/raid1/www/Hosts/bankrupt/TCRAP_Public/201012.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, October 12, 2020, Vol. 23, No. 204
Headlines
A U S T R A L I A
GREVILLE STREET: Second Creditors' Meeting Set for Oct. 19
NEXXA PORTFOLIO: First Creditors' Meeting Set for Oct. 21
C H I N A
CHINA EVERGRANDE: Steep Holiday Discounts Could Squeeze Margins
I N D I A
4G IDENTITY: CRISIL Withdraws D Rating on INR35cr Loan
ACADEMY OF ENGINEERING: Ind-Ra Keeps D/Non-Cooperating Loan Rating
ALAPATT FASHION: ICRA Withdraws B- Rating on INR5.50cr Loan
AMALTAS EDUCATIONAL: Ind-Ra Lowers Term Loan Rating to 'D'
BHAGWATI GEMS: Ind-Ra Hikes LT Issuer Rating to BB, Outlook Stable
BM AGRO: CRISIL Assigns B Rating to INR6.67cr Proposed LT Loan
COOCH BEHAR: ICRA Keeps B- Debt Ratings in Not Cooperating
GEETA THREADS: CRISIL Migrates B+ Debt Ratings to Not Cooperating
GLOBAL ALUMINIUM: CRISIL Withdraws B+ Rating on INR48cr Loans
HARRAJ AGRO: CRISIL Migrates B+ Debt Rating from Not Cooperating
INDRAPRASTH FOODS: CRISIL Withdraws B+ Rating on INR36cr Loan
JALAN JEE: CRISIL Raises Rating on INR9cr Cash Loan to B-
JET AIRWAYS: Lenders Have Until Oct. 16 to Vote on Two Proposals
KHUSHIYA INDUSTRIES: Insolvency Resolution Process Case Summary
LEE AND MUIRHEAD: CRISIL Lowers Rating on INR8cr Loan to B+
MATRIX TECHNOLOGIES: CRISIL Withdraws B+ Rating on INR10cr Loans
MEHRA NOVELTIES: CRISIL Assigns B+ Rating to INR5.75cr Loan
NATIONAL RURAL: CRISIL Assigns B+ Rating to INR7.0cr Loans
NOUVEAU TEXTILES: CRISIL Assigns B Rating to INR20cr New LT Loan
PARADISE CONSUMER: Insolvency Resolution Process Case Summary
R N ENTERPRISES: ICRA Moves B+ Debt Ratings to Not Cooperating
RESITEX: CRISIL Lowers Rating on INR5.0cr LT Loan to B+
ROLSON SYNTHETICS: Insolvency Resolution Process Case Summary
S R TRANZCARS: ICRA Removes 'D' Debt Rating from Not Cooperating
S S AGROZONE: CRISIL Hikes Rating on INR10.52cr Loan to B+
SAI INDO: CRISIL Migrates B Debt Rating to Not Cooperating
SHINE FLEXIBLE: CRISIL Lowers Rating on INR6.50cr Loan to B
SPACEAGE SWITCHGEARS: Ind-Ra Moves BB- LT Rating to NonCooperating
SPEEDOFER COMPONENTS: CRISIL Assigns B- Rating to INR10cr Loans
SURAT HAZIRA: CRISIL Lowers Rating on INR1,814cr Term Loan to B-
SWAGAT DEVELOPERS: CRISIL Lowers Rating on INR65cr Loan to B
TALBROS AUTOMOTIVE: CRISIL Keeps FB+ Rating in Not Cooperating
TIRUPATI FOOD: CRISIL Lowers Rating on INR3.52cr Term Loan to B+
V.N.M.A.D. FIRM: CRISIL Withdraws B+ Rating on INR9cr Cash Loan
VALUEFOC TECHNOLOGIES: CRISIL Withdraws B Rating on INR3cr Loan
VENU INDUSTRIES: ICRA Moves B+ Debt Rating to Not Cooperating
I N D O N E S I A
CHANDRA ASRI: S&P Affirms Then Withdraws 'B+' ICR
J A P A N
LEOPARD ONE: Moody's Confirms Ba1 Rating on Class E Notes
[*] JAPAN: Report Warns of Debt Crisis in Four Industries
N E W Z E A L A N D
DRESDEN OPTICS: Placed Into Voluntary Liquidation
P H I L I P P I N E S
RURAL BANK OF LUNA: Oct. 16 Deposit Insurance Claims Deadline Set
S I N G A P O R E
BAKERZIN: Winds Up Business in Singapore After 22 Years
- - - - -
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A U S T R A L I A
=================
GREVILLE STREET: Second Creditors' Meeting Set for Oct. 19
----------------------------------------------------------
A second meeting of creditors in the proceedings of Greville Street
Enterprises Pty Ltd has been set for Oct. 19, 2020, at 12:00 p.m.
at the offices of Condon Associates, Level 6, 87 Marsden Street, in
Parramatta, NSW.
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 Oct. 16, 2020, at 4:00 p.m.
Schon Gregory Condon RFD of Condon Associates was appointed as
administrator of Greville Street on Sept. 11, 2020.
NEXXA PORTFOLIO: First Creditors' Meeting Set for Oct. 21
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Nexxa
Portfolio Management Pty Ltd will be held on Oct. 21, 2020, at
10:30 a.m. at the offices of SV Partners, 22 Market Street, in
Brisbane, Queensland.
David Michael Stimpson of SV Partners was appointed as
administrator of Nexxa Portfolio on Oct. 9, 2020.
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C H I N A
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CHINA EVERGRANDE: Steep Holiday Discounts Could Squeeze Margins
---------------------------------------------------------------
Bloomberg News reports that China Evergrande Group shares fell
after the embattled developer completed about 71% of its sales
target in the two months through October, offering its steepest
discount in history that could squeeze margins.
The shares fell as much as 2.7% after it said contracted sales were
CNY142 billion ($21 billion) between Sept. 1 and Oct. 8, according
to an exchange filing on Oct. 9, Bloomberg relays. It generated
CNY173 billion for the two months through October last year.
According to Bloomberg, the world's most indebted developer is
trying to cut debt by bolstering sales, offering steep discounts at
800 projects across the nation during the Golden Week holiday,
traditionally a popular time for home-hunters to buy. With $120
billion in debt -- of which at least $5.8 billion is due in the
next two months -- it is under pressure from investors and
regulators to curb leverage, the report says.
"The latest strong sales performance, coupled with previous
settlement with most of strategic investors for its listing
restructuring and its upcoming two IPOs, should be largely to ease
the concern about its default or liquidity risk," Bloomberg quotes
Raymond Cheng, a property analyst at CGS-CIMB Securities, as
saying.
According to Bloomberg, Evergrande is planning to conduct a
secondary listing of its electric vehicle unit in China and spin
off its services management unit.
Evergrande could sustain its price cuts throughout the year and
squeeze gross margins to 24% compared with the consensus forecast
of 27%, according to Bloomberg Intelligence analysts Kristy Hung
and Patrick Wong.
The sales figure translates into average selling prices at 8,627
yuan per square meter during the period, 11% lower than the level
in August. The average price is also the lowest since August 2016,
according to data compiled by Bloomberg.
Its year-to-date contract sales reached CNY592 billion, 91% of its
full-year target. The company expects to reach its 2020 target of
CNY650 billion by the end of October and may aim for a higher
internal goal of CNY800 billion, it said in a statement, Bloomberg
relays.
Bloomberg relates that the Shenzhen-based developer offered the
biggest discounts since it was founded -- a base cut of as much as
30% -- to boost sales, promising an additional cut if people made a
lump sum cash payment. The company, with net-debt-to-equity of 199%
at the end of June, needs to comply with China's latest "three red
line" regulation that dictates new debt thresholds.
Evergrande skirted a $13 billion cash crunch last month, after
persuading investors to waive their right to force repayment if it
failed to win approval for a backdoor listing of its main real
estate assets in China by Jan. 31, Bloomberg recalls. The crisis
spooked the nation's largest banks and financial institutions.
It's an issue of "kicking the can down the road, and the regulator
is unlikely to allow it to go belly up," Bloomberg quotes Hong Hao,
Bocom International head of research, as saying adding that
national property sales have been lackluster.
Cash proceeds from project sales this year may reach CNY720
billion, assuming it can keep converting nearly 90% of sales into
cash inflow just like in the first half of the year, Bloomberg
notes.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
17, 2020, Fitch Ratings has affirmed the Long-Term Foreign-Currency
Issuer Default Ratings of China Evergrande Group and subsidiary
Hengda Real Estate Group Co., Ltd at 'B+' with Stable Outlooks. At
the same time, Fitch has affirmed Evergrande's senior unsecured
rating at 'B' with a Recovery Rating of 'RR5'. Fitch has also
assigned Hengda's wholly owned offshore financing platform, Tianji
Holdings Limited, a Long-Term IDR of 'B+' with Stable Outlook and a
senior unsecured rating of 'B' with a Recovery Rating of 'RR5'.
The Tianji-guaranteed senior unsecured notes issued by Scenery
Journey Limited have been downgraded to 'B' with a Recovery Rating
of 'RR5', from 'B+' with a Recovery Rating of 'RR4', to reflect
Fitch's revised rating approach, whereby the bond rating is linked
to Tianji, the guarantor, rather than Hengda, the keepwell
provider. Fitch affirmed Hengda's 'B+' senior unsecured rating with
a Recovery Rating of 'RR4' and then withdrew the rating because the
senior unsecured rating was no longer relevant to the agency's
coverage.
The affirmation of Evergrande's and Hengda's IDRs reflects the
group's large business scale and diversification, but higher
leverage and weaker liquidity than that of peers. The Stable
Outlook reflects the expectation that the Evergrande will be able
to deleverage after 2020, with improving contracted sales and
collection ratio, as well as its stated intention to reduce land
acquisitions. In addition, the Stable Outlook also reflects its
expectation that Evergrande will be able to negotiate with Hengda's
strategic investors not to redeem the CNY130 billion investment in
early 2021.
On Sept. 24, 2020, S&P Global Ratings revised the outlooks on China
Evergrande Group, the company's property arm Hengda Real Estate
Group Co. Ltd., and offshore financial platform Tianji Holding Ltd.
to negative from stable. At the same time, S&P affirmed its 'B+'
long-term issuer credit ratings on the three companies and its 'B'
long-term issue rating on the U.S. dollar notes issued by
Evergrande and guaranteed by Tianji.
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I N D I A
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4G IDENTITY: CRISIL Withdraws D Rating on INR35cr Loan
------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI
guidelines, had migrated the rating of 4G Identity Solutions
Private Limited (4G) to 'CRISIL D/CRISIL D Issuer Not Cooperating'.
CRISIL has withdrawn its rating on bank facility of 4G following a
request from the company and on receipt of a 'no dues certificate'
from the banker. Consequently, CRISIL is migrating the ratings on
bank facilities of 4G from 'CRISIL D/CRISIL D Issuer Not
Cooperating' to 'CRISIL D/CRISIL D'. The rating action is in line
with CRISIL's policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 35 CRISIL D (Migrated from
'CRISIL D ISSUER NOT
COOPERATING'; Rating
Withdrawn)
Cash Credit 9 CRISIL D (Migrated from
'CRISIL D ISSUER NOT
COOPERATING'; Rating
Withdrawn)
Letter of Credit 6 CRISIL D (Migrated from
'CRISIL D ISSUER NOT
COOPERATING'; Rating
Withdrawn)
Proposed Long Term 10 CRISIL D (Migrated from
Bank Loan Facility 'CRISIL D ISSUER NOT
COOPERATING'; Rating
Withdrawn)
Analytical Approach
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of 4G Identity and its wholly owned
subsidiary, 4G Informatics Pvt Ltd (4G Informatics). This is
because these two companies, together referred to as the 4G group,
are under a common management, in a similar line of business, and
have significant operational linkages and fungible cash flows.
