/raid1/www/Hosts/bankrupt/TCRAP_Public/201015.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, October 15, 2020, Vol. 23, No. 207
Headlines
A U S T R A L I A
A & T EDUCATION: Second Creditors' Meeting Set for Oct. 21
BAUEN CONCRETE: Former Director Pleads Guilty to Fraud
EASTSIDE FORMWORK: First Creditors' Meeting Set for Oct. 23
FAIRVIEW ARCHITECTURAL: Second Creditors' Meeting Set for Oct. 20
GLOBAL BEVERAGE: First Creditors' Meeting Set for Oct. 22
STORAGE AND SOLAR: Second Creditors' Meeting Set for Oct. 22
VERMILION BOND 2020: S&P Assigns B (sf) Rating to Class F Notes
[*] AUSTRALIA: Corporate Insolvencies Up by 11% in September
C H I N A
CHINA EVERGRANDE: Seeks US$1.1BB from Share Sale to Repay Debt
I N D I A
ACCORD COMMUNICATIONS: CARE Keeps D Ratings in Not Cooperating
AISHWARYA INDUSTRIES: CARE Cuts Rating on INR8.85cr Loan to C
ARDEE TECHNOLOGIES: CARE Keeps D Debt Ratings in Not Cooperating
BADARPUR FARIDABAD: CARE Keeps D Debt Rating in Not Cooperating
C.J. CORPORATION: CARE Keeps D Debt Ratings in Not Cooperating
CMI LIMITED: CARE Downgrades Rating on INR235cr Loan to D
DOLPHIN LEATHERS: CARE Lowers Rating on INR1.25cr Loan to C
EROS INTERNATIONAL: CARE Keeps D Debt Ratings in Not Cooperating
H S RAMESH: CARE Keeps D Debt Ratings in Not Cooperating
KAJJEHALLY ESTATE: CARE Lowers Rating on INR6.81cr Loan to C
KISHAN LAL: CARE Lowers Rating on INR4.50cr LT Loan to C
LALITHA METALS: CARE Lowers Rating on INR7.37cr LT Loan to C
LEMON ELECTRONICS: CARE Keeps D Debt Ratings in Not Cooperating
NARAYANI FLOUR: CARE Lowers Rating on INR1.20cr LT Loan to C
ORBIT AVIATION: CARE Keeps D Debt Rating in Not Cooperating
ORBIT RESORTS: CARE Reaffirms Then Withdraws 'D' Debt Rating
PANTEL TECHNOLOGIES: CARE Keeps D Debt Ratings in Not Cooperating
PELLET-ENERGY SYSTEMS: CARE Keeps D Rating in Not Cooperating
PRAYAN ISPAT: CARE Keeps D Debt Ratings in Not Cooperating
PUNJAB BIO: CARE Keeps D Debt Ratings in Not Cooperating Category
R M ENTERPRISE: CARE Keeps D Debt Rating in Not Cooperating
RUBY FASHION: CARE Lowers Rating on INR4.95cr Loan to D
SARJAY CHEMICAL: CARE Keeps D Debt Rating in Not Cooperating
SATISH AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
SAVAIR ENERGY: CARE Keeps D Debt Ratings in Not Cooperating
SHIV ONKAR: CARE Lowers Rating on INR2.73cr LT Loan to C
SHRIRAM EPC: CARE Reaffirms D Debt Ratings; Removed from INC
SND LIMITED: CARE Keeps D Debt Ratings in Not Cooperating Category
SONI TRADERS: CARE Keeps D Debt Ratings in Not Cooperating
SWADESHI ALUMINIUM: CARE Keeps D Debt Rating in Not Cooperating
SWAMI DEVI: CARE Lowers Rating on INR10cr LT Loan to C
URJA AUTOMOBILES: CARE Lowers Rating on INR6.81cr Loan to C
J A P A N
NIPPON STEEL: Mulls Sale of 2 U.S. Plants in Global Restructuring
M A L A Y S I A
AIRASIA GROUP: Unit Proposes to Restructure US$15.3 Billion Debt
MALAYSIA AIRLINES: Survival in Doubt as Political Support Dims
S I N G A P O R E
HYFLUX LTD: Court Grants 'Last' Adjournment for JM Application
KS ENERGY: Wiluan Family Loses Bid to Prevent JM Order
- - - - -
=================
A U S T R A L I A
=================
A & T EDUCATION: Second Creditors' Meeting Set for Oct. 21
----------------------------------------------------------
A second meeting of creditors in the proceedings of A & T Education
Holdings Pty Ltd has been set for Oct. 21, 2020, at 10:00 a.m. via
teleconference only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Oct. 20, 2020, at 4:00 p.m.
Christopher Damien Darin of Worrells Solvency & Forensic
Accountants was appointed as administrator of A & T Education on
Sept. 24, 2020.
BAUEN CONCRETE: Former Director Pleads Guilty to Fraud
------------------------------------------------------
Following an ASIC investigation, Mr. Jaicome Spinella, of West End,
Brisbane, Queensland, pleaded guilty to a charge of obtaining
financial advantage by deception.
Mr. Spinella is the former director of Bauen Concrete Pty Ltd ACN
609 560 492 (Bauen), a company that provided services to the
building and construction industry.
ASIC's investigation found that between December 2016 and July
2017, Mr. Spinella fraudulently used a credit card issued to Bauen
to access AUD3,131,718.82 to wager bets through a digital gambling
account.
As a result of Mr. Spinella's conduct, Bauen was unable to pay its
liabilities and placed in liquidation on July 25, 2017. At the time
Bauen Concrete was placed in liquidation it had 166 creditors owed
AUD6,738,523.
Messrs. Shane Deane and Nicholas Giasoumi of Dye and Co. were
appointed liquidators. ASIC commenced its investigation after
receiving a supplementary report from the liquidators. The report
was funded through the Assetless Administration Fund.
The matter was heard in the Melbourne Magistrates' Court on
September 30, 2020. Mr. Spinella was bailed with special
conditions, to appear at the County Court on Feb. 18, 2021 for
sentencing.
Mr. Spinella was charged with 1 count of obtaining financial
advantage by deception contrary to section 82(1) of the Crimes Act
1958 (Vic). The charge carries a maximum penalty of 10 years
imprisonment.
The matter is being prosecuted by the Commonwealth Director of
Public Prosecutions.
EASTSIDE FORMWORK: First Creditors' Meeting Set for Oct. 23
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Eastside
Formwork Pty Ltd will be held on Oct. 23, 2020, at 11:00 a.m. via
virtual meeting.
Shumit Banerjee of Westburn Advisory was appointed as administrator
of Eastside Formwork on Oct. 12, 2020.
FAIRVIEW ARCHITECTURAL: Second Creditors' Meeting Set for Oct. 20
-----------------------------------------------------------------
A second meeting of creditors in the proceedings of Fairview
Architectural Pty Limited has been set for Oct. 20, 2020, at 11:00
a.m. via teleconference facilities only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Oct. 16, 2020, at 4:00 p.m.
John McInerney and Said Jahani of Grant Thornton Australia Limited
were appointed as administrators of Fairview Architectural on July
7, 2020.
GLOBAL BEVERAGE: First Creditors' Meeting Set for Oct. 22
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Global
Beverage Brands Pty Ltd will be held on Oct. 22, 2020, at 2:30 p.m.
at the offices of Hamilton Murphy, Level 1, 255 Mary Street, in
Richmond, Victoria.
Stephen Dixon of Hamilton Murphy was appointed as administrator of
Global Beverage on Oct. 12, 2020.
STORAGE AND SOLAR: Second Creditors' Meeting Set for Oct. 22
------------------------------------------------------------
A second meeting of creditors in the proceedings of Storage and
Solar Pty Ltd has been set for Oct. 22, 2020, at 2:30 p.m. via
virtual meeting.
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. 21, 2020, at 5:00 p.m.
Matthew Jess of Worrells Solvency & Forensic Accountants was
appointed as administrator of Storage and Solar on Sept. 17, 2020.
VERMILION BOND 2020: S&P Assigns B (sf) Rating to Class F Notes
---------------------------------------------------------------
S&P Global Ratings assigned its ratings to seven classes of
residential mortgage-backed securities (RMBS) issued by Perpetual
Corporate Trust Ltd. as trustee for Vermilion Bond Trust 2020
Series 1. This is the second, Australian, 100% nonresident RMBS
transaction rated by S&P Global Ratings.
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, which entirely comprises residential mortgage loans to
nonresidents of Australia. Because this is a closed portfolio, no
further loans will be assigned to the trust after the closing
date.
-- S&P's view that the credit support is sufficient to withstand
the stresses we apply. Credit support is provided by note
subordination for all rated notes and a loss reserve funded by
excess spread.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a loss reserve,
principal draws, and an amortizing liquidity reserve are sufficient
under its stress assumptions to ensure timely payment of interest.
-- The extraordinary expense reserve of A$150,000, funded from day
one by Columbus Capital Pty Ltd., available to meet extraordinary
expenses. The reserve will be topped up via excess spread to the
extent available, if drawn.
-- The counterparty support provided by National Australia Bank
Ltd. as bank account provider. The transaction documents for the
bank account include downgrade language consistent with its
"Counterparty Risk Framework: Methodology And Assumptions"
criteria, published on March 8, 2019, that requires the replacement
of the counterparty, should its rating fall below the applicable
rating.
-- That loss of income for borrowers in the coming months due to
the effects of COVID-19 will likely put upward pressure on mortgage
arrears. S&P said, "We have recently updated our outlook
assumptions for Australian RMBS in response to changing
macroeconomic conditions as a result of the COVID-19 outbreak. In
our cash-flow analysis, we have assumed a portion of principal and
interest collections are delayed to stress test the liquidity
provided to the transaction." As of Sept. 30, 2020, borrowers with
COVID-19-related hardship arrangments make up 0.36% of the pool
balance.
S&P Global Ratings acknowledges a high degree of uncertainty about
the evolution of the coronavirus pandemic. The current consensus
among health experts is that COVID-19 will remain a threat until a
vaccine or effective treatment becomes widely available, which
could be around mid-2021. S&P said, "We are using this assumption
in assessing the economic and credit implications associated with
the pandemic. As the situation evolves, we will update our
assumptions and estimates accordingly."
RATINGS ASSIGNED
Vermilion Bond Trust 2020 Series 1
Class Rating Amount (mil. A$)
A1-MM AAA (sf) 100.53
A1-AU AAA (sf) 98.43
B AA (sf) 49.81
C A (sf) 59.15
D BBB (sf) 48.26
E BB (sf) 30.25
F B (sf) 18.85
G NR 7.33
H NR 6.29
NR--Not rated.
[*] AUSTRALIA: Corporate Insolvencies Up by 11% in September
------------------------------------------------------------
Eloise Keating at SmartCompany reports that the number of
Australian companies falling into administration rose in September,
in the first increase in insolvencies since June.
SmartCompany, citing CreditorWatch's September Business Risk
Review, discloses that the number of business defaults also
increased last month, by 23%, for the first time since May.
Overall, the number of business insolvencies increased by 11% in
September, with the largest increases recorded in Victoria and
Queensland, SmartCompany relays.
According to SmartCompany, the data follows moves by the federal
government to extend temporary insolvent trading relief to the end
of December, while also unveiling plans to undertake a suite of
broader insolvency reforms to help protect small businesses from
the fallout of the COVID-19 pandemic.
SmartCompany relates that the CreditorWatch data showed
insolvencies increased by 23.8% in Victoria, following a 49.3%
decline in August, and by 24.1% in Queensland, following a decline
of 25.4% in August.
However, the number of businesses collapsing in New South Wales
declined during September by 1.6%, following a drop of 34.3% in
August, SmartCompany notes.
SmartCompany says the September increases come as insolvency
numbers overall have trended downward this year, with government
support measures helping businesses stay afloat.
However, analysis by CreditorWatch suggests some of the businesses
that have been reliant on government payments are now choosing to
wind up their operations as key payments such as the JobKeeper wage
subsidies are reduced, SmartCompany relays.
"Seeing businesses enter into administration is never something you
want to celebrate," SmartCompany quotes CreditorWatch chief
executive Patrick Coghlan as saying. "However, September's
increase in default and administration rates does indicate that
some businesses which have been reliant on government support are
starting to accept the reality of their situation and are taking
steps to settle with their creditors."
According to SmartCompany, Mr. Coghlan said the next six months
will be "crucial in determining what position we start our economic
recovery from".
"What we don't want to see is businesses that are doomed to fail
continuing to operate and taking healthy companies down with them,"
he said in a statement.
The CreditorWatch report showed some improvements in average
payment times for September, with the majority of industries
indicating that bills were being paid faster, however, overall
average payment times are still up by 222% compared to 2019's
average, SmartCompany reports.
Payment times improved the most for information, media and
telecommunications businesses, with the average number of days for
bills to be paid dropping to 14 days in September -- a decrease of
30 days.
On average, retailers were waiting 30 days for bills to be paid in
September, an improvement of six days from August, while financial
services and insurance firms saw their average payment times
increase to 62 days in September, an increase of nine days from the
month prior, SmartCompany discloses.
"For a signal of how Australian businesses are faring, payment
times provide a glaring picture of how tough the environment is,
especially when juxtaposed against 2019," commented CreditorWatch
chief economist Harley Dale.
"It is encouraging to see big declines in many sectors, such as IT
and telecommunications and real estate, because when companies get
paid quicker, it puts liquidity back into the economy, enabling
firms to plan, invest and grow."
=========
C H I N A
=========
CHINA EVERGRANDE: Seeks US$1.1BB from Share Sale to Repay Debt
--------------------------------------------------------------
Julia Fioretti at Bloomberg News reports that China Evergrande
Group is seeking as much as HK$8.43 billion ($1.09 billion) in a
share placement, accelerating efforts to shore up its balance sheet
after a liquidity scare that rattled investors and Chinese
regulators last month.
The world's most indebted developer is selling 490 million shares
in a top-up placement for HK$16.50 to HK$17.20 each, a discount of
as much as 14.7% to the last closing price in Hong Kong, according
to terms of the deal obtained by Bloomberg News. Evergrande, which
is also expected to price a new yuan-denominated bond as soon as
Oct. 13, has an option to sell an additional 120 million shares.
While billionaire Hui Ka Yan's junk-rated property behemoth bought
itself some breathing space in late September after striking a deal
with investors to avoid $13 billion of repayments, the company is
still engaged in a dash for cash as it tries to restore confidence
in its finances, Bloomberg relays. Its cutting prices on new homes
to lure buyers, pursuing listings for its property-management and
electric-vehicle units and tapping markets for fresh capital to
repay a wave of maturing debt.
