/raid1/www/Hosts/bankrupt/TCRAP_Public/201123.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, November 23, 2020, Vol. 23, No. 234
Headlines
A U S T R A L I A
GROCON PTY: Construction Business Placed Into Administration
PEPPER RESIDENTIAL 28: S&P Assigns B+ Rating on Class F Notes
RAHME HOLDINGS: Second Creditors' Meeting Set for Nov. 30
C H I N A
BANK OF COMMUNICATIONS: Fitch Rates $2.8BB Add'l. Tier 1 Bonds BB+
CHINA: SOE Bond Defaults Show Up on Radar of Top Economic Planner
DANKE APARTMENT: In Talks with Several Potential Buyers
HUACHEN AUTOMOTIVE: Enters Bankruptcy Restructuring
PEKING UNIVERSITY: Creditors Approve Restructuring of Conglomerate
TD HOLDINGS: Posts $1.2 Million Net Income in Third Quarter
TIMES CHINA: Fitch Affirms BB- LongTerm IDR, Outlook Stable
H O N G K O N G
ALIBABA PICTURES: Loss Down to CNY162MM in 1st Half Ended Sept. 30
I N D I A
BEAM COX: CARE Keeps D on INR6.5cr Loans in Not Cooperating
BHARAT CARRIERS: CARE Lowers Rating on INR13.03cr Loan to D
CAPACITE ENGINEERING: Ind-Ra Assigns 'BB+' LongTerm Issuer Rating
CCCL INFRASTRUCTURE: CARE Keeps D on INR55cr Debt in NonCooperating
DHROOV RESORTS: CARE Keeps D on INR11cr Loans in Not Cooperating
GLOCAL HEALTHCARE: CARE Lowers Rating on INR35cr LT Loan to C
IL&FS FINANCIAL: Ind-Ra Affirms 'D' Issuer Ratings
INDROYAL PROPERTIES: CARE Keeps D on INR23.5 Debt in NonCooperating
INFRASTRUCTURE LEASING: Ind-Ra Affirms 'D' Issuer Ratings
JAGANNATH EDUCATIONAL: CARE Keeps D Debt Rating in Not Cooperating
JAGJIT ENTERPRISES: CARE Cuts Rating on INR13cr LT Loan to D
KIRAN GLOBAL: CARE Keeps D Ratings in Not Cooperating Category
KPC MEDICAL: CARE Keeps D on INR99.39cr Loans in Not Cooperating
KRISHNA STEELAGE: Ind-Ra Moves BB Issuer Rating to Non-Cooperating
KUBS SAFES: CARE Keeps D on INR28.76cr Loans in Not Cooperating
MAHARAJA PAPER: CARE Keeps C Debt Ratings in Not Cooperating
MBE COAL: CARE Lowers Rating on INR9.75cr LT Loan to D
METTU CHINNA: CARE Keeps D on INR7.5cr Loans in Not Cooperating
RAKE POWER: CARE Moves D Rating on INR10cr Loans to Not Cooperating
RAVI TEJA: CARE Keeps D on INR4.82cr Loans in Not Cooperating
S S INFRASTRUCTURE: CARE Withdraws C Rating on Bank Facilities
SE FORGE: CARE Raises Rating on INR180.85cr LT Loan to C
STERLING CAST: CARE Keeps C on INR5.35cr Loans in Not Cooperating
SUSEE PREMIUM: CARE Keeps D on INR14.4cr Loans in Not Cooperating
VISHNU GRANITES: Ind-Ra Moves B+ Issuer Rating to Non-Cooperating
YUVARAJ CABLE: CARE Lowers Rating on INR5.87cr Loan to C
J A P A N
JTB CORP: Posts Largest 1st-Half Net Loss; To Cut 6,500 Jobs
N E W Z E A L A N D
HAD GARMENTS: Ex-Liquidator Jailed for 4 Years for Theft, Perjury
INTERSTAR NZ 2004-A: S&P Assigns B Rating on Tranche 3 Debt
P H I L I P P I N E S
PAL HOLDINGS: Posts PHP7.92-BB Net Loss in Q3 Ended Sept. 30
S I N G A P O R E
NOVENA GLOBAL: Wind-Up Proceeding Sought by DBS
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A U S T R A L I A
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GROCON PTY: Construction Business Placed Into Administration
------------------------------------------------------------
Australian Financial Review reports that building and development
giant Grocon has placed its construction business into
administration, with chief executive Daniel Grollo blaming
Infrastructure NSW's handling of the Barangaroo project for its
failure.
According to AFR, Mr. Grollo said administrators had been called in
over the legacy construction companies established by his
grandfather Luigi 73 years ago.
The Ribbon hotel development overlooking Sydney's Darling Harbour
and the Northumberland office development in Collingwood on the
Melbourne city fringe will not be included in the administration
entities, the company said, AFR relays.
A spokeswoman for Grocon was unable to say which entities had been
placed in administration or who the administrators were. She also
declined to comment on how much money is owed to creditors.
"It is unfortunate that INSW is forcing our hand to place the
construction business into administration. While I have spoken
before about moving Grocon away from the construction business
model to new initiatives such as build-to-rent, I did not want to
call in administrators," AFR quotes Mr. Grollo as saying.
"My desire is to pay the creditors in full. I believe we will
ultimately win the case against INSW and when we do so, the
creditors will be the first in line to be compensated."
Once a powerhouse in the construction industry, Grocon has been
struggling for some time with a number of legal stoushes and
battles with the construction union contributing to its financial
woes.
Last year, Grocon put two subsidiaries into voluntary
administration in the middle of a court battle with Dexus over a
AUD28 million lease claim, AFR recalls.
The Age reported on Nov. 13 that Grocon's only Melbourne project
– a AUD111 million inner-city office development for the Liberman
family - had ground to a halt, with subcontractors understood to be
owed six months' back pay, according to AFR.
AFR relates that Mr. Grollo said his hand had been forced by
Infrastructure NSW's handling of the Central Barangaroo mixed-use
project, which had been delayed due to a stoush with Crown and
Lendlease's casino project over sight lines and harbour views.
Grocon was awarded development rights for the Central Barangaroo
project in January 2018 as part of a consortium with Aqualand and
Scentre Group. It later introduced Oxford Properties as an
investment partner.
However, following delays at the project, which exacerbated its
financial difficulties, Grocon sold its stake in the AUD2 billion
mixed-use project to developer Aqualand in July last year for AUD73
million.
Last year the state government abandoned its legal battle against
Crown Resorts over sight lines and views.
Grocon is suing the NSW government for AUD270 million – the
amount it said it lost out on when it sold its Central Barangaroo
stake to Aqualand because the views to the harbour were blocked by
the Crown Casino project.
Grocon claims the now abolished Barangaroo Delivery Authority was
aware for years that the Crown/Lendlease sight lines dispute would
have an impact on its design for Central Barangaroo but withheld
this information.