4G Identity was set up in 2007 by Dr. Sreeni Tripuraveni and his
family members. The company provides identity management solutions
by leveraging smart cards and biometric technologies. It also
provides software development, system integration, and data
management for e-governance activities. 4G Informatics also
provides identity management solutions for government and private
institutions.
ACADEMY OF ENGINEERING: Ind-Ra Keeps D/Non-Cooperating Loan Rating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained The Academy of
Engineering and Management Trust's bank loan ratings in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the ratings. The ratings will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR79.69 mil. Bank loans (Long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR250.00 mil. Fund-based working capital limits (Long-term)
maintained in non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The rating was last reviewed on
September 21, 2018. Ind-Ra is unable to provide an update as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1999 under the Indian Trust Act, 1882, The Academy
of Engineering and Management Trust manage engineering and
management college, eight Central Board of Secondary Education
schools and a state board school in West Bengal.
ALAPATT FASHION: ICRA Withdraws B- Rating on INR5.50cr Loan
-----------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Alapatt Fashion Jewellery, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term–Fund 5.50 [ICRA]B-(Stable) ISSUER NOT
Based-Cash Credit COOPERATING; Withdrawn
Rationale
The rating assigned to Alapatt Fashion Jewellery has been withdrawn
at the request of the company and based on the No Objection
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
Alapatt Fashion Jewellery is a partnership firm set up by Mr. John
Alapatt in Trivandrum in 1992, which is involved in the business of
gold and diamond jewellery retailing and operates with single
retail showroom (~2,000 square feet area) in a leased premise
located in Trivandrum. Most of its gold requirements are met
through melted gold obtained from exchange of old jewellery from
customers. Besides, the firm also sources gold and diamond
jewellery from merchants based out of Mumbai and Bangalore.
AMALTAS EDUCATIONAL: Ind-Ra Lowers Term Loan Rating to 'D'
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Amaltas
Educational Welfare Society's (AEWS) bank facilities to 'IND
D(ISSUER NOT COOPERATING)' from 'IND B (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 detailed rating actions are:
-- INR370 mil. Term loan (long-term) due on March 2025 downgraded
with IND D (ISSUER NOT COOPERATING) rating; and
-- INR100 mil. Bank guarantee (long-term) downgraded 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 downgrade reflects AEWS's delays in debt servicing, the details
of which are not available.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months will be positive for the ratings.
COMPANY PROFILE
AEWS has been registered as a society under the Society
Registration Act, 1860. It provides medical services through its
hospital and education via its medical school. Both facilities are
in the Bangar village, Madhya Pradesh
BHAGWATI GEMS: Ind-Ra Hikes LT Issuer Rating to BB, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Bhagwati Gems'
Long-Term Issuer Rating to 'IND BB' from 'IND BB- (ISSUER NOT
COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR340 mil. Fund-based working capital facilities upgraded
with IND BB/Stable rating; and
-- INR9.7 mil. (reduced from INR15.70 mil.) Term loan due on
March 2021 upgraded with IND BB/Stable rating.
The upgrade reflects Bhagwati Gems' better-than-expected
performance in FY20, with growth in the company's revenue and
improvement in the credit metrics.
KEY RATING DRIVERS
Bhagwati Gems' revenue increased to INR3,421 million in FY20
(FY19:INR2,953 million), led by the execution of higher number of
orders. However, Ind-Ra expects the revenue of the company to
decline in FY21, with COVID-19-led-lockdown having led to a fall in
the orders and a complete shutdown of operations from end-March
2020 to mid-June 2020. The figures for FY20 are provisional.
Furthermore, Bhagwati Gems' credit metrics remained strong and
improved in FY20 due to a decline in the debt levels, resulting
from lower utilization of working capital limits and scheduled
repayments, and the consequent fall in interest costs. The interest
coverage (operating EBITDA/gross interest expense) was 5.88x in
FY20 (FY19: 4.62x) and the net financial leverage (total adjusted
net debt/operating EBITDAR) was 1.58x (2.25x). Ind Ra expects the
credit metrics to remain strong in the near term owing to a
continued decline in debt.
Liquidity Indicator - Stretched: The average utilization of
fund-based limits was 68% during the 12 months ended June 2020;
however, there were instances of full utilization during the six
months ended June 2020. The working capital cycle of the company
improved to 41 days in FY20 (FY19: 59 days) due to an improvement
in the inventory days to 87 days (99days). The cash flow from
operation continued to be positive during FY20, though it declined
to INR70.32 million (FY19:INR91.47 million). It is likely to
decline further in FY21 onwards because of a decrease in the
EBITDA and increased working capital requirements The cash and cash
equivalent stood at INR15.85 million in FY20 (FY19:INR4.46
million). The company is likely to reduce its limits in FY21, which
would adversely impact the working capital cycle. The company had
availed the Reserve Bank of India-prescribed debt moratorium for
March-August 2020.
The ratings are also constrained by the partnership nature of
business.
The ratings, however, are supported by the healthy EBITDA margins.
The margin fell slightly to 3.5% in FY20 (FY19: 3.7%) due to an
increase in raw material costs. The ROCE was 18% in FY20 (FY19:
16%). The operating EBITDA margin is likely to decline in FY21 due
to the COVID-19-led disruptions.
The ratings also benefit from the promoters' experience of more
than two decades in the diamond processing business.
RATING SENSITIVITIES
Positive: The interest coverage remaining above 3x, along with a
sustained improvement in the scale of operations as well as
liquidity, will be positive for the ratings.
Negative: The interest coverage falling below 2.5x and further
deterioration in the liquidity position will be negative for the
rating.
COMPANY PROFILE
Bhagwati Gems, a partnership firm, is engaged in the cutting and
polishing of rough diamonds at its unit in Surat. In addition, it
is engaged in the trading of rough, cut and polished diamonds. The
partners are Bharat Kathiriya, Bhimjibhai Kathiriya, Manishaben
Kathiriya and Kevinbhai Kathiriya.
BM AGRO: CRISIL Assigns B Rating to INR6.67cr Proposed LT Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of BM Agro Food Products Private Limited (BAFPPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 6.67 CRISIL B/Stable (Assigned)
Proposed Short Term
Bank Loan Facility .33 CRISIL A4 (Assigned)
The rating reflects the company's exposure to risks related to
ongoing project, leveraged capital structure, and high geographical
concentration in revenue. These weaknesses are partially offset by
the extensive industry experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to risks related to ongoing project: The company is
scheduled to commence its project in October 2021. Demand risk is
expected to be low as rice is one of the staple diets in India.
However, the project remains exposed to risks related to timely
funding and completion, and subsequent stabilisation of operations;
which will remain a key rating sensitivity factor.
* Exposure to intense competition: Due to many organised and
unorganised players in the segment following small capital
requirement, competition is intense.
* Expected leveraged capital structure: Gearing is expected to
remain high and debt protection metrics modest over the medium
term. The project is aggressively funded at a debt-equity ratio of
1.6 times.
Strengths:
* Extensive experience of the promoter: Industry presence of over
two decades in the rice milling segment has enabled the promoters,
to develop a strong understanding of market dynamics and establish
healthy relationships with customers. The company is expected to
witness healthy capacity utilisation post-commencement.
Liquidity Poor
The company has not yet tied up with any financial institution. It
has given a proposal of INR6.4 crore to a financial institution,
which is under consideration. The promoter is expected to extend
need-based funding support.
Outlook: Stable
CRISIL believes BAFPPL will benefit from the extensive experience
of its promoter.
Rating Sensitivity factors
Upward factors
* Timely completion of the project with no cost overrun
* Timely ramp-up and stabilisation of operations with revenue of
more than INR10 crore from fiscal 2023 onwards
Downward factors
* Delay in commencement of operations with cost overrun hampering
business risk profile
* Significantly low cash accrual of less than INR1 crore, which
will be inadequate to meet upcoming debt obligation
Established in 2017 by Mr. Barun Roy and Mr. Manoj Kumar Khajanchi,
BAFPPL is currently setting up a rice mill with an installed
capacity of 5,040 MT per year in West Bengal.
COOCH BEHAR: ICRA Keeps B- Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the ratings for the INR35.00-crore bank facilities of
Cooch Behar Mission Hospital (P) Ltd (CBMPL) Continues to remain
under 'Issuer Not Cooperating' category'. The Long term ratings are
denoted as "[ICRA]B-(Stable) ISSUER NOT COOPERATING" (pronounced
ICRA B minus with Stable outlook Issuer not cooperating).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term–Fund 25.49 [ICRA]B- (Stable); ISSUER
NOT
Based-Term Loan COOPERATING; Rating Continues
to remain under 'Issuer Not
Cooperating' category
Long Term- 9.51 [ICRA]B- (Stable); ISSUER NOT
Unallocated 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/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 2007, CBMH is in the process of setting up a
136-bedded multi-specialty hospital in Cooch Behar, West Bengal.
One of the promoters of the company, Dr. Nirmal Palit, has a long
experience as a doctor. CBMH commenced commercial operation with 20
beds in November 2014. At present, the hospital is operating with
100 beds. However, a significant portion of the proposed
infrastructure of the hospital is yet to be developed.
GEETA THREADS: CRISIL Migrates B+ Debt Ratings to Not Cooperating
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Geeta Threads
Limited (GTL) to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Term Loan 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GTL for obtaining
information through letters and emails dated September 18, 2020 and
September 23, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of GTL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes that rating action on GTL is consistent
with 'Assessing Information Adequacy Risk'. Therefore, on account
of inadequate information and lack of management cooperation,
CRISIL has migrated the rating on bank facilities of GTL to 'CRISIL
B+/Stable Issuer not cooperating'.
GTL, incorporated in 1992 at Barnala (Punjab), is a closely held
public limited company that's manufactures open-ended cotton yarn
of 4-23' counts used for blankets, bedsheets, curtains, and towels.
Operations are managed by Dr BS Garg.
GLOBAL ALUMINIUM: CRISIL Withdraws B+ Rating on INR48cr Loans
-------------------------------------------------------------
CRISIL has withdrawn its rating on the bank facilities of Global
Aluminium Private Limited (GAPL) on the request of the company and
after receiving no objection certificate from the bank. The rating
action is in-line with CRISIL's policy on withdrawal of its rating
on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Buyer's Credit 12.86 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
Cash Credit 35.14 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
CRISIL has been consistently following up with GAPL for obtaining
information through letters and emails dated July 29, 2019 and
January 10, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of GAPL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that rating action on GAPL is consistent
with 'Assessing Information Adequacy Risk'. CRISIL has Continues
the ratings on the bank facilities of GAPL to 'CRISIL B+/Stable
Issuer not cooperating'.
CRISIL has withdrawn its rating on the bank facilities of GAPL on
the request of the company and after receiving no objection
certificate from the bank. The rating action is in-line with
CRISIL's policy on withdrawal of its rating on bank loan
facilities.
GAPL, incorporated in 1997 and based in Hyderabad (Telangana),
manufactures aluminium extrusions. The day-today operations of GAPL
are managed by its managing director, Mr. Anil Agarwal.
HARRAJ AGRO: CRISIL Migrates B+ Debt Rating from Not Cooperating
----------------------------------------------------------------
Due to inadequate information, CRISIL, in line with the Securities
and Exchange Board of India guidelines, had migrated its rating on
the long-term bank facilities of Harraj Agro Foods (HRAF) to
'CRISIL B+/Stable Issuer Not Cooperating' on July 21, 2020.