"The placement should tide them through," Bloomberg quotes Kerry
Goh, chief investment officer at Kamet Capital Partners Pte, as
saying. "But I don't think $1 billion is sufficient for them to be
able to pare down their large debt. This is just sending a signal
to buy some time from creditors to work out the capital structure
through the sale of assets or fundraising."
A top-up placement will allow Evergrande to raise money quickly
from investors without diluting Hui's controlling stake in the
company, Bloomberg notes. News of the offering provided a lift to
Evergrande's offshore bonds, lifting its 8.9% notes due 2021 to
96.5 cents on the dollar, the highest since Sept. 23. In the
onshore market, one of the company's units is seeking to raise as
much as CNY2.1 billion ($310 million) this week via a new five-year
note.
Evergrande's total debt pile exceeds $120 billion, about $5.8
billion of which is maturing in the next two months, data compiled
by Bloomberg show.
According to Bloomberg, Evergrande's liquidity challenges surged to
the fore last month after reports that the company sent a letter to
the provincial government of Guangdong warning that payments coming
due in January could cause a cash crunch and potentially lead to
cross defaults in the broader financial sector. News of the plea
for help sent Evergrande's stock and bonds tumbling even as the
company dismissed the concerns as based on rumors and "fabricated"
documents, Bloomberg relays.
The placement will help Evergrande win back trust from creditors
and boost its cash balance by 5% from the level seen in the first
half of the year to close to CNY150 billion, Bloomberg Intelligence
analysts Daniel Fan and Carmen Lee said.
Still, the discount on Evergrande's offering is wider than those
offered by rival developers in other share placements this year,
Bloomberg notes. Sunac China Holdings Ltd. sold $1 billion of
shares at a discount of 8.25%, while China Vanke Co. offered an
even tighter discount of 4.8%.
Bank of America Corp., Credit Suisse Group AG, Huatai International
Ltd. and UBS Group AG are joint bookrunners for Evergrande's
placement, Bloomberg says.
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.
=========
I N D I A
=========
ACCORD COMMUNICATIONS: CARE Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Accord
Communications Limited (ACL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.24 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 2.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 22, 2019, placed the
rating(s) of ACL under the 'issuer non-cooperating' category as ACL
had failed to provide information for monitoring of the rating. ACL
continues to be non-cooperative despite repeated requests for
submission of information through phone calls and emails dated
September 16, 2020 and September 7, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further, banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating takes into account non-availability of information due
to non-cooperation by Accord Communication Limited with CARE'S
efforts to undertake a review of the rating outstanding. CARE views
information non-availability risk as a key factor in its assessment
of credit risk.
Detailed description of the key rating drivers
At the time of last rating on August 22, 2019, the following were
the rating weaknesses and strengths:
Key Rating Weaknesses
* Ongoing delays in the servicing of interest obligations: There
were ongoing delays in the servicing of interest obligations due to
stressed liquidity position.
ACL was incorporated in 1990 by Mr. P.K. Mohta, Mr. A.K. Mohta, Mrs
Sushma Mohta and Mrs Shailly Mohta who have an experience of over
two decades in the manufacturing of EPABX system industry. ACL is
engaged in designing, manufacturing and marketing of Electronic
Private Automatic Branch Exchange (EPABX) systems. Apart from
manufacturing, the company is also engaged into the trading of
EPABX systems, intercom, phone and phone accessories. The
manufacturing facility of ACL is located in Meerut, UP, with an
installed capacity of 20,000 units as on March 31, 2015, for EPABX
systems. The manufacturing process of ACL is ISO 9001 certified.
The main customers of ACL are government agencies like CRPF, BSF,
Northern Command, etc. The raw material includes IC (Integrated
circuit), PCB (Printed circuit board), transformers, capacitors,
resistance, etc, which is procured from Delhi, Haryana, and
Bangalore etc. CLD Electronics & Communication and Digital
Electronics & Telecom are associate concern of ACL which are
engaged in the manufacturing spare parts for mobile phone.
AISHWARYA INDUSTRIES: CARE Cuts Rating on INR8.85cr Loan to C
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Aishwarya Industries (SAI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 8.85 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 26, 2019, placed the
rating(s) of SAI under the 'issuer not cooperating' category as SAI
had failed to provide information for monitoring of the rating. SAI
continues to be non-cooperative despite repeated requests for
submission of information through phone calls and e-mails dated
September 2, 2020 to September 08, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of non-availability of
last three year financials.
Detailed description of the key rating drivers
At the time of last rating on August 26, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Lack of experience of the promoters in the bulk packaging
industry: The promoters have limited experience in the packaging
industry; however, they have been engaged in several other business
activities under the business house namely "Patil & Samay Family".
With track record of more than two decades in the textile industry,
the promoters have rich expertise in running business ventures.
However, their ability to profitably run the operations in a highly
competitive bulk packaging industry amidst limited pricing power
remains a key challenge.
* Small scale and short track record of operations: SAI have an
installed capacity of 2190 TPA of PP Bags which is very small
considering the highly fragmented nature of industry. It has
started commercial production in its manufacturing unit from
November, 2015. As informed by the management during five months of
operations in FY16, the firm had utilized around 67% of the total
capacity, and registered sales of INR4 crore as on February 29th,
2016.
* Susceptibility of operating margins to volatility in raw material
prices: PP granules are the major raw materials used in the
manufacture of FIBC Bags. PP granules prices, being derivatives of
crude oil, are highly dependent upon crude oil prices, any change
in international crude oil prices have direct impact on the prices
of plastic granules which would put pressure on profitability of
the firm. However, with current decline in crude oil prices, PP
prices are estimated to decline in near to medium term which would
help the firm to achieve the projected operating margins. In FY 16
the firm has procured raw material locally from Reliance Petro
chemicals, who are the largest supplier of PP Granules in India.
* Competitive nature of the Bulk Packaging Industry: Bulk Packaging
industry is a highly competitive industry with limited pricing
power to the players. The industry is fragmented in nature with the
presence of a large number of unorganized and organized regional
manufacturers owing to the low entry barrier on account of low
initial capital investment and ease of accessibility to technology.
SAI having presence in the bulk packaging industry has to face
intense competition especially in the domestic market.
Key Rating Strengths
* Successful Completion of Project within estimated time and cost:
The project work was scheduled to be completed in nine months and
the same has been successfully implemented in the prescribed time
limit. The total cost of the project incurred by the firm is
INR8.35 crore, funded with INR6.25 crore of debt and balance
equity/unsecured loan from promoters.
* Locational advantages enhancing scope of demand: The Firm is
located in Belgaum District of Northern Karnataka, which is
surrounded by plants having huge demand for PP bags used in form of
packing material for their output (e.g. Sugar and Cement units) and
are the potential customers for the firm. With existence of very
few such units in the region catering to such huge requirement, the
scope of demand favors the positioning of the unit of firm.
Established on December 8, 2014; Shree Aishwarya Industries (SAI)
is a partnership firm which has recently set up a manufacturing
unit for production of PP Bags at Ghodageri, Taluk Hukkeri of
Belgaum District. The firm is into manufacturing of PP Bags with a
production capacity of 2190 TPA which would utilize around 250 Kg.
of PP granules per hour to produce around 1663 bags/hour.
ARDEE TECHNOLOGIES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ardee
Technologies Private Limited (ATPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 27.10 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 18.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 25, 2019, placed the
ratings of ATPL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The company continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and email dated January 31, 2020 to September 8, 2020.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating dated June 25, 2019 the following were
the Strengths and Weaknesses.
Key Rating Weakness
* Delays in debt servicing: The demand for steel remained subdued
during FY16 (refers to the period April 01 to March 31) on account
of weak domestic and international market scenario, resulting in
higher inventory pile up coupled with delay in realization of
debtors leading to stressed liquidity conditions during FY16. The
above situation led to cash flow mismatches and in turn the company
has been delaying in meeting its debt obligations in time.
* Decline in total operating income: The company has been
witnessing decline in its scale of operations year-on-year. The
total operating income of the company declined from Rs 59.58 crore
in FY15 and to Rs 45.65 crore in FY16 mainly on account of non-
renewal of a long term purchase contract with a Germany based firm
for supplying of a raw material "inserts" which is required for the
production of final product. However, the company could not operate
efficiently due to non-availability of raw material which along
with general industry slow-down resulted in decline in scale of
operations. The company is now procuring the same raw material from
a firm in Italy.
* Deterioration of capital structure and debt coverage indicators:
The capital structure of the company has been deteriorating,
although remained at moderate level during the review period. The
debt to equity has been deteriorated from 0.49x as on March 31,
2015 to 0.67x as on March 31, 2016, on account of increase in bank
term loan (from EXIM and SIDBI) used for financing its
investment/loan to its overseas subsidiary, viz. Keystone Sensors
LLC, USA (KSL) for the purpose of acquisition of some specific
assets. Furthermore, the Overall gearing of the company
deteriorated from 1.20x as on March 31, 2015 to 1.32x as on March
31, 2016 on account of reason mentioned above coupled with full
working capital utilization.
* Elongation of working capital cycle: The company has been facing
tight liquidity position as indicated by its elongated operating
cycle of 262 days in FY16 (FY15: 177 days), low quick ratio of
0.68x in FY16 (FY15:0.82x) and full working capital utilization.
The extended operating cycle was due to high collection and
inventory days.
Key rating strengths
* Experienced promoters with established track record: ATPL is
promoted by Mr. G.S. Narayan who is a chemical engineer with an
experience of around 40 years in the iron and steel industry in
India and abroad specifically in the field of molten metal
measurements and control. Another director, Dr G. Sunanda, is a PhD
qualified in chemical engineering. ATPL has an established track
record of business of over 25 years has its operations spread over
six units across India in Orissa, West Bengal, AP, Chhattisgarh and
Maharashtra.
* In-house R&D centre approved by Department of Science and
Technology: The company has in-house R&D centre approved by the
Department of Science and Technology Government of India. The
company has developed many innovative products (Viz. high dimension
cored wire for deoxidation of steel, "Wire-in Wire" for improved
recovery during wire injection and magnesium & calcium metal
powder) and also received patents for some of them. ATPL has been
granted ISO 9001:2008 certificates for its two units at Rourkele,
manufacturing measurement instruments and cored wires.
Ardee Technologies Private Limited (ATPL) incorporated on October
7, 1987 was promoted by Mr. G.S. Narayan who is a chemical engineer
with about 40 years of experience in the iron and steel industry.
The company is engaged in manufacturing of various kinds of sensors
used for measuring temperature and gas content in molten iron,
steel and other metals. Further company also manufactures cored
wires at its China plant. The company name has been changed to
Arrdy Engineering Innovations Private Limited on February 18, 2017.
BADARPUR FARIDABAD: CARE Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Badarpur
Faridabad Tollway Limited (BFTL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 386.71 CARE D; Issuer Not Cooperating;
Facilities Based on best available
(Term Loan) information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 15, 2019 reaffirmed the
rating(s) of BFTL under the 'issuer non-cooperating' category as
BFTL had failed to provide information for monitoring of the
rating. BFTL continues to be non-cooperative despite repeated
requests for submission of information through emails dated July
31, August 6, and September 1, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of ongoing delays in debt
servicing. The company has not provided monthly 'No Default
Statement' (NDS) since financial year 2018-19.
Key Rating Weaknesses
* Constrained liquidity: There is a significant amount of traffic
leakage occurring due to the at grade road impacting the revenue
generation ability. The below expectation toll collection has
resulted in weak liquidity for the company and it has defaulted in
repayment of dues to lenders.
* Delay in debt servicing obligations: The weak liquidity has
constrained the company's ability to service its debt in a timely
manner and there have been continuing delays in servicing of debt
obligations to the lenders.
Liquidity: Very Poor liquidity, account is already classified as
Non-Performing asset (NPA) by the lender.
Badarpur Faridabad Tollway Limited (BFTL) is a Special Purpose
Vehicle (SPV) incorporated by Hindustan Construction Company
Limited (HCC) to undertake the construction of an Elevated Six Lane
Highway of 4.4 km from 16.10 km to 20.50 km (including its
approaches) on the Delhi-Agra stretch on National Highway (NH-2) on
Build Operate Transfer (BOT) - Design Build Finance and Operate
(DBFO) pattern under National Highway Development Programme (NHDP).
The Concession Agreement was signed between National Highways
Authority of India (NHAI) and BFTL on September 04, 2008 for a
concession period of 20 years including construction period of two
years. The highway has become operational from November 2010
onwards vis-à-vis the scheduled commercial operation date (COD) of
December, 2010.
C.J. CORPORATION: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of C.J.
Corporation (CJ) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 12.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 11.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019, placed the
rating of CJ under the CARE D 'Issuer not cooperating' category as
C.J. Corporation had failed to provide information for monitoring
of the rating. C.J. Corporation continues to be non-cooperative
despite repeated requests for submission of information through
e-mails dated September 18, 2020, September 21, 2020 and September
22, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating of C.J. Corporation will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
CARE revised the ratings assigned to the bank facilities of CJ in
April 2017 as a result continuous overdraw of working capital
limits for more than 30 consecutive days. The company has been
facing liquidity issues as a result of significant delay in
realization of debtors in last year which directly affected the
fund inflow.
C.J Corporation (CJ) is a partnership firm, established in March
2003, by promoters of Alok group i.e. Jiwrajka family (holding 36%
partnership share) and Mr. Mahendra Chirawala & Mr. Aditya
Chirawala (holding the remaining proportion equally between them).
It is primarily engaged in manufacturing of Corrugated Boxes and
Textile tubes. It also manufactures some specialized products like
corrugated pallets, container assembly, etc. The manufacturing
plant is located at Silvassa.
CMI LIMITED: CARE Downgrades Rating on INR235cr Loan to D
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of CMI
Limited (CMI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short 235.00 CARE D/CARE D; Revised from
Term Bank CARE BBB; Stable/CARE A3
Facilities
Long Term Bank 220.00 CARE D Revised from CARE BBB;
Facilities Stable
(Fund Based
Limits)
Long Term Bank 86.99 CARE D Revised from CARE BBB;
Facilities Stable
(Term Loan)
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facilities of CMI
factors in irregularities in the working capital facilities
attributable to weak liquidity position of the company. The ratings
also takes into account weak operational performance during FY20
(refers to the period: April 01 to March 31) which accentuated
during Q1FY21 (refers to the period from April 1 to June 30) due to
the pandemic and resultantly led to weakening of debt coverage
metrics.
Rating Sensitivities
Positive
* Improvement in the liquidity position
* Improvement in the operational performance of the company
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in servicing of debt obligations: Due to disruption in the
operations owing to the outbreak of Covid-19 pandemic which led to
limited capacity utilization, sales and lower collections weakened
the liquidity profile of the company. In line with RBI's directive
for Covid relief, the lender sanctioned the fund-based limits to
tide over the temporary cash flow mismatches and also extending the
LC usance period from 180 days to 270 days/interchangeability of
non-fund based limit to fund based limit up to June 30, 2020.
