/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/200618.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 Thursday, June 18, 2020, Vol. 23, No. 122 Headlines A U S T R A L I A GASCOYNE RESOURCES: Second Creditors' Meeting Set for June 25 MARTAR PTY: First Creditors' Meeting Set for June 26 MOSMAN ENTERPRISES: Second Creditors' Meeting Set for June 25 NEIGHBOURHOOD HOUSE: Seeks Public Donations as EOI Set to Close THINK TALENT: Second Creditors' Meeting Set for June 25 [*] AUSTRALIA: One-in-Six SMEs Could Close Due to COVID-19 Pandemic C H I N A SICHUAN TRUST: Missed Payments on CNY40MM Trust Product ZHONGLIANG HOLDINGS: Fitch Rates New USD 364-day Senior Notes 'B+' I N D I A AARKAY PACKAGING: CARE Cuts INR8.00cr Loan Rating to B, Not Coop. ALECTRONA ENERGY: CARE Keeps D Debt Ratings in Not Cooperating AMRITA SAI: Ind-Ra Moves 'BB' Bank Loan Rating to Non-Cooperating ANIL BUILDCON: Ind-Ra Moves BB+ LT Issuer Rating to NonCooperating ARKA CARBON: CARE Keeps 'D' Debt Ratings in Not Cooperating BAG POLY: CARE Downgrades Rating on INR6.23cr Loan to B BALAJI INDUSTRIES: CARE Keeps D INR8cr Debt in Not Cooperating BALAJI STEEL: CARE Keeps 'D' Debt Ratings in Not Cooperating BAREILLY HIGHWAYS: CARE Keeps D INR1,400cr Debt Rating in Not Coop. BEEPEE ENTERPRISE: CARE Lowers Rating on INR12.18cr LT Loan to D BHAI GURDAS: CARE Cuts INR2.5cr LT Loan Rating to B+, Not Coop. CELITE TYRE: CARE Lowers Rating on INR16.50cr LT Loan to D CFC CARRIERS: CARE Lowers Rating on INR15.25cr Long Term Loan to C CHAUDHARY INGOTS: CARE Keeps D INR11.5cr Loan Rating in Not Coop. DURLAX INDIA: CARE Cuts INR24.20cr LT Loan Rating to D, Not Coop. DWARKA METROHILLS: CARE Cuts INR9.35cr Loan Rating to C, Not Coop. FIRESTAR DIAMOND BVBA: Ind-Ra Keeps 'D' Rating in Non-Cooperating FIRESTAR DIAMOND FZE: Ind-Ra Keeps 'D' Rating in Non-Cooperating FIRESTAR DIAMOND INT'L: Ind-Ra Keeps 'D' Rating in Non-Cooperating FIRESTAR DIAMOND LTD: Ind-Ra Keeps D Loan Rating in Non-Cooperating FIRESTAR INTERNATIONAL: Ind-Ra Keeps 'D' Rating in Non-Cooperating FRANKLIN TEMPLETON: Court Orders Liquidation Vote Suspension GOURAV POULTRIES: CARE Cuts INR10.29cr Loan Rating to C, Not Coop. HANSRAJ MEMORIAL: CARE Keeps D Debt Ratings in Not Cooperating JAWAHAR SAHAKARI: Ind-Ra Keeps B+ Loan Rating in Non-Cooperating JAY AGRO: CARE Keeps D INR16.51cr Loan Rating in Not Cooperating KASHVI INTERNATIONAL: Ind-Ra Moves BB+ LT Rating to NonCooperating KHUSHI FOODS: CARE Keeps D INR7.37cr Loan Rating in Not Cooperating KPG INTERNATIONAL: CARE Keeps D Debt Ratings in Not Cooperating M.P.K. METALS: CARE Keeps 'D' Debt Ratings in Not Cooperating MOMAI FOODS: CARE Keeps 'C' INR8.64cr Loan Rating in Not Coop. NARAYAN FRUITS: CARE Cuts Rating on INR5.50cr Loan to C, Not Coop. PALM HEIGHTS: CARE Keeps 'D' INR15.00cr Debt Rating in Not Coop. PRAKASH ELECTRICAL: CARE Cuts INR10cr Loan Rating to B, Not Coop. PRATHIJNA SUSTAINABLE: Ind-Ra Withdraws BB Downgraded Loan Rating PRECA SOLUTIONS: Ind-Ra Cuts LT Issuer Rating to BB+, Non-coop. PRISM ENTERPRISE: CARE Lowers Rating on INR7cr Loan to C/A4 RAMA KRISHNA: CARE Keeps 'D' Debt Ratings in Not Cooperating STAR REALCON: CARE Keeps D INR8.50cr Loan Rating in Not Cooperating SUSHEELA TEXFAB: CARE Cuts INR23.60cr Loan Rating to B, Not Coop. YOGI INFRASTRUCTURE: Insolvency Resolution Process Case Summary J A P A N IHI CORPORATION: Egan-Jones Lowers FC Sr. Unsecured Rating to BB+ MITSUI O.S.K: Egan-Jones Lowers Senior Unsecured Ratings to B- SUMITOMO CHEMICAL: Egan-Jones Lowers Sr. Unsecured Ratings to BB N E W Z E A L A N D AOLIDAY NZ: Forced Into Liquidation Over NZD3 Million Debt ARBOR HOUSE: Some Creditors to Miss Out, Liquidator Report Shows CONE ENTERPRISES: Shake Shed Placed Into Receivership DANIEL WELLINGTON: New Zealand Unit Goes Into Liquidation S I N G A P O R E IBC CAPITAL: S&P Alters Outlook to Negative on Thinning Liquidity KRISENERGY LTD: Unit Could Face Winding-Up Petition - - - - - ================= A U S T R A L I A ================= GASCOYNE RESOURCES: Second Creditors' Meeting Set for June 25 ------------------------------------------------------------- A second meeting of creditors in the proceedings of: - Gascoyne Resources Ltd; - GNT Resources Pty Ltd; - Gascoyne (Ops Management) Pty Ltd; - Gascoyne Resources (WA) Pty Ltd; - Dalgaranga Exploration Pty Ltd; - Dalgaranga Operations Pty Ltd; and - Egerton Exploration Pty Ltd has been set for June 25, 2020, at 12:00 p.m. via telephone conference facilities. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 24, 2020, at 12:00 p.m. Michael Ryan, Ian Francis and Kathryn Warwick of FTI Consulting were appointed as administrators of Gascoyne Resources et al. on June 2, 2020. MARTAR PTY: First Creditors' Meeting Set for June 26 ---------------------------------------------------- A first meeting of the creditors in the proceedings of Martar Pty Ltd ATF The Martar Family Trust and Quinmar Pty Ltd ATF Tarquinio Family Trust, will be held on June 26, 2020, at 11:00 a.m. at the offices of Hamilton Murphy Advisory Pty Ltd, Level 1, at 255 Mary Street, in Richmond, Victoria. Richard Rohrt of Hamilton Murphy was appointed as administrator of Martar Pty on June 16, 2020. MOSMAN ENTERPRISES: Second Creditors' Meeting Set for June 25 ------------------------------------------------------------- A second meeting of creditors in the proceedings of Mosman Enterprises Pty Ltd, trading as Fat Albert & Punchbowl Cafe, has been set for June 25, 2020, at 2:00 p.m. at the offices of Hamilton Murphy, Level 1, 255 Mary Street, in Richmond, Victoria. 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 4:30 p.m. Stephen Dixon of Hamilton Murphy was appointed as administrator of Mosman Enterprises on May 20, 2020. NEIGHBOURHOOD HOUSE: Seeks Public Donations as EOI Set to Close --------------------------------------------------------------- Morgan Dyer at Shepparton News reports that the Murchison Community Action Group has called on Greater Shepparton community members to dig into their pockets to help save Murchison's Neighbourhood House. With less than a week remaining until expressions of interest for the purchase of the facility close, the action group has made a last-minute appeal for public donations, the report relates. Shepparton News says the house was advertised for sale last month after it was caught up in the larger liquidation of assets of Murchison Community Care, including the town's nursing home, which was placed into receivership last year. According to the report, Neighbourhood House committee member Margaret Clarke said the house had exhausted all possibilities for grants to buy the property. "It is now under serious threat as the building is being sold as part of the liquidation process of Murchison Community Care," the report quotes Ms. Clarke as saying. "We had hoped to use government grants, if possible, before going to the community to seek financial help." The house received AUD30, 000 from Greater Shepparton City Council to help fund the purchase but Ms. Clarke said the committee had no luck with any other potential contributors, the report relays. "We want to thank council for its generous donation," Ms. Clarke said. "We have had lots of talks with lots of other people, but nothing else has so far been forthcoming. "We can't put our expression of interest in if we don't actually have the money; it can't be put in dependent on finance." Shepparton News adds Ms. Clarke said it was in an ideal location and had a structure and layout that allowed for flexibility and multifaceted use. "We would love people to get the message out to their networks that we are in need of urgent help, or to donate -- no matter how small, would be appreciated," she said. The Neighbourhood House has been a vital community hub, providing programs and services for the Murchison community for the past 22 years and includes a community meals program, maternal and child services, a hairdresser, opportunity shop, internet cafe, and men's shed. THINK TALENT: Second Creditors' Meeting Set for June 25 ------------------------------------------------------- A second meeting of creditors in the proceedings of Think Talent Pty Ltd ATF Think Talent Unit Trust has been set for June 25, 2020, at 11:00 a.m. at the offices of Hamilton Murphy, Level 1, 255 Mary Street, in Richmond, Victoria. 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 4:30 p.m. Stephen Dixon and Leigh Dudman of Hamilton Murphy were appointed as administrators of Think Talent on May 20, 2020. [*] AUSTRALIA: One-in-Six SMEs Could Close Due to COVID-19 Pandemic ------------------------------------------------------------------- Chris Dastoor at MoneyManagement.com reports that as many as one-in-six (15%) of Australian small-to-medium sized enterprises (SMEs) could close a result of the economic repercussions of the COVID-19 pandemic, according to research from the Ruthven Institute. Prior to the pandemic, Australia created 356,000 new businesses last year to bring the total to 2.4 million, most of which comprised of small enterprises employing 20 staff or fewer, the report says. In 2019, there was 293,000 business closures with 1% resulting in bankruptcy or receivership. According to MoneyManagement.com, Phil Ruthven, Institute founder and economic futurist, said this rate could almost double after a recession or global financial crisis. "In 2020 and 2021, due to the GFC Mark II, we forecast one in six businesses closing their doors, instead of the usual one in eight," MoneyManagement.com quotes Mr. Ruthven as saying. "The number of new business start-ups could also fall below 200,000 until the economy regains its composure." Of the 2.4 million businesses in Australia last year, 62.8% employed no one as they comprised sole traders, trusts and shell companies, but 35% were SMEs, MoneyManagement.com discloses. "SMEs contributed 32.5% of Australia's AUD5.6 trillion revenue in FY2019, while the largest enterprises with revenues of over AUD100 million and up to AUD64 billion accounted for a whopping 47% of the nation's total revenue," Mr. Ruthven said. MoneyManagement.com relates that Mr. Ruthven said the main challenge that businesses faced during this time was remaining solvent. "For those who want to prevent becoming the 'one in six', I would advise exploring avenues such as increasing bank accommodation; reducing costs such as rent; seeking new equity; exploring mergers; or selling the business and living to fight another day," Mr. Ruthven said, MoneyManagement.com relays. ========= C H I N A ========= SICHUAN TRUST: Missed Payments on CNY40MM Trust Product ------------------------------------------------------- Bloomberg News reports that Sichuan Trust Co Ltd. has missed payments on trust products, in a further sign of growing risk in the $3 trillion Chinese market for alternative funding for companies unable to access regular bank loans. The Chengdu-based company, backed by the Sichuan regional government, failed to make payments of CNY40 million ($5.6 million) this month, Bloomberg relates citing a filing by Hangzhou Boiler Group Co. on June 16. Hundreds of other investors also gathered to protest at the company's headquarters to demand missing payments, local media Caixin reported, Bloomberg relays. The assets now facing default are trust of trust vehicles, which are invested in other trust instruments. The firm's top management, including Chairman Mou Yue and Chief Executive Officer Liu Jingfeng, have met with investors and assured them they would work out the issue, Caixin reported, citing a video obtained by the newspaper, according to Bloomberg. The total amount overdue wasn't disclosed. Bloomberg says the once fast-growing shadow banking sector is being roiled by a slowdown in China's economy and the impact from the coronavirus lockdown. The industry faces trillions of yuan in trust offerings -- high-yield products backed by loans that are sold to banks, institutional investors and wealthy individuals -- coming due this year. Last year a record 118 trust products went into default, a number that is estimated to rise this year, recalls Bloomberg. The country's 68 trust firms count property developers, manufacturers and local government financing vehicles among their biggest borrowers. Bloomberg notes that the climbing defaults of the sector have already prompted state rescue. Anxin Trust Co., a particularly aggressive shadow lender, said in March the government had been involved in its rescue plan to avoid triggering "systemic financial risks." More than 1,500 trust products with a value of CNY577 billion were designated as risky at the end of last year up from about 870 a year earlier, according to the China Trustee Association, adds Bloomberg. Sichuan Trust Company Limited is a company based in China, with its head office in Chengdu. It operates in the Funds, Trusts, and Other Financial Vehicles industry. ZHONGLIANG HOLDINGS: Fitch Rates New USD 364-day Senior Notes 'B+' ------------------------------------------------------------------ Fitch Ratings has assigned Zhongliang Holdings Group Company Limited's (B+/Stable) proposed US dollar 364-day senior notes a 'B+' rating, with a Recovery Rating of 'RR4'. The proposed notes are rated at the same level as Zhongliang's senior unsecured rating because they will constitute its direct and senior unsecured obligations. Zhongliang intends to use the net proceeds from the issue to refinance existing debt. Zhongliang's ratings are underpinned by its contracted sales scale, which is comparable with 'BB' category homebuilders. The group's projects spread across five core economic regions in China, mitigating regional economic and policy risks. Zhongliang adopts a fast-churn model and aims to begin sales soon after acquiring land, leading to a short land-bank life and low net inventory base and EBITDA margin. This could increase volatility in the company's financial profile and is a key constraint on Zhongliang's ratings. KEY RATING DRIVERS Geographically Diversified Homebuilder: Zhongliang's 458 property projects were located in 142 cities across five core economic regions in China as of end-2019. The majority were in third- and fourth-tier cities, which have weaker demand fundamentals than higher-tier cities. However, Zhongliang has increased its presence in second-tier cities by changing the composition of land acquired in 2019. The improved diversification mitigates against regional economic or policy shocks. Strong Growth: Zhongliang's standardised operational procedures, which cover its entire property-development value chain - including land-acquisition, marketing, design and product lines - aided its rapid expansion from 2015 to 2019; attributable contracted sales increased to CNY99 billion in 2019, from CNY16 billion in 2016, helping the company to become one of China's top-20 property developers. Zhongliang is responsive to changing market conditions. It focused its land bank acquisitions on third- and fourth-tier cities to benefit from buyers resettling from shanty towns as part of the government's policies; 73% of its unsold land bank, in terms of GFA, was located in third- and fourth-tier cities at end-2019. However, weakening demand fundamentals in lower-tier cities have led Zhongliang to shift towards second- and strong third-tier cities. Low Inventory: Zhongliang's fast-churn model requires it to enter the pre-sale phase quickly after land is acquired. Most of its projects are small, at less than 120,000 square metres in gross floor area, enabling the company to de-stock and achieve positive cash flow generation within a short period. The internally generated cash flow supports capital needs for land acquisition and development, reducing the need for large debt funding. However, the model resulted in a short land-bank life and small net inventory base of CNY23 billion at end-2019, while net debt was a low CNY14 billion. Fitch believes continued growth in scale amid a moderating property market may increase pressure to replenish land, leading to higher development expenditure. This may result in large swings in leverage, especially if contracted sales slow significantly. Zhongliang's leverage, measured by net debt/adjusted inventory (with proportional consolidation of joint ventures and associates), was a low 27% at end-2019. Fitch expects leverage to increase to 40%-45% in the next three years. Small Land Bank: Fitch estimates that unsold attributable land bank at end-2019 was sufficient for around 2.6 years of development. The company requires continuous land acquisitions to sustain contracted sales growth. This is likely to drive the company to replenish land bank at market prices and could limit its ability to keep land cost low, especially as it acquires more parcels in tier-two cities, where bidding competition is more intense. Fitch expects Zhongliang to gradually lengthen its land bank life to around three years, which should improve its net inventory base and lower the pressure to acquire land. Low Margin to Edge Higher: Zhongliang's fast-churn model and focus on low-tier cities in the past three years resulted in low average selling prices and an EBITDA margin of 18% as of end-2019; the two metrics are at the lower end of 'B+' rated peers. However, Fitch expects the EBITDA margin to