/raid1/www/Hosts/bankrupt/TCRAP_Public/200916.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, September 16, 2020, Vol. 23, No. 186
Headlines
A U S T R A L I A
GREVILLE STREET: First Creditors' Meeting Set for Sept. 23
PERENTI GLOBAL: Moody's Affirms Ba2 CFR, Outlook Stable
PROGRESS 2020-1 TRUST: S&P Puts Prelim BB(sf) Rating to Cl. E Notes
WHITE MCKINNON: First Creditors' Meeting Set for Sept. 23
WIRECARD AUSTRALIA: Change Financial Buys AU and NZ Business
C H I N A
ANBANG INSURANCE: Applies to Formally Disband, Liquidate
CHINA DILI: S&P Affirms 'B-' Long-Term ICR, Outlook Stable
GCL NEW ENERGY: S&P Downgrades ICR to CCC-, On Watch Negative
INDUSTRIAL & COMMERCIAL: Moody's Rates AT1 Shares 'Ba1(hyb)'
MEINIAN ONEHEALTH: Moody's Cuts CFR to B1, Outlook Negative
TIMES CHINA: S&P Assigns B+ Rating to New USD Sr. Unsec. Notes
TSINGHUA UNIGROUP: Sees Bond Prices Plummet on Debt Issues
I N D I A
AJIT AGRO: CARE Lowers Rating on INR6.40cr LT Loan to C
ARCL ORGANICS: Ind-Ra Withdraws BB-/NonCooperating Issuer Rating
ASIAN RE-SURFACING: CARE Lowers Rating on INR2.23cr Loan to C
DDE RENEWABLE: CARE Reaffirms D Rating on INR42.21cr LT Loan
DEEP LUMBERS: CARE Lowers Rating on INR1.50cr LT Loan to C
DEEP TIMBERS: CARE Lowers Rating on INR3.0cr LT Loan to C
ECO POLYFIBERS: CARE Keeps D Debt Ratings in Not Cooperating
ENN TEE: CARE Keeps D Debt Ratings in Not Cooperating Category
GANESH RICE: CARE Lowers Rating on INR11cr LT Cash Loan to C
HARDEO INDUSTRIES: CARE Lowers Rating on INR6.44cr Loan to B-
HARROW EDUCATIONAL: CARE Keeps D Debt Rating in Not Cooperating
HETRO SPINNERS: CARE Keeps D Debt Ratings in Not Cooperating
HIMANSHU INDUSTRIES: CARE Keeps D Debt Rating in Not Cooperating
INDIA: GDP to Contract by 9.0% in FY2020 Amid COVID-19 Pandemic
ISHANIKA HOTELS: CARE Moves D Debt Rating to Not Cooperating
JAIN HYDRAULICS: CARE Keeps D Debt Ratings in Not Cooperating
JM FERRO: CARE Keeps D Debt Ratings in Not Cooperating Category
JOVIAL STAINLESS: CARE Lowers Rating on INR15.00cr LT Loan to D
KARPAGAM MILLS: CARE Assigns D Rating to INR45.97cr Loan
KRISHNA EDUCATIONAL: CARE Cuts Rating on INR15cr Loan to C
LAXMI TRADERS: CARE Lowers Rating on INR7.0cr LT Loan to C
MAHESHWAR HYDEL: CARE Keeps D Debt Rating in Not Cooperating
MARUTI GRANITES: CARE Lowers Rating on INR11cr LT Loan to D
MGM INFRA: CARE Keeps D Debt Rating in Not Cooperating Category
OM AASTHA: CARE Keeps D Debt Rating in Not Cooperating
OM PACKAGING: CARE Lowers Rating on INR6cr LT Loan to C
PARISHUDH MACHINES: CARE Keeps D Debt Ratings in Not Cooperating
PINK CITY: CARE Keeps D Debt Rating in Not Cooperating Category
RAHUL COMMERCE: CARE Lowers Rating on INR12.60cr LT Loan to C
SAFI TRADERS: Ind-Ra Moves BB LT Issuer Rating to Non-Cooperating
SHREEMAAVAISHNAVI AGRI: CARE Keeps D Rating in Not Cooperating
TULSI TRADING: CARE Keeps D Debt Rating in Not Cooperating
VDC UTILITY: CARE Assigns and Simultaneously Withdraws D Rating
P H I L I P P I N E S
DE LA O RURAL: MB Shuts Bank; PDIC to Pay All Valid Deposit Claims
S I N G A P O R E
BM MOBILITY: To Be Delisted from SGX, Must Provide Exit Offer
FLOATEL INT'L: Creditors Extend Forbearance to End-September
JUBILANT PHARMA: Fitch Maintains 'BB-' LT IDR on Rating Watch Pos.
T H A I L A N D
KTB SECURITIES: Fitch Rates THB450MM ST Sub. Unsec. Debt 'B(tha)'
X X X X X X X X
[*] ASIA: Economic Growth to Contract in 2020, ADB Says
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A U S T R A L I A
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GREVILLE STREET: First Creditors' Meeting Set for Sept. 23
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Greville
Street Enterprises Pty Ltd, trading as Tokosan - Melbourne, will be
held on Sept. 23, 2020, at 11:00 a.m.
Creditors wishing to attend the meeting by way of Teleconference
are advised to contact Condon Associates on (02) 9893 9499 or
enquiries@condon.com.au for the teleconference details.
Schon Gregory Condon RFD of Condon Associates was appointed as
administrator of Greville Street on Sept. 11, 2020.
PERENTI GLOBAL: Moody's Affirms Ba2 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has affirmed Perenti Global Limited's Ba2
corporate family rating (CFR). Moody's has also withdrawn the Ba2
backed senior secured bank credit facility rating of Barminco
Finance Pty Ltd as the obligation is no longer outstanding.
The outlook is stable.
RATINGS RATIONALE
"Perenti's credit profile reflects the company's improved business
profile with the increased scale and diversification following the
acquisition of Barminco," says Saranga Ranasinghe, a Moody's Vice
President and Senior Analyst.
Perenti has a strong position in providing integrated mining
services in its target markets and a demonstrated ability to
execute contracts with a diversified range of counterparties.
Following the acquisition of Barminco, which completed in November
2018, Perenti's product offering has increased through the addition
of a significant level of underground mining services capabilities
both in Australia and Africa.
"The rating also reflects the company's solid margins and credit
metrics," adds Ranasinghe.
Perenti's financial metrics have been improving reflecting the
company's ongoing earnings growth and deleveraging. Perenti's
adjusted financial leverage as measured by debt/EBITDA was 2.1x for
the fiscal year ending June 2020. Moody's expects the company's
financial metrics to remain moderate around 1.8x -- 2.1x over the
next 12-18 months, driven by its expectation that Perenti will
continue to renew existing contracts and win new contracts,
particularly in Africa, Australia and potentially North America.
At the same time, Perenti's ratings are balanced by the cyclical
nature of the mining services sector and Moody's expectation that
competition will remain strong over the next 12-18 months. The
ratings are also constrained by the company's large exposure to
Africa, which Moody's views as showing higher levels of sovereign
risk than Australia and having less-developed institutional
environments.
While the acquisition of Barminco has significantly rebalanced the
company's earnings back to Australia, reducing Perenti's exposure
to these jurisdictions, Moody's expects a significant portion of
the company's growth opportunities will continue to come from
Africa.
However, Perenti's operations in Africa also benefit from a degree
of geographic and mine diversification, as well as from its long
track record of successfully operating in these higher-risk
jurisdictions. The recent contract wins to provide underground
mining services at Barrick's Hemlo Mine in Canada, further supports
Perenti's geographic diversification and reduction in jurisdiction
risk.
The stable outlook on Perenit's ratings reflects its solid credit
metrics and Moody's expectation that the company will continue to
renew its existing contracts, win new contracts and operate within
the parameters set for the rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Perenti's ratings could be upgraded over time if the company
continues to grow its scale and product offerings while maintaining
a track record of strong cash flow generation and improved
earnings, such that adjusted debt/EBITDA is sustained below 1.5x
through the cycle.
Perenti's ratings could be downgraded if the company fails to renew
material contracts or win new contracts, if adjusted debt/EBITDA
exceeds 2.5x, or if operating conditions deteriorate significantly,
leading to reduced earnings and margins over a sustained period.
Perenti Global Limited (Perenti) was established in 1987 as a drill
and blast company in the Australian mining services sector and has
expanded into a vertically integrated provider of surface and
underground mining services in Australia and Africa, with inhouse
capabilities in manufacturing, logistics and supply. Perenti also
provides equipment rental, parts sales, service exchange and
maintenance services.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
PROGRESS 2020-1 TRUST: S&P Puts Prelim BB(sf) Rating to Cl. E Notes
-------------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to six classes
of prime residential mortgage-backed securities (RMBS) to be issued
by Perpetual Trustee Co. Ltd. as trustee for Progress 2020-1 Trust.
Progress 2020-1 Trust is a securitization of prime residential
mortgages originated by AMP Bank Ltd.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed portfolio,
which means no further loans will be assigned to the trust after
the closing date.
-- S&P's view that the credit support is sufficient to withstand
the stresses it applies. This credit support comprises note
subordination and lenders' mortgage insurance policies.
-- The benefit of a standby fixed- to floating-rate interest-rate
swap provided by National Australia Bank Ltd. to hedge the mismatch
between receipts from any fixed-rate mortgage loans and the
variable-rate RMBS.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity reserve
equal to 0.85% of the invested amount of the notes, and an excess
reserve that builds from excess spread from the call option date
are sufficient under our stress assumptions to ensure timely
payment of interest.
S&P Global Ratings acknowledges a high degree of uncertainty about
the evolution of the coronavirus pandemic. The consensus among
health experts is that the pandemic may now be at, or near, its
peak in some regions but will remain a threat until a vaccine or
effective treatment is widely available, which may not occur until
the second half of 2021. S&P said, "We are using this assumption in
assessing the economic and credit implications associated with the
pandemic. As the situation evolves, we will update our assumptions
and estimates accordingly."
PRELIMINARY RATINGS ASSIGNED
Progress 2020-1 Trust
Class Rating Amount (A$ mil.)
A AAA (sf) 460.000
AB AAA (sf) 22.000
B AA (sf) 7.200
C A (sf) 5.350
D BBB (sf) 2.600
E BB (sf) 1.350
F NR 1.500
NR--Not rated.
WHITE MCKINNON: First Creditors' Meeting Set for Sept. 23
---------------------------------------------------------
A first meeting of the creditors in the proceedings of White
McKinnon Pty Ltd, trading as The Morpeth Pharmacy, will be held on
Sept. 23, 2020, at 10:30 a.m. via Zoom video conferencing.
Sule Arnautovic and Bradd William Morelli of Jirsch Sutherland were
appointed as administrators of White McKinnon on Sept. 11, 2020.
WIRECARD AUSTRALIA: Change Financial Buys AU and NZ Business
------------------------------------------------------------
Financial Standard reports that Change Financial, a US-focused
fintech company, announced it has entered into a binding agreement
to acquire all of business assets of Wirecard Australia and New
Zealand for AUD7.8 million (US$5.7 million).
According to Financial Standard, Change Financial said the Wirecard
business has three well established products covering the card
management platform, central managed testing hub for financial
transactions and mobile payments.
The deal comes after the Australia/New Zealand Wirecard business
going into voluntary administration in July 2020. McGrathNicol and
BDO were appointed voluntary administrators.
Financial Standard relates that Change Financial said the Aust/NZ
business is separate from the much publicised administration
process of the global group, which centered on the dealings of
Wirecard AG, the ultimate parent company.
The Aust/NZ Wirecard business was acquired by Wirecard AG in 2014,
with Change Financial saying it was profitable for 29 years of
operations, the report relays.
"The Wirecard business still remains an ongoing concern. Following
a due diligence exercise and competitive sales process, Change
Financial was selected as the preferred bidder and has signed a
binding sale and purchase agreement with the administrators,"
Change Financial, as cited by Financial Standard, said.
Change said the acquisition will bring significant scale and growth
to its business through the addition of 120 new customers,
capability in over 35 countries and a global workforce, Financial
Standard relays.
The cash consideration and costs are set to be funded by a
placement to processional and sophisticated investors of around
AUD6.4 million and an entitlement offer to existing shareholders
for around AUD4.9 million, the report discloses.
Change Financial said it aims to upgrade Wirecard's existing
platform to increase the addressable market in the US and focus on
onboarding at least 10 new US customers over the next 12 months,
adds Financial Standard.
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ANBANG INSURANCE: Applies to Formally Disband, Liquidate
--------------------------------------------------------
South China Morning Post reports that China's Anbang Insurance
Group said on Sept. 14 that it will apply to the country's banking
and insurance regulator to disband and liquidate the company, a
step towards the official end of the once high-flying
conglomerate.
The government took control of Anbang in February 2018 as part of a
nationwide campaign to reduce financial risk in the aftermath of a
massive asset-buying spree by a handful of private-sector
conglomerates, the report recalls.
The Post says Anbang's ex-chairman, Wu Xiaohui, was sentenced by
authorities to 18 years in prison for fundraising fraud and
embezzlement. Regulators also sped up asset sales of Anbang,
including banks, insurance arms and overseas hotel assets it held
stakes in, "to limit the loss caused by illegal activities of Wu".
In February 2020, two years after the seizure, China's Banking and
Insurance Regulatory Commission (CBIRC) said it had finished
running Anbang, and the revamped entity Dajia Insurance Group, a
new company formed to take over assets from Anbang, was close to a
decision on introducing a batch of strategic investors, the Post
relates.
After the Anbang takeover, China has tightened regulations on the
country's financial holdings companies to defuse risks accumulated
by a group of non-financial firms that it says expanded blindly
into the financial sector, the report relays.
On Sept. 13, the People's Bank of China (PBOC) issued related new
rules, setting requirements on registered capital, total assets,
and assets under management on eligible financial holdings firms.
Anbang's risk settlement is nearing completion under the country's
financial stability department, said Pan Gongsheng, vice governor
of the central bank, at a briefing on Sept. 14, the Post relays.
Pan criticised a small number of firms, including Tomorrow
Holdings, Anbang Group and CEFC China Energy Co, for expanding into
the financial sector using a complex web of shareholding
structures, and falsifying capital injections and misusing funds
from financial institutions, the report says.
Anbang Insurance Group Co., Ltd., through its subsidiaries Anbang
Property Insurance Inc., Anbang Life Insurance Inc., Hexie Health
Insurance Co., Ltd, and Anbang Asset Management Co., Ltd., offered
property insurance, life insurance, health insurance, asset
management, insurance sales agency, and insurance brokerage
services. The company provides car insurance, accident insurance,
cargo transportation insurance, credit insurance, life-long
insurance, and medical insurance services.
CHINA DILI: S&P Affirms 'B-' Long-Term ICR, Outlook Stable
----------------------------------------------------------
On Sept. 14, 2020, S&P Global Ratings affirmed its 'B-' long-term
issuer credit rating on China Dili Group (Dili).
S&P said, "We affirm our issuer credit rating on Dili because we
expect the company to continue generating stable cash inflow from
its operations of wholesale markets. This is despite our
expectation that the company's leverage will pick up in 2020-2021
from its 2019 trough to support business expansion."
The recent acquisition of Hada, funded by a convertible bond that
has been fully converted into equity, will have a slight
deleveraging effect. This is based on S&P's estimate that the
combined entity can achieve a reduction in lease liabilities of
about Chinese renminbi (RMB) 1.1 billion, while Dili assumes an
incremental debt of about RMB1 billion from the acquisition. Dili
acquired the landlord of six of its markets from New Amuse Ltd., a
related party owned by its majority shareholder.
S&P expects Dili's expansion of its wholesale business and
provision of funding support to a related-party retail business to
increase its leverage in the next two to three years.
In 2019, the company expanded its wholesale markets business to the
city of Kunming as a joint venture (65% owned by Dili). The company
paid off the remaining RMB178 million land premium in the first
half of 2020, after an initial investment of RMB180 million in
2019. S&P expects Dili to fund its RMB0.65 billion-RMB1.05 billion
investment in this project with a combination of construction loans
and internal resources. S&P said, "Although we expect the joint
venture to undertake most of the construction loans, we believe
Dili will guarantee the loans. This will partly contribute to our
estimate of an increased leverage at 3.5x-3.7x in 2020, from 2.2x
in 2019."
