece at
Jalochi Grampanchayat.
BASANTDEVI CHARITABLE: ICRA Keeps D INR15cr Debt Rating in Non-coop
-------------------------------------------------------------------
ICRA said the rating for the bank facilities of Basantdevi
Charitable Trust continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 15.00 [ICRA]D; ISSUER NOT COOPERATING;
Term Loan Rating Continues to remain under
Issuer not cooperating category
Rationale
The ratings for the INR15.00-crore bank facilities of Basantdevi
Charitable Trust continues to remain under 'Issuer Not Cooperating'
category'. The ratings are denoted as "[ICRA]D
ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of theentity.
Formed in 1991, Basantdevi Charitable Trust runs 6 educational
institutions under the flagship brand name 'MITS Group' in Rayagada
and Bhubaneswar in Odisha. The trust established its first college
named 'Majhighariani Institute of Technology & Science (MITS)' in
1991. Over the years the trust has added various courses under the
same college and also five other colleges/institutions.
BOURN HALL: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Bourn Hall International India Private Limited
Block G, Greenwood City
Sector-40
Gurgaon 122001
Insolvency Commencement Date: May 29, 2020
Court: National Company Law Tribunal, Chandigarh Bench
Estimated date of closure of
insolvency resolution process: November 24, 2020
Insolvency professional: Madan Gopal Jindal
Interim Resolution
Professional: Madan Gopal Jindal
M.G. Jindal & Associates
SCO: 7-8, 4th Floor
Jandu Tower
G.T. Road
Miller Ganj
Ludhiana (Punjab)
141003
E-mail: mgjindal@gmail.com
Last date for
submission of claims: June 12, 2020
DAHYABHAI B: ICRA Keeps B+ Debt Rating in Not Cooperating
---------------------------------------------------------
ICRA said the rating for the bank facilities of Dahyabhai B Patel
(DBP) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 4.00 [ICRA]B+ (Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Non fund-based 5.00 [ICRA]A4; ISSUER NOT
Bank Guarantee COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the bank facilities for INR9.00 crore of DBP
continues to remain under 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+ (Stable)/A4; ISSUER NOT
COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Vadodara, Gujarat based Dahyabhai B Patel (DBP) was established in
1982,and is engaged in civil construction business. The firm is an
approved contractor in 'AA' class and 'Special Category I Building'
class from the state government of Gujarat and has successfully
completed various road construction projects majorly in Gujarat.
DWARKADHIS BUILDWELL: ICRA Keeps B INR15cr Debt Rating in Not Coop.
-------------------------------------------------------------------
ICRA said the rating for the bank facilities of Dwarkadhis
Buildwell Pvt. Ltd. (DBPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Non 15.00 [ICRA]B (Stable); ISSUER NOT
Fund Based COOPERATING; Rating continues
to remain in 'Issuer Not
Cooperating' category
Rationale
The ratings for the INR15.00 crore bank facilities of DBPL continue
to remain under Issuer Not Cooperating category. The long-term
rating is denoted as [ICRA] B (Stable) ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis dated information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity.
Dwarkadhis Buildwell Pvt. Ltd. (DBPL) was incorporated in 2005 and
is the flagship company of Dwarkadhis Group which is promoted by
Mr. Jai Bhagwan Garg and his brother Mr. Bal Krishan Garg. They
entered in the real estate sector in 2002 and were involved in
construction of floors in Shalimar Bagh. DBPL is undertaking a
plotted development project spread across 60.73 acres of land
parcel in Sector 23, Dharuhera, District Rewari (Haryana) under the
name 'DwarkadhisCity'. The company initially received licence for
developing 60.73 acre of land and started development on this since
2006. In August-2013, it received LOI from Directorate Town &
Country Planning, Haryana to develop additional adjoining land of
15.91 acres. The land is owned by the promoters and group
companies. The project mainly comprises of development of
residential plots, while development of commercial plots would be
undertaken in the future and the area is earmarked for the same.
The development on 60.73 acres of land is completed; the occupation
certificate is pending and is under process. The work on the
adjoining 15.91 acres land is started and LOI received in
August-2013, the bookings for this would commence in next couple of
years.
EMTEX ENGINEERING: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Emtex Engineering Private Limited
Khasra No. 401 & 402, 1st Floor
Near Kaluram Market
Ghitorni, New Delhi 110030
Insolvency Commencement Date: June 2, 2020
Court: National Company Law Tribunal, Delhi Bench
Estimated date of closure of
insolvency resolution process: November 29, 2020
(180 days from commencement)
Insolvency professional: Hardev Singh
Interim Resolution
Professional: Hardev Singh
101, Plot No. 6, LSC
Vardhman Rajdhani Plaza
New Rajdhani Enclave
Delhi 110092
E-mail: singh_hardev@rediffmail.com
emtexcirp@gmail.com
Last date for
submission of claims: June 16, 2020
G R CONSTRUCTIONS: ICRA Cuts Rating on INR8.0cr LT Loan to B+
-------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of G R
Constructions (GRC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.00 [ICRA]B+(Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating downgraded
from [ICRA]BB (Stable) and
moved to 'Issuer Not
Cooperating' category
Long Term- 2.20 [ICRA]B+(Stable) ISSUER NOT
Fund Based TL COOPERATING; Rating downgraded
from [ICRA]BB (Stable) and
moved to 'Issuer Not
Cooperating' category
Long Term/ 25.00 [ICRA]B+(Stable)/[ICRA]A4
Short Term- ISSUER NOT COOPERATING;
Non Fund Based Long term rating Downgraded
from [ICRA]BB (Stable) and
ratings moved to 'Issuer Not
Cooperating' category
Long Term/ 10.00 [ICRA]B+(Stable) ISSUER NOT
Short Term- COOPERATING; Rating downgraded
Unallocated from [ICRA]BB (Stable) and
moved to 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding G R Constructions performance and hence the uncertainty
around its credit risk. ICRA assesses whether the information
available about the entity is commensurate with its rating and
reviews the same as per its "Policy in respect of non-cooperation
by the rated entity". The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with G R Constructions, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Further, the firm had opted for the moratorium on payments
permitted by the RBI in March. The formal approval for March, April
and May 2020 is awaited from the lender. As guided by the SEBI vide
its circular dated March 30, 2020, ICRA has not considered the
above as a default. However, if there is no official deferment
communication from the lending institutions in due course, ICRA
would review the above stance on default recognition.
G R Constructions (GRC) is a proprietorship firm engaged in civil
construction, primarily roads, and has started building works for
Hindustan Petroleum Corporation Limited (HPCL) from FY2017. It was
founded by Mr. K Gangadharan Rao in the year 1998 and operates in
and around Visakhapatnam (VSP). Currently the firm has two
divisions - construction and petrol pump division.
G. R. WEAVERS: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA said the rating for the bank facilities of G. R. Weavers
Private Ltd. (GRW) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 5.75 [ICRA]B+ (Stable) ISSUER NOT
Fund based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 13.00 [ICRA]B+ (Stable) ISSUER NOT
Fund based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Short Term- 5.00 [ICRA]A4; ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
'Issuer Not Cooperating' category
ICRA has continued the ratings for the INR23.75 crore bank
facilities of GRW. The rating is now denoted as
"[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING"; Rating
continues to remain under 'Issuer Not Cooperating' category. ICRA
has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
G. R. Weavers Private Ltd. (GRW) was incorporated in March 2013 and
is into manufacturing of PP/HDPE woven sacks/bags. The company's
manufacturing facility is located in Morena district of Madhya
Pradesh and has an installed capacity of 4,400 MT per annum. The
company started its operations in April 2015 and primarily supplies
the bags to cement manufacturers.
