/raid1/www/Hosts/bankrupt/TCRAP_Public/200617.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, June 17, 2020, Vol. 23, No. 121
Headlines
A U S T R A L I A
LIBERTY FUNDING 2020-2: Moody's Rates Class F Notes '(P)B2'
METRO FINANCE 2020-1: Moody's Rates Class E Notes '(P)Ba2'
SILVER HERITAGE: Second Creditors' Meeting Set for June 23
TUCHUZY BONDI: Second Creditors' Meeting Set for June 25
VALUE DENTAL: Second Creditors' Meeting Set for June 23
VIRGIN AUSTRALIA: Bondholders Pin Hopes on Aircraft Debt Revaluing
C H I N A
CHINA FORTUNE: Fitch Affirms LT IDR at BB-, Outlook Stable
I N D I A
AISSHPRA LIFESPACES: ICRA Cuts Rating on INR30cr Loan to B+
ALUCAST AUTO: Insolvency Resolution Process Case Summary
ARULMANI EXPORTS: ICRA Reaffirms B+ Rating on INR10cr Loans
BLUEWATER FOODS: Insolvency Resolution Process Case Summary
C.P. ARORA: ICRA Keeps 'C' Debt Rating in Not Cooperating
CORE GREEN: ICRA Reaffirms 'D' Rating on INR342.49cr Term Loan
CYMBIO PHARMA: Ind-Ra Moves BB LT Issuer Rating to Non-Cooperating
D.M COTTON: ICRA Keeps 'B' Debt Ratings in Not Cooperating
GUDIVADA MUNICIPALITY: ICRA Lowers Issuer Rating to B+
HIRA AUTOMOBILES: Ind-Ra Gives 'BB' Rating, Outlook Stable
INDIA: Credit Market Stung by Bankruptcy Suspension
IVRCL LIMITED: NCLAT Upholds Liquidation as a Going Concern
KODURI ENTERPRISES: ICRA Keeps B Debt Ratings in Not Cooperating
KRISH CEREALS: ICRA Lowers Rating on INR23cr Loan to B+
KRISHNA SAHAKARI: ICRA Keeps B Debt Ratings in Not Cooperating
MAHESHWARI STRUCTURES: ICRA Keeps B Debt Ratings in Not Coop.
MILAN ASSOCIATES: ICRA Withdraws B+ Rating on INR7cr Debt
NAKODA CONSTRUCTION: ICRA Keeps D Debt Ratings in Not Cooperating
NATIONAL STEEL: Insolvency Resolution Process Case Summary
NSL SUGARS: ICRA Reaffirms 'D' Rating on INR219.18cr Term Loan
OM TRADING: ICRA Withdraws B+ Rating on INR13.50cr LT Loan
ONE CAPITALL: ICRA Keeps D INR90cr Debt Rating in Not Cooperating
PAIDALA THIRUPATHI: ICRA Cuts Rating on INR8cr LT Loan to B+
PATNA BAKHTIYARPUR: Ind-Ra Keeps 'D' Loan Rating in Non-cooperating
RAITANI ENGINEERING: ICRA Withdraws B+ Rating on INR37cr Loans
RBR GARMENTS: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable
REGENT GRANITO: ICRA Keeps D Debt Ratings in Not Cooperating
ROBO EQUIPMENTS: ICRA Migrates B+ Debt Ratings to Not Cooperating
S.S.AANANDAN SPINNING: Ind-Ra Moves BB LT Rating to Non-cooperating
SATHYAM GREEN: Ind-Ra Keeps 'BB-' Loan Rating in Non-Cooperating
SATISH SUGARS: ICRA Lowers Rating on INR180cr Loans to B+
SESHA SAI: ICRA Keeps 'B' Debt Ratings in Not Cooperating
SHREE HARI: Ind-Ra Assigns 'B+' LT Issuer Rating, Outlook Stable
SIDDHIVINAYAK CONSTRUCTION: ICRA Cuts Rating on INR4cr Loan to B+
SPICA PROJECTS: ICRA Lowers Rating on INR4.87cr Loan to B+
SRINIVASA EDUCATIONAL: ICRA Keeps B Debt Ratings in Not Coop.
VAMA INDUSTRIES: Ind-Ra Gives 'BB-' Rating, Outlook Stable
VARDHAMAN COLLEGE: ICRA Keeps B+ INR12cr Debt Rating in Not Coop.
VIBRANT PROCESSORS: ICRA Lowers Rating on INR5.50cr Loan to B+
VINAR ISPAT: ICRA Keeps B+ INR15cr Debt Rating in Not Cooperating
I N D O N E S I A
LIPPO MALLS: Moody's Cuts CFR to B1, Outlook Negative
P H I L I P P I N E S
PHILIPPINE TELEGRAPH: Posts PHP15.6MM Net Loss in Q1 Ended March
S I N G A P O R E
HYFLUX LTD: Appoints New Lead Independent Director
S O U T H K O R E A
DOOSAN GROUP: Plans to Sell Unit as Part of Self-Rescue Plan
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A U S T R A L I A
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LIBERTY FUNDING 2020-2: Moody's Rates Class F Notes '(P)B2'
-----------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to the notes to be issued by Liberty Funding Pty Ltd in
respect of Liberty Series 2020-2.
Issuer: Liberty Funding Pty Ltd in respect of Liberty Series
2020-2
AUD190.0 million Class A1a Notes, Assigned (P)Aaa (sf)
AUD160.0 million Class A1b Notes, Assigned (P)Aaa (sf)
AUD100.0 million Class A2 Notes, Assigned (P)Aaa (sf)
AUD18.5 million Class B Notes, Assigned (P)Aa1 (sf)
AUD9.5 million Class C Notes, Assigned (P)A2 (sf)
AUD6.0 million Class D Notes, Assigned (P)Baa2 (sf)
AUD5.5 million Class E Notes, Assigned (P)Ba2 (sf)
AUD2.0 million Class F Notes, Assigned (P)B2 (sf)
The AUD8.5 million Class G Notes are not rated by Moody's.
The transaction is a securitisation of a portfolio of Australian
residential mortgages. All mortgages were originated and are
serviced by Liberty Financial Pty Ltd (Liberty, unrated).
Liberty is an Australian non-bank lender. It started originating
non-conforming residential mortgages in 1997. It subsequently
expanded into prime residential mortgage origination, as well as,
among others, auto loans, small commercial mortgage loans and
personal loans.
Residential mortgages remain Liberty's predominant business. As of
April 2020, it had a portfolio of Australian mortgage assets over
AUD8.23 billion, of which 53% was securitised in public
transactions.
RATINGS RATIONALE
The provisional ratings take into account, among other factors,
evaluation of the underlying receivables, the evaluation of the
capital structure and credit enhancement provided to the notes, the
availability of excess spread over the life of the transaction, the
liquidity reserve in the amount of 2.00% of the notes balance, the
legal structure, and the credit strength and experience of Liberty
as Servicer.
Moody's MILAN credit enhancement (MILAN CE) for the collateral pool
is 8.3%, while the expected loss is 1.60%. MILAN CE represents the
loss Moody's expects the portfolio to suffer in a severe
recessionary scenario, and does not take into account structural
features of the transaction. or lenders mortgage insurance (LMI)
benefit. The expected loss represents a stressed, through-the-cycle
loss relative to Australian historical data.
After lenders mortgage insurance (LMI) benefit, MILAN CE is 8.1%.
The key transactional features are as follows:
- Class A1a and Class A1b Notes benefit from 30.0% credit
enhancement (CE) and Class A2 Notes benefit from 10.0% credit
enhancement.
- The Class A1a Notes will receive principal prior to any other
notes at all times, unless there is an event of default. Once Class
A1a Notes are paid off Class A1b to Class F Notes receive
sequential principal payments. Upon satisfaction of all stepdown
conditions which include - the payment date falling on or after the
payment date in June 2022, absence of charge offs on any notes and
average arrears greater than or equal to 60 days (excluding
COVID-19 hardship loans and as calculated over the prior three
periods plus the current period) do not exceed 4% - Class A1b,
Class A2, Class B, Class C, Class D, Class E, and Class F Notes
will receive a pro-rata share of principal payments (subject to
additional conditions). The Class G Notes do not step down and will
only receive principal payments once all other notes have been
repaid. The principal pay-down switches back to sequential pay
across all notes, once the aggregate loan amount falls below 20.0%
of the aggregate loan amount at closing, or on or following the
payment date in June 2023.
- A liquidity facility provided by National Australia Bank Limited
(Aa3/P-1/Aa2(cr)/P-1(cr)), with a required limit equal to 2.0% of
the aggregate invested amount of the notes less the redemption fund
balance. The facility is subject to a floor of AUD600,000.
- The guarantee fee reserve account, which is unfunded at closing
and will build up to a limit of 0.30% of the issued notional from
proceeds paid to Liberty Credit Enhancement Company Pty Ltd as
Guarantor, from the bottom of the interest waterfall prior to
interest paid to the Class G Notes noteholders. The reserve account
will firstly be available to meet losses on the loans and
charge-offs against the notes. Secondly, it can be used to cover
any liquidity shortfalls that remain uncovered after drawing on the
liquidity facility and principal. Any reserve account balance used
can be reimbursed to its limit from future excess income.
The key features of the mortgage loan pool are as follows:
- The portfolio has a scheduled loan-to-value (LTV) ratio of 69.3%,
with a relatively high proportion of loans with a scheduled LTV
ratio above 80.0% (17.7%) and above 90% (9.6%).
- 8.9% and 0.1% of the loans in the portfolio were extended on an
alternative documentation and low documentation basis
respectively.
- The portfolio contains 3.1% exposure with respect to borrowers
with prior credit impairment (default, judgment or bankruptcy).
Moody's assesses these borrowers as having a significantly higher
default probability.
- Investment and interest-only (IO) loans represent 25.0% and 8.9%
of the pool, respectively.
Its analysis has considered the effect of the coronavirus outbreak
on the Australian economy as well as the effects that the announced
government measures, put in place to contain the virus, will have
on the performance of consumer assets.
The contraction in economic activity in the second quarter will be
severe and the overall recovery in the second half of the year will
be gradual. However, there are significant downside risks to its
forecasts in the event that the pandemic is not contained and
lockdowns have to be reinstated. As a result, the degree of
uncertainty around its forecasts is unusually high. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in May
2020.
Factors that would lead to an upgrade or downgrade of the ratings:
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the ratings. Moody's current expectations of loss
could be better than its original expectations because of fewer
defaults by underlying obligors or higher recoveries on defaulted
loans. The Australian job market and the housing market are primary
drivers of performance.
A factor that could lead to a downgrade of the notes is
worse-than-expected collateral performance. Other reasons for
performance worse than Moody's expects include poor servicing,
error on the part of transaction parties, a deterioration in credit
quality of transaction counterparties, fraud and lack of
transactional governance.
METRO FINANCE 2020-1: Moody's Rates Class E Notes '(P)Ba2'
----------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to notes
to be issued by Perpetual Corporate Trust Limited, as trustee of
Metro Finance 2020-1 Trust.
Issuer: Metro Finance 2020-1 Trust
AUD89.20 million Class A-S Notes, Assigned (P)Aaa (sf)
AUD158.00 million Class A-L Notes, Assigned (P)Aaa (sf)
AUD18.60 million Class B Notes, Assigned (P)Aa2 (sf)
AUD11.10 million Class C Notes, Assigned (P)A2 (sf)
AUD5.10 million Class D Notes, Assigned (P)Baa2 (sf)
AUD9.30 million Class E Notes, Assigned (P)Ba2 (sf)
The AUD4.95 million Class GA Notes and the AUD3.75 million Class GB
Notes are not rated by Moody's.
The transaction is a cash securitisation of a portfolio of
Australian prime commercial auto and equipment loans and leases
originated by Metro Finance Pty Limited. This is Metro Finance's
first auto and equipment asset backed securities (ABS) transaction
for 2020.
Metro Finance was established in 2011 as a commercial
auto/equipment lender. It targets prime borrowers, for small-ticket
auto and equipment assets in low volatility industries. Metro
Finance originates its lending through the commercial auto and
equipment broker and aggregator industry nationally. Significant
origination growth began in 2014.
RATINGS RATIONALE
The provisional ratings take into account, among other factors:
- The limited amount of historical loss data. The static loss data
used for its extrapolation analysis, which reflects Metro Finance's
short origination history, was limited to the origination vintages
between Q3 2014 and Q3 2018.
