/raid1/www/Hosts/bankrupt/TCRAP_Public/200720.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, July 20, 2020, Vol. 23, No. 144
Headlines
A U S T R A L I A
CUPPA EDGE: Second Creditors' Meeting Set for July 24
HARCOL PTY: Second Creditors' Meeting Set for July 27
I-PROSPERITY PTY: First Creditors' Meeting Set for July 27
IPROSPERITY UNDERWRITING: First Creditors' Meeting Set for July 27
MACLEAN-LOWER CLARENCE: Second Creditors' Meeting Set for July 24
MINISO MASTER: Franchisee Collapses, Owes AUD14.6 million
SOUTHSTAR HOMES: Second Creditors' Meeting Set for July 24
TANSACHA PTY: Second Creditors' Meeting Set for July 27
VIRGIN AUSTRALIA: Administrators Warned to be 'Full and Frank'
C H I N A
CBAK ENERGY: Lender Agrees to Swap $250,000 Note for Equity
COLOR STAR: Management Says Going Substantial Concern Doubt Exists
MERCURITY FINTECH: Appoints Samuel Shen as Independent Director
TOMORROW HOLDING: China Seizes Multibillion-Dollar Firms
H O N G K O N G
AGM GROUP: JLKZ CPA LLP Raises Substantial Going Concern Doubt
I N D I A
AADIK MINES: CRISIL Keeps INR3cr Debt on B+/Not Cooperating
ACTIVE PACKAGING: CRISIL Withdraws D Ratings on INR5cr Loans
ADISHANKARACHARYA COTTON: CRISIL Ups Rating on INR12cr Loan to B+
BALAJEE PLY-PRODUCT: CRISIL Cuts Ratings on INR7cr Loans to D
BHAGESHWARI PAPERS: CRISIL Withdraws B+ Rating on INR30cr Loan
BLUE AUTOWORLD: CRISIL Assigns B+ Ratings to INR8cr Loans
BOTHRA METALS: Insolvency Resolution Process Case Summary
CLASSIC HYUNDAI: CRISIL Lowers Ratings on INR10cr Loans to B-
DAMSON TECHNOLOGIES: CRISIL Lowers Rating on INR10cr Cash Loan
DILEEP TRADERS: CRISIL Keeps B+ on INR7cr Debt in Not Cooperating
GREEN TEAK: CRISIL Lowers Rating on INR4.75cr Cash Loan to D
HANS BABA: CRISIL Assigns B+ Ratings to INR4.0cr Loans
JALDHAKA COLD: CRISIL Lowers Rating on INR7.50cr Term Loan to D
KAMALA COLD: CRISIL Migrates B+ Debt Ratings From Not Cooperating
KDH TEXTILE: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
KHATOR TECHNICAL: CRISIL Raises Rating on INR3cr Cash Loan to B+
LACMA PANEL: CRISIL Reaffirms B+ Rating on INR7.35cr Term Loan
MAHALAKSHMI RAW: CRISIL Lowers Rating on INR10cr Cash Loan to D
MEGHALAYA CAST: Ind-Ra Lowers LongTerm Issuer Rating to 'BB-'
NIDHIE WEAVING: CRISIL Assigns B+ Ratings to INR12cr Loans
NUFUTURE DIGITAL: Ind-Ra Lowers LongTerm Issuer Rating to 'BB+'
NYSE INFRASTRUCTURE: CRISIL Withdraws D Rating on INR110cr Loan
PERFECT INDUSTRIES: Insolvency Resolution Process Case Summary
R.P. SINGH CRUSHER: CRISIL Cuts Rating on INR7.07cr Cash Loan to D
RAFFLES GREEN: CRISIL Lowers Rating on INR4cr Cash Loan to D
RAM SPINNING: CRISIL Reaffirms B- Rating on INR12.8cr Cash Loan
RATNESH INFRA: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
REAL AGROTECH: CRISIL Lowers Rating on INR4cr Cash Loan to D
SAI PROJECTS: CRISIL Lowers Rating on INR3.5cr Bank Loan to D
SATI GRANITES: CRISIL Withdraws B+ Rating on INR2.31cr LT Loan
SCV SKY VISION: CRISIL Lowers Rating on INR6cr Loans to D
SHRI DAKSHINERSHWARI: Ind-Ra Withdraws 'BB' LT Issuer Rating
TUSHA TEXTILES: Ind-Ra Lowers LongTerm Issuer Rating to 'B+'
VANTA BIOSCIENCE: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
J A P A N
RYOHIN KEIKAKU: Muji US Files for Chapter 11 Bankruptcy
M A L A Y S I A
CYMAO HOLDINGS: Won't be Classified as PN17 Company
S I N G A P O R E
KRISENERGY LTD: Unhappy Bondholders Rally for a Better Deal
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A U S T R A L I A
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CUPPA EDGE: Second Creditors' Meeting Set for July 24
-----------------------------------------------------
A second meeting of creditors in the proceedings of Cuppa Edge Pty.
Ltd., trading as Fika by Cuppa Flowerhas, been set for July 24,
2020, at 11:30 a.m. via teleconference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by July 23, 2020, at 4:00 p.m.
Christopher Damien Darin of Worrells Solvency & Forensic
Accountants was appointed as administrator of Cuppa Edge on June
19, 2020.
HARCOL PTY: Second Creditors' Meeting Set for July 27
-----------------------------------------------------
A second meeting of creditors in the proceedings of Harcol Pty Ltd
has been set for July 27, 2020, at 2:30 p.m. via teleconference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by July 24, 2020, at 4:00 p.m.
Glenn Anthony Crisp and Malcolm Kimbal Howell of Jirsch Sutherland
were appointed as administrators of Harcol Pty on June 22, 2020.
I-PROSPERITY PTY: First Creditors' Meeting Set for July 27
----------------------------------------------------------
A first meeting of the creditors in the proceedings of:
- i-Prosperity Pty Ltd
- iProsperity Australia Pty Ltd
- iProsperity Group Holdings Limited
- iProsperity Group Pty. Ltd.
- iProsperity Holding Group Pty Ltd
- Cornerstone Capital Investment Group Pty Ltd
- IPG Fund Services Pty Ltd
- i-Prosperity Capital Management Pty Ltd
- i-Prosperity Capital Pty Ltd
- iProsperity Cornerstone Management Pty Ltd
- IPG Asset Services Pty Ltd
on July 27, 2020, at 10:00 a.m. at 1 Wharf Lane, Level 20, 171
Sussex Street, in Sydney, NSW.
Jeremy Joseph Nipps, Barry Wight and Alan Lee Walker of Cor Cordis
were appointed as administrators of iProsperity Pty, et al. on July
15, 2020.
IPROSPERITY UNDERWRITING: First Creditors' Meeting Set for July 27
------------------------------------------------------------------
A first meeting of the creditors in the proceedings of iProsperity
Underwriting Pty Ltd and G&H Partners Co Pty Ltd will be held on
July 27, 2020, at 10:00 a.m. at 1 Wharf Lane, Level 20, 171 Sussex
Street, in Sydney, NSW.
Jeremy Joseph Nipps, Barry Wight and Alan Lee Walker of Cor Cordis
were appointed as administrators of iProsperity Underwriting on
July 15, 2020.
MACLEAN-LOWER CLARENCE: Second Creditors' Meeting Set for July 24
-----------------------------------------------------------------
A second meeting of creditors in the proceedings of Maclean-Lower
Clarence Services Club Ltd has been set for July 24, 2020, at 3:00
p.m. via webinar.
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 July 23, 2020, at 4:00 p.m.
Andrew Thomas Sallway and Duncan Clubb of BDO were appointed as
administrators of Maclean-Lower Clarence on June 19, 2020.
MINISO MASTER: Franchisee Collapses, Owes AUD14.6 million
---------------------------------------------------------
SmartCompany reports that the Australian master franchisee for
multinational discount retailer Miniso has collapsed into voluntary
administration after the COVID-19 pandemic saw sales tank in recent
weeks.
Miniso Master Franchisee Pty Ltd, the main revenue generating
entity associated with Miniso's business in Australia, appointed
administrators from Grant Thornton earlier last week, owing an
estimated $14.6 million to creditors, according to SmartCompany.
SmartCompany relates that the business, operated under a brand
license from Hong-Kong based Tabata Holdings, is one of several
companies associated with Miniso's Australian arm, and is
responsible for most of the retailer's local leases – including
support offices in Melbourne and Sydney.
Miniso has 31 trading stores in Australia. However, about a dozen
franchises, and eight other stores owned under various joint
venture arrangements, are not in administration, SmartCompany
notes.
These stores are nevertheless heavily reliant on the master
franchisee, which holds and distributes stock to related parties on
behalf of Miniso's China-based parent company.
The administration does cover a further nine stores wholly owned by
Miniso itself, SmartCompany has confirmed.
"It would appear from our early enquiries that the company entered
into voluntary administration generally due to the difficult
trading conditions as a result of COVID and consumer trading habits
being restrained," SmartCompany quotes Grant Thornton administrator
Philip Campbell-Wilson as saying in a statement.
"Our investigations will provide more background on that. We are
working with the franchisees, the landlords, management and other
key stakeholders to reset the business model to ensure it has a
long term trading position in Australia. There is still support for
the business to keep going which is important for the
franchisees."
Documents sent to creditors, seen by SmartCompany, reveal Miniso's
local directors have been negotiating with Grant Thornton since
May, amid ongoing concern the coronavirus crisis would render the
business insolvent.
Mr. Campbell-Wilson has since concluded the master franchisee is
currently unable to cover its liabilities, amid uncertainty over
the veracity of the company's books.
The business has slightly less than $1 million in the bank, the
administrators told creditors in a recent affidavit, seen by
SmartCompany.
The scale of Miniso's coronavirus downturn has been difficult to
determine because records may not be accurate, although no evidence
is presented of any foul play.
"The books and records do not, we believe, accurately record the
income and expenses of Master Franchisee," administrators said.
According to SmartCompany, inconsistencies in information provided
to administrators by management are understood to have arisen from
uncertainties in stock levels during the pandemic.
Launched in Australia back in 2017, Miniso attempted to make a
splash in the local market with an aggressive expansion strategy
aimed at securing 300 locations in only a few years.
SmartCompany says the company, headquartered in Guangzhou, China,
has a reputation for 'stack it high, watch it fly' retailing,
trading more than US$2.4 billion (AUD$3.44 billion) across about
3,500 stores in 79 countries.
But after opening 32 stores in Australia over two years, Richad Li,
vice president of Miniso Australia, told Inside Retail last year
the company was re-assessing its position, and would instead target
100 stores by the end of 2020, SmartCompany relays.
SmartCompany relates that the pandemic appears to have thrown yet
another spanner in those plans; while only a "small number" of
Miniso stores closed during the pandemic, it is understood the
company suffered acutely from a decline in foot traffic,
particularly because it did not have a very strong e-commerce
strategy.
"The transmission of COVID–19 has almost certainly resulted in a
decline in the retail stores' sales," administrators said.
According to SmartCompany, the administrators are now asking
creditors for an extension of time to negotiate with landlords -
estimated to be owed a combined $2.6 million - about the future of
Miniso's store network in Australia.
While the most likely option at the moment is a restructuring that
would see Miniso's China-based parent maintain control of the
business, all options, including a potential sale, are technically
on the table, SmartCompany says.
SmartCompany notes that the majority of Miniso's local landlords,
including ASX-listed centre owners Scentre Group, GPT Group,
Vicinity Centres and Stockland, are not currently understood to be
receiving rent payments during the pandemic.
Other creditors, including ANZ Bank, the Australian Taxation Office
and parent company Tabata Holdings, are owed more than $6 million
combined, with the China-based parent the largest creditor, adds
SmartCompany.
SOUTHSTAR HOMES: Second Creditors' Meeting Set for July 24
----------------------------------------------------------
A second meeting of creditors in the proceedings of Southstar Homes
Pty Ltd, trading as Liberty Builders, has been set for July 24,
2020, at 11:00 a.m. via teleconference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by July 23, 2020, at 3:00 p.m.
Andrew Schwarz and Jon Howarth of AS Advisory were appointed as
administrators of Southstar Homes on April 7, 2020.
TANSACHA PTY: Second Creditors' Meeting Set for July 27
-------------------------------------------------------
A second meeting of creditors in the proceedings of Tansacha Pty
Ltd, trading as Thai House Sanctuary Cove, has been set for July
27, 2020, at 2:30 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 July 24, 2020, at 4:00 p.m.
Jason Walter Bettles of Worrells Solvency & Forensic Accountants
was appointed as administrator of Tansacha Pty on June 23, 2020.
VIRGIN AUSTRALIA: Administrators Warned to be 'Full and Frank'
--------------------------------------------------------------
Huntley Mitchell at Travel Weekly reports that the administrators
of Virgin Australia have been warned that the highly-anticipated
second meeting of creditors could be delayed if they fail to
provide sufficient information about the airline's sale.