edge up to around 20% in 2020-2021, as Zhongliang increases its proportion of sales of higher-margin products, which it started booking in 2020. Significant Minority Shareholders: Total non-controlling interests in Zhongliang's balance sheet accounted for 58% of total equity in 2019, which is higher than that of other 'B+' peers. Zhongliang has relied on capital contributions from non-controlling shareholders as a source of financing to expand scale. A large portion of the non-controlling interests in Zhongliang's equity came from capital injections by minority shareholders in new projects, lowering Zhongliang's need for debt funding, but creating potential for cash leakage. Fitch expects non-controlling interests to edge down in the next three years. DERIVATION SUMMARY Zhongliang's attributable contracted sales are at the high-end of the 'B+' peer range in terms of scale. Its land bank is also spread more widely across China's core economic regions than other 'B+' peers, such as Hong Kong JunFa Property Company Limited (B+/Stable). However, more than 70% of Zhongliang's land bank is in tier three and four cities, which Fitch believes have weaker demand than first- and second-tier cities. Zhongliang's land bank quality is also weaker than that of 'B+' rated peers, with an average selling price of CNY10,300/square metre in 2019. Zhongliang's leverage is at the low end of 'BB' rated peers. However, Fitch estimates that its unsold attributable land bank at end-2019 was equivalent to around 2.6 years of GFA sold, which is also shorter than that of fast-churn peers, such as Risesun Real Estate Development Co.,Ltd. (BB-/Stable), with a land bank life of 3.5 years. This pressures Zhongliang to acquire land, even when prices are not optimal, to maintain moderate growth. Zhongliang's attributable contracted sales are at a similar scale to that of CIFI Holdings (Group) Co. Ltd. (BB/Stable), but Zhongliang's net inventory is only 27% of that of CIFI. This narrows its headroom to weather the business cycle and explains its two-notch lower rating. Fitch expects Zhongliang's leverage to rise to 40%-45% in the next few years to ensure its land bank is sufficient for around 3 years of sales; this is the mid-range of 'B+' peers. Its forecast leverage is much lower than that of 'B' rated peers with similar contracted sales scale, such as Kaisa Group Holdings Limited (B/Stable) and Yango Group Co., Ltd. (B+/Stable), whose leverage Fitch estimates at above 65%. Zhongliang's fast-churn model resulted in a contracted sales/total debt ratio of 2.4x in 2019, one of the highest among Fitch-rated Chinese homebuilders. Its EBITDA margin is at the lower end of 'B+' rated peers and it has minimal investment-property interest coverage. The company's 2019 IPO on the Hong Kong stock exchange has enhanced its financial transparency, leading to better regulatory oversight compared with unlisted 'B+' peers, such as Helenbergh China Holdings Limited (B+/Stable) and JunFa. KEY ASSUMPTIONS - Attributable contracted sales to rise by 16% on average in 2020-2022, driven by growth of GFA sold - EBITDA margin of around 20% in 2020-2021 - Land-bank life to lengthen to over three years by 2022 - Average land purchase costs to rise by 2% a year in 2020-2021 - Consolidated land premium at 53% of consolidated contracted sales on average in 2020-2022 Key Recovery Rating Assumptions - Zhongliang to be liquidated in a bankruptcy, as it is an asset-trading company - 10% administration claims - 70% advance rate to accounts receivable - 60% advance rate to adjusted net inventory of Zhongliang and its joint ventures. Applied 20% discount to customer deposits when calculating adjusted net inventory to reflect the around 20% gross profit margin. For joint-venture adjusted net inventory, Fitch takes (investment in joint ventures + amount due from joint ventures - amount due to joint ventures). - 50% advance rate to investment properties, property, plant and equipment - 100% advance rate to restricted cash RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA margin (after adding back capitalised interest) sustained at 20% or above - Leverage (net debt/adjusted inventory) sustained below 40% - Land-bank life (attributable unsold land reserves/GFA to be sold in the following year) above three years Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA margin (after adding back capitalised interest) below 18% for a sustained period - Net debt/adjusted inventory above 50% for a sustained period BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Zhongliang's short-term debt amounted to CNY21.5 billion, or 54% of total debt, at end-2019. Available cash/short-term debt was 0.7x. Its total cash of CNY26.5 billion, after taking into account restricted cash, was enough to cover its short-term debt by a multiple of 1.2x. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ========= I N D I A ========= AARKAY PACKAGING: CARE Cuts INR8.00cr Loan Rating to B, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Aarkay Packaging Industries(API), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.00 CARE B; Stable; Issuer Not Facilities Cooperating; Revised from CARE B+; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 27, 2019, placed the rating(s) of API under the 'Issuer non-cooperating' category as API had failed to provide information for monitoring of the rating. API continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated April 28, 2020 and April 29, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The revision in the rating takes into account the non-availability of requisite information due to non-cooperation by API with CARE's efforts to undertake a review of the outstanding ratings as CARE views information availability risk as key factor in its assessment of credit risk profile. Detailed description of the key rating drivers The revision in the rating takes into account the small scale of operation with low net worth base and deterioration in capital structure (refers to the period April 01-March 31). The rating also factors in healthy profitability margin, moderate debt coverage indicators and comfortable operating cycle. The rating, however, continues to derive strength from experience of promoters in cartons manufacturing industry for a decade. Key Rating Weakness * Small scale of operations with low net worth base: The firms operates in small scale marked by TOI of INR13.50 in FY18 with net worth base of INR1.95 crore as on March 31, 2018. * Deteriorated capital structure: The capital structure of the firm continues to be leveraged followed by deterioration from 2.55x as on March 31, 2017 to 3.57x as on march 31, 2018. Key Rating Strengths * Experience of promoters in cartons manufacturing industry for a decade: API was established in the year 2007 and holds track record for about a decade. The partners collectively have long term experience in cartons manufacturing industry for more than two decades. Prior to establishing API Mr. A. MuthuKumar who is a Managing Partner associated himself with S.K cartons(engaged in cartons manufacturing), hence he has more than two decades of experience in cartons manufacturing industry. Mr. PL. Adaikkapillai, MS. S. Chithra, Mr. Sathyaseelan & Mr. K. Raju collectively has around a decade of experience in cartons manufacturing business by associating themselves with its group entity Aarkay Cartons & API. Partners are taking care of all the operational activities in the firm. * Healthy profitability margins: The PBILDT margin marginally increased by 439 bps from 6.07% in FY17 to 10.46% in FY18. Further, the PAT margin also increased in line with PBILDT by 99 bps from 2.15% in FY17 to 3.14% in FY18. * Moderate debt coverage indicators: The Debt coverage indicators, marked by interest coverage ratio marginally declined from 4.36x as of March 31, 2017 and stood at 4.08x as on March 31, 2018. Total debt to GCA stood moderate at 7.48x in FY18, improved as against 9.70x as of FY17. * Comfortable operating cycle: The operating cycle of the company stood Comfortable at 9 days in FY18 as against 31 days in FY17. M/s. Aarkay Packaging Industries (API) was established in the year 2007 as a partnership concern by Mr. A. MuthuKumar, Mr. PL. Adaikkapillai, MS. S. Chithra, Mr. Sathyaseelan and Mr. K. Raju. API is engaged in manufacturing of corrugated carton boxes finding application in packaging industry. ALECTRONA ENERGY: CARE Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Alectrona Energy Private Limited (AEPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 47.28 CARE D; Issuer not cooperating; Facilities Based on best available Information Short term Bank 20.13 CARE D; Issuer not cooperating; Facilities Based on best available Information Long-term/Short- 35.00 CARE D/CARE D; Issuer not Term Bank cooperating; Based on best Facilities available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated April 6, 2018 placed the ratings of AEPL under the 'issuer non-cooperating' category as AEPL had failed to provide information for monitoring of the rating and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. Further, vide press release dated May 10, 2019, CARE had revised the ratings of AEPL from 'CARE BB; Stable/ CARE A4' to 'CARE D/ CARE D' in issuer non-cooperating category. AEPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter dated May 12, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The ratings take into account on-going delays in debt servicing by AEPL ascertained by CARE as a part of its due diligence exercise. Detailed description of the key rating drivers Key Rating Weaknesses * Delays in debt servicing: CARE as a part of its due diligence exercise interacts with various stakeholders of the company including lenders to the company and as a part of its exercise ascertained that there are on-going delays in debt servicing AEPL is a Chennai-based Engineering, Procurement and Construction (EPC) contractor engaged in execution of turn-key projects in the Solar Power sector. AEPL was promoted by Mr Rohit Rabindranath in May 2010 and is a part of the Zynergy group, which operates in the solar power segment. AEPL mainly undertakes turn-key projects for government entities like Tamil Nadu Energy Development Authority (TEDA), Agency for Non-conventional Energy and Rural Technology (ANERT) etc. AMRITA SAI: Ind-Ra Moves 'BB' Bank Loan Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Amrita Sai Educational Improvement Trust's bank facilities' 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 the ratings. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating action is: -- INR29 mil. Working capital facilities migrated to non- cooperating category with IND BB (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on June 14, 2019. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the ratings. COMPANY PROFILE Amrita Sai Educational Improvement Trust serves as a not-for-profit educational institution. It has an engineering college situated about 25km from Vijayawada. ANIL BUILDCON: Ind-Ra Moves BB+ LT Issuer Rating to NonCooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Anil Buildcon (India) Private Limited's (ABIPL) 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: -- INR5 mil. Fund-based limit migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING) rating; and -- INR280 mil. Non-fund-based limit migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on July 5, 2019. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE ABIPL was incorporated in 1984 as a partnership firm named Anil Construction Company. In 2011, it was converted into a private limited company and renamed ABIPL. It is registered as an A-5 class contractor, due to which it can participate in unlimited tenders for five years from the date of registration (18 July 2014). It undertakes civil construction work in Chhattisgarh and Madhya Pradesh. Its key clients are the Public Works Department, Madhya Pradesh Rural Road Development Authority, South Eastern Coalfields Limited, Pradhan Mantri Gram Sadak Yojana and the Chhattisgarh Rural Roads Development Agency. ARKA CARBON: CARE Keeps 'D' Debt Ratings in Not Cooperating ----------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Arka Carbon Fuels Private Limited (ACFPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 10.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Short term Bank 120.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide press release dated May 30, 2019, reviewed the ratings of ACFPL under the 'Issuer Non-cooperating' category as the company had failed to provide information for monitoring of the ratings and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. ACFPL continues to be non-cooperative despite requests for submission of information through e-mails, phone calls and a letter/e-mail dated May 14, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on May 30, 2019, the following were the rating weaknesses (updated based on best available information i.e. FY19 results from MCA and banker interaction): Key Rating Weaknesses * Ongoing delays in debt servicing: As per interaction with the banker there are ongoing delays in debt servicing owing to the stretched liquidity and weak financial profile of the company. Analytical approach: Combined Swastik group includes three companies operating in similar line of coal trading & transport businesses viz. SCCPL, Arka Carbon Fuels Pvt. Ltd. (ACFPL) & Shree Ganpatlal Onkarlal Agarwal & Co. (SGOAC). Until FY16 we had taken a combined approach for the three entities to arrive at ratings of SCCPL, ACFPL & SGOAC due to common promoters & management and strong operational & financial linkages among the group companies in coal trading business. Subsequently the outstanding rating of SGOAC (CARE B; Stable) were withdrawn on February 15, 2018 based on NOC received from the banker. SGOAC being a proprietorship firm, financial information for the entity is available only till FY16 thus from FY17 onwards a combined approach of two entities, SCCPL and ACFPL, has been considered. ACFPL is a part of Swastik group and Mr. Hitesh Bindal is the founder promoter of the company. ACFPL imports its coal requirement directly or through merchant importers in India and supplies it to the domestic market for usage by various industries like cement, captive power plants, steel and bricks. ACFPL is also engaged in trading of domestic coal purchased through e-auction route from Coal India Limited (CIL). SG, based out of Indore, Madhya Pradesh, is primarily involved in the business of coal trading. The group has presence of more than two decades with interests in diversified businesses including coal trading, logistics, construction and real estate. BAG POLY: CARE Downgrades Rating on INR6.23cr Loan to B ------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Bag Poly Enterprises (BPE), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 6.23 CARE B; Stable; Issuer Not Facilities Cooperating; Revised from CARE B+; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 20, 2019, placed the rating of BPE under the 'issuer non-cooperating' category as Bag Poly Enterprises had failed to provide information for monitoring of the rating. BPE continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 08, 2020, May 6, 2020, May 5, 2020 and May 4, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers The rating has been revised on account of Partnership nature of constitution, Susceptibility of margins to fluctuation in raw material prices, highly competitive industry. The rating, however, derives strength from experienced partners. Key Rating Weaknesses * Partnership nature of constitution: BPE's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partners' capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Moreover, partnership firms have restricted access to external borrowing as credit worthiness of partners would be the key factors affecting credit decision of the lenders. * Susceptibility of margins to fluctuation in raw material prices: High density polyethylene (HDPE) granules and Masterbatch are the main raw materials for the production of plastic bags and tarpaulins. High density polyethylene (HDPE) and Master batch are petrochemical derivatives and its prices remain highly volatile, thus BPE is exposed to the risk of volatility in the prices of crude oil. The operating margin of BPE remains susceptible to any sharp movement in the raw material prices which the firm is unable to pass on to its customers due to low bargaining power towards increase in final product prices. * Highly competitive industry: The Indian flexible packaging industry is highly competitive on account of the low capital intensity and technology requirements, easy availability of raw materials, low entry barriers and small gestation period. The intense industry competition will continue to exert pricing pressures on BPE. The bargaining power of the firm remains very low which also leave the profits vulnerable particularly in a scenario of increasing competitive pressure. Key Rating Strengths * Experienced partners: BPE got established in 2014 and is currently being managed by Mr. Parmod Mittal and Ms. Pinki Mittal. Mr. Parmod Mittal has a work experience of around two decades in the packaging industry through his association with Bag Poly International Private Limited (BPI, family run business) (CARE B+/A4; Stable) since 1994 and through BPE. Ms. Pinki Mittal has a work experience of one and a half years through her association with BPI and through BPE as well. Bag Poly Enterprises (BPE) was established in June, 2014 as a partnership firm by Mr. Parmod Mittal and Ms. Pinky Mittal, sharing profit and losses equally. The commercial operations got commenced in August, 2014. The firm is engaged in manufacturing of high density polyethylene (HDPE) based plastic bags and tarpaulins at its manufacturing facility in Panipat, Haryana with an installed capacity of processing 4800 metric tonnes per annum as on September 30, 2017. The firm's products find application in packaging of various products and also in the transportation industry. The main raw materials are HDPE granules and master batch and procured domestically. The finished products are sold to various wholesalers majorly located in Haryana, Delhi, Punjab and Uttar Pradesh. The firm also sells its products to various government entities. BALAJI INDUSTRIES: CARE Keeps D INR8cr Debt in Not Cooperating -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Balaji Industries (BI) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale, Key Rating Drivers and Detailed description of the key rating drivers CARE had, vide its press release dated February 27, 2019, placed the rating of BI under the 'Issuer noncooperating' category as BI had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. BI continues to be non-cooperative despite repeated requests for submission of information through email letter dated May 11, 2020, May 13, 2020, May 19, 2020 and numerous phone calls. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on February 27, 2019 the following were the rating weakness: Key Rating Weaknesses * Delay in debt servicing obligations: As per banker interaction, there are continuous overdrawals in the cash credit facility for more than 30 days. This was on account of delay in receiving payments from the customers, resulting in stretched liquidity position of the company. BI based out of Nagpur, Maharashtra is a partnership firm promoted by Mr. Ramanrao Bholla and Mrs Vijayalaxmi Bholla. The firm was established in October 2013 and is engaged in the business of processing of roasted gram dal with its processing facility located at Nagpur, Maharashtra. BALAJI STEEL: CARE Keeps 'D' Debt Ratings in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of Shree Balaji Steel (SBS) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 4.80 CARE D; Issuer not cooperating; Facilities Based on best available Information Short term Bank 120.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated February 11, 2019, placed the ratings of SBS under the 'issuer noncooperating' category as SBS had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. SBS continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and emails dated April 15, 2020, April 20, 2020, and May 05, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on February 11, 2019 the following were the rating weaknesses. Key Rating Weaknesses * Delays in servicing of debt obligations: As per banker interaction during last review, there were ongoing delays in repayment of principal and interest obligation of term loan facility and overdrawals in cash credit facility. Further the account was classified as NPA. SBS is based out of Nagpur, Maharashtra is a proprietorship entity promoted by Mr. Radheshyam Sarda and commenced operation in January 1981. SBS is engaged in trading of iron &steel products such as Thermo Mechanically Treated (TMT) bars, round bars, angles, channels, beams, flats, sheets, etc. which find application in industries like construction, infrastructure and engineering. BAREILLY HIGHWAYS: CARE Keeps D INR1,400cr Debt Rating in Not Coop. ------------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Bareilly Highways Project Limited (BHPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 1,400 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 31, 2019, placed the rating(s) of BHPL under the 'issuer non-cooperating' category as BHPL had failed to provide information for monitoring of the rating and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. BHPL continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 7, 2020, May 8, 2020, May 11, 2020, May 13, 2020 and May 20, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating assigned to the bank facilities of Bareilly Highways Project Limited (BHPL) continues to factor in delays in debt servicing by the company. Detailed description of the key rating drivers Key Rating Weaknesses * Delay in Debt servicing obligation: The liquidity position of the company continues to remain weak leading to delays in debt servicing. BHPL is a special purpose vehicle (SPV) promoted by Era Infra Engineering Ltd (EIEL) and OJSC- Sibmost (Sibmost) to undertake 4-laning of the existing 2-lane road from Km 262.0 to Km 413.2 (total project length of 156.57 km) on NH-24 from Bareilly to Sitapur in state of Uttar Pradesh under National Highways Development Programme (NHDP) Phase III of NHAI (rated 'CARE AAA') on Design, Build, Finance, Operate & Transfer (Toll) basis. As per the concession agreement (CA) signed between NHAI & BHPL in June 2010, the concession period is for 20 years (including a construction period of 2.5 years) from the Appointed Date (March 1, 2011). The original scheduled project completion date (SPCD) was August 28, 2013, which had been earlier revised to December 31, 2016, by NHAI (subject to certain conditions). The IE has further extended the SCOD till June 30, 2017. The total project cost was originally envisaged at INR1951 crore to be funded through promoter contribution of INR296 crore, grant of INR255 crore from NHAI, term loans of INR1,350 crore and subordinate debt (from banks) of INR50 crore. The project cost was revised to INR2,601.89 crore, to be funded through promoter contribution of INR550.75 crore, grant of INR255 crore from NHAI, term loans of INR1,746.14 crore and subordinate debt (from banks) of INR50 crore. BEEPEE ENTERPRISE: CARE Lowers Rating on INR12.18cr LT Loan to D ---------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Beepee Enterprise Private Limited (BEPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 12.18 CARE D; Issuer not cooperating; Revised from CARE BB-; Stable; Issuer not cooperating; Based on best available information Short-term Bank 0.30 CARE D; Issuer not cooperating; Facilities Revised from CARE A4; Issuer not cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated April 3, 2019, placed the rating(s) of BEPL under the 'issuer non-cooperating' category Beepee Enterprise Private Limited had failed to provide information for monitoring of the rating. Beepee Enterprise Private Limited continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter dated April 22, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The revision in rating factors in the ongoing delays in the debt servicing. Detailed description of the key rating drivers Key Rating Weaknesses * Ongoing delays in the debt servicing: As per the interaction with banker there are ongoing delays in the debt servicing and the account has been classified as NPA. BEPL was incorporated in 2003 and promoted by Poddar family. Company is manufacturer, supplier and exporter of linen i.e of bed sheets, table cloths, serviettes, chair covers, table linen, duvets, mats and other customized linen etc. the product find its application in textile and hospitality industry (Hotels, Hospital and Airlines). BHAI GURDAS: CARE Cuts INR2.5cr LT Loan Rating to B+, Not Coop. --------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Bhai Gurdas Technical Educational Trust (BGT), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 2.50 CARE B+; Stable; Issuer Not Facilities Cooperating; Revised from CARE BB-; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 11, 2019, placed the rating of Bhai Gurdas Technical Educational Trust under the 'issuer non-cooperating' category as Bhai Gurdas Technical Educational Trust had failed to provide information for monitoring of the rating. BGTET continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 08, 2020, May 6, 2020, May 5, 2020 and May 4, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers The rating has been revised on account of increasing competition and limited reach of the trust, high regulation in education sector in India. The rating, however, derives strength from experienced trustees with competent teaching staff and long track record of the trust with well-established infrastructure. Key Rating Weaknesses * Increasing competition and limited reach of the trust: All the institutes of the BGT are in Sangrur, i.e., single location of Punjab which limits the penetration level for the trust to tap opportunities. Further, due to increasing focus on technical education in India, a number of colleges have been opened up in the close proximity. This exposes the revenue of BGT to competition from other colleges like Lovely Professional University, Thapar University, Punjabi University, Guru Nanak Dev University etc. * High regulation in education sector in India: The educational institutes are regulated by respective state governments with respect to the number of management seats, amount of the tuition fees charged for the government quota and management quota. However, the state and central government have provided thrust to demand for engineering colleges by introducing policy changes like abolition of entrance exams for admission in professional course. Key Rating Strengths * Experienced trustees with competent teaching staff: Mr. Hakam Singh Jwandha has total work experience of four decades gained through his practices as an advocate and through BGT and Mrs. Baljinder Kaur Jwandha has industry experience of 35 years gained through her teaching profession and association with BGT. Mr. Guninderjit Singh has total work experience of 10 years gained through BGT only. Further, BGT has employed a highly experienced and qualified teaching staff to support the academic requirements of the trust. Apart from the key faculty members, BGT has employed a competent administrative staff to run day to day operations. * Long track record of the trust with well-established infrastructure: The trust established its first college in 2001 and since then had established six additional institutions. The facilities provided by the trust at its institutions include laboratories, computer centers including smart classes, conference halls, video conferencing, multi-media projectors, well stocked libraries, PNB bank branch, gymnasium, shopping complex, canteen & cafeteria, auditorium, health centre (dispensary), workshops, Wi-Fi campus etc. The trust is also providing hostel facility and transport facility to its students. Bhai Gurdas Technical Educational Trust (BGT) got registered under the Society Registration Act- 1860 in 2001 and is currently being managed by Mr. Hakam Singh Jwandha, Mr. Guninderjit Singh and Mrs. Baljinder Kaur Jwandha. The trust was formed with an objective to provide higher education in the field of engineering, computer science, management etc. The trust has established seven separate colleges. BGT offers graduate and post graduate courses like B.Tech, B.Ed, BCA, BBA, B.Com, L.L.B, B.A.L.L.B, M. Tech, M.Ed, MCA, MBA, M. Com, M.Sc and various diploma courses like Diploma in Mechanical Engineering, Computer Engineering, Civil Engineering, Electrical Engineering etc. The different courses offered are duly approved by AICTE (All India Council of Technical Education). BGT is also affiliated to Maharaja Ranjit Singh Punjab Technical University, Bathinda (MRSPTU). CELITE TYRE: CARE Lowers Rating on INR16.50cr LT Loan to D ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Celite Tyre Corporation (CTC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 16.50 CARE D; Revised from CARE B; Stable Short-term Bank Facilities 12.75 CARE D; Revised from CARE A4 Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of CTC takes into account overdrawals in its fund based working capital limits exceeding 30 days; as indicated by the management and confirmed by the lender. Rating Sensitivities Positive Factors * Delay free track record of 90 days in servicing of debt obligations. Detailed description of the key rating drivers Key Rating Weaknesses * Overdrawing in fund based working capital limits: As informed by the management and confirmed by CTC's lender, there has been continuous overdrawal in its fund based working capital limits for more than 30 days. This is on account of devolvement of a letter of credit in the cash credit account. * Modest scale of operations: CTC's scale of operations declined from INR121.44 crore in FY17 to INR64.23 crore in FY19, primarily on account of shift of CTC's passenger vehicle tyre business to Celite Tyre Private Limited (CTPL), an associate concern, along with reduced demand for off-the-road (OTR) tyres due to slowdown in demand from end user industries; particularly in mining. * Weak capital structure and debt coverage indicators: CTC's capital structure remained weak marked by an overall gearing of 5.02x as on March 31, 2019, which deteriorated from 2.28x as on March 31, 2017. This was on account of withdrawal of capital by the proprietor and increased reliance on bank borrowings and unsecured loans by the proprietor to fund working capital requirements. This also translated into weak debt coverage indicators for the firm, marked by a TD/GCA of 27.09x as on March 31, 2019. * Vulnerability of profitability to adverse fluctuation in forex rates: CTC is exposed to unfavourable movement in forex rates due to its import of tyres, which forms around 50% of its total purchase. Also, as CTC does not have any exports, there is no natural hedge available for its import payables. Further, despite sizeable exposure to forex risk, it does not have any active hedging policy in place, underlining the inherent risk. Liquidity – Poor CTC's liquidity remained poor with overdrawings in the cash credit account for a continuous period of 30 days since April 9, 2020 and an operating cycle of 151 days in FY19. Long operating cycle largely reflects decline in CTC's scale of operations over last three years ended FY19, without commensurate reduction in outstanding receivables on account of delay in realization of payments from customers. CTC has negligible term loan repayment obligations in next 2-3 years. Key Rating Strengths * Extensive experience of proprietor: Mr. Kamlesh Mehta, proprietor of CTC, has more than two decades of experience in the tyre trading industry. He looks after overall business operations of the entity and takes all the key decisions. Mr. Kamlesh Mehta is also associated with another group entity 'Celite Tyre Private Limited' (CTPL), which trades in premium branded tyres. Established distribution network: CTC is the authorized distributor for various brands of tyres such as Achilles, Goodyear, Birla, Apollo and JK tyres. These tyres find application in diverse industries such as automobile, mining, cement, steel and infrastructure. CTC operates from its warehousing facility located at Vadodara with a storage capacity of more than 50,000 tyres and has distribution network as well as stocking points spread across 14 different locations in India. With its established distribution network, CTC sells OTR tyres directly to the end customers while commercial vehicle tyres are sold through dealers as well as own sales network. Established in 1996, CTC is a Vadodara, Gujarat, based proprietorship firm established by Mr. Kamlesh Mehta. CTC is the authorized distributor for tyres such as OTR tyres and commercial vehicle tyres. CTC operates from its warehousing facility located at Vadodara and has distribution network as well as stocking points spread across India. Mr. Kamlesh Mehta is also associated with another group entity Celite Tyre Private Limited (CTPL), which trades in premium branded tyres. CFC CARRIERS: CARE Lowers Rating on INR15.25cr Long Term Loan to C ------------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of CFC Carriers Private Limited (CFC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 15.25 CARE C; Issuer Not Cooperating; Facilities Revised from CARE BB; Stable; Issuer not cooperating on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated April 1, 2019, placed the rating of CFC under the 'issuer non-cooperating' category as CFC had failed to provide information for monitoring of the rating. CFC continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls and email dated May 15, 2020 and May 8, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating has been revised by taking into account non-availability of information and no due-diligence conducted due to non-cooperation by CFC with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Further, the rating takes in to account the regular overdraws in the working capital limits ranging from 7 to 10 days, highly competitive and fragmented nature of freight and logistics