/raid1/www/Hosts/bankrupt/TCRAP_Public/200918.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
Friday, September 18, 2020, Vol. 23, No. 188
Headlines
A U S T R A L I A
EMECO HOLDINGS: S&P Affirms B+ Long-Term ICR, Outlook Stable
H D SQUARED: First Creditors' Meeting Set for Sept. 25
LA TROBE 2020-S1: S&P Assigns Prelim B(sf) Rating to Class F Notes
LIBERTY SERIES 2017-2: Moody's Hikes Class F Notes Rating to Ba1
MINISO MASTER: Second Creditors' Meeting Set for Sept. 24
OVVIO PTY: Second Creditors' Meeting Set for Sept. 24
SILVER HERITAGE: 400 Tiger Palace Workers in Nepal Lose Jobs
C H I N A
HNA GROUP: Chairman Barred From Flying, Vacationing
JIANGSU ZHONGNAN: Moody's Hikes CFR to B1, Outlook Stable
KANGDE XIN: Founder, Former Execs Move Closer to Prosecution
I N D I A
AGHARA KNITWEAR: ICRA Withdraws B+ Rating on INR3.0cr Loan
AJIT KUMAR: ICRA Keeps B Debt Ratings in Not Cooperating
AMRITA DEVELOPERS: ICRA Withdraws 'B' Rating on INR14.75cr Loan
ANSAL HOUSING: Ind-Ra Affirms 'D' Long Term Issuer Rating
ARQUBE INDUSTRIES: ICRA Lowers Rating on INR20cr LT Loan to B+
B L GOEL: ICRA Lowers Rating on INR7.0cr LT Loan to B+
CAIRN INDIA: Fitch Maintains 'B+' LT IDR on Watch Negative
CIEMME JEWELS: ICRA Keeps D Debt Ratings in Not Cooperating
DANLAW ELECTRONICS: ICRA Withdraws B+ Rating on INR1cr Loan
ENRICH RD: ICRA Keeps C+ Debt Rating in Not Cooperating
FRENCH MOTOR: ICRA Lowers Rating on INR14.50cr Cash Loan to B+
GAYATRI HI-TECH: ICRA Withdraws D Rating on INR491.10cr Loan
HARMONY FOODS: ICRA Lowers Rating on INR13.50cr LT Loan to B+
K V AROMATICS: ICRA Moves D Debt Ratings to Not Cooperating
KAMAKSHI RAW: ICRA Lowers Rating on INR10cr LT Loans to D
KSR PROPERTIES: ICRA Keeps B Debt Rating in Not Cooperating
LEONARD EXPORTS: ICRA Keeps B+ Debt Ratings in Not Cooperating
MAHATHI SOFTWARE: ICRA Withdraws B- Rating on INR31.50cr Loan
MANGALAM PIPES: ICRA Lowers Rating on INR4.40c LT Loan to B+
MANGALORE SEA: ICRA Keeps B+ Debt Ratings in Not Cooperating
N. MOHAMED: ICRA Assigns B Rating to INR3.0cr LT Loan
PLYCOM PVT: ICRA Reaffirms B+ Rating on INR2.0cr LT Loan
PM GRANITE: ICRA Keeps C+ Debt Ratings in Not Cooperating
PRAGATEJ BUILDERS: ICRA Keeps D Debt Rating in Not Cooperating
R. P. MOTORS: ICRA Keeps B Debt Ratings in Not Cooperating
REMEDY MEDICAL: ICRA Keeps B Debt Ratings in Not Cooperating
SAMRUDDHA RESOURCES: ICRA Keeps D Debt Rating in Not Cooperating
SATYESHWAR HEEMGHAR: ICRA Cuts Rating on INR5.42cr Loan to D
SMARTFREN TELECOM: Fitch Affirms LT Rating at 'CCC+(idn)'
SUSEE MOTORS: ICRA Keeps B Debt Rating in Not Cooperating
SVSVS PROJECTS: ICRA Keeps B+ Debt Ratings in Not Cooperating
TIM WORLD: ICRA Withdraws B+ Rating on INR3cr LT Loan
VERMA TRACTORS: ICRA Keeps B+/A4 Debt Rating in Not Cooperating
VIJAYA LAKSHMI: ICRA Lowers Rating on INR48cr LT Loans to B+
WARANA DAIRY: Ind-Ra Affirms 'D' Bank Loan Rating
I N D O N E S I A
JAPFA COMFEED: Fitch Affirms LT IDR at 'BB-' on So Good Acquisition
N E P A L
DD INDUSTRIES: Shuts Down Factory Amid Virus Lockdown
N E W Z E A L A N D
NEW ZEALAND: Officially in First Recession in a Decade
S I N G A P O R E
MARY CHIA: Independent Auditor Flags Material Uncertainty
SWIBER HOLDINGS: Unit Placed in Creditors' Voluntary Liquidation
XIHE HOLDINGS: Seven Tankers Put Up for Sale to Help Pay Creditors
X X X X X X X X
[*] Pandemic Bankruptcy Boom Looms, Ex-IMF Deputy Director Warns
- - - - -
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A U S T R A L I A
=================
EMECO HOLDINGS: S&P Affirms B+ Long-Term ICR, Outlook Stable
------------------------------------------------------------
On Sept. 16, 2020, S&P Global Ratings affirmed its 'B+' long-term
issuer credit rating and issue ratings on Ausralia-based equipment
rental company Emeco Holdings Ltd. S&P assigned its 'B+' issue
rating to Emeco's new senior secured notes due 2024 with a recovery
rating of '3'. S&P expects to withdraw its ratings on the existing
senior secured notes due 2022 upon repayment.
The stable outlook reflects S&P's expectation that Emeco will
sustain and grow its earnings base and cash flows in the
heavy-earth equipment rental industry.
S&P affirmed the ratings on Emeco to reflect management's prudent
financial actions to deleverage the business and improve the
company's resilience in an industry downturn. The company is
building a sizable ratings buffer to withstand end-market
volatility in the mining services industry. Emeco is expanding its
iron ore and gold exposure in Australia; however, the company
maintains a large exposure to both metallurgical and thermal coal
of about 50% of revenues (inclusive of Pit N Portal) as of June 30,
2020.
S&P said, "In our view, Emeco's underwritten equity raising adds to
the company's track record of prudent financial management. The
company's underwritten A$149 million equity raising and cash will
repay 44% of its outstanding secured US$322.1 million (A$442
million) notes, above par at US$104.625 with existing lenders. As a
result, the company has issued new secured notes US$180 million
(A$250 million) that are fully hedged with materially similar terms
as the previous notes. We believe the company's EBITDA-to-interest
coverage ratio to be about 10x over the next 12 months, with a A$19
million reduction in interest costs post the transaction."
Emeco has removed the near-term refinancing risks associated of its
2022 secured notes, with its new notes maturing in March 2024. S&P
said, "We believe management proactively manages its balance sheet
and debt maturity profile, which is supportive of its credit
quality. Moreover, the company will exercise the option to extend
its revolving credit facility to September 2023, with expected
total available liquidity of A$153 million post the transaction. We
believe the company is well placed to refinance its remaining
secured notes before 2024."
S&P said, "We raised the ratings in February 2020 due to our
expectations of the company's deleveraging strategy and ability to
sustain metrics in line with the 'B+' rating level through the
cycle.
"We expect the company's debt reduction and solid cash flow
generation to result in an adjusted debt-to-EBITDA ratio in the
1.0x to 1.5x range over next 12 months." Emeco's fiscal 2020 S&P
Global Ratings-adjusted debt-to-EBITDA ratio was 2.4x, as the
company took precautionary steps to prioritize cash on its balance
sheet after fully utilizing its revolving credit facilities. Absent
the drawdown, adjusted debt to EBITDA would be about 2x.
The rating on Emeco Holdings Ltd. principally reflects the
company's small size globally, capital-intensive operations, and
narrow focus on heavy earthmoving mining equipment rental services.
Further, Emeco's cash flows can be highly volatile given its
exposure to commodity cycles and limited contractual protections.
In the fourth quarter of fiscal 2020, the company had the following
underlying commodity exposures: 33% to metallurgical coal; 25% to
gold; 23% to iron ore; 16% to thermal coal; and, 3% to other
commodities. The company continues to reduce its coal exposure with
new contracts to iron ore and gold producers. Tempering these
weaknesses are Emeco's leading market share in heavy earthmoving
equipment rental with a large fleet size, and emerging track record
of conservative financial management to withstand a moderate level
of earnings volatility.
S&P said, "The stable outlook reflects our expectation that Emeco
will sustain its market position and earnings base from recent
acquisitions in the heavy-earth equipment rental industry. We
forecast solid credit metrics of funds from operations (FFO) to
debt above 45% and adjusted debt to EBITDA below 1.5x over the next
12 months, building headroom at the rating level. Our stable
outlook also incorporates the company's net debt to EBITDA target
of 1.0x (company's measure) over the next 12 months.
"We consider rating upside to be limited. We could consider an
upgrade if Emeco were to materially increase its scale and business
diversity while remaining committed to its existing conservative
financial policies.
"We could lower the rating if adjusted debt to EBITDA rises above
2.5x during benign industry conditions or above 3.5x during an
industry downturn."
S&P could also lower the rating if Emeco were to adopt an
aggressive financial risk appetite, which may be indicated by:
-- A material debt-funded acquisition; or
-- Material shareholder returns.
H D SQUARED: First Creditors' Meeting Set for Sept. 25
------------------------------------------------------
A first meeting of the creditors in the proceedings of H D Squared
Developments Pty Ltd will be held on Sept. 25, 2020, at 10:00 a.m.
via teleconference only.
Steven Arthur Gladman -- SGladman@hallchadwick.com.au -- of Hall
Chadwick was appointed as administrator of H D Squared on Sept. 16,
2020.
LA TROBE 2020-S1: S&P Assigns Prelim B(sf) Rating to Class F Notes
------------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to eight of the
10 classes of residential mortgage-backed securities (RMBS) to be
issued by Perpetual Corporate Trust Ltd. as trustee for La Trobe
Financial Capital Markets Trust 2020-S1. La Trobe Financial Capital
Markets Trust 2020-S1 is a securitization of nonconforming
residential mortgages originated by La Trobe Financial Services Pty
Ltd. (La Trobe Financial).
The preliminary ratings reflect:
-- That the credit risk of the underlying collateral portfolio and
the credit support provided to each class of notes are commensurate
with the ratings assigned. Credit support is provided by
subordination and excess spread. The assessment of credit risk
takes into account La Trobe Financial's underwriting standards and
approval process, and La Trobe Financial's servicing quality.
-- That the transaction's cash flows can meet timely payment of
interest and ultimate payment of principal to the noteholders under
the rating stresses. Key factors are the level of subordination
provided, the condition that a minimum margin will be maintained on
the assets, an amortizing liquidity facility sized at 1.5% of the
note balance, the principal draw function, the yield reserve, the
retention amount built from excess spread before the call date, the
amortization amount built from excess spread after the call date or
upon a servicer default, and the provision of an extraordinary
expense reserve. All rating stresses are made on the basis that the
trust does not call the notes at or beyond the call date, and that
all rated notes must be fully redeemed via the principal waterfall
mechanism under the transaction documents.
-- That S&P also has factored into its ratings the legal structure
of the trust, which has been established as a special-purpose
entity and meets its criteria for insolvency remoteness.
-- The counterparty support provided by National Australia Bank
Ltd. as liquidity facility provider and Commonwealth Bank of
Australia as bank account provider. The transaction documents for
the liquidity facility and bank accounts include downgrade language
consistent with S&P's "Counterparty Risk Framework: Methodology And
Assumptions" criteria, published on March 8, 2019, that requires
the replacement of the counterparty or other remedy, should its
rating fall below the applicable rating.
-- That loss of income for borrowers in the coming months due to
the effects of COVID-19 will likely put upward pressure on mortgage
arrears. S&P said, "We have recently updated our outlook
assumptions for Australian RMBS in response to changing
macroeconomic conditions as a result of the COVID-19 outbreak. We
have also applied a range of additional stresses in our analysis to
assess the rated notes' sensitivity to liquidity stress and the
possibility of higher arrears." As of July 31, 2020, borrowers with
COVID-19-related hardship arrangements make up 3.9% of the pool
balance.
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
La Trobe Financial Capital Markets Trust 2020-S1
Class Rating Amount (mil. A$)
A1S AAA (sf) 90.00
A1L AAA (sf) 260.00
A2 AAA (sf) 77.00
B AA (sf) 20.50
C A (sf) 19.00
D BBB (sf) 13.50
E BB (sf) 7.50
F B (sf) 7.00
Equity 1 NR 3.00
Equity 2 NR 2.50
NR--Not rated.
LIBERTY SERIES 2017-2: Moody's Hikes Class F Notes Rating to Ba1
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on two classes
of notes issued by Liberty Series 2017-2 Trust.
The affected ratings are as follows:
Issuer: Liberty Series 2017-2 Trust
Class E, Upgraded to Baa1 (sf); previously on Oct 28, 2019 Upgraded
to Baa2 (sf)
Class F, Upgraded to Ba1 (sf); previously on Oct 28, 2019 Upgraded
to Ba3 (sf)
RATINGS RATIONALE
The upgrade was prompted by an increase in credit enhancement
available for the affected notes and the collateral performance to
date, with a moderate level of loans in arrears or under
COVID-19-related hardship payment arrangements.
The transaction has been making pro-rata principal repayments among
all the rated notes since September 2018. The unrated Class G notes
will not be repaid until all classes of notes senior to them have
been fully repaid. As such, note subordination continues to build
up gradually.
Following the July 2020 payment date, note subordination available
for the Class E and Class F notes has increased to 6.9% and 5.5%
respectively, from 6.0% and 4.5% at the time of the last action in
October 2019.
As of July 2020, 2.3% of the outstanding pool was 30-plus day
delinquent and 1.0% was 90-plus day delinquent. However, these
delinquency rates are understated by loans which are under
COVID-19-related hardship assistance and not reported as
delinquent. The deal has incurred losses of 0.03% to date, which
have been covered by excess spread.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Its analysis has considered the effect on the performance of
mortgage loans from the current weak Australian economic activity
and a gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around its forecasts is unusually high.
Fitch regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.
Based on the observed delinquencies, losses, COVID-19-related
hardship assistance and considering the ongoing economic
disruptions and the expected higher unemployment levels in 2020 and
2021, Moody's has updated its expected loss assumption to 2.45% of
the outstanding pool, compared to 2.15% of the then outstanding
pool from the last rating action.