In a judgment handed down in the Federal Court July 15, Justice
John Middleton it was important that "proper preparation" be made
for the meeting of creditors next month, where they will decide the
future of Virgin, Travel Weekly relates.
"This will obviously require the administrators to be full and
frank with the creditors, and to provide sufficient information to
enable the creditors to make an informed decision on the matters
for resolution at the meeting of creditors," Travel Weekly quotes
Justice Middleton as saying.
"If a creditor at the meeting needs more time or information to
consider their position, this could be a reason to adjourn the
meeting of creditors.
"If sufficient information is not provided which is material to
creditors in reaching a decision on a proposed DOCA [deed of
company arrangement] which is entered into, this could be a ground
for the court later terminating the DOCA. Neither of these
scenarios is desirable."
Bain Capital was chosen by Virgin's administrators as the bidder
they would put forward to creditors last month, but since then, the
process has not at all been smooth sailing for Vaughan Strawbridge
and his team at Deloitte, according to Travel Weekly.
Travel Weekly relates that bondholders have been busy trying to
block the airline's sale to Bain, launching an application to the
federal government's Takeovers Panel, and legal action in the
Federal Court to try and gain access to the confidential terms of
the sale that Deloitte had agreed on with the private equity firm.
Travel Weekly says the bondholders (which include thousands of
retail investors) are aiming to present an alternative offer -
which they initially lobbed to Virgin's administrators right before
Bain was chosen - at the next creditors' meeting in August.
According to Travel Weekly, Justice Middleton dismissed the
bondholders' request to have the confidentiality order on the sale
terms lifted, claiming that they have the ability to propose a deed
of company arrangement at the next meeting of creditors.
"Mr. Strawbridge has given evidence that any widespread disclosure
of the details of the Bain transaction may impair the parties'
ability to implement the Bain transaction in the manner
contemplated by the transaction documents which have been
negotiated by the administrators to deliver an outcome which is
most beneficial to creditors as a whole," Justice Middleton said,
Travel Weekly relays.
"As with any transaction, a number of steps must be taken before
the Bain transaction can be completed. These steps include
confidential discussions with a range of stakeholders to facilitate
the successful completion of the Bain transaction, to maximise the
likelihood of the business of the Virgin companies being
successfully conducted in the future, and to maximise the return to
creditors.
"I accept that until these further steps are completed, it is not
possible for the administrators to determine the final estimated
outcome for creditors under the Bain transaction."
However, Justice Middleton said bondholders were well within their
right to make a play for the airline.
"There is no doubt that the administrators may promote the SID
[sale implementation deed] with Bain as their preferred proposal in
contest with the noteholders' offer, and may enter into contractual
arrangements that could inform the scope of any alternative
proposal," he said, according to Travel Weekly.
"However, the administrators' preference for one proposal does not
justify the exclusion of all other proposals from consideration by
the creditors."
About Virgin Australia
Brisbane, Queensland-based Virgin Australia is Australia's
second-largest airline. It commenced services in 2000 as Virgin
Blue, wholly owned by the Virgin Group.
As reported in the Troubled Company Reporter-Asia Pacific on April
22, 2020, Bloomberg News related that Virgin Australia Holdings
Ltd. became Asia's first airline to fall to the coronavirus after
the outbreak deprived the debt-burdened company of almost all
income. Administrators at Deloitte, who have taken control of the
Brisbane-based carrier, aim to restructure the business and find
new owners within months. More than 10 parties have expressed an
interest, Deloitte related on April 21.
Virgin Australia, which has furloughed 80% of its 10,000 workers,
will continue to operate some flights for essential workers,
freight and the repatriation of Australians, Bloomberg said. The
airline's frequent flyer program is a separate company and is not
in administration.
Richard John Hughes, John Greig, Vaughan Strawbridge and Sal Algeri
of Deloitte were appointed as administrators of Virgin Australia,
et al., on April 20, 2020.
The company owes AUD6.8 billion to lenders, bondholders, aircraft
lessors, trade creditors and employees.
On April 29, 2020, the company and certain affiliates filed
petitions pursuant to Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York.
As reported in the Troubled Company Reporter-Asia Pacific on June
29, 2020, The Sydney Morning Herald said Virgin Australia
administrator Deloitte said it has agreed to sell the bankrupt
airline to American private equity giant Bain Capital, after rival
bidder Cyrus Capital Partners withdrew its rescue offer due to a
"lack of engagement".
Joint administrator Vaughan Strawbridge said in a statement that
Bain had presented a "strong and compelling bid" for Virgin that
would "secure the future of Australia's second airline". However,
neither Deloitte nor Bain would reveal the size of the bid, how
many jobs will be lost or how much would be paid to creditors,
which are owed AUD6.8 billion, SMH said.
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C H I N A
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CBAK ENERGY: Lender Agrees to Swap $250,000 Note for Equity
-----------------------------------------------------------
CBAK Energy Technology, Inc. entered into an exchange agreement
with Atlas Sciences, LLC (Lender), pursuant to which the Company
and the Lender agreed to (i) partition a new promissory note in the
original principal amount equal to $250,000 from the outstanding
balance of certain promissory note that the Company issued to the
Lender on July 24, 2019, which has an original principal amount of
$1,395,000, and (ii) exchange the Partitioned Promissory Note for
the issuance of 461,595 shares of the Company's common stock, par
value $0.001 per share to the Lender. According to the Exchange
Agreement, the Shares are required to be delivered to the Lender on
or before July 8, 2020 and the exchange will occur upon the
Lender's surrender of the Partitioned Promissory Note to the
Company on the date when the Shares are eligible for free trading.
About CBAK Energy
Dalian, China-based CBAK Energy Technology, Inc., formerly China
BAK Battery, Inc. -- http://www.cbak.com.cn/-- is engaged in the
business of developing, manufacturing and selling new energy high
power lithium batteries, which are mainly used in the following
applications: electric vehicles; light electric vehicles; and
electric tools, energy storage, uninterruptible power supply, and
other high power applications.
CBAK Energy reported a net loss of $10.85 million for the year
ended Dec. 31, 2019, compared to a net loss of $1.96 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company had
$94.20 million in total assets, $82.70 million in total
liabilities, and $11.50 million in total equity.
Centurion ZD CPA & Co., in Hong Kong, China, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated May 14, 2020, citing that the Company has a working capital
deficiency, accumulated deficit from recurring net losses and
significant short-term debt obligations maturing in less than one
year as of Dec. 31, 2019. All these factors raise substantial doubt
about its ability to continue as a going concern.
COLOR STAR: Management Says Going Substantial Concern Doubt Exists
------------------------------------------------------------------
Color Star Technology Co., Ltd., filed its Form 6-K, disclosing a
net loss of $7,502,040 on $21,131,607 of revenue for the six months
ended Dec. 31, 2019, compared to a net loss of $3,071,713 on
$26,242,214 of revenue for the same period in 2018.
At Dec. 31, 2019, the Company had total assets of $52,831,216,
total liabilities of $57,666,242, and $4,835,026 in total
shareholders' deficiency.
Color Star said, "Management has determined there is substantial
doubt about our ability to continue as a going concern. If the
Company is unable to generate significant revenue, secure the
continued forbearance of its bank and/or additional financing or
resolve any pending estimated claim charges, the Company may be
required to cease or curtail its operations. Management is trying
to alleviate the going concern risk through equity financing,
obtaining additional financial support and credit guarantee
commitments and debt restructuring for most litigation
liabilities."
A copy of the Form 6-K is available at:
https://is.gd/GK1O43
Color Star Technology Co., Ltd., through its subsidiary, Sunway
Kids International Education Group Ltd, engages in the education
service business. It provides education and health services to
day-care and preschools in China. The company also offers a
structured system for early childhood education, including
artificial intelligence (AI) and robotic technologies, intellectual
campus administration software as a service system (SAAS System),
and online education courses for kids and parents. In addition, it
provides personalized growth plans for each child based on the
analysis of performance data. Further, the company offers U Campus
SAAS System, a smart school management SAAS System with U Campus,
an online service that provides a package of support for the
operation and management of preschool education institutions,
including student management, employee management, financial
management, attendance management, and health management.
Additionally, it provides Childhood AI Analysis Service, which
provides schools with monitoring equipment that utilizes AI
technology to record and analyze key information about the children
in real time, such as emotions, movement, concentration, and points
of interest; targeted teaching programs consulting service for
preschool children; and online education service, which offers an
English as a Second Language curriculum named Precise Mind to
kindergartens in China, supplementing their existing English
curriculum. The company was formerly known as Huitao Technology
Co., Ltd., and changed its name to Color Star Technology Co., Ltd.
in May 2020. Color Star Technology was founded in 2002 and is
based in New York, New York.
MERCURITY FINTECH: Appoints Samuel Shen as Independent Director
---------------------------------------------------------------
Samuel Y. Shen has been appointed as independent director to
Mercurity Fintech Holding Inc.'s board of directors and a member of
the compensation committee of the Board. Concurrently, Mr. Min
Zhou has resigned from the Board, the audit committee of the Board
and the compensation committee of the Board for personal reasons.
These changes were effective on July 9, 2020.
Mr. Samuel Y. Shen has been in the internet and technology
industries for more than 20 years. He currently serves as
executive chairman for new retail business group at 21Vianet Group,
Inc. (Nasdaq: VNET), a leading carrier- and cloud-neutral Internet
data center services provider in China. In 2020, he also
co-founded Apurimac Partners Inc., a private investment firm with
focus on digital real estate and edge computing industries, and
serves as its founding partner. Prior to that, Mr. Shen was
president for JD Cloud, a full blown public cloud provider in China
and a wholly owned subsidiary of JD.com, Inc. (Nasdaq: JD) from
2017 to 2020. Mr. Shen also had a 23-year career at Microsoft
(Nasdaq: MSFT) taking various leadership roles, during which he
worked at the head quarter and international subsidiaries from 1993
to 2017. His most recent position at Microsoft was chief operating
officer and managing director for the Cloud & Enterprise Group of
Microsoft Asia-Pacific Research & Development Group. Mr. Shen
received his Bachelor of Science degree in chemistry from National
Tsing Hua University in 1986 and his Master of Science degree in
computer science from University of California, Santa Barbara in
1991. From 2001 to 2002, he also attended executive class program
at Northwestern University Kellogg School of Management.
Ms. Hua Zhou, chairperson of the Board and chief executive officer,
commented, "On behalf of the Board, I would like to thank Mr. Min
Zhou for his contribution to the Company and wish him every success
in the future. At the same time, we are pleased to welcome Mr.
Samuel Y. Shen as our new Board member. His extensive leadership
experience and corporate governance expertise in the internet and
technology industry will provide us with valuable guidance as we
continue to grow our business."
About Mercurity
Mercurity Fintech Holding Inc., f/k/a JMU Limited, currently
operates an online platform for providing B2B services to
food-industry suppliers and customers in China. The Company
acquired this business in a merger with Join Me Group (HK)
Investment Company Limited in June 2015.
Mercury Fintech reported net losses of US$1.22 million for the year
ended Dec. 31, 2019, US$123.24 million for the year ended Dec. 31,
2018, and US$161.90 million for the year ended Dec. 31, 2017. As
of Dec. 31, 2019, the Company had US$8.87 million in total assets,
US$836,552 in total liabilities, and US$8.03 million in total
shareholders' equity.
TOMORROW HOLDING: China Seizes Multibillion-Dollar Firms
--------------------------------------------------------
Caixin Global reports that the Chinese government seized nine
financial companies formerly controlled by fallen tycoon Xiao
Jianhua for alleged lawbreaking in an unusually aggressive move to
attack risks from his once free-wheeling financial empire.
The China Banking and Insurance Regulatory Commission (CBIRC) took
over four insurance companies and two trust firms, and the China
Securities Regulatory Commission (CSRC) seized two securities
companies and one futures firm, Caixin discloses citing official
statements on July 17.
All were previously controlled by billionaire Xiao, who was placed
under graft investigation by Chinese authorities in January 2017.
Chinese authorities haven't disclosed the specifics of the
investigation, Caixin notes.
Caixin relates that the moves aim to protect investors' legitimate
interests, both regulators said. The takeovers, which took place on
July 17, will last at least a year, during which the companies will
continue to operate normally, according to the watchdogs.
The massive seizure involves assets amounting to more than CNY1.2
trillion (US$171.5 billion), according to Caixin calculations based
on financial reports. It marks a major step for regulators to
dismantle a sprawling business empire built by Xiao under the
umbrella of Tomorrow Holding Co. Ltd., one of the highest-profile
targets of China's crackdown on financial risks.
Founded in 1999, Tomorrow Holding grew into a conglomerate with
businesses as diverse as banking, securities, insurance, coal and
real estate. Through complicated and sometimes illegal shareholding
arrangements, Tomorrow Holding controlled a large number of
financial institutions that helped fund Xiao's debt-driven business
expansion, Caixin says.