In S&P's view, Dili's strategy to build a vertically integrated
agriproduct distribution business through a close partnership with
sister company Dili Fresh may create operational and financial
synergy over the long term. However, this may also increase Dili's
financial burden and test its execution capabilities.
Also controlled by Mr. Dai Yongge, Dili's major shareholder, Dili
Fresh operates an agricultural produce supermarket chain. Dili
acquired 19% of Dili Fresh in 2019 for RMB950 million and may
acquire the remaining 81% if Dili Fresh's performance meets Dili's
expectation. S&P's rating on Dili continues to capture the
potential for more related-party transactions and the large
fluctuation in Dili's operational strategy in a weak management and
governance assessment.
S&P said, "Despite the common ownership of the two companies, we
have not included the business merger in our base case scenario due
to uncertainties over the call option. Nonetheless, any potential
large-scale acquisition could reduce Dili's financial buffer and
result in weaker credit metrics. We therefore apply a negative one
notch to our rating on the company to reflect its weaker financial
policy. This also captures the risk of Dili's commitment to provide
a loan of up to RMB2 billion to Dili Fresh to support its
operational integration. However, we have only captured RMB365
million in our base case for 2020, due to uncertainty in the timing
of further drawdowns.
"In our view, Dili's business performance is relatively resilient
amid the COVID-19 pandemic. During the first half of 2020, the
company's total revenue decreased slightly by 7%, mainly due to
lower commission income, which is tied to trading volumes. The
volumes were 8% lower due to shorter operational hours and
temporary closure of markets. Some of Dili's markets, such as the
ones in Hangzhou and Guiyang, rely heavily on exports and imports,
thereby facing steeper commission cuts due to global supply chain
disruptions. We expect revenue to decrease by 3%-5% in 2020, before
increasing 7%-9% in 2021.
"The stable outlook reflects our view that Dili's agribusiness will
continue to generate stable cash flow over the next 12 months. It
also reflects our view that the company will continue to increase
in scale while largely maintaining profitability, and potentially
increase involvement in its downstream retail business, which will
increase leverage.
"Although downside is limited in the next 12 months, we could lower
the rating if Dili aggressively uses debt to support business
expansion or large acquisitions, leading to a further deteriorated
leverage and an unsustainable capital structure.
"We could also lower the rating if Dili's liquidity worsens
severely such that there is a material deficiency in its liquidity
sources to uses. An example of such deficiency could be caused by
providing substantial financial support to new business ventures
such as Dili Fresh or acquiring related parties using cash.
"We could raise the rating if Dili demonstrates a track record of
financial discipline while expanding its market portfolio and
implementing its new business strategy.
"This could happen if we believe the company's debt-to-EBITDA ratio
will not materially deteriorate below our projection of 3x-4x,
after considering potential acquisitions and related-party
guarantees." The rating upgrade is also subject to well-managed
related-party transactions on an arm's-length basis.
GCL NEW ENERGY: S&P Downgrades ICR to CCC-, On Watch Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on GCL New
Energy Holdings Ltd.'s (GNE) to 'CCC-' from 'CCC'. S&P placed the
issuer credit rating as well as its 'CCC-' long-term issue rating
on the company's senior unsecured U.S. dollar notes on CreditWatch
with negative implications.
The CreditWatch placement indicates a high chance that S&P would
lower the ratings to 'CC' or 'D' if GNE fails to fully compensate
its bond investors commensurate with the original terms.
S&P said, "We lowered the rating and placed it on CreditWatch
because we see an increased likelihood that GNE will launch a
distressed exchange or similar mechanism for its US$500 million
senior unsecured notes that mature on Jan. 30, 2021. In our view,
GNE's weak liquidity, slow progress on project disposals, and
impaired standing in capital markets limit its ability to meet its
mounting debt obligations over the next few months.
GNE's liquidity remains weak, in our opinion. As of June 30, 2020,
the company's current debt totaled Chinese renminbi (RMB) 15.5
billion, including that associated with assets classified as held
for sale, compared with unrestricted cash of RMB737 million. The
current debt consists of 24% offshore and onshore bonds, 3%
shareholder and associate company loans, and about 73% bank loans,
leasing and others. It addition, S&P estimates GNE had about RMB4
billion payables for property, plant and equipment at the end of
June 2020. These could entail some cash outlays this year. GNE
disbursed RMB3.6 billion cash to its suppliers in 2019.
GNE's project disposals to China Huaneng Group (Huaneng) are
unlikely to generate sufficient cash for repayment of the U.S.
dollar notes. Net cash proceeds from the sale typically account for
20%-30% of the project enterprise value and vary depending on the
capital structure and asset quality of each project. GNE still owes
Huaneng the bridging loan.
GNE's progress on asset disposal is slower than planned. The chance
that GNE and Huaneng will complete the remaining 1.7 gigawatt
planned sale before the maturity of the notes is therefore
diminishing. The transaction with Huaneng has also impeded GNE's
disposal of assets to other parties. The company has only sold 75%
equity interest in a 100 megawatt (MW) project to other parties in
the past few months.
In S&P's view, GNE is unlikely to receive sufficient financial
support from its parent company to meet its debt obligations. The
parent GCL-Poly Energy Holdings Ltd. also has a significant amount
of maturing short-term debt. As of end June 2020, GCL-Poly's
current debt was RMB29.3 billion excluding debt associated with
held-for-sale assets, compared with unrestricted cash of RMB1.1
billion.
S&P said, "The CreditWatch placement reflects a high chance that we
would lower the ratings to 'CC' or 'D' if GNE fails to fully
compensate its bond investors commensurate with the original terms.
This is due to the company's lack of a concrete feasible
refinancing plan for its near-term debt maturities. We believe GNE
will likely initiate a distressed exchange on its upcoming debt
maturities, especially the U.S. dollar senior unsecured notes that
mature on Jan. 30, 2021."
The progress and timing of GNE's asset disposal to Huaneng and
other buyers, securing of potential financing resources, or a
restructuring of debt will be key rating drivers.
INDUSTRIAL & COMMERCIAL: Moody's Rates AT1 Shares 'Ba1(hyb)'
------------------------------------------------------------
Moody's Investors Service assigned a Ba1(hyb) foreign-currency
rating to the proposed USD-denominated additional tier 1 (AT1)
capital qualifying offshore preference shares to be issued by
Industrial & Commercial Bank of China Ltd (ICBC, A1 stable).
The assigned ratings are subject to receipt of final
documentations, the terms and conditions of which are not expected
to change in any material way from the draft documents that Moody's
has reviewed.
RATINGS RATIONALE
The Ba1(hyb) rating is three notches below ICBC's Adjusted Baseline
Credit Assessment (BCA), reflecting the structure of the proposed
issuance and Moody's assumption that investors of these securities
face the risk of full or partial compulsory conversion of the
offshore preference shares into ICBC's H shares common stock upon
the occurrence of the relevant trigger event.
The offshore preference shares rank junior to ICBC's deposits,
other senior obligations, all subordinated indebtedness, and any
obligations issued or guaranteed by ICBC that rank, or are
expressed to rank, senior to the offshore preference shares, and
rank senior only to its common stock.
Under the terms and conditions of the proposed offshore preference
shares, a compulsory conversion of the offshore preference shares
into H shares will be triggered if a non-viability trigger event
occurs. A non-viability trigger event will occur upon the earlier
of (1) the China Banking and Insurance Regulatory Commission having
determined that ICBC will not be able to exist if there is no
conversion or write-off of ICBC's capital; and (2) the relevant
regulatory departments having determined that ICBC will not be able
to exist if the public sector does not provide a capital injection
or other equivalent support.
The rating also incorporates the possibility of impairment
associated with the cancellation of the dividends. Such an
impairment could occur before ICBC reaches the point of
non-viability. Under the proposed terms and conditions, the
offshore preference shares will pay fixed-rate annual dividends,
which will be reset periodically, and ICBC may choose not to pay
dividends on a non-cumulative basis. The distributions on the
offshore preference shares are fully discretionary, but in priority
to any distributions made to ordinary shareholders.
ICBC's standalone BCA is baa1 and its Adjusted BCA, which
incorporates no affiliate support, is the same as its BCA. China
does not have an operational resolution regime for banks.
Therefore, Moody's applies a basic Loss Given Failure approach in
rating ICBC's debt securities. While Moody's assesses that ICBC's
deposits and senior debt are likely to receive a very high level of
support from the Government of China (A1 stable) in times of need,
Moody's does not assume that AT1 securities - which are designed to
absorb losses - will receive extraordinary government support.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
ICBC's offshore preference shares could be upgraded if ICBC's BCA
is upgraded. ICBC's BCA could experience upward pressure if ICBC's
(1) asset quality, measured by the rate of formation of problem
loans, continues to improve; (2) profitability, measured by return
on assets, remains resilient; or (3) capitalization continues to
strengthen, with an improvement in its Tangible Common Equity/Risk
Weighted Assets (TCE/RWA).
ICBC's offshore preference shares could be downgraded if ICBC's BCA
is downgraded. ICBC's BCA could experience downward pressure if
ICBC's (1) asset quality and profitability weaken significantly; or
(2) capitalization weakens, with a deterioration in its TCE/RWA.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Banks Methodology
published in November 2019.
Industrial & Commercial Bank of China Ltd, headquartered in
Beijing, reported total assets of RMB33.1 trillion as of June 30,
2020. ICBC is a global systemically important bank as designated by
the G-20's Financial Stability Board.
MEINIAN ONEHEALTH: Moody's Cuts CFR to B1, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating (CFR) of Meinian Onehealth Healthcare Holdings Co., Ltd. to
B1 from Ba3. At the same time, Moody's has downgraded the senior
unsecured rating on the bonds issued by Mei Nian Investment Limited
and guaranteed by Meinian Onehealth to B1 from Ba3.
The outlook remains negative.
"The downgrade reflects our view that Meinian Onehealth's strategy
to shift to a premium service offering has been more challenging
than previously expected and that its leverage will remain elevated
over the next 12-18 months, amid a significant deterioration in
revenue and earnings during the first half of 2020," says Shawn
Xiong, a Moody's Assistant Vice President and Analyst.
The B1 rating also factors in the operational benefits and support
from Alibaba affiliates as the company's second largest shareholder
group.
The negative outlook reflects uncertainty around the pace of
recovery of the company's operating performance, its weak liquidity
position, and its large upcoming debt maturities over the next 12
months.
RATINGS RATIONALE
Meinian Onehealth's B1 CFR reflects the company's leading position
in China's (A1 stable) private medical examination sector, its
exposure to the country's growing preventive healthcare industry,
and the operational benefits and support from having Alibaba
(China) Technology Co and its affiliates as the second largest
shareholder group, with a 14.39% stake as at June 30, 2020.
Alibaba (China) Technology Co, an indirect and wholly owned
subsidiary of Alibaba Group Holding Limited (A1 stable) and its
affiliates, paid a total consideration of around RMB6.70 billion
for its stake in the fourth quarter of 2019.
On the other hand, the rating is constrained by the integration and
execution risks stemming from (1) its strategy of growing through
acquisitions and multistep investments, (2) it shifts towards a
more premium service offering, and (3) the evolving regulatory
environment.
The coronavirus outbreak has resulted in a significant decline in
Meinian Onehealth's revenue and earnings in the first half of 2020.
It has led to the temporary closure of its medical centers.
Additionally, private medical check-ups have also remained a more
discretionary spending, particularly for individuals.
Although Moody's expects the company's operating performance to
start gradually recovering from the second half of 2020, this will
only partly offset the material decline in the first half of the
year. As a result, Moody's expects Meinian Onehealth's revenue will
decline by 25%-30% in 2020.
For 2021, Moody's expects the company's revenue to recover to 2019
levels. At the same time, the company's adjusted EBITDA margin will
likely recover to around 18%-19% as it continues to generate the
majority of its revenues from corporate customers over the next
12-18 months.
As a result, Moody's expects the company's leverage will increase
significantly in 2020 due to the expected very weak earnings
generation. Moody's expects the company's leverage to improve to
around 4.8x in 2021 as its operating performance recovers.
From an operational perspective, the company has received increased
operational support from and collaboration with Alibaba and its
affiliates during the first half of 2020, including in areas such
as the development of mobile and online applications, the upgrade
of information, sales and finance systems, enhancement of its data
security system, and the building of medical data centers. Moody's
expects the company to benefit from these initiatives over the
medium term.
Meinian Onehealth's liquidity is weak mainly because of weak
operating cashflow and some sizable maturities through the next 12
months. Moody's expects that the company's cash balance of around
RMB2.5 billion at the end of June 2020, combined with its expected
operating cash flow of RMB850 million-RMB900 million, will be
insufficient to cover its short-term debt of RMB4.6 billion
including its USD200 million senior unsecured notes due in Aril
2021, and capital expenditure of around RMB1.2 billion, over the
next 12 months.
The associated risks are mitigated by Meinian Onehealth's access to
diversified funding sources, including bank borrowings, equity
markets, and the onshore and offshore bond markets.
Meinian Onehealth's ratings also consider the following
environmental, social and governance (ESG) factors.
Firstly, Meinian Onehealth operates in the highly regulated
healthcare services industry. A failure to comply with relevant
regulations, or changes in government policies or regulations,
could have an adverse impact on its operations.
Secondly, Meinian Onehealth's ownership is concentrated in a small
number of shareholders, who have pledged a high ratio of their
shares. However, share pledge has been decreasing in recent
periods.
The largest shareholder group is Mr. Yu Rong whom together with his
affiliates, have a 17.22% stake in the company, followed by Alibaba
(China) Technology Co. and its affiliates' 14.39% stake.
This situation is partially mitigated by Meinian Onehealth's status
as a listed and regulated entity.
The company's eleven-member board consists of four independent
directors. Additionally, three members are appointed from Alibaba
Group and its subsidiaries.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could change the ratings outlook back to stable if (1) the
company's operations and revenue recover on a sustained basis over
the next 6-12 months; and (2) it successfully refinances its
upcoming bank loans and USD200 million senior unsecured notes.
Moody's could downgrade the ratings if (1) the company's revenue
and profitability fail to improve meaningfully on a sustained
basis, such that its adjusted debt/EBITDA exceeds 5.0x on a
sustained basis; (2) unexpected future disruptions in its
operations lead to a further significant weakening of its liquidity
position; or (3) it fails to refinance its upcoming bank loans or
refinance its USD200 million senior unsecured notes in a timely
basis.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Shanghai, Meinian Onehealth Healthcare Holdings
Co., Ltd. is a leading Chinese preventive healthcare solutions
provider offering medical examinations and various other services.
The company was listed on the Shenzhen Stock Exchange in 2015.
TIMES CHINA: S&P Assigns B+ Rating to New USD Sr. Unsec. Notes
--------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issue rating to a
proposed issuance of U.S. dollar-denominated senior unsecured notes
by Times China Holdings Ltd. (BB-/Stable/--). The issue rating is
subject to its review of the final issuance documentation.
The China-based property developer intends to use the proceeds to
refinance existing debt. The company is concurrently conducting an
offer to purchase its outstanding 6.25% senior notes due January
2021.
S&P rates the notes one notch below the issuer credit rating on
Times China to reflect structural subordination risk. As of June
30, 2020, Times China's capital structure consists of Chinese
renminbi (RMB) 13.7 billion in secured debt and RMB27.8 billion in
unsecured debt at the subsidiary level (including financial
guarantees provided to borrowings of joint ventures), which we
consider to be priority debt. The company also has RMB24.2 billion
in unsecured debt at the parent level. As such, Times China's
priority debt ratio is about 63.1%, above our threshold of 50% for
notching down an issue rating.
S&P expects Times China's earnings to gradually recover from the
pandemic disruption. In its view, the company's business
fundamentals remain solid, supported by a strong rebound in
contracted sales since April, having increased 14% this year up to
end August, and an increasing contribution from urban redevelopment
projects.