Moody's has maintained its MILAN CE assumption at 11.7% from the
last rating action, based on the current portfolio
characteristics.
Moody's analysis has also considered a stressed scenario with a 30%
higher expected loss, a higher MILAN CE and backloading of losses
to evaluate the resiliency of the note ratings.
The transaction is an Australian RMBS secured by a portfolio of
residential mortgage loans. The portfolio consists of loans
extended to borrowers with impaired credit histories. In addition,
around 16% had scheduled loan-to-value ratio above 90%.
The transaction is supported by a liquidity reserve in the amount
of 3% of the note balance, which can cover approximately 15 months
of interest payments if no collections come in at all.
The principal methodology used in these ratings was Moody's
Approach to Rating RMBS Using the MILAN Framework published in May
2020.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations and (2) an increase in credit enhancement
available for the notes.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in the credit enhancement available
for the notes and (3) a deterioration in the credit quality of the
transaction counterparties.
MINISO MASTER: Second Creditors' Meeting Set for Sept. 24
---------------------------------------------------------
A second meeting of creditors in the proceedings of Miniso Master
Franchisee Pty Ltd has been set for Sept. 24, 2020, at 11:00 a.m.
via webinar facilities only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Sept. 23, 2020, at 4:00 p.m.
Philip Campbell-Wilson and Said Jahani of Grant Thornton Australia
Limited were appointed as administrators of Miniso Master on July
13, 2020.
OVVIO PTY: Second Creditors' Meeting Set for Sept. 24
-----------------------------------------------------
A second meeting of creditors in the proceedings of Ovvio Pty Ltd
has been set for Sept. 24, 2020, at 10:00 a.m. via electronic
means.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Sept. 23, 2020, at 5:00 p.m.
Cameron Gray and Ronald Dean-Willcocks of DW Advisory were
appointed as administrators of Ovvio Pty on Aug. 20, 2020.
SILVER HERITAGE: 400 Tiger Palace Workers in Nepal Lose Jobs
------------------------------------------------------------
Ben Blaschke at Inside Asian Gaming reports that workers of Tiger
Palace Resort, the Nepal integrated resort owned by
Australian-listed Silver Heritage Group, are claiming that the
contracts of around 400 staff have been terminated due to the
company's ongoing financial woes.
Inside Asian Gaming, citing a report in the Kathmandu Post, relates
that workers have this week protested outside Tiger Palace after
receiving an email on September 9 informing them that their
two-year contracts have been terminated and would not be renewed.
Silver Heritage operates two Nepal casinos, Tiger Palace and
Kathmandu's Millionaire's Club, both of which have been closed
since March 23 due to COVID-19.
The workers have also claimed that all employees from general
manager level and below have been released, but that foreign
employees have been retained, the report relays.
In response to inquiries from Inside Asian Gaming, a representative
of Silver Heritage Group said around 385 of the two-year contracts
mentioned had in fact expired this year and that the employees have
been offered the opportunity to leave or to sign a new contract.
Inside Asian Gaming relates that Silver Heritage also "continued
doing the right thing by paying staff even as contracts expired to
get them through COVID and what we believed, and all the world
hoped, would be a few months," the representative said. "But it
looks like we will be closed until 2021."
The standoff comes after Silver Heritage was placed into voluntary
administration in May by its main lender, OCP Asia, the report
notes.
Creditors last month agreed to consider a recapitalization
proposal, subject to shareholder approval, with Silver Heritage
revealing on Sept. 9 that it has now executed a Deed of Company
Arrangement that could result in a cash injection of AUD530,000
(US$387,000) by November, according to Inside Asian Gaming.
Inside Asian Gaming notes that Silver Heritage has faced multiple
hurdles in recent years, including lengthy delays to the launch of
Tiger Palace in December 2017 which blew the budget out by around
US$12 million.
Inside Asian Gaming relates that the company then suffered a
crippling blow in March 2019 when casino operations at Phoenix
International Club in Vietnam, where Silver Heritage provided
gaming management services, were shut down due to amendments to the
property's Investment Certificate which no longer allowed for the
operation of gaming tables.
Phoenix had accounted for around 45% of the company's group-wide
revenue in 2018, the report notes.
About Silver Heritage
Silver Heritage Group Limited -- http://www.silverheritage.com.au/
-- is engaged in the operation and management of casinos in Nepal
and Vietnam, and management of electronic gaming operations in
casinos in Laos and Cambodia. The Company's business is divided in
two business lines: Operation of casinos, and Provision and
operation of electronic gaming machines (EGMs). The Company
operates The Millionaire's Club & Casino (TMC) in Kathmandu, Nepal,
under its own license, and provides management services to the
Phoenix International Club casino (the Phoenix International Club)
in Bac Ninh, Vietnam. It provides EGMs to casinos and licensed
gaming clubs in Laos and Cambodia. The Company's geographic
segments include Laos, Vietnam, Nepal, Cambodia, Macau, Tinian and
Other.
Silver Heritage Group Ltd on May 20, 2020, said its main lender --
identified as OCP Asia -- had appointed John Park and Joseph
Hansell of business advisory firm FTI Consulting as receivers and
managers.
Amanda Coneyworth and Ryan Eagle of KPMG were appointed as
administrators of Silver Heritage on May 18, 2020.
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C H I N A
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HNA GROUP: Chairman Barred From Flying, Vacationing
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Reuters reports that the chairman of cash-strapped HNA Group has
been barred from taking flights and high-speed trains and going on
vacations due to the Chinese conglomerate's failure to pay a
court-ordered $5,300 in a lawsuit, a court document showed.
The once high-flying company, which owns Hainan Airlines, is in the
midst of a restructuring led by the Hainan government to resolve
its liquidity risks stemming from years of aggressive acquisitions
abroad, Reuters says.
The group and its affiliates have delayed payments on a few bond
products this year.
According to Reuters, HNA chairman and legal representative Chen
Feng has also been barred from spending at star-rated hotels,
nightclubs and golf clubs, and buying properties and high-premium
insurance products, an order from the People's Court in Xi'an
city's Beilin district showed on Sept. 15. The order also disallows
his children from attending private schools.
While such court-ordered bans in China are indefinite, there are
precedents where bans have been lifted after the defendants paid,
Reuters notes.
The Xi'an court had ruled in March that HNA Group, along with its
three affiliated companies, needed to return money they owe to a
plaintiff named Chai Jin in a dispute involving HNA's high-interest
online investment platform Jubaohui, Reuters recalls.
The companies were told to pay Chai more than CNY36,000 (US$5,320)
of principal and interest within 10 days of the March ruling,
according to the court. But they failed to do so, the court order
on Sept. 15 said, Reuters relays.
It was not immediately clear if HNA subsequently paid the sum to
Chai.
According to Reuters, HNA has not been able to fully pay back its
Jubaohui investors since early 2018 as its liquidity worsened even
as it began a frenetic sales of assets. There's still some
CNY37.1 million of overdue and unpaid debts at the end of August,
Reuters discloses citing data released on Jubaohui's official
website.
To make matters worse, the coronavirus pandemic this year, which
had devastated travel demand and hurt HNA's main aviation business,
led many to believe that HNA's survival was at stake, Reuters says.
However, a move for a government-led restructuring of HNA following
a plea by the conglomerate in February rekindled hopes that a
solution for its debt problem may be on the horizon.
About HNA Group
China-based HNA Group Co. Ltd. offers airlines services. The
Company provides domestic and international aviation
transportation, air travel, aviation maintenance, and aviation
logistics services. HNA Group also operates holding, capital,
tourism, logistics, and other business.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
17, 2018, HNA Group defaulted on a CNY300 million (US$44 million)
loan raised through Hunan Trust. The company is already under
strict supervision by a group of bank creditors, led by China
Development Bank, following a liquidity crunch in the final quarter
of 2017. The default came despite an estimated $18 billion in asset
sales by HNA in 2018 that have done little to address its ability
to meet its domestic debts.
JIANGSU ZHONGNAN: Moody's Hikes CFR to B1, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has upgraded Jiangsu Zhongnan
Construction Group Co., Ltd.'s corporate family rating (CFR) to B1
from B2 and the backed senior unsecured debt rating on the existing
notes issued by Haimen Zhongnan Investment Development
(International) Co Ltd to B2 from B3.
The outlook on the ratings is stable.
"The upgrade reflects our expectation that Jiangsu Zhongnan's
credit metrics will continue to strengthen over the next 12-18
months, supported by increased revenue recognition from strong
contracted sales and controlled land acquisitions," says Danny
Chan, a Moody's Assistant Vice President and Analyst.
"In addition, the upgrade also reflects Jiangsu Zhongnan's improved
access to funding and reduced exposure to trust financing," adds
Chan.
RATINGS RATIONALE
Jiangsu Zhongnan's B1 CFR reflects its strong sales execution and
fast asset turnover model, improving geographic diversification and
sizable operating scale.
On the other hand, Jiangsu Zhongnan's B1 rating is constrained by
its exposure to low-tier cities, and moderate profitability and
interest coverage, driven partly by the relatively low margins of
both the construction and property development businesses.
The rating also captures the execution risks and funding needs
associated with the company's fast growth plan, and its high
exposure to joint ventures (JVs).
Moody's expects that Jiangsu Zhongnan's debt leverage — as
measured by revenue/adjusted debt — will trend towards 100%-105%
over the next 12-18 months from 86% for the 12 months ended June
2020, as revenue growth will outpace debt growth on the back of
strong contracted sales growth over the past two to three years.
Meanwhile, its interest coverage -- as measured by adjusted
EBIT/interest -- will improve to around 2.5x from 2.0x over the
same period. These credit metrics and the sizable scale of its
gross contracted sales — which totaled RMB196 billion in 2019 —
support its B1 corporate family rating.
With a plan to slow down its debt-funded expansion, Jiangsu
Zhongnan's contracted sales growth will likely moderate to the low
teen percentages over the next 1-2 years from a high base. For the
first eight months of 2020, the company's contracted sales growth
slowed to around 7.6% amid the COVID-19 outbreak, following strong
34% year-on-year contracted sales growth to RMB196 billion in 2019
and 52% year-on-year growth to RMB146 billion in 2018.
Meanwhile, Moody's expects the company's total adjusted debt growth
will remain flat over the next 12-18 months, as it will control its
annual land purchases to within 40% of its cash received from
annual property sales.
Jiangsu Zhongnan's liquidity is good. Moody's expects its current
cash balance, together with the strong cash flow generated from its
operations, will be able to cover its short-term debt and committed
land premiums over the next 12-18 months. As of June 2020, the
company's cash balance (including restricted cash) of RMB28.2
billion covered about 1.2x its maturing debt of RMB23.7 billion as
of the same date.
Moreover, Jiangsu Zhongnan has improved its funding channels by
issuing debut offshore senior notes in 2019. Its trust loan to
total reported debt ratio fell to 23% as of June 2020 from 29% as
of December 2019, helping control funding costs and strengthening
its financial stability.
The B2 senior unsecured debt rating is one notch lower than the
corporate family rating due to structural subordination risk. This
risk reflects the fact that the majority of claims are at the
operating subsidiaries and have priority over Jiangsu Zhongnan's
senior unsecured claims in a bankruptcy scenario. In addition, the
holding company lacks significant mitigating factors for structural
subordination. As a result, the likely recovery rate for claims at
the holding company will be lower.
In terms of governance risk, Moody's has taken into account the
company's concentrated ownership by Zhongnan Urban Construction
Investment Co., Ltd., which owned 54.4% as of August 2020, with
61.1% of these shares pledged. This risk is partially mitigated by:
(1) the approvals and disclosures required by the Shenzhen Stock
Exchange for material related-party transactions by listed
companies; (2) the sizable available-for-sale assets held by
Zhongnan Urban Construction, which can provide alternative
liquidity to Zhongnan Urban Construction in times of need; and (3)
Jiangsu Zhongnan's consistent dividend payout policy, as reflected
by its dividend payout of 10%-25% of its net profit in the past
three years.
Moody's regards the impact of the deteriorating global economic
outlook amid the rapid and widening spread of the coronavirus
outbreak as a social risk under its environmental, social and
governance (ESG) framework, given the substantial implications for
public health and safety.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Jiangsu Zhongnan's stable outlook reflects Moody's expectation that
the company will control its leverage while expanding its business,
achieve modest contracted sales growth, and maintain good liquidity
over the next 12-18 months.
Moody's could upgrade the rating if Jiangsu Zhongnan improves its
financial position, for example with a higher profit margin and
lower leverage, while maintaining solid contracted sales growth.
Credit metrics that indicate a possible upgrade include (1)
adjusted EBIT/interest above 2.5x-3.0x; and (2) cash/short-term
debt above 1.25x, on a sustained basis.
A significant reduction in the contingent liabilities associated
with JVs or reduced risk of providing funding support to JVs would
also be positive for the ratings. This could result from a reduced
usage of JVs or a significant improvement in the financial strength
of its JV projects.
On the other hand, Jiangsu Zhongnan's CFR could be downgraded if
the company executes heavily debt-funded expansions or
acquisitions; suffers declines in contracted sales or revenue; or
records deteriorating liquidity on a sustained basis. Financial
indicators of a possible downgrade include interest coverage
falling below 1.5x-2.0x and cash/short-term debt falling below
1.0x, both on a sustained basis.
Moody's could also downgrade the rating if the company's contingent
liabilities associated with JVs or the risk of providing funding
support to JVs increase significantly. This could result from a
significant deterioration in the financial strength and liquidity
of its JV projects or a substantial increase in investments in new
JV projects.
The principal methodology used in these ratings was Homebuilding
and Property Development Industry published in January 2018.
Jiangsu Zhongnan Construction Group Co., Ltd. is based in China's
Jiangsu Province and principally engages in property development
and construction services. The company had a total land bank of
around 44.1 million square meters as at June 2020.
Jiangsu Zhongnan was founded by Chen Jinshi, who has been engaged
in the construction business in China since 1988, when he
established the company. The company was listed on the Shenzhen
Stock Exchange in 2009 with a market capitalization of RMB35.6
billion ($5.0 billion) as of September 7, 2020.
KANGDE XIN: Founder, Former Execs Move Closer to Prosecution
------------------------------------------------------------
Caixin Global reports that four former senior executives of
troubled Kangde Xin Composite Material Group Co. Ltd., including
its founder and actual controller Zhong Yu, are set to face
criminal trial for their alleged roles in an CNY11.5 billion
(US$1.7 billion) fraud that triggered a series of bond defaults and
a debt crisis at the company.