industry and sensitivity to changes in overall economic condition. The ratings, however, continue to draw comfort from experienced promoters. Detailed description of the key rating drivers Key Rating Weakness * Highly competitive and fragmented nature of the freight logistics industry: Around 80-85 per cent of the road freight transport industry consists of small transport operators that own less than five trucks, are fragmented and unorganized. The highly fragmented and unorganized nature of the industry results in intense price competition and may lead to pressure on the company's profitability in case of adverse situations. However, the players with superior quality of service and presence in different locations across country and clientele across various industries would enjoy competitive edge and would be able to garner more business and long term contracts. CCPL's foray into end to end freight service coupled with group support, CCPL is well placed viz-a-viz competition. * Sensitivity to changes in the overall general economic conditions: CCPL's operations are dependent on the overall economic condition of the country. Higher economic activity translates into higher freight movement which drives demand for road freight transport industry. Lorry hire charges, being the major expense for the company is directly linked to the changes in the diesel prices. As a result, the company's margins are vulnerable to price hike of diesel. However, the risk is mitigated to a large extent with presence of fuel linked price escalation clause in majority of its contracts. Key Rating Strengths * Experienced promoters: CCPL is promoted and is being managed by Mr. Neeraj Sharma having almost two decades of experience in the logistics business. Over the period, Mr. Sharma has gradually increased CCPL's scale of operations from a single state operator to providing services to most of the states in North, South and West India. He is supported by Ms. Darshilla Sharma who is post graduate and has overall experience of more than one decade in the logistics business through her association with CCPL. New Delhi based CFC Carriers Private Limited (CPL) was incorporated on November, 1995 and was promoted by Mr Neeraj Sharma. The company is in the business of providing transportation and carrier services. CPL has a total 25 branch offices across pan India (predominantly concentrated in northern and western India), which facilitate collection and distribution of goods and parcels. Furthermore, the company offers door step delivery services and has smaller light commercial vehicles which pick/deliver the goods from the nodal offices and transport the same to the customer. CHAUDHARY INGOTS: CARE Keeps D INR11.5cr Loan Rating in Not Coop. ----------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Chaudhary Ingots Private Limited (CIPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 11.50 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 5, 2019, placed the rating of CIPL under the 'issuer non-cooperating' category as CIPL had failed to provide information for monitoring of the rating. CIPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated April 13, 2020, April 9, 2020 and April 7, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on March 5, 2019, the following was the rating weakness: (Updated for the information available from the Registrar of companies) * On-going delays: The rating takes into account the ongoing delays in the servicing of interest obligations due to stressed liquidity position. Chaudhary Ingots Private Limited (CIPL), based in Muzaffarnagar, Uttar Pradesh, was set up in November 2001, by Mr. Yatendra Singh Panwar, Mr. Narendra Panwar and Mr. Ashok Sharma. CIPL is primarily engaged in the manufacturing of mild steel ingots and by-products. Mild steel ingots produced by CIPL find application in rolling mills to manufacture steel channels and bars which are ultimately used in the construction and infrastructure industry. CIPL procures raw material in the form of sponge iron, pig iron, mild steel scrap and silico manganese from the domestic players and manufactures ingots in different sizes, which are further categorized based on their carbon content. CIPL sells all its products in the domestic market primarily in the three states namely Uttar Pradesh, Punjab and Rajasthan. CIPL has three group companies - Venus Rolling Mills Private Limited, Trimurti Engineering Works and Trimurti Concast Private Limited engaged in a similar line of activity. DURLAX INDIA: CARE Cuts INR24.20cr LT Loan Rating to D, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Durlax India Private Limited (DIPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long/Short term 10.00 CARE D; Issuer not cooperating; Bank Facilities Revised from CARE BB-/CARE A; on the basis of best available information Long term Bank 24.20 CARE D; Issuer not cooperating; Facilities Revised from CARE BB-; Stable on the basis of best available information Short term Bank 0.80 CARE D; Issuer not cooperating; Facilities Revised from CARE A4 on the Basis of best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated April 2, 2019, placed the ratings DIPL under the 'issuer non-cooperating' category as DIPL had failed to provide information for monitoring of the rating. DIPL continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls and a email dated April 17, May 5, 2020, May 18, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The revision in the rating assigned to the bank facilities of DIPL takes into account non-availability of information due to non-cooperation by DIPL with CARE's efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. The revision in rating also takes into account deterioration in financial risk profile of the company in FY19 (refers to the period April 1 to March 31) characterized by decline in total operating income with net losses registered, deterioration in debt coverage indicators and poor liquidity position. Detailed description of the key rating drivers Key Rating Weakness * Poor liquidity position: The liquidity position of the company is poor marked by lower accruals when compared to repayment obligations, modest cash balance of INR0.05 crore and stretched operating cycle with gross current asset of 447 days in FY19. This could constrain the ability of the company to repay its debt obligations on a timely basis. * Deterioration in financial risk profile in FY19: The scale of operations of the company declined by 33.76% and remained modest with total operating income of INR28.18 crore in FY19 (FY refers to April 01 to March 31) as against INR42.54 crore in FY18. Moreover, the company has booked net losses of INR4.95 crore during FY19 due to higher increase in capital charges. Further, the debt coverage indicators of the company have also deteriorated and stood weak with interest coverage of 1.15x as at the end of FY19. Mumbai (Maharashtra) based, DIPL incorporated in the year 2010 is managed by by Mr Shravan L Suthar, Mr Lalit L Suthar, Mr Pankaj L Suthar, Mr Laxmichand L Suthar and Mr Amit Vyas. The company is engaged in the manufacturing and trading of acrylic solid surface sheets and adhesive. The manufacturing facility of the company is located at Valsad, Gujarat having an installed capacity to manufacture 1, 45,000 sheets per annum. The product of the company i.e. solid surface sheets and adhesives is primarily used as a countertop surface and is used in residential, hospitality, commercial and industrial settings. DWARKA METROHILLS: CARE Cuts INR9.35cr Loan Rating to C, Not Coop. ------------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Dwarka Metrohills Hospital Private Limited (DMH), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 9.35 CARE C; Stable; Issuer Not Facilities Cooperating; Revised from CARE B-; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated April 1, 2019, placed the rating of DMH under the 'issuer non-cooperating' category as DMH had failed to provide information for monitoring of the rating. DMH continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated May 15, 2020 and May 8, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating has been revised by taking into account non-availability of information and no due-diligence conducted due to non-cooperation by DMH with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Further, the rating takes in to account the risk associated with timely completion and implementation of the project, geographical concentration risk and reputation risk. The ratings, however, continue to draw comfort from experienced and qualified promoters. Detailed description of the key rating drivers Key Rating Weakness * Timely completion and implementation risk associated with the project: The company is undertaking a project to setup a hospital. The total cost of the green-field project (Phase-1 and Phase-2) is estimated at INR6.25 crore, being funded by term loan of INR3.85 crore, unsecured loans from promoters' and other related parties of INR0.25 crore and remaining from the promoters' contribution in the form of capital. As on January 31, 2018 MHH has incurred an expenditure of INR4.12 crore towards the project; funded through the promoters' contribution of INR1.46 crore in the form of capital, unsecured loans from promoters' of INR0.25 crore and bank term loan of INR2.41 crore. 96% of the construction work is complete and the commercial operations of Phase-1 would begin from April, 2018 while the Phase2 is expected to be completed by March, 2019. Thus, implementation risk along with risk of timely completion is associated with the project. * Geographical concentration risk: GLC has presence in Chandauli, Uttar Pradesh only, thus exposing it to geographical concentration in its revenue profile, unlike other large chains in this industry which have presence in major cities. However, the hospital is centrally located, making it strategically located for carrying out healthcare business. Furthermore, fortunes of the company are restricted to a single property site. The single-site operations will expose the company's revenue and profitability margins to happening of unfavorable event in relation to hospital property or city. * Reputation risk: Healthcare is a highly sensitive sector where any mishandling of a case or negligence on part of any doctor and/or staff of the unit can lead to distrust among the masses. Thus, all the healthcare providers need to monitor each case diligently and maintain standard of services in order to avoid the occurrence of any unforeseen incident. They also need to maintain high vigilance to avoid any malpractice at any pocket. * Highly fragmented and competitive nature of the industry: The company operates in a highly competitive industry. There are various organized and unorganized players in the market. It faces stiff competition from other hospitals and private clinics in the area. The nature of healthcare industry is highly fragmented. Thus, differentiating factors like range of services offered, quality of service, pedigree of doctors, success rate in the treatment of complex cases, word of mouth etc. would be crucial in order to attract patients and increase occupancy levels. Moreover, the hospital has to remain very careful with its operations and has to follow various regulations imposed by the government. Key Rating Strengths * Experienced and qualified promoters: MHH is being managed by Mr. Vishal Kumar Singh, Mr. Vinit Kumar Singh, Mrs. Rita Singh and Mrs. Monika Singh. Mr. Vishal Kumar Singh has an industry experience of 8 years in the neurosurgical field and is also a director in G.V. Meditech Private Limited (Surya Hospital, Varanasi). Mr. Vinit Kumar Singh has an industry experience of 4 years gained through his association with Anandmai Hospital in Varanasi, he is currently pursuing Master of Surgery (MCH) course in Urology. Mrs. Rita Singh has 10 years of experience in project management and has worked in various projects for a number of years in and outside Uttar Pradesh. The management has adequate acumen about various aspects of business which is likely to benefit the company in the long run. Varanasi based Dwarka Metro Hills Hospital Private Limited (DMH) was incorporated in December, 2011 as a private limited company by the name of Metro Heart Hospital Private Limited, however, the name was changed to its current name, Metro Hills Hospital Private Limited in October, 2012 which was further changed to Dwarka Metro Hills Hospital Private Limited in FY19. MHH is currently being managed by Mr. Vishal Kumar Singh, Mr. Vinit Kumar Singh, Mrs. Rita Singh and Mrs. Monika Singh. The company will operate a multispecialty hospital having various departments for general medicine, general surgery, urology, neurology, radiology, gynecology, nephrology, ophthalmology, orthopedics, physiotherapy, etc. along with 24 hours pharmacy and lab services and is located in Chandauli (Uttar Pradesh) with proposed capacity of 160 beds. FIRESTAR DIAMOND BVBA: Ind-Ra Keeps 'D' Rating in Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Firestar Diamond BVBA's 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 the rating. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating action is: -- USD48 mil. Fund-based working capital facilities (Long term/Short term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 19, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Firestar Diamond BVBA is a step-down subsidiary of Firestar International Private Limited ('IND D'), which is a global diamond and jewelry company founded by Nirav Modi. FIRESTAR DIAMOND FZE: Ind-Ra Keeps 'D' Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Firestar Diamond FZE's bank loan ratings 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: -- USD111 mil. Fund-based working capital facilities (Long- term/Short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 19, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Firestar Diamond FZE is a step-down subsidiary of Firestar International Private Limited (IND D), which is a global diamond and jewellery company founded by Nirav Modi. FIRESTAR DIAMOND INT'L: Ind-Ra Keeps 'D' Rating in Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has maintained Firestar Diamond International Private Limited's bank loan ratings 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 actions are: -- INR3.824 bil. Fund-based working capital facilities (Long- term/Short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; and -- INR1.059 bil. Non-fund-based working capital facilities (Short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 20, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Firestar Diamond International was incorporated in 2006 as a jewellery manufacturing company for exports. It operates Firestar International Private Limited's (a global diamond and jewellery company founded by Nirav Modi) domestic retail business, which functions under the Nirav Modi brand. FIRESTAR DIAMOND LTD: Ind-Ra Keeps D Loan Rating in Non-Cooperating ------------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Firestar Diamond Limited, Hong Kong's bank loan ratings 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: -- USD35 mil. Fund-based working capital facilities (Long- term/Short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 19, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Firestar Diamond is a step-down subsidiary of Firestar International Private Limited ('IND D (ISSUER NOT COOPERATING)'), a global diamond and jewellery company founded by Nirav Modi. FIRESTAR INTERNATIONAL: Ind-Ra Keeps 'D' Rating in Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has maintained Firestar International Private Limited's Long-Term Issuer 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 the rating. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR17.132 bil. Fund-based working capital facilities (Long- term/Short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; and -- INR2.272 bil. Non-fund-based working capital facilities (Short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 19, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Firestar International, founded by Nirav Modi, is a global diamond and jewellery company. FRANKLIN TEMPLETON: Court Orders Liquidation Vote Suspension ------------------------------------------------------------ The Financial Times reports that Franklin Templeton has been forced to halt plans to wind up six of its Indian funds after a court intervened to suspend the procedure amid allegations that the US firm mismanaged the assets. The FT says the California-based fund manager sparked panic in Indian capital markets in April when it announced it would freeze and close six funds that had invested in lower-rated debt in search of higher yields. The FT relates that the move, which trapped about $3bn of customers' funds, prompted outrage from some investors who argued that the asset manager had put their money in peril through excessively risky lending practices, and should have sought their approval before shutting the funds. According to the FT, Franklin Templeton had planned on June 9 to allow investors to start voting on winding up the funds, asking 300,000 unit-holders whether the liquidation should be managed by the funds' trustees or a third party, Deloitte. But a high court in the western Indian state of Gujarat ruled that the vote could not go ahead until an audit of the six funds was made public, the FT relays. The FT relates that Justice Gita Gopi ordered that "the unit-holders would not be having the opportunity of informed decision making" until they had seen the report on the alleged mismanagement. The process would be stayed until "the forensic audit report comes in public domain," she wrote. The judge was responding to Franklin Templeton's appeal against an earlier decision to delay the process last week. A spokesperson for Franklin Templeton said the company would halt the winding-up process, but planned to appeal the order. The company denied allegations that it has mismanaged the funds, the report notes. "We continue to follow due process, both in making investment decisions and in the winding up of these schemes," the spokesperson, as cited by the FT, said. "We have acted in the best interest of our investors and in accordance with all regulations." According to the FT, the asset management giant has previously said that suspending redemptions and winding up the funds was necessary to protect investors' money after the coronavirus pandemic drained liquidity in the country's debt markets. It also said that investors had been warned of the risks inherent in such funds. However, some investors worry that Franklin Templeton's decision to wind up the funds means they will lose substantial portions of their investments. The turmoil added to strain on India's already weakened financial system, prompting heightened outflows across mutual funds as panicked investors in other funds sought to protect their assets, the report notes. GOURAV POULTRIES: CARE Cuts INR10.29cr Loan Rating to C, Not Coop. ------------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Gourav Poultries India Private Limited (GPI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 10.29 CARE C; Stable; Issuer Not Facilities Cooperating; Revised from CARE B-; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated February 6, 2019, placed the rating of GPI under the 'issuer non-cooperating' category as GPI had failed to provide information for monitoring of the rating. GPI continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated April 22, 2020, April 16, 2020, and April 15, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers The long term rating has been revised on account of susceptibility to fluctuation in feed prices and inherent risk associated with the poultry industry coupled with high competition from local players. Key rating Weaknesses * Susceptibility to fluctuation in feed prices: GPI's profitability is vulnerable to the volatility associated with the key raw material prices which are dependent upon prices of maize and soybean (Agro products). As the poultry industry is virtually a buyers' market, producers may not be able to pass on any sharp increase in raw material prices, as the egg prices are controlled by their own demand-supply dynamics. * Inherent risk associated with the poultry industry coupled with high competition from local players: The Poultry industry is driven by regional demand and supply because of transportation constraints and perishable nature of the products. Low capital intensity and low entry barriers facilitate easy entry of players leading to a large unorganized sector. Poultry industry is also vulnerable to outbreaks of diseases which leads to a fall in demand and consequent sharp crash in the egg prices. Key Rating Strengths * Experienced promoters: GPI is a private limited company being managed by Mr. Jai Bhagwan and Mrs. Kiran collectively. Mr. Jai Bhagwan has total work experience of around one and a half decades in poultry industry. Mrs. Kiran has an experience of a half decade in the same industry. Both the directors have adequate acumen about various aspects of business which is likely to benefit the company in the long term. Gourav Poultries India Private Limited (GPI) was incorporated in December, 2010 by Mr Jai Bhagwan and Mr. Vinod Kumar. The company is currently being managed by Mr Jai Bhagwan and Mrs Kiran. GPI is engaged in poultry farming business at its poultry farm located in Jind, Haryana. The company sells broiler chicks (1 day old chick) to various poultry farmers directly as well as through distributor network located in Punjab, Haryana, Jammu & Kashmir, Bihar and Uttar Pradesh. The main raw materials for feeding the chicken are maize, soyabean and mustard. The same are procured from the company's group concern namely Rathi Feeds India Private Limited (RFIPL) which is engaged in the manufacturing of poultry feed since 2008. GPI purchases parent chicken from other poultry farms based in Haryana. Besides GPI, the directors' are also engaged in another group concerns namely Rathi Hatcheries Private Limited (RHPL) and Rathi Feeds India Private Limited. Rathi Hatcheries Private Limited is into the business of poultry farming since 2002. HANSRAJ MEMORIAL: CARE Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Hansraj Memorial Educational Society (HMES) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 19.90 CARE D; Issuer not cooperating; Facilities Based on best available Information Shortterm Bank 13.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 31, 2019, placed the rating of HMES under the 'issuer non-cooperating' category as HMES failed to provide information for monitoring of the rating. HMES continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 26, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on January 31, 2019 the following were the rating weaknesses: Key Rating Weaknesses * Ongoing delays in debt servicing: There are ongoing delays in the servicing of the debt obligation for the term loan and the overdraft facilities availed by the society. Hansraj Memorial Educational Society (HMES) is a part of Jalandhar (Punjab) based Airwings Services group which is engaged in the business of tours & travels and HR management. HMES was founded by Late Mr. Hans Raj Bhatia under the Societies Registration Act of India on February 1, 2000. Mr. Ajay Bhatia is the President of the society and his brother, Mr. Deepak Bhatia, is the General Secretary. HMES is currently operating three schools in the Jalandhar city- Cambridge International school for girls (CISFG; established in 2005), Cambridge International School Co-ed (CISC; established in 2008) and Cambridge International (CISFG; established in 2005), Cambridge International School Co-ed (CISC; established in 2008) and Cambridge International Foundation School (CIFS; established in 2012) and is setting up a new school in Mohali (Punjab). The schools are affiliated to CBSE (Central Board of Secondary Education) and are ISO-9001:2008 accredited. JAWAHAR SAHAKARI: Ind-Ra Keeps B+ Loan Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Jawahar Sahakari Soot Girni Ltd's bank loans ratings 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 rating. The rating will continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating actions are: -- INR286.26 mil. Bank Loans maintained in non-cooperating category with IND B+ (ISSUER NOT COOPERATING) rating; -- INR90 mil. Fund-based working capital facilities maintained in non-cooperating category with IND B+ (ISSUER NOT COOPERATING) rating; and -- INR25 mil. Non-fund-based working capital facilities maintained in non-cooperating category with IND B+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on June 19, 2018. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the ratings. COMPANY PROFILE Jawahar Sahakari Soot Girni was established in 1991 to manufacture cotton yarn. JAY AGRO: CARE Keeps D INR16.51cr Loan Rating in Not Cooperating ---------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Jay Agro Industries (JAI) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 16.51 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 13, 2019, placed the ratings of JAI under the 'issuer noncooperating' category as JAI had failed to provide information for monitoring of the ratings as agreed to in its Rating Agreement. JAI continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 6, 2020, May 12, 2020, May 13, 2020, May 14, 2020. In line with the extant SEBI guidelines, CARE has reviewed the ratings on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair ratings. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The ratings take account its on-going delays and irregularity in servicing its debt obligations. Detailed description of the key rating drivers At the time of last rating in March 13, 2019 the following were the rating strengths and weaknesses. Key Rating Weaknesses * On-going delay in debt servicing: There were delays in servicing of bank facilities till May, 2020 due to poor liquidity position of the firm. Liquidity: Poor Liquidity position of JAI remained poor marked by below unity current ratio of 0.99 times as on March 31, 2015 as against 1.01 times as on March 31, 2014. Current ratio falls below unity mainly on account of higher utilization of working capital limit along with higher creditors as on balance sheet date. During FY15, working capital cycle remained in line at 34 days as against 36 days in FY14. Net cash flow from operations stood positive at INR2.00 crore in FY15 as against negative INR2.79 crore in FY14. Cash and bank balance stood low at INR0.07 crore as on March 31, 2015. Vadodara-based (Gujarat) JAI was promoted by Mr Nimmagadda Prasad and Ms Aruna Prasad for manufacturing of Pesticides in 2003. JAI's manufacturing plant is located in Vadodara district of Gujarat having an installed capacity of 2,400 metric tons per annum (MTPA) & 600 kilo liter per annum (KLPA) as on March 31, 2015 for production of Agrochemicals, Pesticides and Insecticides. JAI is an ISO 9001: 2008 and UKAS Quality Management certified firm. KASHVI INTERNATIONAL: Ind-Ra Moves BB+ LT Rating to NonCooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Kashvi International 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: -- INR150 mil. Term loan due on March 2024 assigned with IND BB+ (ISSUER NOT COOPERATING) rating; -- INR150 mil. Fund-based working capital limit assigned with IND BB+ (ISSUER NOT COOPERATING) rating; and -- INR30 mil. Non-fund-based working capital limit assigned with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 10, 2019. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE KIPL was incorporated in July 2007 by Kashvi Group in Odisha. The company manufactures sponge iron with an installed capacity of 90,000mtpa. KHUSHI FOODS: CARE Keeps D INR7.37cr Loan Rating in Not Cooperating ------------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Khushi Foods Limited (KFL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 7.37 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 12, 2019, placed the ratings of KFL under the 'issuer non-cooperating' category as KFL had failed to provide information for monitoring of the ratings as agreed to in its Rating Agreement. KFL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 6, 2020, May 12, 2020, May 13, 2020, May 14, 2020. In line with the extant SEBI guidelines, CARE has reviewed the ratings on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair ratings. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The ratings take account its on-going delays and irregularity in servicing its debt obligations. Detailed description of the key rating drivers At the time of last rating in March 12, 2019 the following were the rating strengths and weaknesses. Key Rating Weaknesses * On-going delay in debt servicing: There were delays in servicing of bank facilities till May, 2020 due to poor liquidity position of the company. Liquidity: Poor Liquidity position of KFL remained poor marked by current ratio of 1.26 times as on March 31, 2015 as against 1.36 times as on March 31, 2016. During FY15, working capital cycle stood at 92 days as against 77 days in FY14. Net cash flow from operations stood positive at INR2.48 crore in FY15 as against negative INR2.55 crore in FY14. Cash and bank balance stood low at INR0.57 crore as on March 31, 2015. Khushi Foods Ltd. (KFL) earlier known as Khushi Foods Pvt. Ltd. (changed from December 23, 2011) was incorporated on March 5, 2008 by Mr. Rajendra Sharma and Mr. Jagdish Sharma. KFL's processing unit is located at Mahua, Bhavnagar spread over 464.51 sq.mtrs with an installed capacity of 3,200 metric tonne per annum (MTPA). KFL is engaged in the business of dehydrated of vegetables and processes instant ready to cook products. KFL has developed ready to cook products such as garlic magic and pizza magic which face less competition in the market. Such products have heavy demand outside Gujarat and pan India at large for which KFL is looking forward aggressively to promote its products and secure business. KFL also exports its products to various countries such as Nepal, Russia, Bulgaria and Poland. KPG INTERNATIONAL: CARE Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of KPG International Private Limited (KPG) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 4.50 CARE D; Issuer not cooperating; Facilities Based on best available Information Short term Bank 4.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 1, 2019, placed the ratings of KPG International Private Limited under the 'issuer non-cooperating' category as KPG had failed to provide information for monitoring of the rating. KPG International Private Limited continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 12, 2020, May 14,2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers At the time of last rating on March 1, 2019 the following were the rating weakness: Detailed description of the key rating drivers Key Rating Weaknesses * Ongoing delays in servicing debt obligation: There are ongoing delays in servicing of interest obligations on account of stretched liquidity position. Delhi based, KPG International Private Limited (KPG) was incorporated in October, 2016 and commenced its commercial operations in December, 2016. The company is currently being managed by Mr. Gaurav Mahendru and Mr. RC Mahendru. KPG is engaged in manufacturing and trading of garments. The company procures its raw material i.e. fabric from domestic and overseas manufacturers (import constitutes 25% of purchases). KPG sells the product in the brand name 'Howzat' to wholesalers and retailers located in Delhi. M.P.K. METALS: CARE Keeps 'D' Debt Ratings in Not Cooperating ------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of M.P.K. Metals Private Limited (MPKM) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 6.40 CARE D; Issuer not cooperating; Facilities Based on best available Information Short term Bank 0.72 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 22, 2019, placed the rating(s) of MPKM under the 'issuer non-cooperating' category as MPKM had failed to provide information for monitoring of the rating for the rating exercise as agreed to in its Rating Agreement. MPKM continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 01, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating based on best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating PR on March 22, 2019 the following were the rating strengths and weaknesses (updated for the information available from Registrar of Companies): Key Rating Weaknesses * Ongoing delays in debt servicing: The account of the company was NPA owing to stretched liquidity position. Incorporated in 2009, M.P.K Metals Private Limited (MPKM) is promoted by MPK group based out of Jaipur (Rajasthan). MPKM is primarily engaged into the business of manufacturing of structural products includingMild Steel (M S) angles, sections, rounds and flats which finds its application particularly in infrastructure industries ranging from power transmission to real estate. MPKM has its manufacturing unit situated at Jaipur, Rajasthan, having installed capacity of 4,800 Metric Tonnes Per Annum (MTPA) as on March 31, 2016. MOMAI FOODS: CARE Keeps 'C' INR8.64cr Loan Rating in Not Coop. -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Momai Foods Private Limited (MFPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.64 CARE C; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 29, 2019, placed the rating of MFPL under the 'issuer non-cooperating' category as MFPL had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. MFPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated April 10, 2020, April 14, 2020, April 15, 2020 and April 30, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers At the time of last rating on March 29, 2019 the following were the rating strengths and weaknesses (updated from details available from registrar of company) Key Rating Weaknesses * Small scale of operations along with thin profitability: During FY19, Total operating income of MFPL although increased due to increased demand of the product but remained small at INR23.02 crore against INR13.33 crore in FY18. However, PBILDT margin declined due to increase in cost of material consumed but remained moderate to 13.90% during FY19 