According to Caixin, the nine companies formed a key part of the
Tomorrow Holding financial business that backed many of its
high-profile acquisitions in recent years, which often involved
complicated transactions and the use of shell companies.
Many of the financial institutions had funds embezzled by Tomorrow
Holding, which ended up failing to repay the money, causing high
risks for the institutions and their clients, sources close to the
regulators told Caixin.
Last year, the top banking regulator took over Inner Mongolia-based
Baoshang Bank Co. Ltd., a debt-ridden lender controlled by Xiao,
Caixin recalls. The bank was later restructured into Mengshang
Bank, with major shareholders including a national deposit
insurance fund managed by the central bank, the government of the
Inner Mongolia autonomous region and Anhui-based Huishang Bank
Corp. Ltd.
Several other regional lenders previously controlled by Tomorrow
Holding, including Bank of Taian Co. Ltd., Bank of Weifang Co. Ltd.
and Harbin Bank Co. Ltd., have also launched government-led
restructuring to cut ties with the troubled conglomerate, Caixin
relates.
Huaxia Life Insurance Co. Ltd., Tianan Property Insurance Co. Ltd.
of China, Tianan Life Insurance Co. Ltd. of China, E An Property &
Casualty Insurance Co. Ltd., New Times Trust Co. Ltd. and New China
Trust Co. Ltd. were placed under state custody to "protect the
rights of policy holders and customers and to serve the public's
interest," the CBIRC said in its statement, Caixin relays.
Caixin says the four insurers had combined assets exceeding CNY800
billion by the end of 2019 but suffered different degrees of
business and debt problems. The largest one, Huaxia Life, reported
a profit drop of more than 77% in 2019, and Tianan Life booked a
net loss of CNY2.5 billion. The two trust firms managed a total of
CNY467.7 billion of assets at the end of 2019.
Caixin relates that the regulator assigned six institutions to
supervise each of the seized companies' daily operations, including
China Life Healthcare Investment Co. Ltd., China Pacific Property
Insurance Co. Ltd., New China Life Insurance Co. Ltd., PICC
Property and Casualty Co. Ltd., Citic Trust Co. Ltd. and Bank of
Communications International Trust Co. Ltd.
The takeover won't change the companies' debt obligations or
creditor rights, and business operations will continue as normal,
the regulator, as cited by Caixin, said.
On the same day, the CSRC assumed control of Guosheng Securities
Co. Ltd., New Times Securities Co. Ltd. and Guosheng Futures Co.
Ltd., citing their failure to accurately disclose ownership and
flaws in corporate governance.
CSC Financial Co. Ltd., Avic Securities Co. Ltd., China Merchants
Securities Co. Ltd. and Guotai Junan Futures Co. Ltd. were
appointed to manage the companies' daily operations, Caixin
relates. The takeover will not affect the company's businesses and
trading, the CSRC said.
New Times Securities had CNY22.1 billion of assets as of the end of
May. Guosheng Securities had assets of CNY30.8 billion, and
Guosheng Futures, CNY746 million, the CSRC said.
In 2018, China's central bank identified Tomorrow Holding as one of
several "financial holding companies" that needed to be scrutinized
in their ownership structure, connected-party transactions and
sources of funding as part of a sweeping clampdown on financial
risks, Caixin discloses.
=================
H O N G K O N G
=================
AGM GROUP: JLKZ CPA LLP Raises Substantial Going Concern Doubt
--------------------------------------------------------------
AGM Group Holdings Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 20-F, disclosing a net loss of
$1,562,855 on $709,630 of total revenues for the year ended Dec.
31, 2019, compared to a net loss of $8,412,731 on $5,112,520 of
total revenues for the year ended in 2018.
The audit report of JLKZ CPA LLP states that the Company had
incurred substantial losses during the year, which raises
substantial doubt about its ability to continue as a going
concern.
The Company's balance sheet at Dec. 31, 2019, showed total assets
of $14,514,013, total liabilities of $2,662,888, and $11,851,125 in
total shareholders' equity.
A copy of the Form 20-F is available at:
https://is.gd/BVoWeC
AGM Group Holdings Inc. operates as a software company in the
People's Republic of China. The company develops and sells
enterprise application software, including accounting software and
enterprise resource planning software; and social trading software
and multi-accounting trading management system to small and
mid-size broker and institutional clients. It also develops
subscription based and interactive trading education website; and
provides technical support plans and software customization
services. The company was founded in 2015 and is based in Wan Chai,
Hong Kong.
=========
I N D I A
=========
AADIK MINES: CRISIL Keeps INR3cr Debt on B+/Not Cooperating
-----------------------------------------------------------
CRISIL said the rating on bank facilities of Aadik Mines Private
Limited (AMPL) continues to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with AMPL for obtaining
information through letters and emails dated December 31, 2019 and
June 17, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of AMPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes that rating action on AMPL is consistent
with 'Assessing Information Adequacy Risk'. Based on the last
available information, the ratings on bank facilities of AMPL
continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 2017, Telangana-based AMPL trades in granite.
Operation is currently managed by Mr Narahari and his family.
ACTIVE PACKAGING: CRISIL Withdraws D Ratings on INR5cr Loans
------------------------------------------------------------
CRISIL has upgraded its rating on the long term bank facilities of
Active Packaging (AP) to 'CRISIL B-/Stable' from 'CRISIL D'. CRISIL
has withdrawn its rating on the long term bank facilities of AP on
the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL D (Upgraded from
'CRISIL D'; Rating Withdrawn)
Long Term Loan 3.5 CRISIL D (Upgraded from
'CRISIL D'; Rating Withdrawn)
Upgrade in rating reflects the track record of timely payment of
all debt obligations in at least last three months. This was on
account of adequate cash flow generation leading to improved
liquidity.
Further, CRISIL has revised its analytical approach for arriving at
the rating of AP from consolidation with Active tools Private
Limited and Advance tools and forgings to standalone. This is
because of management posture of looking at the three companies at
individual levels. Henceforth, no financial support from one
company to another will be there.
AP is a proprietor ship firm, incorporated in 2018 by Mr. Narinder
Singh. The company is engaged into manufacturing of packaging. The
company's manufacturing facilities are situated at Jalandhar,
Punjab.
ADISHANKARACHARYA COTTON: CRISIL Ups Rating on INR12cr Loan to B+
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sri Adishankaracharya Cotton & Oil Mills Private Limited (SAC; part
of the Ramineni group) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Long Term Loan 0.3 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 4.7 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Upgrade in the rating reflect improvement in liquidity profile of
the company with decrease in long term debt obligations. Company
had repayment obligations of around INR0.75 Cr for FY20 while it
has repayments of only INR0.25 Cr for FY21. With no debt funded
capital expenditure expected, liquidity profile is expected to
remain comfortable over the medium term.
The rating reflects the group's working capital intensive
operations and average financial risk profile. These weaknesses are
partially offset by the extensive experience of its promoters in
the cotton industry and established relationship with key customers
and suppliers.
Analytical Approach
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of SAC and Ramineni Agro industries Private
Limited (RAIPL). This is because the two companies, together
referred to as the Ramineni group, are in the same business, and
have common management and significant operational linkages.
Key Rating Drivers & Detailed Description
Weaknesses:
* Working capital-intensive operations: Operations remain working
capital intensive with expected gross current assets (GCA) of
180-200 days as on March 31, 2020, due to sizeable inventory. Given
the nature of business, GCA days are expected to remain high over
the medium term.
* Average financial risk profile: Financial risk profile is marked
by moderate networth, aggressive capital structure and moderate
debt protection metrics. Networth is expected to be around INR7.5
Cr as on March 31, 2020. Capital structure is aggressive with
expected gearing of 3.52 times as on March 31, 2020. Debt
protection metrics remains moderate, with expected interest
coverage of 1.4 times for FY20.
Strength:
* Extensive experience of its promoters in the cotton industry and
established relationship with key customers and suppliers:
Presence of over three decades in the cotton industry has enabled
the promoters to establish strong relationship with customers and
suppliers. Experience of promoters is expected to support the
business risk profile over the medium term.
Liquidity Stretched
Liquidity profile of the group is marked by high BLU of 92% and
moderate net cash accruals against repayment obligations. It is
expected to generate cash accruals of INR1.25 Cr against repayment
obligations of INR0.83 Cr for FY20. Also, promoters are expected to
provide need based funding support in the form of unsecured loans.
Outlook: Stable
CRISIL believes the Ramineni group will continue to benefit over
the medium term from the extensive experience of its promoters.
Rating Sensitivity factors
Upward factors
* Revenue above INR100 Cr while operating profitability is
maintained at 6 %
* Strengthening of the financial risk profile due to improved
capital structure
Downward factors
* Deterioration in interest coverage ratio to below 1 time
* Stretch in working capital cycle or higher than expected debt
funded capex that weakens the capital structure
Set up in 2012 by Mr. R Srinivasa Rao and his family members, SAC
gins and presses raw cotton. Established in 2009 in Guntur, Andhra
Pradesh, RAIPL is engaged in a similar business but also sells
cotton lint and cotton seeds.
BALAJEE PLY-PRODUCT: CRISIL Cuts Ratings on INR7cr Loans to D
-------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of
Balajee Ply-Product Private Limited (BPPL), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
Cash Credit 3 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
Proposed Term
Loan 2 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
CRISIL has been consistently following up with BPPL for obtaining
information through letters and emails dated October 22, 2019 and
October 29, 2019 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of BPPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on BPPL, is
consistent with 'Scenario 1' outlined in the best 'Framework for
Assessing Consistency of Information with 'CRISIL BB' category or
lower'.
Based on best available information, CRISIL has downgraded the
ratings to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL
B-/Stable/CRISIL A4 Issuer Not Cooperating' on account of overdue
in the cash credit account.
Incorporated in 1997 and based in Jaipur, BPPL manufactures plywood
and block boards, and trades in timber. Manufacturing accounts for
most of its turnover.
BHAGESHWARI PAPERS: CRISIL Withdraws B+ Rating on INR30cr Loan
--------------------------------------------------------------
CRISIL has withdrawn its ratings on the bank facilities of Shree
Bhageshwari Papers Private Limited (SBPPL) on the request of the
company and receipt of a no objection certificate from its bank.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6.5 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Withdrawn)
Cash Credit 30 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
Foreign Exchange
Forward 0.58 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Withdrawn)
Letter of Credit 14.00 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Withdrawn)
Term Loan 8.92 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
CRISIL has been consistently following up with SBPPL for obtaining
information through letters and emails dated June 29, 2019 and
December 9, 2019, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SBPPL. This restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SBPPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB rating category
or lower. Based on the last available information, the ratings on
bank facilities of SBPPL continues to be 'CRISIL B+/Stable/CRISIL
A4 Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of SBPPL on
the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
Incorporated 1996 and promoted by Mr. Umesh Bansal and family,
SBPPL manufactures kraft paper, tissue paper, and mild steel ingots
at its facility in Muzaffarnagar, Uttar Pradesh, which has
installed capacity of 17,800 tonne per annum (tpa) for kraft paper,
19,800 tpa for tissue paper, and 13,000 tpa for mild steel ingots.
BLUE AUTOWORLD: CRISIL Assigns B+ Ratings to INR8cr Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Blue Autoworld Pvt Ltd (BAPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.9 CRISIL B+/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 3.1 CRISIL B+/Stable (Assigned)
The rating reflects the company's large working capital requirement
and a below-average financial risk profile. These weaknesses are
partially offset by BAPL's strong association with TVS Motor Co Ltd
(TVS) and the extensive experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Moderately large working capital requirement: Gross current
assets were estimated to be around 70 days as on March 31, 2020,
because of sizeable inventory required to maintain sufficient
number of vehicles for every model of TVS. Operations are expected
to remain moderately working capital intensive over the medium
term.
* Below-average financial risk profile: Networth was estimated to
be small at around INR7 crore as on March 31, 2020, and is likely
to remain subdued over the medium term on account of modest
accretion to reserves. The debt protection metrics also remained
moderate with interest coverage ratio estimated at around 1.55
times and NCAAD of around 0.07 times in FY20. Financial risk
profile is expected to remain constrained by large working capital
debt.
Strengths:
* Strong association with principal and extensive experience of the
promoters: BAPL is an authorised dealer for TVS, which is among the
top manufacturers of two-wheelers in India. Benefits from the
promoters' experience of over a decade, their strong understanding
of local market dynamics, and healthy relationships with suppliers
and customers should continue to support the business.
Liquidity Stretched
Absence of any yearly debt repayment permits the entire cash
accrual ' around INR30 lakh per annum over the medium term ' to be
used as working capital. Bank limit was highly utilised by around
90% during the 16 months through June 2020. Current ratio remained
comfortable at 1.6 times as on March 31, 2020.
Outlook: Stable
CRISIL believes BAPL will continue to benefit from the extensive
experience of its promoters and established relationship with TVS.