- The evaluation of the underlying receivables and their expected
performance;
- The fact that 69.6% of the receivables were extended to prime
commercial obligors on a no-income verification basis, referred to
as "streamlined". This streamlined product allows obligors who meet
certain stringent requirements to access the loan without providing
financial statements. See below for further information on Metro's
Streamlined product;
- The 50.5% exposure to loans with a balloon payment at the end of
the receivable term. The aggregate balloon exposure as a percentage
of current portfolio balance is 16.7%. Loans with a balloon payment
are subject to higher refinancing and, consequently, default risk;
- The evaluation of the capital structure;
- The availability of excess spread over the life of the
transaction;
- The liquidity facility in the amount of 3.00% of the note balance
subject to a floor of AUD1,000,000;
- The interest rate swap provided by National Australia Bank
Limited (Aa3/P-1/Aa2(cr)/P-1(cr)). The notional balance of the swap
will follow a schedule based on the amortisation of the portfolio,
assuming no prepayments. Any prepayments or defaults will result in
the transaction becoming over-hedged. The prepayment risk is
mitigated by the fact that break costs are charged to the obligors
and these funds will flow through to the trust as collections; and
Initially, the Class A-S, Class A-L, Class B, Class C, Class D, and
Class E Notes benefit from 17.60%, 17.60%, 11.40%, 7.70%, 6.00% and
2.90% of note subordination, respectively. The notes will initially
be repaid on a sequential basis until the credit enhancement of the
Class A Notes is at least 30%.
The notes will also be repaid on a sequential basis if there are
any unreimbursed charge-offs on the notes or if the first call
option date has occurred. At all other times, the structure will
follow a pro-rata repayment profile (assuming pro-rata conditions
are satisfied).
MAIN MODEL ASSUMPTIONS
Moody's base case assumptions are a default rate of 3.25%, a
recovery rate of 35.0% and a portfolio credit enhancement of
20.00%. After accounting for the seasoning of the initial portfolio
(5.4 months), Moody's mean default rate assumption was adjusted to
3.50%. Moody's assumed default rate and recovery rate are stressed
compared to the historical levels of 1.44% and 57.77%
respectively.
The difference between the historical and assumed default rate and
recovery rate is in part explained by the additional stresses
assumed by Moody's to address the lack of a full economic cycle in
the historical data, and by exposure to balloon loans in the
portfolio.
To address the limited historical loss data on Metro Finance's
portfolio, Moody's has benchmarked the short historical data for
Metro Finance to data from comparable Australian commercial auto
and equipment ABS originators. Moody's has also overlaid additional
stresses into its default and PCE assumptions.
The streamlined product offering has been originated for almost
twelve years in the Australian auto and equipment loan space.
However, through-the-cycle historical data on the performance of
this product is limited. To address this risk and the fact that the
portfolio has a very high proportion of streamlined (69.6%),
Moody's has applied further qualitative stresses in its analysis.
Risks arising from the lack of income verification for these
borrowers are partly mitigated by the stringent requirements to
access this product. These requirements include property ownership
with confirmed equity greater than the loan amount or a 30% deposit
for non-property owners, a satisfactory credit reference from a
reputable finance company running at least 12 months, no adverse
credit history, and the business being registered for the
goods-and-services tax for at least 2 years continuously.
Its analysis has considered the effect of the coronavirus outbreak
on the Australian economy as well as the effects that the announced
government measures, put in place to contain the virus, will have
on the performance of the portfolio.
The contraction in economic activity in the second quarter will be
severe and the overall recovery in the second half of the year will
be gradual. However, there are significant downside risks to its
forecasts in the event that the pandemic is not contained and
lockdowns have to be reinstated. As a result, the degree of
uncertainty around its forecasts is unusually high. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
Methodology Underlying the Rating Action
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
May 2020.
Factors That Would Lead to an Upgrade or Downgrade of the Ratings
Factors that could lead to an upgrade of the notes include a rapid
build-up of credit enhancement, due to sequential amortization or
better-than-expected collateral performance. The Australian job
market is a primary driver of performance.
A factor that could lead to a downgrade of the notes is
worse-than-expected collateral performance. Other reasons that
could lead to a downgrade include poor servicing, error on the part
of transaction parties, a deterioration in the credit quality of
transaction counterparties, or lack of transactional governance and
fraud.
SILVER HERITAGE: Second Creditors' Meeting Set for June 23
----------------------------------------------------------
A second meeting of creditors in the proceedings of Silver Heritage
Group Limited has been set for June 23, 2020, at 10:00 a.m. via
conference call.
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.
Amanda Coneyworth and Ryan Eagle of KPMG were appointed as
administrators of Silver Heritage on May 18, 2020.
TUCHUZY BONDI: Second Creditors' Meeting Set for June 25
--------------------------------------------------------
A second meeting of creditors in the proceedings of Tuchuzy Bondi
Pty Ltd has been set for June 25, 2020, at 3:30 p.m. via 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 24, 2020, at 4:00 p.m.
Barry Frederic Kogan and Katherine Sozou of McGrathNicol were
appointed as administrators of Tuchuzy Bondi on June 3, 2020.
VALUE DENTAL: Second Creditors' Meeting Set for June 23
-------------------------------------------------------
A second meeting of creditors in the proceedings of Value Dental
Care Pty Ltd has been set for June 23, 2020, at 10:00 a.m. via
teleconference only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 22, 2020, at 4:00 p.m.
Alan Walker of Cor Cordis was appointed as administrator of Value
Dental on May 18, 2020.
VIRGIN AUSTRALIA: Bondholders Pin Hopes on Aircraft Debt Revaluing
------------------------------------------------------------------
Patrick Hatch at The Sydney Morning Herald reports that one of the
few hopes Virgin Australia bondholders have of receiving anything
from its sale hangs on whether the collapsed airline's
administrators decide to cut the amount owed to aircraft lessors
down to size.
According to SMH, there are growing fears that owners of AUD2
billion worth of unsecured bonds will walk away from the Virgin
administration empty handed as the two final bidders, Cyrus Capital
and Bain Capital, prepare to submit binding offers for the business
by next Monday [June 22].
Making up less than a third of Virgin's AUD6.8 billion debt pile,
bondholders have not been expected to form a large enough voting
group to block any rescue deal administrators Deloitte put to
creditors in mid-August, the report relates.
One bondholder, who spoke on the condition of anonymity due to
confidentiality obligations in relation to the matter, said that
secured creditors, including aircraft owners (which are owed AUD1.8
billion), had debts from long-term contracts, many of which would
be renewed, SMH relays.
He said that could prompt Deloitte to reduce how much of their debt
to recognise and the number of votes they are allocated, which
would boost the bondholders' relative voting strength and force
bidders to offer them something to win their support.
"The AUD7 billion in debt is if they are liquidated - that's if you
sack everyone, and that's assuming all the planes are sent back to
the lessors", he said, SMH relays. "But this is being sold as a
going concern."
Even still, he said the best bondholders should hope for was either
a "token" payment of 10 cents to 15 cents to the dollar, or having
their debt swapped for equity in the new business. Anyone who
thought they might get 50 cents in the dollar was "dreaming", he
said.
A deal needs a 50 per cent vote in favor, both in number - which
will be determined by Virgin's 9000 employees - and by value, which
will be swayed by secured lenders and aircraft lessors, which are
owed a combined AUD4.3 billion. Deloitte has a deciding vote if the
two results are split, SMH says.
SMH relates that Steven Wright, a director at Morgans who is acting
on behalf of around 500 retail investors who bought Virgin bonds
through the stockbroker as part of a AUD325 million issuance in
November, said he could not assess their position before knowing
the size of the final bids.
"We don't have any knowledge of what might be on the table.
Bondholders . . . would like to see an acceptable position put
forward," the report quotes Mr. Wright as saying.
Jason Harris, an insolvency specialist and professor of corporate
law at the University of Sydney, said that bondholders could mount
a legal challenge if they believed Deloitte incorrectly accepted
claims from creditors at the face value of their contracts, without
adjusting the debt for the contracts that were renewed, SMH adds.
"Then you'd end up with a valuation fight," the report quotes
Professor Harris as saying. "[But] I'm not sure that's likely
before the second creditors meeting".
Virgin's Australian- and US dollar-denominated bonds were paying
interest of between 7.8 per cent and 8.2 per cent.
Deloitte declined to comment on how it would allocate votes at the
second meeting of creditors, SMH notes.
About Virgin Australia
Brisbane, Queensland-based Virgin Australia is Australia's
second-largest airline. It commenced services in 2000 as Virgin
Blue, wholly owned by the Virgin Group.
As reported in the Troubled Company Reporter-Asia Pacific on April
22, 2020, Bloomberg News related that Virgin Australia Holdings
Ltd. became Asia's first airline to fall to the coronavirus after
the outbreak deprived the debt-burdened company of almost all
income. Administrators at Deloitte, who have taken control of the
Brisbane-based carrier, aim to restructure the business and find
new owners within months. More than 10 parties have expressed an
interest, Deloitte related on April 21.
Virgin Australia, which has furloughed 80% of its 10,000 workers,
will continue to operate some flights for essential workers,
freight and the repatriation of Australians, Bloomberg said. The
airline's frequent flyer program is a separate company and is not
in administration.
Richard John Hughes, John Greig, Vaughan Strawbridge and Sal Algeri
of Deloitte were appointed as administrators of Virgin Australia,
et al., on April 20, 2020.
The company owes AUD6.8 billion to lenders, bondholders, aircraft
lessors, trade creditors and employees.
On April 29, 2020, the company and certain affiliates filed
petitions pursuant to Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York.
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C H I N A
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CHINA FORTUNE: Fitch Affirms LT IDR at BB-, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed China Fortune Land Development Co.,
Ltd.'s Long-Term Foreign-Currency Issuer Default Rating at 'BB-'.
The Outlook is Stable. At the same time, Fitch has affirmed CFLD's
senior unsecured rating and the ratings on all outstanding bonds at
'BB-'.
CFLD's ratings are supported by its leading position in
industrial-park development in key economic regions. Its improving
geographical diversification, cooperation with Ping An Life
Insurance Company of China, Ltd. and a new management team formed
in 2018-2019 has strengthened its business profile, mitigating its
weakened financial profile. CFLD's comparative advantages of a
large property sales scale, strong brand name and industrial-park
development are in line with a 'BB' category business profile.
Fitch has applied a one-notch uplift to CFLD's Standalone Credit
Profile due to its moderate linkage with Ping An Life, in
accordance with Fitch's Parent and Subsidiary Rating Linkage
criteria. Fitch has assigned CFLD's SCP at 'b+' due mainly to its
high leverage compared with peers. CFLD's leverage of around 65% is
in line with a 'B' category financial profile, in Fitch's view.
The Stable Outlook reflects its expectations that CFLD's leverage
will peak in 2019-2020.
KEY RATING DRIVERS
Moderate Linkage with Ping An: Fitch has assessed the linkage
between CFLD and Ping An Life as moderate. Ping An Life is CFLD's
second-largest shareholder with 25% ownership as of end-May 2020.
Fitch has applied one-notch uplift to CFLD's SCP due to Ping An
Life's stronger credit profile. Fitch regards Ping An Life's
strategic and operational linkage with CFLD as moderate, but the
legal linkage as weak.
The insurer's cooperation with CFLD is different from its other
property investments due to its engagement in CFLD's investment
decisions. Ping An Life has appointed two of its representatives as
executive directors and introduced a joint-chairman to CFLD's
board. CFLD has also set up its southern headquarters in Shenzhen
with new management to cooperate with Ping An Life in urban-complex
development and asset-light investment-property businesses to
expand beyond its traditional industrial-park development.
Leverage to Peak: Fitch estimates that CFLD's leverage - measured
by net debt/adjusted inventory + accounts receivables - of 64% in
2019 will remain stable in 2020 and start to trend down from 2021.
Fitch believes that CFLD's improving cash collection from both
property sales and government reimbursement, capital contribution
from non-controlling interest project partners, a slowdown in
industrial park expenditure and Ping An Life's support in expanding
the commercial property management business, will lead to a lower
leverage from 2021 onwards.