TSINGHUA UNIGROUP: Sees Bond Prices Plummet on Debt Issues
----------------------------------------------------------
Zhang Erchi, Ren Huilan and Anniek Bao at Caixin Global report that
the dollar bonds of state-owned chipmaker Tsinghua Unigroup Co.
Ltd. have fallen steeply in recent weeks, as investors worried
about the money-losing firm's ability to repay billions in debt
coming due in the latter half of the year.
According to Caixin, the value of a $1.5 billion bond due next year
fell nearly a quarter from mid-August to 68.07 cents on the dollar,
edging up 0.47% on Sept. 11 after 22 consecutive days of decline.
Two other bonds due in 2023 and 2028 have seen their dollar values
fall by almost one-third this month, the report says.
Investors are concerned about the company's ability to meet its
bond obligations in the second half, which amount to $5 billion,
Caixin notes.
Tsinghua Unigroup Co., Ltd manufactures computer products. The
Company produces computer softwares, computer hardwares, computer
auxiliary equipment, and other products. Tsinghua Unigroup also
produces electronic components, chemicals, and other products.
=========
I N D I A
=========
AJIT AGRO: CARE Lowers Rating on INR6.40cr LT Loan to C
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Ajit
Agro Industries (AAI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 6.40 CARE C; Issuer not cooperating;
Bank Facilities Revised from CARE B-; Stable
on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from AAI to monitor the rating(s)
vide e-mail communications dated April 2, 2020 to July 21, 2020 and
numerous phone calls. However, despite CARE's repeated requests,
the firm has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of best available information
which however, in CARE's opinion is not sufficient to arrive at
fair rating. The rating on AJit Agro Industries bank facilities
will now be denoted as CARE C; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of non-availability of
financial statements for last two years
Detailed description of the key rating drivers
At the time of last rating on July 10, 2019 the following were the
rating strengths and weaknesses
Key Rating Weakness
* Limited track record and small scale of operation: AAI was
incorporated in May 2017. However, the commercial operations of the
firm started in May 2019. The total operating income remained low
during review period marked by total operating income (TOI) of
INR0.32 crore in FY19 with a low net worth base of INR0.49 crore as
on March 31, 2019. TOI mainly consists of Paddy sales. The small
scale limits the firm's financial flexibility in times of stress
and deprives it from scale benefits and limits competitive position
and pricing flexibility compared to larger entities.
* Leveraged capital structure and weak debt coverage indicators:
The firm had a leveraged capital structure marked by overall
gearing ratio of 9.02x as on March 31st 2019. The debt profile of
the firm majorly consists of Term Loan of INR4.45 crore, sanctioned
on December 2018, Repayment of the term loan shall commence from
December, 2019.
* Working capital intensive nature of operations: Paddy in India is
harvested mainly at the end of two major agricultural seasons
Kharif (June to September) and Rabi (November to April). The
millers have to stock enough paddy by the end of the each season as
the price and quality of paddy is better during the harvesting
season. During this season, the firm keeps a stock of 3 months. The
paddy is procured from the farmers generally with a credit period
of 5-10 days. The company receives payment within 25 days from its
customers.
* Highly fragmented and competitive nature of business with intense
competition from large number of players: The rice milling business
requires limited quantum of investment in machinery, however has
high working capital needs. Further, rice milling is not very
technology intensive and as a consequence the industry is highly
fragmented with large number of players operating in the organized
and unorganized segments. The high level of competition has ensured
limiting bargaining power, as a consequence of which rice mills are
operating at low to moderate profitability margins.
* Constitution of entity as a partnership firm with inherent risk
of withdrawal of capital: With the entity being a partnership firm,
it is exposed to inherent risk of the partner's capital being
withdrawn at time of personal contingency and firm being dissolved
upon the death/retirement/insolvency of the partners. Moreover,
partnership firm business has restricted avenues to raise capital
which could prove a hindrance to its growth.
* Operating as well as net loss due to recent start of operations:
The firm commenced its operations from May 2019. The commercial
operations of the firm started in May 2019. In FY19 (Provisional)
firm reported net loss, as commercial operations was not started
and TOI reported was mainly from the trading of Paddy.
Key Rating Strengths
* Experienced promoter for more than a decade in agro industry:
The Partners of the firm has experience of more than a decade in
Cotton Industry. Through the experience in the Cotton industry, the
firm has established healthy relationship with key local suppliers
and customers as well.
* Locational advantage: The mill is located in Raichur district of
Karnataka state which is one of the major paddy cultivation areas
in the State. This ensures easy raw material access and smooth
supply of raw materials at competitive prices and lower logistic
expenditure.
* Healthy demand outlook for Agro Industry: Agriculture is the
primary source of livelihood for about 58 per cent of India's
population. Gross Value Added by agriculture, forestry and fishing
is estimated at INR17.67 trillion (US$ 274.23 billion) in FY18. The
Indian food industry is poised for huge growth, increasing its
contribution to world food trade every year due to its immense
potential for value addition, particularly within the food
processing industry. The Indian food and grocery market is the
world's sixth largest, with retail contributing 70 per cent of the
sales. The Indian food processing industry accounts for 32 per cent
of the country's total food market, one of the largest industries
in India and is ranked fifth in terms of production, consumption,
export and expected growth. It contributes around 8.80 and 8.39 per
cent of Gross Value Added (GVA) in Manufacturing and Agriculture
respectively, 13 per cent of India's exports and six per cent of
total industrial investment.
Raichur (Karnataka) based Ajit Agro Industries (AAI) was
established in 2017 and is promoted by Mr. Aditya Kothari,
Managing Partner. The commercial operations of the firm started in
May 2019.The firm has nine partners. The Partners of the firm have
more than a decade of experience in the Agro Industry. AAI is
engaged in processing and selling of rice. The rice processing unit
of the firm is located at Raichur, Karnataka. Apart from rice
processing, the firm is also engaged into selling by-products such
as broken rice and rice bran. The main input, paddy, is majorly
procured from paddy merchants and farmers located in Andhra Pradesh
and Karnataka region. The firm sells rice and other by-products to
the rice dealers located in Karnataka, Maharashtra and Tamil Nadu.
ARCL ORGANICS: Ind-Ra Withdraws BB-/NonCooperating Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained ARCL Organics
Limited's Long-Term Issuer Rating at 'IND BB- (ISSUER NOT
COOPERATING)' and simultaneously withdrawn it.
The instrument-wise rating actions are:
-- The 'IND BB-' rating on the INR60 mil. *Fund-based working
capital limits maintained in NCO and withdrawn;
-- The 'Provisional IND BB-' rating on the INR20 mil. **Proposed
fund-based working capital limits maintained in NCO and
withdrawn; and
-- The 'IND A4+' rating on the INR103.5 mil. ***Non-fund-based
working capital limits maintained in NCO and withdrawn.
* Maintained at 'IND BB- (ISSUER NOT COOPERATING)' before being
withdrawn.
**Maintained at 'Provisional IND BB- (ISSUER NOT COOPERATING)'
before being withdrawn.
*** Maintained at 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn.
KEY RATING DRIVERS
The ratings have been maintained in the non-cooperating category
because the issuer did not participate in the rating exercise
despite continuous requests and follow-ups by Ind-Ra.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-objection certificate from the lenders. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017, for credit rating agencies.
COMPANY PROFILE
Incorporated in March 1992 by Suraj Ratan Mundhra, ARCL Organics
(formerly Allied Resins & Chemicals Limited) is a chemical
manufacturer with a 39,600-metric-ton-per-annum site in the
Gobindapur area of West Bengal.
ASIAN RE-SURFACING: CARE Lowers Rating on INR2.23cr Loan to C
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Asian Re-Surfacing of Road Agency Private Limited (ARRA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 2.23 CARE C; Issuer not cooperating;
Bank Facilities Revised from CARE B-; Stable
on the basis of best available
information
Long Term/ 6.25 CARE C/CARE A4; Issuer not
Short Term Cooperating Revised from
Bank Facilities CARE B-; Stable/CARE A4 on
the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from ARRA to monitor the ratings
vide e-mail communications dated August 11, 2020, July 20, 2020,
July 10, 2020, June 30, 2020, June 17, 2020 and June 05, 2020 and
numerous phone calls. However, despite CARE's repeated requests,
the company has not provided the requisite information for
monitoring the rating. In line with the extant SEBI guidelines,
CARE has reviewed the ratings on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on ARRA's facilities will now
be denoted as CARE C/CARE A4 ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised on account of no due-diligence
conducted due to non-cooperation by ARRA with CARE'S efforts to
undertake a review of the rating outstanding. CARE views
information availability risk as a key factor in its assessment of
credit risk. Further, the ratings takes into account the
constraints relating to company's small and declining scale of
operations, operating and net losses in FY19 and high inventory
holding. The ratings are further constrained by project execution
risk inherent in various contracts and competitive industry with
business risk associated with tender driven nature of business. The
ratings, however, draw comfort from experienced management and
moderate capital structure.
Detailed description of the key rating drivers
Credit Risk Assessment
Key Rating Weakness
* Small and declining scale of operations: ARRA is a small player
involved in executing civil contracts. The ability of the company
to scale up to larger-sized contracts having better operating
margins is constrained by its small total operating income of
INR0.49 crore (refers to the period April 1 to March 31). The small
scale of operations in a competitive industry limits the bidding
capability, pricing power and benefits of economies of scale. The
scale has been declining for the past three financial years that is
FY16-FY19 on account of weak order book position of the company as
ARRA did not have any orders in hand in FY19.
* Profitability: The profitability varies with the project due to
tender driven nature of the business owing to varying margins in
the different projects undertaken by the company. Due to no orders
in hand during FY19, the company suffered operating and net losses
in FY19.
* High Inventory Holding: The average inventory holding of the
company stood at 88 days in FY19 as against the elongated inventory
holding of 82 days in FY18 on account of low orders in hand. The
company generally maintains inventory in form of raw material and
work-in progress for smooth functioning of its processes. The
company raises bill on the milestone basis and thereon which gets
acknowledged by client after inspection of work done by ARRA. Post
the inspection, department clears the payment by deducting certain
percentage of bill raised in form of retention money, which they
refund after completion of contract. The company receives payment
from the government bodies on cash basis and similarly extends cash
payment to its suppliers.
* Project execution risk inherent in various contracts: Given the
nature of projects awarded, the company is exposed to inherent risk
in terms of delays in certain projects undertaken by the company
due to delay in approvals and sanction from regulatory bodies, land
acquisition issues etc. thus exposing ARRA towards the risk of
delay in projects resulting in a delay in the realization of
revenue growth. Also, the company's ability to execute a project in
timely manner led by its own operational efficiency and timely
stage payments received from clients exposes the company to
potential risk.
* Competitive industry with business risk associated with
tender-based orders: ARRA faces direct competition from various
unorganized players in the market. There are number of small and
regional players and catering to the same market which has limited
the bargaining power of the company and has exerted pressure on its
margins. Further, the award of contracts are tender driven and
lowest bidder gets the work. Hence, going forward, due to
increasing level of competition and aggressive bidding, the profits
margins are likely to be under pressure in the medium term.
Key Rating Strengths
* Experienced management: The operations of ARRA are currently
managed by Mr. Prem Arora who is a graduate by qualification and
has an experience of around three decades in the civil construction
industry through his association with this entity since inception.
Further, he is supported by Mr. Anmol Arora who assists in the
overall operations of the business.
* Moderate capital structure: The capital structure of the company
continue to remain moderate owing to limited reliance on external
borrowing as marked by overall gearing ratio which stood below
unity as on the past three balance sheet dates ending March
31'17-19.
Delhi based, Asian Re-Surfacing of Road Agency Private Limited
(ARRA) was established on November 18, 1985 as a private company.
The company is being managed by Mr. Prem Arora. The company is
engaged in construction of roads only for government departments.
The raw materials namely, tar, sand, cement, steel, tiles, plywood,
bricks, etc. which the firm procures from various domestic
manufacturers and wholesalers.
DDE RENEWABLE: CARE Reaffirms D Rating on INR42.21cr LT Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of DDE
Renewable Energy Private Limited (DREPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 42.21 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The reaffirmation of rating assigned to the bank facilities of
DREPL continue to take into account the instances of delay in
servicing of debt obligations by the company.
Rating Sensitivities
Positive Factors
* Timely servicing of debt obligations for more than three months
and improvement in the liquidity profile of the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Instances of delay in the servicing of debt obligations: There
have been delays in the servicing of debt obligations by the
company for fiscal FY20 (refer to the period April 01 to March 31)
as confirmed with the lenders. The company has paid the debt
obligations due on February 15, 2020 on March 9, 2020 post which it
has availed the moratorium on their payment obligations of the term
loan as per RBI package with respect to bank facilities due in the
period March 2020 to August 2020. The delay in the servicing of
debt obligations is mainly attributed to stretched liquidity
position due to lower generation of cash accruals
vis-a-vis debt repayments for the fiscal FY20.
* Below average financial risk profile: The company has a below
average financial risk profile characterized by leveraged capital
structure and low debt coverage indicators. The leveraged capital
structure is largely due to high debt and low net worth which is
largely due to accumulated losses. Further, the company has been
continuously reporting net losses since incorporation due to lower
operating income as against higher capital charge (Rs, 1.93 crore
during FY20 and INR1.38 crore during FY19). Also, the company has
given out loans and advances to group company namely Saidham
Overseas Private Limited to the tune of INR2.34 crore in FY20
increased from INR1.33 crore in FY19.
Key Rating Strengths
* Long term power off take arrangement: DREPL has signed a Power
Purchase Agreement (PPA) with NTPC Vidyut Vyapar Nigam Limited
(NVVNL) to supply power generated from the 5 MW solar projects for
a period of 25 years from COD which was on January 10, 2012.
According to the PPA, the power is to be sold at a fixed tariff
rate of INR11.55 per KWH. In the event that the payments are
delayed beyond the due date, NVVNL would be liable to pay late
payment surcharge for the delayed amount at 1.25% per month for the
actual period of delay.
* Stable operational track record: The operational performance of 5
MW grid connected solar photovoltaic (SPV) power plant constructed
by DREPL at Askandra Village, Jaisalmer district, Rajasthan which
was commissioned on January 10, 2012 remained satisfactory with CUF
(Capacity utilization factor) of 16.53% during FY19 (PY: 18.25%).
There was a moderation in the PLF of the plant during FY20 largely
due to degradation of the solar modules and climatic conditions.
Liquidity: Stretched
The liquidity profile of the company continues to remain stretched.
The company is expected to generate GCA of ~INR2.50 crore in FY21
against which it has a repayment obligation of ~Rs 2.20 crore. The
company has availed the moratorium on their payment obligations of
the term loan as per RBI package with respect to bank facilities
due in the period March 2020 to August 2020, and the same has been
approved by the lenders. The company has cash balance of INR1.51
crore and has created DSRA in the form of fixed deposits amounting
to INR1.80 crore as on August 18, 2020.
DREPL was incorporated on November 17, 2009 and is a joint venture
between Nice Infracon Private Limited (NIPL) and Lanco Solar Energy
Private Limited (LSEPL), with NIPL holding 51% shares and LSEPL
holding 49% shares respectively. DREPL has set up a 5 MW solar
energy project in Askandra Village, Jaisalmer district, Rajasthan
under the Phase I of Jawaharlal Nehru National Solar Mission
(JNNSM) of Government of India. The project was funded in debt
equity ratio of 66:34; the project achieved Commercial Operations
Date (COD) on January 10, 2012. The company has signed a 25 years
long term Power Purchase Agreement (PPA) with NTPC Vidyut Vyapar
Nigam Limited (NVVNL) at a fixed tariff rate of INR11.55/kWh in
January 2011.
DEEP LUMBERS: CARE Lowers Rating on INR1.50cr LT Loan to C
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Deep
Lumbers Private Limited (DLP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 1.50 CARE C; Issuer not cooperating;
Bank Facilities Revised from CARE B-; Stable
on the basis of best available
information
Short term 7.50 CARE A4; Issuer not
Bank Facilities cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 14, 2019, placed the
rating of DLP under the 'issuer non-cooperating' category as DLP
had failed to provide information for monitoring of the rating. DLP
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 10, 2020, August 7, 2020, and August 5,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
The long term rating has been revised on account of foreign
currency fluctuation risk, company's presence in a highly
fragmented and competitive industry. The rating, however, draws
strengths from experienced promoters.