Rating Sensitivity factors
Upward factors
* Revenue of around INR75 crore and operating margin of 3.5% or
more
* Prudent working capital management leading to better liquidity
Downward factors
* Steep decline in revenue and operating margin of less than 4%
* Any large, debt-funded capital expenditure
Incorporated in 2010 and promoted by Mr Subhas Rail and Mr
Panchanan Mishra, BAPL is an authorised dealer and service centre
for all two-wheelers of TVS in Malda, West Bengal.
BOTHRA METALS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Bothra Metals and Alloys Limited
Room No. 6A, Ground Floor
Bothra House
5, Assembly Lane
Dadi Seth Agyari Lane
Kalbadevi
Mumbai 400002
Insolvency Commencement Date: July 6, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: January 2, 2021
(180 days from commencement)
Insolvency professional: Harish Kant Kaushik
Interim Resolution
Professional: Harish Kant Kaushik
F-1904, Sapphire
Regency Towers
Kavesar, Ghodbundar Road
Thane (W) 400615
E-mail: harishkant2007@gmail.com
irp.bothrametals@gmail.com
Last date for
submission of claims: July 20, 2020
CLASSIC HYUNDAI: CRISIL Lowers Ratings on INR10cr Loans to B-
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Classic Hyundai (CH) to 'CRISIL B-/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Working Capital 2 CRISIL B-/Stable (Downgraded
Demand Loan from 'CRISIL B/Stable')
The downgrade reflects weakening of business and financial risk
profile. The firm has reported estimated revenue of around INR65
crores during fiscal 2020 as against INR90 crores during fiscal
2019, on account of moderate demand and stress in the automobile
sector. The firm has reported thin margin in the range of around
1.5-2% during the past fiscal which has resulted into low net cash
accruals during the period under review. Further, the networth was
modest on account of accumulated losses during the past fiscal
which has led to weak capital structure. Also, the liquidity of the
firm was stretched owing to inadequate net cash accruals to meet
the repayment obligations over the medium term.
The ratings continues to reflect the firm's below-average financial
risk profile and modest scale of operations. These weaknesses are
partially offset by its promoters' experience in the automotive
dealership business.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations amid intense competition: Scale
remains modest, reflected in estimated revenue of INR65 crore in
fiscal 2020, in the intensely competitive passenger vehicles
segment. CRISIL believes the operations are expected to remain
modest over the medium term.
* Below-average financial risk profile: TOLTNW ratio is estimated
to remain high at negative 5.7 times as on March 31, 2019. Low
operating profitability and large debt are likely to weaken debt
protection metrics, with interest coverage at around 0.7 time in
fiscal 2019.
Strength:
* Experience of promoters: Benefits from the promoters' experience
of two decades in the automobile dealership business should
continue to support the business. Besides Hyundai Motor India
Limited (HMIL), they have dealership of Piaggio under group
entities, and also other business interests. CRISIL believes that
CH will continue to benefit from its promoters' extensive
experience in the automobile dealership industry.
Liquidity Stretched
The liquidity of the firm remains stretched and is expected to
report inadequate cash accrual against its repayment obligations in
the medium term. The bank limit utilization has also been high,
with the cash credit limit of INR10 crore, utilized at an average
of 80% over the 12 months through February 2020. Current ratio was
estimated at around 0.60 times as on March 31, 2020.
Outlook: Stable
CRISIL believes CH's will continue to benefit from its established
market presence.
Rating Sensitivity Factor
Upward Factor
* Improvement in the revenue profile and EBITDA margin of more than
2.5%.
* Improvement in the financial risk profile.
Downward Factor
* Decline in the revenue profile and EBITDA margin of less than
1%.
* Decline in the financial risk profile.
Set up in 2011, CH is an authorized dealer for Hyundai Motor India
Ltd in Malappuram, Kerala. The partnership firm was promoted by Mr
C P Abdulla and his friends Mr Abdul Azeez, Mr Zakir Hussain, and
Mr Ahmad Hassan.
DAMSON TECHNOLOGIES: CRISIL Lowers Rating on INR10cr Cash Loan
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Damson Technologies Private Limited (DTPL) to 'CRISIL D' from
'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The downgrade reflects instances of consistent overdrawals in
working capital limit for more than 30 days.
Key Rating Drivers & Detailed Description
Weaknesses:
* Stretched liquidity: Liquidity is stretched on account of
pressure on operating performance. There was a fire in the
warehouse last year for which an insurance claim has been placed.
However, the claim is yet to be settled. On account of blockage of
the fund, the operating performance remained constrained in fiscal
2020. Also, bank limits are fully utilised and there were instances
of overdrawals in the working capital limit.
* Modest scale of operations in the intensely competitive
electronic equipment industry: Revenue remains modest because the
company faces tough competition from other brands in the fast
changing electronic equipment industry.
Strength:
* Extensive experience of the promoters: DTPL is promoted by Mr
Vivek Goenka and Mr Ritesh Goenka, who have experience of around
two decades in the electronic products trading business. Their
experience has helped them build established clientele and supplier
network.
Liquidity Poor
Liquidity is likely to remain stretched over the medium term. The
bank limits are almost fully utilised and also there has been
instances of overdrawals in working capital limits.
Rating Sensitivity Factors
Upward Factors
* Track record of timely repayments of bank debt.
* cushion in bank limit utilisation by bank limit utilisation of
about 95 percent.
DTPL was incorporated in December 2000. Based in Ahmedabad,
Gujarat, the company designs, distributes, and markets information
technology products such as bluetooth speakers, tablet PCs, and
mobile and computer accessories.
DILEEP TRADERS: CRISIL Keeps B+ on INR7cr Debt in Not Cooperating
-----------------------------------------------------------------
CRISIL said the rating on bank facilities of Dileep Traders -
Kollam (DTK) continues to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with DTK for obtaining
information through letters and emails dated December 31, 2019 and
June 17, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of DTK, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes that rating action on DTK is consistent
with 'Assessing Information Adequacy Risk'. Based on the last
available information, the ratings on bank facilities of DTK
continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Set up as a Proprietorship firm in 2000 by Mr. Dileep Kunju, Dileep
Traders - Kollam (DTK) is engaged in the processing of raw cashew
nuts and sales of cashew kernels. DTK currently operates three
processing facility, two in Kerala and one in Tamil Nadu with
combined installed capacity of dispatching around 8000 kg per day
of cashew kernels.
GREEN TEAK: CRISIL Lowers Rating on INR4.75cr Cash Loan to D
------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of Green
Teak (India) Private Limited (GTPL), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
Cash Credit 4.75 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B-/Stable
ISSUER NOT COOPERATING')
Proposed Term Loan .78 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B-/Stable
ISSUER NOT COOPERATING')
SME Gold Card .47 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B-/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with GTPL for obtaining
information through letters and emails dated November 26, 2019 and
December 2, 2019 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of GTPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GTPL, is
consistent with 'Scenario 1' outlined in the best 'Framework for
Assessing Consistency of Information with 'CRISIL BB' category or
lower'.
Based on best available information, CRISIL has downgraded the
ratings to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL
B-/Stable/CRISIL A4 Issuer Not Cooperating' on account of overdue
in the cash credit account.
Incorporated in 1990 and promoted by Mr Sumer Chand Jain, GTPL
manufactures wooden doors (flush, wire ness doors) and trades in
timber. The company's manufacturing facility is in Jaipur.
HANS BABA: CRISIL Assigns B+ Ratings to INR4.0cr Loans
------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Hans Baba Oil Mills (HBOM).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.15 CRISIL B+/Stable (Assigned)
Proposed Fund-
Based Bank Limits 1.85 CRISIL B+/Stable (Assigned)
The rating reflects the firm's low operating margin due to the
trading nature of business, susceptibility to intense competition
in the edible oil industry and modest scale of operations. These
weaknesses are partially offset by the extensive industry
experience of the promoter, efficient working capital cycle and
sound operating efficiency.
Key Rating Drivers & Detailed Description
Weaknesses:
* Low operating margin due to the trading nature of business:
Limited initial investment and low complexity of operations have
resulted in the existence of innumerable entities, much smaller in
size, leading to significant fragmentation and low operation
margin.
* Susceptibility to intense competition in the edible oil industry:
The edible oil industry has a few big players and many small,
unorganised players. Around 60% of the industry is serviced by the
unorganised sector. These players primarily cater to regional
demand in order to save on transportation cost. Intense competition
has resulted in low operating margin for all players. Furthermore,
prices of edible oils are directly linked to the price of crude
palm oil (CPO), which is highly volatile; the domestic vegetable
oil market depends on the availability of CPO and vegetable oil
substitutes in the overseas market.
* Modest scale of operations: HBOM's business risk profile is
constrained by its modest scale of operations in the intensely
competitive edible oil industry, limiting its operating
flexibility.
Strengths:
* Extensive industry experience of the promoter: The promoter's
experience of 10 years, understanding of market dynamics, and
strong relationships with suppliers and customers will continue to
support the business.
* Efficient working capital cycle: Gross current assets remained at
50-90 days over the three fiscals ended March 31, 2019 supported by
an efficient inventory policy and receivables collection cycle.
* Sound operating efficiency: HBOM has healthy operating
efficiency, as indicated by healthy return on capital employed of
15%. Operating efficiency is supported by high economies of scale
and experienced management.
Liquidity Stretched
Cash accrual is expected at INR0.17 crore against debt obligation
of INR0.10 crore over the medium term. Bank limit utilisation was
moderate at 84% on average over the six months through March 2020.
Outlook: Stable
CRISIL believes HBOM will continue to benefit from the extensive
industry experience of its promoter.
Rating Sensitivity factors
Upward factors:
* Sustainable growth in topline more than 20%, leading to cash
accrual above INR0.50 crore
* Improvement in the working capital cycle
Downward factors:
* Decline in revenue more than 20%, leading to decrease in cash
accrual
* Stretch in working capital cycle
HBOM, established in 2000 and located in Bihar, is owned and
managed by Mr Parmanand Singh. The firm trades in edible oil, which
it sells mainly to wholesalers and brokers across Bihar.
JALDHAKA COLD: CRISIL Lowers Rating on INR7.50cr Term Loan to D
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Jaldhaka Cold Storage Private Limited (DTPL) to 'CRISIL D/CRISIL D'
from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.3 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 1.25 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Funded Interest 1.30 CRISIL D (Downgraded from
Term Loan 'CRISIL B-/Stable')
Long Term Loan 3.65 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Working Capital 7.50 CRISIL D (Downgraded from
Term Loan 'CRISIL B-/Stable')
The downgrade reflects delay in honoring interest obligation for
more than 30 days in term loan, funded interest term loan and
working capital term loan account (delay observed even before March
2020).
Key Rating Drivers & Detailed Description
Weaknesses:
* Vulnerability to delay in payment from farmers, because of
adverse market conditions: As part of the West Bengal government's
initiative to support agriculture, banks extend financial
assistance to farmers for storing produce in private cold storages,
against pledge of receipts. Cold storages obtain loans from banks
on behalf of farmers and traders. However, the primary
responsibility to repay the loan rests with cold storages. In case
of a decline in potato prices and adverse market conditions,
farmers do not find it profitable to pay rent and interest charges,
along with the debt obligation, and hence, do not retrieve potatoes
from cold storages. This affects the profitability of cold
storages.
* Weak financial risk profile: Financial risk profile was marked by
small networth and high gearing of around INR2.33 crore and 6.53
times, respectively, as on March 31, 2019. Financial risk profile
of the company is estimated to have remained weak in fiscal 2020 as
well. Steady, but small cash accrual, will gradually increase
networth, while gearing may improve, led by repayment of term
debt.
* Small scale of operation: Revenue has been modest, in the range
of INR6.62-INR10 crore, in the three fiscals through March 2019 and
estimated at similar level in fiscal 2020 as well.
Strength:
* Extensive experience of the promoters: The two-decade-long
experience of the promoters in the cold storage business, and their
established relationships with traders and farmers, should continue
to support the business.
Liquidity Poor
Liquidity is likely to remain stretched over the medium term. The
bank limits are almost fully utilised and also there has been
instances of delay in interest payment of long term debts.
Rating Sensitivity Factors
Upward Factors
* Track record of timely repayments of bank debt
* Improvement of cushion in bank lines
* Infusion of funds by promoters, leading to gearing lower than 3
times.
Incorporated in 1997, JCSPL provides cold storage facilities to
potato farmers and traders. It also trades in potatoes. Its current
owners-directors, Mr Gobinda Das Pal and Mr Pradyut Kumar Pal,
purchased JCSPL on January 1, 2010. The cold storage at Jalpaiguri
has a capacity of 21,900 tonne.