However, delay in application for extension of such relief beyond
June 2020 led to several LCs being devolved for a period beyond 30
days from the due dates.
* Weak operational performance during FY20 and Q1FY21: CMI's
operating performance was adversely impacted with 21.31% decline in
total operating income to INR511.24 crore in FY20 (PY: INR649.66)
and steep decline in profitability. The decline was mainly due to
combined impact of delays in modalities of conversion of orders
from CMI Energy to CMI Limited (in Q3FY20 -- refers to October 1 to
December 31) as a result of their merger and outbreak of Covid-19
(in Q4FY20 -- refers to January 1 to March 31) which led to lower
order execution during the last quarter which generally accounts
for nearly 30% of the total annual operating income. The PBILDT
margin moderated marginally to 11.99% in FY20 (PY: 13.11%), on
account of increase in administration and freight cost along with
lower operating income. The PAT margin of the company declined
significantly to 0.72% in FY20 from 6.92% in FY19, as result of
lower operating profit, higher deferred tax and increase in
interest cost as a result of debt funded capex done in FY20.
Further, in Q1FY21, the company reported significant decline in the
total operating income to INR22.83 crore (Q1FY20: INR152.04 crore),
the decline is mainly due to disruption in operations due to
outbreak of Covid-19. The company reported net loss of INR13.46
crore during Q1FY21 (Q1FY20: PAT of INR6.74 crore).
* Moderation in the debt coverage parameters: The debt coverage
indicators of the company moderated in FY20 as reflected by
deterioration in the total debt to gross cash accruals from 6.53x
in FY19 to 15.54x in FY20, the deterioration is mainly on account
of lower PAT as a result of lower total operating income in FY20.
Also, interest coverage ratio deteriorated from 2.52x in FY19 to
1.53x in FY20 owing to increase in the interest cost coupled with
decline in the PBILDT. The capital structure of CMI, remains
moderate with debt-equity ratio of 0.24x as on March 31, 2020
(March 31, 2019: 0.19x) and overall gearing of 1.09x as on March
31, 2020 as against 1.08x as on March 31, 2019.
* Working capital intensive operations: CMI is a 100% B2B company
with significant revenue from PSUs. The agreed payment terms in
government contracts are between 90-120 days which actually
stretches up to 200 days. Resultantly, average collection period of
the company stood high at 182 days during FY20 (PY: 141 days).
Moreover, as these entities buy the final stock only post
inspection, the CMI's inventory holding period in FY20 stood at 146
days (PY: 95 days), the increase in inventory holding period is
mainly because the company was unable to dispatch several order in
the month of March, 2020 as pre-inspection was stopped by the
clients due to Covid-19.
* Susceptibility of margins to volatility in raw material prices:
CMI's business is raw material intensive with raw material costs
forming majority of its total operating cost. Primary raw materials
for CMI are copper and aluminium forming more than 60% of total raw
material costs, prices of which are highly volatile. However,
contracts typically incorporate a price variation clause (PVC)
where a company passes on any volatility in the underlying
commodity without impacting its margins. The purchase prices are
benchmarked to international indices such as London Metal Exchange
(LME). During bidding for the government contracts, CMI
incorporates the ruling rate of commodities in the bidding price.
* Competition in the cable industry: The Indian cable industry is
highly competitive and fragmented with a large number of cable
producers in both organized and unorganized sector, leading to the
pressure on prices. However, CMI being in existence for over three
decades in the cable industry has proven product quality standards
for supply of niche cable products and CMI has an advantage with
key approvals from the Indian Railways, SEBs, BHEL, NTPC, oil
refinery companies etc as prequalification criteria for most
government projects is stringent. This creates a huge entry barrier
as a new player will take anywhere between 1 and 4 years to
qualify.
Liquidity: Poor
The temporary closure of business operations due to lockdown has
squeezed CMI's liquidity. The company has been granted moratorium
by its working capital and term loan lenders towards payment of
interest and instalments in line with RBI's Covid-19 relief scheme.
Besides, the company has also been granted ad-hoc limits of INR7.50
crore from its bankers. The counter party risk is low for the
company as majority of its customers are PSUs, however, delays in
payments from the customers led to cash flow mismatches. After
considering the moratorium the company has repayment of INR7.70
crore scheduled for FY21. The company has regular capex of ~Rs.
10.00 crore scheduled for FY21. The company had a negligible free
cash and bank balance which stood at INR0.57 crore as on March 31,
2020.
CMI Ltd. was incorporated in 1967 under the name of Choudhari Metal
Industries Private Limited. CMI Limited was taken over by the
present promoter Mr. Amit Jain in 2007. CMI is a B2B
multi-specialty cable manufacturer and is engaged in the
manufacturing of cables for various industries in segments such as
railways, utilities, oil and gas, petrochemical, energy,
industrial, power amongst others. The product range of CMI includes
signaling, instrumentation, control, power, telecommunication
cables etc. CMI has two manufacturing facilities one located in
Faridabad, Haryana and the other at Baddi, Himachal Pradesh with
installed capacity of 47,000 km and 1,93,140 km respectively as on
March 31, 2020. On February 29, 2016, CMI has acquired 100%
shareholding of CMI Energy India Private Limited (CMIE; formerly
known as General Cable Energy Private Limited) from a Fortune 500
company- General Cable Corporation, USA. The operations commenced
from April, 2016 at Baddi manufacturing facility.
DOLPHIN LEATHERS: CARE Lowers Rating on INR1.25cr Loan to C
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Dolphin Leathers (DL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 1.25 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 5.25 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from DL to monitor the rating
vide e-mail communications/letters dated September 08, 2020,
September 10, 2020, September 15, 2020 and numerous phone calls.
However, despite repeated requests, the entity has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. Further,
Dolphin Leathers has not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. The rating on NFM's
bank facilities will now be denoted as CARE C; Stable; ISSUER NOT
COOPERATING and CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account non-availability
of information and no due-diligence conducted due to
non-cooperation by DL with CARE'S efforts to undertake a review of
the rating outstanding.
Detailed description of the key rating drivers
At the time of last rating in July 15, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses:
* Small scale of operations with low profitability margins: DL is a
small player vis-à-vis other players in the domestic leather
products industry with total operating income of INR36.59 crore
(Rs.46.54 crore in FY17) and PAT of INR0.61 crore (Rs.0.66 crore in
FY17) in FY18, Provisional. Further, the net worth base and total
capital employed was low at INR4.68 crore and INR14.53 crore,
respectively, as on March 31, 2018. The profitability margins of
the firm remained low marked by PBILDT of 4.77% (3.88% in FY17) and
PAT margin of 1.67% (1.41% in FY16) in FY18, provisional.
* Exposure to volatility in raw material prices: The raw material
costs remained the major cost driver for the firm which accounted
for around 86% of the total cost sales in FY18 which was around 89%
in the preceding year. Accordingly, any adverse movement in prices
of raw materials with no corresponding change in final goods prices
can have an adverse impact on the profit margins of the firm.
* Leveraged capital structure with moderate debt coverage
indicators: The capital structure of the firm remained leveraged
marked by overall gearing ratio at 2.11x as on March 31, 2018. The
debt coverage indicators remained moderate marked by interest
coverage ratio of 2.35x and total debt to GCA of 9.72x in FY18,
provisional.
* Partnership nature of constitution: DL, being a partnership firm,
is exposed to inherent risk of partner's capital being withdrawn at
time of personal contingency and firm being dissolved upon the
death/retirement/insolvency of the partners. Moreover, partnership
firms have restricted access to external borrowing as credit
worthiness of partners would be the key factors affecting credit
decision for the lenders.
* Intensely competitive industry: The leather industry is highly
fragmented with a large number of small to medium scale organized
and unorganized players owing to low entry barriers with no visible
differentiators in product profile. High competition in the
operating spectrum and small size of the entity limits the scope
for margin expansion. Though government policies towards the
industry have been supportive both for small-scale sector
development as well export promotion, the industry is caught up
with socio political issues relating to slaughtering of animals.
With the production clustered in 4-5 locations, distribution
network becomes the key to success. Many companies in the leather
products have a strong distribution network and enter into brand
building exercise to improve the sales and market share. Hence the
players in the industry do not have pricing power and are exposed
to competition induced pressures on profitability.
Key Rating Strengths
* Experienced partners with long track record of operations: The
firm is into leather products industry since 1998 and thus has long
operational track record. Furthermore, all the partners have around
two decades of experience in the leather industry, looks after the
day to day operations of the firm.
* Strategic location of the plant: DL has its owned tannery unit
for manufacturing of finished leather which is its basic raw
material for manufacturing of leather products like bags, wallet,
gloves etc. located at Kolkata leather complex, Bantala. The
presence of backward integration of its basic raw materials
minimises its costs and dependability on local suppliers for
purchase of finished leather. Accordingly, the availability of raw
materials is not an issue. Moreover, the firm procures its basic
raw material i.e. raw leather from local suppliers. Further the
manufacturing plant has ample supply of cheap labour.
Established in 1998, Dolphin Leathers (DL) is a partnership firm
engaged in manufacturing and export of leather products like
wallets, ladies hand bags, leather portfolios, letter messenger
bags, leather gloves, welding gloves and other leather accessories.
The tannery unit of the firm is located at Kolkata Leather Complex,
Bantalla where raw leathers are processed and the finished products
are manufactured at Topsia, Kolkata. The major export destinations
of the firm are Germany, Italy, Spain etc.
EROS INTERNATIONAL: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Eros
International Media Limited (EIML) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 196.14 CARE D; Issuer not cooperating;
Facilities Based on best available
(Term Loan) Information
Long-term Bank 263.00 CARE D; Issuer not cooperating;
Facilities Based on best available
(Cash Credit) Information
Short-term Bank 187.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale and Key Rating Drivers
CARE has requested information from EIML to review the rating(s).
The company has not provided requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of best available information
about the company which however, in CARE's opinion, is not
sufficient to arrive at a fair rating. Hence, CARE has assigned
CARE D; ISSUER NOT CO-OPERATING rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The company has also requested for withdrawal of the rating.
However, while 'No Objection Certificate (NOC)' from the lead bank
who has extended the facilities rated by CARE has been received,
the NOC from other banks that have extended the facilities rated by
CARE are awaited.
Detailed description of the key rating drivers
Kindly refer to CARE Ratings Press release dated June 5, 2019.
Key Rating Weakness: Not Applicable
Key Rating Observations: Not Applicable
Eros International Media Ltd (EIML), a step-down subsidiary of Eros
International Plc (EIP) is headed by Mr. Kishore Lulla, the
Executive Co-Chairman of EIML. Eros group has been present in the
Indian film industry for approximately forty years and EIML has its
distribution network in all the theatrical territories in India.
EIML is engaged in acquisition/production/co-production and
distribution of Indian films across various formats. It owns a
content library of 3000+ films and music. The international and
digital rights for the new film content for the entire world
excluding India are licensed to Eros Worldwide FZ-LLC (Dubai)
(holding company of EIML), in accordance with the terms of the
relationship agreement on cost-plus basis.
H S RAMESH: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------
CARE Ratings said the rating for the bank facilities of H S Ramesh
(HSR) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 4.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from HSR to monitor the rating(s)
vide e-mail communications dated August 20, 2020 to August 26, 2020
and numerous phone calls. However, despite CARE's repeated
requests, the firm has not provided the requisite information for
monitoring the ratings. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of best available
information which however, in CARE's opinion is not sufficient to
arrive at fair rating. The rating on H S Ramesh bank facilities
will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating takes into account ongoing delays in servicing of
interest due to stressed liquidity position, decline in total
operating income, deterioration in capital structure and low debt
coverage indicators, short term revenue visibility from order book
position with high geographical concentration risk, working capital
intensive nature of operations, margins susceptible to change in
raw material prices. The rating, however draw strength from
experienced promoter with a long track record of operations and
marginal improvement in profitability margins.
Detailed description of the key rating drivers
At the time of last press release dated July 25, 2019 the following
were the rating strengths and weaknesses:
Key Rating Weaknesses
* Ongoing delays in servicing of interest due to stressed liquidity
position: There are On-going delays in servicing the debt
obligation on time due to insufficient cash accruals and stressed
liquidity position.
* Decline in total operating income: The total operating income of
the firm declined by 46% from INR36.52 crore in FY17 to INR19.88
crore in FY18. The proprietor has floated a new partnership firm,
in January 2018, under the name 'KVC HSR' for undertaking the works
contracts and the revenue for the new contracts has been accounted
under the new firm resulting in the decline during FY18.The new
firm will be merged with HSR in the coming years.
* Deterioration in capital structure and low debt coverage
indicators: The capital structure of the firm marked by overall
gearing had declined, and stood leveraged remained moderate, from
1.07x as on March 31, 2017 to 1.63x as on March 31, 2018 on back of
an increase in unsecured loans from friends and relatives to fund
the operations of the firm. The net worth of the firm also remained
low at INR9.35 crore as on March 31, 2018 as against INR9.68 crore
in FY17 on back of withdrawal of capital from the business. The
proprietor has withdrawn capital of INR0.14 crore during FY18. The
debt coverage indicators marked by PBILDT interest coverage ratio
declined and stood at 2.38x in FY18 as compared to 2.77x in FY17 on
back of a decrease in interest and finance charges during the year.
TD/GCA deteriorated and weak at 11.78x in FY18 as against 6.03x in
FY17 due to increase in total debt levels. TD/CFO stood negative in
FY17 and FY18 on back of low cash accruals.
* Short term revenue visibility from order book position with high
geographical concentration risk: The firm has an order book of
INR20 crore as on July 2019 which translates to 1.01x of total
operating of FY18 and the same is likely to be completed by March
2020. The said order book provides revenue visibility for short
term. The entire work order comprises of Karnataka government which
resulted in high customer and geographic concentration risk.
* Working capital intensive nature of operations: The firm, being
in the construction industry, has high working capital requirement
to meet its operations. The firm has a working capital limit of
INR5 crore and the average working capital utilization for FY17 was
almost full and it remained the same for FY19 (prov.). The working
capital cycle period deteriorated from 98 days in FY17 to 240 days
in FY18 due to increase in average inventory period from 88 days in
FY17 to 201 days in FY18 on back of contracts being executed. The
average collection period also increased from 35 days in FY17 to 75
days in FY18 as there was a delay in receiving the receivables. The
average creditors period also increased from 25 days in FY17 to 35
days in FY18.
* Margins susceptible to change in raw material prices: The prices
of raw materials i.e. sand, cements, bricks and steel etc. have
remained fluctuating in past and are also dependent upon the
availability of these raw materials. Further, the average cost of
unskilled labour has reflected increasing trend in the recent past.