GIRIRAJ INDUSTRIES: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA said the rating for the bank facilities of Giriraj Industries
(GI) continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 1.20 [ICRA]D; ISSUER NOT COOPERATING;
Term Loan Rating continues to remain under
'Issuer Not Cooperating' category
Fund based- 13.80 [ICRA]D; ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain under
'Issuer Not Cooperating' category
Fund based 2.00 [ICRA]D; ISSUER NOT COOPERATING;
Demand Loan Rating continues to remain under
Against 'Issuer Not Cooperating' category
Warehouse
Receipt
Rationale
The rating for the bank facilities for INR17.00 crore of GI
continues to remain under 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D/D; ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Established in 1996, Giriraj Industries (GI) is engaged in
processing of raw cotton to produce cotton bales and cotton seeds
as well as trading of related commodities like cotton seed oil and
cotton seed oil cakes. The firm has a manufacturing unit in
Manavadar, Gujarat and is equipped with thirty ginning machines and
one manual pressing machine with a capacity to process 36 MT of raw
cotton per day.
GSL NOVA: Insolvency Resolution Process Case Summary
----------------------------------------------------
Debtor: GSL Nova Petrochemicals Limited
396, 403, Moraiya Village
Sarkhej-Bavla Highway
Sanand, Ahmedabad
GJ 382210
IN
Insolvency Commencement Date: March 18, 2020
Court: National Company Law Tribunal, Surat Bench
Estimated date of closure of
insolvency resolution process: November 29, 2020
Insolvency professional: CA Kailash Thanmal Shah
Interim Resolution
Professional: CA Kailash Thanmal Shah
505, 21st Century Business Centre
Near World Trade Centre
Ring Road, Surat 395002
E-mail: ipktshah@gmail.com
cirp.gslnova@gmail.com
Last date for
submission of claims: June 16, 2020
HOMERA TANNING: ICRA Keeps B+ Debt Rating in Not Cooperating
------------------------------------------------------------
ICRA said the rating for the bank facilities of Homera Tanning
Industries Private Limited (HTIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Fund 30.00 [ICRA]B+ (Stable); ISSUER NOT
Based/CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term-Non 12.24 [ICRA]A4; ISSUER NOT
Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term/ 4.50 [ICRA]B+ (Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING; Rating
Fund Based continues to remain under
'Issuer Not Cooperating'
Category
Long Term/ 0.12 [ICRA]B+ (Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING; Rating
Unallocated continues to remain under
'Issuer Not Cooperating'
Category
Rationale
The ratings for the INR46.86 crore bank facilities of HTIPL
continue to remain under Issuer Not Cooperating category. The
long-term rating is denoted as [ICRA]B+ ISSUER NOT COOPERATING with
a Stable outlook and short-term rating is denoted as [ICRA]A4
ISSUER NOT COOPERATING.
As part of its process and in accordance with its rating agreement
with Homera Tanning Industries Private Limited, ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
HTIPL was incorporated in 1987 by Mr. Rizwan Ullah and his family
members. The company is involved in the manufacture and export of
finished leather and shoe uppers. Its Kanpur-based tannery
manufactures cow-finished leather for shoes and bags and
buffalo-finished leather for upholstery. In addition, the company
manufactures buffalo finished leather for fashion and safety shoes.
HOTLINE GLASS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Hotline Glass Limited
202, Sangam Apartment
Tansen Nagar, Gwalior
Madhya Pradesh
India 474003
Insolvency Commencement Date: March 13, 2020
Court: National Company Law Tribunal, Indore Bench
Estimated date of closure of
insolvency resolution process: September 9, 2020
(180 days from commencement)
Insolvency professional: Jigar Shah
Interim Resolution
Professional: Jigar Shah
AAA Solvency Professionals LLP
B/801 Gopal Place
Nr. Shiromani Complex
Nehrunagar Cross Road
Nehrunagar, Ahmedabad
Gujarat, India 380015
E-mail: ip.jigar@gmail.com
hotlineglass@aaainsolvency.com
Last date for
submission of claims: June 12, 2020
J.R. FOODS: ICRA Keeps 'D' Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the rating for the bank facilities of J R Foods Limited
(JRFL) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 9.40 [ICRA]D; ISSUER NOT COOPERATING;
Fund Based/CC Rating continue to remain under
the 'Issuer Not Cooperating'
category
Long Term- 2.30 [ICRA]D; ISSUER NOT COOPERATING;
Fund Based TL Rating continue to remain under
the 'Issuer Not Cooperating'
category
Short Term- 35.75 [ICRA]D; ISSUER NOT COOPERATING;
Non Fund Based Rating continue to remain under
the 'Issuer Not Cooperating'
category
Rationale
The ratings for the INR47.45 crore bank facilities of JRFL to
remain under Issuer Not Cooperating category. The ratings are
denoted as [ICRA]D ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis dated information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity.
Incorporated in 1993, J R Foods Limited (JRFL) was promoted by Mr.
J.K. Kothari and refines edible oil from crude palm oil (CPO), rice
bran and other edible vegetable oil. Apart from refinery, the
company has solvent extraction plants. The company's manufacturing
facility is located on the Villupuram-Pondicherry National Highway
in Tamil Nadu. The refinery capacity is 300 MTPD and the solvent
extraction capacity is 400 TPD. However, the company derives about
95% of its operating income from oil refinery as the solvent
extraction unit remains almost unutilised.
JAY ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA said the rating for the bank facilities of Jay Enterprises
continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 7.00 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain
under 'Issuer Not Cooperating'
category
Unallocated 5.00 [ICRA]D ISSUER NOT COOPERATING;
limits Rating continues to remain
under 'Issuer Not Cooperating'
category
Rationale
The rating for the INR12.00 crore bank facilities of Jay
Enterprises continue to remain under 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Jay Enterprise was incorporated in 2010 as a proprietorship firm
and was later converted to a partnership firm in April 2013. Since
its inception, the firm has been carrying on the activity of
trading in finished fabrics. JE at present deals in variety of
fabrics, such as- polyester fabric, synthetic fabrics, cotton
fabrics and others. JE has a registered office and a warehouse on a
rental basis located at Surat, Gujarat.
KRISHNAIAH MOTORS: ICRA Cuts Rating on INR15cr LT Loan to B+
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Krishnaiah Motors Private Limited (KMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 15.00 [ICRA]B+ (Stable) ISSUER NOT
Fund based- COOPERATING; Rating downgraded
Cash Credit from [ICRA]BB- (Stable) and
Moved to issuer not cooperating
Category
Long Term– 9.50 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
Moved to issuer not cooperating
Category
Rationale
The rating downgrade is because of lack of adequate information
regarding KMPL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Krishnaiah Motors Private Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance,
but despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
KMPL, established in 2002 by Major (Retd) P.T Choudary, is a MSIL
dealer in passenger cars in Hyderabad under the name "ACER Motors";
KMPL is involved in the sales of new cars and used cars, service of
vehicles along with sale of spare parts. The company has two
showrooms and two service centres in Hyderabad. The stockyard of
the company is located at Alwal.
LENORA VITRIFIED: ICRA Hikes Rating on INR13cr Term Loan to B
-------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Lenora
Vitrified LLP's (LVL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 13.00 [ICRA]B (Stable); Upgraded from
Term Loan [ICRA]D
Fund-based 9.00 [ICRA]B (Stable); Upgraded from
Cash Credit [ICRA]D
Non-fund 2.50 [ICRA]A4; Upgraded from [ICRA]D
Based Bank
Guarantee
Unallocated 7.50 [ICRA]B (Stable)/A4; Upgraded
from [ICRA]D/D
Rationale
The upgrade in ratings takes into account the regularisation in LVL
debt service obligations. The rating continues to derive comfort
from the extensive experience of the partners in the ceramic
industry and its proximity to raw material sources by virtue of its
presence in the ceramic hub-Morbi (Gujarat).
The ratings, however, are constrained by the weak financial risk
profile, characterised by thin profit margins, leveraged capital
structure, weak coverage indicators, high working capital intensity
and stretched liquidity position. The ratings also factor in the
intense competition in the ceramic industry and the exposure of the
firm's profitability to volatility in raw material and fuel prices.
Further, ICRA notes the exposure of the firm's operations and cash
flows to the cyclicality of the real-estate industry, which is the
main end-user sector. The Stable outlook on the [ICRA]B rating
reflects ICRA's opinion that Lenora Vitrified LLP (LVL) will
continue to benefit from the experience of its promoters in the
ceramic industry.