"It's no secret that Grocon has experienced financial issues in the
past few years, primarily because of the ongoing delays on the
Central Barangaroo project," Mr. Grollo said in July, after
launching fresh legal action against the NSW government, AFR
relays. "As a result, Grocon was left many millions of dollars out
of pocket after years and years of work."
Grocon Pty Ltd is a development, construction and funds management
company.
PEPPER RESIDENTIAL 28: S&P Assigns B+ Rating on Class F Notes
-------------------------------------------------------------
S&P Global Ratings assigned its ratings to eight classes of
nonconforming and prime residential mortgage-backed securities
(RMBS) issued by Permanent Custodians Ltd. as trustee of Pepper
Residential Securities Trust No.28. Pepper Residential Securities
Trust No.28 is a securitization of nonconforming and prime
residential mortgages originated by Pepper Homeloans Pty Ltd.
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including its view that the credit support is sufficient
to withstand the stresses it applies. The credit support for the
rated notes comprises note subordination and excess spread. The
assessment of credit risk takes into account the underwriting
standard and centralized approval process of the seller, Pepper
Homeloans.
-- The availability of a retention amount, amortization amount,
and yield reserve, which will all be funded by excess spread, but
at various stages of the transaction's term. They will have
separate functions and timeframes, including reducing the balance
of senior notes, reducing the balance of the most subordinated
notes, and paying senior expenses and interest shortfalls on the
rated notes.
-- S&P expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity facility
equal to 2.5% of the outstanding balance of the notes, and
principal draws, are sufficient under our stress assumptions to
ensure timely payment of interest.
-- The condition that a minimum margin will be maintained on the
assets.
-- That S&P also has factored into its ratings the legal structure
of the trust, which has been established as a special-purpose
entity and meets our criteria for insolvency remoteness.
-- 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 has recently updated its outlook assumptions for
Australian RMBS in response to changing macroeconomic conditions as
a result of the COVID-19 outbreak. S&P has also applied a range of
additional stresses in its analysis to assess the rated notes'
sensitivity to liquidity stress and the possibility of higher
arrears. As of Oct. 31, 2020, borrowers with COVID-19 related
hardship arrangements make up 3.31% of the closing pool balance.
S&P Global Ratings believes there remains a high degree of
uncertainty about the evolution of the coronavirus pandemic.
Reports that at least one experimental vaccine is highly effective
and might gain initial approval by the end of the year are
promising, but this is merely the first step toward a return to
social and economic normality; equally critical is the widespread
availability of effective immunization, which could come by the
middle of next year. S&P said, "We use 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
Pepper Residential Securities Trust No.28
Class Rating Amount (mil. A$)
A1-s AAA (sf) 162.50
A1-a AAA (sf) 400.00
A2 AAA (sf) 93.00
B AA (sf) 37.50
C A (sf) 24.00
D BBB (sf) 13.50
E BB (sf) 7.80
F B+ (sf) 4.20
G NR 7.50
NR--Not rated.
RAHME HOLDINGS: Second Creditors' Meeting Set for Nov. 30
---------------------------------------------------------
A second meeting of creditors in the proceedings of Rahme Holdings
Pty Ltd, trading as Foresite Constructions, has been set for Nov.
30, 2020, at 3:00 p.m. via teleconference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Nov. 27, 2020, at 4:00 p.m.
Glenn Livingstone and Morgan Kelly of KPMG were appointed as
administrators of Rahme Holdings on Oct. 26, 2020.
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C H I N A
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BANK OF COMMUNICATIONS: Fitch Rates $2.8BB Add'l. Tier 1 Bonds BB+
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Fitch Ratings has assigned a final rating of 'BB+' to Bank of
Communications Co., Ltd.'s (BOCOM, A/Stable/bb-) USD2.8 billion
3.80% undated Additional Tier 1 (AT1) capital bonds. Net proceeds
of the bonds will be used to replenish the bank's AT1 capital. The
bonds will be issued on November 18, 2020 and listed on the Hong
Kong Stock Exchange. The final rating is in line with the expected
rating assigned on November 9, 2020, and follows the receipt of
documents conforming to information previously received.
KEY RATING DRIVERS
Under Fitch's Bank Rating Criteria, a bank's Issuer Default Rating
(IDR) is used as the anchor rating when Fitch believes
extraordinary sovereign support is likely to be extended further
down the capital structure into more junior obligations, including
AT1 notes, if required. Therefore, Fitch applies BOCOM's
support-driven Long-Term IDR of 'A' as the anchor for its undated
AT1 capital bonds. This is in light of BOCOM's high systemic
importance and central state ownership, reflected in the bank's
Support Rating of '1' and Support Rating Floor of 'A', similar to
other state banks in China.
Non-performance risk is mitigated by its expectation of sovereign
support, resulting in zero notches, while the undated AT1 capital
bonds are notched twice from their anchor rating to reflect high
loss severity relative to senior unsecured instruments given their
subordination, implying a rating of 'BBB+'. However, Fitch's Bank
Rating Criteria imposes a rating cap of 'BB+' for issuers with
Support Rating Floors in the 'A' or 'BBB' category. The rating of
the bonds is therefore capped at 'BB+'.
The distribution on AT1 instruments should only be paid out of
distributable items under China's Administrative Measures for the
Capital of Commercial Banks (Trial) (Capital Management Rules). Any
distributable items that are not distributed in a given year are
retained and available for distribution in subsequent years. The
Company Law and Capital Management Rules, however, do not expressly
define distributable items in the context of AT1 instruments.
That said, Fitch does not expect higher non-performance risk for
the undated AT1 capital bonds due to the level of BOCOM's
undistributed profit (end-1H20: CNY176 billion). BOCOM also has the
discretion to cancel, in whole or in part, any distribution on the
bonds, subject to a relevant resolution passed at a general meeting
of the banks' shareholders.
The undated AT1 capital bonds have lower recovery expectations than
for higher-ranking securities due to their subordination status and
write-off features. The bonds will be irrevocably written-off, in
whole or in part, upon the occurrence of a non-viability trigger
event. Such an event occurs when the China Banking and Insurance
Regulatory Commission (CBIRC) determines that without a write-off
the bank would become non-viable, or when the relevant authorities
determine that without a public-sector injection of capital or
other equivalent support the bank would become non-viable,
whichever is earlier.
Once the principal amount of the undated AT1 capital bonds, in
whole or in part, has been written-off, the relevant written-off
portion of the bonds will not be restored or become payable again,
whether in whole or in part, in any circumstances, including where
the relevant non-viability trigger event ceases to continue, and
any accrued but unpaid distribution in respect of such relevant
written-off portion of the bonds shall cease to be payable.