Police in the city of Zhangjiagang, where the Shenzhen-listed
laminating film manufacturer is based, have sent the case to the
public prosecutor's office for further investigation and
prosecution, the company said in a filing on Sept. 15, Caixin
relays. Xu Shu, the general manager of the company at the time of
the fraud, Wang Yu, former finance director, and Zhang Lixiong,
previously head of the treasury department, are also facing
prosecution, the report says.
Caixin relates that the former executives are also under
investigation by the China Securities Regulatory Commission (CSRC),
which has been holding hearings in Beijing to determine what
administrative punishment should be imposed on the Jiangsu
province-based company, which is struggling to survive after a bond
default in January 2019 led to the exposure of one of the most
high-profile corporate frauds in Chinese stock market history.
Kangde Xin Composite Material Group Co., Ltd. --
http://www.kangdexin.com/-- engages in laminating film and
photoelectric materials, 3D, and Internet applications businesses
worldwide. It offers printing substrates, environmental laminating
films, 3D grating materials, 3D imaging technology, automatic
coating equipment, and electronic display equipment under the
Kangde Film and KDX brand names for the printing and packaging, and
decoration markets.
=========
I N D I A
=========
AGHARA KNITWEAR: ICRA Withdraws B+ Rating on INR3.0cr Loan
----------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Aghara Knitwear Pvt. Ltd. (AKPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based
Term Loan 2.90 [ICRA]B+ (Stable); Withdrawn
Fund-based
Cash Credit 3.00 [ICRA]B+ (Stable); Withdrawn
Non-fund Based
Bank Guarantee 0.15 [ICRA]A4; Withdrawn
Unallocated
limits 0.65 [ICRA]B+ (Stable)/A4; Withdrawn
Rationale
The long-term and short-term Ratings assigned to AKPL have been
withdrawn at the request of the company, based on the no-objection
certificate provided by its banker. ICRA is withdrawing the rating
and that it does not have information to suggest that the credit
risk has changed since the time the rating was last reviewed. ICRA
has withdrawn the Stable outlook on the long-term rating.
Key rating drivers and their description
Key rating drivers have not been captured as the rating is being
withdrawn.
Liquidity position
Not captured as the rating is being withdrawn.
Rating sensitivities
Not captured as the rating is being withdrawn.
The Gujarat-based Aghara Knitwear Pvt. Ltd. (AKPL), established in
June 2015 as a greenfield project, manufactures knitted fabric from
cotton yarn. It commenced commercial operations in April 2016. The
manufacturing facility is equipped with 15 knitting machines, with
an installed capacity of 2228 MTPA. Further, the company plans to
undertake a capex of INR0.70 crore to install three knitting
machines for capacity expansion. The company is managed by the
Aghara family.
AJIT KUMAR: ICRA Keeps B Debt Ratings in Not Cooperating
--------------------------------------------------------
ICRA said the rating for the INR10.00 crore bank facilities of Ajit
Kumar Swain has continued to 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] B (Stable)/A4, ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based– 2.00 [ICRA]B (Stable) ISSUER NOT
Cash Credit COOPERATING, Rating continues
to remain in the 'Issuer Not
Cooperating' category
Unallocated 1.00 [ICRA]B (Stable) ISSUER NOT
COOPERATING, Rating continues
to remain in the 'Issuer Not
Cooperating' category
Bank Guarantee 5.00 [ICRA]A4 ISSUER NOT COOPERATING,
Rating continues to remain in the
'Issuer Not Cooperating' category
Unallocated 2.00 [ICRA]A4 ISSUER NOT COOPERATING,
Rating continues to remain in the
'Issuer Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 2009 as a proprietorship firm, the entity commenced
operations in the second quarter of FY2015. Ajit Kumar Swain (AKS/
the entity) is a civil constructor involved in irrigation canals
– earthwork, rehabilitation etc, and road works in Odisha. AKS is
a registered Special Class Contractor with the Public Works
Department (PWD), Odisha, and this allows the entity to bid for
large contracts floated by the department. The proprietor of the
firm is also engaged in construction activities through a group
firm – M S Infraengineers Pvt Ltd (MSIPL), of which he is the
Chief Executing Officer.
AMRITA DEVELOPERS: ICRA Withdraws 'B' Rating on INR14.75cr Loan
---------------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Amrita Developers (Indore) Pvt Ltd (ADPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: 14.75 [ICRA]B (Stable); ISSUER NOT
Fund Based/ COOPERATING; Withdrawn
Cash Credit
Rationale
The rating assigned to ADPL has been withdrawn at the request of
the company and based on the no due certificate received from the
banker, and in accordance with ICRA's policy on withdrawal and
suspension. ICRA is withdrawing the rating and that it does not
have information to suggest that the credit risk has changed since
the time the rating was last reviewed.
Key rating drivers
The key rating drivers have not been captured as the rated
instrument(s) are being withdrawn.
Liquidity position
Liquidity position has not been captured as the rated instruments
are being withdrawn.
Rating sensitivities
Rating sensitivities have not been captured as the rated
instruments are being withdrawn
Amrita Developers (Indore) Pvt Ltd (ADPL) was incorporated in 2007
and is promoted by Mr. Ramesh Chand Jain and his son, Mr. Prayank
Jain. The company has a 56-room hotel, with a conference room,
three banquet halls and two-party lawns (convertible to one) on
1.91 hectares of land on MR-10 road in Indore (Madhya Pradesh). The
hotel-cum-party lawn is run under the brand name Nirvana Hotel &
Resort. The commercial operations in the party lawns commenced in
September 2012 while the hotel was commercially launched for public
in January 2014.
ANSAL HOUSING: Ind-Ra Affirms 'D' Long Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Ansal Housing
Limited's (AHL) Long-Term Issuer Rating at 'IND D (ISSUER NOT
COOPERATING)'. The issuer did not participate in the rating
exercise, despite continuous requests and follow-ups by the agency.
Thus, the rating is based on the best available information.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings.
The instrument-wise rating actions are:
-- INR750 mil. Secured overdraft limits (Long-term) affirmed with
IND D (ISSUER NOT COOPERATING) rating;
-- INR716.3 mil. Non-fund-based limits (Short-term) affirmed with
IND D (ISSUER NOT COOPERATING) rating;
-- INR1.40 bil. Fixed deposit programme (Long-term) affirmed with
IND tD (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
best available information
KEY RATING DRIVERS
The affirmation reflects continued delays in debt servicing by AHL
as stated by the statutory auditor in the FY20 audited report,
owing to the company's tight liquidity position, resulting from
continued weak presales and collections. AHL has submitted details
of subsequent defaults in debt servicing during July-August 2020 to
the BSE Ltd and National Stock Exchange Limited.
RATING SENSITIVITIES
Positive: Timely debt servicing for three consecutive months will
be positive for the ratings.
COMPANY PROFILE
Incorporated in 1983, AHL operates a real estate business with a
key focus on northern India. The company is listed on BSE Ltd and
National Stock Exchange Limited. The company primarily operates in
Delhi National Capital Region, Mumbai, and Tier II and Tier III
towns, and commands a premium of 10%-15% over its local peers.
ARQUBE INDUSTRIES: ICRA Lowers Rating on INR20cr LT Loan to B+
--------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Arqube Industries (India) Limited (AIIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Fund 20.00 [ICRA]B+(Stable) ISSUER NOT
Based/CC COOPERATING; Rating downgraded
from [ICRA]BB(Negative) ISSUER
NOT COOPERATING and continues
to remain in the 'Issuer Not
Cooperating' category
Long Term–Non- 1.50 [ICRA]B+(Stable) ISSUER NOT
Fund Based COOPERATING; Rating downgraded
from [ICRA]BB(Negative) ISSUER
NOT COOPERATING and continues
to remain in the 'Issuer Not
Cooperating' category
Long Term- 10.50 [ICRA]B+(Stable) ISSUER NOT
Unallocated COOPERATING; Rating downgraded
from [ICRA]BB(Negative) ISSUER
NOT COOPERATING and continues
to remain in the 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding AIIL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Arqube Industries (India) Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance,
but despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, a rating view has
been taken on the entity based on the best available information.
Arqube Industries (India) Limited (AIIL) was incorporated in FY2006
as a limited company to take over an existing firm "M/s. Venna
Impex". The firm was liquidated and all the assets and liabilities
were taken over by AIIL. Mr. Raghu Rama Raju is the promoter of
the company having more than 18 years of experience in the hair
processing industry and the company is located in the West Godavari
District of Andhra Pradesh. AIIL is primarily engaged in the
processing and export of human hair (both remy and non-remy) to the
manufacturers of hair extensions, wigs, toupees, hair pieces and
hair weavings based in China, Netherlands, USA and Israel.
B L GOEL: ICRA Lowers Rating on INR7.0cr LT Loan to B+
------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of B L
Goel & Company (BLG), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term 7.00 [ICRA]B+ (Stable) ISSUER NOT
Fund based/ COOPERATING; Rating downgraded
Term loan from [ICRA]BB- (Stable)
continues to remain under
'Issuer Not Cooperating' category
Short-Term 10.00 [ICRA]A4 ISSUER NOT COOPERATING;
Non Fund based/ Rating continues to remain in the
Bank guarantee 'Issuer Not Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding BLG's performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with B L Goel & Company , ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, a rating view has been
taken on the entity based on the best available information.
Based in Delhi, B L Goel & Company (BLG) was established as a
partnership firm in 1998. Mr. B L Goel who is a civil engineer by
profession has experience of more than 30 years in the field of
construction. Currently Mr. B L Goel, his wife Mrs. Ram Murthy Goel
and son Mr. Sanjay Goel serve as partners to the firm. The
promoters have been in the construction business for more than two
decades and have taken up work related to construction of
residential as well as institutional buildings. The current
operations of the firm are handled by Mr. B L Goel and his son Mr.
Sanjay Goel.
BLGC is involved in the business of civil construction and takes up
work related to construction of multi storey buildings for group
housing societies which includes civil, sanitary and electrical
work. The operations of the firm are confined to the NCR region and
the total value of the contracts completed by the firm till date is
around INR500 crores. The firm has completed work for both
government as well as private entities for construction of
residential as well as institutional buildings. Some of the work
completed by the firm in the past includes construction of
residential units at JNU campus, Construction of Kissan Bhavan at
Azadpur, etc. BLGC is also registered as a Class S contractor with
Military engineering services (MES), Western Command which enables
it to bid for contracts up to INR15 crores.
CAIRN INDIA: Fitch Maintains 'B+' LT IDR on Watch Negative
----------------------------------------------------------
Fitch Ratings has maintained Cairn India Holdings Limited (CIHL)
Long-Term Issuer Default Rating of 'B+' on Rating Watch Negative
(RWN).
Fitch has also simultaneously withdrawn the ratings. The agency
will no longer provide ratings or analytical coverage of this
issuer.
Fitch placed CIHL's rating on RWN on June 10, 2020 after Vedanta
Resources Limited (VRL) said it planned to delist the shares of its
Indian subsidiary and CIHL's parent, Vedanta Limited (VLTD). CIHL's
rating is aligned with the credit profile of VLTD, reflecting their
strong linkages and VLTD's 100% ownership of CIHL
The ratings were withdrawn with the following reason: For
Commercial Purposes
KEY RATING DRIVERS
Weaker Profile Under Delisting Plan: The RWN reflects the risk that
should the delisting succeed, Fitch would assess the linkage
between VRL and VLTD as 'Strong', rather than 'Moderate', and the
agency will view the group as a single economic block, as VRL will
own 100% of VLTD, which will hold 100% of CIHL. This will result in
Fitch assessing the VLTD's credit profile based on the consolidated
VRL group, which Fitch believes is weaker.
The rating is maintained on RWN as the delisting has not been
completed. The company is in process of getting the relevant
regulatory approvals and plans to launch the reverse book building
process after that.
CIHL has an ESG Relevance Score of 4 for Governance Structure,
which reflects issues related to overall board structure and
composition, and effective management control. Its assessment does
not factor in any cash leakage from VLTD or CIHL, aside from the
dividends to VRL. CIHL invested in a structured product originated
by VRL's shareholder Volcan Investment Limited in January 2019, and
it was subsequently unwound profitably in August 2019. Various
investors at the group voiced opposition to the transaction and VRL
has since committed to abstain from similar transactions in the
future. However, Fitch believes that absence of large and vocal
minority investors at VLTD after the delisting might make it easier
for Volcan to access the cash at the operating companies for its
liquidity needs.
RATING SENSITIVITIES
No longer applicable as the ratings have been withdrawn.
CRITERIA VARIATION
Fitch applied its Parent and Subsidiary Rating Linkage criteria to
derive the credit profile of VLTD. In case of an assessment of
'Strong' or 'Moderate' linkages between a weaker parent (VRL) and
stronger subsidiary (VLTD), the criteria establish that the Issuer
Default Ratings for both are likely to be based on the consolidated
credit profile. However, the committee assessed VLTD's credit
profile as better than the consolidated group profile.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
CIHL has an ESG Relevance Score of 4 for Governance Structure,
which reflects issues related to overall board structure and
composition, and effective management control. These have a
negative impact on the rating.
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
CIEMME JEWELS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA said the ratings for the INR38.30 crore bank facilities of
Ciemme Jewels Limited continue to remain under 'Issuer Not
Cooperating category'. The ratings are denoted as "[ICRA]D ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 24.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund Based Rating Continues to remain under
Cash Credit Issuer not cooperating category
Long Term– 13.90 [ICRA]D; ISSUER NOT COOPERATING;
Fund Based Rating Continues to remain under
Term loan Issuer not cooperating category
Long Term– 0.40 [ICRA]D; ISSUER NOT COOPERATING;
Non Fund Based Rating Continues to remain under
Issuer not cooperating category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Ciemme Jewels Limited (CJL) is a wholly owned subsidiary of C
Mahendra International Limited (CMIL). CMIL is in turn a wholly
owned subsidiary of C Mahendra Exports Limited which is the
flagship company of the C Mahendra Group. CMIL is the holding
company for all other C Mahendra group companies. CJL was
incorporated on April 3, 2003 as C.M. Jewels Private Limited to
buy, sell, export, import, deal, market and manufacture diamonds,
precious stones, semi-precious stones and jewellery. The name of
the company was changed to Ciemme Jewels Private Limited on
June 6, 2003. The company was converted into a public limited
company and name was further changed to Ciemme Jewels Limited with
effect from June 28, 2007. The company is engaged in the
manufacturing and marketing of Diamond studded jewellery. It also
engages in trading of diamonds.