Moreover, projcets in hand of HSR does not contain any price
escalation clauses related to the prices of raw material. Hence,
HSR remains exposed to raw material and labour price fluctuation
risk and any adverse movement in the key raw material or unskilled
labour cost may have direct bearing on the net margins of the HSR.
Key Rating Strengths
* Experienced promoter with a long track record of operations: The
proprietor, Mr. H S Ramesh, has been in the business of undertaking
construction contracts for over two decades. The firm was
established in year 2010 and since its inception, HSR has
undertaken number of construction contracts of roads, buildings,
bridges. Due to its long-term presence in the market, the firm has
established relationship with government organizations and
suppliers.
* Marginal improvement in profitability margins: The PBILDT margin
of the firm improved and stood at 11.26% in FY18 as against 7.33%
in FY17 on back of a decrease in the employee and labor expenses,
vehicle repair and maintenance expenses and under-absorption of the
fixed overheads due to decline in the total operating income. The
PAT margin also improve in line with PBILDT margin and stood at
4.68% in FY18 as against 3.61% in FY17.
H S Ramesh (HSR) is a proprietorship firm established in 2010 by
Mr. H. S. Ramesh in Mysore, Karnataka. The firm is a class I
contractor for Public Works Department (PWD), Karnataka for
undertaking civil constructions of buildings, roads etc. Over the
last few years, HSR has undertaken various contracts for
construction of roads and buildings in Mysore and Bengaluru regions
of Karnataka for the Public Works Department, Karnataka. Currently,
the firm is executing contracts for PWD in Mysore for construction
of roads in Mysore and Rampura districts of Karnataka.
KAJJEHALLY ESTATE: CARE Lowers Rating on INR6.81cr Loan to C
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kajjehally Estate (KE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.81 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 5.40 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 20, 2019, placed the
rating(s) of KE under the 'issuer not cooperating' category as KE
had failed to provide information for monitoring of the rating. KE
continues to be noncooperative despite repeated requests for
submission of information through phone calls and e-mails dated
September 2, 2020 to September 08, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of non-availability of
last three year financials.
Detailed description of the key rating drivers
At the time of last press release dated August 20, 2019 the
following were the rating strengths and weaknesses:
Key Rating Weakness
* Constitution of the entity as proprietorship concern: Kajjehally
is a proprietorship concern and is managed by the sole proprietor
– Mr. S. Vasudevan with adequate support from his wife Mrs. Priya
Vasudevan. Constitution of the entity as a proprietorship concern
with inherent risk of withdrawal of capital in time of contingency
coupled with restricted access to funding and risk of dissolution
on account of poor succession planning restricts the business risk
profile of the entity.
* Small scale of operations: Though the entity is in operation of
about eight years its scale of operations remained small over the
years. The entity has achieved a PAT of INR3.64 crore on total
operating income of INR5.14 crore in FY14 with total capital
employed of INR25.38 crore as on March 31, 2014. Small scale of its
operations deprives it from scale benefits. The entity has achieved
a PBT of INR4.93 crore on turnover of INR6.75 crore during FY15
(Provisional).The entity has experienced a growth in its total
operating income (TOI) at a compounded annual growth rate (CAGR) of
4.47% during the last three years (FY12-FY14) with a Y-o-Y growth
of about 7.98%.
* Susceptible to vagaries of nature: Kajjehally's operations are
seasonal in nature as the entity is in agro based (firming)
business which is dependent on vagaries of nature. Adverse natural
events have negative bearing on the productivity in the region and
accordingly Kajjehally is exposed to vagaries of nature.
* Labour intensive nature of business: Employee cost accounted for
about 65.0% of total cost of sales in FY14 and was major cost
component in the entire cost structure of the entity. The perennial
nature of the industry has been highly labour intensive, entailing
sizeable expenditure on employees (by way of salaries & wages,
various employee welfare facilities, etc.). Though, Kajjehally has
not experienced any labour problem, it remains a key factor in the
smooth running of the business.
* Project Risk: Kajjehally is currently developing the estate by
constructing buildings, roads, water tanks etc.at an aggregate cost
of INR22.0 crore, being financed at a debt equity ratio of 1.44:1.
As on March 31, 2015, the entity had incurred a cost of INR16.6
crore (about 75.32% of the total project cost) on the project
funded through term loan of INR9.0 crore and rest by promoter's
contribution. The financial closure of the project has already been
achieved. The entire project is expected to complete by August,
2015.
* Elongated operating cycle: The overall operations of Kajjehally
are working capital intensive as reflected by its elongated working
capital cycle at 449 days during FY14. During FY14, the working
capital cycle of the entity elongated as against 350 days in FY13
due to increase in inventory period days. Inventory holding period
generally remains high in this business as its products are
seasonal but are consumed throughout the year and are thus required
to be stored properly. Furthermore, the entity also holds the stock
till the time the prices are high in order to be make high profits.
Furthermore, average cash credit utilization for the last four
month period ended March 31, 2015 remained at about 90-95%.
* High repayment obligation: The overall credit risk profile of the
entity is restricted due to its high debt repayment obligations.
Higher dependence on external funds for developing of the estate
resulted in high repayment obligation for the company. The current
ratio of the entity remained below unity as on
March 31, 2014 mainly owing to substantial amount of current
portion of term loan repayment obligation. Excluding, the current
portion, the current ratio remained satisfactory at 1.73 times in
FY14.
Key Rating Strengths
* Experienced proprietor: Kajjehally is promoted and managed by Mr.
S. Vasudevan (B.Arch., aged about 48years). He is well assisted by
his wife Mrs. Priya Vasudevan in managing the day-to-day affairs of
the business. Mr. S. Vasudevan is having more than two and a half
decade of experience in the real estate business through Ozone
Group based in Bangalore; however has about eight years of
experience in the relevant line of business.
* Healthy profitability, comfortable capital structure and
satisfactory debt service coverage indicators: The operating margin
of the entity remained healthy during the past years in the range
of 53.70% to 76.62% with an improvement in FY14 on the back of
higher absorption of fixed overheads. The PAT margin of the entity
also moved in tandem with the PBILDT margin and remained healthy in
the range of 44.30% to 70.82% over the past years. The entity has a
comfortable capital structure as indicated by the comfortable
debt-equity and overall gearing ratio at 0.16x and 0.22x
respectively as on March 31, 2014. The leverage ratios have
improved as on March 31, 2014 on the back of schedule repayment of
term loans and accretion of profit to reserves. The debt service
coverage indicators of the entity remained comfortable with
satisfactory Total debt to GCA at 1.27years and comfortable
interest coverage ratio at 13.22 times in FY14. The liquidity
position of the entity as reflected by the current ratio remained
below unity as on March 31, 2014 owing to high current portion of
long term debt. Excluding, the current portion, the current ratio
remained satisfactory at 1.73 times in FY14.
Kajjehally Estate (KJE), a proprietorship entity, was established
in 2007 by Mr. S. Vasudevan of Bangalore. Since inception, the
entity has been engaged in cultivation of plants like coffee,
pepper, cardamom, orange, vanilla, areca, timber, silver oak etc.
at its estate situated at 20Kms from Mudigere of Chikmagalur
district in Karnataka. The aggregate area available for cultivation
is 350acres; of which, the present area under cultivation is 330
acres. The day-to-day affairs of the entity are looked after by Mr.
S. Vasudevan with adequate support from her wife Mrs. Priya
Vasudevan.
KISHAN LAL: CARE Lowers Rating on INR4.50cr LT Loan to C
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kishan Lal Agrawal Contractor (KLAC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 4.50 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 5.50 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from KLAC to monitor the rating
vide e-mail communications/letters dated September 8, 2020,
September 10, 2020, September 15, 2020 and numerous phone calls.
However, despite CARE's repeated requests, the entity has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the publicly available information which however,
in CARE's opinion is not sufficient to arrive at a fair rating.
Further, Kishan Lal Agrawal Contractor has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The rating on KLAC's bank facilities will now be
denoted as CARE C; Stable; ISSUER NOT COOPERATING and CARE A4;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account non-availability
of information and no due-diligence conducted due to
non-cooperation by KLAC with CARE'S efforts to undertake a review
of the rating outstanding.
Detailed description of the key rating drivers
At the time of last rating in July 12, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses:
* Constitution as proprietorship entity: KLAC, being a partnership
firm, is exposed to inherent risk of the capital being withdrawn at
time of personal contingency and firm being dissolved upon the
death/insolvency of the partners. Further, partnership firm has
restricted access to external borrowing as credit worthiness of the
partners would be the key factors affecting credit decision for the
lenders.
* Small scale of operations with moderate profit margins: The total
operating income of INR11.22crore with a PAT of INR0.19 crore in
FY16. Furthermore, the total capital employed was also low at
INR5.28 crore as on March 31, 2016. The profit margins of KLAC have
remained moderate during last three years (FY14-FY16) marked by
operating margin in the range of 5.96% to 6.67% and PAT margin in
the range of 0.78% to 1.67%.
* Client concentration risk albeit reputed clients: KLAC executes
orders for various departments of Government of Chhattisgarh which
exposes it to client concentration risk. However, the partners have
long standing relationship with these clients for around three
decades which offsets the risk to some extent. Further as the
clients of the firm are government units so the default risk is
minimal.
* Volatility in input prices: The major inputs for any civil
contractors are bitumen, cement, bricks, asphalt, murram, stone
chips and metals, the prices of which are volatile. However, some
of the contracts executed by the firm contains price escalation
clause but the same is not sufficient to guard against volatile
input material price fully.
* Presence in an intensely competitive industry and tender driven
process risk: The firm has to bid for the contracts based on
tenders opened by the Government of Chhattisgarh. Upon successful
technical evaluation of various bidders, the lowest bid is awarded
the contract. Since the type of work done by the firm is mostly
commoditized, the firm faces intense competition from other
players. Furthermore, orders are generally tender driven floated by
the government departments indicating a risk of non-receipt of
contract.
Key Rating Strengths
* Satisfactory track record and experienced partners: The key
partner Mr. Pankaj Agrawal has around one and a half decade of
experience in civil construction industry and looks after the day
to day operations of the firm. Being in the industry for long
period, Mr. Agrawal has built up long standing relationship with
clients and the firm is deriving benefits out of this. Mr. Agrawal
is supported by his father Mr. Ashok Kumar Agrawal who is also
having long experience in this line of business.
* Moderate order book position: The firm has an order book position
of INR11.10 crore (1.39x of revenue of FY17) as on
July 20, 2017 which is to be executed by August 2018.
* Moderate capital structure with satisfactory debt coverage
indicators: The capital structure of the firm remained moderate
marked by overall gearing of 1.08x as on March 31, 2016.
Furthermore, the debt coverage indicators also remained
satisfactory marked by interest coverage of 3.34x and total debt to
CGA of 5.22x in FY16.
Kishan Lal Agrawal Contractors (KLAC) was constituted in May 1988as
a partnership firm and currently managed by Mr. Pankaj Agrawal and
Mr. Ashok Kumar Agrawal. Since its inception, the firm has been
engaged in civil construction business like laying of pipelines,
supplying and fixing C.I. Pipe Line, construction of water supply
system, construction of stadium building, residential quarters,
college, shopping complex, etc. KLAC participates in tenders and
executes orders for the various departments of Government of
Chhattisgarh. KLAC is classified as a 'Class A contractor' by the
Government of Chhattisgarh which enables it to participate in
higher value contracts.
LALITHA METALS: CARE Lowers Rating on INR7.37cr LT Loan to C
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Lalitha Metals (LM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.37 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B-; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 0.15 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 9, 2019, placed the
ratings of LM under the 'issuer non-cooperating' category as firm
had failed to provide information for monitoring of the rating. The
firm continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated April 30, 2020 to September 8, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the non-availability
of requisite information due to non-cooperation by Lalitha Metals
with CARE's efforts to undertake a review of the outstanding
ratings as CARE views information availability risk as key factor
in its assessment of credit risk profile.
Detailed description of the key rating drivers
At the time of last rating dated July 3, 2019, the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Small scale of operations: Although established in 1976, the
firm's operations are small marked by total operating income of
INR3.82 crore (FY15: INR3.86 crore) in FY16, with negative net
worth as of March 31, 2016.
* Continuing net losses during FY15 and FY16: LM has incurred net
and cash losses during FY15 and FY16 at the back of increase in
interest expenses coupled with underutilization of capacity due to
less number of order received. Furthermore, the cyclone (Hudhud) in
October 2014 in Visakhapatnam (AP) had a severe impact in
operations as well as slowdown in the flow of orders.
* Weak financial risk profile of the firm: The capital structure
continues to remain leveraged as on March 31, 2016 due to erosion
of networth on account of continued net losses. The debt coverage
indicators of the firm were weak in FY16 due to net losses and cash
losses incurred during the last two year balance sheet ended March
31, 2016. The firm is managing debt repayments through unsecured
loans brought in by partners as well as internal accruals. The
liquidity position also remained stressed during FY16, marked by
weak current ratio (0.94x) and quick ratio (0.32x).
* Susceptibility of its profit margins to fluctuation in raw
material prices; iron: India has emerged as the fourth largest
miner and the third largest exporter of iron ore. India has
currently estimated iron ore resource of 25 billion tons. However,
with a number of steel projects in the country coming on stream in
the next one year, a steep increase in internal demand for iron ore
is expected. The firm's major raw material being iron constitutes
for around 70-80% of the total purchases. As prices of iron is
driven by the quantities demanded, any adverse fluctuation in the
prices and availability of the iron can affect the profitability
margins of the firm.
* Working capital intensive nature of business and customer
concentration risk: The operating cycle of the firm remained
stressed during FY16 as well marked by elongated working capital
cycle on account ofhigh inventory and collection period from
customers which resulted in delays in payments to the suppliers. As
per the firm's policy, a credit period of 30 days is allowed to its
customers; however, given the high dependence on Uniparts (India)
Limited which contributed around 80% of sales in FY16), the firm
inherently faces customer concentration risk with limited
negotiation capability, both in terms of price and credit period.
* Constitution as a partnership concern coupled with highly
fragmented and competitive nature of the industry: LM, being a
partnership concern, is exposed to inherent risk of the partners'
capital being withdrawn at the time of personal Contingency.
Moreover, partnership business has restricted avenues to raise
capital which could prove a hindrance to its growth. Furthermore,
the firm is engaged in casting of iron and this industry is highly
fragmented with the presence of several players in the market With
low entry barriers and many small scale players in the market, the
firm's business if largely affected by the unorganized and small
scale players in the market. Such competitive and fragmented market
impacts in lower margins due to competitive prices of peers in the
market.
Key Rating Strengths
* Experience of the partners for more than three decades and long
operational track record of the firm: LM was established in 1976 by
Mr. A Narasimha Rao, father of Mr. A Krishna Balaji and Mr. A V K
Chowdary. The partners have been successfully handling the
operations of the firm since then. The industry experience of the
partners has helped the firm in procuring orders and maintaining
good relations with the suppliers of raw materials over the years.