The claims of the bondholders for payment of principal and any
distribution under the undated AT1 capital bonds will rank in
priority to the claims of holders of all classes of equity capital
and junior obligations of the bank and be subordinated to the
claims of depositors, general creditors and holders of any
subordinated indebtedness that rank senior to the undated capital
bonds, and rank pari passu with the claims of holders of any other
AT1 instruments issued or guaranteed by the bank that rank pari
passu with the undated AT1 capital bonds and parity obligations of
the bank.
Under a non-viability trigger event, the undated AT1 capital bonds
shall be written off concurrently with the write-off or conversion
into ordinary shares of the bank of the principal amount of all
other AT1 capital instruments with the same trigger event, and
before the write-off or conversion into ordinary shares of the bank
of the principal amount of all Tier 2 capital instruments.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The rating for BOCOM's undated AT1 capital bonds is sensitive to a
change in the bank's Long-Term IDR, which may occur due to any
shift in the perceived willingness or ability of the government to
support the bank in a full and timely manner, and/or the relative
notching for non-performance risk, potentially stemming from a
change in Fitch's assumptions around the state's ability and
propensity to prevent BOCOM from triggering the bonds'
loss-absorption features. An upgrade of BOCOM's Support Rating
Floor and Long-Term IDR to 'AA-' or higher would result in an
upgrade of the bonds' rating to 'BBB' under Fitch's criteria.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The rating for BOCOM's undated AT1 capital bonds will be downgraded
if its Support Rating Floor and Long-Term IDR (as anchor) are
downgraded to below 'BBB'.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The rating for BOCOM's proposed undated capital bonds is linked
directly to the bank's Long-Term IDR, and BOCOM's IDR is linked
directly to China's sovereign rating (A+/Stable).
ESG CONSIDERATIONS
BOCOM has an ESG Relevance Score of 4 for Financial Transparency
risk due to under-reporting of non-performing loans and
risk-weighted assets stemming from the use of off-balance-sheet
transactions. This has a negative effect on the bank's credit
profiles, and is relevant to the rating in conjunction with other
factors.
The bank has an ESG Relevance Score of 4 for Governance Structure
risk, as there is potential for significant state influence as the
owner or regulatory influence due to the lack of independence from
the state. This has a negative effect on the bank's credit
profiles, and is relevant to the rating in conjunction with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CHINA: SOE Bond Defaults Show Up on Radar of Top Economic Planner
-----------------------------------------------------------------
Liang Hong and Denise Jia at Caixin Global report that a series of
bond defaults by Chinese state-owned enterprises (SOEs) is on the
radar screen of the country's top economic planner.
At a routine press conference Nov. 17, National Development and
Reform Commission (NDRC) spokesperson Meng Wei called for local
governments to step up supervision through project screening to
prevent default risk for enterprise bonds, Caixin relates.
Caixin says recent failures to repay debt by a coal mining company,
a top Chinese chipmaker and a major car manufacturer highlighted
the risk of rising defaults in China's corporate bond market. The
number of defaults by China's SOEs is expected to rise marginally
next year as the central bank shifts toward a more neutral policy
stance amid an economic recovery, according to a Fitch report
released Nov. 16, adds Caixin.
DANKE APARTMENT: In Talks with Several Potential Buyers
-------------------------------------------------------
Niu Mujiangqu and Denise Jia at Caixin Global report that several
apartment rental companies are in talks to take over struggling
Danke Apartment, but the rental platform's funding shortfall of as
much as CNY3 billion ($457 million) makes potential buyers wary.
According to Caixin, Danke, run by New York-listed Phoenix Tree
Holdings Ltd., and other long-term apartment rental platforms have
become mired in financial troubles in the wake of Covid-19
pandemic, raising questions about a business model that requires
immense sums of cash up front to fund a rapid expansion.
A number of such operators ran out of cash and collapsed, causing
tens of thousands of renters to be evicted, Caixin says. Regulators
in several cities issue guidelines clamping down on risk in the
rental housing market. Hangzhou's housing regulator requires
apartment rental companies to deposit a risk prevention and control
reserve equivalent to two months of rent into a special account
managed by the government, the report notes.
HUACHEN AUTOMOTIVE: Enters Bankruptcy Restructuring
---------------------------------------------------
Shanghai Daily's SHINE reports that Huachen Automotive Group
Holdings has entered bankruptcy restructuring.
SHINE relates that the Shenyang Municipal Intermediate People's
Court in northeast China's Liaoning Province, where the company is
based, on Nov. 20 accepted the restructuring application filed by a
creditor.
According to SHINE, the court said the auto firm had insufficient
assets to pay off its debts, but it was worthwhile and possible to
rescue the company through restructuring.
The state-owned conglomerate is the parent of Brilliance China
Automotive Holdings, which teamed up with German carmaker BMW to
form a joint venture called BMW Brilliance Automotive in 2003, the
report discloses.
SHINE notes that the company has been struggling with debts and
loss-making of its self-owned brands, a situation exacerbated by
the COVID-19 outbreak. Last month, it triggered concern after
defaulting on a 1-billion-yuan (US$152 million) bond, the report
states.
Sources with Huachen said the restructuring only involves its own
brands, and its joint ventures with BMW and Renault will not be
affected, SHINE relays.
On Nov. 20, China's top securities watchdog said it has taken
measures against Huachen Automotive Group Holdings and relevant
intermediaries.
A special inspection into the group's bond default has been
launched, which has caught market attention, the China Securities
Regulatory Commission said in a statement on its website, according
to SHINE.
SHINE relates that he commission issued a warning letter to the
group on Nov. 20, and decided to file an investigation into its
illegal information disclosure and suspected violation of laws and
regulations.
It simultaneously conducted checks on intermediary agencies
involved in the group's relevant bonds, with relevant illegal acts
investigated and punished, according to the statement cited by
SHINE.
Since the launch of the joint venture in 2003, BMW has invested
over CNY52 billion in Shenyang and completed the building of two
automotive factories, one powertrain plant, and one research and
development center, the report notes.
China has become the world's largest sales market for BMW, which
sold more than 720,000 cars in 2019, and the auto company has
announced it would enhance investment to further tap the Chinese
market this year, SHINE adds.
Huachen Automotive Group Holding Co.,Ltd. manufactures automobiles.
The Company produces passenger cars, commercial cars, and more.
Huachen Automotive Group Holding also sales spare parts.
PEKING UNIVERSITY: Creditors Approve Restructuring of Conglomerate
------------------------------------------------------------------
Tang Ziyi at Caixin Global reports that creditors of Peking
University Founder Group Corp. (PUFG) have approved a plan to
restructure the state-owned industrial and investment conglomerate,
making another step forward in efforts to resolve its nearly CNY150
billion (US$22 billion) debt pile.
About four-fifths of the 446 creditors with voting rights who
attended an October meeting voted in favor of the plan, according
to a PUFG statement released on Nov. 19, Caixin relays. Under the
plan, PUFG will merge with three subsidiaries and one affiliate.