Key rating drivers
Credit strengths
* Extensive experience of promoters in ceramic industry: The
partners of the firm have extensive experience in the ceramic
industry through their associations with other companies in the
ceramic industry.
* Location-specific advantages: The location of the firm's
manufacturing facility in the ceramic tiles hub of Morbi (Gujarat)
enables easy access to quality raw materials and allows savings in
transportation cost.
Credit challenges
* Weak financial risk profile: The firm's scale of operations
remains modest; the operating income was INR56.15 crore in FY2019,
increasing from INR40.96 crore in FY2018 (being first full year of
operations). In 11MFY2020, the firm achieved an operating income of
INR61.76 crore. The operating profit margin moderated to 12.78% in
FY2019 from 18.11% in FY2018 as high competition lowered the
realisation. With high depreciation and interest cost, the firm
reported low net margin, at 0.81% in FY2019. The capital structure
remained leveraged, with gearing at 2.09 times as on March 31,
2019. The debt coverage indicators also remain weak owing to low
profitability—the Total Debt/OPBDITA was 3.89 times, TOL/TNW of
3.21 times as on FY2019-end. The working capital intensity remained
high, with NWC/OI at 20% as on FY2019-end, due to stretched
receivables, to support which the creditors were also stretched.
* Vulnerability of profitability to adverse fluctuations in raw
material and fuel prices: Raw material and fuel are the two major
components that determine the cost competitiveness in the ceramic
industry. The firm has, however, little control over the prices of
its key inputs such as natural gas/coal and raw materials, and thus
the profit margins remain exposed to adverse movement in raw
material and gas/coal prices as the ability to pass on any upward
movement in cost to the
customers remains limited due to stiff competition. Additionally,
in the near term, the operations would be impacted in case of
elongation of current scenario and other aligned regulatory
restrictions owing to the Covid-19 pandemic.
* Intense competition and cyclicality in real estate industry: The
ceramic tile manufacturing industry is highly competitive because
of low-entry barriers. The presence of both organised as well as
numerous unorganised players in Gujarat limits the company's
pricing flexibility and the bargaining power with customers,
thereby putting pressure on its revenues and margins. Further, the
real estate industry is the major end user of ceramic tiles, and
hence the company's profitability and cash flows are highly
vulnerable to the cyclicality in the real estate industry.
Liquidity position: Stretched
The overall liquidity situation is expected to remain tight because
of the high working capital requirements, impending debt repayment
and absence of cushion in the cash credit limits. Hence, timely
support from promoters through capital infusion/ unsecured loans
remains crucial in case of any cash flow mismatch.
Rating sensitivities
Positive triggers - ICRA could upgrade LVL's rating if sustained
increase in scale and profitability leads to higher-thanexpected
cash accruals for the firm, and better working capital management
strengthens the overall financial risk profile.
Negative triggers - Negative pressure on LVL's rating could arise
if any substantial decline in revenues and profitability leads to
lower-than-expected cash accruals, which along with any major
debt-funded capital expenditure or stretch in working capital
cycle, leads to further deterioration in the capital structure and
liquidity.
Established in July 2016 as a limited liability partnership firm,
Lenora Vitrified LLP (LVL) manufactures glazed vitrified tiles. It
commenced operations in April 2017. The firm's manufacturing unit
is situated at Morbi in Gujarat and has an installed capacity of
22,80,000 boxes of tiles per annum. The partners of the firm have
extensive experience in the ceramic industry by virtue of being
associated with other ceramic companies.
In FY2019, the firm reported a net profit of INR0.45 crore on an
operating income (OI) of INR56.15 crore compared to a net loss of
INR0.47 crore on an OI of INR40.96 crore in FY2018. The firm
reported an OI of INR61.76 crore in 11MFY2020 (provisional
financial statement).
MAHI FORMALINE: ICRA Keeps 'B' Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA said the rating for the bank facilities of Mahi Formaline (MF)
continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 3.50 [ICRA]B (Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based- 5.00 [ICRA]B (Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the bank facilities for INR8.50 crore of MF
continues to remain under 'Issuer Not Cooperating' category. The
rating is now denoted as "[ICRA]B (Stable); ISSUER NOT
COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Mahi Formaline (MF) was established on November 15, 2014 with the
objective to set up a Greenfield project to manufacture methanol
based organic chemical such as Formaldehyde and its derivatives
such as Urea Formaldehyde, Melamine Formaldehyde, Phenolic resin
and Hexamine. Most of the resins find application in the furniture
industry for manufacture of Plywood, Particle Boards, and Laminates
whereas few find application in pharmaceuticals and paints
industry. The promoters have a long-standing experience in the
particle board manufacturing industry by the virtue of their
association with other particle board-oriented firms.
MAIL ORDER: ICRA Keeps 'D' Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the rating for the bank facilities of Mail Order Solution
(India) Private Limited (MOS) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term- 22.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based– Rating continues to remain
Cash Credit under 'Issuer Not Cooperating'
category
Long term-Fund 5.50 [ICRA]D ISSUER NOT COOPERATING;
Based–term loan Rating continues to remain
under 'Issuer Not Cooperating'
category
Rationale
The rating for the INR27.50 crore bank facilities of MOS continue
to remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D; ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Incorporated in 2004, MOS is engaged in providing integrated
marketing communication services to clients, largely direct
marketing companies, for the purpose of sending direct mails to a
targeted group of customers. MOS' services include printing and
distribution of mail packs (promotional inserts, corporate
communications, etc) for direct marketing, which requires concept
development, creative designing, pre-press activities, print
production personalization, mailing, distribution and fulfillment.
MOS manages all aspects of print projects from concept creation to
delivery in one place. It has presence across all product
categories – bills, catalogues, periodicals, promotional inserts,
and corporate communications for printing, personalization and
distribution. Besides integrated service portfolio, MOS also
benefits from the significant investment undertaken by it for
building the in-house capacities and software purchase/development,
in addition to network building. It also has license arrangements
with logistics service providers like La Poste, Royal Mail and
Swiss Post International for mail delivery.
MEP SANJOSE KANTE: ICRA Cuts Rating on INR371.83cr Loan to B-
-------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of MEP
Sanjose Kante Waked Road Private Limited (MSKWRPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan 371.83 [ICRA]B- (Stable) ISSUER NOT
COOPERATING; rating downgraded
from [ICRA]BB+(CE) (Stable)
and continues to remain under
'Issuer Not Cooperating' category
Non-fund based (36.72) [ICRA]B- (Stable) ISSUER NOT
Limit (sub- COOPERATING; rating downgraded
limit of term from [ICRA]BB+(CE) (Stable)
loan) and continues to remain under
'Issuer Not Cooperating' category
Fund based 5.00 [ICRA]B- (Stable) ISSUER NOT
Working Capital COOPERATING; rating downgraded
from [ICRA]BB+(CE) (Stable)
and continues to remain under
'Issuer Not Cooperating' category
Rationale
The rating is downgraded because of lack of adequate information
regarding MSKWRPL's performance and hence the uncertainty around
its credit risk. Further, despite the corporate guarantee from MEP
Infrastructure Developers Limited for MSKWRPL's bank lines, in
ICRA's opinion, the rating does not benefit from credit
enhancement.
ICRA assesses whether the information available about the entity is
commensurate with its rating and reviews the same as per its
"Policy in respect of non-cooperation by the rated entity". The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with MEP Sanjose Kante Waked Road Private Limited, ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
MEP Sanjose Kante Waked Road Private Limited (MSKWRPL) is a Special
Purpose Vehicle (SPV) promoted by MEP Infrastructure Developers Ltd
(MEPIDL) in joint venture with Sanjose India Infrastructure &
Construction Pvt. Ltd. (SIICPL) for implementing a road project
involving upgradation from two-lane to four-lane of Kante Waked
road in the state of Maharashtra from Km 281.30 to Km 332.30 (Total
Length 50.90 km) and construction of additional 2 lanes. The
project is awarded under the National Highway Development Project -
IV (NHDP-IV) on Hybrid Annuity mode (HAM). The bid project cost is
INR826.28 crore and has a concession period of 17 years (including
2 years of construction period).
