/raid1/www/Hosts/bankrupt/TCRAP_Public/200615.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, June 15, 2020, Vol. 23, No. 119
Headlines
A U S T R A L I A
CORNER NORTHCOTE: Second Creditors' Meeting Set for June 23
E K RECRUITMENT: Second Creditors' Meeting Set for June 22
ELMSDALE PTY: Second Creditors' Meeting Set for June 22
EMPIREAL LTD: First Creditors' Meeting Set for June 23
OZTOPIA HOLDINGS: Second Creditors' Meeting Set for June 22
VR UNICOS: Second Creditors' Meeting Set for June 22
C H I N A
BEIJING SOUND: Defaults on Principal Repayment on Bond Swap
MGM CHINA: Fitch Assigns BB-/RR4 Rating on New Sr. Unsec. Notes
RISESUN REAL ESTATE: Fitch Corrects Ratings Release Dated June 11
SUQIAN ECONOMIC: Fitch Affirms Then Withdraws BB- LT IDR
XUZHOU ECONOMIC: Fitch Affirms Then Withdraws 'BB' LT IDR
[*] HK Property Firm Unit Seeks to Manage Distressed Debt in China
I N D I A
A RAJA: CARE Keeps D INR7.13cr Debt Rating in Not Cooperating
ALLFLEX PLASTICS: CARE Lowers Rating on INR14.94cr LT Loan to 'C'
AMRIT AGROVET: Insolvency Resolution Process Case Summary
ARKA CARBON: CARE Keeps 'D' Debt Ratings in Not Cooperating
AVADH FIBERS: Insolvency Resolution Process Case Summary
BAG POLY: CARE Lowers Rating on INR6.23cr LT Loan to B
BALDEO METALS: Insolvency Resolution Process Case Summary
BHAI GURDAS: CARE Lowers Rating on INR2.50cr LT Loan to 'B+'
CORPORATE POWER: Insolvency Resolution Process Case Summary
DUSHMANTA GIRI: CARE Lowers Rating on INR6.5cr LT Loan to 'C'
DYNAMIC TEXTBOOKS: Insolvency Resolution Process Case Summary
HONEST DERIVATIVES: Insolvency Resolution Process Case Summary
INDIAN STATE OF KERALA: S&P Lowers Long-Term ICR to 'BB-'
INMARK RETAIL: Insolvency Resolution Process Case Summary
INTERNATIONAL LAND: CARE Cuts Rating on INR33.48cr Loan to B-
KADAM AND KADAM: CARE Lowers Rating on INR60.00cr LT Loan to 'D'
KERALA INFRASTRUCTURE: S&P Lowers ICR to 'BB-/B', Outlook Stable
KNOWLEDGE EDUCATION: CARE Keeps D INR8.50cr Debt Rating in Not Coop
LANCO MANDAKINI: Insolvency Resolution Process Case Summary
M.P.K. METALS: CARE Keeps 'D' Debt Ratings in Not Cooperating
MAHALAXMI OIL: CARE Cuts INR6.03cr LT Loan Rating to B, Not Coop.
MODI SOLVEX: CARE Lowers Rating on INR10.25cr Loan to 'B'
NAVALMAR SHIPPING: Insolvency Resolution Process Case Summary
PULKIT PROJECTS: CARE Cuts INR13cr LT Loan Rating to B
RADHE COTTON: CARE Keeps D INR5.58cr Debt Rating in Not Cooperating
RATHI STYLE: CARE Cuts INR5.0cr LT Loan Rating to B-, Not Coop.
RIDDHI SIDDHI: CARE Assigns B+ Rating to INR5.60cr LT Loan
SACOS INDIGO: Insolvency Resolution Process Case Summary
SANWARIA CONSUMER: Insolvency Resolution Process Case Summary
SHIVA WHEELS: CARE Cuts INR8.89cr LT Loan Rating to B-, Not Coop.
SPG MULTI TRADE: Insolvency Resolution Process Case Summary
SULABH PHARMACEUTICAL: CARE Cuts Rating on INR12cr Loan to D
SWASTIK CERACON: CARE Keeps D Debt Ratings in Not Cooperating
SWASTIK COAL: CARE Keeps 'D' Debt Ratings in Not Cooperating
UMESH INDUSTRIES: CARE Keeps B+ INR8.78cr Debt Rating in Not Coop.
VENKATESH ASSOCIATES: CARE Cuts Rating on INR20cr Loan to 'C'
VMA ENTERPRISES: Insolvency Resolution Process Case Summary
WOODLANDS HOUSING: CARE Cuts INR15cr Loan Rating to B-, Not Coop.
I N D O N E S I A
MNC INVESTAMA: S&P Downgrades ICR to 'CC', On Watch Negative
J A P A N
DIC CORPORATION: Moody's Withdraws Ba1 CFR for Business Reasons
MITSUBISHI HEAVY: Unit to Cut Over 50% Workforce in Restructuring
M A C A U
WYNN MACAU: S&P Puts 'BB-' Rating to $750MM Sr. Unsec. Notes
S I N G A P O R E
HYFLUX LTD: Utico Says Approached by Potential Partners in Deal
HYFLUX: Next Pre-Trial Conference Likely to be on June 19 or 22
MULHACEN PTE: Fitch Downgrades LT Issuer Default Rating to CC
T H A I L A N D
THAI AIRWAYS: No Layoffs for Now, Management Says
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A U S T R A L I A
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CORNER NORTHCOTE: Second Creditors' Meeting Set for June 23
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Corner
Northcote Pty Ltd has been set for June 23, 2020, at 12:00 p.m. at
Level 5, Suite 6, at 350 Collins Street, in Melbourne.
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 22, 2020, at 4:00 p.m.
Simon Patrick Nelson of BPS Reconstruction and Recovery was
appointed as administrator of Corner Northcote on May 20, 2020.
E K RECRUITMENT: Second Creditors' Meeting Set for June 22
----------------------------------------------------------
A second meeting of creditors in the proceedings of E K Recruitment
Pty Ltd has been set for June 22, 2020, at 11:00 a.m. at the
offices of O'Brien Palmer, Level 9, at 66 Clarence Street, in
Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 19, 2020, at 4:00 p.m.
Daniel Frisken of O'Brien Palmer was appointed as administrator of
E K Recruitment on May 15, 2020.
ELMSDALE PTY: Second Creditors' Meeting Set for June 22
-------------------------------------------------------
A second meeting of creditors in the proceedings of Elmsdale Pty
Ltd has been set for June 22, 2020, at 11:00 a.m. via
teleconference.
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 18, 2020, at 4:00 p.m.
James S McPherson and Austin R M Taylor of Meertens Chartered
Accountants were appointed as administrators of Elmsdale Pty on May
15, 2020.
EMPIREAL LTD: First Creditors' Meeting Set for June 23
------------------------------------------------------
A first meeting of the creditors in the proceedings of:
- Empireal Ltd;
- LJX Pty Limited;
- LJX Holdings Pty Limited;
- LJHRES Holdings Pty Limited; and
- LJH RES Ltd
will be held on June 23, 2020, at 11:00 a.m. via teleconference.
Philip Alexander Quinlan and Amanda Goni Coneyworth of KPMG were
appointed as administrators of Empireal Ltd et al. on June 11,
2020.
OZTOPIA HOLDINGS: Second Creditors' Meeting Set for June 22
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Oztopia
Holdings Pty Ltd, trading as Oztopia Electrical and Oztopia, has
been set for June 22, 2020, at 11:00 a.m. at QV1 Conference Centre
Level 2, Theatrette, at 250 St Georges Terrace, in Perth, WA.
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 19, 2020, at 4:00 p.m.
Jimmy Trpcevski of David Ashley Norman Hurt was appointed as
administrator of Oztopia Holdings on March 16, 2020.
VR UNICOS: Second Creditors' Meeting Set for June 22
----------------------------------------------------
A second meeting of creditors in the proceedings of VR Unicos Pty
Ltd, trading as Construct Health has been set for June 22, 2020, at
11:00 a.m. at the offices of Jirsch Sutherland, Level 9, at 120
Edward Street, in Brisbane, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 19, 2020, at 5:00 p.m.
Andrew John Spring and Christopher John Baskerville of Jirsch
Sutherland were appointed as administrators of VR Unicos on May,
2020.
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C H I N A
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BEIJING SOUND: Defaults on Principal Repayment on Bond Swap
-----------------------------------------------------------
Liang Hong and Tang Ziyi at Caixin Global report that Beijing Sound
Environmental Engineering Co. Ltd. has failed to make part of a
bond principal repayment that was due on June 8, due to tight
liquidity created by higher operating costs and lost sales during
the coronavirus.
Caixin says the defaulted bond had been a debt swap rolled over
from an earlier bond, a first for China's onshore bond market. Such
swaps are a common debt restructuring technique in offshore
markets, but have just started to take off on the Chinese
mainland.
In February, Beijing Sound warned bondholders that the company
might not be able to repay the principal and interests on its
CNY500 million ($70 million) three-year medium-term bond on time,
Caixin recalls. The company later offered investors an option in
March, allowing bondholders to swap their principal in exchange for
a newly issued bond, with a slightly higher coupon.
But the water and sewage treatment company said it was unable to
secure sufficient funding to make a repayment of 20% of the
principal of the new bond due on June 8, the first weekday after
June 6, according to a statement released by the Shanghai Clearing
House on June 11, Caixin relays. It only secured sufficient money
to repay relevant interest, the statement said.
The company said it suffered from higher operating costs and fewer
sources of cash flow due to tightened industry regulations and the
ongoing coronavirus outbreak, according to the statement cited by
Caixin.
Under the debt swap announced on March 2, the company had said it
planned to issue new one-year notes with a coupon rate of 7%,
slightly higher than the earlier rate of 6.5%.
According to Caixin, Beijing Sound had also agreed to pay 20% of
the principal and relevant interest on June 6 and another 30% on
Sept. 6. The new notes also gave bondholders an option to sell back
the bond for the remaining principal on Dec. 6, 2020.
On March 6, Beijing Sound completed the bond exchange offer. The 11
bondholders who accepted the exchange plan swapped a combined
CNY400 million of principal, or 80% of the face value of the CNY500
million notes, into the new bond, Caixin relates. The remaining
three bondholders didn't accept the offer. On the same day, Beijing
Sound failed to repay principal and interest on the remaining
CNY100 million to the investors.
China Chengxin International Credit Rating Co. Ltd. said it was
almost impossible for Beijing Sound to repay the remaining
principal and interests of the new bond on time, as the company's
cash flow hasn't significantly improved since completion of the
bond rollover, Caixin discloses citing a statement published by the
Shanghai Clearing House on June 11. Given the recent default, the
credit rating agency downgraded Beijing Sound's rating as a bond
issuer to CC from B, indicating a relatively high risk of default,
the report adds.
Beijing Sound Environmental Engineering Co., Ltd. operates waste
management businesses. The Company disposes sewage. Beijing Sound
Environmental engineering also provides equipment installation,
technology consulting, and other services.
MGM CHINA: Fitch Assigns BB-/RR4 Rating on New Sr. Unsec. Notes
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR4' rating to MGM China
Holdings Ltd's (MGM China) proposed senior unsecured notes. Fitch
rates MGM China's and MGM Resorts Internationals' (collectively,
MGM) Issuer Default Ratings (IDR) 'BB-'. The Rating Outlook is
Negative. MGM China intends to use the proceeds for revolver
paydown (USD826 million drawn as of Mar. 31, 2020) and general
corporate purposes. Fitch has also assigned a 'BB-'/'RR4' rating to
MGM China's new HKD2.34 billion senior unsecured revolver.
Fitch views the proposed issuance neutrally as it should be
leverage neutral and provides an increase to MGM China's available
liquidity, but adds more permanent debt to its capital structure.
As of May 31, 2020, MGM China had USD941 million of total liquidity
(cash and revolver availability) relative to USD65 million monthly
cash burn, or 14 months of liquidity on hand. Fitch analyzes MGM on
a consolidated basis after adjusting for distributions to minority
interests and distributions from unconsolidated entities.
Overall, Fitch deemed MGM's aggregate total liquidity heading into
the coronavirus disruption as adequate, but understands MGM's
desire to further bolster liquidity in light of the current
operating pressures and uncertainty. MGM reported $5.3 billion of
domestic cash as of May 18, 2020, pro forma for its recent domestic
note offering and $700 million MGM Growth Properties (MGP) OP unit
redemption. This is relative to a domestic cash burn rate of $270
million per month, which equals to about 20 months of liquidity
(does not incorporate dividends that MGM would receive from its MGP
OP unit ownership). The company has no debt maturities until 2022,
has materially reduced its parent dividend and is reducing or
deferring 50% of planned capex for 2020.
Fitch downgraded MGM's IDR to 'BB-' from 'BB' in March 2020 and
revised its Rating Outlook to Negative from Stable. The rating
actions reflected MGM's decreased financial flexibility following
the recent sale-leaseback transactions as well as the severe
disruption to global gaming caused by the coronavirus outbreak.
The Negative Outlook reflects the unknown depth and duration of the
coronavirus disruption. At this time, the rating takes into account
a gaming recovery that begins later this year and into 2021. The
Outlook also reflects a prolonged de-leveraging trajectory. Fitch
forecasts MGM's net adjusted leverage at 6.2x by 2022, down from
8.4x in 2021, relative to Fitch's 6.0x downgrade sensitivity. To
the extent there is increased visibility with respect to the
trajectory of the recovery and MGM's leverage returning back to
within 6.0x, Fitch could revise the Rating Outlook back to Stable.
KEY RATING DRIVERS
Coronavirus Exposure: Given the global nature of the coronavirus
pandemic, all of MGM's regions are being materially affected. MGM
entered the disruption with a number of liquidity sources and a
manageable development pipeline. MGM's cash position and the debt
incurred in 2020 will increase MGM's liquidity buffer well beyond
the $2.0 billion 2020 negative FCF Fitch is projecting. While MGM
maintains a substantial liquidity buffer, Fitch will emphasize net
leverage over gross leverage. Fitch expects MGM's gross leverage to
return back toward Fitch's downgrade sensitivities once operating
conditions start to improve and the company starts to unwind its
liquidity buffer through debt paydown, which could include paying
make-wholes.
Reduced Financial Flexibility: Following the MGM Grand transaction,
MGM has monetized all of its meaningful wholly-owned assets and the
increase in lease equivalent debt has mostly offset the decline in
traditional debt. The new fixed costs created by the Bellagio and
MGM Grand transactions have weakened MGM's domestic FCF generation,
inclusive of distributions from its subsidiaries. Fitch estimates
domestic FCF margin will be in the low-to-mid single digits after
2021, versus closer to 10% in Fitch's prior forecast before the
sale-leasebacks. MGM guarantees the two mortgages for the Bellagio
and MGM Grand/Mandalay Bay JVs, which is another negative liquidity
consideration, although a manageable one given both are collection
guarantees (Fitch does not consolidate the JV debt).
Leverage Trajectory Unclear: Consolidated rent adjusted leverage
will remain elevated should MGM achieve its target of 1x "domestic
net financial leverage." MGM has paid down $4.1 billion of
traditional debt since the end of 2018 with asset sale proceeds,
but created $4.3 billion of lease equivalent debt in the process.
Uncertainties around MGP ownership reduction make leverage
trajectory opaque, as deconsolidation will result in roughly $6.5
billion of incremental lease equivalent debt from capitalizing the
MGP master lease at 8x.
Favorable Asset Mix: MGM has good geographic diversification, which
includes international properties in Macau. Since 2016, the company
improved its diversification with acquisitions and developments in
U.S. regional markets and the Cotai Strip in Macau. MGM's portfolio
of Las Vegas Strip assets are mostly high quality and its regional
assets are typically market leaders. The regional portfolio's
diversification partially offsets the more cyclical nature of Las
Vegas Strip properties. MGM's two properties in Macau (about 20% of
total consolidated property EBITDAR) provide global diversification
benefits and exposure to a market with favorable long-term growth
trends.
MGM Growth Properties: MGP (BB+/Negative) is roughly 57% owned and
effectively controlled by MGM. Therefore, Fitch analyzes MGM on a
consolidated basis and subtracts distributions to minorities from
EBITDAR. MGM has publicly stated its desire to reduce its ownership
stake in MGP to under 50% by 2020. MGM could further dilute its
stake through its remaining exercise of a $1.4 billion Waiver
Agreement with MGP, in which MGP would be required to redeem OP
units for cash (expires January 2022, $700 million exercised in May
2020). MGM's ownership of the sole MGP Class B share and
controlling voting power (intact until ownership falls below 30%)
will continue to support a consolidated analysis with adjustments
for the minority stake in MGP.
Should MGM reduce its stake in MGP below 30% and deconsolidate,
Fitch would likely analyze the MGM domestic credit on a standalone
basis, whose financial flexibility is weaker given the high amount
of fixed cost associated with the MGP and Non-MGP master leases.
DERIVATION SUMMARY
MGM's 'BB-' IDR reflects the issuer's strong liquidity, diversified
operating footprint, and de-levering path back to moderate
consolidated gross adjusted leverage metrics. This is offset by
weaker financial flexibility following the monetization of its
remaining wholly owned Las Vegas Strip properties, resulting in
higher fixed cost. The IDR takes into consideration MGM's multiple
liquidity sources to withstand the near-term cash burn from the
coronavirus disruption and potential de-levering path back to 6.0x
consolidated gross adjusted leverage amid a moderate recovery in
global gaming. Peer Las Vegas Sands Corp. (BBB-/Stable) has a track
record of adherence to a more conservative financial policy and
stronger international diversification in attractive regulatory
regimes.