Caixin says PUFG, which is owned by Peking University, one of
China's oldest and most prestigious tertiary institutions, rocked
the market in December 2019 by failing to repay a CNY2 billion
bond. According to Caixin, the default underscored the financial
squeeze on Chinese businesses amid slowing economic growth, and
especially concerns about the weak finances of debt-laden business
arms of Chinese universities.
About Peking Founder
Chinese state-owned Peking University Founder Group Corp. provides
information technology services. The Company offers software
development, electronic publishing system development, smart city
solution development, data operation, and other services. Peking
University Founder Group also operates financing, medical
technology development, and other businesses.
On Feb. 19, 2020, Founder Holdings Limited received a notification
letter from Peking Founder, regarding a civil order and decision
letter received by Peking Founder from The First Intermediate
People's Court of Beijing. Pursuant to the civil order and decision
letter, the Court decided to accept the application made by Bank of
Beijing Co., Ltd. for the initiation of restructuring procedure
against Peking Founder, and appointed Peking Founder liquidation
team as the administrator of Peking Founder. The Peking Founder
liquidation team consists of, among others, the People's Bank of
China, the Ministry of Education of the People's Republic of China,
relevant financial regulators and relevant departments of Beijing
Municipal Government.
Bank of Beijing Co. Ltd., one of the creditors of Peking University
Founder Group Corp., asked a court to restructure the indebted
state-owned conglomerate in February 2020, according to Caixin
Global.
TD HOLDINGS: Posts $1.2 Million Net Income in Third Quarter
-----------------------------------------------------------
TD Holdings, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing net income of $1.18
million on $7.21 million of total revenue for the three months
ended Sept. 30, 2020, compared to a net loss of $392,843 on $0 of
total revenue for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $3.32 million on $12.39 million of total revenue
compared to a net loss of $3.26 million on $0 of total revenue for
the same period during the prior year.
As of Sept. 30, 2020, the Company had $100.36 million in total
assets, $6.46 million in total liabilities, and $93.91 million in
total equity.
Going forward, the Company plans to fund its operations through
revenue generated from its commodity trading business, funds from
its private placements as well as financial support commitments
from the Company's chief executive officer and major shareholders.
Based on above operating plan, the management believes that the
Company will continue as a going concern in the following 12
months.
A full-text copy of the Form 10-Q is available for free at:
https://bit.ly/35Turkt
About TD Holdings
Headquartered in Beijing, People's Republic of China, TD Holdings,
Inc., (formerly known as Bat Group, Inc.) operates a luxurious car
leasing business as well as a commodities trading business
operating in China.
For the year ended Dec. 31, 2019, the Company incurred net loss
from continuing operations of approximately $6.94 million, and
reported cash outflows of approximately $2.17 million from
operating activities. These factors caused concern as to the
Company's liquidity as of Dec. 31, 2019.
TIMES CHINA: Fitch Affirms BB- LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed homebuilder Times China Holdings
Limited's Long-Term Foreign-Currency Issuer Default Rating (IDR),
senior unsecured rating and the ratings of all its outstanding
bonds at 'BB-'. The Outlook is Stable.
Times China's ratings are supported by its quality and sufficient
land bank, strong brand recognition in Guangdong province, and a
healthy gross profit margin of 25%-30% for its property-development
business, despite a robust churn rate. In addition, Times China has
a new source of liquidity from the primary-land development of its
urban-renewal projects (URPs).
Fitch thinks profitability will benefit from the wider-margin
urban-renewal business. The ratings are constrained by the smaller
scale of the property-development business and higher leverage than
'BB' peers.
KEY RATING DRIVERS
URPs Support Rating: Times China started benefitting from its URPs
in 2018, and Fitch expects the company's margin can be sustained
above the industry level in the medium term. Times China receives
government compensation for carrying out primary-land development,
which it is able to acquire below market cost. Fitch expects URPs
to account for 15%-20% of Times China's land bank by 2021, based on
a historical conversion pace. Around 30% of the newly acquired land
bank has been converted from URPs.
Wide EBITDA Margin: Fitch expects the EBITDA margin, after adding
back capitalised interest, to be sustained at 25%-30%.
Development-property projects converted from URPs have a wider
gross profit margin of above 40%, due mainly to lower land costs
relative to market prices. Times China's EBITDA margin, after
adding back capitalised interest, was 29% in 2019 and 31% in 2018,
which included revenue and gross profit from URPs. In 1H20, Times
China recognised its gains from village URPs in other income.
Including the gains from village URPs, its EBITDA margin was around
32% in 1H20.
Leverage to Stabilise: Fitch expects leverage (measured by net
debt/adjusted inventory, with proportionate consolidation of JVs
and associates) to stay at 40-45% in 2021. Leverage is similar to
other 'BB-' rated homebuilders with similar sales scale. Fitch has
included the receivables, deposits and other prepayments related to
URP in its inventory calculation, in line with the treatment for
other homebuilders with significant URP business.
Leverage came down from 43.9% at end-2019 to 39.3% at end-June
2020, due mainly to fewer land acquisitions. Fitch expects leverage
to be stable in 2020 versus 2019, in light of the company's
guidance of spending no more than half of its sales proceeds on
land.
Limited Diversification and Scale: About 90% of Times China's land
bank is located in the Greater Bay Area, which is less diversified
than most other 'BB' category peers. Fitch expects total contracted
sales to be supported by robust demand in this area, and to grow by
7% to around CNY84 billion in 2020. Total contracted sales
increased by 29% to CNY78 billion in 2019. Times China's annual
attributable sales scale of around CNY60 billion was smaller than
the more than CNY90 billion of 'BB' peers in 2019.
High Non-Controlling Interests: Times China's exposure to
non-controlling interests (NCI), at 45%-50% of total equity, is
higher than the average of 'BB-' rated peers. This reflects its
reliance on the capital contributions from non-controlling
shareholders, which are mostly developers, to finance its
expansion. This lowers Times China's need for debt funding, but
creates potential cash leakage in the future, and reduces financial
flexibility further because homebuilders with lower NCI can dispose
of stakes in projects to reduce leverage.
DERIVATION SUMMARY
Times China has a similar contracted sales scale to that of KWG
Group Holdings Limited (BB-/Stable), Yuzhou Group Holdings Limited
(BB-/Stable) and Ronshine China Holdings Limited (BB-/Stable).
Times China's land bank is less diversified than these peers, being
concentrated mostly in the Greater Bay Area. However, it has a
stronger pipeline in URPs, and is less reliant on public auctions
in new land acquisitions, leading to more sustainable profit
margins.
Times China's leverage (as defined by net debt/adjusted inventory
of 40%-45%) is also similar to that of Ronshine, but higher than
KWG and Yuzhou.