MEP SANJOSE: ICRA Lowers Rating on INR266.84cr Loan to B-
---------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of MEP
Sanjose Arawali Kante Road Private Limited (MSAKRPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan 266.84 [ICRA]B- (Stable) ISSUER NOT
COOPERATING; rating downgraded
From [ICRA]BB+(CE) (Stable) and
continues to remain under 'Issuer
Not Cooperating' category
Non-fund (26.36) [ICRA]B- (Stable) ISSUER NOT
based limit COOPERATING; rating downgraded
(sub-limit From [ICRA]BB+(CE) (Stable) and
of term loan) continues to remain under 'Issuer
Not Cooperating' category
Fund based 20.00 [ICRA]B- (Stable) ISSUER NOT
Working Capital COOPERATING; rating downgraded
From [ICRA]BB+(CE) (Stable) and
continues to remain under 'Issuer
Not Cooperating' category
Rationale
The rating is downgraded because of lack of adequate information
regarding MSAKRPL's performance and hence the uncertainty around
its credit risk. Further, despite the corporate guarantee from MEP
Infrastructure Developers Limited for MSAKRPL's bank lines, in
ICRA's opinion, the rating does not benefit from credit
enhancement.
ICRA assesses whether the information available about the entity is
commensurate with its rating and reviews the same as per its
"Policy in respect of non-cooperation by the rated entity". The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity, despite the downgrade. As part of its process and in
accordance with its rating agreement with MEP Sanjose Arawali Kante
Road Private Limited, ICRA has been trying to seek information from
the entity so as to monitor its performance, but despite repeated
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
MEP Sanjose Arawali Kante Road Private Limited (MSAKRPL) is a
Special Purpose Vehicle (SPV) promoted by MEP Infrastructure
Developers Ltd (MEPIDL) in joint venture with Sanjose India
Infrastructure & Construction Pvt. Ltd. (SIICPL) for implementing a
road project involving upgradation from two-lane to four-lane of
Arawali Kante road in the state of Maharashtra from Km 241.30 to Km
281.30 (total length 39.24 Km) and construction of additional 2
lanes. The project is awarded under the National Highway
Development Project - IV (NHDP-IV) on Hybrid Annuity mode (HAM).
The bid project cost is INR592.98 crore and has a concession period
of 17 years (including 2 years of construction period).
NATH SOLVENT: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Nath Solvent Extractions Pvt Ltd
192, K.M. Stone
G.T. Road
Vill. Mohra
Ambala
Haryana 133004
Insolvency Commencement Date: May 18, 2020
Court: National Company Law Tribunal, Chandigarh Bench
Estimated date of closure of
insolvency resolution process: November 13, 2020
(180 days from commencement)
Insolvency professional: Krishan Rajesh Chaudhary
Interim Resolution
Professional: Krishan Rajesh Chaudhary
879, Sector 40
Near Community Center
Gurgaon, Haryana 122001
E-mail: krajeshchaudhary@gmail.com
- and -
405, New Delhi House
27 Barakhamba Road
Connaught Place
New Delhi 110001
E-mail: cirp.nse@gmail.com
Last date for
submission of claims: June 1, 2020
OUR CO: ICRA Lowers Rating on INR81cr Loan to 'D'
-------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Our Co.
Infrastructure Developers Private Limited (OCIDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term 3.00 [ICRA]D ISSUER NOT COOPERATING;
Fund based/ Rating downgraded from [ICRA]BB
Overdraft (Stable) and continues to remain
under 'Issuer Not Cooperating'
category
Long-Term 81.00 [ICRA]D ISSUER NOT COOPERATING;
Fund based/ Rating downgraded from [ICRA]BB
Term loan (Stable) and continues to remain
under 'Issuer Not Cooperating'
category
Rationale
The rating downgrade reflects the delay in debt-servicing. The
rating is based on limited information on the entity's performance
since the time it was last rated in March 20, 2019. The lenders,
investors and other market participants are thus advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity,
despite the downgrade.
As part of its process and in accordance with its rating agreement
with Our Co. Infrastructure Developers Private Limited, ICRA has
been trying to seek information from the entity so as to monitor
its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. In the absence of
requisite information and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
Liquidity position: Poor
Our Co. Infrastructure Developers Private Limited liquidity profile
is weak as reflected by irregularities in debt servicing
by entity.
OCIDPL is a private limited company established on September 13,
2007 with an aim of taking up construction projects for Mother's
Pride Group across Delhi – NCR region. The company was inactive
in the initial years and was looking at land in Delhi where it
could set up the building and infrastructure for a Mother's Pride
school. Land of 4.5 acre was purchased in 2013 in sector 57,
Gurgaon where it was proposed to set up 'Presidium' brand of
school.
Initially, it was proposed to construct two Blocks namely Block A
and Block B (Phase – I). Subsequently, in August 2013, Bank of
India sanctioned a term loan of Rs 35 crore and the Company started
working on the project. However, expecting more demand, the Company
proposed to expand its school operations and build additional
infrastructure to support this demand. In this expansion, the
Company has envisaged some additional infrastructure in Blocks A &
B, and a whole new Block C having classrooms and facilities for
extra-curricular activities (like sports, music etc.) (Phase –
II).
PANCHSHEEL SOLVENT: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA said the rating for the bank facilities of Panchsheel Solvent
Private Limited (PSPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based– 12.25 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Rating continues to remain under
'Issuer Not Cooperating' category
Fund Based– 12.50 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain under
'Issuer Not Cooperating' category
Rationale
The rating for the INR24.75 crore bank facilities of PSPL continue
to remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D; ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Incorporated in 2008, PSPL was promoted by the Lalani family. Prior
to this, the management was engaged in the manufacturing of poultry
feed and PET bottles through its group entities. PSPL is currently
engaged in extracting edible refined rice bran oil with an
installed capacity of 1,50,000 tonnes per annum (TPA) and 30,000
TPA of refining unit. Besides, PSPL has flexibility to refine other
crude oils in the same plant and therefore, started refining
cottonseed crude oil since February 2015. The manufacturing
facility of the company is located at Rajnandgaon, Chhattisgarh.
S. P. JAISWAL: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA said the rating for the bank facilities of S. P. Jaiswal
Estates Private Limited (SPJEPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 6.00 [ICRA]B+ (stable); ISSUER NOT
Cash Credit COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Fund Based- 30.40 [ICRA]B+ (stable); ISSUER NOT
Term Loan COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Fund Based– 2.50 [ICRA]B+ (stable); ISSUER NOT
Overdraft COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Non Fund 2.00 [ICRA]A4; ISSUER NOT
Based–Letter COOPERATING; Rating Continues
Of Credit/ to remain under issuer not
Bank Guarantee cooperating category
Unallocated 24.10 [ICRA]B+ (stable)/[ICRA]A4;
limits ISSUER NOT COOPERATING; Rating
Continues to remain under issuer
not cooperating category
Rationale
The ratings for the INR65.00-crore bank facilities of SPJEPL
continues to remain under 'Issuer Not Cooperating' category'. The
ratings are denoted as "[ICRA]B+ (stable)/[ICRA]A4 ISSUER NOT
COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of theentity.
SPJEPL, the flagship company of the HHI Group, was incorporated in
1964 and had set up of a hotel in Kolkata under the brand name The
Hotel Hindusthan International (HHI), which started commercial
operation in 1969. Subsequently, the company had set up a hotel in
Varanasi in 1988. Another hotel was set up in Bhubaneswar in 2007
under the group company, UHPL. SPJEPL acquired a hotel in Bengaluru
under its wholly-owned subsidiary, Sharadhayane Lakshmi Hotels Pvt.
Ltd. in September 2011. Previously, the hotel in Bhubaneswar used
to be run by SPJEPL. However, with the expiry of the lease contract
with UHPL in FY2013, the operations of the Bhubaneswar property are
now being managed by UHPL. In April, 2012, the group started
another hotel in Pune which is owned by OHPL, a wholly-owned
subsidiary of UHPL. However, OHPL has leased out the property in
Pune to UHPL. At present, the HHI Group has a total inventory of
483 rooms spread across five cities (Kolkata, Varanasi,
Bhubaneswar, Bengaluru and Pune). The company also runs a multiplex
in Kolkata by the name of Hind Inox and runs a hotel management
institute - Regency HHI Institute of Hotel Management & Catering
Technology - in Varanasi. The property of Hind Inox has been leased
out to SPJEPL by the group company, HPPL.