* Stable total operating income during FY15 to FY16: LM's total
operating income (TOI) increased from INR0.54 crore in FY14 to
INR3.86 crore in FY15, mainly due to increase in demand in casting
iron segment. However in FY16 the TOI decreased to INR3.82 crore on
account of less number order received.
* Increasing PBILDT margins during FY15 and FY16: The PBILDT margin
of LM has improved from 22.92% in FY15 to 24.05% in FY16 on account
of stable total operating income coupled with decrease in cost of
sales like repair and maintenance, general expense and others.
Lalitha Metals (LM) was incorporated in 1976 by Mr. A. Krishna
Balaji and Mr. A V K Chowdary. The firm is engaged in the business
of manufacturing of Spheroidal Graphite Iron (SG Iron) castings
which include cast iron and non-ferrous castings, valves, pipe
fittings and manhole covers.
LEMON ELECTRONICS: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Lemon
Electronics Limited (LEL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 22.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 65.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 7, 2019 placed the
ratings of LEL under the 'issuer non-cooperating' category as LEL
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. LEL continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and emails dated September 2, 2020,
September 7, 2020 & September 10, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on August 7, 2019 the following were the
rating strengths and weaknesses.
Key Rating Weaknesses:
* Delay in Debt servicing obligation: There are ongoing delays in
debt servicing due to stretched liquidity position.
Lemon Electronics Ltd., was incorporated on June 9, 2008 was
promoted by Mr. Sandeep Mushran, Mr. M.S. Malik and Mr. Gopal
Kalra. Mr. Kapil Chugh, the managing director of the company, took
over the management of the company in February, 2016. The company
is primarily engaged in trading and assembling of mobile handsets
under the brand name of 'Lemon'. The company has its assembling
unit located in Noida, U.P., having a capacity of assembling 10
lakh mobile handsets per month during FY17. Lemon Electronics
Limited through its group company VCPL is also engaged in
manufacturing of mobile accessories viz. memory card, chargers,
batteries, microphones, etc. within the same premises at its unit
located in Noida.
NARAYANI FLOUR: CARE Lowers Rating on INR1.20cr LT Loan to C
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Narayani Flour Mill (NFM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 1.20 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 5.40 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from NFM to monitor the rating
vide e-mail communications/letters dated September 8, 2020,
September 10, 2020, September 15, 2020 and numerous phone calls.
However, despite CARE's repeated requests, the entity has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the publicly available information which however,
in CARE's opinion is not sufficient to arrive at a fair rating.
Further, Narayani Flour Mill has not paid the surveillance fees for
the rating exercise as agreed to in its Rating Agreement. The
rating on NFM's bank facilities will now be denoted as CARE C;
Stable; ISSUER NOT COOPERATING and CARE A4; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account non-availability
of information and no due-diligence conducted due to
non-cooperation by NFM with CARE'S efforts to undertake a review of
the rating outstanding.
Detailed description of the key rating drivers
At the time of last rating in July 12, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses:
* Partnership nature of business: NFM, being a partnership firm, is
exposed to inherent risk of partner's capital being withdrawn at
time of personal contingency. Furthermore, limited ability to raise
capital and poor succession planning may result in dissolution of
the firm.
* Volatile agro-commodity (wheat) prices with linkages to vagaries
of the monsoon and regulated nature of the industry: NFM is
primarily engaged in the processing of wheat products under its
mills. Wheat being an agricultural produce and staple food, its
price is subject to intervention by the government. In the past,
the prices of wheat have remained volatile mainly on account of the
government policies in respect of Minimum Support Price (MSP) &
controls on its exports. Further to be noted, the prices of wheat
are also sensitive to seasonality, which is highly dependent on
monsoon. Any volatility in the wheat prices will have an adverse
impact on the performance of the flour mill.
* Intensely competitive nature of the industry with presence of
many unorganized players: Flour milling industry is highly
fragmented and competitive due to presence of many players
operating in this sector owing to its low entry barriers, due to
low capital and technological requirements. West Bengal and nearby
states are a major wheat growing area with many flour mills
operating in the area. High competition restricts the pricing
flexibility of the industry participants and has a negative bearing
on the profitability.
* Small scale of operations with low profit margins: NFM is a
relatively small player in flour milling business with a total
operating income of INR12.26 crore and PAT of INR0.07 in FY17
(prov.). Furthermore, the total capital employed was also assigned
are available at low at INR2.98 crore as on March 31, 2017.
Further, the PBILDT margin is low at 3.84% during FY17, the PAT
margin is low at 0.58% during the same period.
* Moderate capital structure with moderate debt coverage
indicators: The capital structure of the firm is leveraged marked
by overall gearing ratio at 1.78x as on March 31, 2017. Interest
coverage ratio was moderate at 1.88x and the total debt to GCA was
8.65x as on March 31, 2017. The current ratio also remained
moderate at 1.04x as on March 31, 2017.
Key Rating Strengths
* Experienced partners: NFM is currently managed by two companies
namely Narayani Rice Mill Private Limited and Mahashakti Milling
Technology Private limited (MMTPL). The two directors of MMTPL
namely Mr. Vijay Kanodia and Mr. Rajesh Agarwal have around five
decades of business experience in various fields and NFM is
deriving benefits out of this. They are supported by Mr. Ashok
Agarwal who is the manager of NFM.
* High growth prospects of the industry: Wheat based products have
large consumption across the country in the form of bakery
products, cakes, biscuits and different types of food dishes in
home and restaurants. The demand has been driven by the rapidly
changing food habits of the average Indian consumer, dictated by
the lifestyle changes in the urban and semi-urban regions of the
country.
* Proximity to raw material sources: NFM's unit has close proximity
to local grain markets and major raw material procurement
destinations. Further, West Bengal and nearby states are one of the
major wheat producing area in India. Accordingly, NFM has
locational advantage in terms of proximity to raw material. This
apart, the plant is located in the vicinity of industrial area of
West Bengal, having good transportation facilities and other
requirements like good supply of
power, water etc.
Narayani Flour Mill (NFM), established in December, 2011 as a
partnership firm in the view of initiating a flour milling business
in West Bengal. Currently the firm is operating as per partnership
deed signed on December 2011. The firm has installed its
manufacturing facility at Paraj, Burdwan with an installed capacity
of 200 MT per day. NFM commenced commercial production from March
2012. The firm manufactures wheat flour and wheat bran. NFM
procures wheat from the govt. of West Bengal and processes wheat
flour and bran. After processing NFM keeps the bran with itself and
sells the flour to Govt. of West Bengal. Further, NFM also caters
to local wholesalers and retailers.
ORBIT AVIATION: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Orbit
Aviation Private Limited (OAPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 59.52 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 23, 2019, placed
the rating(s) of OAPL under the 'issuer non-cooperating' category
as Orbit Aviation Private Limited (OAPL) had failed to provide
information for monitoring of the rating. Orbit Aviation Private
Limited (OAPL) continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and an email dated September 1, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on September 23, 2019 the following were
the rating strengths and weaknesses. (Updated for the information
available from lenders discussion)
Key Rating Weaknesses
* Delays in debt servicing: As reported by the bankers, there have
been delays in payment of principal and interest of up-to 30 days.
These were mainly on account of mismatch of cash flows.
* Weak financial profile: The operating revenue declined to
INR77.68 crore in FY19, from INR81.28 crore in FY18. Overall, the
total debt decreased to INR47.46 crore (PY: 77.52), leading to
overall gearing of 1.87 as on March 31, 2019.
Key Rating Strengths
* Experienced promoters: Orbit Aviation Private Limited (OAP) is
part of Punjab based Orbit Group. It is a 64.96% subsidiary of
Orbit Resorts Ltd which is into hospitality and bus transport
business. Mr. Lakhvir Singh, Mr. Gurmeher Singh Majithia, Mr. Mohd
Jameel, Mr. Mohd Rafiq are directors in the company.
Orbit Aviation Private Limited (OAP) incorporated in June 2007 is
engaged in providing chartered flight and public road transport
services. It is a 64.96% subsidiary of Orbit Resorts Ltd, while
rest is held by promoter group. Mr. Lakhvir Singh, Mr. Gurmeher
Singh Majithia, Mr. Mohd Jameel, Mr. Mohd Rafiq are directors in
the company. The company is a NonScheduled Operator for India and
abroad and it owns additionally, the company also provides
passenger bus services through a fleet of 60 buses (including both
standard and luxury) buses in Punjab.
ORBIT RESORTS: CARE Reaffirms Then Withdraws 'D' Debt Rating
------------------------------------------------------------
CARE has reaffirmed and withdrawn the outstanding ratings of 'CARE
D; ISSUER NOT COOPERATING' assigned to the bank facilities of Orbit
Resorts Ltd (ORL) with immediate effect. The above action has been
taken at the request of Orbit Resorts Ltd (ORL) and 'No Objection
Certificate' received from the bank(s) that have extended the
facilities rated by CARE.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on September 23, 2019 the following were
the rating weaknesses and strengths. (Updated for the
information available from lenders discussion)
Key Rating Weaknesses
* Delays in debt servicing: As reported by the bankers, there have
been delays in payment of principal and interest of upto 30 days in
ORL. These were mainly on account of mismatch of cash flows as well
as payment of some tax liabilities by the company.
Key rating Strengths
* Tie up with the EIH group and favorable location: ORL had entered
into an 'Operating and Management Agreement' with EIH Ltd., a
leading hotel and leisure company, for operations and management of
both the hotels. EIH Ltd is a fully integrated owner and operator
of hotels, resorts and cruises with internationally renowned luxury
brands, The Trident and The Oberoi. The established brand of The
Oberoi and Trident and long experience of EIH in management of
hotels reduces the management & marketing risk to a great extent.
Orbit Resorts Ltd (ORL), incorporated in March 1988, is promoted by
Mr. Sukhbir Singh, Deputy Chief Minister of Punjab. The company is
engaged in hospitality business and owns two 5-star hotels in
Gurgaon viz. Trident and Oberoi. Also, the company has a passenger
bus transport business. Hotel properties: Oberoi Gurgaon: The hotel
commenced operations in March 2011 and is a 202 rooms property with
2 restaurants, a bar, a cigar lounge, a private club, a bakery
shop, fitness and spa facility and conference and banquet
facilities. The hotel is located in the prime business and shopping
district of Gurgaon and is a 15 minute drive from Delhi
International Airport. Trident Gurgaon: It is a 5-Star hotel having
136 rooms, 3 dining restaurant, 2 bars, a spa and conference and
banquet facilities. The hotel has been operational since Feb 2004.
The hotel is situated right next to the Oberoi hotel.
PANTEL TECHNOLOGIES: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Pantel
Technologies Private Limited (PTP) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 14.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 10.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 22, 2019, placed the
ratings of PTP under the 'issuer non-cooperating' category as PTP
had failed to provide information for monitoring of the rating. PTP
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated September 7, 2020, September 11, 2020. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. Further banker could
not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account non-availability of requisite
information and no due-diligence conducted due to noncooperation by
Pantel Technologies Private Limited with CARE'S efforts to
undertake a review of the rating outstanding.
CARE views information availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on August 22, 2019, the following were
the rating strengths and weaknesses:
The rating takes into account on-going delays in debt servicing due
to stretched liquidity position.
Pantel Technologies Private Limited (PTP) was incorporated in 2010.
The company is currently being managed by Mr. Vijender Singh and
Mr. Santosh Kumar. The company is engaged in manufacturing of
information technology (I.T.) products such as tablets, mobile etc.
The company imports more than 90% of its raw material requirement
from China. PTP's has cumulative installed capacity of 1.83 lacs
pieces per annum for tablets, mobiles and other accessories as on
March 31, 2015 at its manufacturing units located in Noida, Uttar
Pradesh. PTP exclusively sales its product under the brand name
"PENTA".
PELLET-ENERGY SYSTEMS: CARE Keeps D Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of
Pellet-Energy Systems Private Limited (PES) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 28.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 20, 2019, placed the
rating(s) of PES under the 'issuer non-cooperating' category as PES
had failed to provide information for monitoring of the rating. PES
continues to be non-cooperative despite repeated requests for
submission of information through phone calls and emails dated
September 16, 2020 and September 7, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further, banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating takes into account non-availability of information due
to non-cooperation by Pellet-Energy Systems Private Limited with
CARE'S efforts to undertake a review of the rating outstanding.
CARE views information non-availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on August 20, 2019, the following were
the rating weaknesses:
Key Rating Weaknesses
* Ongoing delays in debt servicing: There are ongoing delays in
debt servicing due to stressed liquidity position. Current status
on the same is not known as CARE could not contact the banker.
Pellet Energy Systems Private Limited (PES) currently being managed
by Mr. Bharat Sharma and Ms. Shruti Sharma was initially
incorporated as Luxury Woodplus Private Limited in 2010. The name
changed to its present status in October 2011. PES is engaged in
manufacturing of biomass pellets at its manufacturing unit located
in Roorkee, Uttarakhand with installed capacity of 500 tons per
day. The company has commenced its manufacturing operations in
April, 2015. The product finds its usage as a fuel in industrial,
commercial and household segment. The main raw material is
sugarcane baggase which is procured domestically. PES primarily
sells its product to FMCG (Fast Moving Consumer Goods) companies
domestically. Its group entities include Advance Hydrau Components
Pvt Ltd engaged in Manufacturing of hydraulic and mechanical
machinery, Subha International engaged in Export of engineering
goods and turnkey projects and Advance Machines engaged in
Manufacturing of engineering goods.
PRAYAN ISPAT: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Prayan
Ispat & Steel Private Limited (PIS) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.09 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 1.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 24, 2019 placed the
ratings of PIS under the 'issuer non-cooperating' category as
Prayan Ispat & Steel Private Limited had failed to provide
information for monitoring of the rating. Prayan Ispat & Steel
Private Limited continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated August 7, 2020, August 12, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Further banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on July 24, 2019 the following were the
rating weakness:
(Updated for the information available from the Registrar of
Companies).
The rating takes into account the On-going delays in debt servicing
due to stressed liquidity position.
Uttar Pradesh-based PIS, is a private limited company incorporated
in 2010 and is currently managed by Mr. Amit Agarwal Mrs. Gaura
Agarwal. PIS is engaged in the manufacturing of M S Ingots. The
manufacturing facility of the company is located in Bijnor, Uttar
Pradesh. The product finds its application in manufacturing of TMT
bars. The company sells its products mainly in Uttaranchal and
Uttar Pradesh to the TMT bar manufacturers. The main raw material
for the manufacturing of MS Ingots is sponge iron and iron scrap
which is procured domestically. Agarwal Sales Corporation is the
group associates of PIS which is engaged in trading of iron & steel
product.