Fitch links MGM China's IDR to MGM's. Fitch views MGM's and MGM
China's standalone credit profiles roughly on par with each other,
but would not de-link the ratings if the stand-alone credit
profiles would moderately diverge. MGM China is strategically and
operationally important to MGM, and MGM China does not have
material ring-fencing mechanisms in its financing documentation
that would limit MGM's access to MGM China's cash flows.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- 2020 revenues for Las Vegas, Regionals and Macau will be down
45%, 30% and 50%, respectively. Flow through to EBITDAR is 70%, 50%
and 55%, respectively. 2021 revenues are down 10%-20% from 2019
levels with similar margins;
-- Total rent payments of roughly $1.3 billion in 2020 for the
MGP, Bellagio, and MGM Grand/Mandalay Bay leases, with low
single-digit escalators annually;
-- A majority of cash flow from operations less capex at MGM
China, MGM Growth Properties and CityCenter JV is distributed;
-- $550 million in annual maintenance capex, with $100 million
attributable to MGM China. This is cut in half in 2020 to conserve
liquidity;
-- No share repurchases are assumed. MGM's parent-level dividend
is essentially zero beginning second-quarter 2020 and resumed at
$271 million per year beginning 2022;
-- Revolvers are drawn at MGM, MGM China and MGP levels in 2020
but repaid during 2020 via unsecured offerings and MGM's exercise
of $700 million OP unit redemption. $750 million in domestic debt
tendered in first-quarter 2020. $725 million of unsecured notes
issued at MGM during 2020. Fitch assumes the $1 billion in MGM
notes maturing 2022 are redeemed for cash;
-- Remaining $700 million of OP unit redemption occurs in 2021,
debt-funded at the MGP level and MGM Resorts uses proceeds to
paydown debt;
-- Covenant waivers are obtained at MGM Resorts and MGM China
level for 2020.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Evidence of stabilization in demand and signs of a significant
rebound in global gaming demand;
- Greater certainty of gross adjusted debt/EBITDAR trending
toward 6.0x by YE2021. This could be on a net basis should the
company's plans for debt paydown become more explicit.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Net adjusted debt/EBITDAR exceeding 6.0x beyond 2022, either
through a more prolonged disruption to global gaming demand or
adoption of a more aggressive financial policy. As the operating
environment normalizes and balance sheet liquidity returns to
levels consistent with historical practices, Fitch will
re-emphasize gross adjusted leverage metrics of below 6.0x for the
'BB-' IDR level;
- A reduction in overall liquidity (low cash and revolver
availability, heightened covenant risk or increased FCF burn) as a
result of prolonged coronavirus pressures.
LIQUIDITY AND DEBT STRUCTURE
Ample Sources of Liquidity: Heading into the coronavirus
disruption, MGM had meaningful cash balances, revolver availability
and generated solid FCF. While FCF has deteriorated, cash and
revolver availability has improved due to opportunistic unsecured
issuance at the MGM Resorts and MGM China levels, and repayment of
revolver draws earlier this year. The company's termination of the
previous $1.25 billion Dutch tender further helped its positioning
to weather the near-term cash burn. MGM monetized its last
meaningful wholly-owned asset in early 2020, which reduces the
company's overall financial flexibility. Voluntary debt paydown
from the Bellagio and MGM Grand transactions eliminated meaningful
maturities until 2022 when the $1 billion in 7.75% notes mature.
These liquidity sources will help fund forecast $2.0 billion
negative FCF during 2020.
SUMMARY OF FINANCIAL ADJUSTMENTS
Leverage: Fitch subtracts distributions to minority holders of
non-wholly owned consolidated subsidiaries from EBITDA for
calculating leverage. Fitch also adds recurring distributions from
unconsolidated JVs.
ESG CONSIDERATIONS
MGM has an ESG Relevance Score of 4 for Group Structure due to the
complexity of its ownership structure for its primary operating
subsidiaries and joint ventures and increasing group transparency
risk. This has a negative impact on the credit profile, and is
relevant to the ratings in conjunction with other factors.
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
RISESUN REAL ESTATE: Fitch Corrects Ratings Release Dated June 11
-----------------------------------------------------------------
Fitch Ratings replaced a ratings release published on June 11, 2020
to correct the name of the obligor for the bonds.
Fitch Ratings has affirmed China-based homebuilder Risesun Real
Estate Development Co., Ltd.'s Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-'. The Outlook is Stable. Fitch has
also affirmed Risesun's senior unsecured rating at 'BB-'.
Risesun's IDR is supported by its deleveraging trend, which can be
sustained by its large size in terms of contracted sales, land bank
and EBITDA. The company has a diversified land bank covering 79
cities in the Bohai Rim, Yangtze River Delta, Pearl River Delta,
and central, northern and south-western China. In addition,
Risesun's EBITDA margin, after adding back capitalised interest,
has been sustained above 25% because of its price premium and low
land costs due to its land-bank acquisition strategy and
satisfactory government relationships.
Fitch expects Risesun's total contracted sales to be around CNY110
billion in 2020, compared with CNY115 billion in 2019 and CNY102
billion in 2018. Fitch forecasts Risesun's leverage to slightly
improve due to a decent sales collection rate of 75%-80% and a
sustainable land-bank life of three to four years.
KEY RATING DRIVERS
Deleveraging Trend: Fitch expects Risesun's leverage - measured by
net debt/adjusted inventory - to reduce gradually to 39% in
2020-2021, in line with that of 'BB-' peers. Risesun's leverage
improved to 40% in 2019, from 45% in 2018 and 54% in 2017, due to
slower land acquisition.
Fitch forecasts Risesun to replenish land at a rate of 1.1x of
contracted sales gross floor area (GFA), with the land acquisition
premium likely to be equivalent to about 41% of cash collected from
contracted sales. The cash collection rate was 75% in 2019 due to
Risesun's strict checks of homebuyers' loan qualifications and
better incentives for the sales team, whose income is based on cash
collected instead of contracted sales.
Sufficient, Diversified Land Bank: Risesun's large land bank
reserve exceeded 37 million sq m at end-2019, similar to 36 million
sq m at end-2018. More than 50% of the land reserves are in Beijing
and the Bohai Rim, where the company, headquartered in Langfang,
Hebei province, has home-market advantages. The company also has
wide geographical diversification, selectively entering cities that
have a net population inflow in the Yangtze River Delta, Greater
Bay Area and central and western China. It has a presence in 79
cities.
In addition, the company has improved its land reserve quality and
increased the portion of land in Tier 1-2 cities in 2019, although
this is still lower than that of 'BB-' peers. Fitch expects
Risesun's land-bank life to stay at three to four years in
2020-2023, in light of the company's strong financial discipline.
Healthy Margin: Fitch forecasts Risesun's EBITDA margin, after
adding back capitalised interest, to be sustained above 25% due to
low average land costs. The company can maintain its price premium,
compared with other developers in the Bohai Rim by providing a
higher-quality living experience through modern housing
technologies, a higher green-space ratio and high-standard property
management services. Risesun's average land costs should rise as it
expands the portion of land bank in Tier 2 cities.
Large Business Scale: Risesun's total contracted sales are forecast
by Fitch to be around CNY110 billion in 2020, a slight decrease
from the CNY115 billion in 2019 due to the impact of the
coronavirus and containment measures. Total contracted sales were
CNY101 billion in 2018 and CNY68 billion in 2017. More than 90% of
total contracted sales are attributable to Risesun.
Moderate Liquidity: Risesun's liquidity, measured by cash to
short-term debt, was 0.9x in 2019. Risesun's liquidity is weaker
compared to that of 'BB-' peers, which have cash to short-term debt
of at least 1.5x. Fitch forecasts Risesun's liquidity to improve in
2020 as the company refinances its maturing onshore bonds and
spreads out debt maturity by using longer-term loans.
DERIVATION SUMMARY
Risesun's credit profile improved in 2019, but is weaker than that
of 'BB' rated homebuilders because of the company's higher
leverage, as measured by net debt/adjusted inventory. Risesun's
scale by contracted sales and land bank is similar to that of Logan
Property Holdings Company Limited (BB/Stable). Although Risesun has
more exposure in lower tier cities, which is reflected by its lower
average selling price (ASP) of around CNY10,500 per sq m. Risesun
and Logan have similar churn rates and both maintain an EBITDA
margin (excluding capitalised interest) of over 25%. Risesun's
leverage of 40% in 2019 is comparable to Logan's 39%.
Risesun's financial profile is comparable with that of Ronshine
China Holdings Limited (BB-/Stable) as they have similar leverage
levels. However, Ronshine has higher non-controlling interests,
which reduces its financial flexibility. Nevertheless, Ronshine
focuses on Tier 1-2 cities and has a better-quality land reserve.
Risesun's business scale is stronger than that of 'B+' peers,
including Helenbergh China Holdings Limited(B+/Stable) and
Zhongliang Holdings Group Company Limited (B+/Stable).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Contracted sales to fall by 3% in 2020 but rise by 5% per year
from 2021, with ASP to increase by 0% for 2020-2023. The expected
ASP growth is in line with that of 'BB-' rated peers.
- Land replenishment at 1.1x of contracted sales GFA in
2020-2021, with land bank life at three-four years.
- Sales collection ratio to remain above 75%
- EBITDA margin, excluding capitalised interest, to remain above
25% in 2020-2023
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Leverage, measured by net debt/adjusted inventory, sustained
below 35% (2019: 40%)
- Liquidity measured by cash/short term debt, sustained above
1.5x (2019: 0.9x)
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage, measured by net debt/adjusted inventory, above 45%
for a sustained period
- EBITDA margin, after adding back capitalised interest in cost
of goods sold, 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
Liquidity Manageable: Risesun had total cash of CNY30.4 billion at
end-2019 against CNY34.8 billion of short-term debt. The company
has unused uncommitted credit facilities of CNY50.9 billion, enough
to cover its short-term debt.
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, either due to their nature or
to the way in which they are being managed by the entity.
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).
SUQIAN ECONOMIC: Fitch Affirms Then Withdraws BB- LT IDR
--------------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn China-based
Suqian Economic Development Corporation's (SEDC) Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDRs) of 'BB-'. The
Outlook is Stable.
SEDC is a government-related entity (GRE), and it is mainly engaged
in infrastructure construction in the Suqian Economic and
Technological Development Zone (ETDZ), which is in eastern China's
Jiangsu province.
The ratings were withdrawn for commercial reasons.
KEY RATING DRIVERS
'Strong' Status, Ownership and Control: SEDC is a limited liability
company directly and wholly owned by Suqian ETDZ management
committee and ultimately by the Suqian municipal government. Fitch
regards this attribute as 'Strong' instead of 'Very Strong' because
the committee has full ownership and strong control of SEDC instead
of the municipal government. SEDC's major decisions, including
mergers and acquisitions, restructuring or spin-offs, major
investments or financing, require approval from the committee.
'Strong' Support Track Record and Expectation: SEDC's profitability
is dependent on the government's schedule for the repurchase of
projects and settlement of payment as most of the company's revenue
is generated from infrastructure construction in the Suqian ETDZ.
SEDC also received CNY400 million-CNY700 million of operating
subsidies a year during 2016-2019 from the government.
'Moderate' Socio-Political Implications of Default: Fitch expects a
default by SEDC to temporarily disrupt construction in the Suqian
ETDZ, where the issuer is the sole company providing infrastructure
and social housing construction. Other GREs may be able to replace
SEDC in this role and continue the construction. Existing
infrastructure would require limited additional funding if there
was a default by SEDC.
'Strong' Financial Implications of Default: Fitch regards this
attribute to be 'Strong' instead of 'Very Strong' as the company's
business operation is limited to the Suqian ETDZ and thus is not
deemed by Fitch to be a proxy funding vehicle for the sponsor, the
Suqian municipality. A default by SEDC would strongly constrain
local GREs' funding capacity as it is the largest public-sector
entity in Suqian municipality by total assets, with the majority of
its profit generated from services to the government.
'b' Standalone Credit Profile: Fitch assesses SEDC's revenue
defensibility to be 'Weaker' and operating risk to be 'Midrange',
as the majority of its revenue is from work contracted with the
local government, with a pre-defined profit margin and payment
schedule. Its business operations are limited to the Suqian ETDZ.
The financial profile remains weak and Fitch expects its net debt
to Fitch-adjusted EBITDA to remain at 25x-28x in the next five
years.
RATING SENSITIVITIES
No longer relevant as the ratings have been withdrawn.
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).
XUZHOU ECONOMIC: Fitch Affirms Then Withdraws 'BB' LT IDR
---------------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn Xuzhou
Economic and Technology Development Zone State-Owned Assets
Management Co., Ltd.'s (XETZ) Long-Term Foreign- and Local-Currency
Issuer Default Ratings (IDR) at 'BB' with a Stable Outlook.
Fitch has also affirmed and simultaneously withdrawn the 'BB'
rating on the USD400 million 6.75% notes due 2021 issued by XETZ's
wholly owned subsidiary, Jinshine International Co., Ltd.
XETZ is a wholly state-owned company founded by the management
committee of Xuzhou Economic and Technology Zone (ETZ). It mainly
carries out primary-land development, relocation-housing
construction, infrastructure development and construction as well
as related ancillary services within Xuzhou ETZ in China's Jiangsu
province.
XETZ's ratings are assessed under Fitch's Government-Related
Entities (GRE) Rating Criteria, reflecting Xuzhou municipality's
ownership via the Xuzhou ETZ management committee, and the
municipality's control and support of XETZ, as well as the
socio-political and financial implications for the government
should XETZ default.
The ratings were withdrawn with the following reason: for
Commercial Purposes
KEY RATING DRIVERS
'Strong' Status, Ownership and Control: XETZ is registered as a
wholly state-owned limited liability company under China's company
law. The company's legal status requires its major decisions, such
as M&As, spin-offs, bankruptcy and liquidation, to be verified and
approved by the government. The state had no plans to dilute its
shareholding in XETZ as of June 2020, according to Xuzhou
State-owned Assets Supervision and Administration Commission.
'Strong' Support Record and Expectation: Fitch expects legitimate
support for XETZ to continue in the medium term. The government
uses capital injections, financial subsidies and repurchases to
monetarily support XETZ's business. Returns on land-development
costs are the major form of support; the return on land costs
dropped by 20% in 2019, but the government increased reimbursements
on relocation-housing construction and infrastructure development
to maintain XETZ's operating revenue growth. Xuzhou ETZ also
injected capital of CNY300 million into XETZ in 2019 after a
similar injection in 2017.
'Moderate' Social-Political Implications of Default: XETZ is
integrated within the city's flagship economic development zone,
Xuzhou ETZ. It is the sole entity involved in the zone's
large-scale urban-infrastructure projects, providing ancillary
services and inviting investment. XETZ also helps to implement the
blueprint of Xuzhou municipal government and Xuzhou ETZ's
management committee. The company's failure could jeopardise Xuzhou
ETZ's policy duties and services, although XETZ may be substituted
by other GREs outside the zone.
'Strong' Financial Implication of Default: XETZ, as the zone's sole
developer, raises funding for the government's public-welfare
projects. The government's failure to offer timely support for
XETZ, an important government financing platform, leading to a
default, could cause the government financial difficulty and limit
its financing options.
'b' Category Standalone Credit Profile: Fitch assessed XETZ's
revenue defensibility as 'Weaker' under its Public Sector,
Revenue-Supported Entities Rating Criteria because the company's
limited control over the pricing of its main revenue source;
industrial-park and residential development as well as related
sales and leasing services. Revenue is also affected by project
scale, nature and progress as well as the government's budget.
Fitch assesses operating risk as 'Midrange' due to the company's
predictable cost structure and the financial profile a 'Weaker' due
to high leverage.
XETZ has large capex, high leverage and limited cash flow debt
servicing ability. Capital-intensive public-work investments and
weak cash generation weighed on leverage, leading to high net
debt/Fitch-calculated EBITDA, including perpetual bonds, of 22.2x
in 2019, with cash flow from operation/debt and interest coverage
consistently below 1.0x. XETZ's leverage is likely to remain above
20.0x under its rating case due to its capex plan. Fitch also
forecasta cash flow from operation/debt and interest coverage to
remain below 1.0x in the medium term. Nevertheless, the stable
contractual framework plus the local government's consistent
financial support mitigates the risk.
DERIVATION SUMMARY
Fitch assesses XETZ's ratings under its GRE criteria. Fitch
believes the local government has a strong incentive to provide
extraordinary support to the company, if needed. Fitch haa also
factored in Xuzhou government's control and support, XETZ's
public-service functions, such as infrastructure development and
urban operations, as well as the impact of a default on the
government.
RATING SENSITIVITIES
Not applicable, as the ratings have been withdrawn.
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).
[*] HK Property Firm Unit Seeks to Manage Distressed Debt in China
------------------------------------------------------------------
Bloomberg News reports that NWS Holdings Ltd., a unit of one of
Hong Kong's biggest property developers New World Development Co.,
has applied for a license to manage distressed loans in China,
according to people familiar with the matter.
NWS has submitted the application to the China Banking and
Insurance Regulatory Commission for a permit in southern Hainan
province, said the people, who asked not to be identified as the
matter is private, Bloomberg relates. If approved, the Hong
Kong-based company could become the first firm not from mainland
China to have direct access to China's CNY2.6 trillion ($368
billion) bad loan market, one of the people said.
According to Bloomberg, China's banking industry is sitting on a
record amount of soured loans as the Covid-19 pandemic hammered the
world's second-largest economy and grounded millions of small
businesses. S&P Global Ratings estimated last month that China's
non-performing asset ratio, a more stringent measure of troubled
advances than the official calculation, could almost double to 10%
from pre-outbreak levels this year. That's a projected increase of
CNY8 trillion, Bloomberg relates.
It is unclear whether NWS will tie up with other companies for a
joint bid, and the application is subject to change, said the
people, Bloomberg relays.
China has set up dozens of smaller bad-debt managers in recent
years with a mandate to deal with regional distressed debt,
Bloomberg notes. Unlike other foreign investors which can only buy
bad loans via asset managers, the license will enable NWS to
purchase the debt directly from banks, and to borrow funds at
relatively low rates in Hainan.
Chinese leaders two weeks ago announced plans to build up a trading
hub on Hainan, which is known more for its beaches and tourism than
as a center for financial services, Bloomberg recalls. It lies just
southwest of the so-called Greater Bay Area that includes Hong
Kong, the semi-autonomous territory of Macau and the mainland city
of Guangzhou.
=========
I N D I A
=========
A RAJA: CARE Keeps D INR7.13cr Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of A Raja
Cottex (ARC) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.13 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 2, 2019, placed the
ratings of ARC under the 'Issuer noncooperating' category as ARC
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. ARC continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and letter/emails dated May 8,
2020, May 12, 2020 and May 13, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating done on July 2, 2019, the following was
the rating weakness:
Key Rating Weaknesses
* Delay in debt servicing: The rating assigned to the bank
facilities of ARC takes into account the fact that account of ARC
had become NPA on the back of on-going delay in debt servicing by
the firm due to weak liquidity position.
ARC is a partnership firm established by six partners led by Mr
Harunbhai Bilakhiya and Mr Sajidbhai Bilakhiya in the year 2013. Mr
Harunbhai Bilakhiya and Mr Sajidbhai Bilakhiya have 33 years and 13
years of industry experience, respectively. ARC is engaged into the
business of cotton ginning and pressing. Its plant is located at
Amreli (Gujarat) with an installed capacity of 400 bales per day as
on March 31, 2016 and is spread across 1,295 sq. meters of area.