SHALLOW CERAMIC: ICRA Moves B+ Debt Ratings to Not Cooperating
--------------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Shallow Ceramic Pvt. Ltd. (SFPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based– 2.21 [ICRA]B+ (Stable); ISSUER NOT
Term Loan COOPERATING; Rating moved to
'Issuer Not Cooperating'
Category
Fund-based– 4.00 [ICRA]B+ (Stable); ISSUER NOT
Cash Credit COOPERATING; Rating moved to
'Issuer Not Cooperating'
Category
Non-fund 1.70 [ICRA]A4; ISSUER NOT
based–Bank COOPERATING; Rating moved to
Guarantee 'Issuer Not Cooperating'
Category
Unallocated 1.19 [ICRA]B+ (Stable); ISSUER NOT
Limits COOPERATING; Rating moved to
'Issuer Not Cooperating'
Category
Rationale
The rating for the bank facilities for INR9.10 crore of SFPL moved
to 'Issuer Not Cooperating' category. The rating is now denoted as
[ICRA]B+ (Stable)/A4; ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately
reflect the credit risk profile of the entity.
Incorporated in May 2014, Shallow Ceramic Pvt. Ltd. (SCPL)
manufactures ceramic wall tiles. The company's manufacturing
facility located in Morbi, Gujarat, with an installed capacity of
manufacturing 32,000 MTPA, became operational in February 2015.
SCPL currently manufactures digitally-printed ceramic wall tiles in
two sizes, 10 cm X 15 cm and 12 cm X 18 cm. The promoters have
extensive experience in the ceramic industry through their
association with another tile-manufacturing entity; Segway
Ceramics.
In FY2018, the company reported a net profit of INR0.11 crore on an
operating income (OI) of INR22.52 crore as against a net profit of
INR0.01 crore on an OI of INR16.2 crore.
SHYAM COTTEX: ICRA Keeps 'B' Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA said the rating for the bank facilities of Shyam Cottex (SC)
continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 1.38 [ICRA]B (Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based-
Cash Credit 4.00 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the bank facilities for INR5.38 crore of SC
continues to remain under 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B (Stable); ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Established in April 2014, Shyam Cottex is a partnership firm,
engaged in the business of ginning and pressing of raw cotton to
produce cotton bales and cotton seeds. The manufacturing facility
of the firm is located at Jivapar, (distt: Rajkot) and is currently
equipped with 24 ginning machines and 1 pressing machine having a
capacity to produce 250 cotton bales per day. The firm mainly deals
in Shankar-6 type of raw cotton.
SIDWIN FABRIC: ICRA Migrates B+ Debt Ratings to Not Cooperating
---------------------------------------------------------------
ICRA Ratings has migrated the rating on bank facilities of Sidwin
Fabric Private Limited (SFPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 5.00 [ICRA]B+ (Stable); ISSUER NOT
limit COOPERATING; Rating moved to
'Issuer Not Cooperating'
Category
Unallocated 5.03 [ICRA] B+ (Stable)/A4; ISSUER NOT
Limits COOPERATING; Rating moved to
'Issuer Not Cooperating' category
Rationale
The rating for the bank facilities for INR10.03 crore of SFPL moved
to 'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]B+ (Stable)/A4; ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Incorporated in the 2011, Sidwin Fabric Private Limited (SFPL)
manufactures non-woven polypropylene fabrics. The company commenced
commercial production from June 2012 from its manufacturing
facility in Himatnagar. The annual installed capacity of the unit
is dependent on the linear density, expressed in GSM (gram per
square metre) of the fabric being manufactured, which is around
2,700 MTPA. With the existing machinery, the company can
manufacture nonwoven fabrics of GSM ranging from 8-200 and having
width of 3.2 metres. The company's products find application in
various industries such as agriculture, medical and hygiene and
packaging.
STABLE PACKAGING: ICRA Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA said the rating for the bank facilities of Stable Packaging
Private Limited (SPPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.00 [ICRA]B+ (Stable) ISSUER NOT
Fund based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term– 8.00 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term– 1.00 [ICRA] A4; ISSUER NOT
Non fund COOPERATING; Rating continues
Based to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the INR15.00 crore bank facilities of SPPL continue
to remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]B+ (Stable)/A4; ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
SPPL was incorporated in 2009 and is engaged in the packaging
business wherein it manufactures products such as plastic bags,
carry bags, garbage bags and other related packaging products.
Apart from carrying manufacturing activity, the company is also
involved in the trading of various packaging products such as paper
bags, corrugated boxes, plastic granules, plastic bags, plastic
films etc. The manufacturing facility of the company is located in
Noida SEZ.
SUNSHINE EXPORTS: ICRA Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
ICRA said the rating for the bank facilities of Sunshine Exports
(SE) continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short term 6.00 [ICRA]D ISSUER NOT COOPERATING;
Fund based Rating continues to remain under
Limits 'Issuer Not Cooperating' category
Rationale
The rating for the INR6.00 crore bank facilities of SE continue to
remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D; ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Sunshine Exports (SE), established in the year 2006, is a
proprietorship firm based out of Nagpur, Maharashtra. The firm is
managed by its proprietor, Mrs. Aruna Moorthy and her husband, Mr.
DTS Moorthy. The firm is engaged in export of Agro products,
primarily rice and sugar.
TRUFORM TECHNO: ICRA Keeps 'D' Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA said the rating for the bank facilities of Truform Techno
Products Limited continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT Scale: Fund 4.25 [ICRA]D; ISSUER NOT COOPERATING;
Based term Rating Continues to remain under
loan limits Issuer not cooperating category
LT Scale: Fund 5.75 [ICRA]D; ISSUER NOT COOPERATING;
Based cash Rating Continues to remain under
credit limits Issuer not cooperating category
ST Scale: Letter 1.00 [ICRA]D; ISSUER NOT COOPERATING;
of credit limits Rating Continues to remain under
Issuer not cooperating category
Rationale
The ratings for the INR11.00-crore bank facilities of Truform
Techno Continues to remain under 'Issuer Not Cooperating'
category'. The ratings are denoted as "[ICRA]D/[ICRA]D ISSUER NOT
COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Established in 1993, Truform Techno Products Limited (Truform), a
closely held public limited company is engaged in manufacturing of
cast iron and ductile iron pipes, fittings, flanges and castings in
various grades which principally find application in water line
fittings as well as rough iron fittings used in industrial
applications. The company's manufacturing facility and
administrative and sales office are in Nagpur, Maharashtra.
Currently, business operations are managed by Mr. Kaushal Mohta.
UNITED HOTELS: ICRA Keeps 'C' Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA said the rating for the bank facilities of United Hotels &
Properties Private Limited (UHPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 2.50 [ICRA]C; ISSUER NOT COOPERATING;
Cash Credit Rating Continues to remain under
Issuer not cooperating category
Fund Based- 9.50 [ICRA]C; ISSUER NOT COOPERATING;
Term Loan
Unallocated 23.00 [ICRA]C/[ICRA]A4; ISSUER NOT
limits COOPERATING; Rating Continues to
remain under issuer not
cooperating category
Rationale
The ratings for the INR35.00-crore bank facilities of UHPL
continues to remain under 'Issuer Not Cooperating' category'. The
ratings are denoted as "[ICRA]C/[ICRA]A4 ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Incorporated in 1992, UHPL was acquired by the present management
in 2007. UHPL had leased out its assets (land, building and other
equipment) in Bhubaneswar to S. P. Jaiswal Estates Private Limited
(SPJEPL), the flagship company of the HHI Group, till FY2012. From
FY2013, the company is managing the Bhubaneswar property and has
set up a hotel in Pune, branded The HHI Pune.