Key rating Weaknesses
* Foreign currency fluctuation risk: The company is mainly
importing material from Malaysia, Singapore, etc, and the material
is completely sold in the domestic market. With initial cash outlay
for procurement in foreign currency and significant chunk of sales
realization in domestic currency, the company is exposed to the
fluctuation in exchange rates which the company does not hedge.
* Fragmented and competitive nature of the industry: The timber
trading sector is highly competitive, comprising a large number a
large number of players in the organized segment as a result of low
entry barriers. This results in intense competition which has a
cascading effect on the player's margins. Furthermore, timber
industry is primarily dependent upon the demand of real estate and
construction sector across the globe.
Key Rating Strengths
* Experienced promoters: Mr. Kamal Deep Garg, director of DTP has
an experience of more than 10 years in trading business through his
association with group concern i.e. DTPL and Deep timber industries
which is being operational from 2009. Furthermore, he was supported
by Mr. Pradeep Garg and Mr. Chander Shekhar Garg having
experience of more than 10 years and 5 years, respectively, in
trading of timber. They collectively look after the overall
operations of the company.
DLPL was incorporated in 2013 and commenced operations in August
2013. The company is currently being managed by Mr. Kamal Deep
Garg, Mr. Pradeep Garg and Mr. Chander Shekhar Garg. DLPL is
engaged in trading and sawing of timber in form of timber blocks.
The company has its trading cum processing facility located at
Gandhidham, Gujarat. The company imports timber wood from Malaysia,
Singapore, New Zealand, etc, and the finished products i.e. timber
blocks are sold domestically. Furthermore, the company also engaged
in trading of timber blocks domestically and the traded good is
also imported from Malaysia, Singapore, New Zealand, etc. The
company has one associate concern, namely, Deep Timbers Private
Limited which is engaged in similar line of business since 2009.
DEEP TIMBERS: CARE Lowers Rating on INR3.0cr LT Loan to C
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Deep
Timbers Private Limited (DTP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 3.00 CARE C; Issuer not cooperating;
Bank Facilities Revised from CARE B-; Stable
on the basis of best available
information
Short term 7.50 CARE A4; Issuer not
Bank Facilities cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 14, 2019, placed the
rating of DTP under the 'issuer non-cooperating' category as DTP
had failed to provide information for monitoring of the rating. DTP
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 10, 2020, August 7, 2020, and August 5,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
The long term rating has been revised on account of small scale of
operations with losses at net level, leveraged capital structure
and weak debt coverage indicators, foreign currency fluctuation
risk, company's presence in a highly fragmented and competitive
industry. The rating, however, draws strengths from experienced
promoters.
Key rating Weaknesses
* Small scale of operations with losses at net level: The total
operating income of DTP declined by ~98% on a year-on-year basis in
FY19 (refers to the period April 1 to March 31), the scale of
operations continued to remain small. Furthermore, the company
incurred losses at net level.
* Weak overall solvency position: The overall gearing ratio
continued to remain leveraged at 5.68x as on march 31, 2019 (PY:
5.74x). The debt coverage indicators also remained weak as on March
31, 2019.
* Foreign currency fluctuation risk: The company is mainly
importing material from Malaysia, Singapore, etc, and the material
is completely sold in the domestic market. With initial cash outlay
for procurement in foreign currency and significant chunk of sales
realization in domestic currency, the company is exposed to the
fluctuation in exchange rates which the company does not hedge.
* Fragmented and competitive nature of the industry: The timber
trading sector is highly competitive, comprising a large number a
large number of players in the organized segment as a result of low
entry barriers. This results in intense competition which has a
cascading effect on the player's margins. Furthermore, timber
industry is primarily dependent upon the demand of real estate and
construction sector across the globe.
Key Rating Strengths
* Experienced promoters: Mr. Kamal Deep Garg, director of DTPL has
an experience of more than 10 years in trading business through his
association with group concern i.e. DTPL and Deep timber industries
which is being operational from 2009. Furthermore, he was supported
by Mr. Pradeep Garg and Mr. Chander Shekhar Garg having
experience of more than 10 years and 5 years, respectively, in
trading of timber. They collectively look after the overall
operations of the company.
DTPL was incorporated in 2009 and is managed by Mr. Kamal Deep
Garg, Mr. Pradeep Garg and Mr. Chander Shekhar Garg. The company
commenced its operations in December 2008. DTPL is engaged in
trading and sawing of timber in the form of timber blocks. The
company has its processing facility located at Gandhidham, Gujarat.
The company imports timber logs from Malaysia, Singapore, etc, and
the finished products (timber blocks) are sold domestically through
wholesalers and retailers in Northern India. The company also sells
on high seas basis (around 10% of the total revenue in FY16 [refers
to the period April 1 to March 31]). Deep Lumbers Pvt. Ltd. is a
group associate and engaged in a similar line of business.
ECO POLYFIBERS: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Eco
Polyfibers Private Limited (EEPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.50 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short Term Bank 7.50 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 25, 2019, placed the
ratings of EEPL under the 'issuer non-cooperating' category as EEPL
had failed to provide information for monitoring of the rating.
EEPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated August 17, 2020 and August 19, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been maintained by taking into account
non-availability of requisite information and no due-diligence
conducted due to non-cooperation by Eco Polyfibers Private Limited
with CARE'S efforts to undertake a review of the rating
outstanding. CARE views information availability risk as a key
factor in its assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on July 25, 2019, the following were the
rating strengths and weaknesses:
The rating has been reaffirmed on account of on-going delays in
debt servicing due to stretched liquidity position
Eco Polyfibers Private Limited (EPPL) was incorporated in 2011 by
Mr. Sanjay Kumar Aggarwal and Mr. Vinod Kumar. The company is
engaged in trading of plastic products such as Low Density Poly
Ethylene (LDPE), High Density Poly Ethylene (HDPE) etc. Further,
the company has one associate concern namely Swastik Lifesceince
Pvt. Ltd. which is engaged in trading of plants since 2007.
ENN TEE: CARE Keeps D Debt Ratings in Not Cooperating Category
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Enn Tee
International Limited (ETIL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.91 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short Term Bank 0.10 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 29, 2019, placed the
ratings of ETIL under the 'issuer non-cooperating' category as ETIL
had failed to provide information for monitoring of the rating.
ETIL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated August 17, 2020 and August 19, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account non-availability of requisite
information and no due-diligence conducted due to noncooperation by
Enn Tee International Limited with CARE'S efforts to undertake a
review of the rating outstanding. CARE views information
availability risk as a key factor in its assessment of credit
risk.
Detailed description of the key rating drivers
At the time of last rating on July 29, 2019, the following were the
rating strengths and weaknesses:
The rating has been reaffirmed on account of on-going delays in
debt servicing due to stretched liquidity position.
Enn Tee International Limited (ETIL), a closely held public limited
company was initially incorporated as a private limited company
(Enn Tee International Private Limited) in February, 1999. Later
on, the constitution was changed in June, 2014. The company started
its commercial productions in 2000 and is currently being managed
by Mr. Harish Chander. The company is engaged in manufacturing and
trading of poly propylene (PP) yarn at its manufacturing facility
located at Haridwar, Uttrakhand. Earlier ETIL had its manufacturing
facility located in Ludhiana, Punjab which was discontinued in 2005
and shifted to Haridwar in September, 2009. ETIL was involved in
trading of yarn between 2005 and 2009. The installed capacity of
the plant is to manufacture 4700 Metric tons per annum (MTPA) of
yarn as on March 31, 2016. The company sells its products through a
network of around 10 dealers mainly in the states of Delhi, Uttar
Pradesh and West Bengal to the manufacturers of garments, elastics,
tape and other textiles products.
GANESH RICE: CARE Lowers Rating on INR11cr LT Cash Loan to C
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Ganesh Rice Mills Sirsa (SGRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Bank facilities- 2.26 CARE C; Issuer not cooperating;
Fund- Based- Revised from CARE B; ISSUER NOT
LT Term Loan COOPERATING on the basis of
best available information
Bank facilities- 11.00 CARE C; Issuer not cooperating;
Fund Based- Revised from CARE B; ISSUER NOT
LT Cash Credit COOPERATING on the basis of
best available information
Bank facilities- 0.04 CARE C; Issuer not cooperating;
Fund Based- Revised from CARE B; ISSUER NOT
LT Proposed COOPERATING on the basis of
best available information
Bank facilities- 1.70 CARE A4; Issuer not
Fund Based- cooperating; based on
ST Working Capital best available information
Limits
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 16, 2019, placed the
rating(s) of SGRM under the 'issuer non-cooperating' category as
SGRM had failed to provide information for monitoring of the
rating. SGRM continues to be non-cooperative despite repeated
requests for submission of information through e-mails dated July
31, 2020, August 3, 2020, August 5, 2020 and August 7, 2020, August
14, 2020, August 17, 2020, August 28, 2020, September 1, 2020 and
numerous phone calls. In line with the extant SEBI guidelines, CARE
has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. Further, banker could not be contacted.
The rating on the company's bank facilities will now be denoted as
CARE C; ISSUER NOT COOPERATING/ CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account non-availability of requisite
information and no due-diligence conducted due to noncooperation by
the company with CARE'S efforts to undertake a review of the rating
outstanding. CARE views information availability risk as a key
factor in its assessment of credit risk. The ratings of the company
continue to be constrained by small scale of operations,
constitution as a partnership firm, fragmented and competitive
nature of industry, regulatory policy risk and business susceptible
to the vagaries of nature. The ratings, however, draw
comfort from experienced partners in processing of paddy and
favorable manufacturing location.
Detailed description of the key rating drivers
At the time of last rating on July 16, 2019, following were the
rating strengths and weaknesses:
Key Rating Weaknesses
* Small scale of operations: The scale of operations of the firm
stood small. The small scale limits the firm's financial
flexibility in times of stress and deprives it from scale
benefits.
* Constitution of the entity being a partnership firm: SGRM's
constitution as a partnership firm has the inherent risk of
possibility of withdrawal of the partner's capital at the time of
personal contingency and the firm being dissolved upon the
death/retirement/insolvency of
partners.
* Fragmented and competitive nature of industry: The commodity
nature of the product makes the industry highly fragmented, with
numerous players operating in the unorganized sector with very less
product differentiation. Furthermore, the concentration of rice
millers around the paddy growing regions makes the business
intensely competitive.
* Regulatory policy risk: The Government of India (GoI), every year
decides a minimum support price (MSP) of paddy which limits the
bargaining power of the rice millers over the farmers. Sale of rice
in the open market is also regulated by the government through the
levy system under which the rice millers have to first supply to
the government through Food Corporation of India (FCI) at the
predetermined prices. The millers can sell rice at the market rates
in the open market only after they fulfill the levy quota.
* Business susceptible to the vagaries of nature: Rice being mainly
a 'kharif' crop is a seasonal crop and is cultivated from June-July
to September-October, and the peak arrival of crop at major trading
centers begins in October. The output is highly dependent on the
monsoon. Unpredictable weather conditions could affect the domestic
output and result in volatility in the price of rice.
Key Rating Strengths
* Experienced partners in processing of paddy: SGRM is currently
being managed by Mr. Bhim Singal and Mr. Sunil Singal. Mr. Bhim
Singal has an experience of three and a half decades through his
association with "Kashi Ram Pawan Kumar Rice Mills" a family run
firm. He is supported by his son Sunil Singal in managing the
overall operations of the firm who has experience of a decade
through his association with SGRM.
* Favorable manufacturing location: The firm's processing facility
is situated in Haryana which is one of the highest producers of
paddy in India. Its presence in the region gives advantage in terms
of easy availability of the raw material as well as favorable
pricing terms. SGRM owing to its location is in a position to cut
on the freight component of incoming raw materials.
Sirsa-based (Haryana) Shree Ganesh Rice Mills (SGRM) was
established in 1999 as a partnership concern by Mr. Bhim Singhal
and Mr. Sunil Singhal. The firm is engaged in milling and
processing and trading of both basmati and non-basmati rice. The
firm procures the raw material (paddy) from the grain market
located in Haryana through commission agents and sells its product
to wholesalers in Haryana, Delhi and Gujarat.
HARDEO INDUSTRIES: CARE Lowers Rating on INR6.44cr Loan to B-
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Hardeo Industries (SHI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.44 CARE B-; Stable; Issuer not
Facilities cooperating; Revised from
CARE B; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SHI to monitor the rating
vide e-mail communications/letters dated August 5, 2020, August 10,
2020, August 12, 2020 and numerous phone calls. However, despite
CARE's repeated requests, the Entity has not provided the requisite
information for monitoring the rating. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at a fair rating. The rating of SHI's bank
facilities will now be denoted as CARE B-; Stable; ISSUER NOT
COOPERATING. Further, the banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating in June 20, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses:
* Short track record of operations with proprietorship nature of
its constitution: SHI commenced manufacturing operations from
Sep.2013 and has a short operational track record of about 5 years.
Being a proprietorship firm, the firm is exposed to the risk of
withdrawal of capital by the proprietor on personal exigencies,
dissolution of firm due to death and restricted financial
flexibility due to inability to explore cheaper sources of finance
leading to limited growth potential.
* Susceptibility of margins to volatility in raw material prices:
PVC resin and chemicals are the main raw materials for SHI, which
are derivatives of crude oil. Material cost comprises about 60-70%
of the total cost. Prices of crude oil are highly volatile in
nature. Hence, SHI's profitability is highly susceptible to
volatility in raw material prices caused by volatility in the crude
oil prices. At the same time the products manufactured by the firm
have substitutes in the form lower grade PVC pipes. Due to intense
competition in the sector, often price fluctuations in raw material
prices cannot be passed on to the customer. The same exposes SHI to
price fluctuation risk.
* Presence in a competitive industry segment: SHI faces competition
from larger established players such as The Supreme Industries
Limited Prince Pipes & Pipe)) and Finolex Industries which
manufacture UPVC pipes and fittings, HDPE pipes and CPVC pipes and
fittings. The above companies have higher manufacturing capacities
along with financial flexibility and strong brand pull in terms of
quality and proven track record. As a consequence SHI is subject to
intense competition from the above players.
Key Rating Strengths:
* Experienced promoters: SHI has a short track record of about one
year of operations. However, the promoters have reinforced their
footings in the pipes segment with sound base on account of their
experience with the associate firm. The proprietor of the firm is
Ms. Sheetal Agrawal, who is a Graduate and has five years of
industry experience. SHI is being managed by Mr. Arun Agrawal and
Mr. Atul Agarwal, who possess one decade of experience in the PVC
pipes industry.
* Operational and financial synergies with associate firm: SHI is
the backward integration of the group in the PVC pipes segment. SHI
benefits from the synergy of operations with its associate firm,
Shree Hardeo Hardware and Sanitation (SHH), which is engaged in the
trading of PVC pipes, column pipes, sanitary products and others
since 2001. SHI sells its major production to the associate firm.
SHH sells its products through an established distribution network
in the state of Chattisgarh. The established dealership network of
SHH is likely to benefit SHI, which is a new entrant in the PVC
[pipes industry].
Established in the year 2013, Shree Hardeo Industries (SHI), is a
proprietorship firm based in Raipur, Chattigarh. SHI is engaged in
the manufacturing of PVC pipes, column pipes and PVC fittings. The
firm commenced manufacturing operations from Sep 2013 and has an
annual installed capacity of 1000 Metric Tonne/annum. The project
was set up at a cost of INR14.50 crore, funded by a term loan of
INR6.25 crore and capital of INR8.25 crore. Product portfolio of
the firm includes SWR pipes and fittings, column pipes, plumb
pipes, casing pipes, UPVC pipes, which are sold under the brand
name of 'Vertex' SHI procures raw material, which includes PVC
resin and other chemicals from suppliers based in Chattisgarh and
others. The finished products are sold to traders and other
associate entities, through a distribution network.