DANLAW ELECTRONICS: ICRA Withdraws B+ Rating on INR1cr Loan
-----------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of Danlaw
Electronics Assembly Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 1.00 [ICRA]B+ (Stable); ISSUER NOT
Fund Based COOPERATING; Withdrawn
Short Term- 1.50 [ICRA]A4; ISSUER NOT COOPERATING;
Non Fund Based Withdrawn
Rationale
The ratings assigned to Danlaw Electronics Assembly Limited have
been withdrawn at the request of the company and based on the No
Dues Certificate received from the banker and in accordance with
ICRA's policy on withdrawal and suspension of credit ratings. ICRA
is withdrawing the rating of [ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT
COOPERATING and notes that it does not have additional information
to suggest that the credit risk has changed since the time the
rating was last reviewed.
Key rating drivers
The key rating drivers have not been captured as the ratings are
being withdrawn.
Liquidity position
Liquidity position has not been captured as the ratings are being
withdrawn.
Rating sensitivities
Rating sensitivities have not been captured as the ratings are
being withdrawn
Danlaw Electronics Assembly Limited was founded on 31st July 1991
and is located in Goa. The company offers a wide range of
electronics manufacturing services to the automotive, medical,
industrial controls and instrumentation sectors. It is a subsidiary
of Danlaw Technologies India Limited.
ENRICH RD: ICRA Keeps C+ Debt Rating in Not Cooperating
-------------------------------------------------------
ICRA said the ratings for the INR15.00 crore bank facilities of
Enrich RD Infraprojects Private Limited continue to remain under
'Issuer Not Cooperating' category'. The ratings are denoted as
"[ICRA]C+/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 3.00 [ICRA]C+; ISSUER NOT COOPERATING;
Fund Based Rating Continues to remain under
Cash Credit Issuer not cooperating category
Short Term– 7.00 [ICRA]A4; ISSUER NOT
COOPERATING;
Non Fund Based Rating Continues to remain under
issuer not cooperating category
Long Term/ 5.00 [ICRA]C+/[ICRA]A4; ISSUER NOT
Short Term- COOPERATING; Rating Continues
Unallocated to remain under issuer not
cooperating category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Enrich RD Infraprojects Private Limited (ERDIPL) was initially
established as a proprietorship firm - R D Electricals by
Mr.Dashrath Redekar in 1986 and converted to a private limited
company in 2007. The operations of the company are collectively
managed by the directors of the company- Mr. Sunil Agrawal and Mr.
Deepak Redekar. ERDIPL is engaged inexecuting turnkey projects
involving designing, supply, erection, testing and commissioning of
the overhead electrification1 for railways. The company is also
engaged in the trading of steel items such as MS Angles, plates,
channels and electrical fittings like GPRS modules and others. The
company is an electrical contractor and primarily participates in
tenders floated by the railways, which are awarded to the lowest
bidder i.e. based on L1 pricing. The major clients of company
include Central Railway, Western Railway, Southern Railway and
Northern Railway.
FRENCH MOTOR: ICRA Lowers Rating on INR14.50cr Cash Loan to B+
--------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of The
French Motor Car Co. Ltd. (FMCCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based- 14.50 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
continues to remain in the
'Issuer Not Cooperating' category
Unallocated 0.50 [ICRA]B+ (Stable)/[ICRA]A4;
Limits ISSUER NOT COOPERATING; Long
Term rating downgraded from
[ICRA]BB- (Stable) and ratings
continues to remain under the
'Issuer Not Cooperating' category
Rationale
The ratings downgrade is because of lack of adequate information
regarding FMCCL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with French Motor Car Co. Ltd., ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, a rating view has
been taken on the entity based on the best available information.
The French Motor Car Co. Ltd. (FMCCL) was established as a
proprietorship concern in 1905 by a French-American diamond
merchant. Later, in 1920 it was converted into a public limited
company. In 1954, FMCCL became an authorised dealer for Tata Motors
Limited's (TML) products (commercial vehicle, spares) and services.
The dealership network of FMCCL is spread across the states of West
Bengal (Kolkata, Howrah and Asansol) and Assam (Guwahati). FMCCL
has four showrooms, one each in Kolkata with 1S (sale) facility,
Howrah, Asansol and Guwahati with 3S (sale, spares and services)
facilities and two workshops with 1S (service) facility, one each
in Guwahati and Asansol. It also has three small offices (two in
West Bengal and one in Assam) with display space of two vehicles
each.
GAYATRI HI-TECH: ICRA Withdraws D Rating on INR491.10cr Loan
------------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Gayatri Hi-Tech Hotels Limited (GHHL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 18.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based- Withdrawn
Cash Credit
Long Term- 491.10 [ICRA]D ISSUER NOT COOPERATING;
Fund Based- Withdrawn
Term Loan
Long Term- 26.80 [ICRA]D ISSUER NOT COOPERATING;
Non Fund Based Withdrawn
Long Term- 1.10 [ICRA]D ISSUER NOT COOPERATING;
Unallocated Withdrawn
Rationale
The rating assigned to GHHL has been withdrawn at the request of
the company and based on the No Due Certificates received from the
bankers, and in accordance with ICRA's policy on withdrawal and
suspension. ICRA is withdrawing the rating and that it does not
have information to suggest that the credit risk has changed since
the time the rating was last reviewed.
Key rating drivers
The key rating drivers have not been captured as the rated
instrument(s) are being withdrawn.
Liquidity position
Liquidity position has not been captured as the rated instruments
are being withdrawn.
Rating sensitivities
Rating sensitivities have not been captured as the rated
instruments are being withdrawn
GHHL is a closely held public limited company belonging to the
'Gayatri Group' having business interests in construction,
real-estate development, sugar, chemicals, film screening and
financial services.
Gayatri Hi-Tech Hotels Limited has set up a 5-Star Super deluxe
luxury hotel consisting of Guest rooms and Service apartments at
Hyderabad. The integrated hotel cum-service apartment project is
operational under brand name of Park Hyatt with 209 Rooms
(consisting of 102 'park rooms' with hotel view and 83 'view rooms'
with city view), 24 suits (consisting of 7 standard suite, 14
executive suites, 1 diplomat suite, 1 chairman suite and 1
presidential suite) and 42 Service Apartments (19 one bedroom
apartments, 21 two bedroom apartments and 2 three bedroom
apartments). The hotel also has a Lounge, All Meal restaurant, Bar,
Meeting Rooms, Board Rooms, Banqueting Facility, Swimming Pool,
Health Club and Spa. The hotel has a technical, franchise,
marketing and management tie-up with Hyatt International
Corporation (Hyatt), USA under "Park Hyatt" brand.
HARMONY FOODS: ICRA Lowers Rating on INR13.50cr LT Loan to B+
-------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Harmony
Foods Private Limited (HFPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 13.50 [ICRA]B+(Stable) ISSUER NOT
Fund Based/cc COOPERATING; Rating downgraded
from [ICRA]BB+(Stable) ISSUER
NOT COOPERATING and continues to
remain in the 'Issuer Not
Cooperating' category
Long Term- 4.62 [ICRA]B+(Stable) ISSUER NOT
Fund Based TL COOPERATING; Rating downgraded
from [ICRA]BB+(Stable) ISSUER
NOT COOPERATING and continues to
remain in the 'Issuer Not
Cooperating' category
Long Term/ 1.88 [ICRA]B+(Stable)/[ICRA]A4
Short Term– ISSUER NOT COOPERATING; Rating
Unallocated downgraded from ICRA]BB+(Stable)/
[ICRA]A4+ ISSUER NOT COOPERATING
and continues to remain in the
'Issuer Not Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding HFPL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of noncooperation by a rated entity"
available at www.icra.in.
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade. As part of its process and in
accordance with its rating agreement with Harmony Foods Private
Limited, ICRA has been trying to seek information from the entity
so as to monitor its performance, but despite repeated requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, a rating view has been taken on the entity based on
the best available information.
Incorporated in 2004, Harmony Foods Private Limited (HFPL) is
involved in processing of wheat into food products such as maida,
rawa, atta and bran with an installed capacity of 350 TPD. The
manufacturing facility is located at Visakhapatnam. The products
manufactured by the company are primarily consumed in the bakery,
supermarkets etc. The bran is used as feed for livestock and also
included as an ingredient in making fish feed.
K V AROMATICS: ICRA Moves D Debt Ratings to Not Cooperating
-----------------------------------------------------------
ICRA has moved the ratings for the bank facilities of K V Aromatics
Private Limited to the 'Issuer Not Cooperating' category. The
rating is now denoted as "[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 8.00 [ICRA]D ISSUER NOT COOPERATING;
Long Term Rating moved to the 'Issuer Not
Cooperating' category
Term Loan- 0.38 [ICRA]D ISSUER NOT COOPERATING;
long term Rating moved to the 'Issuer Not
Cooperating' category
Fund based 194.00 [ICRA]D ISSUER NOT COOPERATING;
Short Term Rating moved to the 'Issuer Not
Cooperating' category
Unallocated 16.00 [ICRA]D ISSUER NOT COOPERATING;
Short Term Rating moved to the 'Issuer Not
Cooperating' category
Non-Fund 11.00 [ICRA]D ISSUER NOT COOPERATING;
based short Rating moved to the 'Issuer Not
term Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
K. V. Aromatics Private Limited (KVAPL) was incorporated in 2005
and was originally registered in the name of M/s J C Infrasoft
Private Limited. The promoters effected the change of name of the
company on 31.3.2008 to K. V. Aromatics Private Limited. The
company's operations are based at Greater Noida in the state of
Uttar Pradesh. Mr. Vinod K. Agarwal, father of the promoters Mr.
Sudhanshu Agarwal and Mr. Himanshu Agarwal ventured into menthol
business in 1990 with the trading of Mentha Oil. The family
established its first manufacturing unit under a company named
Siddhant Chemicals in 1996 at Sambhal. In 2004 the company ventured
into exports. Subsequently the family established its second
manufacturing facility under a company named Abhey Chemicals in the
state of Jammu and Kashmir to take benefit of tax concessions
announced by the government in 2005. In 2007 the promoters
commenced work on setting up of another manufacturing facility at
Greater Noida under the company K. V. Aromatics Private Limited.
The manufacturing facility was completed by 2008 and trial
productions started in October 2008. The product mix of the company
constitutes menthol crystals, menthol powder, De-mentholised
Peppermint oil, and various essential oils and specialty chemicals
such as Rectified Spearmint oil, Cis-3-Hexenol etc.
KAMAKSHI RAW: ICRA Lowers Rating on INR10cr LT Loans to D
---------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Sree
Kamakshi Raw and Boiled Rice Mill (SKRBRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT: Fund Based 7.00 [ICRA]D ISSUER NOT COOPERATING;
Limit downgraded from [ICRA]B+
(Stable), continues to remain
under 'Issuer Not Cooperating'
category
LT: Unallocated 3.00 [ICRA]D ISSUER NOT COOPERATING;
downgraded from [ICRA]B+
(Stable), continues to remain
under 'Issuer Not Cooperating'
category
Rationale
The rating action considers the delay in servicing debt obligation
by SKRBRM as confirmed by the banker. The firm delayed in closing
the adhoc limits availed from bank within the scheduled due dates.
Founded in 2000, M/s. Sree Kamakshi Raw and Boiled Rice Mill
(SKRBRM) is located in Allipuram village of Nellore District. Mr.
K. Suneel Kumar is the managing partner of the firm. The firm has
one raw rice mill unit of 4 MTPH and one boiled rice mill unit of 8
TPH capacity. During 2012, the raw rice mill was renovated, and old
machineries were replaced. The rice is sold under "Double Hearts"
brand. The firm's clients are predominantly located in Kerala,
Gujarat, Tamil Nadu and Karnataka.
KSR PROPERTIES: ICRA Keeps B Debt Rating in Not Cooperating
-----------------------------------------------------------
ICRA said the rating for the INR30.00 crore bank facilities of KSR
Properties Private Limited continues to remain under Issuer Not
Cooperating category. The Long-term rating is denoted as [ICRA]B
(Stable) ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 30.00 [ICRA]B (Stable); ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis dated information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity.
Incorporated in 1999, KSR Properties Private Limited (KSR) is a
private limited concern with Mr. Ramana Reddy Kunduru as Managing
Director. The entity is into the business of real estate
development and has completed three projects since its inception.
The company's main areas of activity are apartments and luxury
villas. Presently, the company is engaged in execution of two
residential apartment project named KSR Cordelia and KSR Basil in
KR Puram and Old Madras Road in Bangalore respectively. In the
future, the company plans to launch one row house project with an
aggregate saleable area of 1.41 lakh square feet (sqft).
LEONARD EXPORTS: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA said the ratings for the INR7.00 crore bank facilities of
Leonard Exports continue to remain in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]B+(Stable)/[ICRA]A4
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based– 3.75 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING, Rating continues
to remain in the 'Issuer Not
Cooperating' category
Non Fund Based 1.00 [ICRA]A4 ISSUER NOT COOPERATING,
Packing credit/ Rating continues to remain in the
FBP/FBD 'Issuer Not Cooperating' category
Non Fund Based- 0.20 [ICRA]A4 ISSUER NOT COOPERATING,
Bank Guarantee Rating continues to remain in the
'Issuer Not Cooperating' category
Untied Limits 2.05 [ICRA]B+ (Stable) ISSUER NOT
COOPERATING, Rating continues
to remain in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Leonard Exports (LE) was established in 2001 as a partnership firm
by Mr. P.K.Darolia (holding 70% stake) along with three other
partners. The firm trades in fly ash, which it procures from
various thermal power plants and sells primarily to cement
manufacturing units. Besides, the firm also provides ancillary
services, like handling and transportation of fly ash. The firm
operates through four branches-Farakka, Suri, Titagarh in West
Bengal and Kahalgaon in Bihar.