Cash Collection Improves: Fitch estimates CFLD's overall cash
collection will continue to improve, as its geographical
diversification gathers steam and cash-collection issues are
addressed. Fitch estimates CFLD had cash inflow of more than CNY30
billion from government reimbursements in 2019, after a 20%
increase in government-related district revenue to CNY38 billion.
This represents a cash collection rate of over 80%, compared with
50% in 2018, according to Fitch's estimate.
Fitch also estimates that CFLD's cash collection from property
sales rose to around 60% in 2019, from 45% in 2018, after its
diversification outside the pan-Beijing region, which was severely
hit by a zoning and land auction freeze and more stringent
home-purchase restrictions in 2018.
District Investment Slows Down: Fitch expects CFLD's investment in
primary land and infrastructure in industrial parks to slow from
2021 due to the end of the early development phases of its parks
outside the pan-Beijing region. Fitch estimates CFLD invested over
CNY30 billion in 2019. Fitch expects the net cash flow from
industrial parks to turn positive in 2020 and help CFLD deleverage
from 2021. CFLD invests in primary land and infrastructure in its
industrial parks to support a wider margin for its
property-development projects surrounding the parks.
Urban Complex Development Start-Up: Fitch believes CFLD's expansion
into the urban complex projects business will strengthen the
business profile. It will help CFLD generate additional contracted
sales outside of traditional industrial parks and potentially
asset-light management fees from the commercial property
operations. CFLD started to acquire urban complex projects as part
of its collaboration with Ping An Life in 2019. CFLD acquired a
project in Wuhan's central business district in 2019 for a total
consideration of CNY11.6 billion, and another in Nanjing in 1H20
for CNY6.3 billion.
Broadening Geographical Diversification: CFLD's increasing reach
will be crucial in diversifying its geographical risks and
maintaining a healthy cash collection in the long run, in Fitch's
view. CFLD has expanded its industrial parks beyond the pan-Beijing
region, including areas surrounding Nanjing, Hangzhou and Hefei.
The contracted gross floor area contribution from the pan-Beijing
region decreased to 36% of the total in 2019, from 46% in 2018 and
66% in 2017.
DERIVATION SUMMARY
CFLD's business profile is in line with 'BB' category credits. The
company is a leading industrial-park developer in China, with the
majority of its revenue from the pan-Beijing region. CFLD receives
non-property income from government contracts and generates
property-development income from projects within its industrial
parks.
CFLD is less subject to counterparty credit risk, especially as its
business model involves paying land premiums and taxes to local
governments, which are in turn used to pay the company. This
significantly strengthens its business profile relative to other
homebuilders, as it does not need to lock up capital in land
reserves that are not immediately needed for development.
On the other hand, CFLD invests in primary land and infrastructure
in its industrial parks to support a high value for its
property-development projects within the parks, but it has to wait
two to three years before the government can reimburse the
investment. The large investment in district-related infrastructure
can sometimes cause a drain on CFLD's cash flow.
CFLD's standalone financial profile is similar to that of Yango
Group Co., Ltd. (B+/Stable). CFLD's leverage - measured by net
debt/adjusted inventory + receivables - of 64% at end-2019 and
Fitch's expectation of 60%-65% in 2020-2021 are at a similar level
to Yango's 60% at end-2019, but higher than that of other 'BB' and
'BB-' rated issuers, such as Seazen Group Limited's (BB/Stable) 30%
and Risesun Real Estate Development Limited's (BB-/Stable) 40% at
end-2019.
CFLD's total contracted sales of CNY102 billion and attributable
contracted sales of CNY89 billion in 2019 are smaller than Yango's
attributable sales of CNY135 billion. However, CFLD generates
sizeable government-related revenue from its large industrial-park
operations unlike its peers without sizeable non-property
development revenue. Fitch estimates that the government
reimbursement cash profit was able to cover at least one time of
the cash interest expense in 2019, and hence provide rating support
to CFLD.
CFLD's IDR includes a one-notch uplift from Ping An Life.
KEY ASSUMPTIONS
- Consolidated contracted sales of around CNY90 billion a year in
2020-2021
- Government-related revenue to increase to CNY41 billion in 2020
and CNY46 billion in 2021
- District development expenditure of around CNY20 billion a year
in 2020-2021
- Property-related development expenditure to account for 130% of
the sales collection in 2020-2021, due to large investments in
urban complex projects in the early stage
- Gross margin of around 40% in 2020-2021
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Net debt/adjusted inventory + accounts receivables below 55%
for a sustained period
- Strengthening linkage with Ping An Life
- Available cash/short-term debt sustained above 1x
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Difficulty in receiving cash receipts from government
- Net debt/adjusted inventory + accounts receivables above 65%
for a sustained period
- Weakening linkage with Ping An Life
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch estimates that CFLD will have around
CNY90 billion debt due and puttable in 2020, including around CNY30
billion in bonds. Fitch believes CFLD will be able to secure
sufficient bond issuance quota to refinance most of its bonds with
new issuance, and the bank loans can be rolled over due to CFLD's
strong banking relationships.
CFLD issued a USD1.2 billion offshore bond in early 2020 with a
coupon rate of 7%-8% to refinance its USD920 million senior notes
due December 2020 and 6.65% USD350 million perpetual notes that
will have a coupon step-up to over 10% if not redeemed in December
2020. CFLD has also issued several onshore bonds to refinance its
existing domestic capital instruments. CFLD will use the cash
generated and lower-cost debt instruments to repay most of its
existing higher-cost loans in 2H20, according to management.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
=========
I N D I A
=========
AISSHPRA LIFESPACES: ICRA Cuts Rating on INR30cr Loan to B+
-----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Aisshpra
Lifespaces (ALS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 30.00 [ICRA]B+ (Stable), ISSUER NOT
Fund Based– COOPERATING; Rating downgraded
Term Loan from [ICRA]BB- (Stable) and
continues to remain in the
'ISSUER NOT COOPERATING'
category
Rationale
The downgrade is because of lack of adequate information regarding
ALS' performance and hence the uncertainty around its credit risk.
ICRA assesses whether the information available about the entity is
commensurate with its rating and reviews the same as per its
"Policy in respect of non-cooperation by the rated entity". The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Aisshpra Lifespaces, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Incorporated in December 2013, Aisshpra Lifespaces (ALS) is a
partnership firm. It is working on its first real estate project,
Paalm Paradise. Itis headed by Mr. Atul Saraf, Mr. Anoop Saraf and
Mr. Vikas Kejriwal. Paalm Paradise is located in Taramandal,
Gorakhpur. The project is in the vicinity of the railway station,
airport, bus station, and national highway. The project is to be
executed in phases. Currently the first phase is ongoing and is
scheduled for completion in December 2019.
ALUCAST AUTO: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Alucast Auto Parts Limited
Registered office:
R.S. No. 390/3A, GP No. 384/A
Khanapur Road, Peeranwadi
Belgaum KA 590014
IN
Insolvency Commencement Date: June 9, 2020
Court: National Company Law Tribunal, Bengaluru Bench
Estimated date of closure of
insolvency resolution process: December 6, 2020
Insolvency professional: Rakesh Chaturvedi
Interim Resolution
Professional: Rakesh Chaturvedi
Paresh Rakesh & Associates
103, Namrata CHS Bldg No. 15
Shahstri Nagar, Link Road
Goregaon West, Mumbai 400104
E-mail: ip@pareshrakesh.in
- and -
Paresh Rakesh & Associates
RH-5, Prithvi Palace
Link Road, Kandarpada
Dahisar (West), Mumbai 400068
E-mail: ip@pareshrakesh.in
Mobile: 7021316351
Last date for
submission of claims: June 25, 2020
ARULMANI EXPORTS: ICRA Reaffirms B+ Rating on INR10cr Loans
-----------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Sree
Arulmani Exports, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term–
Fund-based/TL 5.00 [ICRA]B+ (Stable); Reaffirmed
Long-term–
Fund-based/CC 5.00 [ICRA]B+ (Stable); Reaffirmed
Rationale
The rating reaffirmation factors in the extensive experience of the
promoter in the weaving industry for over three decades and the
proven operational track record of Sree Arulmani Exports. The
rating also considers the logistical advantages enjoyed by the firm
due to its proximity to raw material suppliers as well as fabric
processing units. The rating, however, remains constrained by the
firm's small scale of operations in an intensely competitive and
fragmented fabric industry, which restricts its pricing power.
The rating also factors in the firm's stretched liquidity position
and the expected weakening of its debt protection metrics with
possible disruption in its cash flows because of demand slowdown
amid the lockdown situation following the Covid-19 pandemic. ICRA
also notes the risk of withdrawals arising from the firm's
partnership nature. The Stable outlook reflects ICRA's expectation
that the firm will continue to benefit from the extensive
experience of its promoter in the weaving industry.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoter in weaving industry: The firm's
promoter, Mr. Ramachandran S, has extensive experience spanning
over three decades in the weaving business.
* Location-specific advantages: The firm benefits in terms of lower
transportation cost and easy access to quality raw materials due to
its proximity to raw material suppliers and fabric processing
units.
Credit challenges
* Small scale of operations: The firm has a small scale of
operations with an operating income of INR38.5 crore in FY2019 in
an intensely competitive and fragmented weaving industry, which
restricts its pricing power. Being a partnership concern, the firm
is exposed to the risk of cash withdrawals by the partners.
* Financial profile characterised by stretched liquidity position
and moderate coverage indicators: The firm's financial profile is
characterised by a stretched liquidity position (as illustrated by
the average working capital utilisation of 95% for the period
January 2019 to March 2020) and moderate coverage indicators. The
firm's coverage and capitalisation metrics such as DSCR declined to
1.15 times in FY2019 from 1.21 times in FY2018 and TD/OPBITDA
increased to 6.6 times in FY2019 from 3.3 times in FY2018 due to an
increase in debt levels and high repayments (~Rs. 0.76 crore in
FY2019 and ~Rs. 1.34 crore in FY2020). The same is expected to
weaken in the near term owing to possible disruption in its cash
flows because of demand slowdown amid the lockdown situation
following the Covid-19 pandemic.
* Vulnerability of profitability to fluctuations in yarn prices:
The firm's profitability is vulnerable to fluctuations in
yarn prices, which depend on various factors such as seasonality,
climatic conditions, international demand and supply situation and
export policy. SAE's operating profit margin declined to 4.6% in
FY2019 from 5.9% in FY2018 due to higher raw material costs owing
to the firm's inability to fully pass on the increase in input
cost.
Liquidity position: Stretched
SAE's liquidity position is stretched with high debt repayments
amid subdued fund flow from operations and high working capital
utilisation (an average of 95% of the sanctioned limits between
January 2019 and March 2020).
Rating sensitivities
* Positive triggers: ICRA may upgrade SAE's rating if it witnesses
a sustained increase in its scale of operations and profitability,
and improvement in its capitalisation metrics. Specific credit
metrics that could lead to an upgrade of SAE's rating include
TD/OPBITDA falling below 5.0 times on a sustained basis.
* Negative triggers: The rating will be downgraded if the firm's
scale of operation and profitability deteriorates or if its
liquidity position weakens further due to significant capital
withdrawal by its partners or a stretched working capital cycle on
a sustained basis.
Sree Arulmani Exports was established as a proprietorship concern
in 2006 by Mr. Ramachandran S and was converted into a partnership
firm in 2017 with Mr. Ramachandran and Mrs. Thulasi as partners.
The promoter has extensive experience of nearly three decades in
the weaving industry. The firm is involved in the production of
grey cotton fabric with its manufacturing facility located in
Coimbatore, Tamil Nadu. Its current installed capacity is 144
looms, which include 72 conventional power looms and 72 auto-power
looms. Besides, the firm outsources a portion of its requirements
to other weaving units in its vicinity.