However, the company has subsequently started sharing information
necessary for carrying out a comprehensive review of the rating.
Consequently, CRISIL is migrating its rating to 'CRISIL
B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
Proposed Working
Capital Facility .5 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
The rating reflects the firm's modest scale of operations,
susceptibility to climatic conditions and volatile raw material
prices, and large working capital requirement. These weakness are
partially offset by the extensive experience of HRAF's partners in
the agro commodity business.
Analytical Approach
Unsecured loan of INR1.46 crore extended by the partners as on
March 31, 2020, has been treated as neither debt nor equity as the
loan may remain in business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to climatic conditions and volatile raw material
prices: Yield of agricultural crops depends on adequate and timely
monsoons. Thus, the firm remains vulnerable to shortage of key raw
materials during a weak monsoon. Furthermore, incidence of pest
attacks or crop infections may lead to higher uncertainty in
production and pricing of agro commodities and derived products.
* Modest scale of operations: Scale of operations remains modest at
INR13.99 crore for fiscal 2020, and has been in the range of
INR13.4- 13.9 crore in the past three fiscals. Exposure to intense
competition will continue to limit operating flexibility.
* Large working capital requirement: Gross current assets were in
the range of 294-359 days over the three fiscals ended March 31,
2020, driven by large receivables and inventory. The firm needs to
extend a moderate credit period. Inventories held for few clients
also leads to a stretch in the working capital cycle.
Strength:
* Extensive experience of partners: Benefits from eight-year-long
experience of the partners in the agro products industry, their
healthy relationships with farmers for contractual work, strong
understanding of market dynamics, and strong association with
suppliers and customers will continue to support the business.
Liquidity Stretched
Liquidity remained stretched as reflected in high bank limit
utilisation averaging 97% over the 12 months ending June 30, 2020.
Net cash accrual of INR60-80 lakh, expected over the medium term,
should suffice to cover the maturing debt obligation of INR30-50
lakh per fiscal. Current ratio was moderate at 1.28 times as on
March 31, 2020.
Outlook: Stable
CRISIL believes HRAF will continue to benefit from the extensive
experience of its partners, and their established relationships
with clients.
Rating Sensitivity Factors
Upward factors
* Sustained growth in revenue (by 20%) and stable operating margin,
leading to higher cash accrual
* Better working capital cycle management, leading to improved
liquidity
Downward factors
* Decline in profitability by over 200 bps or stretch in working
capital cycle
* Any large debt-funded capital expenditure weakening the capital
structure.
Formed as a partnership firm in 2012, HRAF manufactures a wide
range of products, including tomato paste, puree and juice, red
chilli paste, apple pulp and dairy products. The manufacturing
facility is at Amritsar. Mr. Amitoj Singh Brar, Mr. Harman Singh
Nijjar, and Mr. Jateshwar Singh Brar are the partners.
INDRAPRASTH FOODS: CRISIL Withdraws B+ Rating on INR36cr Loan
-------------------------------------------------------------
CRISIL has withdrawn its rating on the bank facilities of
Indraprasth Foods Limited (IFL) on the request of the company and
after receiving no objection certificate from the bank. The rating
action is in-line with CRISIL's policy on withdrawal of its rating
on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 36 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating
Withdrawn)
CRISIL has been consistently following up with IFL for obtaining
information through letters and emails dated September 23, 2019,
September 27, 2019 and June 29, 2020 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of IFL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that rating action on IFL is consistent
with 'Assessing Information Adequacy Risk'. CRISIL has Continues
the ratings on the bank facilities of IFL to 'CRISIL B+/Stable
Issuer not cooperating'.
CRISIL has withdrawn its rating on the bank facilities of IFL on
the request of the company and after receiving no objection
certificate from the bank. The rating action is in-line with
CRISIL's policy on withdrawal of its rating on bank loan
facilities.
Established in 1998 IFL, is a closely held public limited company.
The company is engaged in trading and export of agro commodities
such as wheat, soya bean, gram, chickpea, etc. The day to day
operations of the company are managed by Mr. Hiralal Agarwal, Mr.
Sharad Agarwal, Mr. Harish Agarwal, Mr. Varun Agarwal and Mr. Vipul
Agarwal.
JALAN JEE: CRISIL Raises Rating on INR9cr Cash Loan to B-
---------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Jalan Jee
Polytex Limited (JPL) to 'CRISIL B-/Stable/CRISIL A4' from 'CRISIL
D/CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 1 CRISIL A4 (Upgraded from
'CRISIL D')
The upgrade is driven by JPL's improved liquidity position with
timely repayment of interest on cash credit account from December
2019. Furthermore, no repayment obligation and timely realization
from debtors has supported liquidity.
The ratings also reflect JPL's modest scale of operations and
susceptibility to volatility in raw material prices. The ratings
also factor in below-average financial risk profile marked by
subdued debt protection metrics. These weaknesses are partially
offset by the extensive experience of the promoters in the textile
industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* No overdrawals in bank lines: The firm has not overdrawn its cash
credit (CC) limit for more than 30 days in the past 10 months.
* Modest scale of operations in the highly competitive textile
industry: Scale of operations remains modest, with estimated
revenue of around INR37 crore in fiscal 2020 amid the intensely
competitive textile industry. Moreover, it is expected to decline
in fiscal 2021 amid the disruptions caused by the pandemic. CRISIL
believes significant growth in scale of operations is a key rating
sensitivity factor.
* Susceptibility to volatile raw material prices: The operating
margin is vulnerable to any adverse movement in prices of polyester
and acrylic fibre and are influenced by volatility in crude oil
prices.
* Below-average financial risk profile: The financial risk profile
comprises small networth and subdued debt protection metrics with
net cash accrual to total debt and interest coverage ratios
estimated at 0.01 time and 1.5 times, respectively, in fiscal
2020.
Strength:
* Extensive experience of promoters: JPL benefits from the
extensive experience of promoters in textile industry. Over the
years, the promoters has established longstanding relationship with
the customers and suppliers.
Liquidity Stretched
Bank lines were highly utilized averaged at 99.2% over the past 12
months through June 2020. Moreover, JPL availed moratorium facility
from the bank till August 31, 2020. The ongoing COVID-19 pandemic
has impacted business operations and so sufficient cash accrual
generation post pandemic will be a key monitorable and even more so
with debt-funded capital expenditure (capex) plans over the medium
term.
Outlook: Stable
CRISIL believes JPL will continue to benefit over the medium term
from the promoter's experience.
Rating Sensitivity factors
Upward Factors
* Revenue growing at a compound annual growth rate (CAGR) of 15%
over the medium term.
* Improvement in financial risk profile
* Improvement in liquidity position
Downward Factors
* Operating margin declining to below 4% over the medium term
* Substantial decline in turnover post the pandemic
* Debt-funded capex deteriorating the financial risk profile
Incorporated in 2001, JPL manufactures polyester yarn and grey
fabrics. JPL's operations were closed from 2012-2015 and it resumed
operations in fiscal 2016. The company is based in Gorakhpur, Uttar
Pradesh, and is promoted by Mr. Vinod Jalan.
JET AIRWAYS: Lenders Have Until Oct. 16 to Vote on Two Proposals
----------------------------------------------------------------
Livemint.com reports that lenders to Jet Airways have time till
October 16 to vote on two proposals to revive the stressed airline.
The deadline may get extended if banks fail to get internal
approvals, according to a person familiar with the matter.
This comes after reports said the consortium of Kalrock Capital and
Murari Lal Jalan has emerged as the successful resolution applicant
in the corporate insolvency resolution process, Livemint.com says.
In a stock exchange notification, resolution professional of the
airline Ashish Chhawchharia clarified that the committee of
creditors has not concluded the e-voting on the final resolution
plans submitted by two shortlisted bidders, according to
Livemint.com.
Livemint.com relates that the company also added that the
Jalan-Kalrock consortium has intimated the resolution professional
that it has not made any statement claiming to have been chosen as
the successful resolution applicant.
"Voting will be on till October 16 and lenders would need to get
approval from their respective boards before casting vote. If this
exercise is not completed, then the deadline could get pushed
beyond October 16," said the person cited earlier.
For the revival plan to go through, the company will have to secure
66% of the votes of the lenders, who are part of the committee of
creditors, Livemint.com notes. Once the resolution plan is approved
by the majority of the committee of creditors, the RP will move an
application in the National Company Law Tribunal for its approval.
According to Livemint.com, the clarification comes after The
Economic Times carried a report quoting a company official that
London-based asset management company Kalrock Capital and UAE
investor Murari Lal Jalan have been chosen as the new owners of the
bankrupt airline.
Livemint.com says Jet Airways had received bids from two
consortiums, one comprising UK-based Kalrock Capital and UAE-based
entrepreneur Murari Lal Jalan, and the other by Haryana-based
Flight Simulation Technique Centre, Mumbai-based Big Charter and
Abu Dhabi's Imperial Capital Investments LLC. One of the two had
sought more time to revise the bid upwards, and lenders had agreed
to give more time for both parties to submit revised bids, the
report notes.
The carrier was admitted to the National Company Law Tribunal
(NCLT) in June 2019.
Since then, the committee of creditors has met 16 times,
Livemint.com says. The insolvency process for Jet Airways, which
was grounded in April 2019, due to an acute fund crunch, was
supposed to be completed by June this year. According to
Livemint.com, the deadline was first extended to August 21 due to
lockdown curbs, and then extended for an unspecified time by
lenders-appointed resolution professional for the airline, Ashish
Chhawchharia.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited was one of
India's top airlines founded by Naresh Goyal. It provided
passenger and cargo air transportation services as well aircraft
leasing services. It operated flights to 66 destinations in India
and international countries.
Jet Airways on April 17, 2019, halted all flight operations after
its lenders rejected its plea for emergency funds.
On June 20, 2019, the National Company Law Tribunal (NCLT), Mumbai
Bench, accepted an insolvency petition against Jet Airways filed by
its creditors as they attempt to recover some of their dues.
Ashish Chhawchharia of Grant Thornton India has been named as the
resolution professional in the case. Law firm Cyril Amarchand
Mangaldas will represent the interests of the lenders' consortium,
according to a Reuters report.
Creditors have filed claims worth INR30,907 crore, according to
Financial Express. The RP has so far admitted claims worth over
INR14,000 crore.
KHUSHIYA INDUSTRIES: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Khushiya Industries Private Limited
Registered office:
Shop No. 16, Second Floor
Shriji Arched Complex
B/H Jalaram Bhojnalay
Highway Road, Deesa
Gujarat 385535
Insolvency Commencement Date: September 28, 2020
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: March 27, 2021
Insolvency professional: Mr. Chirag Shah
Interim Resolution
Professional: Mr. Chirag Shah
208, Ratnaraj Spring
Besides Navnirman Co. Op. Bank
Opp. HDFC Bank House
Navrangpura, Ahmedabad
India 380009
E-mail: chirag.irp@gmail.com
cirp.kipl@gmail.com
Last date for
submission of claims: October 12, 2020
LEE AND MUIRHEAD: CRISIL Lowers Rating on INR8cr Loan to B+
------------------------------------------------------------
CRISIL has withdrawn its rating on INR10 crore Bank Guarantee, INR3
crore Cash Credit and INR20 crore Proposed Long Term Bank Loan
Facility of Lee and Muirhead Private Limited (LNM) on the request
of the company and after receiving no objection certificate from
the bank. The rating action is in-line with CRISIL's policy on
withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 8 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with LNM for obtaining
information through letters and emails dated September 23, 2019,
September 27, 2019 and June 29, 2020 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of LNM. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that rating action on LNM is consistent
with 'Assessing Information Adequacy Risk'. Based on the last
available information, the ratings on bank facilities of LNM
revised to 'CRISIL B+/Stable/CRISIL A4+ Issuer not cooperating'
from 'CRISIL BB-/Stable/CRISIL A4+ Issuer not cooperating'.