from 28.49% during FY18. Further, with decline in PBILDT margin with higher depreciation cost incurred during the year, MFPL has reported thin PAT margin of 0.59% in FY19 as against 0.68% in FY18. * Leveraged capital structure and moderate debt coverage indicators: Capital structure of MFPL has improved marginally as a result of increase in networth base but remained leveraged marked by overall gearing ratio of 4.65x as on March 31, 2019 as against 5.05x as on March 31, 2018. Further, Debt coverage indicators remained moderate marked by total debt to GCA ratio of 5.51 times as on March 31, 2019 as against 4.83 times as on March 31, 2018. However, on back of decrease in interest cost during the year interest coverage ratio improved to 5.36x during FY19 as against 3.17x during FY18. * Presence in highly competitive industry: MFPL operates in industry with many organized and unorganized players. Also, the presence of big sized players like Vadilal, Amul, Havmor, etc. with established marketing & distribution network results into intense competition in the industry. Key rating strengths * Established clear track record of its debt obligations: MFPL has established clear track record for the past four months ended May 2018 as the same is being taken care by infusion of funds by promoters in the form of unsecured loans as well as cash flow generated from its operations. * Experienced promoters: Mr. Bhaveshbhai Khatra, Mr. Mehulbhai Khatra and Mr. Chandubhai Khatra are key promoters of MFPL, who holds more than a decade of experience in ice cream industry. Liquidity Analysis: * Stretched Liquidity: Liquidity position of MFPL remain stretched as marked by below unity current ratio 1.05 times as on March 31, 2019 as against 0.87 times as on March 31, 2018. Further, cash flows from operation remained positive at INR2.12 crore during FY19 as against INR1.84 crore during FY18. Unencumbered cash and bank balance remained low at INR0.51 crore as on March 31, 2019. Average utilization of its working capital limit remained at 95% for past 12 months ended March 31, 2020. Rajkot-based (Gujarat), Momai Foods Private Limited (MFPL) is a private limited company established in 2013 by Mr. Bhaveshbhai Khatra, Mr. Mehulbhai Khatra and Mr. Chandubhai Khatra. The company is engaged in business of manufacturing of ice cream. The company sells its products in state of Gujarat, Rajasthan and Madhya Pradesh. The company has installed capacity of 1.2 crore liters of ice cream per annum. The company sells its product under the brand name 'MOMAI'. The company sells its ice cream through its network of 40 distributors and 6 retail outlets. The company has ISO 22000:2005 certification for food safety management system. NARAYAN FRUITS: CARE Cuts Rating on INR5.50cr Loan to C, Not Coop. ------------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Narayan Fruits & Vegetables Cold Storage Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 5.50 CARE C; Stable; Issuer Not Facilities Cooperating; Revised from CARE B-; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 4, 2019 placed the rating of Narayan Fruits & Vegetables Cold Storage Private Limited under the 'issuer non-cooperating' category as Narayan Fruits & Vegetables Cold Storage Private Limited had failed to provide information for monitoring of the rating. Narayan Fruits & Vegetables Cold Storage Private Limited continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating has been revised by taking into account non-availability of requisite information and no due-diligence conducted with banker due to non-cooperation by Narayan Fruits & Vegetables Cold Storage Private Limited with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Further, the ratings continue to remain constrained owing by small scale of operations, fragmented nature of the industry with high level of government regulation. The ratings, however, continue to take comfort from experienced promoter in managing business and positive outlook for Indian cold chain industry. Detailed description of the key rating drivers At the time of last rating on March 7, 2019, the following were the rating strengths and weaknesses (updated with information from MCA): Key Rating Weaknesses * Small scale of operations: The scale of operations remained small as the company commenced its operations in February, 2017 marked by a total operating income and gross cash accruals of INR1.67crore and INR0.36 crore respectively during FY19 (FY refers to the period April 1 to March 31). Further, the company's net worth base stood at INR0.49 crore as on March 31, 2019. The small scale limits the company's financial flexibility in times of stress and deprives it of scale benefits. * Weak financial risk profile: The company commenced its operations in February, 2017. The PBILDT margin and PAT margin of the company stood at 55.24% and (5.16)% in FY19 owing to high interest cost against weak profitability. The capital structure of the company marked by overall gearing ratio stood comfortable at around 7.47x as on March 31, 2019, mainly on account of low net worth base. Further owing to weak profitability and gross cash accruals, the coverage indicators marked by interest coverage ratio and total debt to GCA stood weak at 1.61x and 10.22years respectively for FY19. * Fragmented nature of the industry with high level of government regulation: NFV business risk profile is constrained on account of exposed to competition from other regional players operating in warehousing industry. Firm is operating in such an industry which is fragmented in nature and has limited entry and exit barrier. This leads to limited bargaining power with customers and restrict to charge additional rent, which constraints its scale of operations. Key Rating Strengths * Experienced promoter in managing business: The company has been promoted by by Mr. Nikhil Aggarwal and Mrs. Vani Aggarwal. Mr. Nikhil Aggarwal and Mrs. Vani Aggarwal have an experience of 2 decades in the trading and cold storage business respectively through various companies. The diverse experience of the directors allows the company to manage the business affairs efficiently. * Positive outlook for Indian cold chain industry: The warehousing and cold chain industry is emerging as a fast-growing business sector in India, with developments in the food processing sector, organized retail and government initiatives driving growth. Further with rapid growth of organized retail and manufacturing sector, the need for warehousing is increasing. The government is taking steps to set up cold chain infrastructure and has introduced schemes such as capital investment subsidy from the National Horticulture Board (NHB), the National Horticulture Mission (NHM) and the Ministry of Food Processing Industries (MoFPI). Apart from subsides, like credit-linked capital subsidy scheme for construction of cold storages and godowns, the government is also providing consultancy services to help connecting farmers to market & to avoid heavy losses & wastes of food products. Etawah, Uttar Pradesh based Narayan Fruits & Vegetables Cold Storage Private Limited was incorporated in 2016 and commenced its operation February, 2017. The company is being manage by Mr. Nikhil Aggarwal. NFV is engaged in the business of renting of its cold storage facility for potatoes to the local farmers in Etawah from its cold storage unit with multi chambers having installed capacity to store 1,20,141 quintals for storage of potato as on March 31, 2017. PALM HEIGHTS: CARE Keeps 'D' INR15.00cr Debt Rating in Not Coop. ---------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Palm Heights Private Limited (PHP) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 15.00 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 11, 2019, placed the rating of PHP under the 'issuer non-cooperating' category as PHP had failed to provide information for monitoring of the rating. PHP continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 11, 2020, May 07, 2020, and May 06, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). At the time of last rating in March 11, 2019 the following were the rating strengths and weaknesses: Detailed description of the key rating drivers Key Rating Weaknesses * Delays in debt servicing: There were instances of delays in the servicing of the debt obligations. The delays were on account of weak liquidity position as the company was unable to generate sufficient funds in a timely manner. Palm Heights Private Limited (PHP) was incorporated in 2013 and is currently being managed by Mr.Daljit Dogra Singh, Mr.Harjinder Singh Rangi and Mr. Ankit Sidana. The company is currently developing its residential project named 'Palm Heights' at Derabassi, Punjab, on a 2.94 acres of land. The project is being developed in the form of seven towers with a total of 164 flats. The project is expected to be completed by October 2020. As on August 10, 2017, 62 flats have been sold out of 164 flats. The group entities of PHP include DM Associates and Dogra Property Consultants which are engaged in the real estate industry and civil construction, respectively. PRAKASH ELECTRICAL: CARE Cuts INR10cr Loan Rating to B, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Prakash Electrical Engineering Corporation (PEEC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 10.00 CARE B; Stable; Issuer Not Facilities Cooperating; Revised from CARE BB-; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 16, 2019, placed the rating of PEEC under the 'issuer non-cooperating' category as PEEC had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. PEEC continues to be non-cooperative despite repeated requests for submission of information through numerous phone calls and emails dated April 17, 2020, April 24, 2020, May 05, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The revision in the rating assigned to the bank facilities of PEEC takes into account non-availability of information due to non-cooperation by PEEC with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers At the time of last rating on January 16, 2019 the following were the rating strengths and weaknesses. Key Rating Weaknesses * Modest scale of operations: Despite having a long operational track record of about two decades; PEEC's scale of operations remained modest with during last 3 years ended FY17 (refers to the period April 01 to March 31). Furthermore, the net worth base remains modest at INR5.37 crore as on March 31, 2017, limiting financial flexibility of the entity. * Customer and geographic concentration risk albeit reputed clientele: The firm's main customers are Maharashtra State Electricity Distribution Company Limited (MSEDCL) and National Highway Authority of India. The customer concentration makes it vulnerable to the risk of a slowdown in the awarding of tenders and orders from this client. Furthermore, the firm undertakes contracts only in the state of Maharashtra, exposing it to geographical concentration risk. * Partial comfort from volatile raw material prices owing to price variation clause: Major raw materials used by the firm are steel and cable wire and raw material cost comprises 59% of total costs in FY17. The other raw material required for the projects are bought-out items sourced from various indigenous suppliers based on project requirements. The firm does not enter into any long-term contracts with the suppliers. Although the firm has a price escalation clause in contracts, modest size of operations and presence in a competitive business environment with limited bargaining power with customers limits the ability of the firm to pass on any increase in raw material costs for the orders under execution. * Intense competition due to exposure to tender driven nature of business: PEEC business is tender-based which is characterized by intense competition resulting into moderate operating margins for the firm. The growth of business depends entirely upon the firm's ability to successfully bid for tenders and emerge as the lowest bidder. Further, the high concentration of execution of projects for MSEDCL makes the firm's revenues and profitability susceptible to any drop in the tenders awarded by the client. * Proprietorship nature of constitution: Being proprietorship nature of constitution, the firm is exposed to the risk of withdrawal of capital due to personal exigencies, dissolution of firm due to retirement or death of promoter and restricted financial flexibility due to inability to explore cheaper sources of finance leading to limited growth potential. Key Rating Strengths * Long track record of operations with experienced proprietor: PEEC has a track record of around two decades in the industry and has reinforced its footings in the electrical equipment business with sound base. The proprietor of the firm, Mr. Prakash Deshmukh Dadasaheb, has three decades of industry experience which has helped him to gain an adequate acumen about the business which aids in smooth operations of PEEC. * Moderate order book position providing reasonable revenue visibility: The firm has an outstanding order book of INR166.49 crore, which is to be executed within 12 months. Order book/sales ratio based on FY17 (provisional) revenues is 6.80x, providing moderate revenue visibility over the medium term. Orders pertain to supply and installation of electrical cables and transformers in Maharashtra (Ratnagiri, Phaltan and Sindhudurg). * Moderate profitability and comfortable solvency position: The profitability of the entity remained moderate with operating margin in the range of 5% -8% during FY14-FY17. The PAT margin declined marginally by 10 bps on account of increased fixed expenses. The moderate debt profile of the company as compared to its capital base resulted in a comfortable capital structure. * Comfortable operating cycle despite working capital intensive nature of operations: The working capital requirements are met by cash credit facility. The entity offers credit period of two months to its customers and receives similar credit period from suppliers. In certain instances the payment gets delayed as the entity receives delayed payment from government players. PEEC is a proprietorship concern established in the year 1998 by Mr. Prakash Dadasaheb Deshmukh. The firm is registered as a Class-A Electrical Contractor by PWD (Public Works Department) in the State of Maharashtra. The firm undertakes supply, Installation, Testing and Commissioning (SITC) of High tension and low tension (HT/LT) Lines, transformers, electric substations, house wiring, industrial wiring etc. PRATHIJNA SUSTAINABLE: Ind-Ra Withdraws BB Downgraded Loan Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Prathijna Sustainable Solutions Private Limited's (PSPPL) term loan to 'IND BB' from 'IND BBB-'. The agency has simultaneously migrated the rating to the non-cooperating category and has withdrawn it. The detailed rating action is: -- INR1.0 bil. Senior secured rupee term loan* due on March 2034 downgraded, migrated to non-cooperating category and withdrawn. *Downgraded and migrated to 'IND BB (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS The downgrade reflects the absence of clarity on PSPPL's operational performance, encompassing the generation and financial performance, including the debtors ageing report. PSPPL did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Ind-Ra is no longer required to maintain the ratings, as it has received a no objection certificate from the rated facilities' lender. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017 for credit rating agencies. COMPANY PROFILE Incorporated in February 2014, PSSPL is a 19.8 MW wind power project located at Mullur Taluka in Raichur district in Karnataka. PRECA SOLUTIONS: Ind-Ra Cuts LT Issuer Rating to BB+, Non-coop. --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Preca Solutions India Private Limited's (PSIPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-' and has simultaneously migrated it to the non-cooperating category. The issuer did not participate in the surveillance exercise despite continuous requests and follow-ups by the agency. Thus, the rating is based on the best available information. 