VIDYA PRASARINI: ICRA Keeps 'D' Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA said the rating for the bank facilities of Vidya Prasarini
Sabha (VPS) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 13.45 [ICRA]D; ISSUER NOT COOPERATING;
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Unallocated
Limits 0.30 [ICRA]D; ISSUER NOT COOPERATING;
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the INR13.75 crore bank facilities of VPS continue
to remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Vidya Prasarini Sabha (VPS) was established in 1923 with an aim to
provide education to various verticals of the society. At present,
VPS runs around twenty-two education institutes in Pune and
Lonavala, which includes Engineering college, BSC College, BCA
College, Jr. Colleges, high schools and Institutes for computer
courses with a total strength of around 11,800 students, of which
around 7400 students come under government sponsored schools while
remaining 4400 students come under private schools, Jr. Colleges
and other institutes.
XS REAL: ICRA Lowers Rating on INR20.0cr LT Loan to B+
------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of XS Real
Properties Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 20.00 [ICRA]B+(Stable); ISSUER NOT
Unallocated COOPERATING; Rating Downgraded
Facilities from [ICRA]BB+(Stable) and
Continues to remain under
'Issuer Not Cooperating'
category
Rationale
The rating is downgraded because of lack of adequate information
regarding Xs Real performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Xs Real Properties Private Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance,
but despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
Incorporated in 1995 and promoted by Mr. S.G. Prabhakharan, XS Real
Properties Private Limited is a real-estate developer based out of
Chennai. As on date, the company has completed 19 projects, with a
cumulative built-up area of 2.5 million square feet. Though the
operations of the company were primarily limited to Chennai, it has
recently entered into the Coimbatore market. The company has
reputed brand strength in three segments namely, XS Real Xqist in
the luxury segment, XS Real Vibe in the mid segment and XS Real
FairSquare in the affordable segment.
Mr. S. G. Prabhakharan has served as the President of Madras
Chamber of Commerce and Industry. He has been a nonindependent and
non-executive director of The Lakshmi Vilas Bank Limited since June
23, 2009. He was instrumental in setting up the country's first
private sector mutual fund, in collaboration with Pioneer Mutual
Fund, Boston, USA in 1993. He is a realtor having had sterling
practise of law from 1978 to 1994.
[*] INDIA: Lenders Need Capital to Face Virus, Banker Says
----------------------------------------------------------
Bloomberg News reports that India should prepare to inject capital
into state banks, and private-sector lenders need to strengthen
their balance sheets, to help bolster the economy against the
coronavirus pandemic, according to a senior banker.
"I do believe the government will have to be ready to support
public sector banks with capital," Bloomberg quotes Uday Kotak, the
billionaire founder of Kotak Mahindra Bank Ltd., as saying.
A legacy of bad loans, a shadow banking implosion and a historic
bank bailout in March have left Indian lenders weakened coming into
the lockdown, which has stalled the economy and led to a surge in
unemployment, Bloomberg says. According to a Credit Suisse Group AG
report last month, the lenders need to raise $20 billion of
capital, of which state banks will require $13 billion, to
strengthen buffers against potential loan defaults, Bloomberg
relays.
"My advice to both private-sector banks and non-bank financial
companies is: make yourself stronger, fortress your balance
sheets," Mr. Kotak said in an interview. "And if that means raising
capital, go ahead and do it."
Bloomberg relates that Mr. Kotak, who was appointed last week as
the president of the Confederation of Indian Industry, has been
following his own advice. In recent weeks, Kotak Mahindra Bank has
raised close to $1 billion via the sale of shares to bolster
capital buffers. Uday Kotak himself raised a similar amount by
selling shares in the bank.
According to Bloomberg, Prime Minister Narendra Modi has promised a
$277 billion stimulus package to revive the economy, but economists
are still expecting gross domestic product to contract in the
fiscal year through March 2021, which would be the first decline in
more than four decades.
Bloomberg notes that Modi's stimulus is heavily reliant on more
lending from state banks, though the government did not earmark any
funds to recapitalize the sector in the current year's budget.
Still, Finance Minister Nirmala Sitharaman said it will remain
flexible about injecting capital if the need arises.
Other private-sector banks including Yes Bank Ltd. and IndusInd
Bank Ltd. have been looking to raise capital, though State Bank of
India said on June 5 it doesn't need to increase its buffers given
its healthy profits, Bloomberg says.
Mr. Kotak, 61, said it's a good time for Indian firms to tap the
financial markets, as a backup to seeking loans from the banking
sector.
"There is a bank-led model and there is a market-led model. I am
glad the market model is performing significantly better during the
Covid crisis," Mr. Kotak, as cited by Bloomberg, said.
Indian firms have raised a record INR3.83 trillion ($50.7 billion)
via bonds so far this year, compared with INR3.62 trillion a year
ago, according to data compiled by Bloomberg. Equity issuance has
been more muted at INR678 billion.
Mr. Kotak said one focus as head of the industry confederaton will
be improving corporate governance at Indian companies. Appointed
head of Infrastructure Leasing & Financing Services Ltd. after the
non-bank lender defaulted in 2018, Mr. Kotak is already playing a
key role in proposing solutions to the shadow banking crisis.
Bloomberg adds the road ahead for the non-bank lenders will be
difficult, Mr. Kotak said. "Financing business is a tough business
and it will test the principle of survival of the fittest."
=================
I N D O N E S I A
=================
CIPUTRA DEVELOPMENT: Fitch Affirms LT IDR at BB-, Outlook Neg.
--------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating of
Indonesia-based property developer PT Ciputra Development Tbk at
'BB-'. The Outlook remains Negative. At the same time, Fitch
Ratings Indonesia has downgraded wholly owned subsidiary PT Ciputra
Residence's National Long-Term Rating to 'A(idn)' from 'A+(idn)'
with a Negative Outlook.
The Negative Outlook reflects its view of the significant
challenges CTRA will face and its very limited rating headroom in
the near term. CTRA's attributable pre-sales have been below IDR5
trillion, the level at which Fitch would consider negative rating
action, and the pandemic has amplified the risks property
developers face amid weak property demand over the next 12-18
months.
CTRA had strong take-up rates across its various projects earlier
in 2020 before the government imposed social distancing measures.
However, the coronavirus pandemic has stalled CTRA's progress of
recording IDR5 trillion in attributable pre-sales. This underpins
the affirmation of the ratings. Fitch believes CTRA needs to be
able to book a minimum of IDR4 trillion of pre-sales in 2020 for
the company to show an adequate trajectory to reach the IDR5
trillion threshold in the medium term.
CTRR's rating is based on the consolidated profile of its parent,
CTRA. The downgrade of CTRR's National Long-Term Rating follows its
assessment of the company's weakening credit profile relative to
its nationally rated peers.
'A' National Ratings denote expectations of a low level of default
risk relative to other issuers or obligations in the same country
or monetary union.
KEY RATING DRIVERS
Limited Rating Headroom: Fitch expects attributable pre-sales to
return to the IDR5 trillion level only by 2022, although CTRA would
need to be moving towards this level by 2020. Fitch expects at
least 50% yoy decline in pre-sales in 2Q20, with some easing in
subsequent quarters although Fitch believes there are considerable
risks in its recovery expectations, particularly the pandemic's
duration, the economic conditions after the pandemic — including
unemployment and household income trends — and the effect of the
crisis on consumer behaviour.
Weaker commodity prices, in particular thermal coal and crude palm
oil, will negatively affect exports while the Indonesian rupiah is
increasingly volatile. This, coupled with generally tightening
financial conditions, will add another challenge to Indonesian GDP
growth and depress demand for home purchases for most of the year.
Diversified Portfolio, Established Record: Fitch believes CTRA's
rating is supported by its strong market position as one of
Indonesia's largest and most diversified property developers by
product, geography and segmentation, which allow the company to
market its products to a wider range of consumers and should lead
to a steep recovery trajectory once the pandemic subsides. The
company had over 75 residential and commercial projects across 33
Indonesian cities at end-2019, the most across all Fitch-rated
developers.