BLUEWATER FOODS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: M/s Bluewater Foods and Exports Private Limited
281/282, Industrial Area
Baikampady, Mangalore 575011
Insolvency Commencement Date: June 10, 2020
Court: National Company Law Tribunal, Bangalore Bench
Estimated date of closure of
insolvency resolution process: December 10, 2020
(180 days from commencement)
Insolvency professional: Pankaj Srivastava
Interim Resolution
Professional: Pankaj Srivastava
5, 5th Cross Navya Nagar
Jakkur, Bangalore
Karnataka 560064
E-mail: psri@live.com
cirp@psri.in
Last date for
submission of claims: June 27, 2020
C.P. ARORA: ICRA Keeps 'C' Debt Rating in Not Cooperating
---------------------------------------------------------
ICRA said the rating for the bank facilities of C.P. Arora
Engineers-Contractors Pvt. Ltd. (CPA) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 6.75 [ICRA]C; ISSUER NOT COOPERATING;
Cash Credit Continues to remain under the
'Issuer Not Cooperating' category
Non-Fund 8.22 [ICRA]A4; ISSUER NOT COOPERATING;
based Limits Continues to remain under the
'Issuer Not Cooperating' category
Unallocated 0.03 [ICRA]A4; ISSUER NOT COOPERATING;
Limits Continues to remain under the
'Issuer Not Cooperating' category
Rationale
The ratings for the INR15.00 crore bank facilities of CPA continue
to remain under 'Issuer Not Cooperating' category'. The ratings are
denoted as "[ICRA]C/[ICRA]A4 ISSUER NOT COOPERATING."
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
CPA was incorporated in 2003 and was promoted by late Mr. C.P.
Arora. His family members took over the running business of the
proprietorship firm after his death. The company has been involved
in road construction for more than 50 years. CPA is currently
managed by Mr. Karun Arora (son of Mr. C.P. Arora) who has long
experience in the road construction sector. The company primarily
undertakes road construction projects for government entities
(Public Works Department) and also for clients in the private
sector, on a sub-contract basis. The company is also involved in
various ancillary works, required for the completion of a road
project, including construction of footpaths, walkways, cross
drainage works, culverts, sewer lines, water supply lines,
landscaping, and horticulture jobs.
CORE GREEN: ICRA Reaffirms 'D' Rating on INR342.49cr Term Loan
--------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Core
Green Sugar and Fuels Private Limited (CGSFPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based–
Term Loan 342.49 [ICRA]D; Reaffirmed
Fund Based–
Cash Credit 117.11 [ICRA]D; Reaffirmed
Non-fund Based–
Working Capital
Facilities 21.00 [ICRA]D; Reaffirmed
Rationale
The rating reaffirmation factors in the continuing delays in debt
servicing because of CGSFPL stretched liquidity position. The
company's financial position continues to be weak as reflected by
the moderate operating profitability, net loss, high gearing and
weak debt-coverage metrics in FY2019.
Moderate cane crushing volumes along with high cane cost is likely
to constrain the operating profitability at modest levels during
FY2020 with the situation unlikely to witness any material change
in the near term. Further, the high debt levels, high interest
costs and net losses continue to adversely impact the capital
structure and debt coverage metrics.
CGSFPL's ratings remain constrained by the risks associated with
the inherent cyclicality in the sugar business; agroclimactic risks
related to cane production; and Government policies on sugar trade,
cogeneration power and ethanol pricing, and offtake.
However, ICRA takes note of the company's forward integration into
cogeneration and distillery businesses, which provide alternate
revenue streams and reduce the impact of the cyclicality of the
sugar business to some extent. ICRA also notes that the offtake
risk for the cogeneration unit is low in the medium term because of
the five-year PPA with the Karnataka state discom at a remunerative
tariff.
Key rating drivers and their description
Credit strengths
* Forward-integrated operations: Fully integrated profile of sugar
operations (with cogeneration unit of 24 MW and distillery unit of
50 KLPD) cushions profitability in cases of sugar downturn.
* Low offtake risk for power exports: The presence of a five-year
PPA with the Karnataka state discom at a remunerative tariff of
around INR5/unit lowers the offtake risk for the cogeneration unit
in the medium term.
Credit challenges
* Delays in debt servicing: Continuing delays in debt servicing
because of CGSFPL's stretched liquidity position.
* Weak financial profile: Moderate cane crushing volumes along
with relatively high cane cost has constrained the company's
operating profitability at modest levels, which together with high
interest expenses resulted in net losses. High debt along with net
losses has resulted in weak debt coverage metrics.
* Vulnerability of profitability to agro-climatic risk and
regulatory risk: Profitability of sugar mills remains exposed to
the cyclicality of the sugar industry, agro-climatic risks related
to cane production, and Government policies related to sugar
trade.
Liquidity position: Poor
CGSFPL's cash flows are inadequate with respect to its debt
servicing commitments because of relatively lower cane crushing
volumes and high cane costs resulting in poor liquidity. The
company has reported continuous net losses since FY2014.
Rating sensitivities
Positive triggers - The rating may be upgraded if the company
services its debt obligations in a timely manner on a sustained
basis.
Negative triggers - Not applicable.
CGSFPL operates an integrated sugar plant at the Yadgir district of
Karnataka, which was commissioned in April 2011. The plant has a
5000-TCD crushing unit, a 24-MW cogeneration unit and a 50-KLPD
distillery unit. The company is promoted by the Sreeramaneni family
of Andhra Pradesh, which holdsthe entire equity stake in the
company. In FY2019, the company reported a net loss of INR58.2
crore on an operating income of INR321.2 crore compared to a net
loss of INR6.4 crore on an operating income of INR141.4 crore in
the previous year.
CYMBIO PHARMA: Ind-Ra Moves BB LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Cymbio Pharma
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING) /
IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR3.91 mil. Term loan due on March 2020 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May
20, 2019. Ind-Ra is unable to provide an update, as the agency does
not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated on September 14, 1998, as a flagship company of the
Karle group, Cymbio Pharma manufactures and exports herbal
extracts, cosmeceutical products, and beverage extracts.
D.M COTTON: ICRA Keeps 'B' Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the rating for the bank facilities of D.M Cotton
Industries (DCI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based– 8.25 [ICRA]B (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund-based– 0.65 [ICRA]B (Stable) ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Unallocated 1.10 [ICRA]B (Stable)/A4 ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating for the bank facilities for INR10.00 crore of DCI
continues to remain under 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B (Stable)/A4 ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Established in 1998 as a partnership firm, DM Cotton Industries
(DCI) is engaged in the business of cotton ginning and pressing to
produce cotton bales and cottonseeds and in trading of raw cotton
at its manufacturing facility located in Surendranagar, Gujarat
equipped with 24 ginning machines and 1 pressing machine with an
installed capacity of producing ~300 bales per day or 51 MTPD. The
promoters of the firm have over 15 years of experience in the
cotton ginning business.
GUDIVADA MUNICIPALITY: ICRA Lowers Issuer Rating to B+
------------------------------------------------------
ICRA has downgraded the Issuer Rating of Gudivada Municipality from
[ICRA]BB (Stable) to [ICRA]B+ (Stable) Issuer Not Cooperating and
rating continues to remain under issuer not cooperating category.
Rationale
The rating downgrade is because of lack of adequate information
regarding Gudivada Municipality performance and hence the
uncertainty around its credit risk. ICRA assesses whether the
information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by the rated entity". The lenders, investors and
other market participants are thus advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity, despite the
downgrade.
As part of its process and in accordance with its rating agreement
with Gudivada Municipality, ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 01, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
The GDVM was constituted as a municipality in 1937 and is governed
by the Andhra Pradesh State Municipalities Act 1965 (Act). It
manages the municipal services in Gudivada city in the Krishna
district of AP. The GDVM covers an area of 12.67 sq. km. and serves
a population of 1.2 lakh (as per Census 2011). Its main functions
include water supply, solid waste management and construction,
repair and maintenance of roads, and streetlights in its area. The
municipality is governed by an elected body (council) headed by a
Chairperson, while the Commissioner acts as the executive head
overseeing its everyday functioning.
HIRA AUTOMOBILES: Ind-Ra Gives 'BB' Rating, Outlook Stable
----------------------------------------------------------
India Ratings and Research (Ind-Ra) rates Hira Automobiles Ltd at
'IND BB' with a Stable Outlook. As part of the ongoing rating
review exercise and in line with the regulatory requirement, Ind-Ra
had requested the issuer on June 1, 2020, March 5, 2020 and
February 25, 2020, for updated information on the company's
performance. In view of the COVID-19 led lockdown, the issuer has
informed the agency that it needs more time to provide the required
data. It has opted for the debt moratorium allowed by the Reserve
Bank of India until September 2020.
KEY RATING DRIVERS
Ind-Ra is working with Hira Automobiles to see if any information
can be readily provided, so that the agency can update its credit
view as per the regulatory requirement. Ind-Ra will try to complete
the process by 26 June 2020 using the best available information.
If Ind-Ra is unable to do so due to the lack of adequate data, then
the rating may have to be migrated into the issuer non-cooperating
category, so that banks are aware that the agency is unable to
update its credit view.
INDIA: Credit Market Stung by Bankruptcy Suspension
---------------------------------------------------
Anurag Joshi at Bloomberg News reports that since India announced
last month that it would temporarily suspend filings under its
insolvency law amid the pandemic, credit investors have grown
concerned that some weaker borrowers may use the development as an
excuse to delay or avoid debt payments.
Bloomberg relates that yield premiums jumped after Finance Minister
Nirmala Sitharaman unveiled the suspension, and the extra spread
that investors demand to hold short-term AA rated debt over AAA
notes has risen to its highest in about nine years.
"Suspension of bankruptcy filings can give firms a reason to take
advantage of the situation and delay debt repayments," Bloomberg
quotes Rajat Bahl, chief ratings officer at Brickwork Ratings in
Mumbai, as saying. "This will be a setback to bond investors and
creditors."
According to Bloomberg, the government enacted the measure earlier
this month to help borrowers, but for investors and lenders it just
adds to concerns that they won't get their money back on time,
making them more cautious about where to invest. Fund managers are
bracing for a surge in corporate defaults with the Indian economy
forecast to contract for the first time in more than four decades
this fiscal year, despite policy-maker steps to ease borrower
stress.
India's four-year-old Insolvency and Bankruptcy Code had quickened
debt resolution for the nation's distressed companies, the report
notes. Under the recent amendment, a creditor won't be able to
initiate bankruptcy proceedings against a borrower for defaulting
on debt because of the pandemic, in the six-month period started
March 25. The government has an option to extend the rules for as
long as a year, the report sas.
Caution was already high among the Indian bond investors before the
pandemic hit, after domestic issuers failed to repay a record
INR137 billion ($1.8 billion) of corporate notes in 2019, according
to data compiled by Bloomberg. Indian companies face a record
INR6.1 trillion of local-currency notes due in 2020 on top of other
debts, the data show.
Steps by policy makers such as funding banks to purchase corporate
debt and a moratorium on loan repayments until the end of August
haven't bolstered confidence among investors, according to
Bloomberg. They are still are mostly sticking to notes issued by
top-rated local issuers and aren't risking getting into lower-rated
securities.
S&P Global Ratings on June 12 revised its forecast for the Indian
economy, predicting that it will contract by 5% in the year ending
March 31, 2021, compared with a pre-pandemic growth estimate of
6.5%, Bloomberg adds.
IVRCL LIMITED: NCLAT Upholds Liquidation as a Going Concern
-----------------------------------------------------------
The Hindu BusinessLine reports that the National Company Law
Appellate Tribunal (NCLAT) has upheld the decision of the National
Company Law Tribunal, Hyderabad Branch, ordering liquidation of
IVRCL Limited as a going concern.
Given the current stress in the infrastructure sector and the
economy, it is to be seen whether there will be interest in
acquiring the construction company during the liquidation process,
the report relays. Even at the NCLT stage, there was not much
interest for resolution, barring a couple of companies that evinced
interest.
According to the report, the appeal was filed by First Global
Finance with IVRCL and State Bank of India as respondents. SBI, as
the lead lender, had filed the insolvency case under the Insolvency
and Bankruptcy Code, 2016, seeking a resolution plan.
Hindu BusinessLine relates that the petitioner filed the appeal
stating that the Resolution Plan submitted by it was arbitrarily
rejected by the NCLT. Dealing with the petition, in the order,
Justice Jarat Kumar Jain, technical members Ashok Kumar Mishra and
Balvinder Singh, upheld the order passed by NCLT directing
liquidation of the company as a going concern.
The report says the order observed that the Resolution Plan was
rejected by the Committee of Creditors and on account of deviation
in expression of interest and non-fulfilment of various other
eligibility criteria and the liquidation ordered.
After First Global submitted its updated Resolution Plan in
November 2018 along with Phoenix ARC as Financial Sponsor, Phoenix
did not want to be categorised as a resolution applicant along with
First Global. This required deviation in the EoI and restart of the
resolution process, the report states.