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: -- INR240 mil. Fund-based working capital limit downgraded and migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; -- INR272.7 mil. Non-fund-based working capital limit downgraded and migrated to non-cooperating category with INDA4+ (ISSUER NOT COOPERATING) rating; and -- INR120 mil. Term loan due on March 2023 downgraded and migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on the best available information. KEY RATING DRIVERS The downgrade reflects deterioration in PSIPL's credit metrics and profitability, a substantial increase in debt levels in FY19 and stretched liquidity. The gross interest coverage (operating EBITDA/gross interest expense) deteriorated to 2.74x in FY19 (FY18: 3.63x) and net leverage (adjusted net debt/operating EBITDAR) to 4.46x (2.41x). PSIPL's modest EBITDA margin declined to 9.78% in FY19 (FY18: 16.01%). The scale of operations remained modest even as its operating revenue grew to INR1,128 million in FY19 (FY18: INR917 million). In 9MFY20, the company reported revenue of INR610 million and EBITDA margin of 10%. The interest coverage and net leverage stood at 1.5x and 3.7x, respectively, during this period. Liquidity Indicator – Stretched: The company's working capital limit utilization was high at 97% during the 12 months ended April 2020. The free cash flow remained negative and stretched to INR135 million (FY18: negative INR81 million), mainly on account of high capital expenditure. The ratings have been migrated to the non-cooperating category as the company did not provide Ind-Ra with its revised projections data, FY20 provisional financials and the updated management certificate. The company also did not participate in the management meeting in a timely manner due to the COVID-19-led lockdown. COMPANY PROFILE Incorporated in 2008, Hyderabad-based PSIPL is engaged in the designing, manufacturing, supplying, erecting and commissioning of various precast pre-stressed concrete products on a turnkey engineering solution basis. Satish Gottipati, Geetha Gottipati and Uri Kertes are the promoters. PRISM ENTERPRISE: CARE Lowers Rating on INR7cr Loan to C/A4 ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Prism Enterprise (PRI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 7.00 CARE C; Stable/CARE A4; Issuer Not Facilities Cooperating; Revised from CARE B; Stable/ CARE A; Issuer Not Cooperating; on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated June 20, 2019, placed the rating of PRI under the 'issuer noncooperating' category as PRI had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. PRI continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated April 25, 2020, April 27, 2020 and April 28, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The rating assigned to the bank facilities of PRI have been revised on account of non-availability of requisite information. Detailed description of the key rating drivers At the time of last rating on June 20, 2019 the following were the rating strengths and weaknesses. Key Rating Weaknesses * Constitution as a proprietorship firm: The constitution as a proprietorship firm restricts PRI's overall financial flexibility in terms of limited access to external funds for any future expansion plans. Further, there is inherent risk of possibility of dissolution of the firm in case of death/retirement/insolvency/personal contingency of the proprietor. * Limited experience of proprietor in textile industry: Proprietor of the firm Mrs. Kiran Ghanva holds an experience of around seven years in the business of trading of agro products but no relavent experience in textile industry. However, entire business operations will be handled by both Mrs. Kiran Ghanva and her husband Mr. Jignesh Ghanva. * Implementation risk associated with new project: PRI was implementing a new project, total cost of which is INR8.40 crore and envasiged to be funded through debt/equity ratio of 2.73 times. As majority of the cost yet to be incurred, the project was associated with risk related to project implementation. Further, post project implementation, achieving envisaged capacity utilization and sales realization remains crucial for the firm. * Susceptibility of profit margins to volatility in raw material price: PRI is engaged in the business of manufacturing sized and warped yarn and major raw material used by the firm is the cotton yarn and the prices are volatile in nature. Hence, the profitability of the firm is susceptible to the fluctuations in raw material prices and any adverse fluctuation in these prices will have direct impact on the operating margins of the firm. Ability of the firm to pass on fluctuations in the raw material price to its customers will remain crucial. * Presence in highly fragmented and competitive textile industry: PRI operates in highly fragmented and unorganized market of textile industry marked by large number of small sized players. The industry is characterized by low entry barrier due to minimal capital requirement and easy access to customers and supplier. Also, the presence of big sized players with established marketing & distribution network results into intense competition in the industry. Key rating strengths * Location advantage of presence in Gujarat: The factory is situated near Rajkot District at Kotda Sangani where raw materials are easily available along with transportation and labour. * Eligibility for Government Subsidy: Project was eligible for 7% interest subsidy from Government of Gujarat, 2% interest subsidy from State Government, 15% capital subsidy from State Government under RR-TUF scheme and 15% capital subsidy from Central Government under TUF. Rajkot-based (Gujarat), Prism Enterprise (PRI) is a proprietorship firm established in 2016 by Ms. Kiran Ghanva with a main objective of sizing and warping of cotton yarn. Manufacturing plant is located at Rajkot with a proposed installed capacity of 2500000 kgs per annum of sized and warped yarn. The products manufactured by the entity will be used in textile industry. PRI was in the process of acquiring machineries worth INR8.40 crore which primarily included sizing and warping machine which was to be financed through proprietor's contribution of INR2.25 crore, term loan of INR6.00 crore and remaining INR0.15 crore by way of unsecured loan from friends and family. PRI was envisaging commencing of commercial production from May, 2017. RAMA KRISHNA: CARE Keeps 'D' Debt Ratings in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of Rama Krishna Spintex Private Limited (RKSPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 77.02 CARE D; Issuer not cooperating; Facilities Based on best available Information Shortterm Bank 0.70 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 31, 2019, placed the rating of RKSPL under the 'issuer non-cooperating' category as RKSPL failed to provide information for monitoring of the rating. RKSPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated May 26, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The ratings assigned to bank facilities of Rama Krishna Spintex Private Limited (RKS) continue to be constrained by ongoing delays in the servicing of the debt obligation and weak financial risk profile. Detailed description of the key rating drivers Key Rating Weaknesses * Ongoing delays in debt servicing: The company's account has been classified as an Non-performing Asset (NPA) account. * Weak financial risk profile: The profitability of the company declined in FY19 with losses of INR41.13 cr. and INR58.84 cr. at the PBILDT and PAT level, respectively in FY19 (refers to the period from April 1 to March 31) as compared to a PBILDT and net loss of INR7.91 cr. and INR4.87 cr. respectively, in FY18. The overall solvency position of the company also remained weak owing to the losses reported and a negative networth base. Rama Krishna Spintex Private Limited (RKS), based in Bathinda (Punjab), was set up in Feb-2007 as a private limited company. It commenced operations in Jan-2008. The company is currently being managed by Mr. Makhan Lal Mangla, Mr. Mahavir Kumar, Mr. Siddharth Mangla and Mr. Parvesh Mangla. RKS is engaged in the business of manufacturing of cotton yarn such as stubbed cotton yarn, grey cotton yarn and waxed cotton yarn. The plant is located in Bathinda, Punjab, with total installed capacity of 28 MT (Metric tonnes) of cotton yarn per day, as on March 31, 2017. The company manufactures yarn of different counts ranging from 6's to 30's depending upon the customer requirement. The yarn supplied by the company is used as raw material for manufacturing denim, terry towel, suiting cloth, shirting and home furnishing. RKS procures raw material in the form of raw cotton and cotton waste from suppliers situated in Punjab, Maharashtra and Gujrat and sells final products to various manufacturers of fabric and traders located throughout India through its extensive network of 20 dealers. STAR REALCON: CARE Keeps D INR8.50cr Loan Rating in Not Cooperating ------------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Star Realcon Private Limited (SRPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.50 CARE D; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 19, 2019, placed the ratings of SRPL under the 'issuer non-cooperating' category as the company had failed to provide information for monitoring of the rating. SRPL continues to be non-cooperative despite repeated requests for submission of information through numerous phone calls and emails dated May 20, 2020 and May 12, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The rating take into account non-availability of information and no due diligence conducted with banker due to noncooperation of Star Realcon Private Limited with CARE'S efforts to undertake a review of the rating outstanding. CARE views information non-availability risk as a key factor in its assessment of credit risk. Further, the ratings take into account delays in debt servicing. Detailed description of the key rating drivers At the time of last rating on March 19, 2019 the following were the rating weaknesses and strengths: Key Rating Weaknesses * Delays in debt servicing: There are ongoing delays in debt servicing due to stretched liquidity position. Delhi-based Star Realcon Private Limited (SRPL) was incorporated in 2007 by Mr Goldy Gupta and Mr Nitin Kumar Gupta. SRPL is engaged in the civil construction and real estate development for residential and commercial projects. The company undertake civil construction project for construction of institutional and residential buildings, corporate offices, schools, religious buildings and hotels. Majority of the company's projects are from private customers. Sunil Hitech Engineers, Paras Infrastructure Private Limited are name of few major customers. The company's real estate development work include construction of residential and commercial projects. The company has previously developed several commercial and residential projects viz. Star Infinity etc. SUSHEELA TEXFAB: CARE Cuts INR23.60cr Loan Rating to B, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Susheela Texfab Private Limited (STP), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 23.60 CARE B; Stable; Issuer Not Facilities Cooperating; Revised from CARE B+; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated April 2, 2019, placed the rating of STP under the 'issuer non-cooperating' category as STP had failed to provide information for monitoring of the rating. STP continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated May 20, 2020 and May 19, 2020. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating has been revised by taking into account non-availability of information and no due-diligence conducted due to non-cooperation by STP with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Further, the rating takes in to account the presence of company in a fragmented and cyclical textile processing industry along with regulatory risk associated with it. The ratings, however, continue to draw comfort from experienced promoters. Detailed description of the key rating drivers Key Rating Weakness * Presence in a fragmented and cyclical textile processing industry along with associated regulatory risk: The textile processing industry is highly fragmented in nature due to the presence of large number of unorganized players leading to high competition in the industry. Smaller standalone processing units are more vulnerable to intense competition, which constrains their profitability as compared to larger integrated textile companies who have better operating efficiencies. The profitability of SPL thus remains susceptible to any adverse fluctuations in the raw material prices (including prices of dyes & chemicals). Furthermore, textile is a cyclical industry and closely follows the macroeconomic business cycles. The prices of raw materials and finished goods are also determined by global demand-supply scenario. Hence, any shift in the macroeconomic environment globally would have an impact on the domestic textile industry. The textile processing units use various chemicals for dyeing and printing process, which generate polluted water and air that needs to be treated before their disposal. Hence, textile processing units require compliance with stringent pollution control norms set by the regulatory authorities and any violation in compliance with these norms or any further strengthening of these norms may adversely impact SPL's operations. Key Rating Strengths * Experienced promoters in textile industry: The company was incorporated in 2012 by Mr Anil Kumar Tanwar and Mr Randheer Singh Rana. Mr Randheer Singh Rana holds a doctorate in Horticulture and has an experience of more than two decades in cotton fabric manufacturing through his association with associate concerns. Mr Anil Kumar Tanwar is an engineer and has more than two decades of business experience in diversified industry in various capacities. Pilkhuwa (Uttar Pradesh) based Susheela Texfab Private Limited (SPL) was incorporated in 2012 by Mr Anil Kumar Tanwar and Mr Randheer Singh Rana. SPL is currently engaged in manufacturing of various types of knitted fabrics. The manufacturing unit is located at Pilkhuwa, Uttar Pradesh, with installed capacity of 3,500 metric tonne per annum as on February 28, 2018. The major raw materials are cotton yarn and dyes which the company procures from various spinning mills across the country. The company caters to domestic as well as international market. YOGI INFRASTRUCTURE: Insolvency Resolution Process Case Summary --------------------------------------------------------------- Debtor: Yogi Infrastructure Private Limited 7, Ashokvatika Society Opp. Narayan Nagar Society Gorwa, Vadodara 390016 Gujarat, India Insolvency Commencement Date: June 8, 2020 Court: National Company Law Tribunal, Ahmedabad Bench Estimated date of closure of insolvency resolution process: December 5, 2020 (180 days from commencement) Insolvency professional: Mr. Shalabh Kumar Daga Interim Resolution Professional: Mr. Shalabh Kumar Daga 405, Atlantis Enclave Above Dinner Bell Subhash Chowk Gurukul, Memnagar Ahmedabad 380052 Gujarat, India E-mail: jlnus.ahd@gmail.com yogi.cirp@gmail.com Last date for submission of claims: June 22, 2020 ========= J A P A N ========= IHI CORPORATION: Egan-Jones Lowers FC Sr. Unsecured Rating to BB+ ----------------------------------------------------------------- Egan-Jones Ratings Company, on June 8, 2020, downgraded the foreign currency senior unsecured rating on debt issued by IHI Corporation to BB+ from BBB. Headquartered in Tokyo, Japan, IHI Corporation manufactures heavy machinery. MITSUI O.S.K: Egan-Jones Lowers Senior Unsecured Ratings to B- -------------------------------------------------------------- Egan-Jones Ratings Company, on June 10, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by MOL (Mitsui O.S.K. Lines, Ltd.) (Kabushiki-gaisha Shōsen Mitsui) to B- from B. MOL (Mitsui O.S.K. Lines, Ltd.) (Kabushiki-gaisha Shōsen Mitsui) is a Japanese transport company headquartered in Toranomon, Minato, Tokyo, Japan. SUMITOMO CHEMICAL: Egan-Jones Lowers Sr. Unsecured Ratings to BB ---------------------------------------------------------------- Egan-Jones Ratings Company, on June 8, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Sumitomo Chemical Co Limited to BB from BB+. Headquartered in Chuo City, Tokyo, Japan, Sumitomo Chemical Co Ltd. Sumitomo Chemical Company, Limited manufactures chemical products. ===================== N E W Z E A L A N D ===================== AOLIDAY NZ: Forced Into Liquidation Over NZD3 Million Debt ---------------------------------------------------------- Amanda Cropp at Stuff.co.nz reports that tourism businesses owed NZD3 million by online travel agency Aoliday NZ Ltd have forced the company into liquidation. According to Stuff, administrator Grant Thornton had recommended 130 creditors accept Aoliday's offer to pay NZD284,000 while it chased up a major debtor in China. But representatives from major operators such as Wayfare and Ngai Tahu Tourism, insisted on liquidation saying it would "give a clear message" to other agents who failed to pay their bills. Stuff relates that Grant Thornton liquidator David Ruscoe said they had identified the Chinese debtor and issued a demand for payment through their lawyers. Wayfare, which has interests in visitor attractions such as Black Cat Cruises on Akaroa Harbour, pushed for the liquidation of Aoliday NZ over its failure to come to an acceptable arrangement over unpaid debts, Stuff states. "We will get our office in China to visit them and see how much they can recover." According to Stuff, the liquidation report said an Aoliday operation in Australia had also gone into administration offering its creditors AUD300,000 (NZD320,857) to cover debts of AUD9 million (NZd9.6 million). Stuff relates that Mr. Ruscoe said Aoliday NZ had NZD184,000 in the bank and had proposed paying a further NZD100,000 under a deed of arrangement, but that did not satisfy creditors, who voted for liquidation. The liquidators report said Wayfare commercial director Matthew Day had claimed that, unlike other travel wholesalers, Aoliday had not come up with a