CRISIL has withdrawn its rating on INR10 crore Bank Guarantee, INR3
crore Cash Credit and INR20 crore Proposed Long Term Bank Loan
Facility of LNM on the request of the company and after receiving
no objection certificate from the bank. The rating action is
in-line with CRISIL's policy on withdrawal of its rating on bank
loan facilities.
LNM, a part of the Lemuir group, promoted by the Parikh family,
provides project logistics services, such as freight forwarding,
customs clearance, and transportation, and caters to companies in
the power, capital goods, and engineering sectors. Currently, Mr.
Arvind Parikh is the chairman and his son, Mr. Snehal Parikh, is
the managing director of the company.
MATRIX TECHNOLOGIES: CRISIL Withdraws B+ Rating on INR10cr Loans
----------------------------------------------------------------
CRISIL has withdrawn its rating on the long term bank facilities of
Matrix Technologies Inc. (MTI) on the request of the company and
receipt of a no objection certificate from its banks. The rating
action is in line with CRISIL's policy on withdrawal of its ratings
on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Term Loan 1 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
Line of Credit 9 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
CRISIL has been consistently following up with MTI for obtaining
information through letters and emails dated December 31, 2019 and
June 17, 2020, among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of MTI. This restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MTI is consistent
with 'Assessing Information Adequacy Risk'. Based on the last
available information, the rating on bank facilities of MTI
continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
CRISIL has withdrawn its rating on the long term bank facilities of
MTI on the request of the company and receipt of a no objection
certificate from its banks. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
MTI, a Bangalore (Karnataka) based firm, distributes computer and
computer-related hardware mainly to corporates, government entities
and retailers. Operations are managed by the proprietor, Mr.
Narayana Rao, who has over 20 years' experience in the industry.
MEHRA NOVELTIES: CRISIL Assigns B+ Rating to INR5.75cr Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Mehra Novelties (MN).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.75 CRISIL B+/Stable (Assigned)
The rating reflects MN's modest scale of operation, working capital
intensive operations and average financial profile. These weakness
are partially offset by extensive industry experience of the
proprietor and strong and established clientele.
Analytical Approach
Unsecured loans of INR59.45 lakhs as on 31-March-2020 from
promoters are treated as Neither Debt nor Equity as these loans are
low interest bearing and will remain in the business over the
medium term.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operation: MN business profile is constrained by
its scale of operations in the intensely competitive traders
industry. Also, with competitive nature of industry, scale of
operations will continue to limit its operating flexibility in
medium term.
* Working capital intensive operations: Gross current assets were
at 189 days as on 31st march 2020 owing to high debtor days. The
debtor days are high due to limited bargaining power of the firm.
The high working capital intensity constrains its operating
efficiencies.
* Average financial profile: Financial risk profile is average,
marked by modest networth and high gearing. The debt protection
metrics also remain average. Firm's networth and gearing stood at
Rs.2.1 crores and 3.15 times respectively estimated as on March 31,
2020; interest coverage and net cash accrual to total debt (NCATD)
is at 1.42 times and 0.83 times as estimated on March 31, 2020.
Strength
* Extensive industry experience of the proprietor: Mr. Rishi Mehra,
proprietor, has two-decade-long experience in the corporate gift
novelty industry, his strong understanding of the market dynamics,
should continue to support the business.
* Strong and established clientele: The firm benefits from its
established relationship with reputed and established corporates,
thereby reducing its collection related risk. The promoters, Mr.
Rishi Mehra, have been instrumental in continuously developing new
clients. The business risk profile will likely remain supported by
its strong and established clientele.
Liquidity Stretched
Liquidity is stretched, low cash accruals are estimated at Rs.0.20
crore to 0.30 crores level over the medium term against NIL debt
obligation. Bank limits utilization remained at moderate level of
87% levels over the past 12 months ended Aug-2020. Current ratio is
at 1.05 times at FY20. The liquidity however is supported by
funding support from promotors in the form of unsecured loans.
Outlook: Stable
CRISIL believes MN will continue to benefit over the medium term
from its longstanding relationships with principals and experience
of the management to mitigate the inherent risk in trading
business.
Rating Sensitivity Factor
Upward factor
* Sustained revenue growth of 30% percent and maintaining
profitability
* Improvement in working capital cycle and financial risk profile.
Downward factors
* Decline in revenue or profitability below 1% leading to low cash
accrual.
* Weakening of financial risk profile particularly debt protection
metrics.
MN was set in 2004, the firm is promoted by Mr. Rishi Mehra. The
firm is engaged in supplying of corporate gift items & novelties
such as safety products, handicrafts, accessories, promotional
article, metal articles, household and candles. The firm is based
out of Delhi having offices in Delhi and Mumbai.
NATIONAL RURAL: CRISIL Assigns B+ Rating to INR7.0cr Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of National Rural Development And Research Society
(NRDRS).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit .25 CRISIL B+/Stable (Assigned)
Term Loan 6.75 CRISIL B+/Stable (Assigned)
The rating reflects the extensive industry experience of its
trustee and management, and healthy capital structure and debt
protection metrics. These strengths are partially offset by
vulnerability to stringent regulations, modest scale of operations
and geographical concentration in revenue.
Key Rating Drivers & Detailed Description
Strengths:
* Extensive experience of the trustee and management: Longstanding
presence in the education services industry has enabled the trustee
and management to understand market dynamics and establish reach in
its region of operations.
* Moderate capital structure: Gearing and total outside liabilities
to tangible networth ratio are less than 1 time since majority of
the term debt has been repaid. Though capital structure may weaken
marginally over the medium term due to the ongoing debt-funded
capital expenditure (capex), it will remain comfortable.
Moderate profitability led to comfortable debt protection metrics,
with interest coverage and net cash accrual to total debt ratios of
4.67 times and 0.38 time, respectively, for fiscal 2020. The
metrics will remain stable over the medium term despite moderating
due to the debt-funded capex.
Weaknesses:
* Vulnerability to stringent regulations: Establishment and
operations of educational institutions are regulated by various
governmental and quasi-governmental agencies such as the University
Grants Commission, All India Council for Technical Education,
Central Board of Secondary Education, universities, and state
governments. Each body has detailed procedures for granting
permission to set up institutions, and approvals need to be renewed
every 3-5 years. Any non-compliance will result in cancellation of
affiliation and licence, leading to loss of reputation and revenue
for the trust.
* Modest scale of operations: Business risk profile is constrained
by small scale in the intensely competitive education services
segment. This will continue to limit operating flexibility.
* Geographical concentration in revenue profile: Entire income is
derived from a single institute in Nagpur, which exposes NRDRS to
any slowdown in that region.
Liquidity Stretched
Bank limit utilisation was moderate at 87.65% for the 12 months
through August 2020. Cash accrual is expected to be over INR96 lakh
against term debt obligation of INR66 lakh for fiscal 2021. Current
ratio was healthy at 2.2 times on March 31, 2020. Cash and bank
balance stood at around INR66 lakh. Healthy gearing and moderate
networth support financial flexibility and provide financial
cushion available in case of any adverse conditions or downturn in
the business.
Outlook: Stable
CRISIL believes NRDRS will continue to benefit over the medium term
from its established position and management's extensive experience
in the sector. Financial risk profile will remain above average,
backed by healthy cash accrual and prudent financing of capex.
Rating Sensitivity factors
Upward factors
* Significant increase in revenue while maintaining profitability,
leading to accrual more than INR2 crore
* Improvement in student enrolment
Downward factors
* Decline in student enrolment resulting in fall in revenue by 20%
or sharp decrease in profitability
* Weakening of liquidity because of delays in receipt of fees
Set up in 2010 by Mr. Deepak Chafle and family, NRDRS operates an
engineering trust, Suryodaya College of Engineering & Technology,
in Umred Road, Nagpur (Maharashtra). It is currently managed by Mr.
Deepak Chafle (president). Mr. Ranjit Chafle is a secretary and is
managing day to day operations of the trust.
NOUVEAU TEXTILES: CRISIL Assigns B Rating to INR20cr New LT Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long term
bank facilities of Nouveau Textiles Private Limited (NTPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 20 CRISIL B/Stable (Assigned)
Bank Loan Facility
The rating reflects NTPL's exposure to risks related to ongoing
project and expected leveraged capital structure. These weakness
are partially offset by its extensive industry experience of the
promoters and funding support from them.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks related to ongoing project: NTPL is setting up
a grey fabric processing unit, which is scheduled to commence
operations in April 2021. Hence, it is yet to display a full year
of stabilized operations. Demand risk is expected to be moderate as
the industry is highly fragmented marked by low entry barriers with
small capital and technological requirements. Timely completion
and successful stabilisation of its operations at the new unit will
remain a key rating sensitivity factor.
* Expected leveraged capital structure: NTPL is expected to have
an average financial risk profile with high gearing As the project
is aggressively funded through a debt-equity ratio of over 2
times.
Strength
* Extensive industry experience of the promoters and funding
support from them: The promoters have an experience of over 30
years in Textile industry through family business. This has given
them an understanding of the dynamics of the market, and enabled
them to establish relationships with suppliers and customers.
Moreover, the promoters have infused ~Rs.9.5 crore to fund the
capex.
Liquidity Stretched
Cash accrual is expected to remain at INR1-2 crore in fiscals 2021
and 2022 against debt obligations estimated at INR1.8 crore in
fiscal 2022 and 2023. Promoters and family members have infused
around INR10 crore of unsecured loans in the business, and are
likely to extend the fund support to fund the future requirements
as well.
Outlook: Stable
CRISIL believes that NTPL will benefit over the medium term from
its promoter extensive industry experience.
Rating Sensitivity Factor
Upward factor
*Timely stabilization of operations with significant revenue and
profitability, leading to accruals of above INR 1 crore
*Improvement in financial risk profile with equity infusion
Downward factor
*Considerable time or cost overruns in the project,
*Generates significantly low cash accruals, thus leading to
accruals to repayment of less than 1 time.
NTPL was incorporated August, 2020 by Mr. Narayan Tibrewal, Mr.
Amit Tibrewal, and family members. It is currently setting up a
grey fabric processing unit, in Tarapur, Maharashtra. The plant is
expected to be commissioned in April, 2021.
PARADISE CONSUMER: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Paradise Consumer Products Limited
Lunkad Tower
Near General Post office
Jilha Peth, Jalgaon
Maharashtra 425001
Insolvency Commencement Date: September 28, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: March 27, 2021
Insolvency professional: Mrs. Preeti Vimal Agrawal
Interim Resolution
Professional: Mrs. Preeti Vimal Agrawal
Office No. 4, Ground Floor C Wing
Shanti Jyot Building
Balaji Nagar
Near Railway Station
Bhayander West
Thane Pin 401101
E-mail: capreeti2003@gmail.com
cirp.paradise@gmail.com
Last date for
submission of claims: October 12, 2020
R N ENTERPRISES: ICRA Moves B+ Debt Ratings to Not Cooperating
--------------------------------------------------------------
ICRA has moved the long-term ratings for the bank facilities of R N
Enterprises to the 'Issuer Not Cooperating' category. The rating
is now denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 10.76 [ICRA]B+(Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Long Term- 4.24 [ICRA]B+(Stable) ISSUER NOT
Unallocated COOPERATING; Rating moved to
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.