All the partners of ARC except Ms Rasidaben Bilakhiya also held
partnership in Raja Cotton Industries (RCI), a partnership firm
established in the year 2009. RCI is engaged into the business of
cotton ginning & pressing and seed crushing. ARC's plant is located
at Amreli (Gujarat) with an installed capacity of 200 bales per day
as on March 31, 2016 and is spread across 3,500 sq. yard of area.
ALLFLEX PLASTICS: CARE Lowers Rating on INR14.94cr LT Loan to 'C'
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Allflex Plastics LLP (APL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 14.94 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Short-term Bank 0.60 CARE A4; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from APL to monitor the ratings
vide e-mail communications/letters dated May 4, 2020, May 6, 2020,
May 11, 2020 and numerous phone calls. However, despite CARE's
repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on APL's bank facilities will now be denoted as CARE C;
Stable; ISSUER NOT COOPERATING*/CARE A4; ISSUER NOT COOPERATING.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the ratings takes into account the non-
availability of information and no due diligence conducted due to
non-cooperation by APL with CARE's efforts to undertake a review of
the outstanding ratings.
Detailed description of the key rating drivers
At the time of last rating on March 20, 2019 the following were the
rating weaknesses and strength.
Key Rating Weaknesses
* Short track and small scale of operations and low profitability
margins: APL has commenced its manufacturing operations from April
2016 and thus FY17 was the first year of operations. The scale of
operations of APL remained small marked by total operating income
of INR8.35 crore with a net loss of INR4.56 crore in FY17.
Moreover, the total capital employed remained low at INR25.64 crore
as on March 31, 2017. The company has achieved revenue of around
INR22.00 crore during 11MFY18. The profitability margins of the
company remained low marked by PBILDT margin of 3.29% and net loss
of 54.67% in FY17.
* Susceptibility to fluctuation in raw material price: PVC resin is
the major raw material for the firm, which is a crude oil
derivative and accordingly the price of the same is extremely
volatile in nature. Since, the raw material cost is the major cost
driver (comprising about 83.76% of cost of sales in FY17) for APL
any upward movement in the same may induce pressure on
profitability. Given that the firm is a relatively small player
with low bargaining power with the suppliers and in a highly
competitive scenario it may get difficult for the firm to pass on
any sudden rise in the input prices.
* Working capital intensive nature of operation: The operations of
the firm remained working capital intensive in nature marked by its
high collection and inventory period. Accordingly the average
utilization of working capital limit was on the higher side at 80%
during last 12 months ending on Feb 28, 2018.
* Leveraged capital structure and low debt coverage indicators: The
capital structure of APL remained leveraged marked by overall
gearing ratio of 2.30x as on March 31, 2017. The debt protection
metrics of the firm also remained weak marked by interest coverage
of 0.15x in FY17. However, the firm has served its debt obligations
through infusion of partner's capital of INR1.27 crore and
unsecured loans of INR1.35 crore in FY17.
* Highly fragmented and competitive nature of industry: The firm is
into manufacturing of flex banner business which is highly
fragmented space due to presence of huge small players owing to low
entry barrier and low capital requirement. Furthermore, APL is
facing stiff competition from the organized as well as unorganized
players.
Key Rating Strengths
* Experienced partners: The key partner Mr. Kamlesh Thakkar (aged
about 60 years), has around three decades of business experience
through his associate concerns. He looks after the day to day
operations of the firm supported by other partner Mr. Rushab
Thakkar along with a team of experienced professional.
Established in December 2014, Allflex Plastics LLP (APL) was
promoted by Mr. Kamlesh Thakkar and Mr. Rushab Thakkar for setting
up a manufacturing unit of flex banner. After successfully setting
up its plant, the firm has commenced its manufacturing operations
from April 2016. Prior to manufacturing operations, the firm was
dealing with securities trading. The manufacturing facility of the
firm is located at Howrah, West Bengal with aggregate installed
capacity of 14400 pieces of flex banner per annum.
AMRIT AGROVET: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: M/s Amrit Agrovet Private Limited
158 Lenin Sarani
2nd & 3rd Floor
Kolkata 700013
Insolvency Commencement Date: March 12, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: September 8, 2020
(180 days from commencement)
Insolvency professional: Uttam Sarkar
Interim Resolution
Professional: Uttam Sarkar
52E, Bediadanga First Lane
Kolkata 700039
E-mail: usarkar@usarkar.com
cirpamritagrovet@usarkar.com
Last date for
submission of claims: April 5, 2020
ARKA CARBON: CARE Keeps 'D' Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Arka Carbon
Fuels Private Limited (ACFPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short Term Bank 120.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide press release dated May 30, 2019, reviewed the
ratings of ACFPL under the 'Issuer Non-cooperating' category as the
company had failed to provide information for monitoring of the
ratings and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. ACFPL continues to
be non-cooperative despite requests for submission of information
through e-mails, phone calls and a letter/e-mail dated May 14,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on May 30, 2019, the following were the
rating weaknesses (updated based on best available information i.e.
FY19 results from MCA and banker interaction):
Key Rating Weaknesses
* Ongoing delays in debt servicing: As per interaction with the
banker there are ongoing delays in debt servicing owing to the
stretched liquidity and weak financial profile of the company.
Analytical approach: Combined
Swastik group includes three companies operating in similar line of
coal trading & transport businesses viz. SCCPL, Arka Carbon Fuels
Pvt. Ltd. (ACFPL) & Shree Ganpatlal Onkarlal Agarwal & Co. (SGOAC).
Until FY16 we had taken a combined approach for the three entities
to arrive at ratings of SCCPL, ACFPL & SGOAC due to common
promoters & management and strong operational & financial linkages
among the group companies in coal trading business. Subsequently
the outstanding rating of SGOAC (CARE B; Stable) were withdrawn on
February 15, 2018 based on NOC received from the banker.
SGOAC being a proprietorship firm, financial information for the
entity is available only till FY16 thus from FY17 onwards a
combined approach of two entities, SCCPL and ACFPL, has been
considered.
ACFPL is a part of Swastik group and Mr. Hitesh Bindal is the
founder promoter of the company. ACFPL imports its coal requirement
directly or through merchant importers in India and supplies it to
the domestic market for usage by various industries like cement,
captive power plants, steel and bricks. ACFPL is also engaged in
trading of domestic coal purchased through e-auction route from
Coal India Limited (CIL). SG, based out of Indore, Madhya Pradesh,
is primarily involved in the business of coal trading. The group
has presence of more than two decades with interests in diversified
businesses including coal trading, logistics, construction and real
estate.
AVADH FIBERS: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Avadh Fibers Private Limited
Street No. 9, B/S
Piyush Pendwala
Kedarnath Society
Kothariya Road
Rajkot, Gujarat 360002
Insolvency Commencement Date: March 4, 2020
Court: National Company Law Tribunal, Delhi Bench
Estimated date of closure of
insolvency resolution process: August 31, 2020
Insolvency professional: Atul Mittal
Interim Resolution
Professional: Atul Mittal
174, BALCO Apartments
Plot No. 58, IP Extn.
Patparganj, Delhi 110092
E-mail: a.mittalmc@gmail.com
- and -
163, BALCO Apartments
Plot No. 58, IP Extn.
Patparganj, Delhi 110092
E-mail: avadh.ipamittal@gmail.com
Last date for
submission of claims: June 14, 2020
BAG POLY: CARE Lowers Rating on INR6.23cr LT Loan to B
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Bag
Poly Enterprises (BPE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.23 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 20, 2019, placed the
rating of BPE under the 'issuer non-cooperating' category as Bag
Poly Enterprises had failed to provide information for monitoring
of the rating. BPE continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated May 08, 2020, May 6, 2020, May 5, 2020 and
May 4, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The rating has been revised on account of Partnership nature of
constitution, Susceptibility of margins to fluctuation in raw
material prices, highly competitive industry. The rating, however,
derives strength from experienced partners.
Key Rating Weaknesses
* Partnership nature of constitution: BPE's constitution as a
partnership firm has the inherent risk of possibility of withdrawal
of the partners' capital at the time of personal contingency and
firm being dissolved upon the death/retirement/insolvency of
partners. Moreover, partnership firms have restricted access to
external borrowing as credit worthiness of partners would be the
key factors affecting credit decision of the lenders.
* Susceptibility of margins to fluctuation in raw material prices:
High density polyethylene (HDPE) granules and Masterbatch are the
main raw materials for the production of plastic bags and
tarpaulins. High density polyethylene (HDPE) and Master batch are
petrochemical derivatives and its prices remain highly volatile,
thus BPE is exposed to the risk of volatility in the prices of
crude oil. The operating margin of BPE remains susceptible to any
sharp movement in the raw material prices which the firm is unable
to pass on to its customers due to low bargaining power towards
increase in final product prices.
* Highly competitive industry: The Indian flexible packaging
industry is highly competitive on account of the low capital
intensity and technology requirements, easy availability of raw
materials, low entry barriers and small gestation period. The
intense industry competition will continue to exert pricing
pressures on BPE. The bargaining power of the firm remains very low
which also leave the profits vulnerable particularly in a scenario
of increasing competitive pressure.
Key Rating Strengths
* Experienced partners: BPE got established in 2014 and is
currently being managed by Mr. Parmod Mittal and Ms. Pinki Mittal.
Mr. Parmod Mittal has a work experience of around two decades in
the packaging industry through his association with Bag Poly
International Private Limited (BPI, family run business) (CARE
B+/A4; Stable) since 1994 and through BPE. Ms. Pinki Mittal has a
work experience of one and a half years through her association
with BPI and through BPE as well.
Bag Poly Enterprises (BPE) was established in June, 2014 as a
partnership firm by Mr. Parmod Mittal and Ms. Pinky Mittal, sharing
profit and losses equally. The commercial operations got commenced
in August, 2014. The firm is engaged in manufacturing of high
density polyethylene (HDPE) based plastic bags and tarpaulins at
its manufacturing facility in Panipat, Haryana with an installed
capacity of processing 4800 metric tonnes per annum as on September
30, 2017. The firm's products find application in packaging of
various products and also in the transportation industry. The main
raw materials are HDPE granules and master batch and procured
domestically. The finished products are sold to various wholesalers
majorly located in Haryana, Delhi, Punjab
and Uttar Pradesh. The firm also sells its products to various
government entities.
BALDEO METALS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Baldeo Metals Private Limited
M-15 New Mandoli Industrial Area
Saboli, Shahdara
Delhi 110045
Insolvency Commencement Date: June 4, 2020
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: December 1, 2020
Insolvency professional: Dhiren S Shah
Interim Resolution
Professional: Dhiren S Shah
B 102 Bhagirathi Niwas
Near Natraj Studio
Sir M V Road
Andheri (East)
Mumbai 400069
E-mail: dss@dsshah.in
ip2@dsshah.in
Last date for
submission of claims: June 19, 2020
BHAI GURDAS: CARE Lowers Rating on INR2.50cr LT Loan to 'B+'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Bhai
Gurdas Technical Educational Trust (BGT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 2.50 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE BB-; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 11, 2019, placed the
rating of BGT under the 'issuer non-cooperating' category as Bhai
Gurdas Technical Educational Trust had failed to provide
information for monitoring of the rating. BGTET continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 8, 2020, May 6, 2020, May 5, 2020 and May 4, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The rating has been revised on account of increasing competition
and limited reach of the trust, high regulation in education sector
in India. The rating, however, derives strength from experienced
trustees with competent teaching staff and long track record of the
trust with well-established infrastructure.
Key Rating Weaknesses
* Increasing competition and limited reach of the trust: All the
institutes of the BGT are in Sangrur, i.e., single location of
Punjab which limits the penetration level for the trust to tap
opportunities. Further, due to increasing focus on technical
education in India, a number of colleges have been opened up in the
close proximity. This exposes the revenue of BGT to competition
from other colleges like Lovely Professional University, Thapar
University, Punjabi University, Guru Nanak Dev University etc.
* High regulation in education sector in India: The educational
institutes are regulated by respective state governments with
respect to the number of management seats, amount of the tuition
fees charged for the government quota and management quota.
However, the state and central government have provided thrust to
demand for engineering colleges by introducing policy changes like
abolition of entrance exams for admission in professional course.
Key Rating Strengths
* Experienced trustees with competent teaching staff: Mr. Hakam
Singh Jwandha has total work experience of four decades gained
through his practices as an advocate and through BGT and Mrs.
Baljinder Kaur Jwandha has industry experience of 35 years gained
through her teaching profession and association with BGT. Mr.
Guninderjit Singh has total work experience of 10 years gained
through BGT only. Further, BGT has employed a highly experienced
and qualified teaching staff to support the academic requirements
of the trust. Apart from the key faculty members, BGT has employed
a competent administrative staff to run day to day operations.
* Long track record of the trust with well-established
infrastructure: The trust established its first college in 2001 and
since then had established six additional institutions. The
facilities provided by the trust at its institutions include
laboratories, computer centers including smart classes, conference
halls, video conferencing, multi-media projectors, well stocked
libraries, PNB bank branch, gymnasium, shopping complex, canteen &
cafeteria, auditorium, health centre (dispensary), workshops, Wi-Fi
campus etc. The trust is also providing hostel facility and
transport facility to its students.
Bhai Gurdas Technical Educational Trust (BGT) got registered under
the Society Registration Act- 1860 in 2001 and is currently being
managed by Mr. Hakam Singh Jwandha, Mr. Guninderjit Singh and Mrs.
Baljinder Kaur Jwandha. The trust was formed with an objective to
provide higher education in the field of engineering, computer
science, management etc. The trust has established seven separate
colleges. BGT offers graduate and post graduate courses like
B.Tech, B.Ed, BCA, BBA, B.Com, L.L.B, B.A.L.L.B, M. Tech, M.Ed,
MCA, MBA, M. Com, M.Sc and various diploma courses like Diploma in
Mechanical Engineering, Computer Engineering, Civil Engineering,
Electrical Engineering etc. The different courses offered are duly
approved by AICTE (All India Council of Technical Education). BGT
is also affiliated to Maharaja Ranjit Singh Punjab Technical
University, Bathinda (MRSPTU).
CORPORATE POWER: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Corporate Power Limtied
Registered office:
FE-83, Sector-III
Salt Lake City
Ground Floor
Kolkata
West Bengal 700106
India
Plant:
At Bana, Chandwa Block
District Lathehar
Jharkhand 829203
Insolvency Commencement Date: February 19, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: August 16, 2020
Insolvency professional: Mr. Pankaj Dhanuka
Interim Resolution
Professional: Mr. Pankaj Dhanuka
FE 328, Sector 3
Salt Lake City
Kolkata
West Bengal 700106
E-mail: pankajdhanuka@gmail.com
- and -
Deloitte Touche Tohmatsu India LLP
13th Floor, Building–Omega
Bengal Intelligent Park
Block-EP & GP, Sector-V
Salt Lake City
West Bengal 700091
E-mail: incplip@deloitte.com
Last date for
submission of claims: March 5, 2020
DUSHMANTA GIRI: CARE Lowers Rating on INR6.5cr LT Loan to 'C'
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Dushmanta Giri (DG), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.50 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE BB-; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from DG to monitor the ratings
vide e-mail communications/letters dated May 4, 2020, May 6, 2020,
May 11, 2020 and numerous phone calls. However, despite CARE's
repeated requests, the entity has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at a fair rating. The rating on DG's bank
facilities will now be denoted as CARE C; Stable; ISSUER NOT
COOPERATING.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the rating takes into account the non- availability
of information and no due diligence conducted due to non-
cooperation by DG's with CARE's efforts to undertake a review of
the outstanding ratings.
Detailed description of the key rating drivers
At the time of last rating on March 18, 2019 the following were the
rating weaknesses and strength.
Key Rating Weaknesses
* Partnership nature of constitution: DG, being a partnership firm,
is exposed to inherent risk of the partner's capital being
withdrawn at time of personal contingency and firm being dissolved
upon the death/retirement/insolvency of the partners. Moreover,
partnership firms have restricted access to external borrowing as
credit worthiness of partners would be the key factors affecting
credit decision for the lenders.
* Relatively small player: During FY16, the total operating income
of DG witnessed a growth of 53.90% vis-à-vis FY15 on account of
higher orders in hand coupled with higher execution of orders.
However, the scale of operations continues to remain relatively
small.
* Volatile input prices with increasing employee cost: Steel,
bitumen, cement and pipes are the major inputs for DG accounting
for about 29% of the total cost of sales in FY16, the prices of
which are highly volatile. Moreover, the firm does not have any
long term contracts with the suppliers for the purchase of the
aforesaid raw materials. Further, the employee cost increased
continuously during FY14-FY16 and the same accounted for around 58%
in FY16. Hence, the profitability margins of the firm are exposed
to any sudden spurt in the raw material prices and also higher
employee cost.
* Risk of delay in project execution coupled with geographical
concentration risk: As DG is almost fully dependent on flow of
orders from government, steady flow & timely execution acquires
greater importance, especially in view of the stringent rules
involved in government contracts. Further, as DG's contracts are
fixed price contracts, any delay in execution of the projects may
result in escalation in costs which the firm might not be able to
pass on due to lack of price escalation clause in the contracts and
hence, face loss of profitability. DG's business is also
susceptible to financial loss arising out of delay in project
execution, as generally penalty clause exists for delay in
execution of construction projects involving liquidated damages,
etc. DG is a West Bengal based firm having its operations only in
the state of West Bengal. As such the firm is also exposed to
geographical concentration risk.
* Sluggish growth amidst intense competition in the construction
industry: DG operates in the construction industry which requires
bidding for the projects based on the tenders. Accordingly, the
firm is exposed to intense competition. Given the volatile economic
environment, there has been slowdown in release of new contracts,
which has resulted in sluggish growth being witnessed by the
construction industry.
Key Rating Strengths:
* Moderately experienced partners with long track record of
operations: DG is currently managed by Shri Dwaipayan Giri
(Managing Partner) and Smt. Piu Giri of Midnapur, West Bengal. Shri
Dwaipayan Giri, (B.Tech), having around six years of experience in
executing civil construction projects. He is being duly supported
by the other partner to look after the dayto-day affairs of the
firm. Further, DG commenced commercial operation in 1977 and
accordingly has a long track record
of commercial operation.