Hindu BusinessLine relates that the Committee of Creditors rejected
the proposed deviation of certain terms of condition of the EoI
with regard to the Resolution Plan received from the First Global.
The Tribunal held that the consortium was not in compliance with
the minimum qualification criteria as defined in the terms of EoI.
There was another proposal to reconsider the Resolution Plan with
its holding company First Global Stock Broking and Shankar Sharma
and Devina Mehra as consortium members, the report says.
Following failure to come at a finality to the Resolution Plan and
the Committee of Creditors rejecting the bid, NCLT Hyderabad Bench
ordered liquidation of IVRCL as a going concern.
The matter was taken up with the NCLAT, which confirmed the NCLT
order, Hindu BusinessLine adds.
IVRCL Limited develops and executes engineering, procurement,
construction, and commissioning (EPCC) projects in India.
KODURI ENTERPRISES: ICRA Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA said the rating for the bank facilities of Sri Koduri
Enterprises Private Limited (SKEPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 17.00 [ICRA]B(Stable); ISSUER NOT
Fund Based CC COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Long Term– 0.50 [ICRA]B(Stable); ISSUER NOT
NonFund Based COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Long Term– 2.50 [ICRA]B(Stable); ISSUER NOT
Unallocated COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Rationale
The ratings for the INR20.00-crore bank facilities of SKEPL
continues to remain under 'Issuer Not Cooperating' category'. The
ratings are denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Sri Koduri Enterprises Private Limited (SKEPL) is an authorized
auto dealer of three wheelers and four wheelers manufactured by
Piaggio Vehicles Private Limited (subsidiary of Piaggio S.P.A, an
Italy based manufacturer), Case New Holland Construction Equipment
(India) Pvt. Ltd and MRF Tyres in Andhra Pradesh. The company is
also engaged in servicing of vehicles along with sale of spare
parts.
KRISH CEREALS: ICRA Lowers Rating on INR23cr Loan to B+
-------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Krish
Cereals Pvt. Ltd. (KCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 23.00 [ICRA]B+ (Stable) ISSUER NOT
limits COOPERATING; Rating downgraded
from [ICRA]BB+(Stable) and
continue to remain under
'Issuer Not Cooperating'
Category
Rationale
The Long-Term rating downgrade is because of lack of adequate
information KCPL's performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Krish Cereals Pvt. Ltd. ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on
the best available information.
Krish Cereals Pvt. Ltd. (KCPL) is engaged in the business of
milling of Basmati Rice. The company has processing unit with
capacity of 16 tonnes per hour which is located in Nissing (Distt.
Karnal)- Haryana. The Company caters to both domestic as well as
export markets.
KRISHNA SAHAKARI: ICRA Keeps B Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA said the rating for the bank facilities of Krishna Sahakari
Sakkare Karkhane Niyamit (KSSKN) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 229.0 [ICRA]B (Stable); ISSUER NOT
based/CC COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Long-term–Fund 82.0 [ICRA]B (Stable); ISSUER NOT
Based TL COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Rationale
The ratings for the INR311.00-crore bank facilities of KSSKN
continues to remain under 'Issuer Not Cooperating' category'. The
ratings are denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
The Krishna Sahakari Sakkare Karkhane Niyamit (KSSKN), a
co-operative society registered under the Karnataka Cooperative
Societies Act, 1959, operates a sugar mill with a capacity of 5,500
tonne of cane per day (TCD), integrated with a 27-megawatt (MW)
cogen power plant, in Athani Taluk of Belgaum district in
Karnataka. Registered in March 1981, the entity commenced its
commercial operations during FY2003 with 2,500-TCD crushing
capacity. During FY2012, the entity expanded its processing
capacity to 4,000 TCD and also installed a 12- MW cogen plant. The
cogen capacity was increased to 27 MW in FY2017 and the sugar-mill
capacity was increased to 5,500 TCD in FY2018. The Government of
Karnataka holds a 58.5% stake in the entity as on March 31, 2018.
MAHESHWARI STRUCTURES: ICRA Keeps B Debt Ratings in Not Coop.
-------------------------------------------------------------
ICRA said the rating for the bank facilities of Maheshwari
Structures continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 1.10 [ICRA]B(Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category.
Fund based- 5.00 [ICRA]B(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category.
Rationale
ICRA has continued the long-term ratings for the bank facilities of
Maheshwari Structures to the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING."
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity.
Established in year 2008, Maheshwari Structures is Nashik
(Maharashtra) based closely held partnership firm is involved in
fabrication of transmission line towers, solar PV structures and W
beam Guard Rails. The firm initially undertook labour work for
fabrication of transmission line towers for Jyoti Structures
Limited. In year 2013, the firm forayed into manufacturing of
transmission towers and steel structures required for solar
photovoltaic projects and in year 2014 ventured into manufacturing
of W Beam Guard Rails that are installed on the road periphery for
safety on state and national highways.
MILAN ASSOCIATES: ICRA Withdraws B+ Rating on INR7cr Debt
---------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of Milan
Associates (MA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Overdraft 7.00 [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Withdrawn
Bank Guarantee 18.00 [ICRA]A4; ISSUER NOT COOPERATING;
Withdrawn
Rationale
The long-term and short-term ratings assigned to MA have been
withdrawn at the request of the company, based on the no-objection
certificate provided by its banker. ICRA is withdrawing the rating
and that it does not have information to suggest that the credit
risk has changed since the time the rating was last reviewed. ICRA
has withdrawn the Stable outlook on the long-term rating.
Key rating drivers and their description
Key rating drivers have not been captured as the rating is being
withdrawn.
Milan Associates (MA) was promoted by Mr. Raken Dhirajlal Shah in
the year 1994 and was subsequently sold as a going concern to Mr.
Alpesh Patel (present partner) in the year 2007. MA is engaged in
road construction and canal/irrigation work for government
departments and semi government bodies of Gujarat. The firm
currently has three hot mix plants situated in and around Nadiad
(Gujarat). MA is a registered "AA" contractor and an approved
contractor in 'Special Category I Contractor' class with the
Government of Gujarat.
NAKODA CONSTRUCTION: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA said the rating for the bank facilities of Sri Nakoda
Construction Limited (SNCL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 3.67 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Rating continues to be in 'Issuer
Not Cooperating' category
Fund Based- 5.00 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit Rating continues to be in 'Issuer
Not Cooperating' category
Fund Based- 141.33 [ICRA]D ISSUER NOT COOPERATING;
Unallocated Rating continues to be in 'Issuer
Not Cooperating' category
Rationale
The long-term ratings for the bank facilities of SNCL continues to
be in 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D ISSUER NOT COOPERATING."
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
SNCL is the flagship entity of the Valmark Group founded by Mr.
Ratan B. Lath and Mr. Tejraj Gulecha. The Group started its
operation in 2007 under the brand name Valmark. SNCL has so far
completed five residential projects--Amoda Valmark, Abodh Valmark,
Ananda Valmark, Regency Pinnacle Heights and Aastha Valmark--all
located in Bangalore. Besides, there are two other ongoing
projects, Apas Valmark and Orchard Square, both of which are
located near Bannerghatta Road in Bangalore. The promoters of the
Group have a proven track record in the real-estate industry and
have been associated with several landmark projects in Bangalore,
including Kempegowda Maharaja Shopping Complex (K.G.Road), City
Centre (K.G.Road), Classic Orchard (Bannerghatta Road), and Classic
County (Kengeri) among others.
NATIONAL STEEL: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: National Steel and Agro Industries Limited
621, Tulsiani Chambers
Nariman Point
Mumbai 400021
Maharashtra
Insolvency Commencement Date: June 9, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: December 5, 2020
(180 days from commencement)
Insolvency professional: CA Rajeev Mannadiar
Interim Resolution
Professional: CA Rajeev Mannadiar
401, Darshan CHS
Raghunath Dadaji Street
Fort, Mumbai 400001
Tel: +91 22 4971 5974
E-mail: rajeev@integroip.com
nsailcirp2020@gmail.com
Last date for
submission of claims: June 29, 2020
NSL SUGARS: ICRA Reaffirms 'D' Rating on INR219.18cr Term Loan
--------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of NSL
Sugars Limited (NSL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-
Term Loan 219.18 [ICRA]D; Reaffirmed
Fund-based-
Working Capital
Facilities 99.49 [ICRA]D; Reaffirmed
Rationale
The rating reaffirmation factors in the continuing delays in the
debt servicing obligations owing to the stretched liquidity
position of NSL. ICRA notes that the company's loan restructuring
package is under implementation with the banks. NSL's financial
profile is weak as is evident from the moderate operating
profitability (constrained because of the relatively lower cane
crushing volumes and high cane costs), losses at net level, weak
capital structure and weak debt coverage metrics in FY2019-FY2020.
The rating is also constrained by the risks associated with the
inherent cyclicality in the sugar business; the agro-climactic
conditions related to cane production; the Government policies on
sugar trade; the pricing and offtake of cogeneration power and
ethanol; and the counterparty credit risk associated with sale of
power to the utilities in Karnataka and Maharashtra. In addition,
the tenure mismatch between the power purchase agreement (PPA) of
the co-generation units and the debt repayment period (PPA is
ending in FY2021 for Koppa and Aland while repayment is till
FY2027) would expose these co-generation units to demand and tariff
risks post FY2021.
However, ICRA takes note of the significant experience of the
promoters in the sugar industry; and the forward integrated
operations with cogeneration and distillery units, which provide
additional revenue stream and cushion profitability during sugar
downturn.
Key rating drivers and their description
Credit strengths
* Significant experience of promoters in sugar industry: NSL was
incorporated in 1999 and the promoters have extensive experience of
over 15 years in the sugar industry.
* Forward-integrated operations: NSL's sugar operations, with a
capacity of 20,000 TCD, are forward integrated with a 94-MW
cogeneration unit and a 60-KLPD distillery unit. The forward
integrated profile of sugar operations (with cogeneration and
distillery units) cushions profitability during sugar downturn.
Credit challenges
* Delays in debt servicing: Delays in debt servicing owing to NSL's
stretched liquidity position.
* Weak financial profile: NSL's financial profile is weak as is
evident from the moderate operating profitability (due to
relatively lower cane crushing volumes and higher cane costs),
losses at net level, weak capital structure and debt coverage
metrics.
* Exposure of co-generation unit to demand and tariff risk: Tenure
mismatch between the power purchase agreement (PPA) of the
co-generation units and the debt repayment period (PPA is ending in
FY2021 for Koppa and Aland while repayment extends till FY2027)
would expose these units to demand and tariff risks post FY2021.
* Vulnerability of profitability to agro-climatic and regulatory
risks: Profitability of sugar mills remains exposed to the
cyclicality of the sugar industry, agro-climatic risks related to
cane production, and Government policies related to sugar trade.
Liquidity position: Poor
NSL's liquidity position is poor because of the continued net loss
and inadequate cash flows from operations. In addition, NSL's
working capital facilities have been completely utilised. Given
NSL's poor liquidity position, no support from NSL is considered
towards its subsidiaries.
Rating sensitivities
* Positive triggers: The rating may be upgraded if the company
services the debt obligations in a timely manner on a sustained
basis.
Incorporated in 1999, NSL Sugars Limited (NSL) was promoted by
Nuziveedu Seeds Group. The company manufactures and markets sugar,
generates power and produces ethanol. The company has three units,
two at Koppa and Aland in Karnataka and the third at Pawarwadi in
Maharashtra. NSL has a 6000-TCD sugar plant along with a 30-MW
cogeneration plant and a 60-KLPD distillery at Koppa in the Mandya
district of Karnataka and a 7000-TCD sugar plant along with a 34-
MW cogneration plant in Aland, Karnataka. Jay Mahesh Sugar
Industries Limited (JMSIL) was taken over by NSLSL in FY2012 and
amalgamated into NSLSL. Currently, JMSIL is operational with a
7000-TCD sugar unit and a 30-MW cogen unit.
NSL has two subsidiaries, NSL Sugars (Tungabhadra) Ltd, (fully
owned) and NSL Krishnaveni Sugars Ltd. The latter is 74% owned by
NSL. The Group Holding Company is Mandava Holdings Pvt Ltd.