RNE was set up as a partnership firm in 2010. It is an authorized
distributor of Mitsubishi range of air conditioners in Telangana
and Andhra Pradesh. The company is managed by Mr. Rajesh Malik and
Mr. Neeraj Malik. RNE is part of the Malik group which is involved
in automobile dealerships.
RESITEX: CRISIL Lowers Rating on INR5.0cr LT Loan to B+
-------------------------------------------------------
CRISIL has revised the rating on the bank facilities of 'Resitex'
to 'CRISIL B+/Stable Issuer Not Cooperating' from 'CRISIL
BB-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL BB-/Stable')
Long Term Loan 5.0 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL BB-/Stable')
Proposed Fund- .25 CRISIL B+/Stable (ISSUER NOT
Based Bank Limits COOPERATING; Migrated from
'CRISIL BB-/Stable')
Term Loan 1.25 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL BB-/Stable')
CRISIL has been consistently following up with 'Resitex' for
getting information through emails dated September 14, 2020 and
September 19, 2020 among others, apart from telephonic
communication. However, the issuer has continued to be
non-cooperative. This led CRISIL to carry out rating surveillance
with the best available information.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Resitex which restricts CRISIL's
ability to take a forward-looking view on the credit quality of the
entity. CRISIL believes that rating action on Resitex is consistent
with 'Assessing Information Adequacy Risk'. Therefore, on account
of inadequate information and lack of management cooperation,
CRISIL has migrated the rating on the bank facilities of 'Resitex'
to 'CRISIL B+/Stable Issuer Not Cooperating' from 'CRISIL
BB-/Stable'.
Resitex was incorporated as a partnership firm in 2013. The firm is
engaged in manufacturing of Industrial machinery and
consumables.The promotors of the company are Madhu Seksaria,
Siddhant Seksaria and Sunil Seksaria and have an experience of more
than two decades in this business. The manufacturing facility is
located in Thane.
ROLSON SYNTHETICS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Rolson Synthetics Private Limited
No. 343, Kewal Industrial Estate
Senapati Bapat Marg
Lower Parel
Mumbai 400013
Maharashtra
Insolvency Commencement Date: September 30, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: April 1, 2021
Insolvency professional: Mr. Vimal Kumar Agrawal
Interim Resolution
Professional: Mr. Vimal Kumar Agrawal
Office No. 4, Ground Floor C Wing
Shanti Jyot Building
Balaji Nagar
Near Railway Station
Bhayander West
Thane Pin 401101
E-mail: vimal@vpagrawal.in
cirp.rolson@gmail.com
Last date for
submission of claims: October 17, 2020
S R TRANZCARS: ICRA Removes 'D' Debt Rating from Not Cooperating
----------------------------------------------------------------
ICRA has removed its earlier rating on bank facilities of S R
Tranzcars Private Limited of [ICRA]D from the 'ISSUER NOT
COOPERATING' category as the company has now submitted its 'No
Default Statement' ("NDS"). The company's rating was moved to the
'ISSUER NOT COOPERATING' category in November 2019.
S S AGROZONE: CRISIL Hikes Rating on INR10.52cr Loan to B+
----------------------------------------------------------
Due to inadequate information and in line with Securities and
Exchange Board of India guidelines, CRISIL had migrated its
long-term rating on S S Agrozone Private Limited (SSAPL) to 'CRISIL
B/Stable Issuer Not Cooperating'. However, the management has
subsequently started sharing requisite information for carrying out
a comprehensive review of the rating. Consequently, CRISIL is
migrating its rating on the long-term bank facilities of SSAPL from
'CRISIL B/Stable Issuer Not Cooperating' to 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (Migrated
from 'CRISIL B/Stable ISSUER
NOT COOPERATING')
Proposed Fund- 10.52 CRISIL B+/Stable (Migrated
Based Bank Limits from 'CRISIL B/Stable ISSUER
NOT COOPERATING')
The rating reflects the company's moderate scale of operations and
vulnerability to risks inherent in the industry. These weaknesses
are partially offset by the promoter's extensive experience in the
poultry feed industry, SSAPL's moderate financial risk profile and
continuous need-based funding support.
Analytical Approach
Unsecured loan of INR10.71 crore as on March 31, 2020, extended by
the promoter has been treated as 75% equity and 25% debt as it is
likely to remain in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Moderate scale of operations: Intense competition continues to
constrain scalability, and therefore, pricing power with suppliers
and customers. Net sales stood at a moderate INR88.09 crore in
fiscal 2020.
* Vulnerability to risks inherent in the poultry industry: The
poultry farming industry is driven by regional demand and supply
factors because of the constraint on transportation due to
perishability of products. Furthermore, there are industry-specific
risks such as frequent outbreaks of disease that may significantly
impact realisations and profitability of players such as SSAPL.
Strengths:
* Promoter's experience and funding support: The promoter's
experience of over 6 years has helped establish strong
relationships with suppliers, ensuring timely supply. Regular,
unsecured loans from the promoter (Rs 10.71 crore as on March 31,
2020) support the business, and will continue in the near term.
* Moderate financial risk profile: Total outside liabilities to
adjusted networth ratio was moderate at 1.35 times as on March 31,
2020. Adjusted networth was comfortable at INR10.20 crore as on
March 31, 2020, and is expected to improve over the medium term,
backed by ramp-up in revenue and operating margin. Interest
coverage and net cash accrual to adjusted debt ratios were moderate
at 2.18 times and 0.18 time, respectively, in fiscal 2020.
Liquidity Poor
Bank limit utilisation averaged 98% for the 12 months through July
2020. Cash accrual is expected to be over INR1.48-2.16 crore, which
will sufficiently cover term debt obligation of INR0.06-1.01 crore
over the medium term. Current ratio was moderate at 1.20 times as
on March 31, 2020. The promoter is likely to extend support through
equity infusion and unsecured loans to meet working capital
requirement and debt obligation.
Outlook: Stable
CRISIL believes SSAPL will continue to benefit from its promoter's
extensive experience.
Rating Sensitivity Factors
Upward factors
* Increase in operating margin by 300 basis points, leading to
higher cash accrual
* Growth in revenue by more than 20%
Downward factors
* Decline in revenue by 15% and drop in profitability below 2%
* Large, debt-funded capital expenditure, weakening the capital
structure
* Significant increase in working capital requirement, weakening
the liquidity and financial risk profile.
Incorporated in 2012 by Mr. Sanjay Pandey (promoter and managing
director), SSAPL manufactures poultry feed. The company is based
out of Lucknow (Uttar Pradesh).
SAI INDO: CRISIL Migrates B Debt Rating to Not Cooperating
----------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Sai Indo Metal
Resources Private Limited (SIMRPL) to 'CRISIL B/Stable/CRISIL A4
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Letter of Credit 2 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Packing Credit 8 CRISIL B/Stable (ISSUER NOT
(pre-shipment COOPERATING; Rating Migrated)
credit)
Packing Credit in 2 CRISIL A4 (ISSUER NOT
Foreign Currency COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SIMRPL for obtaining
information through letters and emails dated September 16, 2020 and
September 22, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SIMRPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes that rating action on SIMRPL is consistent
with 'Assessing Information Adequacy Risk'. Therefore, on account
of inadequate information and lack of management cooperation,
CRISIL has migrated the rating on bank facilities of SIMRPL to
'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'.
Promoted by Mr. Nilesh Shah in 2010, SIMRPL trades in a variety of
engineering products used in setting up greenfield/brownfield
projects in multiple fields. It exports all its products mainly to
West Africa, through a trade partner in Dubai.
SHINE FLEXIBLE: CRISIL Lowers Rating on INR6.50cr Loan to B
-----------------------------------------------------------
CRISIL has downgraded its rating on the long term bank facilities
of Shine Flexible Print And Packs Private Limited (Shine) to
'CRISIL B/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.50 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term .86 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
Term Loan 1.64 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects deteriorating business risk profile
marked by modest scale of operations of around INR11 crore and
reduced operating margin of less than 7% in FY 2020. The same has
resulted in decreased NCA of less than INR 50 lakh which is tight
against repayment obligations.
The rating continues to reflect Shine's modest scale of operations
and intensive working capital requirement. These weaknesses are
partially offset by extensive experience of the promoters in the
polyester packaging industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations: SHINE has a modest scale of
operations, as reflected in its revenue of around INR 11 crore in
FY 2020. The same is due to intense competition from both
established as well as small players, in the highly fragmented
industry. CRISIL believes that SHINE's business risk profile will
remain constrained by the company's modest scale of operations.
* Large working capital requirements: SHINE's operations are
working capital intensive in nature, as reflected in its gross
current assets of more than 300 days as on March 31, 2020.
Working-capital-intensive operations are on account of high debtors
and inventory days of about 130 days and 187 days, respectively as
on March 31, 2020. CRISIL believes that SHINE's operations will
remain working capital intensive in nature, over the medium term
Strength:
* Promoter's extensive experience in packaging industry: SHINE,
set up in 2006, is promoted by Mr. KS Lalu. Over the years, the
promoter has developed healthy relations with key customers,
resulting in repeat orders from them, thereby ensuring a stable
topline. CRISIL believes that SHINE will continue to benefit over
the medium term from its promoter's extensive industry experience
Liquidity Stretched
Average month end bank limit utilization for the last 12 months
ended on April 2020 is around 88%. Net cash accruals remains tight
against repayment obligations. Current ratio is modest at less than
0.9 times as on March 31, 2020.
Outlook: Stable
CRISIL expects Shine to continue to benefit from the promoters'
industry experience over the medium term.
Rating Sensitivity factors
Upward Factors:
* Strong revenue growth while maintaining EBITDA margin of more
than 4%
* Efficient working capital management and maintenance of moderate
capital structure
Downward Factors:
* Major decline in revenues or operating margin falling below 2.5%
* Stretch in working capital cycle or significant debt funded
capex
Incorporated in 2006, the company is engaged in manufacturing of
flexible packaging materials. The company has manufacturing
facility based in Aluva (Kerala).
SPACEAGE SWITCHGEARS: Ind-Ra Moves BB- LT Rating to NonCooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Spaceage
Switchgears Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will now
appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING) /
IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR80 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 10, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Spaceage Switchgears was incorporated in October 1998 and is
engaged in manufacture, trading and contracting for high-mast
lighting projects within India and foreign countries.
SPEEDOFER COMPONENTS: CRISIL Assigns B- Rating to INR10cr Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of Speedofer Components Private Limited (SCPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 1 CRISIL B-/Stable (Assigned)
Cash Credit 5.5 CRISIL B-/Stable (Assigned)
Foreign Letter
of Credit 3.5 CRISIL B-/Stable (Assigned)
The rating reflects SCPL's modest scale of operations, large
working capital requirement and weak financial risk profile. These
weaknesses are partially offset by the extensive experience of the
promoters in the soft ferrite industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: Scale of operations is modest because
of large working capital requirement and intense competition in the
industry. Revenue stood at INR20-30 crore over the three years
through 2020 and is estimated to have declined to INR19.66 crore in
fiscal 2020 from INR30.13 crore in fiscal 2019 due to subdued
demand intense competition creating revenue pressure. It is
expected to decline further in fiscal 2021 on account of the
Covid-19 pandemic and the nationwide lockdown to contain it in the
first quarter of the fiscal.
* Large working capital requirement: Gross current assets were
156-193 days over the three fiscals ended March 31, 2020, driven by
receivables, inventory and creditors of 95, 58 and 90 days,
respectively. Large working capital requirement and limited support
from creditors led to increased reliance on external debt, as
reflected in the high bank limit utilisation. Furthermore, SCPL
availed of unsecured loans at a high rate of interest, which
resulted in higher interest outgo and interest coverage ratio of
less than 1 time.