payment plan, Stuff relays. He was upset with the way the company had dealt with the situation and thought it was important to send a clear message to others in the tourism industry that this was unacceptable. Stuff says Wayfare is currently considering significant staff cutbacks across its businesses which include Real Journeys, Go Orange and the International Antarctic Centre in Christchurch. Ngāi Tahu Tourism has already laid off more than 300 workers as a result of its heavy reliance on international visitors, particularly the Chinese market, and eight of its visitor attractions were listed as Aoliday creditors. Last month a survey by Tourism Industry Aotearoa found 280 operators had problems with bad debts, and the list of Aoliday creditors reads like a "Who's Who" of New Zealand tourism, recalls Stuff. Along with larger well known enterprises such as Whale Watch Kaikoura, Waitomo Caves and Te Papa Museum of NZ, a lot of smaller businesses were hit by the Aoliday failure, Stuff notes. Creditors have until June 30 to lodge claims with the liquidator, the report says. ARBOR HOUSE: Some Creditors to Miss Out, Liquidator Report Shows ---------------------------------------------------------------- Karen Coltman at Wairarapa Times-Age reports that when the file is closed on Arbor House Trust's liquidation some creditors will be left out of pocket. According to Times-Age, liquidator John Scutter, of Fervor Limited, made public the trust's six-monthly report last week, which shows preferential creditors [former employees] have been paid NZD59,192 mainly in wages, but NZD53,000 to preferential creditors is still owing. Another NZD37,140 is owed to unsecured creditors. But the balance sheet to date for the trust shows cash left after all assets have been settled at NZD23,000. There are some small amounts of cash to come in, but Mr. Scutter is expecting a shortfall. Times-Age relates that Mr. Scutter said the trust had worked hard to pay everyone it could. "Because it is a legal liquidation process there will be no more money available when it is finished," the report quotes Mr. Scutter as saying. Some of the remaining secured creditors are utility companies but others are smaller companies. Twenty-six unsecured creditors are owed money. At the time of closing the rest home in October last year, Trust chairman Rob Tuckett said it was losing money, district health board funding was inadequate, and they had been struggling for some time, the report recalls. Times-Age says the trustees decided to close rather than risk building up debt. If a couple of beds became empty, the balance sheet tipped into the red. In July the trust sold the property for NZD800,000 to a newly established company, Arbor Holdings Ltd, well below its September 2017 QV [rateable value] of NZD1,380,000, the report notes. According to the report, Arbor House Trust chairman Rob Tuckett said after the sale that he was pleased to have found a buyer as they needed to sell to get out of debt. He hoped the liquidation process would put the trust in the clear. WCM Legal directors, the trust's legal representation, approached the trust with the offer to buy Arbor House and Arbor Holdings Ltd was then established, Tuckett said. A few months later the property was placed back on the market. Arbor Holdings Ltd director Jason Carruthers told the Times-Age at the time it had no idea Arbor House residents would not be its tenants. "The trustees signed a six-year lease, it was a good situation for us and the occupants," the report quotes Mr. Carruthers as saying of that decision. "It had been operating for over 30 years as an age-care provider so we thought this would continue but three months after our purchase it is empty. We had no intention to develop the property." The property remains on the market for sale or lease, the report notes. CONE ENTERPRISES: Shake Shed Placed Into Receivership ----------------------------------------------------- Aimee Shaw at The New Zealand Herald reports that Shake Shed & Co, which was found to have wrongfully formed in breach of Wendy's Supa Sundaes franchise agreements, has been placed into receivership ending a three-year battle with the ice cream chain's owner. NZ Herald relates that Cone Enterprises, the master franchise owner of 27 mall-based ice cream kiosks, was placed into receivership in February, two months after the court ordered Shake Shed to pay interest on a NZD5.5 million settlement with Singaporean-based Global Food Retail Group. According to the report, GFRG launched legal action against Cone Enterprises and its director and former Wendy's Supa Sundaes New Zealand master franchise holder Chang Xi in 2018. This came after Xi initiated that the group collectively rebranded Wendy's Supa Sundaes stores to Shake Shed & Co without the permission from the owner. NZ Herald says the relationship breakdown between Xi, the franchisees and the parent company came after GFRG ordered Xi to change suppliers for the 34 Wendy's Supa Sundaes nationwide from a local ice cream company to an Australian one in 2017. Xi and the local franchisees refused to change suppliers, citing the proposed ice cream supplier as inferior and more expensive. In 2018, the High Court found that Xi and the franchisees had breached their franchise agreements with GFRG and Shake Shed was ordered to pay NZD5.5m in damages, NZ Herald relays. GFRG sought further action to enforce the payment at the end of last year. NZ Herald notes that Associate Judge Dale Lester ordered that 18 per cent interest be added to the sum from the date of the judgement until payment, tipping all 27 Shake Sheds into receivership. NZ Herald, citing the receivers' first report, discloses that Cone Enterprises owed about NZD7.7 million, including NZD5.5 million to GFRG and NZD558,000 to Heartland Bank. Receivers Andrew Grace and Colin Gower of BDO successfully sought a court order protecting the franchisees from liability for rent payments for 22 operators, NZ Herald states. The receivers told a judge earlier this month that they were in negotiations with an overseas party interesting in purchasing the Shake Shed group, adds NZ Herald. DANIEL WELLINGTON: New Zealand Unit Goes Into Liquidation --------------------------------------------------------- Arabella Roden at Jeweller Magazine reports that the New Zealand subsidiary of Daniel Wellington was liquidated on May 28 -- less than two years after it was incorporated -- due to the "unprecedented challenges" of the COVID-19 pandemic. A report prepared by liquidator Craig Sanson of PriceWaterhouseCoopers noted that New Zealand's level-four lockdown – which was in place from 25 March to 27 April and prohibited trading of all non-essential businesses – had "diminished revenues" for the business, while "significant" fixed costs remained, Jeweller discloses. Confirming the company's demise to Jeweller, Scott Patchett, who was a director of Daniel Wellington (New Zealand) and is general manager of Daniel Wellington (Australia), said, "We have filed for liquidation for our New Zealand subsidiary, and we are currently in the liquidation process. The COVID-19 pandemic has caused unprecedented challenges to many retail businesses globally, including Daniel Wellington." The two Daniel Wellington flagship stores, located on Queen Street and Newmarket in Auckland, were closed on 28 May with a loss of 12 jobs, Jeweller notes. The Swedish brand is also stocked in a number of retailers, including chains Walker & Hall and Silvermoon. When asked whether retailers had been informed of the liquidation, and about their options for remaining stock and repairs, Patchett said, "During this process we have, and will continue to be in communication with all our wholesale partners." According to Jeweller, the liquidators' report indicated that Daniel Wellington (New Zealand) had debts of at least NZD872,824.93 – of which NZD855,0467 was owed to unsecured creditors. A further NZD17,357.93 was owed to employees, though all wages and annual leave entitlements have been paid. The receivables were calculated to be NZD137,000. Patchett could not provide a definitive answer about the Australian operation, when questioned about the future of the company's local presence and distribution: "We would like to stress that Australia and New Zealand are completely separate entities. Out of respect for everyone involved, we decline to comment any further at this stage," he said, Jeweller relays. Daniel Wellington was founded in Sweden in 2011 and entered the Australian market two years later, distributed by West End Collection. The relationship with West End Collection ended in 2018, the same year that Daniel Wellington subsidiaries in Australia, New Zealand and South Africa were established. Business data firm Dun & Bradstreet estimates Daniel Wellington's annual revenue at US$226.89 million (AUD328.33 million); it is known for its early use of social media-influencer marketing, with celebrities including Kendall and Kylie Jenner paid to promote the brand online, Jeweller discloses. In 2017, the business was named as the "fastest growing private company in Europe", according to the Inc. 5000 Index, which tracks the percentage increase in revenue over three years, adds Jeweller. ================= S I N G A P O R E ================= IBC CAPITAL: S&P Alters Outlook to Negative on Thinning Liquidity ----------------------------------------------------------------- S&P Global Ratings, on June 16, 2020, revised the outlook on IBC Capital Ltd. (Goodpack) to negative from stable. At the same time, S&P affirmed its 'B' long-term issuer credit rating on the company. S&P also affirmed all its ratings on the company's debt. Soft demand across the broader automotive industry due to the pandemic will weigh on Goodpack's earnings, resulting in elevated leverage over the next 12 months. The spread of the coronavirus has triggered unprecedented containment actions, including the shutdown of many businesses and reduction in trade activities. Over the past three months, major automakers have halted production and this has led to a fallout in Goodpack's leasing solutions, which derives more than 80% of its revenue from the rubber segment. S&P said, "We believe the full impact from the pandemic will lag for Goodpack. It is also only in the first quarter of fiscal 2021 (year ending June 30, 2021) that automakers' inventory will run down due to halts in production in the previous quarter. As such, the company expects deterioration in sales demand will become more pronounced then. "We forecast Goodpack's revenues to fall by more than about 8.5% in 2020 and a further 3.5% in 2021 due to sluggish industry headwinds. We anticipate the company's EBITDA is likely to decline by about 10% in 2020 and more than 5% in 2021. "We now project Goodpack's adjusted debt-to-EBITDA ratio to increase above 7x in both fiscals 2020 and 2021, from 6.0x in fiscal 2019. Our calculations include the company's recent drawdown of an additional US$93.9 million of its US$95 million revolving credit facility (RCF) in March 2020. Goodpack drew down on its RCF to bolster its cash position during a period of trade uncertainty. As of May 30, 2020, Goodpack's cash position remains sizable at about US$95 million. "In our view, if free operating cash flow were unable to recover toward breakeven over the next 12 months, it could lead to an unsustainable cash burn at the current rating level. We expect Goodpack will require over US$60 million to cover its debt obligations and spending in the 12 months to March 31, 2021. Free operating cash flow (FOCF) will remain negative during this time. We expect the company's cash flow from operations to contract below US$50 million amid weakened operating conditions, from US$56 million in 2019. On top of a maturing US$94 million RCF, committed investments could also constrain the company's ability to preserve cash, given that it has US$85 million in container trade payables due by March 2021. "We affirmed the rating on Goodpack because we see a high likelihood of a timely refinancing of the company's RCF over the next three months. With the additional RCF drawn, Goodpack's short-term debt increased significantly to US$98.9 million as of March 31, 2020, from US$9.7 million as of March 31, 2019. In our view, refinancing would alleviate any liquidity pressure in the next 12 months." In addition, conducive business fundamentals will alleviate the effects of sluggish growth and pave the way for a quicker recovery. S&P said, "We also believe that the extended hire charges in Goodpack's business model will help to cushion any large swings in earnings experienced by the automotive industry over the next 12 months. Despite supply chain disruptions and temporary closure of businesses, Goodpack's containers are still utilized by its customers given that they function as storage for commodities. As a result, the fleet utilization increased to 84% in May 2020, from 78% in June 2019. Customers are charged for the extended hires and this partially offsets the slowdown in sales demand. In addition, we believe that Goodpack's sustained investments will help to ensure that it has sufficient containers to go around, such that when the business environment improves, the company has favorable prospects for a quicker recovery." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook reflects the risk that a protracted weakness in the automotive industry exacerbated by the pandemic may result in Goodpack's EBITDA interest coverage to fall below 1.75x and debt-to-EBITDA ratio to exceed 7.5x. It also reflects Goodpack's weakened liquidity position due to refinancing risks on its RCF maturing in less than 12 months. S&P said, "We could lower the ratings on Goodpack if business prospects do not recover, causing the company's EBITDA interest coverage to fall below 1.75x sustainably or its debt-to-EBITDA ratio to remain above 7.5x. Although less likely, a multi-notch downgrade could be precipitated by Goodpack's inability to refinance its RCF maturing in March 2021 in a timely manner. "We may revise the outlook to stable if business conditions improve and Goodpack is able to restore its liquidity profile to adequate. An upgrade would also be triggered by an increase in the company's financial headroom with EBITDA interest coverage well exceeding 1.75x and the debt-to-EBITDA ratio falling below 6.5x sustainably." KRISENERGY LTD: Unit Could Face Winding-Up Petition --------------------------------------------------- The Business Times reports that KrisEnergy Ltd said on June 15 that a creditor has presented a winding-up petition in the Cayman Islands against a wholly owned key subsidiary. But Rubicon Vantage International's winding-up petition has not yet been served on KrisEnergy (Gulf of Thailand), or KEGOT, the group added in its filing on the Singapore Exchange, BT relays. The board added that KrisEnergy is now taking advice from its legal advisers on its next steps. According to BT, KrisEnergy and Rubicon have been in legal proceedings since 2018 involving a bareboat charterparty dating to 2014. BT relates that the High Court in Singapore last year granted KrisEnergy a moratorium blocking Rubicon from enforcing a British court judgment over US$2.6 million (SGD3.6 million) in debt. Holders of KrisEnergy's senior secured zero coupon notes due 2024 have a second-ranking security interest over the secured assets of KrisEnergy subsidiaries, such as KEGOT, which are pledged under a revolving credit facility with DBS Bank, the board reiterated in its filing, according to BT. "The board will update stakeholders of any material developments relating to the proceedings as and when appropriate," it added. Separately, KrisEnergy, which is in the process of restructuring its debt, will hold a virtual informal investor meeting for security holders on June 19 at 6:30 p.m., the report discloses. Investors, who must register in advance, can ask questions during the meeting on teleconferencing platform Zoom or submit them over e-mail to krisenergy@krisenergy.com Trading in KrisEnergy shares has been suspended since Aug. 14 last year, BT notes. About KrisEnergy Limited KrisEnergy Limited -- https://krisenergy.com/ -- is a Singapore-based investment holding company. The Company is an independent upstream oil and gas company with a portfolio of exploration, appraisal, development and production assets focused on the geological basins in Asia. The Company operates through exploration and production of oil and gas in Asia segment. The Company holds interests in approximately 20 licenses in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam covering a gross acreage of approximately 60,750 square kilometers. In August 2019, the firm sought court protection from creditors' legal action while it restructured its debts, according to The Business Times. Keppel Corporation, a creditor and shareholder of KrisEnergy, then publicly came out to support the application and KrisEnergy's management in formulating a restructuring plan. Total debts stood at around US$558.8 million as at June 30, 2019, according to KrisEnergy's presentation slides for its Sept. 10 informal investor meeting for noteholders and shareholders. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***