OM TRADING: ICRA Withdraws B+ Rating on INR13.50cr LT Loan
----------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of Om
Trading Company (OTC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 13.50 [ICRA]B+(Stable); Withdrawn
fund based
limit
Rationale
The rating assigned for the bank facility of OTC has been withdrawn
at the request of the company and based on the No Objection
Certificate received from its banker. However, ICRA does not have
information to suggest that the credit risk has changed since the
time the ratings were last reviewed.
Key rating drivers
Key rating drivers have not been captured as the rated
instrument(s) are being withdrawn.
Established in 2005, Om Trading Company is a proprietorship concern
of Mr. Sacchin Bora. The firm is a trader of telecom kits (around
15 types) and cables. From January 2019, the operations of its
group company Sol Cables ('SC') were ceased, and OTC bought all the
plant and machinery of SC (for manufacturing of different cables).
The cables manufactured by the firm comprise cross-linked
polyethylene (XLPE) insulated and polyvinyl chloride (PVC)
insulated cables for the power and control cable industry segments.
These cables are used in underground as well as overhead
transmission of signals.
ONE CAPITALL: ICRA Keeps D INR90cr Debt Rating in Not Cooperating
-----------------------------------------------------------------
ICRA said the rating for the bank facilities of One Capitall
Limited (OCL) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 90.00 [ICRA]D; ISSUER NOT COOPERATING;
Bank lines Rating continues to remain
under Issuer Not Cooperating
category
Rationale
The rating for the INR90-crore long-term bank lines of OCL
continues to remain under the Issuer Not Cooperating category. The
rating is denoted as [ICRA]D; ISSUER NOT COOPERATING.
As a part of its process and in accordance with its rating
agreement with OCL, ICRA has been trying to seek information from
the entity to monitor its performance. However, despite repeated
requests by ICRA, the entity's management has remained
non-cooperative. The current rating action has been taken by ICRA
basis the best available/dated/limited information on the issuer's
performance. Accordingly, the lenders, investors and other market
participants are advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity.
One Capitall Limited (OCL) was established by Mr. Areef Patel to
primarily enter the investment business and to provide finance to
corporates, firms, and individuals. OCL is a part of the House of
Patels Group, the flagship company of which is Patel Integrated
Logistics Limited (PILL). OCL was incorporated on April 11, 2008 as
One Capital Private Limited and its name was changed to One
Capitall Private Limited on July 1, 2009. It was converted into a
public limited company on June 9, 2010. The company primarily
focuses on corporate lending, with the portfolio mainly consisting
of loan against property to small builders and developers,
asset-backed loans to small and medium enterprises and unsecured
loans to individuals known to the promoter.
PAIDALA THIRUPATHI: ICRA Cuts Rating on INR8cr LT Loan to B+
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Paidala
Thirupathi Reddy and Bros, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based CC COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
Rating Continues to remain
under issuer not cooperating
category
Long Term– 2.00 [ICRA]B+ (Stable) ISSUER NOT
Non Fund Based COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
Rating Continues to remain
under issuer not cooperating
category
Rationale
The rating downgrade is because of lack of adequate information
regarding Paidala Thirupathi Reddy and Brothers performance and
hence the uncertainty around its credit risk. ICRA assesses whether
the information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by the rated entity". The lenders, investors and
other market participants are thus advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity, despite the
downgrade.
As part of its process and in accordance with its rating agreement
with Paidala Thirupathi Reddy and Brothers, ICRA has been trying to
seek information from the entity so as to monitor its performance,
but despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
Paidala Thirupathi Reddy and Bros was established in 2002 as a
partnership firm by Mr.P.Thirupathi Reddy and Mr.P.Balarami Reddy.
It is a civil contractor executing road construction, road repair
works for government projects. In the past they have executed
irrigation and road related works in various districts of Andhra
Pradesh such as Nellore, Chittor, Prakasham and Kadapa.
PATNA BAKHTIYARPUR: Ind-Ra Keeps 'D' Loan Rating in Non-cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Patna
Bakhtiyarpur Tollway Limited's long-term bank loan rating in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating action is:
-- INR7,145.89 bil. Bank loans(long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: the ratings were last reviewed on
June 8, 2018. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Patna Bakhtiyarpur Tollway is a special-purpose vehicle
incorporated to implement a 50.65km lane expansion (four-laning)
between Anisabad in Patna and Bakhtiyarpur on the National
Highway-30 (NH-30) in Bihar under an 18-year concession from the
National Highways Authority of India National Highway Authority of
India ('IND AAA'/Stable).
RAITANI ENGINEERING: ICRA Withdraws B+ Rating on INR37cr Loans
--------------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Raitani Engineering Works Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 12.00 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; Withdrawn
Non fund based– 25.00 [ICRA]B+ (Stable) ISSUER NOT
Bank Guarantee COOPERATING; Withdrawn
Rationale
The ratings have been withdrawn in accordance with ICRA's policy on
withdrawal and suspension, and as desired by the company on receipt
of No Objection Certificate provided by the bank. ICRA does not
have adequate information to suggest that the credit risk has
changed since the time the ratings were last reviewed.
Key rating drivers and their description
Key rating drivers have not been captured for the rating withdrawal
due to inadequacy of incremental information since the time the
ratings were last reviewed.
Liquidity position
Liquidity position has not been captured for the rating withdrawal
due to inadequacy of incremental information since the time the
ratings were last reviewed.
Rating sensitivities
Sensitivities have not been captured for the rating withdrawal due
to inadequacy of incremental information since the time the ratings
were last reviewed.
Incorporated in 1992, Raitani Engineering Works Private Limited is
engaged in the civil construction business, which includes
construction of bridge, civil structure, road, developing
infrastructure for laying railway lines etc. in Bihar, West Bengal,
Assam and Uttar Pradesh. It was initially established as a
partnership firm in 1976 by Guwahati-based Raitani family and
subsequently, it was converted into a private limited company.
RBR GARMENTS: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed RBR Garments
Private Limited's (RBR) Long-Term Issuer Rating at 'IND BB'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR430 mil. Fund-based limit is withdrawn (paid in full);
-- INR250 mil. Proposed fund-based working capital limits*
assigned with Provisional IND BB/Stable/Provisional IND A4+
rating; and
-- INR50 mil. Proposed non-fund-based working capital limits*
assigned with Provisional IND A4+ rating.
*The ratings are provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facilities
by RBR to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The affirmation reflects RBR's continued modest EBITDA margins and
small scale of operations. The company margins modest expanded to
7.5% in FY20 (FY19: 2.5%) due to due to stable raw material prices.
The company's return on capital employed stood at 9.5% in FY20
(FY19: 0.7%). The company faces intense competition due to the
highly-fragmented nature of textile industry and forex risks as it
derives a majority of its revenue from export markets. FY20 numbers
are provisional in nature.
The company's revenue significantly declined to INR500.2 million in
FY20 (FY19: INR812 million), due to disruptions in production amid
non-availability of working capital limits due to a family
settlement among the directors. Moreover, the company had an
outstanding order book of around INR490.1 million as at end-April
2020, providing revenue visibility for the next six months only.
However, Ind-Ra expects the revenue to increase significantly in
FY21, as the company will commence execution of all orders, which
were previously sub contracted to others, subject to the sanction
of working capital facilities in June 2020.
Liquidity Indicator – Poor: Owing to the family settlement among
the directors, RBR's closed its existing working capital facilities
by August 2019 and is seeking fresh sanction of limits. As of March
31, 2020, the company had long-term loans outstanding of INR19.9
million as debt. Thus, Ind-Ra believes that the company does not
have significant liquidity support in the absence of working
capital limits. Also, the company's working capital cycle remains
elongated despite a significant improvement to 117 days in FY19
(FY18: 312 days), mainly on account of reduced inventory days of
164 (228) and higher creditor days of 117 (37).
The ratings, however, are supported by the significant improvement
in RBR's comfortable credit metrics, as reflected in interest
coverage (operating EBITDA/gross interest expense) of 3.4x in FY20
(FY19: 0.4x) and net leverage (total adjusted net debt/operating
EBITDA) of 1.6x (22.6x). The improvement in the credit metrics was
on account of a reduction in debt as the company has closed its
working capital limits
The ratings are also supported by the promoter's experience of
around three decades in the knitted garments manufacturing
businesses.
RATING SENSITIVITIES
Negative: A decline in the revenue and/or operating profitability,
leading to deterioration in the credit metrics and stressed
liquidity, all on a sustained basis, will be negative for the
ratings.
Positive: An increase in the revenue and profitability leading to
an improvement in the credit metrics and liquidity, all on a
sustained basis, will lead to a positive rating action.
COMPANY PROFILE
Established in 1987 as a partnership firm and later converted into
a private company in 2005, Tirupur-based RBR manufactures knitted
garments and exports them to the US and Europe. The company is into
the business of manufacturing casual wear, sportswear and golf wear
to USA, Europe and rest of the world.
REGENT GRANITO: ICRA Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA said the rating for the bank facilities of Regent Granito
India Ltd. (RGL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term-Loan 5.33 [ICRA]D; ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating' category
Cash Credit 37.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating' category
Bank Guarantee 5.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating' category
Letter of 10.00 [ICRA]D; ISSUER NOT COOPERATING;
Credit Rating continues to remain under
'Issuer Not Cooperating' category
Credit Exposure 0.03 [ICRA]D; ISSUER NOT COOPERATING;
Limit Rating continues to remain under
'Issuer Not Cooperating' category
Rationale
The rating for the bank facilities for INR57.36 crore of RGL
continues to remain under 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D/D; ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Regent Granito India Ltd. (RGL) is a vitrified tiles manufacturer
with a production plant at Himmatnagar in Gujarat. The company was
established in 2003 and has manufacturing capacity of ~19,000 sq.
m. of double charged vitrified tiles per day. RGL currently
manufactures vitrified tiles of sizes 800mm x 800mm, 600mm x 600 mm
and 800mm x 1200mm with the current set of machineries at its
production facility.
ROBO EQUIPMENTS: ICRA Migrates B+ Debt Ratings to Not Cooperating
-----------------------------------------------------------------
ICRA Ratings has migrated the rating on bank facilities of Robo
Equipments and Forgings Private Limited (REFPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based– COOPERATING; Rating moved to
Cash Credit the 'Issuer Not Cooperating'
category
Long Term- 1.00 [ICRA]B+ (Stable) ISSUER NOT
Non Fund COOPERATING; Rating moved to
Based the 'Issuer Not Cooperating'
category
Long Term/ 7.00 [ICRA]B+ (Stable)/A4 ISSUER NOT
Short Term- COOPERATING; Rating moved to the
Unallocated 'Issuer Not Cooperating'
Limits Category
ICRA has moved the long term ratings for the bank facilities of
REFPL to the 'Issuer Not Cooperating' category. The rating is now
denoted as "[ICRA]B+ (Stable)/A4 ISSUER NOT COOPERATING."
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis limited information on
the issuers' performance. Accordingly the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity.
Incorporated in 2010, Robo Equipments and Forgings Private Limited
is engaged in fabrication of heavy steel structure specifically
used in power projects and conveyor belts. The fabrication unit is
located at Sangareddy, Hyderabad and the company commenced
fabrication operations in June 2012. The company is promoted by Mr.
Shiva Rama Raju.
S.S.AANANDAN SPINNING: Ind-Ra Moves BB LT Rating to Non-cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated S.A.Aanandan
Spinning Mills Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR110.6 mil. Long-term loans due on May 2026 migrated to
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
rating;
-- INR450 mil. Fund-based Facilities migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR60 mil. Non-fund-based Facilities migrated to non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May
7, 2019. Ind-Ra is unable to provide an update, as the agency does
not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1996, S.A.Aanandan Spinning Mills manufactures
cotton yarn in the count range of 20s-100s. The company has an
annual installed capacity of 21,264 spindles.
SATHYAM GREEN: Ind-Ra Keeps 'BB-' Loan Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Sathyam Green
Power Private Limited's bank facilities in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using the ratings. The rating will
continue to appear as 'IND BB- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR358.4 mil. Senior bank loans maintained in non-cooperating
category with IND BB- (ISSUER NOT COOPERATING) rating; and
-- INR97.5 mil. Fund-based working capital limit maintained in
non-cooperating category with IND BB- (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 3, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Sathyam Green Power operates a 10MW biomass power plant in the
Merta district of Rajasthan and is majorly held by Focal Biomass
Holdings Limited.