KAMALA COLD: CRISIL Migrates B+ Debt Ratings From Not Cooperating
-----------------------------------------------------------------
Due to inadequate information, CRISIL, in-line with the Securities
and Exchange Board of India guidelines, had migrated its ratings on
the bank facilities of Kamala Cold Storage Pvt Ltd (KCSPL) to
'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating'. However, the
company's management has subsequently started sharing the requisite
information for a comprehensive review of the rating. Consequently,
CRISIL is migrating its ratings to 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.16 CRISIL A4 (Migrated from
'CRISIL A4 ISSUER NOT
COOPERATING')
Cash Credit 6.30 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
Working Capital
Facility 1.50 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
The ratings continue to reflect exposure to the highly regulated
and intensely competitive nature of the cold storage industry, and
weak financial risk profile. These weaknesses are partially offset
by the extensive experience of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to the highly regulated and intensely competitive nature
of the cold storage industry: West Bengal's potato cold storage
industry is regulated by the West Bengal Cold Storage Association,
with rental rates fixed by the Department of Agricultural
Marketing. The fixed rentals will continue to limit the players'
ability to earn profits based on their respective strengths and
geographical advantages. Pressure to offer discounts to ensure
healthy utilisation of storage capacity, especially given the
intense competition, will also constrain profitability.
* Weak financial risk profile: Networth is estimated at a modest
INR2.75 crore as on March 31, 2020, despite steady accretion to
reserve in recent years. Gearing was high estimated at around 2.2
times on account of loans extended to farmers, especially around
end of fiscal. Debt protection metrics are likely to remain
moderate: interest coverage and net cash accrual to total debt
ratios are likely at 1.7 times and 0.05 time, respectively, in
fiscal 2020.
* Vulnerability to delays in payment by farmers because of adverse
market conditions: KCSPL provides loans to farmers against the
stored products. In the event of adverse market trends, farmers do
not find it profitable to pay the rental and interest charges along
with loan obligation, and hence do not retrieve potatoes from cold
storages. Thus, the company remains exposed to delays in payment by
farmers.
Strength:
* Extensive experience of the promoters: The promoters' experience
of more than two decades in the cold storage industry and their
long-standing association with farmers and traders that leads to
healthy utilisation of storage capacity should continue to support
the business.
Liquidity Stretched
In the absence of maturing debt, net cash accrual, estimated at a
modest INR35 lakh in fiscal 2020, supports liquidity. Bank limit
tends to be highly utilised in March and April when business peaks
for the cold storage industry. The current ratio was moderate at
1.3 times as on March 31, 2020.
Outlook: Stable
CRISIL believes KCSPL will continue to benefit from the extensive
experience of its promoters in the cold storage business.
Rating Sensitivity factors
Upward factors
* Increase in rental rates and optimum capacity utilisation
resulting in ramp-up in revenue, with operating margin exceeding
20%
* Improvement in the liquidity and financial risk profiles
Downward factors
* Decline in rental rates and capacity utilisation
* Interest coverage ratio weakens to less than 1 time
* Delay in payments by farmers
KCSPL, incorporated in 1996, provides cold storage facilities to
potato farmers and traders and also trades in potatoes. The company
is owned by Kolkata-based Mr Sabyasachi Gorai and family. The cold
storage unit is located at Bankura (West Bengal).
KDH TEXTILE: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed KDH Textile
Private Limited's (KDH) Long-Term Issuer Rating at 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR290 mil. (increased from INR230 mil.) Fund-based working
capital limits affirmed with IND BB+/Stable/IND A4+ rating;
and
-- INR12.58 mil. (reduced from INR28.30 mil.) Term loan due on
March 2023 affirmed with IND BB+/Stable rating.
KEY RATING DRIVERS
The affirmation reflects KDH's continued medium scale of operations
and modest credit metrics. The company's revenue grew to INR1,274
million in FY20 (FY19: INR1,188 million) due to higher sales
volumes. FY20 financials are provisional in nature.
The ratings factor in KDH's modest credit metrics with gross
interest coverage (operating EBITDA/net interest expenses) of 2.05x
in FY20 (FY19: 1.85x) and net financial leverage (adjusted net
debt/operating EBITDA) of 4.47x (5.09x). The slight improvement in
metrics was due to the rise in KDH's absolute EBITDA to INR70.66
million in FY20 (FY19: INR64.57 million).
The ratings also factor in KDH's average margin, which was almost
flat at 5.54% in FY20 (FY19: 5.43%) due to the intense industry
competition and fluctuating raw material prices. The company's
return on capital employed stood at 13.06% in FY20 (FY19: 12.67%).
Liquidity Indicator – Stretched: The company's average use of its
fund-based working capital facility was 96.17% for the 12 months
ended May 2020. Although KDH's working capital cycle improved to
105 days in FY20 (FY19: 117 days) due to a decline in inventory, it
continued being elongated. KDH had cash and cash equivalents of
only INR15.20 million as at FYE20 (FYE19: INR3.69 million) against
a debt of INR331 million (INR332 million). The cash flow from
operations improved and turned positive to INR3.31 million in FY20
(FY19: negative INR53 million) due to a decrease in the working
capital requirements.
The ratings, however, continue to be supported by the promoters'
over three decades of experience in the textile industry.
RATING SENSITIVITIES
Negative: A decline in the operating profitability, leading to
sustained deterioration in the credit metrics will be negative for
the ratings.
Positive: A significant further improvement in the revenue, while
maintaining the operating profitability with net leverage below 3x,
all on a sustained basis, will be positive for the ratings.
COMPANY PROFILE
Founded in June 2009, KDH is engaged in the designing and
embroidery of fabrics. Its facility is located at Sonipat,
Haryana.
KHATOR TECHNICAL: CRISIL Raises Rating on INR3cr Cash Loan to B+
----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Khator
Technical Textiles Limited (KTTL) to 'CRISIL B+/Stable/CRISIL A4'
from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.7 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 3 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 1 CRISIL A4 (Upgraded from
'CRISIL D')
Packing Credit 2 CRISIL A4 (Upgraded from
'CRISIL D')
Proposed Long Term 4.3 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 9 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The upgrade reflects track record of on-time payment of interest on
term loans post restructuring of these loans in December 2019 and
also no overdraws for more than 30 days for the six months ended
June 2020. The principal repayments of term loans restructured
would begin from December 2020.
The nation-wide lockdown to contain the Covid-19 pandemic may have
a limited impact on the business risk profile of KTTL in fiscal
2021, as the company resumed operations in the second week of May
2020, albeit at a lower operating rate. Furthermore, as the
proportion of fixed cost is low, the impact of the lockdown on the
profit margin and net cash accrual this fiscal should be muted.
CRISIL has taken into cognizance the moratorium provided by bankers
on interest payment on working capital debt under the Reserve Bank
of India's Covid-19 Regulatory Package. This should significantly
contain the risk of default. CRISIL believes KTTL should revive its
operations over the next one-two months, and see steady payments
from customers over the medium term.
The ratings continue to reflect KTTL's small scale of operations
and large working capital requirement. These weaknesses are
partially offset by the extensive experience of the promoter and
the company's high operating margin.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: Scale of operations is modest, as
reflected in limited production capacity of 250 metric tonne per
month (utilised at 90%) and estimated revenue of INR20 crore in
fiscal 2020. The small scale of operations restrict the bargaining
power with customers and suppliers.
* Large working capital requirement: Operations are working capital
intensive, with gross current assets (GCA) of 228 days as on March
31, 2019 driven by high debtors of 90 days. Working capital cycle
is expected to remain at a similar level over the medium term.
Strengths
* Extensive experience of the promoter: The promoter's decade-long
experience in the technical textile industry and his strong
technical expertise should continue to support the business.
* High operating margin: The operating margin has been high at
14.0-20.5% over the three fiscals ended 2019, due to niche product
offerings and healthy relationships with suppliers and customers.
Operating margin is estimated at 17% in fiscal 2020.
Liquidity Stretched
Liquidity is stretched as reflected in high bank limit utilisation,
low unencumbered cash and bank balance and moderate current ratio;
however this constraint is partially offset by sufficient cash
accrual against debt obligation. Bank limit utilisation averaged
99% over the 12 months through March 2020. Unencumbered cash and
bank balance is estimated at INR0.65 crore and current ratio at
1.58 times as on March 31, 2020. Net cash accrual is expected at
INR1.36-2.86 crore per annum against term debt obligation of
INR0.44-1.33 crore per annum over the medium term. There are no
major capex plans over the medium term.
Outlook: Stable
CRISIL believes KTTL will continue to benefit from the extensive
experience of its promoter.
Rating Sensitivity factors
Upward factors:
* Sizeable revenue over INR40 crore and sustained profitability
generates higher cash accrual.
* Efficient working capital management strengthens liquidity.
Downward factors:
* Lower-than-expected cash accrual of below INR1 crore on account
of significant drop in revenues or margins.
* Stretched working capital cycle, or any large, debt-funded
capital expenditure (capex) weakens the capital structure.
Incorporated in 2013, Mumbai-based KTTL manufactures geo-technical
textiles, which find application in infrastructure work, such as
construction of roads, dams, and inland fillings. The company plans
to undertake expansion to increase its capacity. Mr Amit Khator is
the promoter.
LACMA PANEL: CRISIL Reaffirms B+ Rating on INR7.35cr Term Loan
--------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of Lacma Panel Industries LLP (LPIL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (Reaffirmed)
Proposed Non
Fund based limits 1.25 CRISIL A4 (Reaffirmed)
Term Loan 7.35 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect the modest scale of LPIL's
operations, average capital structure, and large working capital
requirement. These weaknesses are partially offset by the extensive
experience of the partners in manufacturing particle boards and
comfortable debt protection metrics.
Analytical Approach
Unsecured loans (INR1.92 crore as on March 31, 2020) extended by
the partners have been treated as neither debt nor equity as these
loans are expected to remain in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations amid intense competition: LPIL has
modest scale reflected by revenue estimated at INR23 crore in
fiscal 2020, with concentration in Gujarat. Further, intense
competition may continue to constrain scalability, pricing power,
and profitability. Due to the measures taken to contain Covid-19
outbreak, revenue is expected to further fall in fiscal 2021 on
account of sluggish demand as the purchase would be discretionary.
* Weak capital structure: Networth is estimated at a modest INR5.30
crore as on March 31, 2020, with total outside liabilities to
adjusted networth ratio moderately high at 2.9 times, respectively.
Capital structure is expected to improve over the medium term, with
gradual repayment of debt.
* Large working capital requirement: Gross current assets are
estimated at 202 days as on March 31, 2020, driven by high debtors
of 97 days and moderate inventory of 95 days. Due to sizeable
credit given to customers and maintenance of moderate wip inventory
the working capital requirement is high. The working capital cycle
may remain stretched over the medium term and hence will be closely
monitored.
Strengths:
* Extensive experience of the partners in manufacturing particle
boards industry: The partners' extensive experience of over a
decade, their strong understanding of local market dynamics, and
healthy relations with customers and suppliers should continue to
support the business.
* Comfortable debt protection metrics: Debt protection metrics are
likely to remain adequate owing to moderate profitability. Interest
coverage and net cash accrual to adjusted debt ratios were 2.66
times and 0.23 time, respectively, in fiscal 2020.
Liquidity Poor
Liquidity is poor with cash accruals is projected at over
INR1.20-2.00 crore per annum over the medium term, against yearly
repayment obligation of INR0.72 crore and INR1.23 crore in fiscals
2021 and 2022, respectively. Fund-based limit of INR4 crore was
utilised on an average of 90% during the 12 months through April
2020. Cash and cash equivalents were INR1.08 crore as on March 31,
2019. Liquidity is partly supported by the timely, need-based funds
extended by the partners. Moratorium has been availed on all the
bank facilities for the period of March to August 2020.
Outlook: Stable
LPIL will continue to benefit from the extensive experience of its
partners.
Rating Sensitivity factors
Upward factors
* Substantial and sustainable increase in revenue and
profitability, leading to cash accrual of more than INR2.5 crore
* Significant improvement in the working capital cycle, thereby
improving financial profile and liquidity
Downward factors
* Steep decline in revenue or profitability, resulting in cash
accrual below INR0.8 crore
* Further stretch in the working capital cycle, impacting capital
structuref
LPIL was set up in 2016 as a limited-liability partnership between
Mr Mansukh Panchotiya and his family members. This Morbi
(Gujarat)-based firm manufactures wood-based particle boards.
MAHALAKSHMI RAW: CRISIL Lowers Rating on INR10cr Cash Loan to D
---------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of Sri
Mahalakshmi Raw and Boiled Rice Mill (SMRB), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
Long Term Loan 0.27 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with SMRB for obtaining
information through letters and emails dated May 31, 2019 and
November 15, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of the company, which restricts
CRISIL's ability to take a forward-looking view on the credit
quality. CRISIL believes information available is consistent with
'Scenario 1' outlined in the Framework for Assessing Consistency of
Information with 'CRISIL BB' category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation coupled with adverse information in the
public domain, CRISIL has downgraded the long term rating to
'CRISIL D Issuer Not Cooperating' from 'CRISIL B+/Stable Issuer Not
Cooperating'.