HARROW EDUCATIONAL: CARE Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Harrow
Educational Society (HES) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.39 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 22, 2019 placed the
ratings of HES under the 'issuer non-cooperating' category as HES
had failed to provide information for monitoring of the rating.
Harrow Educational Society continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated August 7, 2020, August 12,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. Further banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on July 22, 2019 the following were the
rating weakness:
The ratings take into account the on-going delays in the servicing
of interest obligations due to stressed liquidity position.
Uttar Pradesh based HES was established in 1981 with an objective
to provide education services. The society is managed by Er. Navin
Prasad Mathur (President), Mrs. Veena Mathur (Secretary) and Mr.
Vinesh Pal Singh (Treasurer). HES provides undergraduate and
post-graduate courses in various fields of Engineering, Computers
Science, Management and Pharma. The colleges is affiliated to
Gautam Buddha Technical University and is approved by the All India
Council for Technical Education (AICTE). The society also operates
a school in the name of Harrow School providing primary and
secondary education from Nursery to class XIIth. The school is
affiliated to Central Board of Secondary Education (CBSE).
HETRO SPINNERS: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Hetro
Spinners Private Limited (HSPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 21.68 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short Term Bank 1.52 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 13, 2019, placed the
rating(s) of HSPL under the 'issuer non-cooperating' category as
HSPL had failed to provide information for monitoring of the
rating. HSPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and an e-mail communications/letters dated from October 2019 to
August 14, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating.
Detailed description of the key rating drivers
At the time of last rating dated June 13, 2019 the following were
the Strengths and Weaknesses
Key Rating Weakness
* Ongoing delays in meeting of debt obligations: Hetro Spinners
Private Limited (HSPL) has been facing liquidity issues due to
which there are on-going delays and unable to meet its debt
obligations.
Hetro Spinners Private Limited [erstwhile Sai Manasa Spintex
(India) Limited] was incorporated in the year 2009, however, the
commercial operations of the company started from the year 2010.
The company has changed its constitution from Hetro Spinners
Limited to Hetro Spinners Private Limited in August 2018. The
company was promoted by Mr. K Gopala Reddy, his friends and
relatives. The company is engaged in manufacturing of cotton yarn
(20-47 count) and sale of cotton seeds. The company procures the
raw material (cotton lint) from the traders located in and around
Guntur. The company sells its products i.e. cotton yarn and cotton
seeds to the spinning millers and traders located at various places
like West Bengal, Tamil Nadu, Maharashtra and Telangana.
HIMANSHU INDUSTRIES: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Himanshu
Industries (Himanshu) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 22, 2019 placed the
ratings of Himanshu under the 'issuer noncooperating' category as
Himanshu Industries had failed to provide information for
monitoring of the rating. Himanshu Industries continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 7, 2020, August 12, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on July 22, 2019 the following were the
rating weakness:
There are on-going delays in the servicing of interest obligations
due to stressed liquidity position.
Himanshu Industries (Himanshu) was established in January, 2005 as
a proprietorship firm by Mr. Himanshu Garg. The firm is engaged in
the manufacturing of corrugated boxes, mono cartons and rigid
boxes. The firm has its manufacturing unit at Faridabad, Haryana
with an installed capacity of 10,00,000 pieces per month as on
March 31, 2017. Prior to April, 2016, the firm was engaged in
leasing & renting services. The firm undertakes direct sales under
the brand name "BigBox Inc" mainly to manufacturers located in the
region of Delhi NCR wherein it caters to some large and reputed
player viz. VLCC Health Care Limited, Panasonic India Private
Limited, FieldFresh Foods Private Limited (DelMonte India), Intex
Technologies (India) Limited, Karbonn Mobile India Private Limited,
Magicon Impex Private Limited (JIVI Mobiles), etc.
INDIA: GDP to Contract by 9.0% in FY2020 Amid COVID-19 Pandemic
---------------------------------------------------------------
India's gross domestic product (GDP) growth for fiscal year (FY)
2020 ending on 31 March 2021 is forecast to contract by 9.0% as the
coronavirus disease (COVID-19) pandemic weighs heavily on economic
activity and consumer sentiment in the country, according to a new
report by the Asian Development Bank (ADB) released on Sept. 15.
In its Asian Development Outlook (ADO) 2020 Update, ADB forecasts a
strong recovery for the economy in FY2021, with GDP to grow by 8.0%
as mobility and business activities resume more widely.
"India imposed strict lockdown measures to contain the spread of
the pandemic and this has had a severe impact on economic
activity," said ADB Chief Economist Yasuyuki Sawada. "It is crucial
that containment measures, such as robust testing, tracking, and
ensuring treatment capacities, are implemented consistently and
effectively to stop the spread of COVID-19 and provide a
sustainable platform for the economy's recovery for the next fiscal
year and beyond."
The growth outlook remains highly vulnerable to either a prolonged
outbreak or a resurgence of cases, with the country now having one
of the highest number of COVID-19 cases globally. Other downside
risks include increasing public and private debt levels that could
affect technology and infrastructure investment, as well as rising
nonperforming loans caused by the pandemic that could further
weaken the financial sector and its ability to support economic
growth.
Government initiatives to address the pandemic, including the rural
employment guarantee program and other social protection measures,
will aid rural incomes protecting the vulnerable people, but
private consumption may continue to suffer. Investment is also
expected to contract as investors remain deterred by heightened
risks and uncertainties. The fiscal deficit is expected to rise
significantly in FY2020 as government revenues fall and
expenditures rise.
The government also initiated reforms in response to the COVID-19
pandemic focusing on enhancing agriculture markets, upgrading
industrial park infrastructure, and implementing the National
Infrastructure Pipeline. These efforts will promote foreign
investment, incentivize global supply chains to reallocate to
India, and create manufacturing hubs across the country. Financial
support to low-income groups and small businesses can also help
revive the economy in a more inclusive way.
Inflation is expected to fall in the remainder of FY2020 to 4.5%
with tamed food prices and decreased economic activity, and then
further decline to 4.0% in FY2021. India's current account deficit
is forecast to shrink to 0.3% of GDP this fiscal year, then widen
to 0.6% of GDP in FY2021 with exports expected to recover as global
growth rebounds.
ADB is committed to achieving a prosperous, inclusive, resilient,
and sustainable Asia and the Pacific, while sustaining its efforts
to eradicate extreme poverty. Established in 1966, it is owned by
68 members - 49 from the region.
ISHANIKA HOTELS: CARE Moves D Debt Rating to Not Cooperating
------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Ishanika
Hotels Private Limited (IHL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term bank 12.00 CARE D; Issuer not cooperating;
facilities- migrated from CARE D on the
Term Loan basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from IHL to monitor the ratings
vide e-mails communications/letters dated August 27, 2020, August
21, 2020, August 20, 2020, August 19, 2020 and numerous phone
calls. However, despite CARE's repeated requests, the company has
not provided the requisite information and No Default statement
(NDS) for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Hence, based on the
information from public sources regarding the delay in timely
repayment of its debt obligations, CARE has downgraded its ratings
on the bank facilities of Ishanika Hotels Private Limited to 'CARE
D; Issuer Not Cooperating' from 'CARE D'.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised by taking into account the ongoing
delays in repayment of debt obligation due to stressed liquidity
position. The rating also takes into account the non-availability
of information and due-diligence has been conducted due to
non-cooperation by Ishanika Hotels Private Limited with CARE'S
efforts to undertake a review of the rating outstanding. CARE views
information availability risk as a key factor in its assessment of
credit risk. Further, banker could not be contacted. The rating on
the company's bank facilities will now be denoted as CARE D; ISSUER
NOT COOPERATING.
Lucknow based, Ishanika Hotels Private Limited (IHL) was
incorporated as a private limited company in April, 2017. The
company is currently being promoted by Mr. Arun Kumar Singh and
Mrs. Roli Singh. The hotel comprises of total 50 rooms, along with
2 banquet halls, 2 conference rooms, 1 restaurant. The company has
entered into marketing arrangements with online tours and travels
portals like Go Ibibo, Make My Trip, and also has tie-ups with
local tourist guides for potential customers.
JAIN HYDRAULICS: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Jain
Hydraulics Private Limited (JHP) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short Term Bank 0.10 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 8, 2019, placed the
ratings of JHP under the 'issuer non-cooperating' category as JHP
had failed to provide information for monitoring of the rating. JHP
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated August 17, 2020 and August 26, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account non-availability of requisite
information and no due-diligence conducted due to noncooperation by
Jain Hydraulics Private Limited with CARE'S efforts to undertake a
review of the rating outstanding. CARE views information
availability risk as a key factor in its assessment of credit
risk.
Detailed description of the key rating drivers
At the time of last rating on July 8, 2019, the following were the
rating strengths and weaknesses:
The rating has been reaffirmed on account of on-going delays in
debt servicing due to stretched liquidity position
Delhi based, Jain Hydraulics Private Limited (JHP) was incorporated
in May 1981 by Mr. Ajay Kumar Jain and his family members. The
company is currently managed by Mr. Ajay Kumar Jain, Mr. Ajay Jain
and Mr. Ankit Jain. The company is engaged in the manufacturing of
recycling equipments used for recycling of metal, bio medical waste
and solid waste. The product portfolio of the of the company
comprises scrap baling presses, shredders & crushers, box balers &
shearers paper shredders, slag crushers & finer etc. The company
has its manufacturing unit located in Manesar, Gurgaon and the
manufacturing processes of the company are ISO 9001:2000 certified.
Further, the company has its separate trading unit in Delhi. The
company has entered into new business of manpower consulting. JHP
provides the skilled and technical employees to the different
government departments. The company attains the contracts through
tendering and bidding and provides the employees on its on
payrolls.
JM FERRO: CARE Keeps D Debt Ratings in Not Cooperating Category
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of JM Ferro &
Alloys Private Limited (JMFAPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.50 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short Term Bank 12.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 5, 2019, placed the
rating(s) of JMFAPL under the 'issuer non-cooperating' category as
JMFAPL had failed to provide information for monitoring of the
rating. JMFAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated August 07, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Rating takes into account the delays in the debt servicing.
Detailed description of the key rating drivers
At the time of last rating on August 5, 2019 the following were the
rating weaknesses and strengths:
Key Rating Weaknesses
* Delay in debt servicing: As per the interaction with the banker,
the account has turned NPA.
Incorporated in 2011 as private limited company, J M Ferro Alloys
Private Limited (JM) is engaged in the business of trading of steel
products namely Hot Rolled (HR) sheets/coils/CTL, Galvanized Plain
(GP) coil/sheet, scrap, Pipe, Tube, TMT bars and others. JM's
products find application mainly in automobile, electrical,
construction and consumer durable industry. Around 60% of JM
purchases are from the domestic market and balance is imported
indirectly through agents. Revenues are generated entirely from the
domestic market. JM stocks traded material at its warehouse
situated at Kalamboli and supplies as per the customer's
requirements.
JOVIAL STAINLESS: CARE Lowers Rating on INR15.00cr LT Loan to D
---------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jovial Stainless Steel and Alloys (JSS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 15.00 CARE D; Issuer not cooperating;
Bank Facilities Revised from CARE B+; Stable
on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 4, 2019, placed the
rating of JSS under the 'issuer non-cooperating' category as Jovial
Stainless Steel and Alloys had failed to provide information for
monitoring of the rating. JSSA continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls and a letter/email dated August 24, 2020,
August 21, 2020, August 20, 2020 and August 19, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The revision in the rating assigned to the bank facilities of
Jovial Stainless Steel and Alloys takes into account ongoing delays
in the servicing of debt obligation.
* Ongoing delays in the servicing of debt obligation: There have
been ongoing delays in the servicing of debt obligation.
Furthermore, the account has been classified as NPA.
Jovial Stainless Steel and Alloys (JSS) was established as a
proprietorship concern in July 2017 and the firm is currently being
managed by Mr. Ashok Bansal. JSS is established with an aim to set
up two manufacturing facilities at Kaithal, Haryana for
manufacturing of Stainless steel (SS) tubes, SS Pipes, SS sections,
SS rods, strips and coils with an aggregate installed capacity of
manufacturing 10800 metric tonne of Stainless steel products per
annum. The commercial operations of Unit I commenced in March,
2018. And the commercial operation of Unit II is expected to
commence from August 2018. Further, the firm is ISO 9001:2015
certified.
KARPAGAM MILLS: CARE Assigns D Rating to INR45.97cr Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Sri
Karpagam Mills India Private Limited (SKM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long–term Bank
Facilities 45.97 CARE D Assigned
Short-term Bank
Facilities 13.95 CARE D Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SKM factors in the
ongoing delay in servicing the term loan repayment obligations and
instances of overdraws in working capital facilities. The ratings
are also constrained by the company's modest scale of operation,
weak debt coverage metrics, profit margins exposed to volatility in
raw material prices and poor liquidity position with elongated
receivables. The ratings, however, derive strength from vast
experience of the promoters in the textile industry.
Rating sensitivities
Positive factors
* Improve liquidity and operating cycle resulting in efficient
working capital utilization on sustained basis.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in servicing debt obligations and instances of overdraws:
The operating cycle of the company elongated from 127 days in FY19
to 234 days in FY20 (Prov) due to increased finished goods
inventory. Due to stretched working capital cycle there had been
instances of overdraws for more than 30 days in its working capital
facilities in the past. Furthermore there are also ongoing delays
in servicing of term loan repayment obligations.
* Moderate size of operations: The operating income of SKM stood
moderate in the range of INR102.6 crore to INR143.3 crore for the
past four years ended FY20 (Provisional).
* Weak Capital Structure and debt coverage metrics: The capital
structure of the company stood weak, with overall gearing of 2.49x
as on March 31, 2020 (Provisional) as against 2.97x as on March 31,
2019. The debt coverage indicators also stood weak with Total debt
/ GCA of 19.39x as on March 31, 2020 (Provisional) as against
18.12x as on March 31, 2019.
* Volatility in raw material prices: The profitability of spinning
mills depends largely on the prices of cotton and cotton yarn which
are governed by various factors such as area under cultivation,
monsoon, international demand-supply situation, etc.
Key Rating Strengths
* Vast experience of the promoters in the textile industry: Mr. A
Somasundaram, the Managing Director, has rich experience in the
textile industry for more than three decades and is actively
involved in company's operation. The Company is also managed and
supported by his family members Mr. A Krishnasamy, Mr. A.
Shanmugasundaram and Mrs A Sivamani.
Liquidity: Poor
The liquidity of SKM is poor with fully utilized bank limits and
moderate cash balance of INR0.36 crore as on March 31, 2020
(Prov.). The operating cycle of the company is higher at 234 days
(PY: 127 days) for FY20 on account of higher receivables and
inventory which led to overdraws in working capital in past and
also ongoing delays in servicing the term loan obligations.
* Industry Outlook and impact of Covid-19: The Cotton Association
of India (CAI) has projected a record cotton crop of 354.5 lakh
bales for CS2019-2020, which is around 14% higher than the last
season crop of 312 lakh bales. However the demand distortions
caused from Covid-19 pandemic are expected to hurt the domestic
textiles production as well. Covid-19 is expected to lead to drop
in the revenue along with moderation in profitability margins and
debt coverage indicators apart from impacting the liquidity
profiles of most of the companies engaged in the sector.
Sri Karpagam Mills India Private Limited (SKM) was incorporated in
the year 2005 by Mr. A. Somasundaram and his brothers. SKM is
located at Coimbatore, Tamil Nadu is engaged in manufacturing of
cotton yarn of counts 10-60s with installed capacity of 52,800
spindles as on June 30, 2020.
KRISHNA EDUCATIONAL: CARE Cuts Rating on INR15cr Loan to C
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Krishna Educational Trust (SKET), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 15.00 CARE C; Issuer not cooperating;
Bank Facilities Revised from CARE B-; Stable
on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 23, 2019 placed the
rating of SKET under the 'issuer non-cooperating' category as SKET
had failed to provide information for monitoring of the rating.