MAHATHI SOFTWARE: ICRA Withdraws B- Rating on INR31.50cr Loan
-------------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Mahathi Software Private Limited (MSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 31.50 [ICRA]B-(Stable); ISSUER NOT
Fund Based TL COOPERATING; Withdrawn
Short Term- 7.00 [ICRA]A4; ISSUER NOTCOOPERATING;
Fund Based Withdrawn
Long Term- 4.97 [ICRA]B-(Stable); ISSUER NOT
Unallocated COOPERATING; Withdrawn
Rating action
The long-term and short-term ratings assigned to MSPL have been
withdrawn at the request of the company. ICRA is withdrawing the
rating and that it does not have information to suggest that the
credit risk has changed since the time the rating was last
reviewed. ICRA has withdrawn the Stable outlook on the long-term
rating.
Key rating drivers and their description
Key rating drivers have not been captured as the rating is being
withdrawn.
Liquidity Position:
Not captured as the rating is being withdrawn.
Rating sensitivities:
Not captured as the rating is being withdrawn.
Mahathi Software Private Limited, incorporated in 2001, is an IT
services provider with focus on the healthcare industry. The
company is located in Vishakapatnam, Andhra Pradesh, and derives
majority of its revenues from customers based out of USA. The
company also leased out a 3-storey building, with built-up area of
1,35,000 sq.ft. in Rushikonda, Vishakapatnam, to Andhra Pradesh
Electronics and IT Agency (APEITA).
MANGALAM PIPES: ICRA Lowers Rating on INR4.40c LT Loan to B+
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Mangalam
Pipes Pvt Ltd, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.40 [ICRA]B+ (Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
continues to remain under
'Issuer Not Cooperating' category
Long Term- 0.69 [ICRA]B+ (Stable) ISSUER NOT
Fund Based TL COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
continues to remain under
'Issuer Not Cooperating' category
Short Term- 3.00 [ICRA]A4 ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
'Issuer Not Cooperating' category
Short Term- 3.47 [ICRA]A4 ISSUER NOT COOPERATING;
Non Fund Based Rating continues to remain under
'Issuer Not Cooperating' category
Rationale
The rating is downgraded because of lack of adequate information
regarding Mangalam Pipes Pvt Ltd and hence the uncertainty around
its credit risk. ICRA assesses whether the information available
about the entity is commensurate with its rating and reviews the
same as per its "Policy in respect of non-cooperation by the rated
entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Mangalam Pipes Pvt Ltd , ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
Mangalam Pipes Pvt Ltd. was incorporated in 2008 by promoters who
have experience in this domain since 1986. It is a well known
manufacturer and supplier of HDPE Pipes, HDPE coils, fittings and
accessories. It also undertakes jointing, welding services for hdpe
pipes. The company products are sold under the brand name
"Mangalam". It has 500 dealers/sub dealers covering Karnataka,
Tamilnadu, Kerala, Maharashtra and some part of Andhra Pradesh. It
manufactures pipes with diameters ranging from 20-315mm in all
prescribed pressure classes. At present the company has a
manufacturing capacity of 6000 tn/annum.
MANGALORE SEA: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA said the ratings for the INR7.50 crore bank facilities of
Mangalore Sea Products continue to remain under Issuer Not
Cooperating category. The Long-term rating is denoted as [ICRA]B+
(Stable) ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 5.00 [ICRA]B+ (Stable); ISSUER NOT
Fund Based/CC COOPERATING; Rating continue to
remain under the 'Issuer Not
Cooperating' category
Long Term- 2.50 [ICRA]B+ (Stable); ISSUER NOT
Fund Based TL COOPERATING; Rating continue to
remain under the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis dated information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity.
Mangalore Sea Products was bought by Mr. Abdul Khader from Mr. H.S.
Nissar on January 28, 2014. It is a partnership firm closely held
by Mr. Abdul Khader and his wife Ms. Hafeeza Khathijamma. The firm
manufactures and sells fish meal and fish oil. The firm has a
manufacturing unit at Ullal, Mangalore with capacity to process 200
tonne of fish per day. The firm started its operations in May 2014.
The firm has its corporate office in Mangalore.
N. MOHAMED: ICRA Assigns B Rating to INR3.0cr LT Loan
-----------------------------------------------------
ICRA has assigned rating to the bank facilities of N. Mohamed
Jamaluddin's (NMJ), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term–Fund- 3.00 [ICRA]B (Stable); assigned
based/Working
Capital Facility
Short Term–Non- 1.90 [ICRA]A4; assigned
fund Based
Long Term/Short 1.60 [ICRA]B (Stable)/[ICRA] A4;
Term-Unallocated Assigned
Rationale
The assigned ratings factor in NMJ's established position and
experience of the proprietor as a contractor in the engineering,
procurement and construction segment for over a decade. The ratings
positively factor in NMJ's low counterparty risk as the Government
entities are NMJ's ultimate counterparty for most of the projects.
Further, ICRA notes the healthy profitability metrics of the entity
with an OPBDITA/OI of 10.1% in FY2020. The ratings are, however,
constrained by its small scale of operations and the risks involved
in scaling up of operations required to complete the project orders
in hand. The ratings factor in the stretched liquidity position of
the entity along with the possibility that NMJ's liquidity would
remain stretched in the near term also.
The Stable outlook on the [ICRA]B rating reflects ICRA's opinion
that NMJ will be able to scale up its operations to achieve steady
growth in the near term, backed by a healthy order book position.
Key rating drivers and their description
Credit strengths
* Established position and experience of proprietor in the sector:
NMJ's established position in the sector is supported by its
healthy track record of executing orders for government entities
such as the Public Works Department, the Fisheries Department, town
and city corporations among others. The rating also derives comfort
from the experience of the proprietor in the sector for over a
decade.
* Low counterparty risk: The current order book of NMJ comprises
orders solely from government entities. The counterparty risk
remains low as the Government of Tamil Nadu/Government of India is
the ultimate counterparty for the project orders.
* Healthy profitability metrics: NMJ's financial profile is
characterised by a healthy profitability with comfortable operating
margin and net profit margin of 10.1% and 4.9%, respectively in
FY2020 (as per provisional financials).
Credit challenges
* Modest scale of operations: NMJ's scale of operations remains
modest with an operating income (OI) of INR9.6 crore in FY2020 (as
per provisional financials). However, with orders in hand worth
INR50 crore, the scale of operations is expected to improve in the
near term.
* Liquidity position of the entity expected to remain stretched in
the near term: ICRA expects the liquidity position of the entity to
remain stretched in the near term with cumulative interest
repayment on the working capital facility for the moratorium period
extended by the banks falling due in September 2020. Any delay in
payment from the counterparties due to adverse financial position
of the state governments can lead to a further deterioration of the
liquidity position of the entity.
Liquidity position: Stretched
NMJ's liquidity position remains stretched as characterised by the
minimal unencumbered cash balance of INR0.02 crore available as on
March 31, 2020 and no buffer available in its working capital
limits. NMJ's average month-end utilisation of its working capital
facility remained high at 102% between July 2019 and July 2020.
Rating sensitivities
Positive triggers – ICRA may upgrade the ratings of NMJ if the
company is able to significantly improve its scale of operations
while improving its working capital cycle and liquidity position.
Negative triggers – Pressure on NMJ's ratings could arise if the
company's liquidity position deteriorates due to any significant
delay in execution of the orders or payment from counterparties.
N. Mohamed Jamaluddin was established as a proprietorship firm in
2004, with its headquarters in Chennai. NMJ executes engineering
contracts for government entities and mainly focuses on dredging,
widening and desilting of river beds. NMJ has a history of
executing contracts for Government entities like Public Works
Department, Fisheries Department, Railways and city/town
corporations.
PLYCOM PVT: ICRA Reaffirms B+ Rating on INR2.0cr LT Loan
--------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Plycom
Pvt. Ltd. (PPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 2.00 [ICRA]B+ (Stable); reaffirmed
Fund Based/CC
Short-term- 1.00 [ICRA]A4; reaffirmed
Non Fund
Based/LC
Long term/ 3.00 [ICRA]B+ (Stable)/[ICRA]A4;
Short term- Reaffirmed
Unallocated
Rationale
The ratings reaffirmation is constrained by the likely decline in
the operating income of PPL in FY2021 owing to the Covid-19
pandemic and weak debt coverage metrics with an interest coverage
of 1.65 times, TOL/TNW of 1.38 times, and Debt/OPBDIT of 3.09 times
in FY2020. The ratings are also constrained by the intensely
competitive and fragmented nature of the plywood industry with
presence of numerous companies in the industry which have
established brand presence. The ratings, however, factor in the
significant experience of the promoters spanning over two decades
in the plywood industry, and low working capital intensity with
NWC/OI of 4% in FY2020 owing to high creditors.
The Stable outlook reflects ICRA's belief that PPL will continue to
benefit from the extensive experience of the promoters
in the plywood industry.
Key rating drivers and their description
Credit strengths
* Experience of management in the plywood industry: Incorporated in
1999, PPL trades in timber-based products manufactured by Group
companies namely Everest Ply & Veneers Pvt Ltd (EPVPL), Tirupati
Veneers Pvt Ltd (TVPL) and Solid Ply Pvt Ltd (SPPL). The promoters
have extensive experience in manufacturing plywood, face veneer,
core veneer and black boards. The company markets its plywood and
face veneer under the brand name, Plycom.
* Low working capital intensity: The working capital intensity
stood low at 4% in FY2020 on account of high creditor days. The
company uses 180 days inland LC for its trading operations,
resulting in high creditor days. The company generally offers 45-60
days credit to its customers, however, payments are realised in
120-150 days. The inventory days stood low at 12 in FY2020 as the
company procures inventory mainly against orders.
Credit challenges
* Weak financial risk profile: Although the gearing stood low at
0.27 times as on March 31, 2020, the debt coverage indicators were
weak on account of low profitability with an interest coverage of
1.65 times, TOL/TNW of 1.38 times, and Debt/OPBDIT of 3.09 times in
FY2020.
* Intensely competitive and fragmented nature of plywood industry:
The plywood industry is intensely competitive with presence of
numerous players which have established brand presence. Further,
the operating income (OI) decreased to INR32.88 crore in FY2019
and further to INR16.36 crore in FY2020 from INR39.82 crore in
FY2018 after trading in iron and steel was stopped. Also, the
revenues are expected to decline in FY2021 owing to the Covid-19
pandemic.
Liquidity position: Stretched
The company's liquidity position is stretched with limited cushion
available in the working capital limits and low cash balances. The
average working capital limit utilisation stood high at 87% in the
past 15 months till June 2020. Further, PPL does not have any
repayment obligations and capex plans in the near term, which
support its liquidity position to an
extent.
Rating sensitivities
Positive triggers – The rating could be upgraded if there is a
substantial increase in the scale of operations along with an
improvement in the company's profitability margins. Further, an
interest cover ratio of more than 2 times on a sustained basis may
also lead to a rating upgrade.
Negative triggers – Pressure on the rating may arise if there is
a significant decline in the scale of operations and profit due to
a prolonged impact of the Covid-19 pandemic, affecting its
financial performance.
Incorporated in 1999, PPL trades in timber-based products. The
promoters have extensive experience in manufacturing plywood, face
veneer, core veneer and black boards through the Everest Group
companies, which include EPVPL, TVPL and SPPL. The manufacturing
facility of the Group companies is located in Dakamarri village,
Bhimillipatnam Mandal, Visakhapatnam.
PM GRANITE: ICRA Keeps C+ Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA said the ratings for the INR10.40 crore bank facilities of PM
Granite Exports Private Limited continue to remain under Issuer Not
Cooperating category. The Long-term rating is denoted as [ICRA]C+
ISSUER NOT COOPERATING and Short-term rating is denoted as [ICRA]A4
ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 0.75 [ICRA]C+; ISSUER NOT COOPERATING;
Fund Based/CC Rating continue to remain under
the 'Issuer Not Cooperating'
category
Long Term- 1.72 [ICRA]C+; ISSUER NOT COOPERATING;
Fund Based TL Rating continue to remain under
the 'Issuer Not Cooperating'
category
Short Term- 5.00 [ICRA]A4; ISSUER NOT COOPERATING;
Fund Based Rating continue to remain under
the 'Issuer Not Cooperating'
category
Long Term/ 2.93 [ICRA]C+/[ICRA]A4; ISSUER NOT
Short Term- COOPERATING; Rating continue to
Unallocated remain under the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis dated information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity.
PM Granites Export Private Limited (PMGEPL) is engaged in
processing of granite stone blocks and export of granite blocks,
slabs, tiles and other related products. PMGEPL was originally set
up in 2001 as PM Rocks Private Limited by Mr. M Babanna.
Subsequently, the firm was renamed as PM Granites Export Private
Limited in 2004. The company largely exports granite slabs & tiles.
In addition, PMGEPL also has an operational windmill of a capacity
of 1.25MW.
PRAGATEJ BUILDERS: ICRA Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
ICRA said the rating for the INR20.00 crore bank facilities of
Pragatej Builders & Developers Private Limited continues to remain
under the 'Issuer Not Cooperating' category. The rating is denoted
as "[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 20.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Term Loan 'Issuer Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Established in 1996, PBDPL is a wholly promoter group owned
organization engaged in the execution of slum rehabilitation
projects. The company is managed by Mr. Rajeshwar Vishnu Kharat and
Mr. Ramesh Vishnu Kharat who have previously undertaken a slum
rehabilitation project at Dharavi under PBDPL's group concern –
Prathamesh Construction Co. The other group concerns of the company
– Apex Developers and Prerna Housing Developers are engaged in
the execution of redevelopment and rehabilitation projects
respectively.
R. P. MOTORS: ICRA Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the ratings for the INR5.96 crore bank facilities of R.
P. Motors (RPM) continue to remain under the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]B (Stable);
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 1.86 [ICRA]B (Stable); ISSUER NOT
Limits– COOPERATING; Rating continues
Term Loan to remain under the 'Issuer Not
Cooperating' category
Fund Based 2.80 [ICRA]B (Stable); ISSUER NOT
Limit–Cash COOPERATING; Rating continues
Credit e-DFS to remain under the 'Issuer Not
Cooperating' category
Fund Based 1.00 [ICRA]B (Stable); ISSUER NOT
Limit-Cash COOPERATING; Rating continues
Credit Regular to remain under the 'Issuer Not
Cooperating' category
Unallocated 0.30 [ICRA]B (Stable); ISSUER NOT
Limits COOPERATING; Rating continues
to remain under the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Established in December 2013 as a proprietorship concern, R. P.
Motors (RPM) is an automobile dealer and has a showroom-cum-service
workshop with 3S facilities (Sales-Services-Spares) in Shillong,
Meghalaya. The entity is at present the sole authorised dealer of
Ford India Private Limited (FIPL) in Meghalaya, and also sells and
services vehicles. The entity also sells spare parts and
accessories and trades in second hand cars of any make. RPM is
managed by the proprietor, Mr. Renikton Lyngdoh.