KEY ASSUMPTIONS
- Contracted sales to increase by 7% in 2020, 10% in 2021, and 5%
in 2022 (2019: 29%)
- Cash collected as a percentage of total sales at 77% in
2020-2022 (2019: 77%)
- Land premium outflow of around 50% of sale proceeds in
2020-2022 (2019: 48%)
- Overall EBITDA margin, excluding capitalised interest, at
25%-30% in 2020-2022 (2019: 31%)
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Proportionally consolidated net debt/adjusted inventory
sustained below 35%
- Attributable contracted sales scale expands to a level
comparable with 'BB' rated peers
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Proportionally consolidated net debt/adjusted inventory above
45% for a sustained period
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Fitch believes Times China maintains
sufficient liquidity to fund development costs, land premium
payments and debt obligations due to its diversified funding
channels, healthy maturity profile and flexible land-acquisition
strategy. Times China had available cash of CNY31.2 billion,
excluding restricted cash of CNY3.4 billion, as of end-June 2020,
against CNY25.4 billion in short-term debt. The company issued
USD300 million of 6.75% senior notes due 2025 in June and a tap of
USD250 million in October 2020. It also issued USD350 million in
6.2% of senior notes due 2026 in September 2020.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
=================
H O N G K O N G
=================
ALIBABA PICTURES: Loss Down to CNY162MM in 1st Half Ended Sept. 30
------------------------------------------------------------------
Janice Heng at Alibaba Pictures Group's net loss narrowed to
CNY162.1 million (SGD33.1 million) for the half-year ended Sept.
30, 2020, less than half the CNY390.4 million net loss in the
year-ago period, according to the Chinese film company's results
released on Nov. 19.
Revenue for this first half was CNY926.7 million, down from CNY1.5
billion in the year-ago period, BT discloses.
Loss per share for the period was 0.61 fen, compared with a loss
per share of 1.48 fen in the year-ago period. No dividend was
declared, the report notes.
According to BT, dual-listed in Singapore and Hong Kong, the firm
had earlier announced plans to delist from the Singapore Exchange's
mainboard on Dec. 4. Trading in its shares in Singapore has been
suspended since Nov. 11, the report notes.
Based in Hong Kong, Alibaba Pictures Group Limited produces and
invests in television programming and motion pictures in China.
=========
I N D I A
=========
BEAM COX: CARE Keeps D on INR6.5cr Loans in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Beam Cox
Constructions Private Limited (BCCPL) 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 Rating continues to remain
under ISSUER NOT COOPERATING
category
Short term Bank 0.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 13, 2019, placed the
rating(s) of BCCPL under the 'issuer non-cooperating' category as
BCCPL had failed to provide information for monitoring of the
rating. BCCPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated from January 2020 to October 14, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 13, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Delay in debt servicing: The company operates in a working
capital intensive industry and has been facing stretched collection
period with majority of contracts executed for the Government
departments which has been associated with delayed payment of
bills. Consequently the company suffers from a weak liquidity
position and cash flow mismatches resulting in delays in meeting
the debt obligations in a timely manner.
Key Rating Strengths
* Experienced promoters in the construction industry: The company
is managed by Mr. Y Ravinder Reddy, a graduate with around 20 years
of experience in this line of industry and other directors of the
company who have rich industry experience in the areas of
construction, finance and engineering
BCCPL was incorporated in the year 1994 by Mr. Y Ravinder Reddy and
other three directors. The company is registered as Class-I
contractor with Andhra Pradesh government and is into execution of
civil works and construction contracts for government entities.
Major works of the company include construction of school
buildings, school and college hostel buildings, laying of cement
roads, laying of water pipelines, etc.
BHARAT CARRIERS: CARE Lowers Rating on INR13.03cr Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Bharat Carriers Limited (BCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 13.03 CARE D Revised from CARE BB+;
Facilities Stable
Short term Bank
Facilities 0.50 CARE D Revised from CARE A4+
Detailed Rationale & Key Rating Drivers
The ratings have been revised on account of delay in debt
servicing. The ratings are constrained due to dependency on
fortunes of principal with low bargaining power, working capital
intensive nature of operations, cyclical nature of auto industry
and weak capital structure and debt protection metrics. The rating,
however, derives strength from experienced promoters with long
track record of operations, diversified product portfolio with
multiple dealerships and wide distribution network in Odisha, long
established relationship with most principals and reputed clientele
for carriers business, diversified source of revenue and stable
financial performance in FY19 (refers to the period April 1 to
March 31) & H1FY20.
Rating Sensitivities
Positive Factors - Factors that could lead to positive rating
action/upgrade:
* Default free track record of 90 days
* Maintenance of PBILDT margin at around 5%-6% on
a sustained basis
* Reducing Operating cycle to below 47 days
* Maintaining relationship with existing OEMs
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in debt servicing: There are delays in debt servicing and
overdrawals in the CC account on few occasions which are
regularized within next two days.
* Weak capital structure and debt protection metrics: Overall
gearing and total debt/GCA of the group has deteriorated to 2.99x
and 13.16x as on Mar 31, 2019 from 2.82x and 12.43x respectively as
on Mar 31, 2018 due to increase in debt in Shree Bharat Motors
Limited (SBML) in FY19 in the form of working capital borrowings.
The debt availed is mainly used to fund the increased sales of
Daimler India Commercial Vehicles (DICV) wherein the company has to
provide additional credit period to the customers in view of bulk
orders placed by mining contractors. The debt coverage indicators
of the group is weak and is sensitive to equity infusion to the
extent of INR4 crore in FY20 and INR2 core in FY21 in addition to
infusion of unsecured loan of INR4 crore in FY20 to support the
repayments in BCL. On a standalone basis, the overall gearing ratio
of BCL improved from 3.32x as on March 31, 2018 to 2.29x as on
March 31, 2019 and Total debt/GCA improved from 7.28x in FY18 to
4.90x in FY19.
* Dependency on fortunes of principal with low bargaining power:
The group lacks bargaining power due to its dependence on such
large principals that set policies, targets and link incentive
based income to satisfactory compliance of such policies. The
financial risk profile of the company has a high degree of
correlation with the performance of OEM's vehicles in the market
and their ability to launch new products. Further, any reputational
damage to the OEM would impact the topline of dealerships.
* Working capital intensive nature of operations: The group's
operating cycle elongated to 72 days in FY19 vis-à-vis 47 days in
FY18 on the back of high inventory period which increased from 33
days in FY18 to 53 days in FY19 in view of slowdown in the auto
sales in H2FY19. Instances of building up inventory also take place
during the year end in order to avail various incentives launched
by OEMs in order to meet year end targets. The collection period of
the group also increased from 31 days in FY18 to 40 days in FY19
due to credit given for the workshop job performed by SBML to some
of the major customers of the company.