* Moderate order book position: The order book position of the
entity improved remained satisfactory as on November 30, 2016. The
value of orders in hand (including on-going projects) was INR75.53
crore, being 2.40 x of TOI in FY16.
* Satisfactory client portfolio: DG has a list of well-known
clients from the Govt. sector like PWD Roads Dept. Govt. of West
Bengal, West Bengal State Rural Development Agency (WBSRDA) Paschim
Midnapore, Govt. of West Bengal, Executive Engineer Midnapore
Highway, Govt. of West Bengal etc. indicating low default risk.
* Comfortable capital structure: Both the long term debt equity and
the overall gearing ratio remained comfortable at 0.02x and 0.05x
as on Mar 31, 2016.
DG was initially established in 1977 as a proprietorship entity by
Shri Dushmanta Giri to execute civil contract work for Govt. of
West Bengal. It was converted to partnership firm on January, 20,
2012 by Shri Dushmanta Giri, Smt. Piu Giri and Shri Dwaipayan Giri,
based out of Midnapore, West Bengal. The partnership firm has been
reconstituted in February 19, 2012 after the demise of Shri
Dushmanta Giri and the current partners are Smt. Piu Giri and Shri
Dwaipayan Giri. DG is a small sized West Bengal based firm engaged
in providing different types of construction services, which
include construction of roads, buildings etc.
DYNAMIC TEXTBOOKS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Dynamic Textbooks Printers Private Limited
Registered office:
134, 1st Floor
Bhagwati Market
Gali Lohewali
Charkhewala
Chawri Bazar
Central Delhi 110006
Work:
C-1, Industrial Area
Bijoli, Jhansi 284001
Uttar Pradesh
Insolvency Commencement Date: May 27, 2020
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: November 24, 2020
Insolvency professional: Shiv Nandan Sharma
Interim Resolution
Professional: Shiv Nandan Sharma
129, Navjeevan Vihar
Near Aurobindo College
New Delhi 110017
E-mail: sharmasn@gmail.com
cirp.dynamic@gmail.com
Last date for
submission of claims: June 13, 2020
HONEST DERIVATIVES: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Honest Derivatives Private Limited
Registered office:
E-43, 2nd Floor
Sumel Business Park
Near New Cloth Market
Outside Raipur Gate
Ahmedabad 380002
Factory:
Gate No. 50, Maldabadi
Tal: Jamner
Dist: Jalgaon 424206
Maharashtra
Insolvency Commencement Date: May 28, 2020
Court: National Company Law Tribunal, Surat Bench
Estimated date of closure of
insolvency resolution process: November 28, 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.honest@gmail.com
Last date for
submission of claims: June 15, 2020
INDIAN STATE OF KERALA: S&P Lowers Long-Term ICR to 'BB-'
---------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Kerala to 'BB-' from 'BB'. At the same time, S&P affirmed its 'B'
short-term issuer credit ratings on the Indian state. The outlook
on the long-term rating is stable.
Outlook
S&P said, "The stable outlook reflects our view that Kerala will
continue to benefit from strong access to domestic capital markets
and liquidity support from the Indian central bank over the next
12-24 months. We envisage Kerala's trend growth will remain healthy
over the longer term, and stabilize the state's debt burden and
improve its operating balances."
Downside scenario
S&P said, "We may lower the ratings on Kerala if the state's debt
burden surges significantly. This may result from a combination of:
(1) much weaker economic recovery or a prolonged pandemic, leading
to a permanently weakened revenue base; and (2) expansionist fiscal
policy.
"We may also lower the ratings if we view the erosion of Kerala's
budgetary performance to be structural and reflective of weakening
financial management by the state to attain fiscal sustainability.
Downward pressure would also occur if we view the Indian central
government to be less likely to provide a credit-stability
mechanism under a financial stress scenario."
Upside scenario
S&P said, "We could raise the rating if Kerala's economic growth
bounces back much faster than we expect and the state's credit
metrics improve materially from their current levels, in particular
if deficit after capital account improves to stay below 25% of
revenues. This could result from a much stronger recovery of the
tourism sector than we expect and a combination of stronger revenue
streams under the new goods and services tax (GST) regime, higher
efficiency of GST collections, and rationalization of
expenditures."
Rationale
S&P lowered its ratings on Kerala to reflect the heightened
pressures of the COVID-19 pandemic on Kerala's fiscal metrics.
The ratings on Kerala are constrained by the state's large deficits
resulting from considerable spending on socio-economic programs.
The pandemic has necessitated fiscal measures to stabilize the
economy and support a healthcare response. At the same time, the
state's revenue has declined significantly due to subdued economic
activity from the lockdown. S&P anticipates these factors will
exacerbate Kerala's already-weak budgetary performance indicators.
Kerala's satisfactory financial management tempers some of these
weaknesses. The state's long-term planning and level of
transparency and disclosure compares favorably with that of
domestic peers. The ratings also benefit from Kerala's strong
access to domestic capital markets via the RBI's bond auction
window. This strong external access mitigates the state's low level
of internal cash holdings to cover debt servicing.
Moreover, Kerala remains well placed to manage the health impact of
COVID-19 among Indian states given the infrastructure invested in
healthcare over years. The ratings also benefit from our
expectations of state-specific support from the central government
in the event of financial emergency.
Strengths in financial management temper weak economic profile and
unbalanced intergovernmental system
The institutional framework of Indian states is characterized by
their mature intergovernmental structure and adequate transparency
and accountability. The system is founded in strong democratic
institutions, and a free press yields policy stability and
predictability. The pace of intergovernmental reforms is slow.
Nevertheless, there is no history of significant policy flip-flops.
On the downside, features of the Indian intergovernmental system
are a chronic mismatch in revenue and expenditure, weak policy
implementation, and very high local and regional government (LRG)
debt levels.
Kerala's creditworthiness is constrained by the poor, albeit
improving, productivity of the local economic base. S&P estimates
India's GDP per capita at about US$2,000 in 2020. Kerala's economy
is wealthier, with per capita GDP of more than US$3,000. Kerala's
more educated workforce has raised its per capita productivity to
more than that of other states. The state's traditionally strong
focus on social welfare programs has boosted its development, as
reflected in the state's high placing on the Human Development
Index relative to many other Indian states.
S&P Global Ratings is forecasting India's GDP will contract by 5%
this year. The COVID-19 outbreak in India and two months of
lockdown have led to a sudden stop in the economy.
S&P said, "We expect Kerala to undergo a similarly-large economic
contraction in fiscal 2020-2021 (fiscal year ending March 31, 2021)
from the pandemic and the impact of lower oil prices on remittances
from nonresident Keralites. While Kerala demonstrated resilience in
the past, where it rebounded swiftly after historical floods in
2018 and 2019, COVID-19 is an immense exogenous shock that is
creating larger uncertainties for the state than any other past
crisis. The global demand for tourism has hit a nadir and we do not
expect Kerala's tourism sector to pick up meaningfully this year.
That said, we expect Kerala's growth to rebound in fiscal 2021-2022
as COVID-19 comes under control, the labor market recovers, and
domestic tourism gradually resumes before international travel.
This is in line with our 8.5% growth forecast for the sovereign.
"We continue to assess Kerala's financial management as
satisfactory. Policymakers are generally in accord on key
development issues, as seen in their coordinated response to
COVID-19. There is a consistent focus by successive governments on
key policy priorities. Kerala sets and adheres to the targets set
in its five-year plan with focus on infrastructure development, and
improving healthcare and educational standards. This supports our
view of long-term capital and financial planning, which we view as
more advanced than that of some domestic peers."
Similar to other Indian states, Kerala has no liquidity management
policy, and the state relies on strong liquidity support from the
RBI. Kerala's debt management is weaker than international peers'
but better than that of some domestic peers. The bulk of Kerala's
debt is also on-balance-sheet, with limited off-budget exposure.
The results of investment in healthcare are visible in the response
of Kerala to COVID-19, compared to most domestic states. Kerala has
the highest recovery rate and the lowest mortality rate (less than
1%) among Indian states. The government has promptly prepared
impact assessments for the pandemic and is working on plans to
restart the economy.
Very high committed expenditure causes structural deficits and a
heavy debt burden, which will worsen due to COVID-19.
Pressing COVID-19 related expenditures and Kerala's diminished
revenue streams following the economic shutdown have hit the
state's fiscal position hard. We project Kerala's operating
deficits will surge to an average of 15.6% of adjusted operating
revenues over fiscals 2019-2023, a sharp spike from 4.8% in our
last review. S&P forecasts the after-capital-account deficit will
average about 27.6% of total adjusted revenues over the same
period.
S&P said, "In our view, Kerala's underdeveloped infrastructure and
high demand for public services will continue to constrain the
government's ability to substantially improve its budgetary
performance over the next two to three years.
"Kerala's capacity to self-finance is limited, leading to the state
increasing its debt to deliver on basic services. We estimate the
state's fiscal response to support economic recovery will lead its
tax-supported debt to increase to 239% of consolidated operating
revenue by fiscal 2022-2023. Kerala's direct debt will continue to
increase as it funds essential upgrades and new infrastructure,
besides supporting vulnerable sections of the population. This will
aggravate the state's interest burden and increase its operating
expenditure. We forecast Kerala's interest expense as a percentage
of adjusted operating revenues will average 21.8% over fiscals
2019-2021, significantly higher than that of international peers
and some domestic peers.
"We also expect state-owned Kerala Infrastructure Investment Board
(KIIFB) to push the pedal on its project pipeline to support the
capital expenditure requirements of Kerala as the state's own
budget remains under strain. We assess government-related entities
of Kerala as mostly non-self-supporting, given that half of them
are loss-making. That said, the indebtedness of the sector is
relatively low."
S&P assesses the liquidity of Kerala as adequate. Given the large
deficits, the state is unlikely to be able to accumulate cash
reserves to improve its internal liquidity position. However,
India's deep domestic capital market is the state's main avenue for
refinancing. The RBI enhances external liquidity access for Indian
states by conducting bond auctions regularly on behalf of state
governments. Notwithstanding the volatility in capital markets,
Indian states (including Kerala) have been able to access the
capital market in recent months. States in India are not allowed to
directly access capital markets themselves. Bond issuances are done
on a pooled basis through the RBI, thus enhancing states' access to
external liquidity. Furthermore, the RBI concludes settlement from
its own reserves on behalf of states in case a state does not have
sufficient funds to make payment on the due date. This is a very
strong liquidity support, in our view.
Kerala can rely on the RBI for short-term committed liquidity
facilities in the shape of ways and means of advances (WMAs),
overdraft, and special drawing facilities (SDF). In view of the
market volatility caused by COVID-19, the RBI recently increased
the limit on WMAs by 60% to support liquidity requirements of
Indian states. Furthermore Indian states, including Kerala, have
benefitted from timely and rule-based debt relief mechanisms from
the central government via the Finance Commission.
Environmental, social, and governance (ESG) factors relevant to the
rating action:
-- Health and safety.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
Downgraded
To From
Kerala (State of)
Issuer Credit Rating BB-/Stable/B BB/Stable/B
INMARK RETAIL: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Inmark Retail Private Limited
481-B, IV Phase
Peenya Industrial Area
Bangalore KA 560058
Insolvency Commencement Date: June 2, 2020
Court: National Company Law Tribunal, Bangalore Bench
Estimated date of closure of
insolvency resolution process: November 28, 2020
Insolvency professional: Mr. V S Varun
Interim Resolution
Professional: Mr. V S Varun
Flat no. 1B-108
The Tree by Provident
2nd Main Road
Herohalli
Off Magadi Road
Bangalore 560091
E-mail: vsvarun@yahoo.com
Last date for
submission of claims: June 22, 2020
INTERNATIONAL LAND: CARE Cuts Rating on INR33.48cr Loan to B-
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
International Land Developers Private Limited (ILDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 33.48 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 11, 2019; placed the
rating(s) of ILDPL under the 'issuer non-cooperating' category as
ILDPL had failed to provide information for monitoring of the
rating. ILDPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails dated May
05, 2020; May 08, 2020 and May 12, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of non-availability of
requisite information due to non-cooperation by ILDPL. CARE views
information availability risk as a key factor in its assessment of
credit risk.
Detailed description of the key rating drivers
At the time of last rating on January 11, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* High project execution risk with ongoing projects at nascent
stages of development: ILDPL is currently developing two group
housing projects namely, 'ARETE' located at Sector 33, Gurgaon and
'GSR Drive' located at Sector 36, Gurgaon. For ARETE project, the
company has incurred only 43% of the total cost of the project as
on December 31, 2017 (34% as on March 27, 2017); majorly comprising
of land cost, statutory fees for approvals and excavation. In 'GSR
Drive', the company has incurred INR60 cr out of total estimated
project cost of INR739 cr as on 31, December, 2017 i.e. about 8% of
total cost. The slowdown in construction can be attributed to lower
sales & collections owing to lower demand as a result of overall
slowdown in the real estate sector. Overall, the company remains
exposed to execution risk and the completion of projects within
envisaged cost and timelines remain a key rating sensitivity.
Moreover, with most part of balance cost to be incurred is planned
to be funded through customer advances, the funding risk for the
projects also continues to remain at high level.
* Significant project off-take risk: The projects of ILDPL are at
nascent stage of operation and carry off-take risk. ARETE project
was launched in January, 2014 and as on Dec 31, 2017 the company
has sold 4.06 lsf of area as compared to 3.98 lsf as on Jan 31,
2017, out of a total saleable area of 8.65 lsf. The company has
sold only 0.06 lsf area during last 11 months ending Dec 31, 2017
on account of low demand due to slowdown in industry. GSR Drive has
been recently launched with about 0.73 lsf area sold till Dec-17
out of a total saleable area of 15.55 lsf. With slow sales
progress, the offtake risk of the projects remains high. Also, with
the current demand slowdown in the real estate market especially in
the Delhi and NCR region, the ability of the company to sell the
inventory as envisaged remains crucial for timely completion of
this project.
* Inherent risk associated with the real estate industry - Industry
Risk: The real estate sector is moving towards a more rational
regime where developers now focus on project execution and
delivery. 2018 is expected to gradually move towards better home
sales and see a spurt in launches in some locations. The year will
also see the sector moving from an investor-driven to an end-user
driven cycle. As per market sentiments the India Real Estate Market
may not witness a sharp reversal in 2018 but its long term the
growth prospects remain strong. As the sector continues to remain
troubled with issues of high unsold inventory, delayed
delivery of projects and financial stress on developers, the
broader market opinion is that while the long term story for
residential market remains strong; the short term is expected to be
sluggish.
Key Rating Strength
* Experienced promoters and proven track record of project
execution: ILDPL was promoted by Mr. Alimuddin Rafi Ahmed with
experience of more than 12 years in the real estate industry.
The company belongs to ILD group involved in real estate business.
Other companies of the group are ALM Infotech City Private Limited
and ILD Millenium Private Limited. In the past the group have
completed and delivered two real estate projects including an
Industrial Township in Manesar and a commercial project in Gurgaon
with the total saleable area of 83lsf. The group is currently
executing four residential group housing project in its group
companies: ILD Grand, Gurgaon (ALM Infotech City Pvt. Ltd.), ILD
Spire Greens, Gurgaon (ILD Millennium Pvt. Ltd.), Arete, Gurgaon
and GSR Drive at Sector 36, Gurgaon (ILD).
Incorporated in July 2006, International Land Developers Pvt. Ltd.
(ILDPL) is a Gurgaon based real estate developer promoted by Mr.
Alimuddin Rafi Ahmed. The company is a part of ILD group. Other
companies of the group are ALM Infotech City Private Limited
(Withdrawn in Mar-16 at CARE BB) and ILD Millenium Private Limited
(Withdrawn in Mar16 at CARE BB) are also engaged in real estate
development. In the past, the group has delivered two real estate
projects including an industrial township in Manesar (58 lsf) and
ILD Trade Centre, Gurgaon (25 lsf). ILDPL is currently developing
two group housing project located at Sector 33, Gurgaon and Sector
36, Gurgaon.
KADAM AND KADAM: CARE Lowers Rating on INR60.00cr LT Loan to 'D'
----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kadam and Kadam Jewellers Pvt Ltd (KKJPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short- 60.00 CARE D; Issuer Not Cooperating;
Term Bank Revised from CARE BB-Stable/
Facilities CARE A4 on the basis of best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 18, 2019, placed the
ratings of KKJPL under the 'issuer non-cooperating' category as
KKJPL had failed to provide information for monitoring of the
rating as agreed to in its Rating Agreement. KKJPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated May 18,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of delays in servicing of
debt obligations as informed by the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in servicing of debt obligations: There have been
instances of delays as informed by the company since June 2019.
Kadam and Kadam Jewellers Pvt Ltd (KKJPL) was established in the
year 2000 in Mumbai by Mr. Nitin Kadam, who is also one of the
founder directors of The All India Gems & Jewellery Trade
Federation. KKJPL is in the business of manufacturing and trading
of gold/silver/diamond studded jewellery and sells them to
retailers, wholesalers and traders across India. KKJPL has recently
set up a subsidiary company named "Kadam & Kadam International
DMCC" in Dubai during FY17.
KERALA INFRASTRUCTURE: S&P Lowers ICR to 'BB-/B', Outlook Stable
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit ratings on Kerala
Infrastructure Investment Funding Board (KIIFB) to 'BB-/B' from
'BB/B'. The outlook on the long-term rating is stable.
S&P said, "At the same time we lowered the issue ratings on KIIFB's
Indian rupee (INR) 50 billion MTN program and the INR21.5 billion
senior unsecured offshore bonds (or "masala bonds") issued under
the program to 'BB-' from 'BB'. We equalize the ratings on the MTN
program and the bonds with the long-term foreign currency issuer
credit rating on the guarantor, the Indian state of Kerala
(BB-/Stable/B)."
The stable outlook takes into account our expectation that KIIFB's
strategic role as a policy instrument of the government of Kerala
to promote infrastructure financing will prevail over the next
12-24 months at least. The stable outlook also reflects the outlook
on the government of Kerala. The ratings and outlook on KIIFB will
move in tandem with those on Kerala.
S&P said, "We may lower the ratings on KIIFB if we see signs of a
change in the company's policy role, a reduction in government
support, or a move to significantly lower the government's stake in
KIIFB. These could erode the government's obligation or incentive
to support the entity.
"We may also lower the ratings on KIIFB if the government modifies
or discontinues the guarantee facility, or even the broader Kerala
Infrastructure Investment Fund (KIIF) Act itself. We may also
downgrade KIIFB if we lower the rating on the government of
Kerala.