SATISH SUGARS: ICRA Lowers Rating on INR180cr Loans to B+
---------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Satish
Sugars Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 69.80 [ICRA]B+ (Stable) ISSUER NOT
FundBased/CC COOPERATING; Rating downgraded
from [ICRA]BB (Stable) and
continues to remain under issuer
not cooperating category
Long Term- 110.20 [ICRA]B+ (Stable) ISSUER NOT
Fund Based TL COOPERATING; Rating downgraded
from [ICRA]BB (Stable) and
continues to remain under issuer
not cooperating category
Rationale
The rating downgrade is because of lack of adequate information
regarding Satish Sugars Limited's performance and hence the
uncertainty around its credit risk. ICRA assesses whether the
information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Satish Sugars Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
Satish Sugars Limited is situated at Gokak Taluka of Belgaum
district in North Karnataka. It started operations in SY2001 as a
1,250 TCD Khandasari unit. At present, it has 10,000 TCD sugarcane
crushing capacity, 31 MW cogeneration unit and 60 KLPD distillery.
SSL is promoted by Mr. Satish Jarkiholi and his family.
SESHA SAI: ICRA Keeps 'B' Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA said the rating for the bank facilities of Sesha Sai Cotton
Company (SSCC) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.00 [ICRA]B(Stable); ISSUER NOT
Fund Based CC COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Long Term– 6.00 [ICRA]B(Stable); ISSUER NOT
Unallocated COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Rationale
The ratings for the INR12.00-crore bank facilities of SSCC
continues to remain under 'Issuer Not Cooperating category'. The
ratings are denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Sesha Sai Cotton Company (SSCC) was established in the year 2001 as
a proprietorship concern by Mr. Jampu Anjaneyalu who has an
experience of around 20 years in cotton Industry. The firm is
engaged in ginning and pressing of cotton and has taken 12 ginning
machines on lease from Jaya Mill and others.
SHREE HARI: Ind-Ra Assigns 'B+' LT Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shree Hari Steel
Industries (SHARI) a Long-Term Issuer Rating of 'IND B+'. The
Outlook is Stable.
The instrument-wise rating action is:
-- INR100 mil. Fund-based working capital limits assigned with
IND B+/Stable rating.
KEY RATING DRIVERS
The rating reflects SHARI's small scale of operations with revenue
of INR853.25 million in FY19 (FY18: INR793.20 million). The
increase in revenue in FY19 was due to the improved demand of iron
and steel products. However, Ind-Ra expects the revenue to have
declined in FY20 due to the lower demand of iron and steel products
as reflected in the sales of INR405.92 million booked until
February 2020. Furthermore, the revenue of 1QFY21 is also likely to
have been affected by the impact of the nationwide COVID-19-led
lockdown.
The ratings are constrained by the firm's weak credit metrics as
indicated by interest coverage (operating EBITDA/gross interest
expenses) of 1.28x in FY19 (FY18: 1.07x) and net leverage (adjusted
net debt/operating EBITDA) of 2.91x (6.18x). The improvement in the
credit metrics was driven by a rise in the absolute EBITDA and a
decline in the debt, resulting from the lower utilization in the
working capital limit. The absolute EBITDA grew to INR22.99 million
in FY19 (FY18: INR19.24 million), driven by the rise in revenue
during the period.
The ratings are further constrained by SHARI's modest EBITDA margin
even though it rose to 2.69% in FY19 (FY18: 2.43%) owing to the
lower cost of operations. Its return on capital employed was 19% in
FY19 (FY18: 16%). During 11MFY20, the firm booked the operating
margin of 3.58%.
Liquidity Indicator – Poor: The firm's average maximum use of its
fund-based limits was around 87% during the 12 months ended May
2020. The firm's cash flow from operations turned positive to
INR61.77 million in FY19 (FY18: negative INR49.03 million) on
account of positive changes in the working capital requirements.
Consequently, The net cash cycle improved to 32 days in FY19 (FY18:
59 days) on account of a fall in the average receivables. Also,
SHARI's free cash flow also turned positive to INR59.47 million in
FY19 (FY18: negative INR51.64 million). The cash and cash
equivalents stood at INR0.52 million at FYE19 (FYE18: INR1.43
million). However, the firm does not have any capital market
exposure and relies on banks and financial institutions to meet its
funding requirements.
The ratings are, however, supported by the proprietor's experience
of more than three decades in the iron and steel industry.
RATING SENSITIVITIES
Positive: An increase in the scale of operations along with an
improvement in the credit metrics with interest coverage above 2.0x
and improved liquidity profile will lead to a positive rating
action.
Negative: A further decline in the scale of operations along with
further deterioration in the credit metrics and/or deterioration in
liquidity will be negative for the ratings.
COMPANY PROFILE
SHARI was established in April 1994 as a proprietorship firm by
Shiv Kumar Agarwal. The firm is engaged in the trading of coal and
iron and steel products in Rourkela, Odisha. The firm procures
trading materials through auction and sells them to players in the
steel industry.
SIDDHIVINAYAK CONSTRUCTION: ICRA Cuts Rating on INR4cr Loan to B+
-----------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Siddhivinayak Construction, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: 4.00 [ICRA]B+(Stable) ISSUER NOT
Fund based– COOPERATING; Rating downgraded
Cash Credit from [ICRA]BB- (Stable) ISSUER
NOT COOPERATING* Rating continues
to remain in the 'Issuer Not
Cooperating' category.
Long-term/ 4.00 [ICRA]B+(Stable)/[ICRA]A4;
Short-term: ISSUER NOT COOPERATING;
Non-Fund based– Long Term Rating downgraded from
Bank Guarantee [ICRA]BB-(Stable) and Ratings
continues to remain in the
'Issuer Not Cooperating'
Category
Rationale
The rating downgrade is because of lack of adequate information
regarding Siddhivinayak Construction's performance and hence the
uncertainty around its credit risk. ICRA assesses whether the
information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Siddhivinayak Construction, ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
Established in 2008 by proprietor Mr. Naresh T. Aidasani,
Siddhivinayak Construction is involved in the business of bitumen
trading and civil construction. The firm undertakes small road
construction projects from Power Works department (PWD) and other
government entities. These projects are mostly sub-contracted by
the firm.
SPICA PROJECTS: ICRA Lowers Rating on INR4.87cr Loan to B+
----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Spica
Projects And Infrastructures Pvt. Ltd. (SPIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based- 4.87 [ICRA]B+ (Stable); Rating
Cash Credit downgraded from [ICRA]BB(Stable)
and continues to remain under
'Issuer Not Cooperating' category
Fund-based- 0.57 [ICRA]B+ (Stable); Rating
Term Loan downgraded from [ICRA]BB(Stable)
(Equipment and continues to remain under
Finance) 'Issuer Not Cooperating' category
Non-fund 28.85 [ICRA]B+ (Stable)/[ICRA]A4;
Based-Bank Rating downgraded from
Guarantee [ICRA]BB(Stable)/[ICRA]A4+
and continues to remain under
'Issuer Not Cooperating' category
Rationale
The Long-Term rating is downgraded because of lack of adequate
information SPIPL's performance and hence the uncertainty around
its credit risk. ICRA assesses whether the information available
about the entity is commensurate with its rating and reviews the
same as per its "Policy in respect of non-cooperation by the rated
entity". The lenders, investors and other market participants are
thus advised to exercise appropriate caution while using this
rating as the rating may not adequately reflect the credit risk
profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Spica Projects And Infrastructures Pvt. Ltd, ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
In 1997, the company's promoters formed a partnership firm in the
name of M/s Santosh Kumar Singh (SKS) for civil construction
business. In 2012, SKS was converted into a private limited company
and its name was changed to Spica Projects And Infrastructures Pvt.
Ltd. (SPIPL). SPIPL is involved in road construction business in
Jharkhand and is empanelled as a Class-I contractor with the Public
Works Department (PWD) of the state.
SRINIVASA EDUCATIONAL: ICRA Keeps B Debt Ratings in Not Coop.
-------------------------------------------------------------
ICRA said the rating for the bank facilities of Srinivasa
Educational Society (SEC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 3.62 [ICRA]B(Stable); ISSUER NOT
Fund Based– COOPERATING; Rating Continues
Term Loans to remain under issuer not
cooperating category
Long Term- 0.70 [ICRA]B(Stable); ISSUER NOT
Fund Based–OD COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Long Term 5.68 [ICRA]B(Stable); ISSUER NOT
Unallocated COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Rationale
The ratings for the INR10.00-crore bank facilities of SEC continues
to remain under 'Issuer Not Cooperating' category'. The ratings are
denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Srinivasa Educational Society (SEC, the society) was started in
2004 by Mr. B. Srinivasa Rao, has set up Kakinada Institute of
Technology and Science (KITS, the institute) in 2008 which is
affiliated to Jawaharlal Nehru Technical University, Kakinada
(JNTUK). The institute offers 6 courses in B-tech, 6
specializations in M-tech, 2 specializations in M Pharmacy, MBA,
and polytechnic courses.
VAMA INDUSTRIES: Ind-Ra Gives 'BB-' Rating, Outlook Stable
----------------------------------------------------------
India Ratings and Research (Ind-Ra) rates Vama Industries Limited
at 'IND BB-' with a Stable Outlook. As part of the ongoing rating
review exercise and in line with the regulatory requirement, Ind-Ra
had requested the issuer on May 27, 2020 and June 6, 2020 for
updated information on the company's performance. In view of the
COVID-19 led lockdown, the issuer has informed the agency that it
needs more time to provide the required data. The company has opted
for the debt moratorium allowed by the Reserve Bank of India until
September 2020.
KEY RATING DRIVERS
Ind-Ra is working with Vama Industries to see if any information
can be readily provided, so that the agency can update its credit
view as per the regulatory requirement. Ind-Ra will try to complete
the process by July 23, 2020 using the best available information.
If Ind-Ra is unable to do so due to lack of adequate data, then the
rating may have to be migrated into the issuer non-cooperating
category, so that banks are aware that the agency is unable to
update its credit view.
VARDHAMAN COLLEGE: ICRA Keeps B+ INR12cr Debt Rating in Not Coop.
-----------------------------------------------------------------
ICRA said the rating for the bank facilities of Vardhaman College
of Engineering continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 12.00 [ICRA]B+(Stable); ISSUER NOT
Unallocated COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Rationale
The ratings for the INR12.00-crore bank facilities of Vardhaman
College of Engineering Continues to remain under 'Issuer Not
Cooperating' category'. The ratings are denoted as
"[ICRA]B+(Stable) ISSUER NOT COOPERATING".
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Vardhaman College of Engineering was started by Vardhaman
Educational society in the year 1999. Vardhaman Education Society
was incorporated in the year 1989 by 5 members. But in the year
2011, the trust members were revised and currently there are 9
members. Mr. T. Vijender Reddy is the chairman of Vardhaman
Educational Society since 2011. The society is involved in
providing technical education. The college is situated at Kacharam
(Village), Shamshabad (Mandal) Rangareddy Dist, TS – 501218. The
college is spread over an area of 14.6 acres with built-up area of
35332.36 square feet. The institution offers both under-graduate
and post-graduate courses namely B-Tech, M-tech and MBA.
VIBRANT PROCESSORS: ICRA Lowers Rating on INR5.50cr Loan to B+
--------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Vibrant
Processors Private Limited (VPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 5.50 [ICRA]B+ (Stable) ISSUER NOT
based/Cash Credit COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
continues to remain under
'Issuer Not Cooperating'
Category
Long-term Fund 2.84 [ICRA]B+ (Stable) ISSUER NOT
Based Term Loan COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
continues to remain under
'Issuer Not Cooperating'
Category
Short-Term Non- 1.48 [ICRA]A4; continues to remain
Fund Based under 'Issuer Not Cooperating'
category
Long-Term/Short- 6.33 [ICRA]B+ (Stable)/[ICRA]A4
Term-Unallocated ISSUER NOT COOPERATING;
Long term rating downgraded
from [ICRA]BB- (Stable);
ratings continues to remain
under 'Issuer Not Cooperating'
category
Rationale
The ratings downgrade is because of lack of adequate information
regarding VPPL's performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade. As part of its process and in
accordance with its rating agreement with Vibrant Processors
Private Limited, ICRA has been trying to seek information from the
entity so as to monitor its performance, but despite repeated
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Vibrant Processors Private Limited (VPPL) was incorporated in
December 2010 and commenced its operations of dyeing fabrics on a
job-work basis from December 2013. VPPL's manufacturing facility
stands on a 10,000 square feet land parcel in Palsana (Surat),
Gujarat, with an installed capacity to dye 2.50 lakh metres of
polyester fabric per day.