The downgrade reflects delays in debt servicing for more than 90
days, because of its stretched liquidity position.
Incorporated in 1992, SMRB processes rice. It is a partnership firm
set up by Mr. P Sudhakara Reddy and Mrs P Sailaja. The firm's
manufacturing facility is based in Nellore (Andhra Pradesh).
MEGHALAYA CAST: Ind-Ra Lowers LongTerm Issuer Rating to 'BB-'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Meghalaya Cast &
Alloys Private Limited's (MCAPL) Long-Term Issuer Rating to 'IND
BB-' from 'IND BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based Limits downgraded with IND BB-/Stable
rating;
-- INR10.12 mil. (reduced from INR11.2 mil.) Long-term loans due
on March 2022 downgraded with IND BB-/Stable rating; and
-- INR21.38 mil. Non-fund-based limits affirmed with IND A4+
rating.
KEY RATING DRIVERS
The downgrade reflects deterioration in MCAPL's credit metrics
along with continued poor liquidity. The company's interest
coverage (operating EBITDA/gross interest expense) declined to 1.6x
in FY20 (FY19: 2.2x) and the net leverage (adjusted net
debt/operating EBITDAR) to 6.5x (3.6x). The metrics deteriorated
due to a fall in the absolute EBITDA to INR14.42 million (INR23.71
million) owing to an increase in the cost of raw materials consumed
as well as a decline in sales volume.. FY20 financials are
provisional in nature. Ind-Ra expects the company's credit metrics
to improve slightly in FY21 based on the scheduled repayment of
long-term loans.
The ratings factor in the company's continued small scale of
operations, as reflected by revenue of INR604.94 million in FY20
(FY19: INR886 million). The revenue declined due to lower sales in
4QFY20 and fall in sales realization per unit. The agency expects
the company's revenue to decline further due to the muted sales in
1QFY21 owing to the COVID-19 led nation-wide lockdown.
The ratings are also constrained by the company's modest EBITDA
margin of 2.38% in FY20 (FY19: 2.68%), which contracted due to
lower sales in 4QFY20. The return on capital employed stood at 5%
in FY20 (FY19: 12%).
Liquidity Indicator - Poor: MCAPL's average maximum utilization of
working capital facilities was 99.6% with a few instances of
overutilization over the 12 months ending May 2020. The unaudited
year-end cash balance was INR9.26 million as at FYE20 (FYE19:
INR1.96 million). The company's cash flow from operations turned
negative to INR10.34 million in FY20 (FY19: INR34.25 million) due
to stretched working capital requirements owing to higher inventory
level of INR165.6 million (INR51.24 million). MCAPL has availed of
the moratorium facility from its banker for term loan and
short-term facilities until September 2020.
The ratings, however, are supported by the founder's experience of
over a decade in the manufacturing and casting of mild steel
billets.
RATING SENSITIVITIES
Negative: A decline in the scale of operations, further
deterioration of credit metrics and stretch in the liquidity
position will lead to a negative rating action.
Positive: An improvement in the scale of operations with interest
coverage rising above 2x and improved liquidity profile may lead to
a positive rating action.
COMPANY PROFILE
Incorporated in 2001, MCAPL manufactures mild steel billets. The
company's manufacturing plant, located at Burnihat (Meghalaya) has
an annual installed capacity of 34,320 metric tons. The plant's
capacity utilization stood at 66%, as in March 2020.
NIDHIE WEAVING: CRISIL Assigns B+ Ratings to INR12cr Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long term
bank facilities of Nidhie Weaving Mill (NWM).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (Assigned)
Long Term Loan 4 CRISIL B+/Stable (Assigned)
The rating reflects NWM's modest scale, working capital intensive
operations and below average financial risk profile. These
weaknesses are partially offset by the extensive industry of the
partners.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale and Working capital intensive operations: NWM's
business profile is constrained by its scale of operations in the
intensely competitive Textile Weaving industry with revenue in the
range of INR23 to INR28 crore for the past fiscal years, which will
continue to limit its operating profitability. The firm reported
an estimated revenue of INR28 crore for fiscal 2020. NMW's
operations are also working capital intensive, with gross current
assets (GCA) in the range of 80-170 days over the three fiscals
ended March 31, 2020. NMW's working capital management is reflected
in its GCA of 170 days as on March 31, 2020, driven largely by
debtors and inventory levels in Fiscal 2020. CRISIL believes the
working capital levels shall remain at similar levels over the
medium term.
* Below Average Financial Risk Profile: Gearing is high at an
estimated 2.67 times as on March 31, 2020, due to high reliance for
funding their working capital requirements, and this is expected to
remain at similar levels over the medium term. Debt protection
metrics are modest with interest coverage and net cash accruals to
total debt estimated to be around 2.52 times, and 0.14 times as on
March 31, 2020. CRISIL believes that the financial risk profile
shall continue to remain below average over the medium term.
Strengths:
* Extensive experience of the partners: With more than 4 decade's
experience in the Textile Weaving, CRISIL believes that this has
given them an understanding of the dynamics of the market, and
enabled them to establish good relationships with suppliers and
customers. CRISIL believes that partners's extensive experience
shall continue to support the business over the medium term.
Liquidity Stretched
Bank limit utilisation is high at around 88 percent for the past
twelve months ended May 2020. Cash accrual are expected to be over
in the range of INR0.40 crore- INR2 crore which shall be tightly
matched to meet repayment obligations in the range of INR0.60 crore
- INR1 crore over the medium term. However, liquidity is partially
supported by the unsecured loans by the partners. Current ratio are
estimated to be around 1.18 times as on March 31, 2020.
Outlook: Stable
CRISIL believe NWM will continue to benefit from the extensive
experience of its promoter, and established relationships with
clients.
Rating Sensitivity factors
Upward factor
* Improvement in scale of operation by 20% and sustenance of
operating margin
* Improvement in working capital cycle
Downward factor
* Decline in net cash accruals below INR0.50 crore as result of
lower revenue/ operating margins
* Any Large debt-funded capital expenditure which may weaken the
liquidity position
NWM was established as a partnership firm based in Palladam, Tamil
Nadu. NWM is owned & managed by S. Aruchamy, A. Krushnaveni, P.
Santhalingam, S. Deepa, S. Prabha and S. Sivasubramaniam. The Firm
is engaged into manufacturing of grey fabrics.
NUFUTURE DIGITAL: Ind-Ra Lowers LongTerm Issuer Rating to 'BB+'
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded nuFuture Digital
(India) Limited's (NFDIL) Long-Term Issuer Rating to 'IND BB+' from
'IND BBB-'. The Outlook is Negative.
The instrument-wise rating action is:
-- INR175 mil. (reduced from INR250 mil.) Fund-based working
capital facilities downgraded with IND BB+/Negative/IND A4+
rating.
The rating downgrade and the Negative Outlook reflect NFDIL's
stretched net leverage on account of its increased debt, availed
mainly to meet the working capital gap and capex, and the company's
poor liquidity profile.
KEY RATING DRIVERS
The company has breached Ind-Ra's negative rating guideline with
its net leverage (adjusted net debt/operating EBITDAR) sustaining
above 3.5x over FY18-FY20 (FY20: 9.84x, FY19: 7.37x, FY18: 5.35x)
on account of increased debt levels. The debt grew 7.22% yoy in
FY20 to INR6,708.81 million after soaring 75.75% yoy in FY19,
mainly to fund capex related to technological advancements and to
extend loans and advances to majorly Future Corporate Resources
Private Limited – a holding company of the Future Group. The debt
also includes unsecured loans received from Future Group entities;
excluding these, the net adjusted leverage (adjusted net
debt/operating EBITDAR) stood at 5.71x in FY20 (FY19: 5.96x). The
company's gross coverage (operating EBITDA/gross interest expense)
deteriorated slightly to 2.02x in FY20 (FY19: 2.21x; FY18: 1.95x)
on account of increased interest expenses. FY20 financials are
provisional in nature.
The company expects to incur further INR1,200 million of capex over
the medium term which may increase its reliance on external debt.
The company had availed the Reserve Bank of India-prescribed
moratorium on its loans over March-May 2020 and has applied for an
extension until August 2020. NFDIL's interest cost is likely to
increase during FY21 due to the additional interest the company had
to pay because of the moratorium and increased borrowing cost.
Ind-Ra expects the credit metrics to remain stretched in FY21 on
account of high debt levels and a likely lower EBITDA (FY20:
INR677.95 million; FY19: INR848.53 million) due to the COVID-19-led
lockdown. NFDIL's working capital limits and non-convertible
debentures are backed by the personal guarantee of Kishore Biyani
(founder of Future Group).
Liquidity Indicator - Poor: NFDIL continued to report negative free
cash flow of INR409.87 million in FY20 (FY19: negative INR5,206.77
million) on account of a wider working capital gap, loans &
advances extended by NFDIL and capex of about INR1,840 million
incurred over FY19-FY20. The deficit was met by a mix of debt and
private equity. At FYE20, NFDIL had cash and equivalents of
INR35.76 million (FYE19: INR0.52 million), against the repayments
of around INR1,197 million in FY21 and INR1,225 million in FY22.
The company's peak average utilization of fund-based limits was
around 87.86% during the 12 months ended May 2020. NFDIL depends
largely upon the minimum guaranteed payments it receives from the
Future Group entities, according to its master service agreements
(signed between NFDIL and Future Retail Ltd (FRL), Future Lifestyle
Fashions Ltd (FLFL) and Future Consumer Ltd (FCL)) through an
escrow mechanism. However, any delay in the payments to NFDIL from
these key counterparties, mainly due to the weakening of their
credit metrics and liquidity profile, can lead to high refinancing
risk for NFDIL in the near term. During FY20, the company's net
working capital cycle elongated to 86 days (FY19: negative 39 days)
on account of high debtor days of 164 (119); the cycle is likely to
remain in the same range or even stretch further in FY21 owing to
the consistently higher debtor days.
NFDIL's revenue fell 4.19% yoy to INR1,951.63 million during FY20
due to the lower-than-expected revenue generated from the
technological services offered to the Future Group entities. In
FY21, Ind-Ra expects a further fall in the revenue due to the
COVID-19-led lockdown. The scale of operations is moderate. The
company is developing an artificial intelligence analytical
software and is likely to complete this project by FYE22. Once the
project is successfully completed, the company will able to
generate healthy revenues.
The company's modest EBITDA margin remain volatile (FY20: 34.74%;
FY19: 41.66%; FY18: 30.71%). Its major costs are employee expenses,
service fees, software license charges, internet bandwidth charges,
annual maintenance charges, etc. which account for around 60% of
the total revenue. These charges varies as per the services availed
by the Future Group. The company's return on capital employed was
3.23% in FY20 (FY19: 5.39%). Amid the lockdown in FY21, NFDIL
expects to reduce its administrative expenses and infrastructure
management & hosting charges are likely to remain low too. Ind-Ra
expects EBITDA margin to further decline in FY21 on account of high
fixed costs and the likely lower revenue.
The ratings remain supported by NFDIL's strong operational linkages
with the Future Group's retail businesses. NFDIL provides
information technology and certain business services exclusively to
FRL, FLFL and FCL. Since NFDIL acts as the information technology
backbone for these entities, it forms an integral part of the
group's operations. Therefore, the agency believes NFDIL will
remain strategically important to the group. In FY20, NFDIL derived
54.2% of its total revenue from FRL (FY19: 50.1%), 29.3% from FLFL
(26.1%), 7.1% from FCL (6%) and 9.34% from other Future group
entities (17.71%). Ind-Ra continues to factor in the distress
support potentially available to NFDIL from the group in the form
of unsecured loans (FY20: INR2,800 million; FY19: INR1,200
million).
RATING SENSITIVITIES
Negative: Future developments, which may individually or
collectively, lead to a negative rating action include:
- the net leverage remaining above 4.5x over the medium term
- a substantial deterioration in the liquidity profile of NFDIL
- the cancellation of or an adverse change in master service
agreements
Positive: Net leverage being sustained below 4.5x while the overall
improvement in the credit metrics and liquidity profile of NFDIL
and its key counterparties will lead to a rating upgrade.
COMPANY PROFILE
Incorporated in 2007, NFDIL provides IT and business services to
Future Group companies.
NYSE INFRASTRUCTURE: CRISIL Withdraws D Rating on INR110cr Loan
---------------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI
guidelines, had migrated the rating of NYSE Infrastructure Private
Limited (NYSE) to 'CRISIL D Issuer Not Cooperating'. CRISIL has
withdrawn its rating on the long term bank facility of NYSE
following a request from the company and on receipt of a 'no dues
certificate' from the banker. Consequently, CRISIL is migrating the
rating on bank facilities of NYSE to 'CRISIL D' from 'CRISIL D
Issuer Not Cooperating'. The rating action is in line with CRISIL's
policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 110 CRISIL D (Migrated from
'CRISIL D ISSUER NOT
COOPERATING'; Rating
Withdrawn)
NYSE was set up in 2001 as a special-purpose vehicle by Navayuga
Engineering Company Ltd and Soma Enterprises Ltd. The company
constructed a four-lane highway of around 17 kilometres on National
Highway 5, the Chennai-Kolkata section of the Golden Quadrilateral
project. It was a build, operate, and transfer project on an
annuity basis awarded by NHAI.