CTRA's significant exposure to the mid and low-to-mid-end market,
which is driven by first-time home buyers, will improve its
pre-sales in the medium term, as demand in the segment is less
sensitive through cycles. Products in this segment, defined as
homes priced below IDR2 billion/unit, accounted for 73% of CTRA's
consolidated pre-sales in 2019, up from 64% in 2018. Fitch believes
this strategy helped the company outperform its peers as 1Q20
attributable pre-sales rose 5% yoy, compared with the 22% average
decline across all Fitch-tracked developers. Fitch believes CTRA
can restore its operating performance in a timely manner once the
operating environment stabilises.
Sizeable Land Bank: CTRA had around 2,341 hectares of land bank at
end-2019 across the country, with a sizeable presence in the main
urban areas of Greater Jakarta and Greater Surabaya. The large land
bank ensures project longevity, especially when land prices are
rising. The Ciputra group also jointly develops projects with land
owners on a profit- or revenue-sharing basis, helping it expand its
operational scale while limiting the balance-sheet burden. Fitch
expects CTRA to provide support to joint ventures to the extent of
its shareholdings due to the reputational risk and Fitch has
proportionately consolidated the key financials of major
subsidiaries when computing CTRA's financial metrics.
Rating Based on Consolidated Profile: CTRA and its subsidiaries
have moderate overall intra-group operational and legal linkages
that stem from comfortable access to cash within the group, common
shareholders and board members among the group companies, and a
negative pledge provision in the documents for CTRA's Singapore
dollar bond that covers all its principal subsidiaries. There are
also risks to the overall reputation of the group from the use of
the 'Ciputra' brand. Fitch believes these linkages give CTRA strong
operational control over its subsidiaries and therefore they
operate as a single entity.
DERIVATION SUMMARY
CTRA's rating on the international scale may be compared with that
of PT Pakuwon Jati Tbk (BB/Stable), PT Bumi Serpong Damai Tbk (BSD;
BB-/Stable), PT Modernland Realty Tbk (B/Rating Watch Negative
(RWN)), PT Kawasan Industri Jababeka Tbk (B/Negative) and PT Alam
Sutera Realty Tbk (B-/RWN).
Pakuwon is one of Indonesia's leading mixed-use property developers
with the majority of its operating cash flows from its large
investment-property portfolio. Pakuwon is rated higher than CTRA
because of its superior non-development income base and more
conservative capital structure, which lead to significantly
stronger non-development interest cover. Pakuwon's higher rating is
also supported by wider profit margins and stronger free cash
flow.
Fitch believes BSD and CTRA have similar business risk profiles,
with comparable property pre-sales scale as the two largest
developers in Indonesia. Both companies have a strong record in the
domestic property market and benefit from added financial
flexibility from their non-development property cash flows. BSD is
more geographically concentrated than CTRA, with the majority of
its pre-sales from its mature BSD City township. However, Fitch
believes BSD has higher sales flexibility stemming from its larger
land bank, which allows BSD to sell large land parcels to
co-developers and investors, providing cash flow support during
slow demand periods. Fitch believes this, combined with BSD's
stronger non-development interest cover, gives it a more resilient
profile and results in its Stable Outlook relative to CTRA's
Negative Outlook.
Fitch believes CTRA's higher rating relative to Modernland,
Jababeka and Alam Sutera is underpinned by CTRA's significantly
larger operating pre-sales, supplemented by its healthy
non-development interest cover, better geographical diversification
in its land bank and projects, lower leverage and exposure to
cyclical industrial land sales, and a stronger liquidity position.
CTRR, which is rated based on the consolidated profile of CTRA, may
be compared on the national scale with Jababeka (BBB+(idn)/Stable),
PT PP Properti Tbk (PPRO; BBB-(idn)/Negative) and PT Sri Rejeki
Isman Tbk (Sritex; A+(idn)/Stable). Fitch believes Jababeka's
business profile is weaker because CTRR has a significantly larger
operating pre-sales scale, more geographically diversified projects
and lower business cyclicality due to exposure to residential
property sales as opposed to Jababeka's industrial land sales. CTRR
also has lower leverage than Jababeka.
Fitch believes CTRR's higher operating pre-sales, wider profit
margin, lower leverage and stronger non-development interest cover
relative to PPRO, combined with CTRR's better geographical
diversification and more established record in residential and
commercial property development, warrant a multiple-notch
difference between the ratings of the two companies.
Sritex and CTRR both have a strong market position as the leading
players in their respective industries. Nevertheless, Fitch
believes Sritex's larger operating EBITDA scale, combined with
CTRA's relatively more cyclical business given its exposure to
property sales, warrant a one-notch rating difference between their
rating on the national scale.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
- Attributable pre-sales of IDR3 trillion-4 trillion in 2020
- Discretionary land acquisition spending of around IDR400
billion-500 billion in 2020 and IDR500 billion-600 billion in 2021
- Total construction capex of around IDR3 trillion in 2020
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Presales improvement in line with Fitch's expectations, leading
to annual attributable presales of more than IDR5 trillion by 2022,
may lead to a revision of the Outlook to Stable
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability to improve attributable pre-sales to more than IDR5
trillion by 2022, with minimum of IDR4 trillion achieved in 2020.
- Weakening in overall legal and operational ties between the
parent and the operating subsidiaries
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: CTRA had around IDR4.2 trillion of
consolidated cash and around IDR1.1 trillion of undrawn debt
facilities as of March 31, 2020, compared with around IDR1.1
trillion of short-term debt maturities, of which around IDR635
billion comprised short-term working-capital facilities that would
be typically rolled over in the normal course of business in light
of CTRA's established record and strong market position as a
leading property developer in Indonesia.
CTRA's liquidity is supported by its relatively large cash balance,
diversified funding access to domestic and international bond
markets and strong access to the domestic banking market. CTRA's
large pool of unpledged assets also provides the company with
additional financing avenues if required; Fitch estimates CTRA's
unencumbered asset/unsecured debt ratio was around 2x as of March
31, 2020.
Furthermore, CTRA's property-development model allows for financing
flexibility, including timing construction costs with sales, and
the discretionary nature of acquiring land bank. CTRA's long
land-reserve life also means that the company has the flexibility
to conserve cash when pre-sales are low. All these factors may
allow the company to accumulate cash and shore up its liquidity
profile if required.
SUMMARY OF FINANCIAL ADJUSTMENTS
- CTRA reports land purchase costs under investment cash flows
(capex). Fitch has removed these costs from cash flow from
investments and included them under cash flow from operations as
working capital.
- The company reports land bank as a long-term asset on its
balance sheet. Fitch has classified land bank as part of current
inventory due to the nature of CTRA's business of land development
and sales. Fitch has also classified advances from customers as
part of working capital.
- Fitch has moved 'final tax' to after the 'profit before income
tax' line in the income statement.
- Fitch has proportionately consolidated the key financials of
CTRA's major subsidiaries to reflect significant minority
interests
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
PT Ciputra Development Tbk
- LT IDR BB-; Affirmed
- Senior unsecured; LT BB-; Affirmed
PT Ciputra Residence
- Natl LT A(idn); Downgrade
- Senior unsecured; Natl LT A+(idn); Downgrade
- Senior unsecured; Natl LT A(idn); Downgrade
=========
J A P A N
=========
[*] JAPAN: 61 Firms Went Bankrupt in May Due to Coronavirus
-----------------------------------------------------------
The Japan Times reports that the number of corporate bankruptcies
in May stemming from the COVID-19 pandemic stood at 61, Tokyo Shoko
Research Ltd. said June 8.
The data covered failures that left liabilities of JPY10 million or
more, the report discloses citing the credit research firm.
According to The Japan Times, a Tokyo Shoko Research official said
that midsize companies increasingly may go bust due chiefly to
production adjustments by big companies from now on.
The Japan Times relates that the cumulative number of bankruptcies
caused by the spread of the novel coronavirus from February through
June 8 reached 221 across 42 of the 47 prefectures.
The accommodation sector was hit hardest by the pandemic, with 35
bankruptcy cases, followed by the restaurant industry, with 34.
The Japan Times says the overall number of corporate bankruptcies
with debts of JPY10 million or more in the country in May tumbled
54.8 percent from a year before, or 57.7 percent from the previous
month, to 314, the lowest level since June 1964, when the figure
stood at 295.