"We may upgrade KIIFB if we raise the rating on Kerala and the
company continues to perform the same level of service for the
state government.
"We lowered the ratings on KIIFB following a similar action on the
government of Kerala. In our view, the COVID-19 pandemic will
significantly worsen Kerala's credit metrics. We believe KIIFB will
maintain its linkages with Kerala, given the company's sole
ownership by the government of Kerala.
"In our view, the likelihood of support to KIIFB from the
government of Kerala is almost certain, given KIIFB's critical role
and integral link to the state. The ratings on KIIFB mirror those
on Kerala. We do not assess the entity's stand-alone credit profile
because that is not a rating driver, given the almost certain
likelihood of extraordinary support from the state. In addition, we
do not believe the government support is subject to transition
risk. KIIFB executes strategic governmental policies and is a
non-severable arm of the Kerala state government."
The ratings on KIIFB are supported by the company's position as the
sole agency for the state to promote the long-term financing of its
strategic infrastructure projects. The ratings benefit from the
support the company receives from the government in several forms,
including guarantees, capital injections, tax revenue streams for
funding, and escrow mechanism.
KIIFB was set up in 1999 as an agency to mobilize funds for capital
expenditure on behalf of the Kerala government. After being dormant
for more than a decade, the government amended the KIIF Act in 2016
to strengthen the oversight, guarantee structure, and controls,
with the government intending to use the vehicle in a major way for
its infrastructure plans.
S&P said, "We view KIIFB's role as critical given that it is the
nodal infrastructure-funding agency of the Kerala government,
focused on strategic projects that are crucial for the economy. The
government created KIIFB in anticipation of the need to invest in
physical infrastructure to boost growth. KIIFB's policy role and
the terms of operations are spelt out clearly in the KIIF Act. The
state proposes that KIIFB will finance infrastructure projects
worth INR544 billion (US$7.2 billion) over 2017-2024 in Kerala.
KIIFB has projects worth INR116 billion under construction, and it
has tendered additional projects worth about INR141 billion. We
expect KIIFB's role in supporting capital expenditure will become
paramount given the strain on the state government's budget."
The Kerala government envisions using KIIFB to secure funding for
infrastructure to back new growth sectors. This is critical given
the heavy reliance of Kerala's current economic growth on
consumption. KIIFB's operations support the government's efforts to
chart a new course in economic development. S&P therefore believes
that KIIFB has a crucial public policy objective to fulfill.
There is no clear written line of separation for infrastructure
projects between the government of Kerala and KIIFB. The state has
made public its intentions to place all its strategic and
large-scale projects with KIIFB. The government's budget has
mandated KIIFB as the execution agency across various strategic
projects.
The process for selecting projects starts with elected
representatives discussing with their constituency officials and
residents about their infrastructure requirements. The elected
representatives then present the wish list of projects to the
legislative assembly for debate. The state may fund small projects
from its own budget if possible. For the rest of the projects,
KIIFB is the final approver. As a part of delivering its mandate,
KIIFB scrutinizes, approves, and funds selected projects from the
proposed list.
In S&P's view, KIIFB is integrally linked to the state through the
government's tight supervisory control and support in the shape of
a statutory guarantee on the company's debt obligations. KIIFB
benefits from having all its debt obligations guaranteed by the
state under the KIIF Act. The support reflects the government's
commitment to expanding the entity's scale and scope of
operations.
S&P believes KIIFB's board structure reflects the highest level of
commitment and tight link with the state government. The government
appoints KIIFB's chief executive officer and most of the board of
directors. KIIFB is the only state government-related entity (GRE)
that has its chief minister, finance minister, budget secretary,
finance secretary, and chief secretary of the state present on the
board. The chief minister is the chairman of the board while the
minister of finance heads the executive committee. The presence of
top government officials heightens the reputational risk for the
government if KIIFB were to fail to meet its debt obligations.
The government has in place an escrow mechanism to ensure that tax
revenue due to KIIFB from the government is received in a timely
manner. This is on top of ongoing support, mainly through regular
capital infusions and loan guarantees.
The Kerala government has clear processes and procedures to enable
effective governance, monitoring, and control over the GRE. In
S&P's experience, the safeguards and support mechanisms deployed by
Kerala for KIIFB are more than what we have generally observed in
state GREs in India. The government has the administrative capacity
and mechanism for responding to KIIFB's financial distress in a
timely manner. The Fund Trustee and Advisory Commission (FTAC) is
an additional oversight mechanism the Kerala government created
under the legislative framework of KIIF. We believe this additional
feature, besides the usual oversight by the Bureau of Public
Enterprises, will help ensure that investments of the fund are
ring-fenced in line with the intent of the Act and that there is no
diversion of funds. Notably, the three-man FTAC is headed by
eminent central officials--former comptroller and auditor-general
of India, former deputy governor of the Reserve Bank of India
(RBI), and a retired executive director of the RBI.
S&P said, "We believe the strength of government support for KIIFB
offsets the uncertainties relating to the company's financial
position. In our view, KIIFB's importance to the government of
Kerala, at least in the next few years, will translate into timely
funding support should the entity encounter difficulty in servicing
its debt obligations."
Environmental, social, and governance (ESG) factors relevant to the
rating action:
-- Health and safety.
KNOWLEDGE EDUCATION: CARE Keeps D INR8.50cr Debt Rating in Not Coop
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Knowledge
Education Foundation continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.50 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 7, 2019 placed the
rating of Knowledge Education Foundation under the 'issuer
non-cooperating' category as Knowledge Education Foundation had
failed to provide information for monitoring of the rating.
Knowledge Education Foundation continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls. In line with the extant SEBI guidelines, CARE
has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating factors in the ongoing delays in debt servicing.
Detailed description of the key rating drivers At the time of last
rating on March 1, 2019, the following were the rating strengths
and weaknesses:
Key Rating Weaknesses
* Ongoing delay in debt servicing: There have been delays in debt
servicing of term loan on account of stressed liquidity position.
Delhi based, KEF (Regd.) established in 2009 was promoted by Mr.
Sunil Gupta (Managing Trustee and Chancellor of society) for
developing and operating education institutes. Knowledge Education
Foundation operates school under the brand name of 'Delhi Public
School (DPS)' in Bikaner, Rajasthan under an agreement with The
Delhi Public School Society (DPS Society). The school provides
primary and secondary education from Nursery to XII standard and is
affiliated with CBSE (Central Board of Secondary Education).
LANCO MANDAKINI: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Lanco Mandakini Hydro Energy Private Limited
14-H, Pushpanjali Enclave
General Mahadev Singh Road
Dehradun 248001
Uttarakhand
India
Insolvency Commencement Date: June 11, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: December 8, 2020
(180 days from commencement)
Insolvency professional: Bhrugesh Amin
Interim Resolution
Professional: Bhrugesh Amin
BDO India LLP
Level 9, The Ruby
North West Wing
Senapati Bapat Road
Dadar (W)
Mumbai 400028
India
E-mail: bhrugeshamin@ndo.in
irplanco@bdo.in
Last date for
submission of claims: June 25, 2020
M.P.K. METALS: CARE Keeps 'D' Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of M.P.K.
Metals Private Limited (MPKM) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.41 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short Term Bank 0.72 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 22, 2019, placed the
rating(s) of MPKM under the 'issuer non-cooperating' category as
MPKM had failed to provide information for monitoring of the rating
for the rating exercise as agreed to in its Rating Agreement. MPKM
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated May 01, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating based on best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating PR on March 22, 2019 the following were
the rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
* Ongoing delays in debt servicing: The account of the company was
NPA owing to stretched liquidity position.
Incorporated in 2009, M.P.K Metals Private Limited (MPKM) is
promoted by MPK group based out of Jaipur (Rajasthan). MPKM is
primarily engaged into the business of manufacturing of structural
products includingMild Steel (M S) angles, sections, rounds and
flats which finds its application particularly in infrastructure
industries ranging from power transmission to real estate. MPKM has
its manufacturing unit situated at Jaipur, Rajasthan, having
installed capacity of 4,800 Metric Tonnes Per Annum (MTPA) as on
March 31, 2016.
MAHALAXMI OIL: CARE Cuts INR6.03cr LT Loan Rating to B, Not Coop.
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Mahalaxmi Oil Mill (MOM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.03 CARE B; Issuer Not Cooperating;
Facilities Revised from CARE B+; on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019, placed the
ratings of MOM under the 'Issuer noncooperating' category as MOM
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. MOM continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and letter/emails dated May 08,
2020, May 13, 2020 and May 15, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings assigned to the bank facilities of MOM have been
revised on account of non-availability of requisite information.
The rating continues to remain constrained on account of leveraged
capital structure, working capital intensive operations,
susceptibility of profitability to fluctuation in raw material
prices and stretched liquidity position. However, the ratings
continue to derive strength from experienced partners having more
than a decade of experience in similar industry, capital infusion
during FY16 to support growth in scale of operations and good sales
mix through direct channel and through dealers.
Detailed description of the key rating drivers
At the time of last rating done on June 28, 2019, the following
were the rating strengths and weaknesses.
Key Rating Weaknesses
* Leveraged capital structure and working capital intensive
operations: MOM had a leveraged capital structure with a total
debt of INR5.64 crore as against net worth of INR1.64 crore
translating into an overall gearing of 3.44 times at FY15 end.
However, unsecured loans from related parties formed 15% of the
total debt as on March 31, 2015, which have no scheduled
repayments. MOM's working capital limits largely remained fully
utilized for the past twelve months ended January 31, 2016. Working
capital borrowings formed around 38% of the total debt as on March
31, 2015.
* Susceptibility of profitability to fluctuations in raw material
prices: MOM procures maize germ from the starch units of different
maize producing states like Punjab, Uttarakhand, West Bengal and
Maharashtra. The pricing of maize germ is domestically determined
and depends on the price of maize and the
proportion of protein content in it. Prices also depend on the
weather conditions in major soya producing states. MOM procures
maize germ regularly as per its production capacity exposing it to
fluctuations in raw material prices.
Key Rating Strengths
* Experienced partners: The key partners of MOM namely Mr Mansukh
Bhagat and Mr Premchand Patel have more than ten years of
experience in manufacturing maize oil and maize oil cake used as
cattle feed through their earlier partnership firm Laxmi Oil Mill
which was dissolved and a new partnership firm was created in
February 2014, with new machinery.
* Capital infusion to support growth in scale of operations: MOM
was incorporated in February 2014 and registered a total operating
income of INR2.80 crore with PBILDT of INR0.35 crore and PAT of
INR0.09 crore in FY15 (refers to the period April 01 to March 31)
due to first year of operations. During 10MFY16, the scale of
operations have increased significantly with the total operating
income of INR21.71 crore on the back of increased production and
improvement in capacity utilization of the plant. MOM had an
installed capacity of 100 TCD as on March 31, 2015 and average
capacity utilization of around 70% during 10MFY16. MOM incurred
capex of around INR1.00 crore in FY16 for increasing installed
capacity to 130 TCD and setting up a unit for manufacturing cotton
cake and wash oil (cotton oil) to diversify its product range which
was expected to become operational from April 2016. The capex was
funded through equity infusion of INR0.40 crore and unsecured loan
addition of INR0.62 crore.
* Good sales mix through direct channel and through dealers: MOM
sells its products under the brand name 'Mewad King' and leverages
on its established distribution network for its sales with around
70% of its total operating income through existing dealers. MOM
sells its primary product; maize oil cake majorly in the states of
Gujarat, Rajasthan and Maharashtra where sales take place through a
network of dealers. MOM procures its raw material; maize germ
(obtained as by-product while extracting starch from maize) from
different maize producing states like Punjab, Uttarakhand, West
Bengal and Maharashtra. Maize oil recovered during the process is
sold to oil refineries located nearby.
Liquidity position: Stretched
The liquidity position of MOM remained moderate marked by low
current ratio of 1.15 times as on March 31, 2015. The cash and bank
balance remained low at INR0.08 crore as on March 31, 2015.
MOM is a partnership firm engaged in manufacturing maize oil and
maize oil cake used as cattle feed. The partners of the firm are Mr
Mansukh Bhagat (65% share), Mr Premchand Patel (15% share), Mr
Hitesh Patel (10% share) and Mr Manoj Velani (10% share). The
manufacturing facility of the firm is located in Dhansura Taluka of
Gujarat with an installed capacity of 100 tonnes crushed per day
(TCD). MOM sells its product variants under the brand name of
'Mewad King'.
MODI SOLVEX: CARE Lowers Rating on INR10.25cr Loan to 'B'
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Modi
Solvex (MDS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 10.25 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 29, 2019, placed the
rating of MDS under the 'issuer noncooperating' category as Modi
Solvex had failed to provide information for monitoring of the
rating. MS continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated May 8, 2020, May 6, 2020, May 5, 2020 and
May 4, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The rating has been revised on account of raw material price
fluctuation risk, high degree of competition resulting from
fragmented nature of the edible oil industry, partnership nature of
constitution. The rating, however, derives strength from
experienced partners and long track record of operations.
Key Rating Weaknesses
* Raw material price fluctuation risk: The entities in edible oil
industry are susceptible to fluctuations in raw material prices.
Price of rice is governed by the demand-supply dynamics prevalent
in major rice growing nations, weather conditions and prices of
substitute. Furthermore, any increase in the rice bran prices
without a corresponding increase in edible crude oil prices will
adversely impact the profitability margins of the entities in this
business.
* High degree of competition resulting from fragmented nature of
the edible oil industry: Low barriers to entry have resulted in
highly fragmented nature of the edible oil industry. Furthermore,
most of the manufacturers offer similar products with little
difference which competes with each other resulting in lower
margins for most of the players.
* Partnership nature of constitution: MDS's constitution as a
partnership firm has the inherent risk of possibility of withdrawal
of the partners' capital at the time of personal contingency and
firm being dissolved upon the death/retirement/insolvency of
partners.
Key Rating Strengths
* Experienced partners and long track record of operations: MDS
was established in 2001 and its day to day operations are looked
after by its five partners jointly. Mr. Narinder Kumar Modi, Mr.
Vijay Kumar Modi and Mr. Anubhav Modi have an industry experience
of around four decades, three and a half decades and two decades
respectively through their association with MDS and Modi Rice &
General Mills (entity engaged in processing of paddy till 2001).
Furthermore, Mr. Ashish Modi and Mr. Sahil Modi have an industry
experience of around one and a half decades through their
association with MDS.
Modi Solvex (MDS) was established in 2001 as a partnership firm by
Mr Anubhav Modi, Mr Narinder Kumar Modi, Mr Vijay Kumar Modi, Mr
Ashish Modi and Mr Sahil Modi sharing profit and loss in the ratio
of 25%, 25%, 20%, 15% and 15% respectively. The firm is engaged in
the extraction of rice bran oil from rice bran at its processing
facility located in Ludhiana, Punjab with an installed solvent
extraction capacity of 8280 metric tonne of rice bran oil per annum
as on March 22, 2018. The firm manufactures rice bran oil in
semi-edible form for industrial use, which is sold to refineries
based in Punjab and Haryana through brokers and commission agents.
NAVALMAR SHIPPING: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: M/s. Navalmar Shipping (India) Private Limited
No. 207/208, Sunrise Chambers
2nd floor, #22 Ulsoor Road
Bangalore 560042
Insolvency Commencement Date: May 29, 2020
Court: National Company Law Tribunal, Bangalore Bench
Estimated date of closure of
insolvency resolution process: December 3, 2020
Insolvency professional: Ritesh Prakash Adatiya
Interim Resolution
Professional: Ritesh Prakash Adatiya
E-904, Iscon Platinum
Bopal Cross Road
Bopal, Ahmedabad
E-mail: riteshadatiya01@gmail.com
- and -
401, The First
B/h ITC Hotel
B/s Keshavbaugh Party Plot
Vastrapur, Ahmedabad 380015
Tel: 079-4891661
Mobile: 9979855266
Last date for
submission of claims: June 20, 2020
PULKIT PROJECTS: CARE Cuts INR13cr LT Loan Rating to B
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Pulkit Projects Private Limited (PPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.00 CARE B; Stable; Issuer Not
Facilities Cooperating; Revised from
CARE B; Stable on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 4, 2019 placed the
rating of PPPL under the 'issuer non-cooperating' category as
Pulkit Projects Private Limited had failed to provide information
for monitoring of the rating. Pulkit Projects Private Limited
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised by taking into account non-availability
of requisite information and no due-diligence conducted with banker
due to non-cooperation by Pulkit Projects Private Limited with
CARE'S efforts to undertake a review of the rating outstanding.
CARE views information availability risk as a key factor in its
assessment of credit risk.
Further, the ratings continue to remain constrained owing by small
scale of operations, elongated operating cycle and competitive
industry and risks associated with tender-based orders. The
ratings, however, continue to take comfort from experienced
promoter and track record of operations of group, moderate but
declining profitability margins and moderate order book though
concentrated and assured revenue visibility in the form of lease
rentals.
Detailed description of the key rating drivers
At the time of last rating on March 29, 2019, the following were
the rating strengths and weaknesses (Updated with information from
MCA):
Key Rating Weaknesses
* Small scale of operations: The scale of operations of the
company marked by a total operating income and gross cash accruals
improved to INR15.79 crore and INR1.30 crore respectively during
FY19 as against INR8.81 crore and INR1.12 crore respectively during
FY18. The net worth of the company also stood small at INR13.18
crore as on March 31, 2019. The small scale limits the company's
financial flexibility in times of stress and deprives it of
benefits of economies of scale.
* Elongated Operating cycle: The operating cycle of the company
improved but remained elongated to 432 days for FY19 as against 708
days for FY18 mainly on account of prolongation of collection
period. Being a highly competitive nature of industry the company
gives extended credit period of around 3 to 4 months to its
customer. Furthermore, the collection period elongated
significantly to 90 days for FY19 and company has to extend
additional credit period to its customers. Further, the company
maintains average inventory of around a month form smooth execution
of its manufacturing process. The average inventory holding period
stood at 342 days for FY19. The company normally procures the raw
material i.e. annealed glass on cash and advance basis while it
gets credit up to 17 days from other raw material supplier. The
high working capital requirements are largely met through bank
borrowings which resulted into almost fully utilization of the
average working capital limits for the past 12 month period ending
February, 2019.