PUNJAB BIO: CARE Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Punjab Bio
Mass Power Limited (PBPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Bank Facilities– 17.85 CARE D; Issuer Not
Cooperating,
Term loan Based on best available
Information
Bank Facilities- 9.97 CARE D; Issuer Not Cooperating,
Fund-based-LT- Based on best available
Cash Credit Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 13, 2018, placed the
rating(s) of PBPL under the 'issuer non-cooperating' category as
Punjab Bio Mass Power Limited had failed to provide information for
monitoring of the rating, including the NDS, and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. PBPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and email dated September 3, September 8, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of non-submission of
material information required for our periodic review exercise and
due to ongoing delays in debt servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Ongoing delays in debt: There are delays in debt servicing by
PBPL.
Punjab Biomass Power Ltd. (PBPL), a Joint Venture (JV) between
Bermaco Energy Systems Ltd. (BESL) and IL&FS Renewable Energy
Limited (IREL) is a 12 MW biomass-based (paddy straw) operational
power plant in Patiala district, Punjab. IREL holds 50% of the
equity stake, 44.31% is held by Bermaco Group companies and
remaining 5.70% is held by Gammon Infrastructure Projects Limited
(GIPL). Bermaco Group commenced its operation in early 1960s and
has an engineering background. Bermaco Energy Systems Limited
(BESL), Bermaco group's dedicated venture in power sector started
in 1996. BESL successfully re-commissioned 10MW paddy straw based
power plant at Jhalkheri, Punjab in 2002 from M/S Punjab State
Electricity Board under an O&M performance contract. The other JV
partner, IL&FS Renewable Energy Limited (IREL) is a wholly owned
subsidiary of IL&FS Energy Development Company Limited (IEDCL, CARE
D; ISSUER NOT COOPERATING), which is flagship company for power
sector investment for the IL&FS group. IREL is subsidiary, which
spearheads all renewable initiatives and investments for the group.
R M ENTERPRISE: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of R M
Enterprise (RME) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 5, 2019, placed the
rating of RME under the 'Issuer noncooperating' category as RME had
failed to provide information for monitoring of the rating as
agreed to in its rating agreement. RME continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated May 13,
2020, June 4, 2020, August 4, 2020, August 14, 2020, August 31,
2020 and September 2, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 5, 2019, following was the key
rating weakness.
* On-going delay in debt servicing: There are on-going delays in
debt servicing due to poor liquidity position of the firm.
Liquidity: Poor
Liquidity position of the firm remained poor marked received
booking advances of INR0.20 crore as against 45% of expected total
project cost was already incurred as on January 31, 2016.
Surat (Gujarat) based, RME was established as a partnership firm in
2015. RME is currently executing a residential with 3 BHK 51 flats
at Surat named 'Kusum Heights' which comprises of 13 floors
involving development of 1895.16 Square Feet area. The project
implementation commenced in October 2015 and till April 2017, RME
has incurred the total cost of INR8.81 crore (45% of total project
cost) out of the total cost of INR19.43 crore. RME has received
approvals for land and other relevant clearances for the project.
RUBY FASHION: CARE Lowers Rating on INR4.95cr Loan to D
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Ruby
Fashion Textile (RFT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 4.95 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B; Stable;
on the basis of best available
information
Short term Bank 0.75 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE A4 on the
basis of best available
information
CARE has been seeking no default statement from RFT to monitor the
ratings vide e-mail communications dated September 4, 2020 to
September 24, 2020 and numerous phone calls. However, despite
CARE's repeated requests, the firm has not provided no default
statement for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. The ratings on RFT bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed Rationale & Key Rating Drivers
The revision in rating assigned to the bank facilities of RFT
factors in ongoing delays in meeting of debt obligations.
Detailed description of the key rating drivers
Key Rating Weakness
* Ongoing delays in meeting of debt obligations: Ruby Fashion
Textile has been facing liquidity issues due to which there are
irregularities and delays in repayment of term loan installments
and interest obligations.
SARJAY CHEMICAL: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sarjay
Chemical Private Limited (SCPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 2, 2019, placed the
rating of SCPL under the 'Issuer non-cooperating' category as SCPL
had failed to provide information for monitoring of the ratings as
agreed to in its rating agreement. SCPL continues to be
non-cooperative despite repeated requests for submission of
information through emails, phone calls and a letter dated May 13,
2020, May 18, 2020, June 26, 2020, August 4, 2020 and September 2,
2020.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 2, 2019, following was the key
rating weakness.
* On-going delay in debt servicing: There are on-going delays in
debt servicing due to poor liquidity position of the company.
Liquidity: Poor
Liquidity position of the company remained poor marked by low cash
and back balance as well as below unity current ratio as on March
31, 2014.
Ahmedabad-based SCPL was established in December 2010 by its key
promoters; Mr. Harish Patel and Mr. Jay Patel to start
manufacturing activity of micro nutrients in a category of
inorganic chemicals mainly zinc sulphate and manganese sulphate at
Dahej in Bharuch district of Gujarat State. The unit is spread over
the area of 5,200 sq. meters with total capacity of 10,800 metric
tonnes per annum (MTPA) for both the products. SCPL completed a
Greenfield project during January 2016 at a total cost of INR11.10
crore which was funded through term loan of INR6.50 crore, equity
share capital of INR3 crore and unsecured loan of INR1.60 crore.
SCPL has commenced trial runs from end of January 2016. The
promoter of SCPL is also running another proprietorship firm namely
M/s Universal Chemicals (UC) in Ahmedabad since 1990. UC is engaged
in trading of inorganic chemicals, dyes and dyes chemicals and
agricultural commodities like grain, seeds, oil seeds and spices
etc. in domestic market and in international market in Pakistan,
Middle and Far East countries, Canada, USA etc.
SATISH AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Satish Agro
Industries (SAI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 3, 2019, placed
the rating of SAI under the 'Issuer non-cooperating' category as
SAI had failed to provide information for monitoring of the ratings
as agreed to in its rating agreement. SAI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated
June 24, 2020, June 25, 2020, June 26, 2020, August 4, 2020 and
September 2, 2020.In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on September 3, 2019, following was the
key rating weakness.
* Ongoing delay in debt servicing: There are on-going delays in
debt servicing due to poor liquidity position of the firm.
Indore (Madhya Pradesh) based Satish Agro Industries (SAI) was
formed as a proprietorship concern by Mr. Satish Jain in 1998. SAI
is engaged in manufacturing of agricultural spray pumps, power
sprayers and other machinery parts. The firm supplies its product
to government departments, private sector unit and direct counter
sale to farmers.
SAVAIR ENERGY: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Savair
Energy Limited (SEL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Bank Facilities- 21.00 CARE D; Issuer Not Cooperating,
Fund-based-LT- Based on best available
Cash Credit Information
Bank Facilities- 47.00 CARE D/CARE D; Issuer not
Non-fund based– Cooperating; based on best
LT/ST- BG/LC available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 27, 2018, placed
the rating(s) of SEL under the 'issuer noncooperating' category as
Savair Energy Limited had failed to provide information, including
the NDS, for monitoring of the rating. Savair Energy Limited
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated September 3, September 8, 2020. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of non-submission of
material information required for our periodic review exercise and
due to ongoing delays in debt servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Ongoing delays in debt: There have been on-going delays in debt
servicing due to weakening of liquidity profile.
Analytical approach: Standalone
Incorporated in the year 2001 by the name of Energy Logistics
Private Limited, the Company was subsequently renamed as Savair
Energy Limited (SEL). The company was setup to provide services
related to Energy Audits. Subsequently in the year 2007, the
company started undertaking EPC, turnkey projects, erection,
installation and execution for various projects in the energy
sector. SEL is promoted by Mr. Saji Antony who is a Mechanical
Engineer by qualification and has worked in various Oil & Gas
companies for 20 years before starting the business in 2001. The
company now focuses in providing EPC services in the Energy and
Infrastructure space, SKID & Packages for the Air filtering, fuel
filtering, Gas Conditioning and Heat Exchanges systems, project
management consultancy in the field of Energy & Infrastructure. The
manufacturing facility is located in Ambernath MIDC.
SHIV ONKAR: CARE Lowers Rating on INR2.73cr LT Loan to C
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Shiv
Onkar Plasto Private Limited (SOPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 2.73 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SOPL to monitor the rating
vide e-mail communications/letters dated September 3, 2020,
September 7, 2020 and September 10, 2020 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the publicly available information which however,
in CARE's opinion is not sufficient to arrive at a fair rating.
Further, Shiv Onkar Plasto Private Limited has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The rating on SOPL's bank facilities will now be
denoted as CARE C; Stable; ISSUER NOT COOPERATING. Further due
diligence could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating in July 16, 2019 the following were the
rating strengths and weaknesses: (Updated the information available
from Ministry of Corporate Affairs).
Key Rating Weaknesses
* Nascent stage of manufacturing activities with operations
stabilization risk: SOPL has set up a manufacturing unit of molded
plastic chair at aggregate cost of INR5.20 crore funded by term
loan of INR1.96 crore, unsecured loan of INR1.61 crore and balance
through equity of INR1.63 crore. The plant became operational in
April, 2017. Hence, the company has an extremely short track record
of manufacturing operations. During FY19, the company has reported
net loss of INR0.18 crore on a total operating income of INR1.23
crore.
* Volatility in prices of raw materials: The primary raw material
required by SOPL is PP granules which would constitute the majority
of the total cost of sales, thereby making profitability sensitive
to raw material prices. The major raw material for the company is
polypropylene granule which is a crude oil derivative and witnesses
frequent price fluctuations. Therefore, the operating margin of the
company remains susceptible to any sharp movement in raw material
prices.
* Fragmented and competitive industry: Molded plastic chair
business is highly fragmented due to presence of huge small players
owing to low entry barrier and low capital requirement.
Furthermore, SOPL being new in the industry is facing stiff
competition from the organized as well as unorganized players.
Key Rating Strengths
* Experienced promoters: The key promoter Mr. Jitendra Kumar Singh
has around 7 years of experience in civil construction business,
looks after the day to day operations of the company. He is
supported by other directors namely Mr. Sudhir Kumar Singh and Mrs
Poonam Singh who also have experience in civil construction
business. However, the promoters lack experience in the plastic
chair industry.
SOPL was incorporated in July 2009 in the name of Shiv Onkar
Constructions Private Limited. However, the name of the company was
changed to current one with effect from April 2015. Initially the
company was into civil construction and restaurant business.
However, the company had discontinued the civil construction and
restaurant business since April 2016. After change of its name, the
company had started setting up manufacturing plant for molded
plastic chair. In April 2017, SOPL has completed the project with
aggregate cost of INR5.20 crore. SOPL has commenced commercial
operations from April 2017 onwards. The manufacturing facility of
the company is located at Sitamarhi, Bihar with aggregate installed
capacity of 432000 chairs per annum.
SHRIRAM EPC: CARE Reaffirms D Debt Ratings; Removed from INC
------------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of
Shriram EPC Limited (SEPCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 561.98 CARE D Reaffirmed and removed
Facilities from INC
Short-term Bank 899.52 CARE D Reaffirmed and removed
Facilities from INC
Long-term/Short- 6.36 CARE D Reaffirmed and removed
term Bank from INC
Facilities
The ratings were also removed from the 'Issuer Not Cooperating'
category.
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of Shriram EPC Limited
factors in the ongoing delays in servicing of debt obligations.
Rating Sensitivities
Positive Factors
* Satisfactory track record of timely servicing of debt obligations
on sustained basis.
* Sustained improvement in operational and financial performance.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in debt servicing with tight liquidity position: Being an
EPC contractor, the operations of Shriram EPC Limited (SEPCL) are
working capital intensive with the project cycle generally ranging
from six months to three years. The higher receivables position and
delays associated with projects have increased the pressure on the
cash flow position of the company. The resultant tight liquidity
position of the company has led to ongoing delays in servicing of
term loan and working capital facilities.
For FY20, total income of SEPCL declined 11% y-o-y to INR723 crore
from INR813 crore in FY19. Revenue from operations declined 8%
y-o-y to INR681 crore from INR741 crore in FY19, majorly due to
slower execution on account of Covid19 impact during Q4FY20. PBILDT
margin of the company stood at 13.85% in FY20 as against 17.61% in
FY19.
For FY20, the company reported net loss of INR81 crore against PAT
of INR29 crore in FY19, due higher provisions and writeoffs on
account of Covid19. The company had recognized impairment loss
(exceptional items) of INR66.07 crore and INR34.14 crore as loss on
write-off of contract work-in-progress during FY20.
Liquidity: Poor
Poor liquidity marked by lower accruals when compared to repayment
obligations, elongated working capital cycle, fully utilized bank
limits and modest cash balance. The company had cash and bank
balance (excluding margin money) of INR13.4 crore as on March 31,
2020. Working capital cycle for FY20 remains stretched at 116 days
(PY: 113 days) due to high collection period. During FY20,
collection period stood at 317 days (PY: 293 days). Scheduled
repayment for FY21 is INR25.8 crore as against GCA of INR25 crore
reported in FY20.
As part of COVID-19 relief package announced by RBI, the company
had availed moratorium on its debt obligations between March-August
2020 from all lenders.
Chennai based Shriram EPC Limited (SEPCL) was incorporated in June
2000, after merging companies engaged in similar businesses,
consolidating their operations. Initially, setup as an EPC
contractor to carry out the construction works of associate
entities within the group, SEPCL has been able to establish its
presence in undertaking jobs for external parties and
government/quasi government entities. SEPCL specializes in
executing EPC contracts, providing integrated solutions
encompassing design, engineering, procurement, construction and
project management services. The company's services are primarily
spread across municipal services, process & metallurgy, power and
mineral processing segments.
SND LIMITED: CARE Keeps D Debt Ratings in Not Cooperating Category
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of SND Limited
(SNDL) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 171.20 CARE D; Issuer not Cooperating;
Facilities- based on best available
Term loan information
Long-term Bank 100.00 CARE D; Issuer not Cooperating;
Facilities- based on best available
Cash Credit information
Short-term Bank 100.00 CARE D; Issuer not Cooperating;
Facilities-Non- based on best available
Fund based limits information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SNDL to monitor the ratings
vide e-mail communications dated September 3, September 8, 2020 and
numerous phone calls. However, despite CARE's repeated requests,
the company has not provided the requisite information for
monitoring the ratings, including the NDS. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information. The ratings on SNDL will now be
denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of non-submission of
material information required for our periodic review exercise and
due to ongoing delays in debt servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Ongoing delays in debt: The Company has not serviced the interest
and installments for the quarter ended June 2019.