* Weak financial risk profile: Debt protection metrics were weak,
indicated by interest coverage and net cash accrual to total debt
ratios of 0.71 time and 0.06 time, respectively, in fiscal 2020.
The capital structure has remained modest, as reflected in small
networth of INR3.13 crore and high total outside liabilities to
tangible networth ratio of 3.31 times as on March 31, 2020.
Strength
* Extensive experience of the promoters: The three-decade-long
experience of the promoters, their strong understanding of the
market dynamics and healthy relationships with customers and
suppliers will continue to support the business risk profile.
Liquidity Stretched
Cash accrual, expected to be negative in fiscal 2021, will be
insufficient vis-a-vis debt obligation of INR1.79 crore. Bank limit
utilisation averaged 97% over the 12 months through August 2020.
The company has availed of moratorium for March-August 2020 under
the Reserve Bank of India's Covid-19 Regulatory Package and has
also used Covid-19 emergency lines of INR1.03 crore, which are
expected to support liquidity to a certain extent. Current ratio
stood at 1.07 times on March 31, 2020.
Outlook: Stable
CRISIL believes SCPL's financial risk profile will remain under
pressure because of increased reliance on external debt and
continued high bank limit utilisation. However, the business risk
profile remains supported by the promoters' extensive experience
and healthy relationships with clients.
Rating Sensitivity factors
Upward factors:
* Significant increase in revenue and operating margin
* Higher-than-expected net cash accrual leading to accrual to debt
obligation ratio of more than 1 time
Downward factors:
* Further stretch in liquidity leading to delay in debt servicing
* Decline in revenue by more than 40% leading to
higher-than-expected fall in earnings before interest, taxes,
depreciation and amortisation
Incorporated in 2007, SCPL is owned and managed by Mr. Bramha Jeet
Singh Randhawa. The company manufactures soft ferrite cores. The
manufacturing facility is in Greater Noida, Uttar Pradesh.
SURAT HAZIRA: CRISIL Lowers Rating on INR1,814cr Term Loan to B-
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Surat Hazira NH-6 Tollway Private Limited (Surat Hazira Tollway;
formerly, Soma Isolux Surat Hazira Tollway Pvt Ltd) to 'CRISIL
B-/Stable' from CRISIL BB-/Stable.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 1,814 CRISIL B-/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects deterioration in liquidity position of the
company owing to cancellation of moratorium that was earlier
provided to the company by lenders. The company had received
approval on moratorium on debt servicing in line with the RBI
guidelines of providing relief from COVID-19 impact. The company
had accordingly not made the quarterly principal repayment for
March and June 2020 and interest payment from April-August 2020.
However, in the consortium meeting held in August 2020, lenders
clarified that the moratorium was not applicable to the company,
being a Non-performing Asset (NPA) account. While the company had
been meeting its debt servicing obligations on time since
Resolution Plan had been implemented with effect from April 01,
2018, as per the restructuring norm, account continues to be
classified as an NPA as 10% of the total debt has not been paid by
March 31, 2020
Given the reversal of moratorium, the company had total overdue of
around INR80 cr as on August 31, 2020 of which INR45 cr was cleared
by the lenders from the existing cash balance in August. The
company also had liquidity of INR50 cr in the form of fixed
deposits in debt service reserve account (DSRA) which was not
dipped into by the lenders and hence the balance amount of around
INR35 cr remains overdue as on date. As per discussion with the
lenders, the consortium lenders are expected to dip into DSRA and
clear the overdues in September 2020. Over and above the DSRA, the
company has unencumbered cash balance of INR34 cr as of Sep 24,
2020 which also provides cushion to the liquidity.
Nonetheless, liquidity pressure will remain given impact of lower
toll collection owing to lockdown imposed due to COVID-19, and
upcoming major maintenance expenses, thereby impacting the
company's debt servicing ability.
The rating reflects modest debt protection metrics and
susceptibility of toll revenue to volatile traffic volumes and
risks related to non-maintenance of the stretch. These weaknesses
are partially offset by good traffic potential on the project
stretch.
Analytical Approach
CRISIL has taken a standalone view on Surat Hazira Tollway.
Key Rating Drivers & Detailed Description
Weakness:
* Modest debt protection metrics: Toll revenue of INR162 crore was
generated during fiscal 2020, a decline of 4% over the
corresponding period of the previous fiscal. This is on account of
diversion of traffic from one of the toll plazas due to
continuation of level crossing underneath Railway over bridge
(RoB). The company had planned construction of ramp near RoB which
would curtail the traffic diversion, however approval from
authority is awaited. Further, extended monsoon during the fiscal
and poor maintenance of feeder network- Fagne Songadh has also
impacted the traffic on the project stretch. The company has
collected INR55 crore from April- August 2020 which is 19% lower
than collection for same period last fiscal. While toll collections
in August 2020 have ramped up to around 116% of toll collection in
August 2019, cash flows continues to be weak on account of
significantly lower toll collection than envisaged as per the RP
plan and high debt obligations. Lower than expected toll collection
has weakened debt protection metrics, with average DSCR remaining
below 1 time over the tenue of the debt.
* Susceptibility of toll revenue to fluctuations in traffic volume
and risks related to non-maintenance of stretch: Tolling on the
road began on August 21, 2015, with the receipt of provisional
completion certificate. Surat Hazira Tollway achieved date of
commencement of commercial operations (DCCO) on April 30, 2016, for
completion of 90.77% of the total project. Toll collection is the
main source of revenue for the project and hence any fluctuation in
it due to lower-than-expected traffic volume or toll rate revision
will constrain cash flow and debt-servicing capability. Further,
major maintenance for the stretch is expected to start from next
fiscal and the company has not created any Major Maintenance
Reserve. Toll collection will be insufficient to cover the major
maintenance expenditure thereby impacting the road condition and
traffic on the stretch.
Strengths:
* Good traffic potential, supported by the presence of industrial
belt: The Surat-Hazira Tollway project route connects Gujarat with
eastern and western India. There are two distinct land uses on the
stretch: a concentrated industry cluster in the south of Surat and
the remaining is predominantly used for agriculture. The route
offers good traffic potential, driven by traffic volumes for Hazira
port, and the existing Dholera industrial area near Surat. Despite
this, given the traffic diversion because of the presence of level
crossing, the tollable vehicles have been able to skip one of the
toll plazas (Bhatia Toll Plaza), which has impacted the traffic on
the project stretch.
Liquidity Poor
Liquidity is poor with DSCR expected to remain below 1 time for the
tenure of the debt. Cash flows are not expected to be sufficient
against debt servicing obligation of INR184 crore and INR180 crore
during fiscals 2021 and 2022, respectively. DSRA (of INR50 cr) is
available for meeting the debt servicing obligation. The company
also has unencumbered cash and cash equivalent of INR34 crore as on
Sep 24, 2020 to support near term liquidity.
Outlook: Stable
CRISIL believes that Surat Hazira Tollway will continue to benefit
from its strategic project location.
Rating Sensitivity factors
Upward factors:
* The projects reports healthy and sustained toll revenue growth of
over 15% for fiscal 2021 and fiscal 2022
* Lower than expected maintenance cost resulting in strengthening
of DSCR levels
Downward factors:
* Promoter support toward debt servicing is not available in a
timely manner
* Delay in servicing of debt obligations
* Lower toll revenue growth of less than 10% in fiscal 2021
Established in 2009 as an SPV by Roadis (formerly, Isolux Corsan
India Engineering and Construction Pvt Ltd, part of the Isolux
Corsan group) and Soma Enterprises Ltd, Surat-Hazira Tollway
entered into a concession agreement with the National Highway
Authority of India for the execution of a road project on design,
build, finance, operate, and transfer basis (DBFOT).
Surat Hazira Tollway constructed four lanes of the Surat'Hazira
port section of NH-6, State Highway (SH)-168, and SH-187 (length of
project highway is 132.9 kilometre) in Gujarat under the National
Highways Development Project Phase III, through public-private
partnership on DBFOT basis. The concession tenure is 19 years,
which includes a construction period of 30 months. The revised
project cost of INR3,237 crore was funded through debt and equity
in the ratio of 75:25. The project was delayed by 48 months and it
achieved DCCO on April 30, 2016.
The RP for the project has been implemented with effect from April
2018 and 52.5% of outstanding debt of INR2392 crore had been
converted into sustainable debt.
SWAGAT DEVELOPERS: CRISIL Lowers Rating on INR65cr Loan to B
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Swagat Developers (SD) to 'CRISIL B/Stable' from 'CRISIL
B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 65 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 11.8 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The downgrade reflects lower than expected construction and booking
progress, and increased demand risk for the firm's project amid
sluggish demand. The demand scenario is further weakened by the
Covid-19 pandemic, which may lead to further delay in booking
progress and customer advances. This is likely to impact
profitability and constrain the debt service coverage ratio (DSCR)
over the medium term.
The rating reflects the firm's exposure to project implementation &
offtake risk, and susceptibility to cyclicality in the real estate
sector. These weaknesses are partially offset by the extensive
industry experience of its partners and favorable project
location.
CRISIL has also taken into cognizance, moratorium granted by the
banker in debt servicing of term loan, up to August 31, 2020, as
permitted by the Reserve Bank of India (RBI).
Key Rating Drivers & Detailed Description
Weakness:
* Implementation and offtake risk related to project: Construction
progress is around 35-40% at present. There has been delay of
around two years in the progress owing to weak demand in market and
covid-19 related disruptions. CRISIL believes that timely
completion of project and offtake would remain a key rating
sensitivity factor.
* Susceptibility to risks and cyclicality inherent in the real
estate industry: The real estate sector in India is cyclical
because of sharp movements in prices and a highly fragmented market
structure. With increase in supply, attractive prices offered by
various builders, and constant regulatory changes, profitability of
real estate players is expected to come under pressure over the
medium term.
Strengths:
* Partners' extensive experience in the real estate business: SD's
partners have been in the real estate industry for over two decades
and have completed several projects measuring over 12 lakh square
feet in Gujarat, leading to their established market presence.
* Favorable project location: Project is located in Surat, which is
major textile hub. Presence of numerous textile players operating
in the region creates demand for commercial real estate catering to
this industry. However with current slowdown in the textile
industry, demand for commercial real estate is expected to remain
subdued in the medium term.
Liquidity Poor
No Debt Service Reserve Account (DSRA) is maintained for debt
servicing. Liquidity is poor due to low booking progress and
advances from customers. Cash Debt Service Coverage Ratio (CDSCR)
is at estimated at 1.2 time over the tenure of term loan; however
CDSCR is lower than 1.1 time in the near to medium term. Liquidity
is supported by capital infusion by partners.
Outlook: Stable
CRISIL believes SD will benefit from the extensive industry
experience of its partners.
Rating Sensitivity factors
Upward factors
* Faster than expected booking progress and customer advances
* Improvement in liquidity in form of DSRA and increase in CDSCR of
more than 1.1 times for each year
Downward factors
* Further delays in construction and booking progress
* CDSCR of less than 1 time for term loan servicing
Established in 2007, SD is a Surat-based partnership firm. It is
setting up a commercial real estate project named Texking in Surat.
TALBROS AUTOMOTIVE: CRISIL Keeps FB+ Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the rating on bank facilities of Talbros Automotive
Components Limited (TACL) continues to be 'FB+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Fixed Deposits 20.00 FB+/Stable (Issuer Not
Cooperating)
CRISIL has been consistently following up with TACL for obtaining
information through letters and emails dated March 17, 2020 and
August 15, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of TACL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes that rating action on TACL is consistent
with 'Assessing Information Adequacy Risk'. Based on the last
available information, the ratings on bank facilities of TACL
continues to be 'FB+/Stable Issuer not cooperating'.