This apparently came after courts and law firms reduced operations
necessary for business failures amid the pandemic, sources familiar
with the situation said, The Japan Times relays.
Total liabilities left by failed companies in May sagged 24.3
percent from a year earlier to JPY81.34 billion, their first fall
in three months. In reality, however, an increasing number of
companies are apparently facing financing difficulties, the sources
said.
The Japan Times adds that the Tokyo Shoko Research official said
that total liabilities "may return to high levels starting around
summer as the number of companies having financing difficulties
behind the scenes is growing."
=====================
N E W Z E A L A N D
=====================
MAX FASHIONS: May Have to Close 17 Stores, Cut Jobs
---------------------------------------------------
Stuff.co.nz reports that clothing chain Max will have to close 17
stores and cut jobs if it cannot reach a deal with landlords, after
its stores shut for seven weeks during the coronavirus lockdown.
The shutdown had taken a considerable toll on the business, said
Max Fashions managing director Jamie Whiting, Stuff relates.
According to Stuff, Mr. Whiting said the cost-cutting, including a
permanent 30 per cent pay cut for senior management, had not been
enough.
Income was not expected to recover for some time as a result of
lower consumer spending, lower foot traffic, and supply chain
disruption, he said.
"Thus we have had to make the immensely difficult decision to
potentially make significant redundancies of a number of our
dedicated staff.
"We are absolutely devastated -- but this decision had to be made
to ensure the survival of our business.
"We are a very close-knit team and to say we are proud of how our
people have conducted themselves through these challenging times
would be an understatement."
Twenty-five stores would stay open, Mr. Whiting said.
Stuff says the company proposed a formal creditor's compromise with
its landlords.
"We appreciate this is a difficult situation for all parties
involved and one which we have never encountered before -- however
with the support of the landlords we can get through this together
and rebuild our businesses," the report quotes Mr. Whiting as
saying.
If the landlords agreed to the deal, Mr. Whiting said the company
was confident it would rebuild after the restructuring, Stuff
relays.
The decision was made by directors and Max shareholders, along with
external advisors.
Max Fashions received NZD1.68 million in wage subsidy payments
offered by the Government, for 284 staff, Stuff discloses.
=====================
S O U T H K O R E A
=====================
ASIANA AIRLINES: HDC Wants to Renegotiate Acquisition Deal
----------------------------------------------------------
Yonhap News Agency reports that HDC Hyundai Development Co., a
major construction company, on June 9 called for a renegotiation
with the creditors of Asiana Airlines Inc. over its planned
acquisition of South Korea's No. 2 airline due to a sharp rise in
debts and the growing impact of the new coronavirus on the airline
industry.
In December, HDC Hyundai Development formed a consortium with major
financial group Mirae Asset Daewoo to sign a deal to acquire a
30.77 percent stake in Asiana from Kumho Asiana Group, as well as
new shares to be issued and Asiana's six affiliates, for KRW2.5
trillion (US$2.2 billion).
But airlines, hit hard by the COVID-19 pandemic, have suspended
most of their flights on international routes since March and
posted hefty losses in the first quarter, Yonhap says.
"We are still committed to acquiring Asiana, but we want the (main
creditor) Korea Development Bank and related parties to renegotiate
the acquisition terms to reflect the current market conditions and
the company's current financial status," HDC said in a statement.
Yonhap relates that HDC described the ongoing virus crisis as a
"never expected and very negative factor," which will affect its
planned acquisition of the country's second-biggest carrier.
The company also picked Asiana's snowballed debts as another reason
for the renegotiation that is "damaging the acquisition value of
the carrier," Yonhap relays.
Asiana's debts have increased by KRW4.5 trillion since July last
year and its debt-to-equity ratio skyrocketed by 16,126 percent at
the end of March from the end-July, it said.
HDC's calls for the renegotiation comes after Asiana's creditors
sent an ultimatum on June 5 to the HDC to notify them of its intent
to complete the acquisition by June 27, according to Yonhap.
Asiana's net losses for the January-March quarter deepened to
KRW683.26 billion (US$555 million) from KRW89.18 billion a year
earlier, Yonhap discloses.
HDC had reiterated its plan to acquire Asiana, dismissing
speculation that it may have difficulties in taking over the
company due to the economic fallout from the coronavirus outbreak,
adds Yonhap.
Yonhap notes that regulators in the United States, China,
Kazakhstan, Uzbekistan, Turkey and South Korea approved HDC's
planned takeover of Asiana. Russia is the only remaining country
that is still reviewing the integration.
To help Asiana stay afloat, the country's two state lenders -- the
Korea Development Bank (KDB) and the Export-Import Bank of Korea
(Eximbank) -- plan to inject a combined KRW1.7 trillionn into
Asiana, according to Yonhap. Last year, the two policy banks
extended a total of KRW1.6 trillion to the cash-strapped carrier.
In its latest self-help plans, Asiana has had all of its 10,500
employees take unpaid leave for 15 days a month since April until
business circumstances normalize, Yonhap notes. Asiana's executives
have also agreed to forgo 60 percent of their wages, though no
specific time frame was given for how long the pay cuts will remain
in effect, adds Yonhap.
Headquartered in Osoe-Dong Kangseo-Gu, South Korea, Asiana Airlines
Incorporated is engaged in air transportation, engineering,
construction, facilities, electricity, ground handling, catering,
communication, logo products and e-business. Asiana Airlines is a
unit of the Kumho Asiana Group, a South Korean conglomerate whose
business portfolio includes tire manufacturing and chemical
production.
===============
X X X X X X X X
===============
[*] Asian Companies at Higher Risk of Default This Year
-------------------------------------------------------
Asian companies are at a higher risk of default in the coming
quarters than last year, a Reuters analysis of their credit ratios
showed, as the coronavirus pandemic has squeezed revenue and made
it harder to refinance debt.
Reuters relates that one measure of how easily a company can pay
interest on outstanding debt -- operating profit to interest ratio
-- fell to the lowest in 11 years at the end of March. The sample
took into account companies worth at least $500 million with
available data on Refinitiv.
Net debt to EBITDA (earnings before interest, taxes, depreciation,
and amortisation), which shows how many years it would take a
company to pay back debt, was at its highest since June 2014,
Reuters says.
"We expected the pick-up in default rates to be mostly amongst
smaller companies who already had a stretched liquidity profile and
less access to alternative funding channels," Reuters quotes Alaa
Bushehri, head of emerging market debt at BNP Paribas Asset
Management, as saying. "This is being exacerbated now by COVID-19
lockdowns, slow-down in activity and a lower commodity
environment."
Energy, real estate and utilities firms topped default risk charts,
Reuters found.
Airlines were the worst affected with flights grounded and people
unwilling to travel. Virgin Australia, for example, entered into
voluntary administration in April.
Late last month, Moody's forecast the default rate on high-yield
debt issued by non-financial Asia-Pacific firms would climb to 6.4%
by the end of this year, from 2.3% in March, according to Reuters.
According to Reuters, some companies will try to restructure their
debt to avoid default, especially offshore debt.
That could be an uphill task as a sharp depreciation in Asian
currencies this year has increased repayment costs of companies
that have borrowed in dollars and have no natural or financial
hedges in place, said Buddhika Piyasena, head of Asia-Pacific
Corporate Ratings at Fitch Ratings.
The yield on a bond CN166986559= issued by China's Tianqi Lithium
Corp, for instance, climbed to about 60% last month on perceived
higher risk of the company missing its interest payments this year.
It is currently trading at 40%.
About $100 billion worth of dollar bonds are maturing between June
2020 and December 2021, Reuters discloses citing Refinitiv data.
"High-yield companies with weak credit quality will likely have
increasing difficulty refinancing offshore bonds, given coronavirus
induced market volatility and investors' heightened risk aversion,"
Moody's analyst Sean Hwang said in a note, Reuters relays.
"We expect investors to be increasingly selective in managing their
high-yield exposure, which will weaken low-rated companies' access
to funding."
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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thereof are US$25 each. For subscription information, contact
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