* Cyclical nature of auto industry: The auto industry is inherently
vulnerable to the economic cycles and is highly sensitive to the
interest rates and fuel prices. A hike in interest rate increases
the costs associated with the purchase leading to purchase
deferral. Fuel prices have a direct impact on the running costs of
the vehicle and any hike in the same would lead to reduced
disposable income of the consumers, influencing the purchase
decision. The group thus faces significant risks associated with
the dynamics of the auto industry.
Key Rating Strengths
* Experienced Promoters with long track record of operations:
Bharat group is managed by Mr. Om Prakash Didwania along with his
brother Mr. Jay Prakash Didwania. Both the promoters have vast
experience in auto trade and transportation for more than three
decades. Due to their long standing experience in automobile
dealership business they have been able to increase their
dealership network across Odisha in various segments and currently
hold dealerships with more than ten OEMs.
* Diversified product portfolio with multiple dealerships and
wide distribution network in Odisha: Bharat group deals in 2W, 3W,
passenger vehicle and commercial vehicles segment. In FY19, the
group also ventured in two wheeler tyre and spares parts
distributorship. The group currently has dealerships of Hero Motor
(2W), Volkswagen (4W), Fiat (4W), Chevrolet (4W), Bajaj Auto (2W
and 3W), UM Motorcycles (2W), Daimler (CV), Vespa (2W), Triumph
motorcycles (2W), Nissan (4W), Jeep (4W) and Maxis (Tyres for 2W).
The geographical reach of the group is in all major towns of Odisha
namely Bhubaneswar, Angul, Balasore, Berhampur, Sambalpur,
Rourkela, Keonjhar, Barbil and Cuttack thereby providing a
satisfactory outreach within the state.
* Long established relationship with most principals and reputed
clientele for carriers business: Bharat group has multiple
dealerships under Bharat Motors Limited (BML), SBML and Unideal
India Private Limited (UIPL) and has a long standing relationship
with majority of its principals. Currently, Bharat group has been
associated with Hero Moto Corp Ltd. (HMCL), Bajaj Auto Ltd.,
General Motors Ltd. and Volkswagen India Pvt. Ltd., etc for more
than a decade. Due to favorable long standing relationship with
principals from dealership business, the promoters have been
successful in leveraging their relation to provide logistics
services to the OEMs such as Maruti, Hyundai, Nissan, Tata Motors
etc. Accordingly BCL has several reputed clients with a long
relationship.
* Diversified source of revenue: Bharat group has revenue sources
from its dealerships business in BML, SBML and UIPL and also has
logistics business in Bharat Carriers Ltd (BCL). Accordingly the
group has diversified revenue profile. The dealership business
derives revenue from sale of vehicles, sale of spare parts and
workshop proceeds. A balanced mix between dealership and logistics
services business enables Bharat Group to have an edge over the
dealers who are predominantly in the dealership business.
* Stable financial performance in FY19 & H1FY20: The total
operating income of Bharat group registered a y-o-y decline of
3.06% to INR529.66 crore in FY19. The deterioration in operating
income is due to lower sales from passenger vehicles under BML in
FY19 in view of slowdown witnessed in H2FY19. However, the sales
from commercial vehicle segment increased from INR175.77 crore in
FY18 to INR192.24 crore under SBML in FY19. PBILDT margin improved
in FY19 and stood at 6.31% vis-à-vis 5.05% in FY18 in view of
decline in cost of vehicle purchased. However, interest coverage
ratio moderated to 1.89x in FY19 vis-à-vis 2.01x in FY18 due to
increase in interest expense. In H1FY20, the group reported PBT of
INR1.64 crore on total operating income of INR227.07 crore. On a
standalone basis, BCL's net sales declined by ~4.69% y-o-y to
INR94.24 crore in FY19. PBILDT margin improved to 14.77% in FY19 as
against 12.72% in FY18. Interest coverage ratio deteriorated from
3.22x in FY18 to 3.04x in FY19. BCL earned GCA of INR9.26 crore in
FY19 as against debt repayment obligations of INR19.60 crore in
FY19. The shortfall has been repaid out of realisation from debtors
and increase in level of creditors. In H1FY20 (provisional), BCL
reported total operating income of INR37.59 crore and PBT of
INR0.19 crore. The company earned a PBT of INR0.36 crore on total
operating income of INR83.47 crore in FY20 (provisional).
* Industry Outlook: The automobiles sector was already grappling
with soft consumer demand in FY20. Additionally, the strict
enforcement of Government rules to adopt new emission standards (BS
VI) from April, 2020, led to OEMs hiking their product prices and
further deferred consumers' purchases. Against this backdrop of an
existing slowdown environment, the outbreak of Covid19 in mid-March
2020 added to the woes of this industry. The pandemic caused
disruptions in supply chains and brought manufacturing activity to
a halt for nearly 30 days. However, the consumer demand which could
not be met in April, May 2020 and initial days of June 2020 due to
the nation-wide and various state lockdowns is expected to be
spread across the next 6 months - from July 2020 to December 2020.
Short term outlook for the overall automobile sector is still
gloomy. As macroeconomic numbers continue to disappoint, reaching
pre-Covid level is unlikely in FY21. While volume pickup is
expected from H2-FY21, full demand recovery is expected only in
FY22 wherein the 2-wheelers, passenger vehicles and tractor
segments shall witness faster recovery than the rest.
Liquidity: Poor
Liquidity is tight with occasional overdrawals in the CC account
and there are delays in the debt servicing of a term loan.
Analytical approach: Combined
For arriving at the ratings, CARE has combined the business and
financial risk profiles of Bharat Motors Ltd. (BML), Shree Bharat
Motors Ltd. (SBML), Bharat Carriers Ltd. (BCL) and Unideal India
Pvt. Ltd. (UIPL) as these companies are engaged in similar line of
operation, closely held entities under common management and
exhibit cash flow fungibility.
Bharat Carriers Limited (BCL) is involved in providing
transportation/logistics services of two wheelers and four wheelers
for major OEM in India like Maruti, Hyundai, Nissan, Tata Motors,
etc. It has branches at Delhi, Pune, Kolkata, Bangalore, Hosur,
Vishakhapatnam, Raipur, Patna, Chennai, Jharkhand and in major
towns of Odisha.
About the Group
Bharat Group promoted by Mr. Jay Prakash Didwania along with his
brother Mr. Om Prakash Didwania is a leading automobile dealer
having widespread branches in all major towns of Odisha. Bharat
group has a total of 14 showrooms across Odisha with full-fledged
3S facility (sale, service & spare). The group operates multiple
dealerships under various companies namely Bharat Motors Ltd.
(BML), Shree Bharat Motors Ltd (SBML) and Unideal India Pvt. Ltd
(UIPL). The group also provides logistic services to reputed OEMs
through Bharat Carriers Ltd (BCL) with a fleet of more than 375
trailers as on March 31, 2019.