PERFECT INDUSTRIES: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Perfect Industries Private Limited
Shop No. 222, Shriram Shyam Tower
Kings Way Nagpur MH 440001
Insolvency Commencement Date: July 9, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: December 7, 2020
Insolvency professional: CA Naren Sheth
Interim Resolution
Professional: CA Naren Sheth
1014-1015, Prasad Chamber
Tata Road No. 1
Opera House
Charni Road (East)
Mumbai 400004
Mobile: 09821133426
Tel: 022 66322870
E-mail: mkindia58@gmail.com
cirp.pipltd@gmail.com
Last date for
submission of claims: July 23, 2020
R.P. SINGH CRUSHER: CRISIL Cuts Rating on INR7.07cr Cash Loan to D
------------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of R.P.
Singh Crusher and Construction Company (RSC), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.07 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with RSC for obtaining
information through letters and emails dated November 30, 2018 and
May 13, 2019 and February 12, 2020 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of RSC, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RSC, is
consistent with 'Scenario 1' outlined in the best 'Framework for
Assessing Consistency of Information with 'CRISIL BB' category or
lower'.
Based on best available information, CRISIL has downgraded the
rating to 'CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable
Issuer Not Cooperating' as there have been continuous overdrawls in
the account for more than 90 days even for the period prior to
month of March 2020.
RSC was established in 2014 by Mr. Raj Pal. The firm trades in
stone aggregate, stone dust, grit, stone crushers, and other such
products, and lays ballast.
RAFFLES GREEN: CRISIL Lowers Rating on INR4cr Cash Loan to D
------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of
Raffles Green Pet India Private Limited (RGP), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.95 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4'
ISSUER NOT COOPERATING')
Cash Credit 4.00 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B-/Stable
ISSUER NOT COOPERATING')
Proposed Long 0.10 CRISIL D (ISSUER NOT COOPERATING;
Term Bank Loan Downgraded from 'CRISIL B-/Stable
Facility ISSUER NOT COOPERATING')
Term Loan 4.95 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B-/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with RGP for obtaining
information through letters and emails dated July 10, 2020,
November 26, 2019 and December 2, 2019 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of RGP. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that the information available for RGP is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower.
CRISIL has downgraded its ratings on the bank loan facilities of
RGP to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL
B-/Stable/CRISIL A4 Issuer Not Cooperating' as there have been
instances of delays in servicing of term debt obligations as well
as overdrawals in the cash credit facilities for more than 30
days.
Incorporated in 2013, RGP is Kadi based company. It is setting up a
unit to manufacture pet flakes by recycling used PET bottles. The
company is promoted by Mr. Jerambhai Chhaganbhai Kalathiya and his
younger brother, Mr. Ankitbhai Mansukhbhai Ajani. The year 2015-16
was the first year for the operations.
RAM SPINNING: CRISIL Reaffirms B- Rating on INR12.8cr Cash Loan
---------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B-/Stable' rating on the long
term bank facilities of Sri Ram Spinning Mills Ltd (SRSM).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12.8 CRISIL B-/Stable (Reaffirmed)
Long Term Loan 10 CRISIL B-/Stable (Reaffirmed)
Proposed Cash
Credit Limit 0.45 CRISIL B-/Stable (Reaffirmed)
Standby Line
of Credit 1.75 CRISIL B-/Stable (Reaffirmed)
The rating reflects SRSM's modest scale of operations,
susceptibility to volatile cotton prices and adverse government
regulations, and its below-average financial risk profile. These
weaknesses are partially offset by the extensive experience of the
promoters in the cotton yarn industry.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: Scale of operations remains modest
amidst intense competition in the cotton yarn industry. Revenue is
estimated at INR52 crore in fiscal 2020, and may remain subdued in
the current fiscal due to the Covid-19 pandemic.
* Exposure to risks related to availability of cotton and
volatility in its prices, and adverse government regulations:
Operations remain susceptible to availability of cotton and any
sharp price fluctuations, or any adverse change in government
regulations pertaining to the cotton yarn industry.
* Below-average financial risk profile: Financial risk profile is
marked by a small networth of INR10.3 crore estimated as on March
31, 2020 (Rs 10.2 crore, a year before). Gearing was moderately
high at 1.76 times as on March 31, 2020 (1.85 times, a year
before). Debt protection metrics are average, with interest
coverage and net cash accrual to total debt ratios of 1.62 times
and 0.07 time, respectively estimated for fiscal 2020 (1.55 times
and 0.06 time, respectively, in fiscal 2019).
* Large working capital requirement: Operations should remain
working capital-intensive: gross current assets were above 150 days
as on March 31, 2020, driven by large inventory of around 100
days.
Strength:
* Extensive experience of the promoters and their need-based
funding support: The decade-long experience of the promoters in the
cotton yarn industry and their healthy relationships with customers
and suppliers'ensuring uninterrupted supply of raw material and
flow of repeat orders'should continue to support operations.
Need-based funding support from the promoters is also likely to
continue in the medium term.
Liquidity Stretched
Liquidity remains stretched: cash accrual of INR0.96 crore expected
over the medium term, should sufficiently cover the yearly debt of
INR0.45 crore. Bank limit utilisation averaged 97% over the 12
months through April 2020, and should remain high due to large
working capital requirement. Liquidity is further supported by
need-based funding via equity and unsecured loans, extended by the
partners.
Outlook: Stable
CRISIL believes SRSM will continue to benefit from the extensive
experience of its promoters in the cotton yarn industry, and
established relationships with customers and suppliers.
Rating Sensitivity factors
Upward factors:
* Sustained growth in revenue, and operating margin of around 6%
or higher
* Prudent working capital management
Downward factors:
* Drop in revenue (below INR30 crore) or operating margin (below
4%)
* Stretch in receivables weakening liquidity
Incorporated in 1995, SRSM manufactures cotton yarn with counts of
30-40. The Hyderabad (Telangana)-based company has a capacity of
23,184 spindles.
RATNESH INFRA: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Ratnesh Infra'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 the
ratings. The rating will now appear as 'IND BB-(ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR30.0 mil. Fund-based facilities migrated to non-cooperated
category with IND BB- (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR30.0 mil. Non-fund-based facilities migrated to non-
cooperated 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
Ratnesh Infra is a proprietorship firm incorporated in September
2010. The firm is engaged in engineering, procurement and
construction business and its manufacturing unit is located at
Chakan (Pune). Ratnesh Infra has an installed capacity of 7,500
metric tons per annum.
REAL AGROTECH: CRISIL Lowers Rating on INR4cr Cash Loan to D
------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of Real
Agrotech Industries (RAI), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B/Stable
ISSUER NOT COOPERATING')
Long Term Loan 1.33 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with RAI through letters
and emails, dated July 29, 2019, and January 10, 2020, among
others, apart from telephonic communication, for obtaining
information. However, the issuer has remained non-cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL has
not received any information on either the financial performance or
strategic intent of RAI, which restricts CRISIL's ability to take a
forward-looking view on the entity's credit quality.
Due to delay by the firm in meeting debt obligation, CRISIL has
downgraded the rating on the long-term bank facilities to 'CRISIL D
Issuer Not Cooperating' from 'CRISIL B/Stable Issuer Not
Cooperating'.
RAI is a partnership firm set up in 2013 by the Patel family of
Bavla, Gujarat. The firm processes non-basmati rice and trades in
basmati rice.
RAI is a partnership firm set up in 2013 by the Patel family of
Bavla, Gujarat. The firm processes non-basmati rice and trades in
basmati rice.
SAI PROJECTS: CRISIL Lowers Rating on INR3.5cr Bank Loan to D
-------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of Sai
Projects and Systems Private Limited (SPS), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3.5 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
Letter of Credit .6 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
Overdraft 1 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL A4 ISSUER
NOT COOPERATING')
Proposed 1 CRISIL D (ISSUER NOT COOPERATING;
Overdraft Downgraded from 'CRISIL B+/Stable
Facility ISSUER NOT COOPERATING')
Overdraft 3 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with SPS for obtaining
information through letters and emails dated July 29, 2019 and
January 10, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SPS, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SPS is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Based on the continued delays in servicing the bank debts, CRISIL
has downgraded the ratings to 'CRISIL D/CRISIL D Issuer Not
Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
SPS was incorporated in the year 2007 and is engaged in the
business of providing turn-key electric solutions for factory
automation to varied industries. The company's corporate office is
located at Bangalore, Karnataka.
SATI GRANITES: CRISIL Withdraws B+ Rating on INR2.31cr LT Loan
--------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of Sati
Granites India Private Limited (SGIPL), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 4.5 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Withdrawn)
Export Packing 3.0 CRISIL A4 (ISSUER NOT
Credit COOPERATING; Rating Withdrawn)
Letter of Credit 1.25 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Withdrawn)
Proposed Long Term 2.31 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Withdrawn)
Term Loan 7.20 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
CRISIL has been consistently following up with SGIPL for obtaining
information through letters and emails dated August 31, 2019 and
February 06, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SGIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SGIPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'. Based on the last available information, the rating on bank
facilities of SGIPL continues to be 'CRISIL B+/Stable/CRISIL A4
Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of SGIPL on
the request of the company and receipt of a no objection
certificate from the bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
SGIPL, established in 2011 by Mr. Sandeep Jalan and Mr. Swastik
Jalan, is part of the SATI group which processes and trades in
granite stones. SGIPL's manufacturing facility is in Hosur (Tamil
Nadu). The company began commercial operations in April 2013. The
SATI group has been engaged in the granite trading business since
2002 through various group entities.
SCV SKY VISION: CRISIL Lowers Rating on INR6cr Loans to D
---------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of SCV
SKY Vision (SCV), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
Long Term Loan 5 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with SCV for obtaining
information through letters and emails dated July 29, 2019 and
December 09, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of the company, which restricts
CRISIL's ability to take a forward-looking view on the credit
quality. CRISIL believes information available is consistent with
'Scenario 1' outlined in the Framework for Assessing Consistency of
Information with 'CRISIL BB' category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation coupled with adverse information in the
public domain, CRISIL has downgraded the long term rating to
'CRISIL D Issuer Not Cooperating' from 'CRISIL B+/Stable Issuer Not
Cooperating'.
The downgrade reflects delays in debt servicing for more than 30
days, because of its stretched liquidity position.
SCV, established in 1980, is a Multi system operator (MSO) of
television channels in Chitoor district. SCV's operations are
managed by Mr. Chenchu krishnama Naidu, Managing partner.
SHRI DAKSHINERSHWARI: Ind-Ra Withdraws 'BB' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Shri
Dakshinershwari Maa Polyfabs Limited's Long-Term Issuer Rating of
'IND BB (ISSUER NOT COOPERATING)'.
The instrument-wise rating actions are:
-- The 'IND BB' rating on the INR670 mil. Proposed long-term loan
is withdrawn; and
-- The 'IND BB' rating on the INR200 mil. Proposed fund-based
working capital limit withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings as the company
did not proceed with the instruments as envisaged.
COMPANY PROFILE
Shri Dakshinershwari Maa Polyfabs was incorporated in November 2016
to set up a plant for manufacturing printed plastic bags, leno
bags, cement bags, and ad protex bags.
TUSHA TEXTILES: Ind-Ra Lowers LongTerm Issuer Rating to 'B+'
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Tusha Textiles
(Mumbai) Private Limited's (TTMPL) Long-Term Issuer Rating to 'IND
B+' from 'IND BB'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR150 mil. Fund-based limits downgraded with IND
B+/Stable/IND A4 rating.
KEY RATING DRIVERS
The downgrade reflects Ind-Ra's expectation of a fall in TTMPL's
revenue in FY20, based on 9MFY20 financials, which might sustain in
FY21 as well due to a continued low demand and export disruptions
caused by the COVID-19-led lockdown. The company's scale of
operations remains small with revenue falling 6% yoy to INR548
million in 9MFY20. During FY19, TTMPL achieved revenue of INR904
million (FY18: INR865 million) due to a 25.8% yoy increase in its
local sales to INR67 million.
Liquidity Indicator - Poor: TTMPL's peak average utilization of
fund-based limits was 95% for the 12 months ended June 2020. The
cash flow from operations is likely have turned negative in FY20
(FY19: INR57 million), owing to the elongated working capital cycle
of 121 days according to the numbers for 9MFY20 (FY19: 52 days).
Ind-Ra believes the cash flow from operations could continue being
negative in FY21 due to the expected decline in the EBITDA and the
continued stretched working capital cycle. The cash and cash
equivalents at end-9MFY20 were INR7.46 million (FY19: INR5.97
million). The total debt obligations for FY21 are INR20.57 million.