VINAR ISPAT: ICRA Keeps B+ INR15cr Debt Rating in Not Cooperating
-----------------------------------------------------------------
ICRA said the rating for the bank facilities of Vinar Ispat Limited
(VIL) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: 15.00 [ICRA]B+ (Stable) ISSUER NOT
Fund based– COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short-term: (2.75) [ICRA]A4 ISSUER NOT COOPERATING;
Non Fund based– Rating continues to remain
under
Letter of Credit^ 'Issuer Not Cooperating'
category
^Sub-limit of Cash Credit
Rationale
The rating for the bank facilities for INR15.00 crore of VIL
continues to remain under 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+ (Stable)/A4 ISSUER NOT COOPERATING.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Established in 1991, Vinar Ispat Limited is engaged in the
manufacturing of mild steel angles, channels, bars, flats etc. and
has two manufacturing units located at Chandrapur in Maharashtra
and Jabalpur in Madhya Pradesh. Both the manufacturing facilities
are approved by the Bureau of Indian Standards and Power Grid
Corporation of India Ltd. The Company has installed rolling
capacities of 75,000 MTPA at Chandrapur and 25,000 MTPA at
Jabalpur. The products manufactured by VIL find application mainly
in the transmission line tower (TLT) manufacturing business.
=================
I N D O N E S I A
=================
LIPPO MALLS: Moody's Cuts CFR to B1, Outlook Negative
-----------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Lippo Malls Indonesia Retail Trust to B1 from Ba3.
In addition, Moody's has downgraded the backed senior unsecured
rating on the bond issued by LMIRT Capital Pte. Ltd., a
wholly-owned subsidiary of LMIRT, to B1 from Ba3. The bond is
guaranteed by the trustee of LMIRT.
The outlook on all ratings remains negative.
RATINGS RATIONALE
"The downgrade reflects LMIRT's increased refinancing risk, as the
trust will be reliant on the proceeds from its divestment of
Pejaten Village and Binjai Supermall, as well as external funding
to address its 2021 debt maturity amid challenging market
conditions for fund raising. The trust's liquidity has weakened to
levels no longer consistent with its Ba3 rating," says Junling Tan,
a Moody's Analyst.
"The negative outlook reflects its expectation that LMIRT's credit
metrics will weaken in 2020 because of the softer operating
conditions caused by the coronavirus outbreak, and the volatility
of the Indonesian rupiah against the Singapore dollar creates
additional risk for the trust. Furthermore, the weakening of
earnings could result in a breach of bank loans' financial
covenants in 2020, for which Moody's expects the trust to require
waivers from its lenders," adds Tan.
Without the divestment, Moody's expects a 39% decline in LMIRT's
2020 revenue caused by temporary malls closure and weaker demand
for retail space. LMIRT's adjusted net debt/EBITDA will weaken to
around 12.4x in 2020 from 5.2x in 2019, and adjusted
EBITDA/interest expense will weaken to around 1.2x from 3.0x over
the same period. At the same time, the trust's short-term debt is
expected to increase to around 24% of its total debt from 8% in
2019, as a result of the drawdown in its revolving credit
facilities. Subsequently, Moody's expects gradual recovery in the
operating conditions and improvement in occupancy rates in 2021,
resulting in adjusted net debt/EBITDA and EBITDA/interest expense
to improve to 6.4x and 2.3x respectively.
LMIRT held cash and cash equivalents of SGD145.7 million at March
31, 2020, which will be sufficient to cover the repayment of its
SGD75 million bond maturing in June 2020 and SGD40 million
revolving credit facility. Consequently, LMIRT will likely rely on
external funding to address its SGD175 million syndicated term loan
maturing in August 2021 and its SGD140 million of perpetual
securities callable in September 2021.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The retail
property sector has been one of the sectors affected by the shock
given its sensitivity to consumer demand and sentiment.
More specifically, the expected weakening in LMIRT's credit
profile, including its exposure to Indonesia, have left it
vulnerable to shifts in market sentiment in these unprecedented
operating conditions, and the company remains vulnerable to the
outbreak continuing to spread.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Its action reflects the impact on LMIRT of the breadth
and severity of the shock, and the broad deterioration in credit
quality it has triggered.
Moody's has also taken into consideration the governance risk
stemming from related-party transactions between LMIRT and the
Lippo group of companies. This risk is partially mitigated by the
regulatory oversight provided by the Monetary Authority of
Singapore and exercised through the board, which mostly consists of
independent directors. Furthermore, there is an alignment of
interest between LMIRT and its sponsor, Lippo Karawaci, because the
latter has a 32% stake in the trust.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative ratings outlook, an upgrade is unlikely over the
next 12-18 months. Nonetheless, the outlook could return to stable
if the trust (1) improves its liquidity, such that cash balances
and committed facilities are sufficient to cover operating cash
needs and debt repayments over the next 12-18 months; and (2)
executes its business plans and maintains adjusted net debt/EBITDA
below 7.0x.
On the other hand, LMIRT's ratings could be downgraded if: (1) the
operating environment deteriorates, leading to higher vacancy
levels and declining operating cash flows or falling asset
valuations; (2) the trust's credit metrics weaken, with adjusted
net debt/EBITDA exceeding 7.0x-7.5x or adjusted EBITDA/interest
expense falling below 2.0x; or (3) the trust fails to execute its
planned asset sales or arrange for refinancing its debt maturing
over next 12 months; or (4) there is a breach in financial
covenants under the trust's bank loans without corresponding
waivers from its lenders resulting in further weakening of its
liquidity profile and ability to access capital.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.
Lippo Malls Indonesia Retail Trust is a real estate investment
trust and has been listed on the Singapore Stock Exchange since
November 2007. At December 31, 2019, it had a portfolio of 23
retail malls and seven retail spaces across major cities in
Indonesia, with a total appraised value of around SGD1.8 billion.
=====================
P H I L I P P I N E S
=====================
PHILIPPINE TELEGRAPH: Posts PHP15.6MM Net Loss in Q1 Ended March
----------------------------------------------------------------
BusinessWorld Online reports that Philippine Telegraph & Telephone
Corp. (PT&T) trimmed its net loss in the first quarter by 23.4%
after revenues from its broadband business improved.
In a disclosure to the stock exchange on June 10, the listed
company said it had incurred a net loss of PHP15.60 million for the
first three months, down from the PHP20.36 million it reported
during the same period last year, BusinessWorld relates.
PT&T's total revenues for the quarter stood at PHP107.38 million,
an improvement of 38.5% from the previous year's PHP77.56 million,
BusinessWorld discloses.
"The company ended the quarter with more than 1,800 data services
circuits, notable broadband connections which is a key performance
indicator for an increase of 30% over the same quarter of the
previous year," the company said.
According to BusinessWorld, the listed company attributed its net
loss to additional expenses such as "recognition of the legal
interest rate of 6% per annum on unsettled obligations as directed
by the Rehabilitation Court, the increases in operating expenses
and increase in depreciation as the company invests in more
property and equipment to support the business."
BusinessWorld says PT&T remains keen on its plan to provide mobile
services in the country since the penetration of smartphones
continues to grow and the advent of 5G technology provides an
ability for the company to enhance various applications.
It said it was also studying the latest concepts in implementing
"vizualization of network components into data centers."
"This will expectedly reduce the numbers of network elements
deployed throughout the country and will substantially reduce cost
and implementation period," it said.
Makati City-based Philippine Telegraph & Telephone Corp. --
http://www.ptt.net.ph-- operates a telecommunication network. The
Company also offers basic telephone and long distance services,
digital data and other data communication services, and a variety
of other products.
=================
S I N G A P O R E
=================
HYFLUX LTD: Appoints New Lead Independent Director
--------------------------------------------------
Hyflux Ltd announced on June 16 the appointment of Mr. Hong Pian
Tee as a Director and Lead Independent Director with effect from
June 16, 2020. With immediate effect, Mr. Teo Kiang Kok will
relinquish his position as Lead Independent Director. Mr. Teo
continues to be a Non-Executive Independent Director of the
Company.
Mr. Hong is considered to be a Non-Executive Independent Director
for the purpose of Rule 704(8) of the SGX-ST Listing Manual.
Mr. Hong was a partner of PricewaterhouseCoopers and Managing
Director of PricewaterhouseCoopers Intrust Limited from 1985 to
1999. Mr. Hong's experience and areas of expertise since 1977 are
in corporate advisory, financial reconstruction and corporate
insolvencies. He has been a corporate/financial advisor to clients
with businesses in Singapore and Indonesia and in addition was
engaged to restructure companies with operations in Taiwan,
Indonesia and Malaysia.
Mr Hong is currently Chairman and Executive Director of Pei Hwa
Foundation Ltd. Of companies listed on the Official List of the
Singapore Exchange Securities Trading Limited:
a. Mr. Hong is Lead Independent Director of XMH Holdings Ltd
and Sinarmas Land Ltd and Independent Director of Yanlord
Land Group Ltd;
b. Mr. Hong was previously Non-Executive Chairman and an
Independent Director of AsiaPhos Ltd and Sin Ghee Huat
Corporation Ltd, Lead Independent Director of Golden
Agri-Resources Ltd and Independent Director of Memstar
Technology Ltd.
With the appointment of Mr. Hong, Hyflux's Board of Directors now
comprises eight
members. They are:
* Ms Olivia Lum
* Mr. Hong Pian Tee
* Mr. Teo Kiang Kok
* Mr. Lee Joo Hai
* Mr. Gay Chee Cheong
* Mr. Christopher Murugasu
* Mr. Gary Kee
* Mr. Lau Wing Tat
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.
=====================
S O U T H K O R E A
=====================
DOOSAN GROUP: Plans to Sell Unit as Part of Self-Rescue Plan
------------------------------------------------------------
Yonhap News reports that cash-strapped Doosan Group plans to sell
its key construction equipment maker unit Doosan Infracore Co. as
part of its self-rescue measures to receive financial support from
creditor banks, industry sources said June 16.
According to Yonhap, South Korea's 15th-largest conglomerate is
seeking to sell its shares and assets to improve its financial
structure and repay debts held by the flagship unit Doosan Heavy
Industries & Construction Co. in return for a KRW3.6 trillion
(US$2.98 billion) lifeline from state-run banks.
The group plans to sell a 36.27 percent stake held by Doosan Heavy
in Doosan Infracore as part of its self-rescue measures worth some
KRW3 trillion, Yonhap discloses citing financial industry sources.
According to Yonhap, market watchers said the deal could fetch
between KRW600 to KRW800 billion. Credit Suisse will reportedly
arrange the deal as a sales manager.
South Korea's leading power plant builder Doosan Heavy has faced a
liquidity crisis due to years of declining orders amid an economic
slowdown, Yonhap says.
Yonhap notes that the company's business setbacks have deepened in
recent years as the Moon Jae-in administration is pushing for a
nuclear phase-out policy.
The country seeks to shift its energy policy from nuclear and
fossil fuel-based power generation to renewable energy sources,
such as solar power. The group is a key player in the commercial
nuclear field.
Doosan Heavy swung to a net loss of KRW371.4 billion in the first
quarter from a year earlier due to increased one-off costs and
losses from equity ties with Doosan Bobcat Co, Yonhap discloses.
In an effort to secure liquidity, Doosan Group has put its
affiliates and assets, such as Doosan Solus Co., a copper foil
maker for electric vehicles, and Doosan Tower, the group's
headquarters building in Seoul, up for sale, according to Yonhap.
Last week, group chairman Park Jeong-won said the group has a
target of raising KRW1 trillion this year by selling new shares and
assets.
"As the process to sell units including Doosan Solus is being
protracted, the group appears to have shifted its focus to Doosan
Infracore," Yonhap quotes Lee Dong-hun, an analyst at Daishin
Securities, as saying.
Doosan Group also plans to split its troubled construction unit
Doosan Engineering & Construction Co. into two and to put the
split-up entity with relatively highly valued assets up for sale,
Yonhap relays.
The sale of Doosan Engineering is part of the group's move to
normalize its business. In March, Doosan Heavy acquired the
construction firm, the report adds.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***