SND Limited (SNDL) is a power distribution franchisee within three
urban circles (Civil lines, Mahal and Gandhibag) of Nagpur. In
September 2010, Maharashtra State Electricity Distribution Company
Limited (MSEDCL) invited competitive bids to appoint the franchisee
for the aforementioned three urban circles of Nagpur. The term of
franchise is for 15 years, which is extendable by mutual consent.
The bidding was based on 'Input-based franchisee model' and SNDL
emerged as the successful bidder. The Distribution Franchisee
Agreement (DFA) was signed by the company with MSEDCL on February
23, 2011, and it took over power distribution within these circles
with effect from May 01, 2011. SNDL was promoted by the Spanco
group (Spanco Limited), which was unable to achieve financial
closure for the project and this resulted in SNDL owing an overdue
up to INR230 crore to MSEDCL as on August 31, 2012.
Subsequently, Spanco group entered into a share
'subscription-cum-shareholders' agreement with Essel Utilities
Distribution Company Limited (EUDCL) of the Essel group to sell
majority stake in SND. In September 2012, EUDCL received the
approval of MSEDCL to acquire up-to 99% of the stake in SND in
consideration for settling of dues of MSEDCL.
Consequently, EUDCL holds up-to 99% equity stake and balance is
with Spanco group. The total cost incurred stood at INR340 crore
funded through debt of INR195 crore, through MSEDCL capital grant
of INR48 crore and balance through equity & internal accruals. The
previous management (Spanco) had spent INR110 crore.
SONI TRADERS: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Soni
Traders continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 60.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 24, 2019 placed
the ratings of Soni Traders under the 'issuer non-cooperating'
category as the company had failed to provide information for
monitoring of the ratings as agreed to in its Rating Agreement.
Soni Traders continues to be non-cooperative despite repeated
requests for submission of information through phone calls and
emails dated September 2, 2020, September 7, 2020 & September 10,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on September 24, 2019 the following were
the rating strengths and weaknesses.
Key Rating Weaknesses:
* Delay in Debt servicing obligation: The rating took into account
the continuous overdrawal in the working capital facilities leading
to delay in interest servicing.
Soni Traders was constituted as a sole proprietorship firm in 2004
and later in October 2015 was reconstituted as a partnership firm
with Mr. P.L. Soni and Ms. Munni Devi Soni as partners. The firm is
engaged in the business of trading of Bitumen products such as
Industrial Bitumen, Bitumen 80/100, Black Bitumen, Industrial
Cutback bitumen etc. The Managing Partner of the firm Mr. P.L. Soni
has more than 20 years of experience and deep understanding of the
construction industry through his firm Soni Traders.
SWADESHI ALUMINIUM: CARE Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Swadeshi
Aluminium Company Private Limited continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 18.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 13, 2019, placed the
rating(s) of Swadeshi Aluminium Company Private Limited under the
'issuer non-cooperating' category as Swadeshi Aluminium Company
Private Limited had failed to provide information for monitoring of
the rating. Swadeshi Aluminium Company Private Limited continues to
be noncooperative despite repeated requests for submission of
information through phone calls and emails dated September 16, 2020
and September 7, 2020. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. Further, banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating takes into account non-availability of information due
to non-cooperation by Swadeshi Aluminium Company Private Limited
with CARE'S efforts to undertake a review of the rating
outstanding. CARE views information nonavailability risk as a key
factor in its assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on August 13, 2019, the following were
the rating weaknesses:
Key Rating Weaknesses
* Ongoing delays in servicing debt obligation: There are ongoing
delays in servicing of its debt obligations in timely manner on
account of stretched liquidity position. Current status on the
same is not known as CARE could not contact the banker.
Swadeshi Aluminium Company Private Limited is primarily engaged in
the manufacturing of aluminium alloy ingots and sections which find
application in automobile industry. The company procures raw
material i.e. aluminium scrap from domestic and overseas players
that includes Middle East and European countries. The import
constituted around 15% of total purchase in FY14. It sells its
products in mainly in Northern India.
SWAMI DEVI: CARE Lowers Rating on INR10cr LT Loan to C
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Swami Devi Dyal Hi Tech Education Academy (SDD), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 10.0 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 1.00 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 18, 2019, placed the
rating of SDD under the 'issuer non-cooperating' category as Swami
Devi Dyal Hi Tech Education Academy had failed to provide
information for monitoring of the rating. SDD continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
September 8, 2020, September 7, 2020, September 4, 2020, September
3, 2020 and September 1, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The rating has been revised on account of high level of competition
in the industry and limited reach of the society and highly
regulated nature of the educational sector.
Key Rating Weaknesses
* High level of competition in the industry and limited reach of
the society: All the institutes of the SDD are in Panchkula i.e.,
single location of Haryana which limits the penetration level for
the society to tap opportunities. Furthermore, due to increasing
focus on technical education in India, a number of colleges have
been opened up in the close proximity. This exposes the revenue of
SDD to competition from other colleges.
* Highly regulated nature of the educational sector: In addition to
AICTE, the educational institutes are regulated by respective state
governments with respect to the number of management seats, amount
of the tuition fees charged for the government quota and management
quota. The factors have a significant impact on the revenue and
profitability of the institutions. However, the education industry
remains highly regulated industry with constant intervention from
the central state government and other regulatory bodies
SDD got registered under the Society registration Act-1860 in
August 2000. The society was established by Mr. M.L Jindal
(President), Mr. Ashok Jindal (Vice- President) and Mr. Amit Jindal
(General Secretary) and is providing higher education in the field
of Dental Sciences, Computer Applications, Nursing, Management,
Law, Pharmacy, Hotel Management and Education. The society is
running twelve separate institutions under Swami Devi Dyal Group of
Professional Institutions in Panchkula, Haryana.
URJA AUTOMOBILES: CARE Lowers Rating on INR6.81cr Loan to C
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Urja
Automobiles Pvt. Ltd. (UAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.81 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Short term Bank 5.40 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from UAPL to monitor the rating
vide letters/e-mails communications dated Sept. 14, 2020, Sept. 16,
2020, Sept. 17, 2020, and numerous phone calls. However, despite
CARE's repeated requests, the entity has not provided the requisite
information for monitoring the rating. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at fair rating. Further, Urja Automobiles
Pvt. Ltd. has not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. The rating on UAPL's
bank facilities will now be denoted as 'CARE C; Stable; Issuer Not
Cooperating'. However banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating takes into account its relatively small size of
operations, Risk of non-renewal of dealership agreement from
principles, pricing constraints and margin pressure arising out of
competition from other auto dealers in the market, negative profit
margins, leveraged capital structure and weak debt protection
metrics and working capital intensive nature of operation. However,
the rating derives strength from its experienced promoters,
authorised dealership of Nissan Motor India Pvt. Ltd. and
integrated nature of business.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operation: UAPL is a small player in auto
dealership business with revenue and PAT of INR4.81 crore and
INR-0.88 crore respectively, in FY19. Furthermore, the total
capital employed was also modest at INR7.61 crore as on March 31,
2019. The small scale restricts the financial flexibility of the
company in times of stress.
* Risk of non-renewal of dealership agreement from principles: UAPL
has entered into a dealership agreement with NMIPL in 2013. The
dealership agreement with NMIPL has been renewed every year and the
same is currently valid till March 2018 subject to renewal of the
agreement afterwards, completely at the discretion of NMIPL.
Furthermore, the agreements may get terminated at any time on
violation of certain clauses. However, the risk is mitigated to
some extent in view of its moderately long association with NMIPL.
* Pricing constraints and margin pressure arising out of
competition from other auto dealers in the market: UAPL faces
aggressive competition on account of established presence of
authorized dealers of other commercial vehicles manufacturers like
Maruti, Hyundai etc. Considering the existing competition, UAPL is
required to offer better terms like providing discounts on
purchases to attract new customers. Such discounts offered to
customers create margin pressure and may negatively impact the
revenue earning capacity of the company. Furthermore, the revenues
of UAPL would also be governed by launch of newer models by NMIPL,
and acceptance of the products in the market.
* Working capital intensive nature of operation: Being a trading
nature of operation, the business of UAPL is working capital
intensive mainly on account of inventory period as the company has
to maintain fixed level of inventory for display and to guard
against supply shortages. The average operation cycle is ranging
between 221 days during FY19.
* Negative profit margins, leveraged capital structure and Weak
debt protection metrics: The profit margin of the company remained
thin and range bound over the past years due to inherent low margin
nature of dealership business with no control over the purchase and
selling prices. Currently the PBILDT and PAT margin is negative and
stood at -0.79% and -18.23% respectively in FY19.The capital
structure of the company remained leveraged marked by the overall
gearing of 2.72x as on March 31, 2019.
Key Rating Strengths
* Moderately experienced promoters: UAPL is currently managed by
Mr. Rahul Kumar, Managing Director, having about a decade of
experience in similar line of business. These apart, all other two
directors are also having around a decade of experience in similar
industry.
* Authorized dealership of Nissan Motor India Pvt. Ltd: UAPL is an
authorized dealer of NMIPL and has started its association since
2013. The company has one showroom located at Danapur, Patna. UAPL
is getting a competitive advantage of being solo dealer of NMIPL
passenger vehicles for this area. NMIPL has been one of market
leaders in the passenger vehicles segment for decades and has a
wide & established distribution network of sales and service
centres across India, providing it a competitive advantage over its
peers.
* Integrated nature of business: The company operates through its
workshop to provide after sales service and deals in original
accessories & spare parts apart from selling cars by virtue of
being a '3-S' (Sales, Services and Spare parts) authorized dealer
of NMIPL. Owning authorized service centre helps the company to tap
a larger client base who prefers to purchase vehicles from dealers
having own authorized service centre to avoid hassles in case of
breakdown and requirement of service
Urja Automobiles Private Limited (UAPL) was incorporated during
February 2013 by Mr. Rahul Kumar of Danapur in Patna. Subsequently,
the company started to initiate an auto dealership business and has
setup a selling and servicing facility at Saguna in Danapur. The
company has entered into dealership authority from Nissan Motor
India Pvt. Ltd. (NMIPL) for selling and servicing passenger
vehicles. Later on the company started sales and service facility
at other three locations in Bihar, namely, Araa, Patliputra and
Purnia. The day-to-day affairs of the company are looked after by
Mr. Rahul Kumar (Managing Director) with adequate support from
other three directors and a team of experienced personnel.
=========
J A P A N
=========
NIPPON STEEL: Mulls Sale of 2 U.S. Plants in Global Restructuring
-----------------------------------------------------------------
The Japan Times reports that Nippon Steel Corp. is considering
selling off its two automotive steel plants in the U.S. state of
Indiana as part of global restructuring given a slump in demand
amid the coronavirus pandemic, a company source said Oct. 14.
Because its partner ArcelorMittal S.A., which jointly owns a
company running the two plants, has decided to sell its share to a
U.S. steel-maker, the leading Japanese steel-maker is thinking of
following suit, the source said, the Japan Times relays.
With the COVID-19 pandemic dealing a fresh blow to an industry
already struggling with fierce competition from Chinese rivals,
Nippon Steel had already announced it will close a plant in Kure,
Hiroshima Prefecture, by September 2023 to slash costs and improve
profitability, according to the report.
The Japan Times relates that the company said the planned massive
restructuring to cut back domestic output will result in a
reduction of Nippon Steel's annual output capacity by around 5
million tons, while generating a profit of roughly JPY10 billion
($95 million).
The world's No. 3 steel producer is focusing more on growing
overseas markets, and last year bought Indian steel-maker Essar
Steel India Ltd. jointly with world No. 1 ArcelorMittal, the report
notes.
In Japan, output of crude steel in 2019 fell 4.8% to 99.28 million
tons, the fifth straight yearly decline, dipping below the 100
million-ton threshold for the first time in 10 years, the Japan
Times discloses citing the Japan Iron and Steel Federation.
Nippon Steel Corporation manufactures steel products. The Company
mainly produces and sells steel plates, steel pipes, structural
steel, and more. Nippon Steel also offers chemicals, new materials,
and other products.
===============
M A L A Y S I A
===============
AIRASIA GROUP: Unit Proposes to Restructure US$15.3 Billion Debt
----------------------------------------------------------------
ch-aviation reports that AirAsia X has proposed to its creditors to
restructure MYR63.5 billion (USD15.3 billion) of liabilities
through a reconstitution into an acknowledgement of indebtedness
for a principal amount of up to MYR200 million (USD48.2 million).
ch-aviation relates that the Malaysian long-haul low-cost carrier
proposed in a stock market filing that any outstanding amounts
above the reconstituted value and all sums, such as interest,
incurred after June 30, 2020, be waived. The carrier said that the
scheme would enter into force if it is approved by at least 75% of
participating creditors present during a forthcoming court-mandated
meeting, ch-aviation relays.
A source told The Edge Malaysia business daily that around 70% of
the debt under the restructuring proposal is owed to Airbus.
AirAsia X also reportedly owes approximately MYR6 billion (USD1.5
billion) to lessors.
According to the ch-aviation fleets advanced module, AirAsia X
operates twenty-four A330-300s. It said it hoped to retain its
fleet size of around 25 units in the future, although the aircraft
would be used on a "rotational basis" in the near term. The airline
has firm orders from Airbus for thirty A321-200Ns, seventy-eight
A330-900s, and ten A350-900s.
ch-aviation says the airline simultaneously proposed to consolidate
its shares and reduce 90% of its issued share capital through
consolidation of every ten shares into one share. This would
translate into the reduction of the issued share capital from
MYR1.53 billion (USD370 million) to MYR0.15 billion (USD3.6
million).
"The credit arising from the Proposed Share Capital Reduction of
MYR1.38 billion will be used to offset the accumulated losses of
the Company," the airline said.
Subject to all relevant approvals, AirAsia X said it hoped to
complete both the debt restructuring and the share consolidation by
the end of the first quarter of 2021, according to ch-aviation.
ch-aviation relates that the airline said it hoped "to begin
operating with two aircraft in selected markets in the first
quarter of 2021 and to gradually resume flights to all destinations
by end-2021".
Meanwhile, while AirAsia X had no plans to shrink its fleet in the
future, the airline's parent AirAsia Group is pursuing a downsizing
strategy. Group Chief Executive Tony Fernandes told reporters
during a briefing that the holding would not be taking any new
aircraft in the near future and would also seek to return around 60
jets to lessors by the end of 2021, ch-aviation relays.
"We are not going to buy new planes, and we are going to return as
many as we can . . . I don't see us getting into a position where
we want to buy planes for a number of years. And even if we want to
buy planes, there will probably be a lot of cheap secondhand
planes," ch-aviation Mr. Fernandes as saying.