REMEDY MEDICAL: ICRA Keeps B Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA said the ratings for the INR12.00 crore bank facilities of
Remedy Medical Services Pvt. Ltd. (RMSPL) continue to remain under
the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B (Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 8.20 [ICRA]B (Stable); ISSUER NOT
Limits–Term COOPERATING; Rating continues
Loan to remain under the 'Issuer Not
Cooperating' category
Fund Based 0.50 [ICRA]B (Stable); ISSUER NOT
Limits–Cash COOPERATING; Rating continues
Credit to remain under the 'Issuer Not
Cooperating' category
Unallocated 3.30 [ICRA]B (Stable)/[ICRA]A4;
Limits ISSUER NOT COOPERATING; Rating
continues to remain in the
'Issuer Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Established in 1999, Remedy Medical Services Private Limited
(RMSPL) commenced operations as a diagnostic centre in November,
2001. In 2004, it had set up a multi-speciality hospital in Kolkata
with a total capacity of 49 beds. The capacity was enhanced in
Q3FY2016 to 56 beds.
SAMRUDDHA RESOURCES: ICRA Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
ICRA said the rating for the INR25.00 crore bank facilities of
Samruddha Resources Limited Continues to remain under 'Issuer Not
Cooperating' category'. The ratings are denoted as "[ICRA]D ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash credit 25.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating Continues to remain under
Issuer not cooperating category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Incorporated in 1997 and formerly known as Samruddha Overseas
Limited), SRL is involved in the mining and trading of iron ore
fines. The group is promoted by Mr. Vinay Rohidas Patil, son of the
Mr. Namdar DajiSaheb Rohidas Patil (former Minister of Agriculture
Maharashtra State and belonging to Dhule district of Maharashtra).
Prior to 1997, the promoters were engaged in the textile business.
SATYESHWAR HEEMGHAR: ICRA Cuts Rating on INR5.42cr Loan to D
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Satyeshwar Heemghar Private Limited (SHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 5.42 [ICRA]D ISSUER NOT COOPERATING;
Limits–Term Rating downgraded from [ICRA]B-
Loan (Stable) and continues to remain
under 'Issuer Not Cooperating'
category
Fund Based 3.40 [ICRA]D ISSUER NOT COOPERATING;
Limits–Cash Rating downgraded from [ICRA]B-
Credit (Stable) and continues to remain
under 'Issuer Not Cooperating'
category
Fund Based 1.00 [ICRA]D ISSUER NOT COOPERATING;
Limits-Working Rating downgraded from [ICRA]B-
Capital Loan (Stable) and continues to remain
under 'Issuer Not Cooperating'
category
Non-Fund 0.18 [ICRA]D ISSUER NOT COOPERATING;
Based Limits– Rating downgraded from [ICRA]A4
Bank Guarantee and continues to remain under
'Issuer Not Cooperating'
Category
Rationale
The rating downgrade reflects the delay in debt-servicing. The
rating is based on limited information on the entity's performance
since the time it was last rated in June 20, 2019.
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Satyeshwar Heemghar Private Limited (SHPL), ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
Credit challenges:
There has been delays in debt as mentioned in Publicly available
sources.
Liquidity position: Poor
Satyeshwar Heemghar Private Limited liquidity profile is weak as
reflected by irregularities in debt servicing by entity.
Incorporated in September 2014, Satyeshwar Heemghar Private Limited
(SHPL) is promoted by the West Bengalbased Ghosh family. The
company provides cold storage facility to potato farmers and
traders on a rental basis and has a storage capacity of 22,790
metric tonnes (MT). The cold storage unit is located at Mohaboni,
Paschim Midnapore, West Bengal.
SMARTFREN TELECOM: Fitch Affirms LT Rating at 'CCC+(idn)'
---------------------------------------------------------
Fitch Ratings Indonesia has affirmed PT Smartfren Telecom Tbk's
National Long-Term Rating at 'CCC+(idn)'.
The affirmation reflects the uncertainty over Smartfren's ability
to obtain external liquidity to cover capex and debt repayment
needs, despite the significant improvement in the telecom company's
reported EBITDA margin and cash flow generation in 1H20. Smartfren
will continue to rely on its remaining undrawn committed facilities
of USD79.5 million from Niven Holdings Limited and CNY677.1 million
from China Development Bank (CDB; A+/Stable), and mandatory
convertible bonds to cover its cash shortfall in the next 18-24
months.
'CCC' National Ratings denote a very high level of default risk
relative to other issuers or obligations in the same country or
monetary union.
KEY RATING DRIVERS
Dependent on External Funding: Smartfren's rating is constrained by
its inability to fund its operations and capex in the medium term
without relying on external funding. Fitch expects Smartfren to be
reliant on the funding from Niven and CDB, and the mandatory
convertible bonds to finance its upcoming maturities (2H20: USD37.5
million, 1H21: USD37.5 million, 2H21: USD37.5 million). Smartfren
has potential funding from its warrants worth IDR1.1 trillion as of
June 2020, which the holders can exercise until November 2021.
However, Fitch does not factor this into its projections as the
exercise is uncertain due to its dependence on volatile market
conditions.
Large Capex Pressures FCF: Fitch expects Smartfren's negative free
cash flow (FCF) to persist in the medium term as it plans to
maintain its significant capex to further strengthen its 4G
long-term evolution (LTE) coverage. The Indonesian telco industry
requires continuous high investment to remain competitive,
particularly as Smartfren's network coverage remains limited
compared with top industry players. Smartfren's FCF deficit
remained large at more than IDR 3.8 trillion in 2018 and 2019 on
the back of significant capex of above IDR2.7 trillion.
Fitch forecasts Smartfren's cash flow from operations (CFO) will
remain insufficient to cover IDR2 trillion-4.5 trillion in
projected annual capex for 2021-2023, despite a significant
reversal in CFO to IDR364 billion in 1H20 from a negative IDR287
billion in December 2019. Scaling back investments may cause
Smartfren to lag further behind its larger competitors and may
affect its growth momentum, although capex can be flexible.
Expanding, Small Subscriber Base: Fitch estimates that Smartfren's
subscriber base will remain smaller than that of the top-three
local operators in the medium term despite its recent growth spurt.
Positive reception of its affordable packages, in particular
unlimited 4G data for IDR80,000/month, boosted its subscriber base
to 26 million in 1H20 from a stagnant 11-12 million in 2016-2018.
The subscribers remain significantly lower than the more than 50
million each of PT XL Axiata Tbk (BBB/AAA(idn)/Stable) and PT
Indosat Tbk (BBB/AAA(idn)/Stable), the second- and third-largest
Indonesian telcos, respectively. Fitch expects Smartfren's
subscriber growth to be more gradual from 2H20 due to the
competitive nature of the local telco industry.
Subscriber Addition Essential for Improvement: Smartfren will
require substantial additional subscribers to raise its economies
of scale to boost profitability and cash flow generation
materially. Smartfren's reported EBITDA margin (pre-PSAK73
adjustment) improved to 31.5% by end-June 2020 from 19.8% at
end-December 2019, although still lagging behind XL's and Indosat's
50% and 40%, respectively, due to its lower subscriber base.
Sustaining the growth of its subscriber base will hinge on its
ability to continue offering attractive packages and the expansion
of its 4G network. Adding fewer subscribers than Fitch expects may
weaken Smartfren's coverage as the lower profit may not adequately
cover its intensive investment.
Smartfren's earnings, and cash flow improvement also depend on the
sustainability of average revenue per user (ARPU). Fitch expects
Smartfren's blended ARPU to decline to IDR28,400 in 2020 and 2021
from IDR33,200 in 2019. This will be driven by Smartfren's plan to
continue offering affordable packages of below IDR50,000/month to
tap into the price-sensitive middle-to-low income segment and boost
its subscriber base, competing against the three-biggest local
operators.
DERIVATION SUMMARY
Smartfren's rating is driven by its insufficient liquidity despite
its improvement in cash flow generation. Fitch believes Smartfren
remains highly dependent on uncertain external liquidity sources to
cover its cash shortfall as Fitch expects its internally generated
cash flow to be insufficient to service its large capex plans and
debt obligations. The rating also reflects Smartfren's weak
coverage and high foreign-exchange exposure. These risks are
characteristics of a 'CCC(idn)' category rating definition,
although Fitch rates the company at 'CCC+(idn)' as Fitch expects
Smartfren to have sufficient coverage to pay its interest in the
next 18 months.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Subscriber base to increase by 3 million annually. Its
assumption is based on Smartfren's subscriber growth of 11.2
million and 2.5 million in 2019 and 1H20, respectively. Its
rating-case annual additional subscriber assumption is much lower
than management's (2020: 6.5 million, 2021: 13 million, 2022-2023:
14 million).
- Blended ARPU to decline to IDR27,200 by 2023. Fitch projects
Smartfren's ARPU will continue declining in line with management's
strategy to boost its subscriber base by providing best-value
proposition packages.
- EBITDA (post-PSAK73) to hover at around 10%-12%. Its PSAK73
adjustment cut Smartfren's reported margins of 19.8% and 31.5% in
2019 and 1H20 to 14.0% and 9.3%, respectively, due to the addition
of financial lease costs as operating expense. However, Fitch
expects some gradual improvement in its EBITDA generation on the
back of Smartfren's growing subscriber base in the medium term.
- Its expectation for front-loaded capex is slightly different
from its previous forecast based on management's latest investment
plan. Management plans to invest in more base transceiver stations
in its new forecast in response to the positive reception of its
products from users in 2019. Its forecast capex is based on
management's expected capex as a percentage of its projected
revenue. Management confirmed capex will be scalable based on
realised revenue or subscriber growth and the availability of
funding.
- Fitch will not account for equity-like issuance such as warrant
conversions and mandatory convertible bonds due to the uncertain
nature of these transactions. Fitch assumes the company will be
able to source the additional debt for its capex through bank
loans.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An ability to fund operations without reliance on equity and
equity-like issuance
- Generate positive operating cash flow on a sustained basis
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Coverage, measured by operating EBITDA/interest paid, declining
below 1.0x on a sustained basis
- Weakening liquidity or operating performance such that the
company is unlikely to be able to meet its obligations
LIQUIDITY AND DEBT STRUCTURE
Tight Liquidity, Limited Funding Access: Smartfren had IDR359
billion of readily available cash (including IDR9 billion in cash
collateral) and IDR2,420 billion in undrawn facilities at end-June
2020 against IDR1,045 billion in maturing long-term bank loan.
Smartfren's liquidity remains supported by external funding sources
from CDB and Niven. The additional USD50 million loan it drew down
in 1H20 helped it to repay its matured USD22.5 million bank loan.
Smartfren has not exercised its warrants or mandatory convertible
bonds in 2020 to date.
Fitch believes Smartfren's weak cash generation ability and tight
liquidity will force the company to remain dependent on external
funding from offshore bank loans and uncertain equity-like
instruments such as warrant conversion and mandatory convertible
bond issuance. Smartfren converted IDR2.2 trillion in mandatory
convertible bonds into series C shares in 1Q19. Warrants exercised
in 2019 amounted to IDR2.48 trillion.
SUMMARY OF FINANCIAL ADJUSTMENTS
In line with its revised criteria, Fitch has adjusted reported
EBITDA to treat lease costs as operating expense in the income and
cash flow statements. Smartfren adopted PSAK73 starting January 1,
2020.
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.
SUSEE MOTORS: ICRA Keeps B Debt Rating in Not Cooperating
---------------------------------------------------------
ICRA said the ratings for the INR6.00 crore bank facilities of
Susee Motors (India) Private Limited continue to remain under
Issuer Not Cooperating category. The Long-term rating is denoted as
[ICRA]B (Stable) ISSUER NOT COOPERATING and Short-term rating is
denoted as [ICRA]A4 ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 3.00 [ICRA]B (Stable); ISSUER NOT
Fund Based/CC COOPERATING; Rating continue
to remain under the 'Issuer Not
Cooperating' category
Short Term- 3.00 [ICRA]A4; ISSUER NOT COOPERATING;
Non Fund Based Rating continue to remain under
the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis dated information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity.
Incorporated in October 2012, Susee Motors (India) Private Limited
is the sole authorized dealer for Volkswagen vehicles in the
Vellore, Tiruvannamalai and Kanchipuram districts of Tamil Nadu
since January2013. The company has one 3S (sales, service and
spares) showroom in Vellore and about 100 employees as on date.
The 'Susee Group', which traces its origin to a business dealing
with trading of pulses/grains started in the late 1930s by Mr.
Subramania Nadar and Ms. Seeniyammal, is an established name in the
auto dealership space in Tamil Nadu. The group currently has five
subgroups – belonging to the descendants of the promoters; all of
these operate under the 'Susee' brand, but have no operational or
financial linkages. SMIPL belongs to one of the sub groups and is
owned and managed by Mr. Soundararajan, son of the aforementioned
promoters, and his son Mr. Manivannan. Mr. Soundararajan 2 and Mr.
Manivannan have interest in five other entities – two engaged in
the auto dealership business, one each in the FMCG, woven sacks
manufacturing and education businesses.
SVSVS PROJECTS: ICRA Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA said the ratings for the INR50.50-crore bank facilities of
SVSVS Projects Private Limited continue to remain under 'Issuer Not
Cooperating' category'. The ratings are denoted as
"[ICRA]B+(Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 2.50 [ICRA]B+(Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
Long Term– 48.00 [ICRA]B+(Stable) ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in.
SVSVS Projects Private Limited (SPPL) is a Hyderabad based
construction company engaged in executing construction of roads,
bridges, dams, buildings and irrigation works. The company is
currently executing projects on construction and maintenance of
roads for Road Construction Department of Bihar and Andhra Pradesh.
TIM WORLD: ICRA Withdraws B+ Rating on INR3cr LT Loan
-----------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of Tim
World Enterprises, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Unallocated 3.00 [ICRA]B+ (Stable); withdrawn
Long-term
Fund Based
Unallocated– 0.40 [ICRA]B+ (Stable)/[ICRA]A4;
Short term/ Withdrawn
Long term
Unallocated 6.60 [ICRA]A4; withdrawn
Short-term
Non-fund based
ICRA has withdrawn the rating of [ICRA]B+ (Stable)/A4 assigned to
Tim World Enterprises. The rating has been withdrawn in accordance
with ICRA's policy on withdrawal and suspension at the request of
the company. ICRA does not have incremental information to suggest
that the credit risk has changed since the time the rating was last
reviewed.