TACL, part of the Talbros group, was incorporated in 1956, and is
promoted by Mr. Pran Talwar and family. The company manufactures
gaskets and forgings that are supplied to original equipment
manufacturers and the aftermarket. It has four gasket production
facilities: two at Faridabad in Haryana and one each at Pune in
Maharashtra and Sitarganj in Uttarakhand. It has a materials
division at Sohna, in Gurgaon, and a forging plant at Bawal in
Rewari, Haryana. TACL is listed on the Bombay Stock Exchange and
National Stock Exchange.
TIRUPATI FOOD: CRISIL Lowers Rating on INR3.52cr Term Loan to B+
----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term facilities of
Tirupati Food Products (TFP) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable' and reaffirmed the short-term rating at 'CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee .36 CRISIL A4 (Reaffirmed)
Cash Credit 2.45 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Fund-
Based Bank Limits .17 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 3.52 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects improvement in the scale of operations on
account of timely project completion and successful start of
operations, which has resulted in an increase in cash accrual.
The ratings reflect TFP's modest scale of operations and average
financial risk profile. These weaknesses are partially offset by
the extensive experience of the partners in the agricultural
products industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: TFP's business profile is constrained
by its modest scale due to the early stage of operations. Revenue
stood at a low INR15.13 crore for fiscal 2020. The small scale will
continue to limit its operating flexibility.
* Average financial risk profile: Networth was low at INR2.67 crore
and gearing high at 1.85 times as on March 31, 2020. Debt
protection measures were weak with interest coverage and net cash
accrual to total debt ratios of 2.6 times and 0.16 time,
respectively, for fiscal 2020.
Strength
* Extensive experience of the partners: The partners' experience of
over a decade in the agricultural products industry, their
understanding of the dynamics of the market, and healthy
relationships with suppliers and customers should continue to
support the business.
Liquidity Stretched
Cash accrual, expected at INR0.77 crore per annum over the medium
term should cover annual term debt obligation of INR0.56 crore and
support liquidity. Bank lines were utilised 75% on average in the
12 months through August 2020. Current ratio is healthy at 1.66
times as on March 31, 2020.
Outlook: Stable
CRISIL believes TFP will continue to benefit from the extensive
experience of its partners, and comfortable relationships with
clients.
Rating sensitivity factors
Upward factors
* Increase in revenue by 20% and stable operating margin, leading
to higher cash accrual.
* Improvement in working capital cycle.
Downward factors
* Decline in scale of operations leading to fall in revenue by 20%
and, hence leading to lower net cash accrual.
* Large debt-funded capital expenditure weakens the capital
structure.
* Substantial increase in working capital requirements weakens the
financial risk profile, especially liquidity.
TFP, established in 2018 in Hooghly, West Bengal, is owned and
managed by Mr. Soumik Samanta, Mr. Krishnaendu Dey, Mr. Dibyendu
Dey, Mr. Annwesan Mondal, Mr. Debdeep Mondal, and Mr. Chandana
Mondal. The firm has a rice mill with installed capacity of 40
tonne per shift.
V.N.M.A.D. FIRM: CRISIL Withdraws B+ Rating on INR9cr Cash Loan
---------------------------------------------------------------
CRISIL has withdrawn its rating on the bank facilities of
V.N.M.A.D. Firm (VNMAD) on the request of the company and after
receiving no objection certificate from the bank. The rating action
is in-line with CRISIL's policy on withdrawal of its rating on bank
loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL B+/Stable'; Rating
Withdrawn)
CRISIL has been consistently following up with VNMAD for obtaining
information through letters and emails dated September 18, 2020 and
September 23, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of VNMAD. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that rating action on VNMAD is consistent
with 'Assessing Information Adequacy Risk'. CRISIL has migrated the
ratings on the bank facilities of VNMAD to 'CRISIL B+/Stable Issuer
not cooperating'.
CRISIL has withdrawn its rating on the bank facilities of VNMAD on
the request of the company and after receiving no objection
certificate from the bank. The rating action is in-line with
CRISIL's policy on withdrawal of its rating on bank loan
facilities.
Established in 1995, VNMAD is a partnership firm trading in and
processing pulses such as masoor dal, toor dal, yellow peas, and
chick peas. Its operations are managed by Mr. D R Balamurugan.
VALUEFOC TECHNOLOGIES: CRISIL Withdraws B Rating on INR3cr Loan
---------------------------------------------------------------
CRISIL has withdrawn its rating on the bank facilities of Valuefoc
Technologies Private Limited (VTPL) on the request of the company
and after receiving no objection certificate from the bank. The
rating action is in-line with CRISIL's policy on withdrawal of its
rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Working 2.6 CRISIL B (ISSUER NOT
Capital Facility COOPERATING; Migrated from
'CRISIL B/Stable'; Rating
Withdrawn)
Secured Overdraft 0.4 CRISIL B (ISSUER NOT
Facility COOPERATING; Migrated from
'CRISIL B/Stable'; Rating
Withdrawn)
CRISIL has been consistently following up with VTPL for obtaining
information through letters and emails dated September 16, 2020 and
September 22, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of VTPL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that rating action on VTPL is consistent
with 'Assessing Information Adequacy Risk'. CRISIL has migrated the
ratings on the bank facilities of VTPL to 'CRISIL B/Stable Issuer
not cooperating'.
CRISIL has withdrawn its rating on the bank facilities of VTPL on
the request of the company and after receiving no objection
certificate from the bank. The rating action is in-line with
CRISIL's policy on withdrawal of its rating on bank loan
facilities.
ValueFoc Technologies is a Kerala based company, is involved in
energy solution service providing industry. The company's business
model includes importing modules for Solar Panels and integrating
them to provide energy saving solutions. It was incorporated in
2013.
VENU INDUSTRIES: ICRA Moves B+ Debt Rating to Not Cooperating
-------------------------------------------------------------
ICRA has moved the long-term rating for the bank facilities of Venu
Industries to the 'Issuer Not Cooperating' category. The rating is
now denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 15.00 [ICRA]B+(Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating moved to
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.
Venu Industries is involved in the milling of paddy and produces
raw and boiled rice. The rice mill is situated in Nizamabad
district of Telangana. It has an installed production capacity of
67,200 metric tonne per annum. The firm is managed by Mr. Srinivas,
Mr. Sai Rahul, Mr Venugopal and Mr. Balaji, who belong to the same
family. It sells rice under the brand name, Healthy Rice.
=================
I N D O N E S I A
=================
CHANDRA ASRI: S&P Affirms Then Withdraws 'B+' ICR
-------------------------------------------------
S&P Global Ratings affirmed both its 'B+' issuer credit rating on
PT Chandra Asri Petrochemical Tbk. (CAP) as well as its 'B+' issue
rating on the company's notes. S&P subsequently withdrew the
ratings at CAP's request.
The outlook was negative at the time of withdrawal. The negative
outlook reflects the weakening credit and liquidity profile of
CAP's parent, PT Barito Pacific Tbk. (Barito Pacific). Barito
Pacific's total debt increased to US$272 million as of June 30,
2020, with debt-servicing requirements of about US$73 million
(US$25 million financing cost + US$48 million debt maturity) over
the next 12 months. Barito Pacific's debt servicing will rely on
its ability to regularly tap banks or capital markets to repay
maturing debt and interest to stabilize its liquidity profile. S&P
said, "Our base case captures limited dividends from CAP in 2021
and 2022, which is a main dividend contributor. We also expect
limited dividends from other major operations such as geothermal
electricity producer Star Energy Geothermal (Wayang Windu) Ltd.,
given sizable minority interests and a cash waterfall mechanism
that prioritizes debt repayment over shareholder distributions."
CAP has historically operated as a separate entity with no
significant operational dependence on other group companies. It has
also limited its dividend payout to Barito Pacific as it
prioritizes its own balance sheet consolidation ahead of a
potential investment in a second cracker. However, S&P believes a
further meaningful deterioration in Barito Pacific's credit quality
could affect CAP through higher dividends, asset swaps, or an
erosion in capital market sentiment toward CAP.
CAP is the largest listed petrochemical company in Indonesia and
operates a sizable naphtha cracker with ethylene capacity of 860
thousand tons per annum. Barito Pacific owns 42% of CAP, while its
controlling shareholder, the Pangestu family, directly owns 15%.
Thailand's heavy material, petrochemicals, and packaging producer
Siam Cement Group Public Co. Ltd. has a strategic ownership of 31%
in CAP since 2012.
=========
J A P A N
=========
LEOPARD ONE: Moody's Confirms Ba1 Rating on Class E Notes
---------------------------------------------------------
Moody's Japan K.K. has confirmed the ratings of five classes of
notes, and has downgraded the rating of one class of note issued
under four Japanese apartment loan securitization transactions.
The apartment buildings -- which are the mortgaged properties of
the underlying loans -- were built by the same property builder,
who also acts as the master lessee, property manager and paying
agent.
The rating actions conclude the review for downgrade initiated on
July 17, 2020 in response to a possible deterioration in the
performance of the underlying apartment loans due primarily to
uncertainty around the timing of repairs on the apartment buildings
with construction defects, in turn due to a deterioration in the
financial position of the property builder.
The affected ratings are as follows:
(1) Transaction name: Leopard One Funding Limited
(Lead Analyst: Yusuke Nakamura / Analyst)
JPY550M Class D Notes, Confirmed at Baa2 (sf); previously on July
17, 2020 Baa2 (sf) placed under review for downgrade
JPY151M Class E Notes, Confirmed at Ba1 (sf); previously on July
17, 2020 Ba1 (sf) placed under review for downgrade
(2) Transaction name: Leopard Two Funding Limited
(Lead Analyst: Yusuke Nakamura / Analyst)
JPY540M Class D Notes, Confirmed at Baa2 (sf); previously on July
17, 2020 Baa2 (sf) placed under review for downgrade
JPY41M Class E Notes, Confirmed at Baa3 (sf); previously on July
17, 2020 Baa3 (sf) placed under review for downgrade
(3) Transaction name: L-Map One Funding Limited
(Lead Analyst: Yusuke Nakamura / Analyst)
JPY17,540M Class A Notes, Downgraded to Aa2 (sf); previously on
July 17, 2020 Aaa (sf) placed under review for downgrade
(4) Transaction name: ORIX APL-J Trust 1
(Lead Analyst: Naomi Fujiwara / Vice President - Senior Analyst)
JPY300M Class D Trust Certificates, Confirmed at Baa1 (sf);
previously on July 17, 2020 Baa1 (sf) placed under review for
downgrade
Underlying Assets: Apartment loans
RATINGS RATIONALE
The rating actions reflect the impact from Moody's increased net
loss assumptions for the underlying pools after considering the
credit enhancement available to the affected notes.
Moody's revised net loss assumptions have taken into consideration
(1) the progress and prospects of the defect repairs on the
apartment buildings in the four transactions, and (2) the risk of a
deterioration in the performance of the apartment loans.
For Leopard One Funding Limited, Leopard Two Funding Limited and
ORIX APL-J Trust 1, the credit enhancement available to the
affected notes has increased due to the sequential note's
redemption since closing. Moody's has concluded that the net effect
of risks posed to the notes is consistent with their current
ratings even with increased net loss assumptions.
On the other hand, L-Map One Funding Limited has a target
subordination payment structure which allows collections from the
collateral pool to be used to redeem junior notes, provided that
the target credit enhancement level for the senior notes is met.