* Competitive industry and risks associated with tender-based
orders: PPPL faces direct competition from various organized
players in the market. There are other established players in the
organized sector catering to the same market which has limited the
bargaining power of the company and therefore has a bearing on its
margins. Furthermore, the company majorly undertakes government
projects, which are awarded through the tender-based system. The
company is exposed to the risk associated with the tender-based
business, which is characterized by intense competition. The growth
of the business depends on its ability to successfully bid for the
tenders and emerge as the lowest bidder. This apart, any changes in
the government policy or government spending on projects are likely
to affect the revenues and profits of the company.
Key Rating Strengths
* Experienced promoter and track record of operations of group: Mr
Mohan Lal Singhal (Director) and Mr Pulkit (son of Mr. Mohan Lal
Singhal) look after the day to day operations of the company. Both
of them are charted accountants by qualification holds more than
two decades of experience respectively in water management service
through their association with PPPL and other group entity namely
Nidhi Investments Private Limited, Pulkit Projects Private Limited,
Nidhi Projects Private Limited, Nidhi Infratech Private Limited,
Pulkit Infratech Private Limited. Further, the research and
development was taken care by professionals having extensive
experience in water management and sanitation & sewage management
service. Further, the promoter and directors have been operational
in the industry through this entity and other associates, which has
been enabled company to establish strong footmark in the industry.
They are well supported by professionally qualified and experienced
second tier management, who actively takes part in day-to-day
business operations and implementation of managerial decision. The
company has an order book of around Rs64 crores from the Uttar
Pradesh Jal Nigam.
* Moderate but declining profitability margins: The company has
reported moderate profitability margins marked by PBILDT margin of
13.65% during FY19 as against 21.57% during FY18 on account of
increase in raw material cost of the company. PAT margin of the
firm also remained moderate at 6.10% during FY19 as against 9.50%
during FY18 mainly on account of higher depreciation cost of the
company.
* Moderate order book though concentrated and assured revenue
visibility in the form of lease rentals: The unexecuted order book
position of the company as on Feb 28, 2019, stood at INR 23 crore
providing short to medium term revenue visibility. The order book
is concentrated towards single order. Hence, effective and timely
execution of the orders has a direct bearing on the margins. The
company has commercial building in Vikas Puri, Delhi with tenants
as Dena Bank and HDFC sales, with lock in period of 15 years and 9
years respectively. The rental income from both the
tenants is around INR1 crore providing assured revenue visibility
over the medium term.
New Delhi based Pulkit Projects Private Limited (PPPL) was
incorporated in 2005 as a private limited company and promoted by
M. L. Singhal and Sunita Singhal. The company is largely engaged in
civil construction such as construction of buildings, residential
and commercial complexes etc. PPPL is currently executing a common
effluent treatment plant (CETP) of 12.5MLD capacity in two Modules
of 6.25 MLD each based on Primary, Physico-Chemical, Biological
(extended ASP), Tertiary Treatment and allied works on Turnkey
Basis at HSIIDC Industrial Estate, Bahadurgarh, Haryana. PPPL is
engaged in Planning, Design, Engineering, Construction, Testing,
Commissioning, Trial run, Operation and Maintenance for 60 months
of Common Effluent Treatment Plant (CETP) of 12.5MLD Capacity in
two Modules of 6.25 MLD each based on Primary, Physico-Chemical,
Biological (extended ASP), Tertiary Treatment and allied works on
Turnkey Basis.
RADHE COTTON: CARE Keeps D INR5.58cr Debt Rating in Not Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Radhe
Cotton Company (RADHE) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.58 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019, placed the
ratings of RADHE under the 'Issuer non-cooperating' category as
RADHE had failed to provide information for monitoring of the
rating as agreed to in its Rating Agreement. RADHE continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and letter/emails dated May 8,
2020, May 13, 2020 and May 15, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating done on June 28, 2019, the following was
the rating weakness:
Key Rating Weaknesses
* Delay in debt servicing: The rating assigned to the bank
facilities of Radhe Cotton Company takes into account the fact that
account of RADHE had become NPA on the back of on-going delay in
debt servicing by the firm due to weak liquidity position.
Gokhalana, Jasdan (Rajkot) – based, RADHE was incorporated as a
partnership firm in 2012 by six partners. The partners of RADHE
include mainly Mr Rameshbhai Khakhriya, Manubhai Khakhriya and
Dhirajbhai Jivabhai Khakhriya. The firm is engaged into the
activity of cotton ginning, bailing and cleaning of cotton. The
products of RADHE include cotton seeds, cottonseeds oil cake and
cotton wash oil.
RATHI STYLE: CARE Cuts INR5.0cr LT Loan Rating to B-, Not Coop.
---------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Rathi Style And Textile Private Limited (RSTPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.00 CARE B-; Stable; Issuer Not
Facilities Cooperating; Revised from
CARE B; Stable on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 2, 2019, placed the
rating(s) of RSTPL under the 'issuer non-cooperating' category as
Rathi Style And Textile Private Limited had failed to provide
information for monitoring of the rating. Rathi Style And Textile
Private Limited continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter dated April 17, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in rating factors in significant decrease in the scale
of operations and highly elongated working capital cycle during
FY19. CARE also views information availability risk as a key factor
in its assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on April 2, 2019 the following were the
rating strengths and weaknesses: (updated for the information
available from Registrar of Companies):
Key rating Weakness
* Moderate scale of operations coupled with moderate
capitalization: The total operating income has significantly
declined by 86.86% and stood at INR44.98 crore in FY19 (vis-à-vis
INR342.39 crore in FY18). Further the tangible networth of the
company stood small at INR3.63 crore as on March 31, 2019
(vis-à-vis INR3.65 crore as on March 31, 2018). The moderate scale
coupled with low networth base limits the entity's financial
flexibility in times of stress and deprives it from scale
benefits.
* Thin operating margin and low net profit margin: However despite
significant decline in total sales in FY19, the PBILDT margin has
improved by 109 bps and stood at 1.16% during FY19 (vis-à-vis
0.07% in FY18) mainly on account of decrease in raw material
consumption cost as a percentage of total operating income from
99.73% in FY18 to 97.28% in FY19 coupled with decrease in power and
fuel cost and selling expenses. However, despite increase in
interest cost during the FY19, the net profit margin of RSTPL has
improved by 14 bps and stood at 0.16% in FY19 (vis-s-vis 0.02% in
FY18) owing to improvement at operating profit margin. However it
profit margins continues to remain low.
* Moderately leveraged capital structure and weak debt coverage
indicators: The overall gearing has improved and stood at 0.60x
times as on March 31, 2019 (vis-à-vis 1.09x times as on March 31,
2018) on account of lower utilization of working capital limits.
However, due to high creditor's level, the total outside
liabilities to tangible networth stood relatively high at 2.30x as
on March 31, 2019. Moreover, despite improvement in the total debt
to GCA at 29.34x times in FY19 (vis-à-vis 54.24x times in FY18) on
account of reduction in debt level; the same continue to remain
high. Owing to increase in interest cost the interest coverage
ratio deteriorated and stood at 1.24x times in FY19 (vis-à-vis
1.75x times in FY18).
* Stretched liquidity position: The liquidity position of the
company is remained moderately weak marked by moderate current
ratio of 1.44x times and quick ratio of 1.32x times as on March 31,
2019, owing to trading nature of business where most of the funds
are blocked in debtors. The collection period has significantly
deteriorated to 145 days in FY19 from 27 days in FY18. Moreover,
the creditors period has also significantly elongated to 106 days
in FY19 from 24 days in FY18.
* Presence in highly fragmented industry leading to stiff
competition: RSTPL operates in highly fragmented, organized and
unorganized market of textile industry marked by large number of
small sized players. The industry is characterized by low entry
barrier due to minimal capital requirement and easy access to
customers and supplier. Also, the presence of big sized players
with established marketing & distribution network results into
intense competition in the industry.
Key rating Strengths
* Experienced and resourceful promoter in the apparel trading
industry: Mr. Chaina Ram Saini and Ms. Monika Bhatter have good
experience in this domain and looks after the overall management of
the firm. Further, the directors are supported by a team of
qualified managerial personnel having long standing experience in
the industry. Further the promoters are resourceful and supporting
the business through infusion of equity capital on year on year
basis.
Rathi Style And Textile Private Limited (RSTPL) was incorporated in
the year 2012 as a private limited company. RSTPL was promoted by
Mr. Mahesh Kumar Rathi. Later on and Mr. Vijay Tanwar, Mr. Chaina
Ram Saini and Ms. Monika Bhatter joined as additional directors as
on December 01, 2014, December 30, 2016 and February 01, 2017
respectively. Further Mr. Mahesh Kumar Rathi & Mr. Vijay Tanwar
resigned as on February, 2017, and currently the entire operations
are handled by Mr. Chaina Ram Saini & Ms. Monika Bhatter. The
actual operations of the company have started since FY15. RSTPL is
engaged in trading of readymade garments for women namely kurtis,
leggings, and western top and others. The company procures traded
goods from the local market based in Maharashtra & Gujarat. RSTPL
sells its products in Maharashtra & Gujarat and generates ~100% of
its revenue from domestic market.
RIDDHI SIDDHI: CARE Assigns B+ Rating to INR5.60cr LT Loan
----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Riddhi
Siddhi Freezing And Storage (RSFS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.60 CARE B+; Stable Assigned
Facilities
Detailed Rationale and key rating drivers
Key Rating Sensitivities
Positive factors
* Increase in scale of operation (turnover above INR20.00 crore)
while sustaining its current operating margin on a sustained
basis.
* Improvement in capital structure (overall gearing ratio below
1.0x) and its reduced reliance on external borrowing for funding
its working capital requirement on a sustained basis.
Negative factors
* Any sizeable decline in scale of operation (turnover below
INR7.50 crore) with decline in operating margin from current level
on a sustained basis and any changes in the government policy which
affects the operations of the entity.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operations with moderate profitability margins:
The total operating income has witnessed erratic trend during last
three years (FY17-FY19) due to fluctuating market scenario and
prices for potatoes. Moreover, the overall scale of operations of
the firm remained small marked by total operating income of
INR10.62 crore (FY18: INR4.70 crore), PAT of INR0.04 crore (FY18:
INR0.06 crore), and cash accruals of INR0.60 crore (FY18: INR0.70
crore) in FY19. Furthermore, the tangible networth also remained
low at INR4.84 crore as on March 31, 2019. The operating margin has
deteriorated significantly during FY19 mainly due to sharp decline
in potatoes prices but the same remained moderate at 10.05% in FY19
as against 25.15% in FY18. The PAT margin also moved in line with
the PBILDT margin during last here years and the same stood low at
0.38% in FY19 as against 1.37% in FY18. During FY20, estimated the
firm has reported a total operating income of INR9.58 crore with a
PAT of INR0.13 crore.
* Partnership nature of constitution: RSFS, being a partnership
firm, is exposed to inherent risk of the partner's capital being
withdrawn at time of personal contingency and firm being dissolved
upon the death/retirement/insolvency of the partners. Furthermore,
partnership firms have restricted access to external borrowing as
credit worthiness of partners would be the key factors affecting
credit decision for the lenders.
* Exposure to agro climatic risks and traded material price
fluctuations: The firm is into storage and sale of potatoes and
accordingly it procures its traded goods mainly during harvesting
season, preserves it and sales as per the marked scenario. As, agri
products cultivation is highly dependent on monsoons, thus exposing
the fate of the firms' operation to vagaries of nature. Further,
the prices of the agri products are highly fluctuating and are
dependent on the agro climate conditions which impact the
profitability of the industry players.
* Moderate capital structure and debt coverage indicators: The
capital structure of the firm has improved year on year as on last
three account closing dates mainly on account of scheduled
repayment of term loans and lower utilization of working capital
limits and the same stood moderate marked by overall gearing ratio
of 0.90x as on March 31, 2019 as against 2.23x as on March 31,
2018. Furthermore, the debt coverage indicators also remained
moderate marked by interest coverage of 2.27x (FY18:2.42x) and
total debt to GCA of 7.33x (FY18:10.62x) in FY19.
* Competition from other local players: In spite of being capital
intensive, the entry barrier for new cold storage is low, backed by
capital subsidy schemes of the government. As a result, the potato
storage and sale business in the region has become competitive.
Key Rating Strengths
* Experienced promoters with satisfactory track record of
operations: RSFS is into storage and slae of potatoes business
since 2016 and accordingly has a satisfactory track record of
operations of around 4 years. Further, the key partner; Mr. Chhagan
Mal Singhi has more than three decades of experience in tea
business and around four years of experience in storage and sale of
potatoes business, looks after the overall management of the firm.
He is supported by other partner Mr. Nitin Agarwal and Mr. Anand
Agarwal who also has around four year of experience in this line of
business.
Liquidity: Adequate
Liquidity is marked by sufficient cushion in accruals vis-a-vis
repayment obligations and modest cash balance. The average
utilization of working capital limit was around 31% during last 12
month ended on March 31, 2020. The cash and cash equivalent stood
at INR0.17 crore as on March 31, 2020. This apart, the firm has
received a subsidy of INR1.98 crore from National Horticultural
Board on July 17, 2018 and the same is deposited with the bank
which will be used to repayment of term loan.
Riddhi Siddhi Freezing And Storage (RSFS) was constituted as a
partnership firm in December 2014 for setting up a cold storage
facility and sale of potatoes in the north east region. Currently,
the firm is being managed by Mr. Nitin Agarwal, Mr. Chhagan Mail
Singhi, Mr. Anand Agarwal and others. The firm has commenced its
operations from 2016 and it been engaged in the business of storage
and sales of potatoes in the North East region. The cold storage
facility of RSFS is located at Rongpuria, Patia Pathar Gaon,
Tinsukia, Assam with aggregated storage capacity of 5200 metric
tons. Potatoes are sourced from wholesale dealer of West Bengal and
Bihar and sold locally. The firm has received a subsidy of INR1.98
crore for setting up a new cold storage facility in the state from
National Horticultural Board (back ended subsidy) on July 17, 2018
and the same is deposited with the bank which will be used to
repayment of term loan.
SACOS INDIGO: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Sacos Indigo Private Limited
220, Mahavir Industrial Estate
Opposite Mahakali Caves Road
Andheri (E) Mumbai
MH 400093
IN
Insolvency Commencement Date: May 26, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: November 23, 2020
(180 days from commencement)
Insolvency professional: Mr. Santanu T Ray
Interim Resolution
Professional: Mr. Santanu T Ray
AAA Insolvency Professionals LLP
A301, Bsel Tech Park
Sector 30a
Opp. Vashi Railway Station
400705
Tel: 022-42667394
E-mail: santanutray@aaainsolvency.com
sacosindigo@aaainsolveny.com
Last date for
submission of claims: June 13, 2020
SANWARIA CONSUMER: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Sanwaria Consumer Limited
Office Hall No. 1, First Floor
Metro Walk Bittan Market
Bhopal MP 462016
IN
Insolvency Commencement Date: May 29, 2020
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: November 25, 2020
(180 days from commencement)
Insolvency professional: Rajeev Goel
Interim Resolution
Professional: Rajeev Goel
B-2/23, Janak Puri
New Delhi 110058
E-mail: goelrjv@yahoo.co.in
rgsclip@gmail.com
Last date for
submission of claims: June 15, 2020
SHIVA WHEELS: CARE Cuts INR8.89cr LT Loan Rating to B-, Not Coop.
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shiva Wheels Private Limited (SWPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 8.89 CARE B-; Issuer Not Cooperating;
Facilities Revised from CARE B+; on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SWPL to monitor the ratings
vide e-mail communications/letters dated May 4, 2020, May 06, 2020,
May 11, 2020 and numerous phone calls. However, despite CARE's
repeated requests, the entity has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. The rating on SWPL's
bank facilities will now be denoted as 'CARE B-; ISSUER NOT
COOPERATING'.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the rating assigned takes into account the
deterioration in total operating income during FY19 audited (refers
the period from April 1 to March 31). Further the rating also
factors in the no due-diligence conducted due to non-cooperation by
SWPL with CARE'S efforts to undertake a review of the rating
outstanding.
Detailed description of the key rating drivers
Key Rating Weaknesses:
* Small scale of operations: The total operating income has
declined to INR44.38 crore in FY19 as against INR51.30 crore in
FY18. Further, the tangible networth also remained low at INR2.86
crore as on Mar.31, 2019.
* Risk of non-renewal of dealership agreement: SWPL has entered
into a dealership agreement with HMSI in Feb., 2010. The dealership
agreement with HMSI has been renewed every year and the same is
currently valid till December, 2017 subject to renewal of the
agreement afterwards, completely at the discretion of HMSI.
Furthermore, the agreements may get terminated at any time on
violation of certain clauses. However, the risk is mitigated to
some extent in view of its long association with HMSI.
* Pricing constraints and margin pressure arising out of
competition from other auto dealers in the market: SWPL faces
aggressive competition on account of established presence of
authorized dealers of other passenger vehicle manufacturers like
Bajaj, Hero, Yamaha etc. Considering the existing competition, SWPL
is required to offer better terms like providing discounts on
purchases to attract new customers. Such discounts offered to
customers create margin pressure and may negatively impact the
revenue earning capacity of the company. Furthermore, the revenues
of SWPL would also be governed by launch of newer models by
principles, and acceptance of the products in the market.
* Thin profit margins, leveraged capital structure and moderate
debt protection metrics: The profit margin of the company remained
thin marked by PBILDT margin of 3.42% and PAT margin of 0.25% in
FY19. The capital structure of the company has remained leveraged
marked by overall gearing ratio of 3.46x (FY18: 4.18x) as on March
31, 2019. The debt service coverage indicators remained moderate
marked by interest coverage of 1.27x and total debt to GCA of
36.69x during FY19.
Key Rating Strength
* Experienced promoters with long track record of operation: SWPL
has been in operation since 1988. The company is managed by Mr
Sanjib Paul having two decades of experience in auto dealership
business along with the other three directors. All the directors
are actively involved in the business of the company.
* Authorized dealership of HMSI: SWPL is an authorised dealer of
HMSI and has started its association with the same since 2010. The
company has two showrooms in Kolkata. SWPL is getting a competitive
advantage of being one of the two dealers of Honda 2W for the
highly populated area of Kolkata. This apart, as the company also
sales multi brand 2W, it enjoys revenue diversity. This apart,
Honda has been one of market leaders in the 2W segment for decades
and has a wide & established distribution network of sales and
service centres across India, providing it a competitive advantage
over its peers.