The company has availed the Reserve Bank of India-prescribed
moratorium allowed for its term loan, fund-based limits and
non-fund-based limits facilities over March -August 2020.
The company's EBITDA margins remained modest despite rising to 6.4%
during 9MFY20 (FY19: 5.8%, FY18: 4.4%) due to a reduction in power
& fuel expenses, coupled with a fall in the indirect expenses. The
return on capital employed was 9% in FY19 (FY18: 3%). Ind-Ra
expects the margins to decline in FY21 owing to a fall in the
revenue which will further defer the company's fixed-cost
recovery.
The credit metrics remained weak in 9MFY20 with the net leverage
(adjusted net debt/operating EBITDA) of 6.0x (FY19: 3.4x, FY18:
4.5x) and the gross coverage (operating EBITDA/gross interest
expense) of 1.3x (1.3x, 1.1x), owing to the low absolute EBITDA of
INR35 million. During FY19, the credit metrics marginally improved
due to a fall in the total debt, coupled with an increase in the
absolute EBITDA to INR53 million (FY18: INR38 million). Ind-Ra
expects the credit metrics to deteriorate in FY21 owing to a
decline in the EBITDA.
The ratings are supported by the promoters' experience of two
decades in the textile industry.
RATING SENSITIVITIES
Negative: Further deterioration in the liquidity along with a fall
in the revenue or EBITDA margin, leading to deterioration in the
credit metrics, all on a sustained basis will be negative for the
ratings.
Positive: An improvement in the liquidity and positive cash flow
from operations, along with a significant increase in the revenue
and EBITDA margin, leading to an improvement in the credit metrics,
all on a sustained basis, will be positive for the ratings.
COMPANY PROFILE
Incorporated in 2002, TTMPL manufactures fabric. Its two
manufacturing units are located in Mumbai, Maharashtra with total
installed capacity of 660,000 meters per month.
VANTA BIOSCIENCE: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Vanta Bioscience
Ltd. (VBL) Long-Term Issuer Rating to 'IND D' from 'IND BB-'. The
Outlook was Stable.
The instrument-wise rating actions are:
-- INR23 mil. (increased from INR20 mil.) Fund-based working
capital limits (long-term) downgraded with IND D rating;
-- INR187.1 mil. (increased from INR131.8 mil.) Term loan (long-
term) due on December 2027 downgraded with IND D rating; and
-- INR90 mil. Proposed fund-based facilities withdrawn (issuer
did not proceed with the instrument as envisaged).
Analytical approach: To arrive at the ratings, Ind-Ra has taken a
consolidated view of VBL, its fully owned subsidiary Vanta Clinical
Research Ltd. and step subsidiary Vayam Research Solutions Ltd. in
view of the strong management, legal, financial and operational
linkages between the entities.
KEY RATING DRIVERS
The downgrade reflects VBL's delay in the repayment of principal
and interest in January 2020 due to delays in the realization of
receivables from customers in China because of the COVID-19
outbreak. The company has availed the Reserve Bank of
India-prescribed moratorium for its term loan facilities over
March-August 2020.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in a rating upgrade.
COMPANY PROFILE
Promoted by Mohan Krishna and Dopesh Raja, VBL was incorporated in
2010. The company acquired facilities from Kemin Industries South
Asia Private Limited at end-March 2017 under an asset purchase
arrangement. VBL undertakes research and development, clinical and
pre-clinical studies in the field of genetic toxicology, animal
toxicology, inhalation toxicology and ecotoxicology. In September
2018, VBL incorporated Vanta Clinical Research to carry out its
clinical research business and further, in October 2019, Vayam
Research Solutions was added as a step subsidiary.
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J A P A N
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RYOHIN KEIKAKU: Muji US Files for Chapter 11 Bankruptcy
-------------------------------------------------------
Business Insider reports that minimalist lifestyle brand Muji's US
subsidiary has filed for Chapter 11 bankruptcy protection, its
Japanese owner Ryohin Keikaku Co said on Friday, joining the list
of casualties from the coronavirus pandemic.
According to the report, Ryohin Keikaku said Muji aims to close
unprofitable stores and renegotiate rents in the United States,
where its 18 stores have been closed since mid-March due to the
pandemic.
Business Insider says the outbreak has inflicted widespread
financial pain on global retailers, leading many such as J.Crew and
Brooks Brothers to file for bankruptcy protection.
According to the report, Ryohin Keikaku said the US filing will not
affect its operations in other markets. But the business has also
been hit by store closures and weak consumer spending in its main
market, Japan.
Ryohin Keikaku on July 10 reported an operating loss of JPY2.9
billion for the quarter through May, the report discloses.
===============
M A L A Y S I A
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CYMAO HOLDINGS: Won't be Classified as PN17 Company
---------------------------------------------------
The Star reports that loss-making Cymao Holdings Bhd, which has
triggered the Practice Note 17 (PN17) criteria after its external
auditors raised doubts over the group's going concern, clarified
that it will not be classified as a PN17 company.
The Star relates that the wood-based product maker said that it was
saved from slipping into PN17 status, thanks to Bursa Malaysia's
PN17 relief measures that would be in effect from
April 17, 2020 to June 30,2021.
According to The Star, Cymao's external auditors, Messrs PKF, have
issued an unqualified audit opinion with indication on material
uncertainty relating to going concern in respect to the group's
audited financial statements for the financial year ending
Dec. 31, 2019 (FY19).
The audit opinion also pointed out that Cymao's shareholders'
equity on a consolidated basis is 50% or less of its share capital
excluding treasury shares as at March 31, the report relays.
"For the avoidance of doubt, Cymao will not be classified as a PN17
listed issuer and will not be required to comply with the
obligations pursuant to Paragraph 8.04 and PN17 of the Main Listing
Requirement (LR) for a period of 12 months from the date of this
announcement.
"Cymao will re-assess its condition and announce whether it
continues to trigger any of the criteria in PN17 of the Main LR
upon the expiry of the 12 months from the date of this
announcement," it said in a filing with Bursa Malaysia.
For context, the PN17 relief measures were introduced to assist
listed entities that were affected by the Covid-19 outbreak, the
report notes.
The Star adds that Cymao said in another announcement that there is
a deviation of more than 10% between the unaudited financial
results announced on Feb. 27 and its unaudited financial statements
for FY19.
This was in relation to the group's net loss after tax of MYR11.10
million in the audited financial statement as compared to MYR4.68
million as announced in the unaudited financial results, The Star
relates.
"The variance of more than 10% was due to the impairment of
property, plant and equipment (PPE) of MYR6.7 million being
recognised in the 2019 audited financial statements. The said
impairment of PPE was not reflected in the fourth quarter of FY19
as the auditors' assessment was based on value in use
calculations.
"However, based on a valuation report which was drawn up after the
announcement of the fourth quarter of FY19 results, the company
reflected the impairment of MYR6.7 million in the 2019 audited
financial statement, which explains the deviation of 10% between
the profit or loss after tax and non-controlling interest stated in
the quarter and the 2019 audited financial statement," it said.
Malaysia-based Cymao Holdings Berhad is an investment holding
company. The Company, through its subsidiaries, manufactures and
markets quality processed downstream wood products such as veneer,
plywood, decorative plywood, engineered wood flooring, and lay-on
wood.
=================
S I N G A P O R E
=================
KRISENERGY LTD: Unhappy Bondholders Rally for a Better Deal
-----------------------------------------------------------
Anita Gabriel at The Business Times reports that a group of
"desperate" bondholders of KrisEnergy Ltd have banded together to
bat for a better deal and oppose the upstream oil and gas firm's
proposed restructuring - its second debt workout in four years - as
the pandemic-led oil shock compounds the firm's debt dilemma.
BT says the disgruntled lot are especially miffed that the scheme,
which largely involves a debt-to-equity swop, the details of which
were released only a month ago by KrisEnergy, "disproportionately"
favors the firm's largest shareholder - Keppel Corp.
"We feel helpless and betrayed and want a middle ground. After
being subjected to years of financial and emotional trauma, the
bondholders now see their hard-earned investments at the brink of
eradication," laments Chris Ng, an investor in KrisEnergy's bonds,
who has so far helped rally unhappy bondholders to push for a less
bitter outcome, BT relays.
The group has reached out to the Securities Investors Association
of Singapore (SIAS) for help, the report says. Bondholders held a
meeting with SIAS on July 16 to provide feedback and form an
informal steering committee. The informal committee is expected to
meet KrisEnergy's top executives at a dialogue session to be
arranged and moderated by SIAS sometime this week.
For some bondholders, it is less about the deal's economics and
more the lack of engagement that has vexed them, the report
states.
"At least give us a seat at the table to say 'Hey, this is not good
enough'. What is the rationale of the disproportionate allocation?"
Woon Lai Har, who doesn't consider herself to be a novice investor,
was quoted by BT as saying.
"How does a zero coupon note (holder) that contributed SGD140
million get over 50 per cent equity while we, who have in totality
jointly sank in SGD330 million and have funded this company
significantly, get less?
"At least explain the rationale instead of saying 'take it or leave
it', said Ms Woon, who had picked up KrisEnergy bonds from the
secondary market, wowed by the "nameplate" of the oil and gas
firm's key shareholder Keppel, which counts Temasek Holdings as its
largest shareholder.
"We are not agitators. We just want to talk and discuss if it's
better to throw new money into a bad market rather than liquidate,"
she added.
When contacted, a spokesperson from KrisEnergy replied: "There are
preparations underway to shortly hold a moderated session with
bondholders and therefore the company believes it would be
premature to express any views prior to that session," BT relays.
Keppel owns some 40 per cent of KrisEnergy and is a significant
direct creditor of the mainboard-listed firm, arising from its
holding of some SGD140 million zero coupon notes (ZCN) due 2024 to
rescue KrisEnergy in 2016 when it was in dire need of fresh funds
amid the oil slump, recalls BT. Keppel has also guaranteed a
revolving credit facility of nearly US$200 million provided by DBS
to KrisEnergy.
Under the proposed scheme of arrangement, KrisEnergy will convert
all unsecured debt including two tranches of notes - SGD130 million
4 per cent (2 per cent cash plus 2 per cent accrued) due 2022 and
SGD200 million senior bonds due 2023 - into equity. It is also
proposing to convert 45 per cent of the secured ZCN into equity and
extend the maturity of the remaining to 2025, according to BT.
Post-restructuring, the two tranches of bonds and the ZCN will be
converted into 35 per cent and 57.5 per cent equity respectively in
KrisEnergy while its existing shareholders' holdings will be
diluted to 7.5 per cent, the report notes.
If the deal sees the light of day, bondholders are set to endure a
painful hair cut with a potential recovery of 4-7 per cent - measly
and hard to stomach, they say, versus the ZCN holder, Keppel, which
stands to recover 79-92 per cent, BT states. These are the
potential illustrative recovery rates stated in KrisEnergy's
proposal that was presented at the second informal investor meeting
on June 19.
"We know we have limited legal rights. However, it's very unjust
that throughout the process, we have given our support to the
company on their promise of a better outcome and yet it resulted in
a significantly worse outcome for the bondholders but vast
improvement for the shareholders," BT quotes Mr. Chris Ng as
saying.
According to BT, KrisEnergy has pitched the scheme as an
urgently-needed deleveraging and a better recovery plan to a
liquidation as it will allow "equitising creditors" and existing
shareholders to enjoy growth and upside in equity value. It also
said it has exhausted most other options, including a hunt for a
white knight and is eager to forge ahead with its Cambodian
project. The company is hoping to secure a consensual restructuring
by end of third quarter 2020.
For bondholders - and no doubt, for KrisEnergy too - this is very
much deja-vu, the report says. In 2016, KrisEnergy drew the ire of
bondholders as it sought their forbearance to push back the debt
maturity and at a lower coupon rate to buy more time for an action
plan to ride the commodity crisis. Bondholders slammed that deal as
"inequitable" and had misgivings over taking second place to the
new ZCN that was issued, in the event of a default.
While KrisEnergy had made some concessions to the debt revamp, they
weren't enough to appease the irate bondholders and, in the end,
the plan got the requisite nod of bondholders, BT notes.
BT relates that Terence Lin, general manager of iFAST Global
Markets, which is representing some individual bond investors said:
"As we are just coming out of that restructuring, there is now a
lot of unhappiness over the second round. This is a very poor
proposal".
He suggested some concessions, such as the company maintaining some
debt and not having a complete debt-to-equity swop as well as
raising bondholders' post-equity shareholding to a more substantial
portion rather than a "really tiny" 35 per cent.
"With the existing proposal, clients are thinking of liquidation as
the preferred outcome, although I can't in good conscience advise
my clients that this is in their economic interest," he added, BT
relays.
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.
Trading in its shares has been suspended pending the restructuring,
BT noted.
Total debts stood at around US$558.8 million as at June 30, 2019,
according to KrisEnergy's presentation slides for its Sept. 10,
2019, 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.
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