This structure has resulted in the redemption of the junior notes
in reverse sequential order, which has limited the increase in
credit enhancement available for the senior Class A Notes. The
rating downgrade of the Class A Notes reflects the limited increase
in credit enhancement, which makes the notes more vulnerable to an
increase in net loss assumption.
The builder first announced in 2018 that it had found defects in
its apartment buildings. Since then, vacancy rates in the apartment
buildings involved in the transactions have increased
significantly. Similarly, the vacancy rate in the builder's broader
portfolio of buildings has also increased to 21.8% in August 2020
from 7.2% in April 2018. The repayment of the apartment loans
relies on rent collections from the apartment buildings, which
makes vacancy rates a key factor in evaluating the credit quality
of the apartment loans. The lender of the apartment loan can only
have recourse to the apartment building and not to the borrower.
According to the builder [1], approximately 40% to 60% of the
inspections for the apartment buildings in each transaction have
been completed. At this stage of the inspection process, about
0%-2% of the apartment buildings in each transaction were found to
have major defects, about 20%-40% have minor defects and about
10%-20% have partial defects, while only less than 10% have no
defects.
The builder has recently announced a plan to strengthen its cash
and financial position via an equity and debt funding from a third
party. The expected cash injection decreases the risks that the
builder becomes unable to continue its duties - as the master
lessee, property manager and paying agent - or that the apartment
buildings will be left unrepaired.
However, without a clear target repair completion date and with
staffing shortages, there is still significant uncertainty on the
timing of repairs and the recovery of future vacancy rates. The
later the repairs occur, the more difficult it will be to attract
new tenants considering that the apartment buildings are mostly
more than 15 years old. Moody's assumes that property vacancy rates
deteriorate as properties age. In addition, the hit to the
builder's reputation may negatively impact its ability to attract
new tenants even after the repairs are completed.
Moody's has considered that the likelihood of loan defaults
occuring in a concentrated manner has decreased with the announced
cash funding plan. However, to derive each loan portfolio default
rate, Moody's has considered several vacancy rate scenarios and
their impact on the apartment loans' debt service coverage ratio
analysis, reflecting the downside risks surrounding future vacancy
rates. Moody's has also tested various recovery rate and default
timing assumptions, considering the possible volatility stemming
from the small number of loans in each pool. Moody's has increased
its net loss assumptions for the underlying pools based on these
scenarios and sensitivities.
Moody's has conducted a cash flow analysis under various
sensitivity scenarios. Moody's has also captured the significant
asset concentration present in the simulated portfolio default
distribution.
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.
Moody's analysis has considered the effect on the performance of
apartment loans from the current weak Japanese 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 the containment of the virus. As a result, the
degree of uncertainty around Moody's forecasts is unusually high.
Moody's regards the coronavirus outbreak as a social risk under its
environmental, social and governance framework, given the
substantial implications for public health and safety.
The principal methodology used in these ratings was "Moody's Global
Approach to Rating SME Balance Sheet Securitizations" (Japanese)
published in May 2020.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that would lead to a ratings upgrade or downgrade include
developments around the cash injection plan, repair completion and
vacancy rates, which would lead to an improvement or a
deterioration in the credit quality of the apartment loans, and the
amount of credit enhancement available for each class of notes.
[*] JAPAN: Report Warns of Debt Crisis in Four Industries
---------------------------------------------------------
Jiji Press reports that many small and midsized Japanese firms in
four industries, including lodging and restaurants, will have
difficulty repaying debts if the coronavirus continues to wreak
havoc on their businesses through 2021, a think tank report
reviewed by Jiji Press showed.
In the report, Nomura Research Institute Ltd.'s Center for
Strategic Management & Innovation called for policy measures in
response to the crisis, citing concerns that weaknesses in the four
sectors will have broad complications for consumption, Jiji Press
relays.
According to Jiji Press, the four industries are lodging,
restaurants, entertainment such as movie theaters and karaoke
outlets, and lifestyle services such as hair and beauty salons.
There are some one million small and midsize firms in those
industries.
Jiji Press relates that the report said that if the situation
persists until autumn 2021, it will take more than 20 years for
small and midsize firms in the lodging, restaurant and
entertainment industries to repay debts.
If the situation drags on until spring 2022, the lifestyle services
sector will be in the same situation, the report, as cited by Jiji
Press, said.
Banks classify corporate clients that are unlikely to complete
repayments of loans within 20 years as having the potential risk of
failure, Jiji Press says.
Small and midsize companies in the four sectors are increasingly
vulnerable to sudden bankruptcies as they struggle to generate
profits.
The dire situation could spread to other industries and large
companies.
"The government needs to support economic activities while
promoting industry consolidation at the same time," Jiji Press
quotes Shinichiro Umeya of the center, as saying.
He stressed the importance of policies that promote reform and
protect employment, while adjusting corporate capital and debts
through public assistance, Jiji Press adds.
=====================
N E W Z E A L A N D
=====================
DRESDEN OPTICS: Placed Into Voluntary Liquidation
-------------------------------------------------
Stuff.co.nz reports that Dresden Optics has been placed into
voluntary liquidation citing the impact of Covid-19 on its
business.
Stuff relates that the procedural liquidation was part of the
company's plan to wind up its New Zealand business as it struggled
to operate due to the closed borders, the first liquidators report
by Meltzer Mason revealed.
According to Stuff, Meltzer Mason's report said the company owed
unsecured creditors about NZD1 million and Inland Revenue about
NZD6700, but the total estimated deficiency was unknown.
All assets subject to a registered financing statement had been
dealt with by the company and its parent company prior to
liquidation, the report said.
The realisable value of its stock were yet to be determined but the
book value of its assets including cash at bank, debtors, fittings
and equipment and stock was about NZD148,460, Stuff states.
The fixed assets comprised of the shop fit-out, and were not
expected to realise any considerable amount, the liquidators report
said.
Stuff says the liquidators urged creditors to make claims by
November 9.
"Creditors who do not make a claim within the period may be
excluded from any distribution that may be made," the report, as
cited by Stuff, said.
The liquidation was expected to be completed by the end of the
year, the report said.
Dresden glasses promised to revolutionise the New Zealand eye wear
market with its NZD69 glasses. Dresden Vision glasses are made in
a closed-loop process, from a range of materials including recycled
bank notes, beer keg caps and fishing nets.
=====================
P H I L I P P I N E S
=====================
RURAL BANK OF LUNA: Oct. 16 Deposit Insurance Claims Deadline Set
------------------------------------------------------------------
The Philippine Deposit Insurance Corporation (PDIC) announced that
depositors of the closed Rural Bank of Luna (Apayao), Inc. have
until October 16, 2020 to file their deposit insurance claims.
Based on latest PDIC data, deposit insurance claims for 4,364
deposit accounts with aggregate insured deposits amounting to
PHP8.2 million have yet to be filed by depositors. Data also showed
that as of July 31, 2020, PDIC had paid depositors of the closed
Rural Bank of Luna (Apayao), Inc. the total amount of PHP146.4
million, corresponding to 94.2% of the bank's total insured
deposits amounting to PHP155.5 million.
Depositors are advised to file their claims either online via
electronic mail (email) at pad@pdic.gov.ph or through postal mail
or courier addressed to the PDIC Public Assistance Department, 6th
Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino Street,
Makati City.
Claims may also be filed personally at the PDIC's Public Assistance
Center in Makati City on a per appointment basis. To make an
appointment, depositors may call the Public Assistance Hotline at
(02) 8841-4141 or at Toll Free number 1-800-1-888-7342 or
1-800-1-888-PDIC, send an e-mail to pad@pdic.gov.ph, or send a
private message at PDIC's official Facebook account,
www.facebook.com/OfficialPDIC.
When filing claims through e-mail, scanned copies or photo images
of the signed and accomplished Claim Form, evidence of deposit
(i.e., savings passbook, certificate of time deposit, etc.), and
one valid photo-bearing ID with the depositor's signature should be
attached to the e-mail. Scanned copy or photo image of the first
and last page of the passbook, or the front and back
portion of the certificate of time deposit should be sent as e-mail
attachments.
For claims filed personally or via postal mail or courier service,
depositors are advised to enclose the accomplished and signed Claim
Form, original Savings Passbook and/or Certificate of Time Deposit
and photocopy of one (1) valid photo-bearing ID with depositor's
signature.
The depositors are further advised that additional documents and/or
original copy of documents submitted via e-mail may be required by
PDIC, as necessary, in the course of evaluation and processing of
claims.
The Claim Form can be downloaded from the PDIC website
http://www.pdic.gov.ph/files/New_PDIC_Claim_Form.pdf.The Claim
Form is free and there is no fee for filing deposit insurance
claims.
Depositors who are below 18 years old should mail or submit either
a photocopy of their Birth Certificate issued by the Philippine
Statistics Authority (PSA) or a duly certified copy issued by the
Local Civil Registrar. Representatives of claimants are required to
mail or submit an original copy of a notarized Special Power of
Attorney of the depositor or parent of a minor depositor. The
Special Power of Attorney template may be downloaded from the PDIC
website.
Depositors who have been notified of their documentary deficiencies
through official letters from PDIC are requested to comply with the
indicated requirements. The procedures and requirements for the
filing of deposit insurance claims are posted in the PDIC website.
The last day for filing deposit insurance claims was moved to
October 16, 2020 from August 17, 2020 to allow the depositors more
time to prepare the required documents before filing their claims,
and to ensure that affected depositors are not disenfranchised
because of the enhanced community quarantine.
Under the PDIC Charter, depositors are given two years from bank
takeover to file deposit insurance claims with the PDIC. Rural Bank
of Luna (Apayao), Inc. was taken over by the PDIC on August 17,
2018 after it was ordered closed by the Monetary Board of the
Bangko Sentral ng Pilipinas on August 16, 2018.
Depositors who will not be able to file their deposit insurance
claims with PDIC on or before October 16, 2020 may file a claim
against the assets of the bank with the Regional Trial Court -
Branch 26, Luna, Apayao where the Petition for Assistance in the
Liquidation (PAL) of Rural Bank of Luna (Apayao), Inc. is pending
under Sp. Proc. No. 9-2019. Payment of these claims shall be
subject to availability of assets of the closed bank, legal
priority and approval of the Liquidation Court.
Depositors who have outstanding loans or payables to the bank will
be referred to the duly designated Loans Officer prior to the
settlement of their deposit insurance claims.
=================
S I N G A P O R E
=================
BAKERZIN: Winds Up Business in Singapore After 22 Years
-------------------------------------------------------
Yahoo Lifestyle reports that restaurant chain Bakerzin is winding
down business after 22 years in Singapore.
Circumstances leading to Singapore cafe and dessert chain
Bakerzin's closure remains unclear, the report says. According to
the Business Times, the chain has ceased all operations of its five
outlets across the island as of October 9, Yahoo Lifestyle relays.
This closure also includes Bakerzin's outlet at Gardens by the Bay,
which reportedly has its lease running until mid-2021.
According to Yahoo Lifestyle, the dessert chain was started in 1998
by Chef Daniel Tay, first named Baker's Inn before it was renamed
to the familiar Bakerzin in 2004. At Bakerzin's peak, the
restaurant chain has an annual turnover of approximately SGD14
million.
Without any statement on its closure, Bakerzin had, however, issued
a notice for creditors' meeting for the purpose of winding up on
Oct. 5, Yahoo Lifestyle notes.
Yahoo Lifestyle adds that the chain's Facebook page was last
updated on September 30, and its website is no longer functional.
Chef Daniel sold Bakerzin in 2007 but was managing the chain until
late-2013. A serial F&B entrepreneur, he currently owns the
cheesecake store Cat & The Fiddle as well as traditional bakery Old
Seng Choong.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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