Shiva Wheels Pvt. Ltd. (SWPL) was established as a partnership firm
namely Shiva Auto in 1988. Since inception, the firm has been in
two wheelers selling business. Later, in the year 2003, the firm
was converted into a company and rechristened as SWPL. Presently,
the company has two showrooms in and around Kolkata. The showroom
at Ramgarh in Kolkata sells multi brand two wheelers, spare parts
and accessories and the other showroom a B.T. Road is in authorised
dealership of HMSI for the north part of Kolkata.Apart from this,
the company has a workshop along with B.T. Road showroom.
SPG MULTI TRADE: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: SPG Multi Trade Private Limited
F-10, Prabha Co-Hsg. Soc. Ltd.
R.B. Mehta Marg, Ghatkopar East
Mumbai 400077
Insolvency Commencement Date: March 3, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: November 30, 2020
(180 days from commencement)
Insolvency professional: Modilal Dharnraj Pamecha
Interim Resolution
Professional: Modilal Dharnraj Pamecha
C-802 Padmarag
J.B. Nagar
Andheri (E)
Mumbai 400059
Maharashtra
E-mail: camodilalpamecha@gmail.com
Last date for
submission of claims: June 17, 2020
SULABH PHARMACEUTICAL: CARE Cuts Rating on INR12cr Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sulabh Pharmaceutical Private Limited (SPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 12.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB; Stable;
Issuer not cooperating; Based
on best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 27, 2019, placed the
rating(s) of SPPL under the 'issuer non-cooperating' category as
Sulabh Pharmaceutical Private Limited had failed to provide
information for monitoring of the rating and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. SPPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated April 20, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating(s).
The revision in rating assigned to the bank facilities of Sulabh
Pharmaceutical Private Limited (SPPL) factors in the ongoing delays
in debt servicing.
Key updates
* Ongoing delays in debt servicing: As per the interaction with the
banker, there are ongoing delays in debt servicing and the account
has been classified as NPA since September 2019.
Established in March 2012, Sulabh Pharmaceutical Pvt Ltd. is
promoted by Mr. Pravinkumar N. Prajapati and Mrs. Anita P.
Prajapati. SPPL is a distributor of pharmaceuticals products
especially in western region of Mumbai covering areas upto Mira
Road. Furthermore, SPPL manufactures pharmaceutical products
(manufacturing contributes to 5% of the business operations) under
its brand name on loan and license basis (outsourced) from units
situated in Baddi, Himachal Pradesh and distributes the same to
various stockists in Mumbai. The entity has tie-up with more than
500 major retailers in the entire Mumbai City.
On December 31, 2016, the promoters have merged its group entity
Jayesh Distributors (JD) which was into existence since 1997 and
engaged in wholesale trading of pharmaceutical products of
well-known FMCG firms/companies namely Godrej, Emami, Medimix, Fog,
DABUR, HUL & Procter & Gamble. SPPL has three warehouses spread
around 6000 sq. ft. (3000 sq. ft. per floor) situated in Bhiwandi,
Thane District, Maharashtra.
SWASTIK CERACON: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Swastik
Ceracon Limited (SCL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 76.62 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short Term Bank 15.50 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Long term/Short 2.50 CARE D/CARE D; Issuer not
term Bank Facilities Not Co-operating; Based on
best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide press release dated March 20, 2017, placed the
rating of SCL under the 'Issuer non-cooperating' category as the
company had failed to provide information for monitoring of the
rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. Furthermore, CARE
had revised the rating to CARE D; Issuer non-cooperating vide its
press release dated June 7, 2018 and reaffirmed the rating of SCL
at CARE D; Issuer non-cooperating vide its press release dated May
20, 2019 due to on-going delays.
SCL continues to be non-cooperative despite requests for submission
of periodic Default, if any, statement and other information
through e-mails, phone calls and letter/e-mail dated May 15, 2020.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating assigned to the bank facilities of Swastik Ceracon
Limited (SCL) takes into account on-going delays in servicing of
its debt obligations, as per interaction with its lenders.
Detailed description of the key rating drivers
At the time of last rating on May 20, 2019, the following were the
rating strengths and weaknesses (updated based on the best
available information)
Key Rating Weaknesses
* Delays in debt servicing obligations: As per recent telephonic
interaction with lenders of SCL, the lenders have confirmed that
there are delay/ irregularities in serving of debt obligations by
the company and the account has been treated as NPA.
Incorporated in 2003, SCL is promoted by Mr. Girish Patel & Mr.
Pankaj Patel and Mr. Jigar Patel. SCL manufactures different
varieties of vitrified tiles. SCL has four manufacturing units,
which are located in the state of Gujarat near Himmatnagar,
Mehsana, Palaj and Nandasan having a combined installed capacity of
32,000 square meters per day (SMPD) as on September 30, 2015.
SWASTIK COAL: CARE Keeps 'D' Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Swastik
Coal Corporation Private Limited (SCCPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 55.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short Term Bank 320.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide press release dated May 30, 2019, reviewed the
ratings of SCCPL under the 'Issuer Non-cooperating' category as the
company had failed to provide information for monitoring of the
ratings and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SCCPL continues to
be non-cooperative despite requests for submission of information
through e-mails, phone calls and a letter/e-mail dated May 14,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on May 30, 2019, the following were the
rating weaknesses (updated based on best available information i.e.
FY19 results from MCA and banker interaction):
Key Rating Weaknesses
* Ongoing delays in debt servicing: As per interaction with the
banker there are ongoing delays in debt servicing owing to the
stretched liquidity and weak financial profile of the company.
Analytical approach: Combined
Swastik group includes three companies operating in similar line of
coal trading & transport businesses viz. SCCPL, Arka Carbon Fuels
Pvt. Ltd. (ACFPL) & Shree Ganpatlal Onkarlal Agarwal & Co. (SGOAC).
Until FY16 we had taken a combined approach for the three entities
to arrive at ratings of SCCPL, ACFPL & SGOAC due to common
promoters & management and strong operational & financial linkages
among the group companies in coal trading business. Subsequently
the outstanding rating of SGOAC (CARE B; Stable) were withdrawn on
February 15, 2018 based on NOC received from the banker.
SGOAC being a proprietorship firm, financial information for the
entity is available only till FY16 thus from FY17 onwards a
combined approach of two entities, SCCPL and ACFPL, has been
considered.
SCCPL is a flagship company of Swastik group and Mr. Vishnu Prasad
Jindal is the founder promoter of the company. SCCPL imports its
coal requirement directly or through merchant importers in India
and supplies it to the domestic market for usage by various
industries like cement, captive power plants, steel and bricks.
SCCPL is also engaged in trading of domestic coal purchased through
e-auction route from Coal India Ltd. and its subsidiaries. SG,
based out of Indore, Madhya Pradesh, is primarily involved in the
business of coal trading. The group has presence of more than two
decades with interests in diversified businesses including coal
trading, logistics, construction and real estate.
UMESH INDUSTRIES: CARE Keeps B+ INR8.78cr Debt Rating in Not Coop.
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Umesh
Industries Private Limited (UIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.78 CARE B+; Stable; Issuer not
Facilities cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 12, 2019 placed the
ratings of UIPL under the 'issuer non-cooperating' category as UIPL
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. UIPL continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and emails dated April 08, 2020,
April 13, 2020 and April 15, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the ratings on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating done on February 12, 2019 the following
were the rating strengths and weaknesses (updated for publically
available information).
Key Rating Weaknesses
* Moderate scale of operations with thin profit margins: Total
Operating Income (TOI) of UIPL increased and remained moderate at
INR90.03 crore during FY19 as against INR79.04 crore during FY18.
Further, PBILDT margin declined however remained thin at 1.22% in
FY19 as against 1.56% during FY18 owing to increase in the cost of
raw material consumed during FY19. Consequently, PAT margin
remained low at 0.11% during FY19.
* Moderate capital structure and weak debt coverage indicators: As
on March 31, 2019, capital structure of UIPL remained moderate
marked by an overall gearing of 1.77 times as on March 31, 2019 as
against 2.65 times as on March 31, 2018 while debt coverage
indicators of UIPL remained weak marked by total debt to Gross cash
accruals (TDGCA) of 12.58 years and interest coverage ratio of 1.96
times as on March 31, 2019 as against TDGCA of 19.62 years and
interest coverage ratio of 1.59 times as on March 31, 2018.
* Presence in lowest segment of textile value chain and in a highly
fragmented industry with low entry barriers: Due to low entry
barriers in the cotton ginning industry which is lowest in textile
value chain, many small scale units are operating in this segment.
This has resulted in the fragmented nature of the industry and
intense competition within the players.
* Seasonality associated with cotton availability and
susceptibility of margins to cotton price fluctuations and prices
and supply for cotton are highly regulated by government: The
prices of raw material, i.e. raw cotton is volatile in nature and
depends upon the vagaries of monsoon which exposes the company to
price volatility risk. Furthermore, the cotton prices in India are
highly regulated by government through MSP (Minimum Support Price)
along with export quotes decided by the government. Hence, any
adverse change in government policy may negatively impact the
prices of raw cotton in domestic market and could result in lower
realizations and profit for UIPL.
Key Rating Strengths
* Experienced promoters: The key promoters of UIPL have an
experience of 15 years in the field of cotton ginning while UIPL is
primarily a family-driven business.
* Location advantage: UIPL's presence in the cotton producing belt
of Gujarat results in benefits derived from a lower logistic
expenditure, easy availability and procurement of raw materials at
effective prices and consistent demand for finished goods.
Harij-based (Gujarat), UIPL was incorporated in November 2004 as
Umesh Cotton Ginning and Pressing Pvt. Ltd. (UCGPPL) and
subsequently the name of the company was changed to UIPL in August
2010. UIPL is promoted by Mr. BabulalIshwarlal Thakkar and is
engaged in manufacturing as well as trading of cotton bales and
cotton seeds since its inception. UIPL deals in 'Shankar 6' type of
cotton which is being sourced through local farmers and also from
agriculture marketing yards from Gujarat. UIPL operates through its
sole ginning and pressing unit located in Harij.
VENKATESH ASSOCIATES: CARE Cuts Rating on INR20cr Loan to 'C'
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Venkatesh Associates (VA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 20.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 27, 2019, placed
the rating of VA under the 'issuer non-cooperating' category as VA
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. VA continues to be
non-cooperative despite repeated requests for submission of
information through numerous phone calls and emails dated April 17,
2020, April 24, 2020, May 05, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating assigned to the bank facilities of VA
takes into account no due-diligence conducted and non-availability
of information due to non-cooperation by VA with CARE'S efforts to
undertake a review of the rating outstanding. CARE views
information availability risk as a key factor in its assessment of
credit risk.
Detailed description of the key rating drivers
At the time of last rating on February 27, 2019 the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
* Project execution risk due to high dependence on customer
advances: The project is heavily dependent on customer advances as
it is assumed to fund 44% of the total project cost. However, the
debt has been tied up for the projects. Moreover, the customer
advance to be receivable covers about ~25% of the balance
construction cost and total debt. Furthermore, the firm has sold
around 46% of the total saleable area and has received
INR35.75crore as customer advances. The project under the name 'Oxy
Primo' has been recently completed in October 2017.
* Presence in competitive and cyclical real estate industry: The
firm is exposed to the cyclicality associated with the real estate
sector which has direct linkage with the general macroeconomic
scenario, interest rates and level of disposable income available
with individuals. The real estate industry in India is highly
fragmented with most of the real estate developers having
region-specific presence.
* Partnership nature of constitution: VA's constitution as a
partnership firm restricts its access to external borrowing owing
to its partnership nature of constitution. Furthermore, the firm is
exposed to inherent risk of partners' capital being withdrawn at
time of personal contingency. This limits the financial flexibility
of the firm.
Key Rating Strengths
* Experienced promoter group in real estate development in Pune
resulting in marketing advantage: VA is a part of Venkatesh Oxy
Group which is one of the established real estate groups of Pune
and has been engaged in real estate business since past more than a
decade. The group has developed six residential projects with an
area of 9.35 lsf. Moreover, VA has a marketing advantage due to
strong presence of its group projects in the same vicinity and
hence reducing the risk of project execution and selling to some
extent.
* Receipt of approvals and clearance for the project coupled with
moderate booking status: VA has received all the necessary
clearances and approvals for the projects, related to land
acquisition and construction. Commencement certificate from the
Pune Municipal Corporation has been received. Furthermore, the said
land has also been converted to non-agriculture use and
environmental clearance for the project has also been obtained.
Further, the firm has sold 1.08lsf for its two on- going projects
and has already received ~81% of the customer advances from the
sold area. Furthermore, 71% of the total area sold has been
registered thereby mitigating the cancellation risk to an extent.
* Strategic location of the project: The project has a strategic
location being situated in one of the established localities of
Pune at Wagholi Road which is around 16-17 kilometers from the
centre of Pune. In addition, the project has easy access to basic
civic amenities such as schools, hospitals, colleges, malls,
situated close by and has close proximity to Kharadi IT Park,
Pune International Airport and Pune railway station.
VA is a partnership firm (SPV) formed on August 07, 2012 and
belongs to Venkatesh Oxy Group. Currently, VA is developing two
residential projects named 'Venkatesh Oxy Evolve', and 'Venkatesh
Oxy Desire' with a total saleable area of 2.34lakh square feet
(lsf), situated at Wagholi (Pune).
VMA ENTERPRISES: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: M/s VMA Enterprises Private Limited
50, Samrat Apartments
Vasundhara Enclave
New Delhi 110096
India
Insolvency Commencement Date: May 29, 2020
Court: National Company Law Tribunal, Delhi Bench
Estimated date of closure of
insolvency resolution process: November 25, 2020
(180 days from commencement)
Insolvency professional: Mr. Bimal Ashok Desai
Interim Resolution
Professional: Mr. Bimal Ashok Desai
217, Florence Pride
Opp. Corporation Garden
Sun Pharma Road, Vadorada
Gujarat 390020
India
E-mail: bimal.a.desai@icai.org
Last date for
submission of claims: June 12, 2020
WOODLANDS HOUSING: CARE Cuts INR15cr Loan Rating to B-, Not Coop.
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Woodlands Housing Private Limited (WHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 15.00 CARE B-; Stable; Issuer Not
Facilities Cooperating; Revised from
CARE B+; Stable on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 2, 2019, placed the
rating(s) of WHPL under the 'issuer non-cooperating' category as
Woodlands Housing Private Limited had failed to provide information
for monitoring of the rating. Woodlands Housing Private Limited
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated April 17, 2020. In line with the extant SEBI guidelines, CARE
has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in rating factors in non-cooperation by WHPL and
CARE's efforts to undertake a review of the ratings outstanding.
CARE views information availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on March 29, 2019 the following were the
rating strengths and weaknesses: (updated for the information
available from Registrar of Companies):
Key rating Weakness
* Project funding and execution risk: During the last review
exercise the company has estimated cost of INR141.41 crore, which
has reduced to INR99.31 crore (Rs.18.40 crore has been incurred
till January 31, 2018) as due to lower demand, WHPL has decided to
construct lesser number of villas i.e. 54 as against 69 villas
considered at time of initial rating exercise. Moreover as on
January 31, 2018 WHPL has incurred a total cost of INR18.40 crore
(around 19% of the projected total cost) which was funded through
promoters funds amounting to INR10.11 crore, term loan amounting to
INR 4.96 crore and balance through customer advances received. As
on January 31, 2018, WHPL has constructed structure of 11 villas
and completed the construction of 1 villa.
* Marketing risk: Term loan repayment will commence from March 31,
2018 and thus its ability to monetize its already developed
property shall be critical. As on January 31, 2018, WHPL has booked
15 villas out of the total 54 villas to be booked
and received customer advances amounting to INR7.38 crore and
INR22.96 crore is receivable.
* Weak financial risk profile: The overall financial risk profile
remained weak marked by negative tangible networth base, continuous
decrease in the total operating income and weak profitability
margins during FY17-FY19.
Key rating Strengths
* Experienced promoters: WHPL is primarily promoted by Mr. Surendra
Kapur who has been engaged into real estate development for over 50
years and has developed over 5 lakh sq. ft. in his personal
capacity. He is further supporter by his son Mr. Joy Kapur who has
assisted his father and has been in the industry for over 15 years.
Company's third director, Mr. Gaurav Kapur is the son of late Mr.
Ashok Kapur (and nephew of Mr. Surendra Kapur) who was the
co-founder of Yes Bank. Mr. Gaurav Kapur is the owner of 212 Bar &
Grill and Café Sundance in Mumbai.
* Location advantage: The project is a residential project designed
around the concept of 2nd homes. It is located in the Khandala
Valley of Maharashtra which is been a prime hill station and
vacation destination located approximately 85 Km away from Mumbai.
Its proximity to Mumbai, elevation and overall weather makes
Khandala one of the most visited hill stations becoming a prime
tourist destination for quick weekend getaways. The prime
destination of the project and its concept of 2nd homes along with
modern amenities being offered mitigate WHPL's marketing risk.
Incorporated in 2016 by Mr. Surendra Kapur, son Mr. Joy Kapur, and
nephew Mr. Gaurav Kapur, Woodlands Housing Private Limited (WHPL),
is engaged into real estate development. The company is currently
developing a 40.84 acre '2nd homes' real estate project at Village
Chavani (foothills of Khandala), Dukes Nose Khalapur, Khandala
Valley in phased manner. Phase 1 would include development of 34.84
acres (total saleable area of 285060 sq. ft.) consisting of 69
residential villas. However the company has changed its plan and
now it will construct 54 villas with total csot of INR99.31 crore.
The project will be developed with modern amenities for
recreational and entertainment purpose such as swimming pools,
clubhouse, tennis & badminton courts, restaurants, Gymnasium, and
Spa among others. Construction activity commenced in June 2016 and
till January 31, 2018, WHPL has completed ~16% of the construction.
Furthermore, it has achieved 28% booking of plots (15 plots out of
54) as on January 31, 2018.
=================
I N D O N E S I A
=================
MNC INVESTAMA: S&P Downgrades ICR to 'CC', On Watch Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on PT MNC
Investama Tbk. and the issue rating on the company's senior secured
notes to 'CC' from 'CCC'. S&P also placed the ratings on
CreditWatch with negative implications. S&P then withdrew the
ratings at the request of the Indonesia-based diversified media
company.
The rating actions follow a hearing by the Singapore Court on MNC
Investama's application for moratorium on June 4, 2020. In S&P's
view, the application signals a high likelihood that the company
will opt for a restructuring of its US$231 million notes due May
2021, rather than continue to pursue refinancing or repayment
options.