SKET continues to be non-cooperative despite repeated requests for
submission of information through e-mails dated August 25, 2020,
August 26, 2020 and numerous phone calls. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings has been revised by taking into account
non-availability of requisite information and no due-diligence
conducted due to non-cooperation by Shree Krishna Educational Trust
with CARE'S efforts to undertake a review of the rating
outstanding. CARE views information availability risk as a key
factor in its assessment of credit risk. Further, the ratings
continue to remain constrained by small scale of operations, weak
financial risk profile and residual project risk. The ratings,
however, continue to draws comfort from experienced trustee.
Detailed description of the key rating drivers
At the time of last rating on July 23, 2019 the following were the
rating weaknesses and strengths:
Key Rating Weaknesses
* Small scale of operations: SKET's scale of operations has
remained small marked by fees and gross cash accruals of INR3.57
crore and INR0.33 crore respectively during FY16. The small scale
limits the trust's financial flexibility in times of stress and
deprives it of scale benefits.
* Weak financial risk profile: Despite of being operational around
a decade, SKET has weak financial risk profile marked by weak
profitability profile, expected weak capital structure and coverage
indicators. Trust profitability profile remain weak evident from
SBID (surplus before interest and depreciation) and deficit of
14.60% and -17.45% respectively in FY16 (FY refer to financial year
from April1 to March 31) Trust has moderate capital structure
evident from overall gearing stood at 0.50 times in FY16; however
it is expected to deteriorate in the future over the medium term
due to increase in term debt taken by the trust for the
construction of academic as well non-academic blocks. Customer
concentration risk though stable revenue model providing long term
revenue visibility SKET has entered into a lease agreement with
Great Lakes Institutes of Management (GLIM) for 30 years, commenced
from February 1, 2016 till March 31, 2046. As per contract, the
trust will hand-over the entire academic as well as non -academic
blocks to GLIM, in lieu of agreed monthly rental. Also, GLIM has to
submit security deposit equivalent to 6 months of lease rent.
Further, security deposit amount will increase with an increase in
lease rent. Being on the Strategic Alliance Management Agreement,
it is expected that major portion of revenue is to be generated
from a single client which exposes to the customer concentration
risk.
* Residual project risk: SKET is undertaking an expansion project
by constructing 2 new academics blocks and hostels for which the
trust has taken a term loan of INR15.00 crores and repayment has
already started from November 2016.Any delays in the implementation
may impact the trust's financial risk profile adversely and is also
crucial from credit prospective. Furthermore, the debt funded
project is expected to increase in gearing levels in the medium
term. The trust is also exposed towards project execution risk, in
terms of completion of the project with-in the envisaged time and
cost.
Key Rating Strengths
* Experienced trustee: SKET is promoted by Mr. Vijay Gupta and his
family members. Mr. Vijay Gupta is a graduate and holds two
decades of experience in education industry. Mr. Vijay Gupta
manages the overall operations of the trust with the support of
trust members. Further, they have experienced team of
administrative, professors, technicians, marketing and finance
professionals, who have over a decade of experience in their
respective field.
Gurgaon-Haryana based Shree Krishna Educational Trust (SKET) is a
non-profit trust incorporated in October, 2007 by Mr. Vijay Gupta
and family members. The trust is currently running educational
institute named as 'Gurgaon College of Engineering for Women' in
Bilaspur-Tauru Road, near Manesar (district –Gurgaon), Haryana.
In Feb 2015, trust has entered into an agreement with Great Lakes
Institutes of Management (GLIM) for giving entire college premises
on lease for 30 years (i.e. till Jan 2046).
LAXMI TRADERS: CARE Lowers Rating on INR7.0cr LT Loan to C
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Sri
Laxmi Traders (SLT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.00 CARE C; Stable; Issuer not
Facilities cooperating; Revised from
CARE B-; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SLT to monitor the rating
vide e-mail communications/letters dated August 5, 2020, August 10,
2020, August 12, 2020 and numerous phone calls. However, despite
CARE's repeated requests, the Entity has not provided the requisite
information for monitoring the rating. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at a fair rating. The rating of SLT's bank
facilities will now be denoted as CARE C; Stable; ISSUER NOT
COOPERATING. Further, the banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating in June 20, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses:
* Constitution of the entity as a proprietorship concern: SLT is a
proprietorship concern and is managed largely by the sole
proprietor – Mr. Surendra Kumar Bhagat. Accordingly, it is
exposed to the inherent risk of capital being withdrawn at time of
personal contingency and risk of dissolution on account of poor
succession planning.
* Profit margins vulnerable to volatility in commodity prices: The
prices of agricultural commodities are volatile in nature and are
linked to production in domestic market and global demand-supply
situation. The prices of agro commodities are also affected by the
changes in government regulations and vagaries of weather. The
price of maize, (comprising 85% of the total operating income in
FY15) is highly volatile as it is linked to the demand supply
dynamics in the international market. On receipt of orders, the
entity procures the commodities from the various corn mandis (local
markets) at daily spot prices. Depending on the availability and
price, the average cost price varies for each order, and thus
affecting the firm's overall profitability.
* Working capital-intensive nature of operations: The working
capital requirements are supported primarily by working capital
bank borrowings and SLT had an average cash credit utilisation of
85% during the last 12 months ended June 2018.
* Highly fragmented and competitive industry with low entry
barriers: The agro-commodities trading business is highly
fragmented with large number of organized and unorganized players
in India. There is high competition within the industry due to low
entry barriers. Furthermore, any change in government regulations
and incentives in agro commodity exports/imports have high bearing
on the profitability of the trading entities. In such a competitive
scenario smaller entities like SLT in general are more vulnerable
on account of its limited pricing flexibility.
Key Rating Strengths:
* Experienced proprietor with satisfactory track record of
operations: SLT is engaged in the business of trading of agro
commodity since 2006. The entity is managed by Mr. Surendra Kumar
Bhagat (aged 46 years, Under-Graduate), having an experience of 25
years, who has been overseeing the operations since its formation.
SLT is into agro commodity trading and the operations of the entity
have been increasing over the years from INR128.8 crore in FY13 to
INR181.5 crore in FY15 at a CAGR of 43.13%. The long presence of
the entity with rich experience of the proprietor supports the
business risk profile of the entity.
Sri Laxmi Traders (SLT) was set up as a proprietorship entity in
2006 by Mr. Surendra Kumar Bhagat of Purnea District, Bihar. The
entity is engaged in wholesale trading of agro commodities like
maize, onion, paddy and potato which is procured from the local
farmers and sold in the states of Orissa, Gujarat, West Bengal,
Karnataka, etc. Mr. Surendra Kumar Bhagat, the proprietor, having
an experience of 25 years in the agro-commodity business looks
after the overall affairs of the entity.
MAHESHWAR HYDEL: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shree
Maheshwar Hydel Power Corporation Limited (SMHPCL) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 451.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 31, 2018, placed the
rating of SMHPCL under the 'issuer non-cooperating' category as
SMHPCL had failed to provide the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SMHPCL continues to
be non-cooperative despite repeated requests for submission of
information through email dated August 26, 2020, August 25, 2020 &
August 21, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating of long-term bank facilities of SMHPCL continues to
factor in the ongoing delay in servicing of debt obligations.
SMHPCL is setting-up 400 MW (10x40MW) Maheshwar Hydro Power Project
on the river Narmada at Maheshwar near Mandleshwar, Madhya Pradesh.
The project was initially conceived for setting up by the Narmada
Valley Development Authority (NVDA). Later, it was transferred to
erstwhile Madhya Pradesh State Electricity Board (MPSEB) in 1980,
before awarding it to S Kumars group (the group) as an Independent
Power Project. The group created a Special Purpose Vehicle (SPV) in
1993 in the name of SMHPCL for execution of the project. The
project entailed a total estimated cost of ~Rs. 3,939cr (originally
INR2,760 cr) to be funded in a debt to equity mix of 70:30. The
long-term Power purchase agreement (PPA) for the project was signed
in 1994 with erstwhile MPSEB (succeeded by M.P. Power Management Co
Ltd as holding company for all discoms in M.P). The work on the
project which started in the year 1998-99 was stalled in September
2001 due to withdrawal of certain lenders impacting the financing
of the project. Consequently, SMHPCL approached Power Finance
Corporation (PFC) for sanction of debt and the work on the project
was started again in November 2005.
MARUTI GRANITES: CARE Lowers Rating on INR11cr LT Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Maruti Granites and Marbles Private Limited (MGMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 11.00 CARE D Revised from CARE B+;
Facilities Stable; Issuer Not Cooperating
and removed from INC
Detailed Rationale, Key Rating Drivers
The revision in the rating of MGMPL takes into account delay in
debt servicing.
Key Rating Sensitivities
Positive Factors
* Regularity in debt servicing with improvement in its liquidity
position
Detailed description of the key rating drivers
Key Rating Weakness
* Delays in debt servicing owing to poor liquidity position: As per
bank statement of Cash Credit account, there is overdrawn in cash
credit account from January 31, 2020 to July 22, 2020 owing to
non-payment of interest obligation for the month of January, 2020
and February 2020 owing to poor liquidity position. From March 2020
to August 2020, the company has taken moratorium as per RBI
guidelines. Further, in July 2020, the company has taken Covid-19
term loan of INR2.20 crore, out of which INR1.07 crore was
disbursed on July 23, 2020 and used for adjustment in cash credit
account. Due to it, from July 23, 2020, cash credit account is
regular. However, from July 23, 2020 to August 24, 2020, the
utilization of working capital stood more than 95% as per bank
statement.
Liquidity: Poor
The liquidity position of the company stood poor marked by
elongated operating cycle of 437 days in FY20, deteriorated from
375 days in FY19 owing to increase in collection and inventory
holding period. The elongated operating cycle has led to delay in
debt servicing.
MGMPL, incorporated in 1987, is promoted by Udaipur (Rajasthan)
based Rajgarhia family. MGMPL is engaged in the business of marble
processing with its processing facility located at Sukher, Udaipur,
Rajasthan.
MGM INFRA: CARE Keeps D Debt Rating in Not Cooperating Category
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of MGM Infra
Development Solutions Private Limited (MGM) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.69 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 13, 2019, placed the
rating of MGM under the 'issuer non-cooperating' category as MGM
Infra Development Solutions Private Limited had failed to provide
information for monitoring of the rating. MGM continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 24, 2020, August 21, 2020, August 20, 2020 and August 19,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on June 13, 2019 the following were the
rating weaknesses:
* Ongoing delays in the servicing of debt obligation: There have
been ongoing delays in the servicing of debt obligation.
Furthermore, the account has been classified as NPA.
MGM, incorporated in 2009, is a private limited company being
managed by Mr. Gurpreet Singh and Mr. Manpreet Singh. The company
is setting up a unit to manufacture concrete blocks, bricks, pavers
etc at Roopnagar, Punjab. The commercial operations commenced from
December, 2015 with substantial completion of project. The
commercial operations were expected to commence from May, 2015,
however, the same commenced from December, 2015 due to time
overrun.
OM AASTHA: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Om Aastha
Indo Energy Private Limited (OAIEPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from OAIEPL to monitor the rating
vide e-mail communications/letters dated June 12, 2019, June 7,
2019, June 5, 2019 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
Om Aastha Indo Energy Private Limited (OAIEPL) bank facilities will
now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating in August 28, 2018 the following were
the rating strengths and weaknesses;
Key Rating Weaknesses
* On-going delay in debt servicing: There are on-going delays in
debt servicing of the company.
* Comment on liquidity: The liquidity position was stressed as
reflected by its on-going delay in debt servicing.
Om Aastha Indo Energy Private Limited (OAIEPL) was constituted as a
private limited company in October 2011 by Mr. Shailesh Pratap,
Mr. Bishwambar Singh and Mrs. Sudha Pratap for setting up a rice
milling unit. The company has started its commercial operations
from January 2014. The company has been engaged in rice milling
activities at its plant located at Bhabhua, Bihar with aggregate
installed capacity of 17400 MTPA. The company procures its raw
material from local market and sells its finished products across
Bihar.
OM PACKAGING: CARE Lowers Rating on INR6cr LT Loan to C
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Om
Packaging (OP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 6.00 CARE C; Issuer not cooperating;
Bank Facilities Revised from CARE B+; Issuer
not on the basis of best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 12, 2019, placed the
rating(s) of Om Packaging under the 'issuer non-cooperating'
category as Om Packaging had failed to provide information for
monitoring of the rating. Om Packaging continues to be
noncooperative despite repeated requests for submission of
information through e-mails dated July 31, 2020, August 3, 2020,
August 5, 2020 and August 7, 2020, August 14, 2020, August 17,
2020, August 28, 2020, August 31, 2020, September 1, 2020 and
numerous phone calls. In line with the extant SEBI guidelines, CARE
has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. Further, banker could not be contacted.
The rating on the company's bank facilities will now be denoted as
CARE C; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account non-availability of requisite
information and no due-diligence conducted due to non-cooperation
by the company with CARE'S efforts to undertake a review of the
rating outstanding. CARE views information availability risk as a
key factor in its assessment of credit risk. The ratings of the
company continue to be constrained by small scale of operations,
susceptibility of margins to volatile raw material prices and
constitution as a partnership firm. The ratings, however, draw
comfort from experienced partners in packaging industry.
Detailed description of the key rating drivers
At the time of last rating on July 12, 2019, following were the
rating strengths and weaknesses:
Key Rating Weaknesses
* Small scale of operations: OP is a relatively small scale entity
which remained stable as compared with FY15 income. Furthermore,
the firm's networth base was relatively small. The small scale
limits the company's financial flexibility in times of stress and
deprives it from scale benefits. The operating income has seen an
increasing trend in the past three years on account of increase in
capacity utilisation and sales volume from domestic as well as
overseas customers.
* Susceptibility of margins to volatile raw material prices: The
primary raw material required by OP is paper, adhesives, MS strips,
metal strips, PP granules, etc, which constituted around 70% of the
total cost of sales in past three years, thereby making
profitability sensitive to raw material prices. The major raw
material like polypropylene paper, is commodity in nature and
witness frequent price fluctuations. Therefore, the operating
margin of the company remains susceptible to any sharp movement in
raw material prices. Furthermore, the prices of the raw material
keeps on fluctuating, hence, to some extent the OP is able to pass
on the increase in the prices to the end customers as prices are
negotiated on order basis.
* Constitution as a partnership firm: OP's constitution as a
partnership firm has the inherent risk of withdrawal of the
partners' capital at the time of personal contingency and the firm
being dissolved upon the death/retirement/insolvency of the
partners. Moreover, partnership firms have restricted access to
external borrowings. However, over past two years, the partners
have continuously being infusing capital into the firm.
Key Rating Strengths
* Experience of the partner in packaging industry: Mr. Birendra
Kumar is the main promoter of the firm. He has more than two
decades of experience in the packaging industry. Before starting OP
in 1999, he used to work at some packaging units for four years.
Mr. Avinash Kumar is relative of Mr. Birendra Kumar and has
recently joined OP as a partner of the firm. Both the partners look
after the day-to-day operations of the company and they are
assisted by team of experienced professionals.
Om Packaging (OP) is a partnership firm, incorporated in 1999,
between Mr. Birendra Kumar, Mr. Ramu Sing Yadav & Mr. Shyam
Sunder Yadav and subsequently in February 2012, Mr. Ramu Sing
Yadav & Mr. Shyam Sunder Yadav retired from the business and Mr.
Avinash Kumar joined the business. OP is thereafter managed by two
partners Mr. Birendra Kumarand and Mr. Avinash Kumar sharing
profit and loss in the ratio of 95:05 respectively. The firm is
into business of manufacturing of wide range of packaging products
like industrial barrels, drums, paper cores and tubes and
containers. OM caters to domestic as well as overseas customers.
PARISHUDH MACHINES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Parishudh
Machines Private Limited (PMPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.50 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short Term Bank 2.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 12, 2019 placed the
rating of PMPL under the 'issuer non-cooperating' category as PMPL
had failed to provide information for monitoring of the rating.
PMPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails dated August 24, 2020,
August 7, 2020 and numerous phone calls. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on July 12, 2019 the following point has
been considered: (Updated for the information available from the
Registrar of Companies):
The ratings take into account the on-going delays in the servicing
of interest obligations due to stressed liquidity position.
Uttar Pradesh-based, PMPL was incorporated on February 6, 1987, by
Mr. V.S. Goindi and Mr. G.S. Goindi. It started its commercial
operations in 1988. PMPL is engaged in manufacturing and servicing
of Computerized-Numerical-Control (CNC) turning and grinding
machines and automatic lathes with the plant being located at
Ghaziabad (UP) and Sitarganj (Uttaranchal). The manufacturing
facility of PMPL is well equipped with modern amenities and is ISO
9001:2008 certified. This apart, PMPL also manufactures various
engineering components. PMPL markets its products under the brand
name 'Parisudh'. The major end-users of the machines manufactured
by PMPL are the automobile manufacturing industry, forging
industry, refrigeration industry, railways, bearing industry, etc.
PMPL is a part of Goindi group, promoted by Mr. V. S. Goindi,
which offers a comprehensive range of machine tools to various
industries.
PINK CITY: CARE Keeps D Debt Rating in Not Cooperating Category
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Pink City
Expressway Private Limited (PCEPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1,790.55 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 5, 2018, placed the
rating of PCEPL under the 'issuer non-cooperating' category as
PCEPL had failed to provide the information for the rating exercise
as agreed to in its Rating Agreement. PCEPL continues to be
non-cooperative despite repeated requests for submission of
information through email dated August 26, 2020, August 25, 2020 &
August 21, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account the delays in the servicing of debt
obligations by the company.
Pink City Expressway Private Limited (PCEPL) is an SPV formed by
ETA Group of Dubai and KMC Group of Hyderabad (51:49 JV). IKSHU
Infrastructure Pvt Ltd was inducted in FY13 with 13% stake dilution
by each of the sponsors. The company was incorporated on April 2,
2008 to undertake the improvement, operation and maintenance
including strengthening and widening of the existing 4-lane road to
6-lane highway with service lane on either side from 42.7 km to 273
km (a length of 225.6 km) in states of Haryana and Rajasthan on
NH-8 (Gurgaon-Kotputli-Jaipur Section) on BOT basis. The project
was awarded to a consortium led by ETA group of Dubai and KMC
Constructions Ltd. of Hyderabad on a competitive bidding process,
wherein the ETA-KMC consortium quoted the highest revenue share
(from toll collections) of 48.06% with NHAI which is expected to
increase 1% every year. The concession period is for 12 years till
April 2, 2021 (including original construction period of 30
months).
RAHUL COMMERCE: CARE Lowers Rating on INR12.60cr LT Loan to C
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Rahul Commerce Private Limited (RCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.60 CARE C; Stable; Issuer not
Facilities cooperating; Revised from
CARE B; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term bank 1.40 CARE A4; Issuer not
Facilities cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 27, 2019, placed the
rating(s) of RCPL under the 'issuer non-cooperating' category as
RCPL had failed to provide information for monitoring of the rating
as agreed to in its Rating Agreement. RCPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 06, 2020, August 11, 2020 and August 14, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
RCPL bank facilities will now be denoted as CARE C; Stable; ISSUER
NOT COOPERATING*/CARE A4, ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been revised on account of significant de-growth in
total operating income and incurred net loss of INR6.23 crore in
FY19 (refers the period from April 01, to march 31). The ratings
continue to remain constrained by small scale of operation with low
profit margins, working capital intensive nature of operations with
high collection period, weak capital structure and debt coverage
indicators and intense competition and exposure to tender driven
process risk. The ratings continue to derive strength from
experienced promoters.
Detailed description of the key rating drivers
At the time of last rating in June 27, 2019 the following were the
rating strengths and weaknesses: (Updated the
information available from Ministry of Corporate Affairs).
* Small scale of operations with low profit margins: The total
operating income has declined to INR0.88 crore in FY19 from
INR15.09 crore in FY18 which has deteriorated from INR22.09 crore
in FY17, a steady decrease in past three years. The company has
reported net loss of INR6.23 crore in FY19 as against net profit of
INR0.01 crore in FY18.
* Working capital intensive nature of operation with high
collection period: The operating cycle stretched in FY19 due to
significantly low operating income achieved during the year.
* Weak capital structure and debt coverage indicators: The capital
structure of the company has deteriorated and remained weak due to
negative tangible networth as on March 31, 2019. The debt coverage
also remained weak as marked by below unity interest coverage ratio
in FY19.
* Intense competition and exposure to tender driven process risk:
IT system/solution is a very fragmented and competitive space with
presence of huge small players operating in the same region due to
low capital requirement. Therefore the company is facing intense
competition especially for small players. RCPL executes orders of
government clients. In the government segment the orders are
generally tender driven floated by various government organizations
indicating a risk of non-receipt of contract. However, RCPL also
executes orders for large reputed private parties where risk of non
–receipts of contract is less considering its long association
with these clients.
Key Rating Strengths:
* Experienced promoters: The key promoters; Mr. Deven Shah (aged
about 50 years), has around 25 years of experience in same line of
business, looks after the day to day operations of the company. He
is supported by other promoters Mr. Vinay Joshi (aged about, 48
years) who has around 25 years of experience in this line of
business and Mr. Soumen Datta (aged about, 48 years) who also has
around 25 years of experience in this line of business. The
promoters are supported by a team of experienced technical
professional.
RCPL was incorporated in June 1975 and the company is currently
managed by Mr. Deven Shah, Mr. Vinay Joshi and Mr. Soumen Datta.
RCPL is a specialized IT service provider engaged in consultancy
services with regards to IT systems and solutions along with
supply, installation and maintenance of IT systems/solutions to
corporates. RCPL mainly supply computer hardware (like projector,
server, laptop, computer, monitor, printer and scanner, UPS etc.)
and related software systems with customized implementation and
provides regular maintenance services of the same.
SAFI TRADERS: Ind-Ra Moves BB LT Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Safi Traders'
Long-Term Issuer Rating to the non-cooperating category. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Therefore, investors and
other users are advised to take appropriate caution while using
these ratings. The rating will now appear as 'IND BB (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR590 mil. Fund-based facilities migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 22, 2019. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1998, Safi Traders is a supplier of a wide range of
steel products in south Tamil Nadu. Its operations are managed by
its promoter, Safi Mohammed.
SHREEMAAVAISHNAVI AGRI: CARE Keeps D Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of
Shreemaavaishnavi Agri Producer Company Limited (SMV) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.95 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 2, 2019, placed the
rating of SMV under the 'Issuer non-cooperating' category as SAPCL
had failed to provide information for monitoring of the ratings as
agreed to in its rating agreement. SAPCL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter June 11,
2020, June 15, 2020, June 16, 2020, June 17, 2020 and August 4,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating takes into account delays in debt repayment owing to
poor liquidity position of the company
Detailed description of the key rating drivers
At the time of last rating on July 02, 2019, following was the key
rating weakness
Rating Weakness
* Ongoing delays in Debt servicing: There are on-going
irregularities in debt servicing owing to poor liquidity of the
company.
Shreemaavaishnavi Agri Producer Company Limited (SMV) based out of
Madhya Pradesh was incorporated in 2016. It is engaged in the
trading of agricultural commodities including Wheat, Soyabean, and
Chana etc. During FY17, the company undertook a project for
establishing a dall processing mill with an installed capacity of
720 tonne per day. The company purchases raw-material directly from
the farmers and sells its products all over India under the brand
name of "SMVAP".
TULSI TRADING: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Tulsi
Trading Co (TTC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.25 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 21, 2019, placed the
rating of TTC under the 'Issuer noncooperating' category as TTC had
failed to provide information for monitoring of the ratings as
agreed to in its rating agreement. TTC continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter May 12, 2020,
May 18, 2020, June 11, 2020, June 17, 2020, August 04, 2020 and
August 13, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating takes into account delays in debt repayment owing to
poor liquidity of the firm.
Detailed description of the key rating drivers
At the time of last rating on June 21, 2019, following was the key
rating weakness.
Rating Weakness
* Ongoing delays in Debt servicing: There are on-going
irregularities in debt servicing by TTC due to its poor liquidity.
Rajkot-based (Gujarat), Tulsi Trading Co. (TTC) is a partnership
firm established in 2015 by Mr. Hiren Bhagvanjibhai Sakariya, Mr.
Kiran Bhagvanjibhai Sakariya and Mr. Vasantkumar Talshibhai
Sakaria. The firm trades in agriculture commodities like cotton
bales and cotton seeds. TTC supplies agriculture commodities across
India.
VDC UTILITY: CARE Assigns and Simultaneously Withdraws D Rating
---------------------------------------------------------------
CARE has reviewed the rating assigned to the bank facilities of VDC
Utility Services LLP to CARE D and has simultaneously withdrawn it,
with immediate effect. The ratings assigned to the bank facilities
of VDC Utility Services LLP are primarily constrained on account of
irregularities in the month of December 2019 with non-establishment
of clear track record of three consecutive months after settlement
of its loan on account of moratorium availed for six month
commenced from March 2020. The rating withdrawal is at the request
of VDC and 'No Objection Certificate' received from the bank that
has extended the facilities rated by CARE.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in debt servicing: There are delays in repayment of its
debt obligation in technical past three months as there were
irregularities in the month of December 2019 and VDC has not
established clear track record of three consecutive months after
settlement of its loan on account of moratorium availed for six
month commenced from March 2020.
Liquidity Analysis:
* Poor Liquidity: The liquidity position of VDC remained poor
marked by insufficient cash accruals of INR0.93crore against its
repayment obligations of INR1.24 crore for FY20. Also, its working
capital limit utilization for past one year ended June 2020
remained full while the cash flow from operating activities
continue to remain low at INR0.50 crore in FY19 as against
INR0.53crore in FY18 mainly on account of blockage of funds in
inventories and receivables and the liquidity in form of cash and
bank balance was low INR0.25 crore as on March 31, 2019 as against
INR0.30 crore as on March 31, 2018. Furthermore, The firm has
availed moratorium for instalment and interest payments of its Term
loan and Bank overdraft facility for the period from March,
2020 to August, 2020.
Vapi (Gujarat) based VDC Utility Services LLP (VDC) was initially
established as a partnership firm in January, 2014 as 'Vapi Drain
Cleaners' which later got converted into limited liability
partnership firm on August, 2017 by partners Ms. Heema M. Patel,
Ms. Falguni S. Mistry, Mr. Malav G. Patel, Mr. Swanil A. Mistry
and Mr. Sunil K. Rajani. VDC is engaged in contracting
and sub-contracting of operation and maintenance of underground
sewerage line through direct orders as well as tenders. It is also
engaged in manufacturing and supply of RCC (Reinforced Concrete
Cement) ducts from its plant located at Dholera, Gujarat.
=====================
P H I L I P P I N E S
=====================
DE LA O RURAL: MB Shuts Bank; PDIC to Pay All Valid Deposit Claims
------------------------------------------------------------------
The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP)
prohibited De La O Rural Bank, Inc. from doing business in the
Philippines through MB Resolution No. 1116. A dated September 10,
2020 which also directed the Philippine Deposit Insurance
Corporation (PDIC) as Receiver to proceed with the takeover and
liquidation of the bank. PDIC took over the bank on September 11,
2020.
De La O Rural Bank, Inc. is a single-unit rural bank located at 10
San Jose St., Brgy. San Jose (Pob.), Pangil, Laguna. Latest
available records show that as of June 30, 2020, De La O Rural
Bank, Inc. has 2,079 deposit accounts with total deposit
liabilities of PHP84.8 million, of which 94.9 % or PHP80.5 million
are insured deposits.
The PDIC assured depositors that all valid deposits and claims will
be paid up to the maximum deposit insurance coverage of
PHP500,000.00 per depositor.
Individual account holders of valid deposits with balances of
PHP100,000.00 and below do not need to file deposit insurance
claims, provided they have no outstanding obligations or have not
acted as co-makers of obligations with De La O Rural Bank, Inc.
These individual depositors must ensure that they have complete and
updated addresses with the bank. Mailing Address Update Forms
(MAUF) will be made available at the bank premises and may be
downloaded from the PDIC website, made available at the bank
premises and may be downloaded from the PDIC website,
www.pdic.gov.ph. Depositors may submit the forms until October 9,
2020, either through the dropbox available at the bank premises, or
by sending a scanned copy of said Form and valid ID to email
address, delao-pad@pdic.gov.ph. Payment of insured deposits through
mailing of postal money order is targeted to start on the third
week of October 2020.
For business entities and all other depositors who are required to
file claims for deposit insurance, receiving of claims is targeted
to start by mid-October 2020. Details will be announced through the
PDIC website www.pdic.gov.ph, and PDIC's official Facebook account,
www.facebook.com/OfficialPDIC.
Borrowers are likewise reminded to continue paying their loan
obligations with the closed De La O Rural Bank, Inc. and to
transact only with designated PDIC representatives. The procedures
for settlement of loan obligations are available in the PDIC
website and Facebook account.
For more information on the requirements and procedures for filing
deposit insurance claims and settlement of loan obligations,
depositors and borrowers of the bank are enjoined to attend the
virtual Depositors-Borrowers' Forum scheduled on October 16, 2020.
Details of the Forum will also be announced in the PDIC website
and Facebook account.
As provided for by the PDIC Charter, the PDIC shall likewise accept
Letters of Intent from interested banks and non-bank institutions
for possible purchase of assets and assumption of liabilities (P&A)
as a mode of liquidating De La O Rural Bank, Inc. Letters of intent
should be submitted within 60 days from takeover date subject to
compliance with the requirements prescribed under the Guidelines in
Pre-qualifying Proponents and Evaluating the Proposals for Purchase
of Assets and Assumption of Liabilities Mode of Liquidating Closed
Banks which can be accessed in the PDIC website.
To ensure the safety of all concerned and observance of health
protocols, all clients of the bank may communicate with PDIC
through any of the following modes: Public Assistance Hotline
during office hours at (02) 8841-4141, Toll-Free Hotline at 1-800-
1-888-PDIC (7342) during office hours for those outside Metro
Manila, e-mail to delao-pad@pdic.gov.ph or Facebook private
message.
=================
S I N G A P O R E
=================
BM MOBILITY: To Be Delisted from SGX, Must Provide Exit Offer
-------------------------------------------------------------
Janice Heng at The Business Times reports that mainboard-listed BM
Mobility is to be delisted after the company failed to comply with
conditions to be given an extension of time to resume trading, its
judicial managers said in a Singapore Exchange filing on Sept. 14.
According to the report, BM Mobility received a notification of
delisting from SGX that day, in which SGX noted that the company
did not fulfil said conditions.
On July 29, 2019, the company had requested a suspension in the
trading of its shares under Listing Rule 1303(3), for suspension in
cases where the issuer is unable to continue as a going concern, or
unable to demonstrate its ability to do so, BT recalls.
When suspended under that rule, an issuer must submit a proposal
with a view to resuming trading within 12 months of the date of
suspension, or risk being delisted.
On May 29, 2020, BM Mobility said that its interim judicial
managers had received a non-binding confidential expression of
interest from an online card and board game developer, distributor
and operator in China, for a potential restructuring exercise
involving a transfer-of-listing exercise, and were engaging the
potential investor in talks. It applied for an extension of time to
observe its listing obligations, BT recalls.
BT relates that on June 16, the company said it had been granted
extensions of time until Aug. 31 to sign an acquisition agreement,
subject to its announcement of the signing of a definitive
agreement for said acquisition by that date. On Aug. 31, BM
Mobility said that no definitive agreement had been signed yet.
As BM Mobility did not submit a resumption proposal and no
acquisition agreement had been signed by the deadline, it did not
fulfil the conditions for the grant of extension of time, said the
SGX in its notification of delisting. Its shares will thus be
delisted.
BT adds that BM Mobility must now comply with Listing Rule 1309,
which requires it or its controlling shareholder(s) to provide a
reasonable exit offer to shareholders. It is requested to inform
the SGX of the exit offer proposal "as soon as practicable but no
later than one month from the date of the notification of
delisting", and provide updates on the status of the exit offer
proposal.