CAPACITE ENGINEERING: Ind-Ra Assigns 'BB+' LongTerm Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Capacite Engineering Private Limited (CEPL):
-- Long-Term Issuer Rating assigned with IND BB+/Negative rating;
-- INR67.5 mil. Fund-based cash credit facilities downgraded with
IND BB+/Negative/IND A4+ rating; and
-- INR70 mil. Non-fund-based facilities downgraded with IND A4+
rating.
Analytical Approach: To arrive at CEPL's ratings, Ind-Ra has
continued to take the bottom-up rating approach in accordance with
its Parent-Subsidiary Linkage Criteria. The agency has continued to
notch up the standalone rating of CEPL to factor in its moderate
operational and strategic linkages with its group company, Capacite
Infraprojects Limited (CIL; 'IND A'/Negative).
The downgrade reflects a deceleration in CEPL's pace of project
construction in 1HFY21 and consequent likely deterioration in the
credit metrics on account of COVID-19 led operational disruptions.
This, the agency believes, will also impact the liquidity of the
company over the near-to-medium term.
The Negative Outlook reflects a likely decline in CIL's ability to
support CEPL's operations, following a stretch in its liquidity and
lower-than-expected operating performance in 1HFY21, resulting from
a considerable slowdown in its order book execution due to the
nation-wide COVID-19 led lockdown. CIL's order book comprises real
estate projects in cities, which were the worst hit on account of
the outbreak of the pandemic.
KEY RATING DRIVERS
The ratings are constrained by CEPL's continued small scale of
operations. The company's revenue grew 31.5% yoy to INR345 million
in FY20, driven by increased execution of its order book and
consultancy services provided, and the revenue booking of large
projects that were in the mobilization stage at FYE19. However, the
agency expects the revenue growth to moderate in FY21, since the
company could not generate any revenue in 1QFY21 on account of the
lockdown, which resulted in a complete halt of construction
activities. The company has, since, been able to gradually scale up
its operations and is currently operating projects at around 80%
efficiency levels.
Liquidity Indicator – Stretched: CEPL utilized an average of 94%
of its fund-based working capital limits and 13% of its non
fund-based limits for the 12 months ended August 2020. The
company's working capital cycle elongated to 93 days in FY20 (FY19:
44 days) due to the delayed receipt of dues from CIL owing to
lockdown during FYE20, and the lower mobilization of advances
outstanding in CEPL's books due to the execution of a large
project. The agency expects the working capital cycle of the
company to partially improve in FY21, as CIL, which is CEPL's
largest customer, returns to its pre-COVID-19 level of activity
from end-3QFY21, along with the presence of government projects,
which ensure faster payments. CEPL's cash flow from operations,
although improved, remained negative at INR14 million in FY20
(FY19: negative INR33 million) due to the elongated working capital
cycle. The company availed of the Reserve Bank of India-prescribed
moratorium from March-August 2020. The unencumbered cash & cash
equivalents at FYE20 was INR4 million against repayments of INR3.5
million in FY21.
The ratings factor in the company's modest credit metrics, which
improved in FY20 owing to an increase in its absolute EBITDA to
INR23 million (FY19: INR10 million). The company's interest
coverage (EBITDA/gross interest expenses) stood at 1.7x in FY20
(FY19: 0.8x) and its net leverage at 5.7x (7.8x). The agency
expects CEPL's credit metrics to weaken over the near term, driven
by low profitability and debt-funded capex in FY21 and
consequently, high interest and debt obligations. Ind-Ra believes
CEPL is likely to incur the proposed capex for the purchase of
construction equipment, which the company plans to lease out to
CIL. The rental income from this, the management believes, will aid
in servicing the company's debt likely to be raised to fund the
capex.
The ratings are further constrained by CEPL's moderate EBITDA
margin, which expanded to 6.7% in FY20 (FY19: 4%) on the back of
the presence of high-margin orders in the order book and increased
proportion of income from high-margin consultancy services. Ind-Ra
expects CEPL's profitability to reduce in FY21, owing to the low
absorption of overheads.
The ratings, however, are supported by CEPL's moderate operational
and strategic linkages with CIL and the Capacite group of
companies. Two of CIL's directors are also on the board of CEPL and
the two companies have a common treasury. Furthermore, CEPL
undertakes all activities related to mechanical, engineering and
plumbing (MEP) works for a majority of CIL's projects, when these
activities are under the latter's scope, indicating CEPL's
operational importance to CIL. Both entities operate under the
Capacite brand name. Additionally, CEPL is generally the preferred
contractor for CIL for the MEP portion of its projects and has the
first right of refusal for these orders. However, CIL's ability to
support CEPL's operations is likely to reduce, owing to the adverse
effect of the COVID-19 led disruptions on the former's operations.
The ratings are also supported by CEPL's adequate order book. At
end-June 2020, CEPL had an order book of INR1,246 million (3.6x
FY20 revenue). Furthermore, the company is in the final stages of
signing an order, worth around INR1,500 million, which the agency
believes will significantly enhance CEPL's revenue visibility. The
company's order book comprises projects primarily related to MEP
works. However, the order book concentration is high, since around
98% of the total orders are from CIL. Moreover, the top three
projects comprise around 94% of the total order book. Thus, any
delay in the construction of these projects would result in delayed
revenue booking for the company. Further, CEPL intends to bid for
orders on its own over the medium term to diversify its order
book.
RATING SENSITIVITIES
Negative: A negative rating action can result, individually or
collectively, from:
- the weakening of linkages with CIL/Capacite group and further
deterioration in CIL's credit profile
- a fall in its scale of operations
- deterioration in CEPL's credit profile or a further
elongation in the working capital cycle, resulting in
continued stretched liquidity
Revision of Outlook to Stable: A sustained increase in CEPL's scale
of operations and profitability, resulting in improved liquidity,
with the interest coverage sustaining above 1.5x, would result in
revision of Outlook to Stable.
COMPANY PROFILE
CEPL, incorporated in 2012, is a turnkey solution provider for MEP,
interiors and finishing works. The company has recently forayed
into the erection of structural steel works and provision of
consultancy services to CIL for selective projects.
CCCL INFRASTRUCTURE: CARE Keeps D on INR55cr Debt in NonCooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of CCCL
Infrastructure Limited (CIL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 55.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 1, 2018, placed the
rating of CIL under the 'issuer non-cooperating' category as CIL
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. Further, vide press release
dated December 18, 2019, CARE revised the rating to CARE D and
continued the ratings in issuer non-cooperation category.
CIL continues to be non-cooperative despite repeated requests for
submission of information including e-mail dated October 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.
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 delays in debt-servicing by the
company.
Detailed description of the key rating drivers
At the time of last rating on the following were the rating
weaknesses (updated for information available from MCA):
Key Rating Weaknesses
* Delays in debt servicing: CARE as part of its due diligence
exercise interacts with various stakeholders of the company
including lenders to the company and as part of this exercise has
ascertained that there are delays in debt servicing.