Including the 24 A330s operated by AirAsia X, the whole group's
fleet currently numbers 279 Airbus aircraft, of which 239 are
narrowbody A320ceo and A320neo family twinjets, ch-aviation
discloses. Mr. Fernandes said that by the end of the next year, the
group's fleet would probably stand at around 180 aircraft. On top
of the orders attributed to AirAsia X, the group also has firm
commitments for thirteen A320-200Ns and 349 A321-200Ns.
Besides trimming its fleet, AirAsia has also indicated plans to lay
off around 10% of its staff to cope with the reduced demand. Mr.
Fernandes said he hoped to be able to rehire the affected personnel
as soon as the crisis is over, adds ch-aviation.
About AirAsia
AirAsia Berhad provides low-cost air carrier service. The company
provides services on short-haul, point-to-point domestic and
international routes. AirAsia, headquartered in Malaysia, operates
from hubs in Malaysia, Thailand, Indonesia, Philippines and India.
As reported in the Troubled Company Reporter-Asia Pacific on July
9, 2020, auditor Ernst & Young said the carrier's ability to
continue as a going concern may be in "significant doubt." In a
statement to the Kuala Lumpur stock exchange, Ernst & Young said
AirAsia's current liabilities already exceeded its current assets
by MYR1.84 billion at the end of 2019, a year when it posted a
MYR283 million net loss, Bloomberg News disclosed. That was before
the coronavirus crisis, which has further hit the carrier's
financial performance and cash flow.
MALAYSIA AIRLINES: Survival in Doubt as Political Support Dims
--------------------------------------------------------------
Reuters reports that Malaysia Airlines is struggling to make
payments owed to creditors and lessors amid the coronavirus
pandemic that has forced it to slash its operations.
Reuters says the national airline, which restructured after two
deadly crashes in 2014, has a new plan involving big discounts from
creditors, but unlike last time the cash-strapped government is
unwilling to bail it out.
The airline has been loss-making for about a decade, Reuters notes.
Losses were aggravated by two tragedies in 2014 -- the mysterious
disappearance of flight MH370 and the shooting down of flight MH17
over eastern Ukraine.
In the price-sensitive domestic market, it faced rising competition
from low-cost rivals AirAsia Group Bhd and Malindo Air, an offshoot
of Indonesia's Lion Air, according to Reuters.
In the international market, cashed-up Gulf carriers Emirates,
Etihad Airways and Qatar Airways used the heft of their global
networks to encroach on lucrative long-haul routes. Budget rival
AirAsia X Bhd, now itself in financial trouble, offered discounted
fares on routes within Asia, Reuters says.
State fund Khazanah Nasional became the sole shareholder of its
parent company and delisted it in 2014 as part of a $1.5 billion
restructuring that saw its staff numbers cut by 6,000, or about
30%, recalls Reuters. It targeted a return to profit in three
years, but it has not been profitable yet.
According to Reuters, analysts and lessors said the airline has
been beset by high costs, a messy strategy and a bloated workforce
even after the restructuring.
"We're at this stage because the airline has run out of money, run
out of ideas and the government seems to have run out of patience
with it," Reuters quotes Shukor Yusof, an analyst at Endau
Analytics, as saying.
Before the pandemic, the government was seeking a strategic partner
to invest in the airline but those plans fell apart as interested
parties such as Air France-KLM and Japan Airlines were hit by a
collapse in revenue in their home markets, Reuters states.
Finance Minister Tengku Zafrul Abdul Aziz said last week the
government will not provide financial relief or debt guarantees,
raising questions about the airline's fate, Reuters reports.
Reuters relates that National Union of Flight Attendants Malaysia
(Nufam) president Ismail Nasaruddin termed the finance minister's
statement "irresponsible".
"As a government you should be able to show some sense of
responsibility," Ismail told Reuters on Oct. 13. "It's damaging
(to) morale (and) confidence. People don't trust you now."
Any support measures for the carrier will need to be addressed by
Khazanah, Zafrul said last week, Reuters relays.
Zafrul is a director of Khazanah's board, which is chaired by Prime
Minister Muhyiddin Yassin, who is struggling to hold on to power.
Reuters reported last week that Khazanah has warned leasing
companies it will stop funding the airline group and force it into
a winding down process if restructuring talks with lessors are
unsuccessful.
A group of leasing companies claiming to represent 70% of the
airplanes and engines leased to Malaysia Airlines have rejected its
plan, calling it "inappropriate and fatally flawed," Reuters says.
The airline group has said it was pleased with the level of support
from lessors but warned it will have to shut down if they don't
back the plan.
The airline, which has a fleet of 88 planes, leases aircraft from
about a dozen leasing companies, including Avolon, Aercap, BBAM,
Air Lease and Standard Chartered's leasing arm. All of them
declined to comment, while another lessor SMBC Aviation did not
respond to a Reuters query.
Under a "Plan B" scenario, Khazanah would inject funds into
Firefly, an operator of 12 turboprops that is a fully owned
subsidiary of Malaysia Airlines' parent.
According to a document seen by Reuters, Firefly would obtain
narrowbody planes and subsequently widebody aircraft from the
market. Lease rates have fallen sharply due to a lack of demand
from airlines.
Before the pandemic hit, Malaysia Airlines had pushed back its
order for Boeing Co 737 MAX jets and industry sources said it was
considering smaller planes such as Airbus SE A220s or Embraer SA
E190s, Reuters relays.
"It's quite clear that the future of Malaysia Airlines has to be a
very smaller airline if it has any chance of surviving," said one
leasing executive, adds Reuters.
About Malaysia Airlines
Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines
-- http://www.malaysiaairlines.com/-- engages in the business of
air transportation and the provision of related services.
As reported in the Troubled Company Reporter-Asia Pacific on March
19, 2020, The Malaysian Reserve said that Malaysia Airlines Bhd
(MAB) is at risk of bankruptcy and staff are encouraged to take the
voluntary unpaid leave programme, said the group CFO Boo Hui Yee in
an internal memo addressed to the airline's 13,000 staff.
Khazanah is the sole shareholder of MAB after taking the airline
private in 2014. The sovereign wealth fund injected MYR6 billion
into the airline to keep it afloat.
From its delisting from Bursa Malaysia from 2015 to 2017, MAB had
registered a loss of MYR2.3 billion due to the ringgit's weakness
and higher jet fuel costs.
According to Reuters, the Malaysian government has been seeking a
strategic partner for its national airline, which has struggled to
recover from two tragedies - the mysterious disappearance of flight
MH370 and the shooting down of flight MH17 over eastern Ukraine.
=================
S I N G A P O R E
=================
HYFLUX LTD: Court Grants 'Last' Adjournment for JM Application
--------------------------------------------------------------
Lee Meixian at The Business Times reports that Hyflux Ltd has a
last chance for a firm conclusion to one of the current three deals
on the table, as Justice Aedit Abdullah on Oct. 14 agreed to grant
adjournment to the judicial management application.
A hearing will be conducted "no earlier than three weeks" from now,
the judge said, the report relates.
But this was after he chastised Hyflux's lawyer Nish Shetty from
Clifford Chance Asia for making a last-minute request for an
adjournment at the start of the hearing on Oct. 14.
According to BT, Justice Abdullah described Mr. Shetty's actions as
"taking the court for granted" and said that "hairdressers and
dentists do seem to get more notice than me about cancellations".
At the virtual hearing on Zoom, he ordered Mr. Shetty and Tan Kok
Quan Partnership lawyer Eddee Ng, who represents the unsecured
working group (UWG) of creditors, to meet him physically in court,
the report notes.
There, Mr. Shetty explained that the various new developments in
the last 48 hours -- including a new expression of interest (EOI)
from American fund manager Strategic Growth Investments (SGI) on
Oct. 12 -- had led to his request.
But in remarking on the repeated requests for extensions to
Hyflux's debt moratorium without better progress shown in closing a
restructuring deal, Justice Abdullah said: "Suspicion is building
up considerably whether there is some sort of gamesmanship going on
here."
This echoed Mr. Ng's views. He too argued in court that his clients
- Mizuho, Bangkok Bank, BNP Paribas, CTBC Bank, KfW, Korea
Development Bank, and Standard Chartered Bank - were against the
adjournment.
He referred to numbers detailed in its affidavit that showed how
"powerless" a state Hyflux is in. "There is no more time," he said.
"They (Hyflux) are diminishing the chances of a successful JM . . .
This is nothing more than a cynical attempt to reduce the ability
of any JM to be able to do his work," BT relays.
The UWG holds 55.56 per cent of the senior unsecured debt of Hyflux
and 57 per cent of the senior unsecured debt of Hydrochem, BT
discloses.
To this, Mr. Shetty replied that a JM would take into account the
interests of all the stakeholders, not merely the UWG's, and
Pison's offer should be given a chance. "As at January this year,
(a liquidation analysis by EY was) looking at a liquidation value
of between two and six cents, so if the deal were to be done, even
the UWG would be better off."
There are currently three offers on the table, BT notes. In the
latest from SGI, the fund manager will invest at least SGD204.8
million, if it progresses. Senior unsecured creditors will get the
lion's share of SGD97 million, trade creditors SGD15.8 million, and
the perpetual securities and preference shares investors SGD32
million - all on a pro-rata basis.
The other two offers are from Middle Eastern utility firm Utico;
and Pison, the investment vehicle of Indonesian magnate Johnny
Widjaja, BT states.
According to BT, the latest update from Pison as at Sept. 25 was
that it has received 164 tender application forms in its proposed
debt purchase programme, has accepted about 140 of them, and is "in
the process of finalising several more".
No other creditors objected to an adjournment, although a few hoped
for a shorter extension as Hyflux's restructuring process has
already dragged on for more than two years, BT relates.
The MTN holders' lawyer wanted more clarity on what Pison's deal
offers to subordinated creditors and how professional adviser fees
will be resolved.
BT says the lawyer for Securities Investors Association
(Singapore), or Sias, also hoped that the adjournment would enable
the EOI from SGI, which was introduced by Sias to Hyflux, to be
developed into a "comprehensive" restructuring plan. Sias did not
support a JM at this juncture as this may impede discussions with
SGI.
A date for the next hearing will be arranged by the registry and
conveyed to the lawyers. Meanwhile, Hyflux's debt moratorium was
similarly extended until the next hearing date, BT notes.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company engaged WongPartnership LLP as legal advisors and Ernst
& Young Solutions LLP as financial advisors in this process. On
Jan. 29, 2019, WongPartnership applied to discharge themselves due
to difficulties relating to "loss of confidence and good cause" in
working with the client. The Company subsequently appointed
Clifford Chance and Cavenagh Law as its legal advisers in WongP's
place.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to Reuters.
KS ENERGY: Wiluan Family Loses Bid to Prevent JM Order
------------------------------------------------------
The Business Times reports that a second attempt by Indonesia's
Wiluan family to fight OCBC's bid to place KS Energy and a key unit
under judicial management (JM) failed on Oct. 13.
In a two-hour JM hearing at the Singapore High Court that was hotly
contested by the management of the beleaguered firm, Justice Aedit
Abdullah granted OCBC's application and placed a JM order over the
ailing Singapore-listed oil services firm, BT relates.
According to BT, the court appointed Deloitte & Touche's Andrew
Grimmett -- agrimmett@deloitte.com -- and Lim Loo Khoon --
juslim@deloitte.com -- as judicial managers of KS Energy and a key
operating subsidiary KS Drilling (KS Companies). Both were earlier,
on Aug. 31, appointed the group's interim judicial managers
(IJMs).
BT says the latest development is a major blow to Indonesian tycoon
and KS Energy founder Kris Wiluan, who had resisted the JM bid, and
is separately facing 112 charges of alleged false trading and
market rigging.
Mr. Wiluan, 71, an Indonesian citizen and Singapore permanent
resident, had described OCBC's attempt to use the criminal charges
filed against him as a basis for its JM application as
"disingenuous" as the firm's share price had nothing to do with
OCBC's loan facilities, BT relates.
His son, Richard Wiluan who is the firm's current chairman and
chief executive, has also vehemently fought the JM bid by OCBC, the
firm's super-majority creditor which holds over 84-86% of the total
liabilities of KS Energy and its subsidiary, according to BT.
Both father and son together own nearly 66% of mainboard-listed KS
Energy. Trading in the shares of the offshore and marine firm that
provides drilling and rig services as well as specialised
engineering and fabrication, has been suspended since Aug. 12, BT
notes.
In August, OCBC applied to place the mainboard listed firm and its
unit under JM after it sent letters of demand to the firms as well
as six other subsidiaries for a US$230.7 million term loan and a
S$5 million bridging loan to KS Drilling, BT recalls. KS Drilling
is an 80.09 per cent-owned subsidiary of KS Energy, which has
provided US$150 million in guarantee for the term loan.
Sarjit Singh Gill SC -- sarjit.gill@shooklin.com -- and Daniel Tan
-- daniel.tan@shooklin.com -- from law firm Shook Lin & Bok are
lead counsel for the bank.
In a second affidavit filed in late September (post-appointment of
IJMs to the firms on Aug. 31), Mr. Richard Wiluan claimed that both
OCBC and the court-appointed officers failed to appreciate the
firm's operational needs and lacked a commitment to its
rehabilitation, BT says.
He went as far as accusing OCBC of engineering a default, saying
the lender's real intention was to wind up the firms. According to
BT, OCBC denied the allegations as "frivolous, baseless and
irrelevant" and said it did not care to engage in a "tit-for-tat
exchange", in its reply affidavit filed earlier this month. In
fact, the lender stressed that JM was the "least drastic" option
given that it could have sought to wind up the the firms as they
were "hopelessly insolvent" or appoint receivers for their rigs.
"Either option would have been a death knell for the KS Companies,"
said OCBC in court documents.
As for the IJMs, Mr. Wiluan alleged that they were too focused on
recovering the funds for OCBC at the expense of other creditors. In
addition, given the IJMs' inexperience, he said the company was
losing time and missing tenders opportunities to land suitable
projects.
In his reply affidavit, Mr. Grimmett said no tenders have been
launched on the opportunities brought to the IJMs attention by the
management, BT relates. Furthermore, he said that these
opportunities may not be viable given the group's lack of financial
resources as they involve substantial upfront cost.
He added that the IJMs have concluded that the KS Companies would
not be able to continue as a going concern without a comprehensive
business and debt restructuring under OCBC's auspices, the report
relays.
In an IJM report dated Oct. 8, the court-appointed managers said it
would consider KS Energy's listing status as an asset that can be
of interest to potential investors, be it parties in a similar
industry who may be interested to acquire its existing business or
those seeking a back-door listing, adds BT.
About KS Energy
Headquartered in Singapore, KS Energy Limited operates as an energy
services provider primarily to the oil and gas, marine, and
petrochemical industries in Kurdistan, Egypt, Pakistan, Vietnam,
Indonesia, Malaysia, and internationally. KS Energy Limited is a
subsidiary of Pacific One Energy Limited.
*********
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,
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Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
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