About BM Mobility
Headquartered in Singapore, BM Mobility Ltd., an investment holding
company, builds and operates charging stations for electric
vehicles in China. It operates 22 charging stations in Beijing,
which are used by the public and electric-car rental companies. The
company also sells and rents electric scooters to commercial users.
In addition, it is involved in the research and development,
manufacture, and sale of SBR and other foamed materials; and
trading of foamed materials, textiles, sports and sports
accessories, garments, and footwear. The company was formerly
known as Ziwo Holdings Ltd. and changed its name to BM Mobility
Ltd. in January 2018.
On July 20, 2020, Andrew Grimmett, Lim Loo Khoon and Tan Wei Cheong
of Deloitte & Touche LLP were appointed as Judicial Managers of the
Company.
FLOATEL INT'L: Creditors Extend Forbearance to End-September
------------------------------------------------------------
Fiona Lam at The Business Times reports that the forbearance
agreement between Floatel International and an ad-hoc committee
(AHC) of holders of its US$400 million senior secured, first-lien 9
per cent bonds has again been extended, this time to Sept 30, from
Sept 15.
The AHC holds more than 56 per cent of the Oslo-listed bonds'
outstanding amount, BT discloses.
BT relates that Floatel, an associate company of Keppel Corp, on
Sept. 15 announced the standstill extension in an update about its
discussions with secured financial creditors.
Aside from the first-lien bonds, Floatel also has US$75 million in
second-lien 12.75 per cent bonds and is the borrower under a US$150
million term loan and US$100 million in undrawn revolving credit
facilities with a syndicate of bank lenders, BT relays.
Signed in April, the forbearance agreement has been extended
several times, and relates to about US$22.8 million in coupon
payments due under both the first-lien and second-lien bonds.
Floatel on Sept. 15 said it is still in negotiations with its key
stakeholders, including the AHC and all bank lenders under the
credit facilities.
It added that the vessels that are on charter continue to operate
as normal and it is business as usual for the group's operations.
On Sept. 1, Floatel announced that its payment agreement with the
bank lenders--where certain expenses in respect of Floatel
Endurance and the bank collateral companies are covered by proceeds
in the blocked accounts--had lapsed. It said then that it was in
constructive discussions with the lenders to extend that payment
agreement.
Floatel International Ltd. owns and operates a fleet of oil
production platform vessels. The Company charters mobile oil
platform drilling vessels for the production of crude oil. Floatel
International offers their vessels to oil production companies
internationally.
JUBILANT PHARMA: Fitch Maintains 'BB-' LT IDR on Rating Watch Pos.
------------------------------------------------------------------
Fitch Ratings has maintained Singapore-based Jubilant Pharma
Limited's (JPL) Long-Term Foreign-Currency Issuer Default Rating
(IDR) of 'BB-' on Rating Watch Positive (RWP) and affirmed its
senior unsecured rating and the rating on its senior unsecured
notes at 'BB'.
The Long-Term IDR was placed on RWP in November 2019 following an
announcement of board approval at JPL's parent - Jubilant Life
Sciences Limited (JLS) - to demerge JLS's Life Science Ingredients
(LSI) business into a separate listed entity.
Fitch will continue to rate JPL based on its parent's consolidated
profile, which will benefit from the removal of linkages with the
lower-margin and more-volatile LSI business upon demerger. The RWP
reflects this improvement in business profile, which will outweigh
a marginal loss of diversification and support a one-notch rating
upgrade upon the completion of the demerger. Fitch expects to
resolve the RWP upon the completion of the demerger, which JLS
expects to occur in the next four to six months, subject to the
necessary approvals.
Fitch believes JLS will maintain a comfortable leverage level (pro
forma for the demerger) in the financial year ending March 2021
(FY21), despite the impact of the coronavirus pandemic and
competitive pressure in JPL's high-margin radiopharma business.
JPL's limited dependence on generic formulations and favourable
market position in speciality pharmaceutical-focused segments,
along with a strong financial profile, continue to underpin its
credit profile, despite its small size and high degree of
regulatory risk arising from limited production-facility
diversification.
KEY RATING DRIVERS
LSI Separation Positive: Fitch believes the benefits from the
separation will outweigh the slight reduction in diversification
due to LSI's weaker profile than the pharma business stemming from
its commoditised products. LSI accounted for 35% of JLS's revenue,
but only 22% of EBITDA in FY20. The LSI business has adequate
market positions in certain segments, but its profitability is
weaker and it faces volatility from competition and input price
changes. The demerger will remove linkages to the pharma business,
as Fitch does not expect the resultant LSI entity to have
operational or legal linkages with JLS.
Transaction Progressing as Expected: The demerger remains on track
with receipt of approval from shareholders and lenders in August
2020. The new entity will share the 'Jubilant' brand name and will
have common shareholders - including the founding Bhartia family,
who will hold more than 50%. However, Fitch does not see
significant risk around unwarranted intercompany transactions based
on the family's record of operating other independent listed
companies that share the 'Jubilant' brand.
Comfortable Leverage Despite Lower Profitability: Fitch expects
JLS's consolidated pro forma FFO net leverage to increase to 2.8x
in FY21, from 2.2x reported in FY20, but it will remain
well-positioned for a 'BB' IDR. The deferment of elective
procedures at hospitals amid the coronavirus pandemic caused volume
in JPL's radiopharma business to decline by 40%-50% in April and
May. Volumes have since increased to around 90% of normal levels,
but Fitch expects additional pressure due to entry of competition
for one of JPL's key nuclear imaging products.
Fitch believes the healthy operations of the contract manufacturing
of sterile products (CMO), active pharmaceutical ingredients (API)
and generic dosage segments will only partly offset the lower
profitability of the radiopharma business, which has high margins
and accounts for over 50% of JPL's EBITDA. Its rating case does not
include this incremental revenue from new launches due to
uncertainty in the approval process. JLS aims to move the LSI
business's debt - consisting of external debt located at JLS's
standalone level - to the new LSI entity.
Small Scale; Specialty Focus: JPL has a smaller scale and lower
degree of business diversification than larger generic
pharmaceutical companies. Nonetheless, Fitch believes its focus on
segments, such as nuclear imaging, CMO and allergy therapy, which
made up over 75% of the pharma business' EBITDA in FY20, limits its
exposure to pricing pressure in the US generic pharmaceutical
market.
JPL's Draximage business is the third-largest participant by sales
in North America's small nuclear imaging market, with some of its
top products enjoying limited competition. JPL is among the leading
contract manufacturers in North America for sterile injectables and
the segment's sustained growth benefits from its longstanding
customer relationships. JPL is the second-largest company in the
allergenic extract market and the sole supplier of venom products
in the US.
Notes Rated Above IDR: The senior notes are rated above the IDR as
bondholders have direct recourse to the cash flow and assets of
JPL, which has a better credit profile than the parent's
consolidated profile. JLS's consolidated profile will closely
reflect JPL's after the demerger and an upgrade in IDR will bring
it to the same level as the rating on the notes. JPL's low secured
and prior-ranking debt/EBITDA ratio after bond issue in 2016
alleviates subordination risk. In addition, the senior notes'
indenture restricts prior-ranking debt to 0.2x of JPL's
consolidated assets, subject to certain carve outs.
Strong Linkage with Parent: JPL's rating will continue to be based
on the consolidated profile of its parent JLS as Fitch expects
linkages between the two entities to remain strong due to
management control and commonality as well as JLS's access to the
cash and cash flow of its key operating subsidiary.
Regulatory Risk: JPL is exposed to above-average regulatory risk
due to its small scale and limited production plants. New product
approvals for the US market in the API and generic dosage segments
will depend on resolution of adverse actions by the US Food and
Drug Administration (USFDA) last year. Nonetheless, JPL has low
dependence on generic drugs and sales to the US are still allowed
from its two plants. Any downside from USFDA curbs on sales to the
US will be limited by the plants' sales elsewhere. However, the
impact will be greater if US policies related to drug pricing
affect JPL's specialty segments.
DERIVATION SUMMARY
JPL has a smaller scale, with limited geographic diversification,
than larger generic pharmaceutical companies, such as Mylan N.V.
(BBB-/RWP) and Teva Pharmaceutical Industries Limited
(BB-/Negative). This is partly counterbalanced by the higher
acquisition-led leverage of larger peers, particularly in the case
of Teva, as Fitch expects its leverage to remain elevated amid
continued pricing pressure on generic drugs in the US and
litigation. The demerger of JLS's LSI business will also strengthen
JPL's business profile, considering the exposure of this largely
commoditised business to competition and price volatility.
Glenmark Pharmaceuticals Ltd (BB/Stable) has a larger and more
geographically diversified pharma business than JPL. Nonetheless,
JPL's greater presence in specialty pharmaceuticals limits its
exposure to ongoing pricing pressure in the US generic
pharmaceutical market. The RWP reflects a probable improvement in
JPL's business profile after the demerger, while its leverage will
remain similar to that of Glenmark.
Ache Laboratorios Farmaceuticos S.A. (BB/Negative) benefits from
its solid market positioning and a stronger financial profile than
JPL, although Brazil's Country Ceiling of 'BB' constrains its
rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- JLS's pharma revenue to decline by low single digits in rupee
terms over FY21 with growth in CMO and generics and rupee
depreciation offsetting the decline in radiopharma segment. Revenue
to grow by mid-single digits in FY22.
- JLS's pharma EBITDA margin to reduce to around 18% in FY21 and
FY22 (FY20: 23%) due to lower profitability in the radiopharma
segment following the impact of pandemic and competitive pressure.
- JLS's annual capex in the pharma business to remain between 8%
to 9% of sales over FY21-FY22.
- No cash dividend in FY21 and annual dividend from pharma
business proforma for the demerger to remain at below 20% of net
income in FY22.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch will resolve the RWP and upgrade the IDR by one notch if
the proposed demerger is completed as outlined, with Fitch's
expectation for a transfer of the LSI business's debt and cash to
the new entity.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch will look to affirm the ratings with a Stable Outlook if
the proposed demerger is not completed.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: JLS's consolidated unrestricted cash balance of
INR13.9 billion at end-March 2020 sufficiently covered INR9.3
billion in short-term debt maturities including INR6.5 billion of
short-term debt that Fitch expects the company to roll over in the
normal course of business. JPL has comfortable liquidity with
consolidated cash balance of INR10.5 billion at end-March 2020
compared with INR3.3 billion of near-term debt maturities.
After the demerger, JLS's debt structure will consist mainly of
USD400 million of senior notes, including USD200 million maturing
in October 2021 and USD200 million due in March 2024. Pro-forma for
the demerger, Fitch expects JLS to generate marginally positive
free cash over the next few years. Nonetheless, Fitch expects JPL
to use some cash to acquire product rights, which will result in
some dependence on refinancing to pay the US dollar notes due
October 2021. Fitch believes JPL's reasonable leverage will
mitigate the refinancing risk and expect JPL to complete the
refinancing well ahead of time, as it did in the past.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
===============
T H A I L A N D
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KTB SECURITIES: Fitch Rates THB450MM ST Sub. Unsec. Debt 'B(tha)'
-----------------------------------------------------------------
Fitch Ratings (Thailand) has assigned a National Short-Term Rating
of 'B(tha)' to KTB Securities (Thailand) Public Company Limited's
(KTBST, BB(tha)/Negative/B(tha)) upcoming issue of up to THB450
million in subordinated unsecured debentures. The debentures will
have a maturity of nine months. The company plans to use the
proceeds to refinance outstanding subordinated debentures.
KEY RATING DRIVERS
The National Short-Term Rating of 'B(tha)' for the upcoming
subordinated debentures is derived from the implied National
Long-Term Rating of 'BB-(tha)' based on the rating correspondence
table in Fitch's Bank Rating Criteria.
The implied National Long-Term Rating of the subordinated
debentures of 'BB-(tha)' is one notch below KTBST's National
Long-Term Rating of 'BB(tha)' to reflect the subordinated
debentures' higher loss-severity risk relative to senior unsecured
instruments, as per Fitch's Corporate Hybrids Treatment and
Notching Criteria.
This arises from the debentures' subordinated status, as
subordinated noteholders rank after senior creditors in the
priority of claims. Additional notching has not been applied due to
the lack of going-concern loss-absorption and equity-conversion
features.
By Fitch's rating definition, a National Short-Term Rating of
'B(tha)' indicates an uncertain capacity for timely payment of
financial commitments relative to other issuers or obligations in
the same country.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The National Short-Term Rating of the subordinated debentures is
sensitive to the change in KTBST's National Long-Term Rating, which
is the anchor rating. However, an upgrade does not appear probable
unless KTBST is upgraded by multiple notches to above 'BBB(tha)'.
Factors that could, individually, or collectively, lead to negative
rating action/downgrade:
A downgrade of KTBST's National Long-Term Rating to 'B(tha)'
category would result in a downgrade of the subordinated debenture
rating.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
===============
X X X X X X X X
===============
[*] ASIA: Economic Growth to Contract in 2020, ADB Says
-------------------------------------------------------
Economies across developing Asia will contract this year for the
first time in nearly six decades but recovery will resume next
year, as the region starts to emerge from the economic devastation
caused by the coronavirus disease (COVID-19) pandemic, according to
a report released by the Asian Development Bank (ADB) on Sept. 15.
The Asian Development Outlook (ADO) 2020 Update forecasts -0.7%
gross domestic product (GDP) growth for developing Asia this
year--marking its first negative economic growth since the early
1960s. Growth will rally to 6.8% in 2021, in part because growth
will be measured relative to a weak 2020. This will still leave
next year's output below pre-COVID-19 projections, suggesting an
"L"-shaped rather than a "V"-shaped recovery. About three-quarters
of the region's economies are expected to post negative growth in
2020.
"Most economies in the Asia and Pacific region can expect a
difficult growth path for the rest of 2020," said ADB Chief
Economist Yasuyuki Sawada. "The economic threat posed by the
COVID-19 pandemic remains potent, as extended first waves or
recurring outbreaks could prompt further containment measures.
Consistent and coordinated steps to address the pandemic, with
policy priorities focusing on protecting lives and livelihoods of
people who are already most vulnerable, and ensuring the safe
return to work and restart of business activities, will continue to
be crucial to ensure the region's eventual recovery is inclusive
and sustainable."
A prolonged COVID-19 pandemic remains the biggest downside risk to
the region's growth outlook this year and next year. To mitigate
the risk, governments in the region have delivered wide-ranging
policy responses, including policy support packages--mainly income
support--amounting to $3.6 trillion, equivalent to about 15% of
regional GDP.
Other downside risks arise from geopolitical tensions, including an
escalation of the trade and technology conflict between the United
States and the People's Republic of China (PRC), as well as
financial vulnerabilities that could be exacerbated by a prolonged
pandemic.
The PRC is one of the few economies in the region bucking the
downturn. It is expected to grow by 1.8% this year and 7.7% in
2021, with successful public health measures providing a platform
for growth. In India, where lockdowns have stalled consumer and
business spending, GDP contracted by a record 23.9% in the first
quarter of its fiscal year (FY) and is forecast to shrink 9% in
FY2020 before recovering by 8% in FY2021.
Subregions of developing Asia are expected to post negative growth
this year, except East Asia which is forecast to expand by 1.3% and
recover strongly to 7.0% in 2021. Some economies heavily reliant on
trade and tourism, particularly in the Pacific and South Asia, face
double-digit contractions this year. Forecasts suggest that most of
developing Asia will recover next year, except for some economies
in the Pacific including the Cook Islands, the Federated States of
Micronesia, the Marshall Islands, Palau, Samoa, and Tonga.
The inflation forecast for developing Asia is revised downwards to
2.9% this year from 3.2% forecast in April, due to continued low
oil prices and weak demand. Inflation for 2021 is expected to ease
further to 2.3%.
The update to ADO 2020 features a theme chapter, Wellness in
Worrying Times, which discusses the importance of wellness as
communities recover from COVID-19's toll on physical and mental
health. The chapter explains that wellness can be an engine of
inclusive economic growth if the region leverages its rich wellness
traditions, and appropriate policies are promoted by governments.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***