Incorporated in 2016, Tim World Enterprises is a partnership firm
run by Mr. Dilip Hari Bhai Patel (son of Promoter Mr. Harilal
Dhanjibhai Patel) and his younger brother Mr. Bharat Harilal Patel.
The company buys pine wood, hardwood and softwood logs from
domestic traders, which import from countries like Malaysia, New
Zealand and Africa. It processes and distributes timber from its
offices in Dindigul and Tuticorin, Tamil Nadu. Timber sold by the
company finds application in furniture, construction work and
packaging industry.
VERMA TRACTORS: ICRA Keeps B+/A4 Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA said the rating for the INR7.00 crore bank facilities of Verma
Tractors has continued to be in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA] B+(Stable)/A4, ISSUER
NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 7.00 [ICRA]B+ (Stable)/A4 ISSUER NOT
Short Term– COOPERATING, Rating continues
to
Fund Based–CC remain in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Verma Tractors (VT) established in 2004 is an authorized dealer of
Escorts Tractors in the city of Barabanki , U.P. The firm operates
in the city through its four outlets. The outlets are in Barabanki
city and blocks of Kaiserganj, Fatehpur and Ramnagar. The operation
of the firm is being managed by three partners Mrs Daya Rani Verma,
Mrs Archana Verma and Mr. Suresh Chandra Verma.
VIJAYA LAKSHMI: ICRA Lowers Rating on INR48cr LT Loans to B+
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Sri
Vijaya Lakshmi Raw & Boiled Rice Mill (SVLRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Fund 45.00 [ICRA]B+ (Stable) ISSUER NOT
Based/CC COOPERATING; Rating downgraded
from [ICRA]BB-(Stable) ISSUER
NOT COOPERATING and continues
to remain in the 'Issuer Not
Cooperating' category
Long Term- 3.00 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating downgraded
from [ICRA]BB-(Stable) ISSUER
NOT COOPERATING and continues
to remain in the 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding SVLRM performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Sri Vijaya Lakshmi Raw & Boiled Rice Mill, ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with the aforesaid policy of
ICRA, a rating view has been taken on the entity based on the best
available information.
Sri Vijaya Lakshmi Raw & Boiled Rice Mill (SVLRM) was incorporated
in the year 1992 and is engaged in the milling of paddy and
produces raw and boiled rice. It is promoted by Mr. G. Harinadha
Reddy and Mr. G. Veera Raghava Reddy. The company has a milling
unit in Nandakuduru (East Godavari district) of Andhra Pradesh with
a milling capacity of 172800 MTPA. The firm also has 1MW bio mass
power used for captive consumption.
WARANA DAIRY: Ind-Ra Affirms 'D' Bank Loan Rating
-------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Warana Dairy And
Agro Industries Ltd's bank facilities at 'IND D (ISSUER NOT
COOPERATING)'. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Thus, the ratings are based on the best available information.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings.
The instrument-wise rating actions are:
-- INR485.19 mil. Bank loan (Long-term) affirmed with IND D
(ISSUER NOT COOPERATING) rating; and
-- INR80 mil. Fund-based working capital limit (Long-term)
affirmed with IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information
KEY RATING DRIVERS
The affirmation reflects the classification of Warana Dairy And
Agro Industries' account as non-performing by the banker.
RATING SENSITIVITIES
Positive: The reclassification of the account as standard and
timely debt servicing thereafter for at least three consecutive
months would be positive for the ratings.
COMPANY PROFILE
Formed in 2008, Warana Dairy And Agro Industries is engaged in milk
processing and milk product manufacturing.
=================
I N D O N E S I A
=================
JAPFA COMFEED: Fitch Affirms LT IDR at 'BB-' on So Good Acquisition
-------------------------------------------------------------------
Fitch has affirmed PT Japfa Comfeed Indonesia Tbk's Long-Term
Issuer Default Rating (IDR) at 'BB-' and National Long-Term Rating
at 'A+(idn)'. The Outlook is Negative.
The affirmation follows the company's announcement that it plans to
acquire 100% of PT So Good Food, a manufacturer of primarily
processed meat, such as chicken nuggets, from its parent, Japfa Ltd
(JL). Fitch believes the proposed transaction will slow
deleveraging compared with its previous estimate, but that the
company will remain on track to deleverage to a level appropriate
for its rating by end-2022 given its solid market position in
Indonesia's poultry industry and improving product diversification
from the proposed acquisition. Fitch now expects Japfa's leverage,
measured as net debt/EBITDA that proportionately consolidates
minority stakes in a number of subsidiaries, to be around 4.0x in
2020, from 3.0x previously. This captures the additional debt
associated with the proposed acquisition and some weakening in
earnings in 2Q20.
The proposed transaction is not considered to be material according
to listing regulations, as it is valued at less than 20% of Japfa's
equity and, as such, does not require minority shareholder
approval. However, the listing rules deem the transaction as
affiliated and require Japfa to publicly disclose transaction
details to ensure it is on an arm's length basis and not
detrimental to disinterested parties. This is consistent with its
view of linkages and Fitch therefore continues to rate Japfa based
on its Standalone Credit Profile.
The Negative Outlook captures the risk around the company's ability
to bring down its leverage from its expectation of around 4.0x by
end-2020 in the next 12-18 months, made more difficult should a
recovery in domestic demand be slower than Fitch anticipates. The
pace of recovery depends on government efforts to control the
coronavirus pandemic and manage the associated economic
implication. The proposed acquisition comes at a time when Japfa's
core business is already challenged by weak demand, but Fitch
believes the transaction would strengthen its vertical integration
by expanding its downstream product offering. The pandemic has
altered consumer preferences for processed-meat consumption, with
the proposed acquisition enabling Japfa to grab a share of this
change.
'A' National Ratings denote expectations of a low level of default
risk relative to other issuers or obligations in the same country
or monetary union.
KEY RATING DRIVERS
Stable Feed Business: The affirmation of Japfa's ratings reflects
stability from its animal feed business and strong position as the
second largest in Indonesia's poultry market. Earning from the
animal feed segment, which contributes around 30%-40% of revenue,
is less volatile than in other segments. Japfa's market-leading
position enables it to pass through raw-material cost increases,
retain raw-material inventory and adjust output to maintain stable
margins. PT Charoen Pokphand Indonesia Tbk and Japfa together
control about half of Indonesia's poultry-feed market and react
similarly to increases in raw-material costs by seeking to raise
prices.
Leverage Increase Temporary: Japfa will fund around 70% of the
IDR1.2 trillion for the proposed acquisition with promissory notes,
with balance paid with internal cash. The loan will be repayable on
demand and will rank pari passu with Japfa's other unsecured
obligation. Fitch has also revised down its EBITDA assumption for
2020 by about 15% to reflect weaker demand. These factors will push
Japfa's leverage above its previous expectations for 2020-2021,
before returning to within the negative rating sensitivity of 2.5x
by end-2022. The pace of recovery and a second wave of infections
are risks to its forecast, as reflected in the Negative Outlook.
The pandemic weakened poultry demand, as the halt of economic
activity reduced consumers' spending power and shoppers cut
purchases from traditional wet markets in favour of processed meat
consumption. This, coupled with a high level of supply, led to a
sharp 30% month on month drop in live bird and day-old chick prices
in April 2020. Prices have since recovered, supported by government
measures to reduce supply. Fitch thinks Jakarta's return to
large-scale social restrictions on September 14 will have a smaller
impact on poultry demand than the initial nationwide restrictions
in April, as the supply-demand imbalance has improved. The new
restrictions are also less stringent and are limited to Jakarta.
Supportive Government Measures: The government takes an active role
in regulating the country's chicken supply. It typically directs
the poultry industry to reduce the supply of day-old chicks
following declines in live-bird prices. Average live-bird prices
fell sharply in April due to low demand, but government directives
pushed them back up in early May. Fitch believes the government
will remain proactive in maintaining the demand-supply balance, as
low poultry prices amid excess supply hurt small-scale farmers.
Improving Product Diversification: The proposed So Good Foods
acquisition will improve Japfa's vertical integration and product
diversification and allow the company to capture rising demand for
processed food, which should partially offset the lower demand for
existing products. Processed-meat consumption has increased since
the beginning of the pandemic, as evident from the 15% yoy rise in
chicken nuggets and 26% in frozen-cut chicken sales volume in 1H20.
Fitch believes this is because consumers prefer to stock up on
frozen food due to movement restrictions and are concerned about
infection control at wet markets. Fitch thinks the pandemic could
accelerate the penetration of modern retail chains as consumers
become accustomed to shopping at modern retail formats and that
changing consumer preferences support So Good Foods, which is
Indonesia's second-largest processed-meat company by market share.
Weak Parent-Subsidiary Linkage: Its parent and subsidiary linkage
assessment is that Japfa is a stronger entity than its parent, JL,
as it has historically contributed more than half of JL's
consolidated EBITDA. Fitch believes Japfa's linkage with JL is
weak, as reflected in moderate ringfencing at Japfa under its
US-dollar bond documentation as well as Indonesian stock exchange
regulations that limit related-party transactions. The proposed So
Good Foods acquisition will be conducted within these parameters,
with the company fulfilling the necessary requirements. Therefore,
Fitch continues to rate Japfa on a standalone basis, but may review
this approach if Japfa's dividend policy changes or there is other
evidence of JL being able to extract cash.
DERIVATION SUMMARY
Japfa's IDR can be compared with that of Pilgrim's Pride
Corporation (PPC, BB+/Stable), Marfrig Global Foods S.A.
(BB-/Stable) and Minerva S.A. (BB-/Stable).
Fitch believes PPC - one of the largest global chicken producers,
with operations spanning the US, Mexico, Puerto Rico and Europe -
has a superior credit profile relative to Japfa due to its larger
operating scale, stronger global market position and better
geographic diversification. PPC's business and credit profiles are
strong, but its rating is constrained by the weak corporate
governance of its ultimate indirect controlling parent company,
Brazil-based JBS S.A. (BB+/Stable).
JBS is one of the largest protein producers globally and has a
significantly larger operating scale as well as better product and
geographical diversification compared with Japfa. However, its
rating is constrained by weak corporate governance due its
shareholding structure and uncertainty over the outcome of several
investigations into JBS and its shareholders. These include
administrative procedures by the Securities and Exchange Commission
of Brazil and potential fines from the U.S. Department of Justice.
Fitch believes Japfa's strong financial profile relative to Marfrig
and Minerva makes up for its smaller operating EBITDA scale. Japfa
has shown a more conservative capital structure and financial
policy than Marfrig and Minerva, with significantly stronger
leverage and interest coverage over the past four years. The three
companies have similar EBITDA margins of around 10%, indicating
largely comparable credit profiles. Nevertheless, Fitch expects
Japfa's financial profile to temporarily deteriorate on account of
the pandemic, as reflected in the Negative Outlook.
Japfa's National Rating is comparable with that of PT Sri Rejeki
Isman Tbk (Sritex, A+(idn)/Stable), PT Sumber Alfaria Trijaya Tbk
(Alfamart, AA-(idn)/Stable), PT Mayora Indah Tbk (AA(idn)/Stable)
and PT Pan Brothers Tbk (A-(idn)/Stable). Fitch believes the larger
operating EBITDA scale, lower commodity-price exposure and superior
financial profile of Alfamart - Indonesia's largest mini-market
operator - warrant a one-notch difference to Japfa's rating.
Similarly, Fitch believes the stronger financial profile, wider
profit margin, better free cash flow generation and better earning
stability of Mayora - a leading consumer goods producer in
Indonesia - warrant a multiple-notch rating difference to Japfa.
Sritex and Japfa have similar operating EBITDA scale, and Fitch
believes Japfa's stronger market position as Indonesia's
second-largest poultry company offsets its weaker geographical
diversification relative to Sritex. Fitch also believes Japfa's
lower profit margin is counterbalanced by the risks around the
lengthening of Sritex's working capital cycle on account of the
pandemic. Both companies also have the ability to pass through most
cost changes to customers, warranting the same rating level.
Compared with Pan Brothers, Fitch believes Japfa's larger operating
scale and lower leverage, coupled with Pan Brothers' weak operating
cash flow generation on account of its heavy working-capital
requirement, justifies the multiple-notch difference between the
two companies.
KEY ASSUMPTIONS
- Proposed So Good Foods acquisition completed in November 2020
as planned. Fitch assumes Japfa will defer promissory note
repayments given the available flexibility and its high leverage
profile.
- Flat sales in 2020, as a 5% decline from Japfa's existing
business is countered by the full-year consolidation of So Good
Foods. Sales to rise by 5% in 2021 and 10% in 2022, assuming a
gradual demand recovery.
- EBITDA margin to decline to 7% in 2020 following the sharp drop
in prices in 2Q20 and moderate rebound. EBITDA to improve gradually
to around 9%-10% in 2021 and 2022.
- Capex of IDR1.3 trillion in 2020, given the flexibility to
defer expansionary capex in light of the weak demand.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Leverage, as measured by net debt/EBITDA that proportionately
consolidates minority stakes in a number of subsidiaries, of below
2.5x by 2021 (2019: 1.9x; 2020F: 3.9x)
- No significant weakening of industry fundamentals or Japfa's
market position
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage above 2.5x for a sustained period
- Significant reduction of the size of the animal-feed segment,
which would be demonstrated by its share of total revenue falling
to below 30% (end-2019: 37%)
LIQUIDITY AND DEBT STRUCTURE
Comfortable liquidity: Japfa reported IDR2.3 trillion in cash at
end-June 2020, against short-term debt of IDR4.7 trillion. Of the
total short-term debt outstanding, around IDR4.5 trillion is
short-term revolving working capital, which can be rolled over
under the normal course of business. Japfa does not have
significant maturities until 2022, when its USD250 notes and IDR1
trillion domestic bond are due. Japfa's short-term liquidity is
also supported by its ability to defer capex, its access to diverse
funding sources and its extensive banking and capital market
access, both domestically and internationally.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
=========
N E P A L
=========
DD INDUSTRIES: Shuts Down Factory Amid Virus Lockdown
-----------------------------------------------------
Krishana Prasain at The Kathmandu Post reports that rising expenses
and zero revenue have forced Om Prakash Sharma to shut down his
factory that makes polypropylene yarn used to manufacture socks.