S&P said, "As the maturity of the notes draws nearer, we believe
MNC Investama has increasingly limited flexibility to find
alternative funding options. The weakened global economic
conditions and weak investor sentiment, as well as MNC Investama's
weak credit standing after a distressed exchange in 2018, will
exacerbate the problem. We also continue to view that the company's
management has limited willingness to execute divestments to repay
debt.
"We placed the ratings on CreditWatch prior to the withdrawal
because we believe MNC Investama's application to the court to
restrain creditor proceedings 11 months ahead of maturity of the
notes indicates the company's intent to undertake a debt
restructuring. We would likely consider such a restructuring as
distressed, given the high possibility of a conventional default in
its absence."
=========
J A P A N
=========
DIC CORPORATION: Moody's Withdraws Ba1 CFR for Business Reasons
---------------------------------------------------------------
Moody's Japan K.K. has withdrawn the Ba1 corporate family rating
and stable outlook of DIC Corporation.
RATINGS RATIONALE
Moody's has decided to withdraw the rating for its own business
reasons.
DIC Corporation, headquartered in Tokyo, is a specialty chemical
company and one of the leading manufacturers of printing inks and
color filter pigments.
MITSUBISHI HEAVY: Unit to Cut Over 50% Workforce in Restructuring
-----------------------------------------------------------------
The Japan Times reports that Mitsubishi Aircraft Corp. will cut
more than half of its 2,000-strong workforce in a restructuring
move as the coronavirus devastates travel demand and delays
continue to plague its regional jet project, a source close to the
matter said.
The aircraft-making subsidiary of Mitsubishi Heavy Industries Ltd.
will also close its U.S. headquarters, a development center in
Canada and sales offices in the United States and Europe, the
source said, The Japan Times relates.
While the company's testing site in the state of Washington will
remain, its workforce will be also drastically reduced, the report
says.
By making the small regional jet, now known as the Mitsubishi
SpaceJet, MHI hoped to succeed in the commercial aircraft market as
airlines shifted to small and midsize planes from larger ones to
improve fuel-efficiency. The plane was supposed to be Japan's first
home-grown passenger jet, The Japan Times states.
According to The Japan Times, Mitsubishi Aircraft will also
reshuffle its development team, with Chief Development Officer Alex
Bellamy stepping down and Yasuhiko Kawaguchi, who has experience at
the U.S. test site, taking the lead in aircraft development as
chief engineer, starting July 1.
The Japan Times says MHI is trying to restore its aviation
prospects through the regional jet business of Canada's Bombardier
Inc., which recently sold the unit.
But the parent company said last month that it expects to book an
impairment loss of JPY50 billion ($470 million) to JPY70 billion
from the purchase in the business year ending March, the report
relates. The loss reflects a sharp drop in air travel amid the
pandemic.
Mitsubishi Heavy plans to reduce development costs in the aircraft
business by more than half to JPY60 billion for the current year.
In February, the company said Mitsubishi Aircraft would delay its
first delivery of the small jet to 2021 or later due to parts
problems, chalking up its sixth postponement, the report recalls.
The plane, previously known as the Mitsubishi Regional Jet, is due
to be delivered first to All Nippon Airways Co.
Based in Japan, Mitsubishi Heavy Industries, Ltd. --
http://www.mhi.co.jp/indexe.html-- was founded by Yataro Iwasaki
in 1884 as a shipbuilding firm called Nagasaki Shipyard & Machinery
Works, which was later named Mitsubishi Shipbuilding Co. Ltd., and
then again launched as Mitsubishi Heavy Industries, Ltd. in 1934 as
a private firm that manufactured ships, heavy machinery, airplanes
and railroad cars.
In 1950, Mitsubishi Heavy was divided into three separate entities
on a law aimed toward dissolving Nagasaki Shipyard & Machinery
Works and thus dismantling the overconcentration of economic power.
It was later consolidated in 1964 and reborn as Mitsubishi Heavy
Industries, Ltd.
=========
M A C A U
=========
WYNN MACAU: S&P Puts 'BB-' Rating to $750MM Sr. Unsec. Notes
------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to
Macau-based casino resort owner and operator Wynn Macau Ltd.'s
proposed $750 million senior unsecured notes due in 2026 and placed
it on CreditWatch with negative implications. Wynn Macau is a
majority-owned subsidiary of Wynn Resorts Ltd.
S&P said, "We expect the company to use proceeds for general
corporate purposes until business recovers from the effects of the
COVID-19 pandemic, then to facilitate repaying a portion of the
secured debt outstanding under its Wynn Macau revolver and term
loan. As of May 31, 2020, Wynn Macau had total available liquidity
of about $1.7 billion, including cash and revolver availability.
The company estimates its EBITDA loss in a zero-revenue scenario is
approximately $2.5 million daily and $75 million monthly.
Incorporating estimated capital spending and debt service, we
estimate the proposed notes offering would extend Wynn Macau's
liquidity runway to approximately 26 months in an almost
zero-revenue environment compared to about 18 months as of May 31,
2020.
"We believe this proposed issuance and our view that the company
will use available liquidity to repay secured debt when its Macau
operations stabilize will reduce subordination risk in Wynn Macau's
capital structure. Pro forma for the issuance, we expect the share
of senior secured debt in Wynn Macau's total debt to fall below 50%
from about 55%. We expect this ratio will continue to fall as Wynn
Macau begins to recover in the second half of 2020 and into 2021,
and uses remaining excess cash on the balance sheet and operating
cash flow to repay secured debt. As a result, we also raised the
issue-level rating on Wynn Macau's existing unsecured debt to 'BB-'
from 'B+'.
"All our ratings on Wynn Macau and Wynn Resorts remain on
CreditWatch with negative implications, where they were initially
placed Feb. 3, 2020. The CreditWatch reflects the significant
anticipated stress on the company's revenue and cash flow across
its portfolio this year. We plan to resolve the CreditWatch when we
can evaluate how continued travel and visa restrictions might
affect Macau's visitation and gaming revenue this year, as well as
how the U.S. recession, potential continued social distancing
measures, and lingering travel fears might affect consumer
discretionary spending at the company's casinos in 2020 and 2021.
We plan to assess how quickly Wynn Resorts' EBITDA and cash flow
generation might recover later this year and into next year, as
well as how quickly credit measures can recover following a spike
in 2020.
"We could lower our ratings on Wynn in the near term if we no
longer believe the coronavirus will be contained by midyear and
travel restrictions lifted, such that its properties can begin to
recover. In the event we no longer believe Wynn Resorts will
recover in 2021 such that S&P Global Ratings-adjusted leverage
improves below 6x, we could lower ratings."
ISSUE RATINGS - SUBORDINATION RISK ANALYSIS
S&P said, "We apply our subordination risk criteria to rate Wynn
Macau's credit facilities and notes because we do not assign
recovery ratings to debt issued in Macau. We have not published an
insolvency report for the jurisdiction and have not ranked it
because, to date, there is limited historical precedent for a
large-scale bankruptcy filing of a foreign-owned entity there.
Macau is a special administrative region of the People's Republic
of China. Furthermore, even if lenders have a good claim with a
registerable interest in the real estate, we believe there is
significant uncertainty surrounding the application of the
insolvency process and lenders' ability to realize asset value."
Capital structure
Pro forma for the proposed notes issuance, Wynn Macau's capital
structure consists of $2.9 billion of secured debt outstanding as
of March 31, 2020 (pro forma for the incremental $50 million
revolver draw in April 2020), issued by subsidiary Wynn Resorts
(Macau) S.A. and $3.1 billion of unsecured debt issued by Wynn
Macau.
Analytical conclusions
The secured debt issued by Wynn Resorts (Macau) is rated 'BB-', the
same as the issuer credit rating on Wynn Macau, because it is
secured.
The unsecured debt at Wynn Macau is structurally subordinated and
ranks behind the secured debt issued by a subsidiary in the capital
structure. S&P said, "However, we believe the proposed unsecured
notes issuance will reduce the ratio of secured-debt-to-total debt
in the capital structure below 50%. Furthermore, we believe Wynn
Macau will use cash flow generated by its Macau operations and cash
on the balance sheet from the proposed notes issuance to repay
secured debt once its Macau casinos begin to recover. As a result,
we believe subordination risk will be mitigated enough to support
rating the unsecured debt 'BB-', the same as the issuer credit
rating."
=================
S I N G A P O R E
=================
HYFLUX LTD: Utico Says Approached by Potential Partners in Deal
---------------------------------------------------------------
Fiona Lam at The Business Times reports that two interested parties
are looking to acquire shares in Utico, and if successful, the deal
could value the United Arab Emirates-based utilities group at up to
US$1.5 billion.
In a press statement on June 12, Utico did not disclose the size of
the stake that may be acquired, but said the parties have interests
in the Gulf Cooperation Council, the UK, Singapore and Indonesia,
BT relates.
Utico added that the potential buyers had approached it to become
partners in relation to the acquisition of troubled Singapore water
treatment firm Hyflux and to grow the Middle Eastern firm,
according to the report.
Even though Utico is "comfortable" to close the transaction on its
own now, the company said it is studying the propositions, given
that its rescue deal for Hyflux is pending and Utico's stock is not
listed and trading publicly yet, BT relays.
BT meanwhile reports that Utico confirmed on June 12 that it has
extended the deadline for its revised offer for Hyflux to June 30,
provided the Singapore firm does not extend its debt moratorium
beyond July 30, among other conditions.
Utico also asked the Hyflux board to step down immediately, if and
when the debt restructuring scheme is approved, the report
relates.
Its revised offer will see all Hyflux creditors accepting shares of
Utico and Hyflux as payment, instead of cash as previously stated
in the restructuring agreement signed last November, BT adds.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company engaged WongPartnership LLP as legal advisors and Ernst
& Young Solutions LLP as financial advisors in this process. On
Jan. 29, WongPartnership applied to discharge themselves due to
difficulties relating to "loss of confidence and good cause" in
working with the client. The Company subsequently appointed
Clifford Chance and Cavenagh Law as its legal advisers in WongP's
place.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to Reuters.
HYFLUX: Next Pre-Trial Conference Likely to be on June 19 or 22
---------------------------------------------------------------
Rachel Mui at The Business Times reports that Hyflux Ltd on June 11
said its next pre-trial conference is likely to be held on June 19
or June 22, where further directions will be issued regarding the
water treatment firm's main reorganisation process and applications
by any of the creditors.
This comes as a group of bank lenders is seeking to put Hyflux
under judicial management, after two years of a court-sanctioned
restructuring process that has continued to leave creditors
empty-handed, BT says.
An unsecured working group (UWG) of banks comprising Bangkok Bank,
BNP Paribas, CTBC Bank, Mizuho, KfW, Korea Development Bank and
Standard Chartered Bank plans to revive an earlier application to
be carved out of Hyflux's debt moratorium, the High Court heard
during Hyflux's case management conference on June 11, according to
BT.
In a bourse filing late on June 11, Hyflux announced that at the
case management conference, the court had ordered the UWG to serve
its affidavit on the company by June 12, as well as a redacted
version of the affidavit on the other creditors by June 16, BT
relates.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company engaged WongPartnership LLP as legal advisors and Ernst
& Young Solutions LLP as financial advisors in this process. On
Jan. 29, WongPartnership applied to discharge themselves due to
difficulties relating to "loss of confidence and good cause" in
working with the client. The Company subsequently appointed
Clifford Chance and Cavenagh Law as its legal advisers in WongP's
place.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to Reuters.
MULHACEN PTE: Fitch Downgrades LT Issuer Default Rating to CC
-------------------------------------------------------------
Fitch Ratings downgraded Mulhacen Pte Ltd's Long-Term Issuer
Default Rating (IDR) and senior secured payment-in-kind (PIK)
toggle notes to 'CC' from 'CCC'.
The rating action reflects its view of increased liquidity risks at
Mulhacen and its reduced financial capacity to make cash coupon
payments of its PIK toggle notes and repay the principal at
maturity in 2023. Fitch expects the PIK mechanism included in the
notes to be activated at least in the next two coupon payments,
which Fitch viewa as evidence of heightened credit risks at
Mulhacen.
Its assessment is based on projections of dividends that Mulhacen
could upstream from its only asset, WiZink Bank, S.A. (WiZink)
during the life of the bond, following an adverse ruling by Spain's
Supreme Court in March 2020 as well as the impact of the economic
downturn in Spain on credit card borrowers' creditworthiness and
the possibility of reduced credit card spending patterns. Fitch
also takea into account WiZink's guidance of likely suspension of
dividend distributions at least until October 1, 2020 following
recommendation by the European Central Bank.
KEY RATING DRIVERS
IDR AND DEBT
Mulhacen's Long-Term IDR, which is primarily driven by WiZink's
ability to upstream dividends, reflects very high credit risks. In
its view, WiZink's earnings generation capacity and, ultimately,
the ability to upstream dividends to Mulhacen will remain
negatively affected by higher litigation risks and interest margin
pressures from the adverse ruling by Spain's Supreme Court in March
2020 on revolving credit facilities. In addition, Fitch expects
WiZink's asset quality and earnings to deteriorate relative to its
previous expectations as a result of the economic impact of the
coronavirus outbreak given the bank's highly correlated cyclical
business with economic performance of the countries in which it
operates. Furthermore, heightened pressure to preserve regulatory
bank capital could also limit its capacity to upstream dividends.
Following the ruling by the Supreme Court, WiZink increased the
level of provisions related to usury cases to around EUR210
million, of which EUR12 million were utilised in 1Q20. The number
of cumulative claims linked to usury cases has remained fairly
contained in the year, still representing less than 1% of the
bank's active customers in Spain at end-March 2020, but Fitch
expects them to increase once the legal and court processes start
normalising after the lockdown.
WiZink's regulatory Common Equity Tier 1 ratio was 16% (13.8% on a
fully loaded basis) at end-March 2020, which represents a modest
capital buffer relative to the minimum level committed with the
Bank of Spain of 13.8%, above which the bank is allowed to
distribute dividends. End-March 2020 capital ratios are pro-forma
for a capital increase of EUR18.5 million by Varde Partners, an
amount equivalent to the interim dividend distributed in August
2019.
Aside from litigation risks, Fitch also expecta WiZink's earnings
challenges to intensify due to lower business volumes and rising
loan impairment charges, considering the significant impact of the
coronavirus outbreak on the Spanish economy, the ability of
borrowers to repay their debts and the possibility of reduced
credit card spending patterns. Fitch forecasts Spain's GDP to
contract 9.6% in 2020 before seeing a partial recovery of 4.4% in
2021, while unemployment rate is expected to increase to 21.8% at
end-2021. Fitch believes that WiZink's successful experience in
managing the past economic crisis and its plan to diversify its
revenue base will only partially mitigate the impact of the current
economic environment on its earnings capacity given the cyclical
nature of the consumer lending business.
Fitch has not assigned Recovery Ratings to the notes given the wide
range of possible outcomes for the bondholders until the notes
reach maturity in 2023, which at this stage makes the assessment of
recoveries particularly sensitive to alternative scenarios.
Mulhacen is the non-operating holding company set up by Varde
Partners to acquire WiZink Bank, a niche lender in the credit card
market in Spain and Portugal. The bank is Mulhacen's only asset,
and the issuer does not have any material sources of income to
service its outstanding debt other than the dividends up-streamed
from the bank.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Rating upside could arise if WiZink's ability to distribute
cash dividends resumes earlier than expected and on a sustainable
basis, improving Mulhacen's liquidity position and ability to
reduce the net cash flow leverage of the bond. This could be the
result of a significant easing of pressures on the bank's earnings
generation capacity, which could result from lower-than-expected
litigation costs or a more benign economic impact from the
pandemic.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- The ratings of Mulhacen and the PIK notes could be downgraded
if Fitch expects Mulhacen's liquidity position and capacity to
service its financial obligations to deteriorate further and if
there are clear indications that Mulhacen will not be able to
resume cash dividend payments and reimburse the principal of the
notes.
===============
T H A I L A N D
===============
THAI AIRWAYS: No Layoffs for Now, Management Says
-------------------------------------------------
Malay Mail reports that the management of Thai Airways
International (THAI) has told staff that they will not be laid off
in the near future and a reorganisation plan will be concluded in
about a year.
Acting THAI president Chakkrit Parapuntakul sent the message to
staff in a televised meeting at the airline's head office on June
12. No reporters were invited, Thai News Agency (TNA) reported on
June 12, Malay Mail relates.
He said that the management was negotiating with creditors
including aircraft lessors, creditors and trading partners and he
asked staff to do their best to help the airline cut costs. He said
that he had no ideas on the post-Covid-19 future of aviation but he
believed THAI would survive with a rehabilitation plan, according
to the report.
Malay Mail relates that Chakkrit said THAI would downsize its
routes and fleet including its aircraft number and types.
He said the country would likely resume its international flight
services on July 1 but the business would also depend on disease
control measures in destination countries. However, THAI would
emphasize flat fare rates and online ticket sales.
Malay Mail adds that Chakkrit told employees that their THAI staff
condition continued and they would not be laid off for the time
being, pending the rehabilitation plan of the airline. The plan
would take shape in a year, he said.
Restructuring and a clear business direction might not require huge
layoffs and staff might be rotated and trained to work for highly
profitable units, he said, Malay Mail relays.
He added that the management needed to ask staff to voluntarily
have their salaries cut to maintain cash flow because the airline
was unable to borrow from any source at the moment, TNA, as cited
by Malay Mail, reported.
About Thai Airways
Thai Airways International PCL (BAK:THAI) --
http://www.thaiairways.co.th/-- is the national carrier of
Thailand. The company provides air transportation, freight and
mail services on domestic and international routes including Asia,
Europe, North America, Africa and South West Pacific. The Company
is a state enterprise which is controlled by the government and
partly owned by the public.
As reported in Troubled Company Reporter-Asia Pacific on May 21,
2020, Reuters said Thailand's cabinet approved a plan to
restructure troubled Thai Airways International Pcl's finances
through a bankruptcy court, the Southeast Asian country's prime
minister said on May 19. The plan for a court-led restructuring of
the national carrier replaces a previous proposal of a
government-backed rescue package that was heavily criticised in the
country.
Thai Airways on May 27 said it appointed board members as
rehabilitation planners in a bankruptcy court submission.
Thai Airways posted losses every year after 2012, except in 2016.
In 2019, it reported losses of THB12.04 billion.
*********
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
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***