After 15 years, Mr. Sharma's firm DD Industries bit the dust as the
virus lockdown and restriction orders took their toll. His factory
in Chhatapipra, Bara has remained shuttered for five months, and he
said he is no longer able to pay his 25 employees, utility bills,
bank loan and taxes, according to the Post.
"Schools and colleges have remained closed for nearly six months,
and demand for polypropylene yarn has dried up," the report quotes
Mr. Sharma as saying. Unsold inventory had been sitting in his
warehouse for eight months, he added.
"The factory was already facing hard times following the
government's policy to allow imports of readymade socks and raw
materials at 5 percent duty. But it was my only source of income so
I fought to keep it going," he said. "The current situation has
left me with no option but to pull down the shutters."
According to the Post, the monetary policy issued nearly two months
ago had brought cheer to micro, small and medium enterprises as it
addressed many of their demands, and the entrepreneurs were urging
the government to implement it right away. But its implementation
was delayed and the virus outbreak brought stay-home orders which
knocked businesses to the ground.
"The implementation part is weak," the Post quotes Umesh Prasad
Singh, acting president of the Federation of Nepalese Cottage and
Small Scale Industries, as saying.
"As the monetary policy announced for this fiscal year supported
the sector, we were very hopeful. But it did not happen as
expected," he told the Post. "It has been nearly two months since
the industry started sinking gradually," he said.
As per the policy, export and troubled industries, as well as other
sectors, would get special refinancing facilities at a maximum 3
percent interest rate, while micro, cottage and small industries
would get credit at a maximum 5 percent interest rate, the Post
discloses.
As part of the relief package, the policy extended the loan
repayment deadline by six months, nine months and one year,
depending on the degree of impact on the particular sector as the
central bank sought to ease the pain caused by the pandemic on
businesses, the report relates.
"But not a single entrepreneur has been able to get refinancing
service or new financing service as per the monetary policy," he
added.
"The provisions in the monetary policy have not been implemented.
Banks have been saying that they will provide the service but
nothing has been done," he said.
Due to the lockdown restrictions imposed in many parts of the
country, entrepreneurs are having a hard time and only a few micro,
small and cottage industries are in operation, he added, the Post
relays.
Entrepreneurs have no income, but government taxes and bank
interest payments are piling up, so there is no option for them but
to close down, he said.
"Instead of providing relief and creating an encouraging
environment for entrepreneurs who are trying to survive, the
government is only adding to their stress," he said.
According to the report, Mr. Singh said around 30 percent of the
micro, small and cottage industries remain closed, and
entrepreneurs have started looking for other livelihoods.
"If the situation continues for another two months, 90 percent of
the micro, small and cottage industries will fold," he added. Only
2-4 percent of the factories are in operation, he said.
"We will talk with the government; and if it offers relief, we will
gradually re-start operations, otherwise there is no sense in
staying open just to pay taxes," Mr. Singh, as cited by the Post,
said.
"The government had announced waiving rent and electricity charges,
but this has not happened. Entrepreneurs have to pay their
employees, raw materials are getting damaged, and the machines are
starting to break down. How can entrepreneurs run their businesses
if the government does not provide relief," he said.
=====================
N E W Z E A L A N D
=====================
NEW ZEALAND: Officially in First Recession in a Decade
------------------------------------------------------
Radio New Zealand reports that the economy has shrunk by a record
amount and fell into its first recession in a decade as it was
battered by the government's moves to eliminate Covid-19, but it
will already be on the road to recovery.
According to RNZ, official numbers show gross domestic product
(GDP) fell a seasonally adjusted 12.2 percent for the three months
to June.
It followed a revised 1.4 percent fall in the first quarter and was
the biggest fall since the current system of measuring data was
introduced in 1987.
"Industries like retail, accommodation and restaurants, and
transport saw significant declines in production because they were
most directly affected by the international travel ban and strict
nation-wide lockdown," the report quotes Stats NZ senior manager
Paul Pascoe as sayaing.
The consensus of forecasts was for a fall of between 12-13 percent,
but the Reserve Bank forecast more than 14 percent and Treasury 16
percent, RNZ notes.
RNZ says service industries fell by 10.9 percent, with consumer
spending falling more than 25 percent, but there were double digit
falls for manufacturing, and construction.
The economy shrank by 12.4 percent on the same quarter a year ago,
while the annual average growth rate fell to 2 percent.
According to the report, Finance Minister Grant Robertson said the
sharp economic decline was no surprise, but the government's
measures such as the wage subsidy, business loans, and other
schemes had cushioned the impact and laid the foundation for the
rebound.
"Going hard and early means that we can come back faster and
stronger. Economists expect the current September quarter to show a
record jump back to growth in the economy."
Opposition parties were quick to jump on the numbers as an example
of government failure.
"The lack of pragmatism and a clear plan from Labour has made the
economic hole deeper and the impact harder than it needed to be,"
RNZ quotes National finance spokesperson Paul Goldsmith as saying.
RNZ relates that ACT leader David Seymour said the government had
allowed the economy to fall off a cliff and created a mountain of
debt.
But economists had already moved on from the data, which many
regarded as 'ancient history'.
"There is little point getting hung up on Q2 numbers. There is
likely to be major revisions to the numbers by StatsNZ as new
information comes to hand," RNZ quotes Kiwibank chief economist
Jarrod Kerr as saying.
"Activity that was halted during the lockdown, particularly across
traditional services, was not necessarily cancelled activity but
rather deferred."
RNZ relates that Mr. Kerr said the downturn was the one "we had to
have" and it has offered a range of opportunities to transform the
economy and set it on a different growth path, but this would mean
it would need to keep spending and investing.
RNZ says economists are forecasting a rebound of as much as 10
percent in the current quarter to the end of September, which would
be the end of the recession.
But uncertainties surrounding Covid-19 and border closure look set
to keep business investment and household spending subdued, meaning
the actual hit to the economy will persist for much longer.
New Zealand's growth slump was worse than Australia's 7 percent and
the US 9.1 percent fall, but was close to contractions in Canada
and most of Europe, and much better than the UK's 20.4 percent
decline, RNZ states.
Financial markets were unmoved by the numbers, the report adds.
=================
S I N G A P O R E
=================
MARY CHIA: Independent Auditor Flags Material Uncertainty
---------------------------------------------------------
Janice Heng at The Business Times reports that Catalist-listed Mary
Chia Holdings said on Sept. 14 that its independent auditor has
included in its report a material uncertainty related to the
company's ability to continue as a going concern--though the
auditor's opinion is not modified in respect of this.
In a Singapore Exchange filing, the beauty and wellness company
said that its directors are of the view that it is appropriate for
the group's audited financial statements to be prepared and
presented on a going-concern basis, BT relates.
In its report on Mary Chia's audited financial statements for the
year ended March 31, independent auditor Foo Kon Tan LLP drew
attention to a note in the financial statements, regarding the
firm's losses and liabilities, according to BT.
The group recorded a SGD9.633 million loss and a SGD9.628 million
total comprehensive loss for the year, with net operating cash
outflows of SGD1.3 million, BT discloses. As at March 31, the
group's current liabilities exceeded its current assets by SGD8.22
million, and it had a SGD11 million deficit in equity.
BT says the company's current liabilities exceeded its current
assets by SGD2.47 million, with a deficit in equity of SGD2.46
million.
"These factors indicate the existence of a material uncertainty
which may cast significant doubt on the group's ability to continue
as going concern. Our opinion is not modified in respect of this
matter," the auditor, as cited by BT, wrote.
On Sept. 14, Mary Chia said its directors were of the view that the
group can continue as a going concern, as it "continues to be
prudent with its cash flow planning and to take active measures to
streamline its business and reduce costs", and "continues to be
focused on new sales initiative via social media platforms to drive
revenue with lower upfront costs," BT relays.
It added that controlling shareholder Suki Sushi has given an
undertaking to provide financial support to the group for the 12
months following the date of the independent auditor's report, to
operate without any curtailment of operations.
BT relates that the director and the former director have also
provided an undertaking not to demand repayment of the unsecured
and non-interest bearing amounts of SGD1.494 million and SGD2.118
million due from the group respectively, within the next 36 months
from March 31, 2017 or until the cash flows of the group permits,
whichever is later.
Mary Chia is also actively exploring potential corporate
fund-raising exercises.
BT adds that the company said in its SGX filing: "Further, the
Board is of the opinion that sufficient information has been
disclosed for trading of the company's securities to continue in an
orderly manner and confirmed that all material disclosures have
been provided for trading of the company's shares to continue."
Mary Chia Holdings Limited (SGX:MCH) -- https://www.marychia.com/
-- provides lifestyle and wellness services in Singapore. The
Company's principal business activity is the provision of beauty
and facial services, slimming services and spa services for both
women and men at its lifestyle and wellness centers.
SWIBER HOLDINGS: Unit Placed in Creditors' Voluntary Liquidation
----------------------------------------------------------------
Swiber Holdings Limited announced on Sept. 14 that Aster Marine
Pte. Ltd. (AMPL), a wholly owned subsidiary of the Company, has
been placed in creditors' voluntary liquidation on Sept. 11, 2020
pursuant to a special resolution passed at a meeting of AMPL's
members dated Sept. 11, 2020.
At a subsequent meeting of AMPL's creditors held on Sept. 11, 2020,
Messrs. Bob Yap Cheng Ghee and Toh Ai Ling, both care of KPMG
Services Pte. Ltd., were appointed as the joint and several
liquidators of AMPL.
Swiber Holdings Limited (SGX:BGK) -- http://www.swiber.com/-- is a
Singapore-based investment holding company. The Company, through
its subsidiaries, is engaged in offshore marine engineering; vessel
owning and chartering, and provision of corporate services. The
Company is an integrated offshore construction and support services
provider for shallow water oil and gas field development. It offers
a range of engineering, procurement, installation and construction
(EPIC) services, complemented by its in-house marine support and
engineering capabilities, to support the offshore field development
and production activities of its clientele base across the Asia
Pacific, Middle East, Latin America and West Africa regions. It
operates approximately 10 construction vessels. The Company's
subsidiaries include Swiber Offshore Construction Pte. Ltd., Swiber
Offshore Marine Pte. Ltd., Swiber Corporate Pte. Ltd., Resolute
Offshore Pte. Ltd. and Swiber Capital Pte. Ltd.
Swiber had $1.43 billion of liabilities and $1.99 billion of assets
at March 2016, as per the company's published accounts.
Swiber Holdings shocked the business world when it filed for
liquidation in July 2016 as several of its directors resigned. Only
a few days after the intent to liquidate, Swiber changed course and
applied for judicial management. Bob Yap Cheng Ghee, Tay Puay
Cheng and Ong Pang Thye of KPMG Services Pte Ltd. were appointed as
joint and several interim judicial managers of Swiber Holdings
Limited and Swiber Offshore Construction.
In May 2019, Swiber yet again escaped another liquidation scenario
when its creditors voted in favor of a restructuring proposal that
contemplated an equity investment from Seaspan Corporation. The
plan included a proposed investment from Seaspan of up to $200
million. That Investment Agreement has been terminated as of
January 2020.
XIHE HOLDINGS: Seven Tankers Put Up for Sale to Help Pay Creditors
------------------------------------------------------------------
Reuters reports that the supervisor of Singaporean shipping group
Xihe Holdings Pte Ltd has put seven oil tankers controlled by the
company up for sale as part of efforts to recoup funds owed to
creditors, three sources said on Sept. 16.
Xihe Holdings is part of the Lim family business empire, which also
includes oil trader Hin Leong Trading and fleet manager Ocean
Tankers (Pte) Ltd, both of which were placed under court-appointed
supervisors earlier this year.
The sale includes three crude oil supertankers and is expected to
get fully underway in the coming days, the sources said, Reuters
relays.
The ships were valued at a total of just over $196 million, Reuters
discloses citing vessel valuer TonnEdge on Eikon.
Reuters relates that Clarksons Platou and Arrow Shipbroking Group
have been appointed by the supervisor to act as the joint brokers
for the marketing and sales of the vessels, they said.
According to Reuters, the seven tankers are part of 136 ships that
Xihe Group owns, which range from coastal barges to very large
crude carriers (VLCCs).
Lim Oon Kuin, also known as O.K. Lim, with his son Evan Lim Chee
Meng and daughter Lim Huey Ching, own 77 companies under the Xihe
Group, which consists mainly of Xihe Holdings and Xihe Capital.
Reuters notes that the bulk of Lim's fleet is idled in the South
China Sea, off the east of peninsular Malaysia. At least six of the
tankers have cargoes that are the subject of competing legal claims
from multiple parties.
Hin Leong is seeking to restructure billions of dollars of debt
after the oil price crash revealed a massive, years-long fraud at
the once fabled trading house, Reuters states.
Reuters adds that a preliminary report prepared by
PricewaterhouseCoopers Advisory Services Pte, a separate
court-appointed supervisor, said Hin Leong had no future as an
independent company after it "grossly overstated" the value of its
assets by at least $3 billion.
About Xihe Holdings
Xihe Holdings is a Singapore-based tanker shipowner.
As reported in Troubled Company Reporter-Asia Pacific on Aug. 17,
2020, The Business Times said Xihe Holdings, the exempt private
company owned by Hin Leong founder OK Lim and his son, has been
placed under interim judical managers (IJMs), after more creditors
threw their support behind OCBC Bank's application to take control
over Xihe's restructuring out of the Lim family's hands.
A Singapore High Court appointed Grant Thornton Singapore as IJMs
for Xihe Holdings during a chambers hearing on Aug. 13, BT said.
===============
X X X X X X X X
===============
[*] Pandemic Bankruptcy Boom Looms, Ex-IMF Deputy Director Warns
----------------------------------------------------------------
Caixin Global reports that the number of corporate bankruptcies is
likely to spike worldwide over the next few months, as the Covid-19
pandemic batters companies around the globe, a former deputy
managing director of the International Monetary Fund (IMF) warned.
Following an acute shortage of liquidity, many enterprises are now
facing debt problems, which may result in a bankruptcy boom during
the fourth quarter and the first half of 2021, Zhu Min, who is also
a former deputy governor of the People's Bank of China, said at a
recent forum in Shanghai, according to Caixin.
A total of 424 U.S. companies have gone bankrupt this year as of
Aug. 9, a 10-year high for the period, as "the U.S. economy
contracts and the coronavirus takes its toll on numerous
industries," said an intelligence unit of S&P Global Ratings Inc.,
Caixin relays.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
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