CIL was established in 2007 as a subsidiary of Consolidated
Construction Consortium Limited (CCCL). CIL operates a Solar Power
plant of 5-MW capacity at Sekkarakudi in Tuticorin district of
Tamil Nadu. The plant is spread over an area of 44 acres and
commissioned its operations in February 2012.
DHROOV RESORTS: CARE Keeps D on INR11cr Loans in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Dhroov
Resorts (DHR) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 11.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 24, 2019, placed
the rating of DHR under the 'issuer noncooperating' category as DHR
had failed to provide information for monitoring of the rating. DHR
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated October 9, 2020, October 8, 2020, and October 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.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
At the time of last rating in September 24, 2019 the following were
the rating strengths and weaknesses:
Detailed description of the key rating drivers
Key Rating Weaknesses
* Instances of delays in debt servicing: There were instances of
delays in debt servicing on account of weak liquidity position as
the firm was unable to generate sufficient funds in a timely
manner.
M/s Dhroov Resorts, a sole proprietary concern of Mr. Balbir Singh
Verma, is constructing a 4- star hotel project by the name of
"Dhroov Resorts" in Shimla, H.P. Mr. Verma is a MLA (Member of
Legislative Assembly) from the Chopalarea (in Shimla district) and
is also a certified builder and civil contractor in the region. The
total project cost of INR23.57 crore is expected to be funded
through a debt of INR15 crore and promoter's capital of INR7.21
crore and other borrowings of INR1.36 cr. As on December 31, 2015,
the firm has incurred a total cost of INR20.87 crore. The hotel is
expected to start commercial operations from April 2016 onwards.
GLOCAL HEALTHCARE: CARE Lowers Rating on INR35cr LT Loan to C
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Glocal Healthcare Systems Private Limited (GHSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 35.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable;
ISSUER NOT COOPERATING
Short term bank 5.00 CARE A4; ISSUER NOT COOPERATING
facilities Rating continues to remain
under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 7, 2018, placed the
rating(s) of GHSPL under the 'issuer non-cooperating' category as
GHSPL had failed to provide information for monitoring of the
rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. GHSPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated
November 3, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of lack of adequate
information regarding company's performance coupled with
uncertainty around its credit risk profile.
The rating assigned to the long-term bank facilities of GHSPL
continue to remain constrained by weak financial performance in
FY19 (refers to the period April 1 to March 31) and FY18 as well as
negative networth position as on March 31, 2019, decline in
occupancy rate, and project risk. The ratings continue to derive
strength from the rich experience of the promoters, strong IT
Infrastructure and in-house skill development services, strategic
location of hospitals.
Detailed description of the key rating drivers
At the time of last rating on August 27, 2019, the following were
the rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
* Decline in occupancy rate: GHSPL's overall occupancy declined
from 47.2% in FY15 to 19.3% in FY16 as the company reduced its
focus on Rashtriya Swasthya BimaYojana (RSBY) patients owing to
delay in receipt of funds from Government and opening of four new
hospitals.
* Weak financial performance in FY18 and FY19: The operating income
has improved at a CAGR of 24% in last 3 years though the company
has incurred operating loss of INR15 crore in FY17 (operating loss
of INR13 crore in FY16). However, in FY18 the Company earned
operating profit of INR0.56 crore, albeit continued net loss and
cash loss over the last three years. The operating income of the
company declined to INR48.66 crore in FY19. Further, the company
earned operating loss of INR3.71 crore in FY19.
* Deterioration in capital structure with negative networth: The
capital structure deteriorated further in FY18 & FY19 due to
complete erosion of networth as a result of substantial losses
incurred by the company and increase in term loan.
* Project Risk: GHSPL plans to open 20 hospitals under separate
LLPs through SPV route at an aggregate cost of around INR360.0
crore over the next 3 years. Timely commissioning of these
hospitals within the estimated cost will remain a key rating
sensitivity.
Key Rating Strengths
* Reputed and experienced promoters: GHSPL is promoted by Dr. Syed
Sabahat Azim and Mr. Meleveetil Damodaran. Dr. Azim has an
experience in the healthcare sector for over two decades and Mr.
Damodaran has held key positions in both Central and State
government in India's Financial Sector, before demitting office as
SEBI Chairman in 2008.
* Strong IT Infrastructure and in-house skill development services:
Further, GHSPL has developed strong IT infrastructure which will
help in providing quality healthcare services to masses at very
competitive prices. GHSPL also provides skill development services
through its group company, Indigram Skills and Knowledge
Initiatives Private Ltd, which would ensure continuous supply of
skilled manpower for its operations.
* Strategic location of hospitals: The hospitals of GHSPL are
strategically located in Tier III cities, which are mostly deprived
of basic secondary healthcare. Owing to the growing purchasing
power of the rural and suburban populace as well as the demand for
quality healthcare, GHSPL plans to cater to this gap.
Analytical approach: Consolidated. The following subsidiaries have
been taken in the consolidated financials-Elevar Equity Mauritius,
Sequoia Capital India Investments Holding III, SIDBI Trustee
Company Limited A/C Samridhi Fund.
Glocal Healthcare Systems Pvt Ltd (GHSPL) was incorporated in July
2010 by Dr. Syed Sabahat Azim and Mr. Meleveetil Damodaran to
provide basic secondary healthcare services to the sub-urban and
rural population of the country. GHSPL is currently running 11
(including 6 in SPV) basic secondary hospitals of 100 beds each.
The company plans to open 20 more hospitals in separate SPV's
phasewise by March 2019.
IL&FS FINANCIAL: Ind-Ra Affirms 'D' Issuer Ratings
--------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed IL&FS Financial
Services Ltd's (IFIN) Long-Term and Short-term Issuer Rating at
'IND D'.
The instrument-wise rating actions are:
-- INR49.85 bil. Non-convertible debentures* (NCDs) (Long-term)
affirmed with IND D rating;
-- INR11.0 bil. Subordinated debt* (Long-term) affirmed with
IND D rating;
-- INR7,587.5 bil. Bank loans (Long-term) affirmed with
IND D rating; and
-- INR7.0 bil. Short-term debt/commercial paper programme^
(Short-term) affirmed with IND D rating.
^Unutilized
*Details in annexure
KEY RATING DRIVERS
The ratings continue to reflect IFIN's missed payments on
contractual debt obligations. The IL&FS group is functioning under
a resolution framework wherein payments are made mostly to meet
operational expenses to ensure the going concern status of the
company. The group remains in a cash conserving mode while making
efforts towards asset monetization.
The group entities have been categorized as red, amber and green
depending on the cash flow position. IFIN has been categorized as a
red entity, which means the entity cannot meet its payment
obligations even towards senior secured financial creditors as and
when such payment obligations are due.
In FY19, IFIN witnessed a loss of INR132.7 billion (FY18: profit of
INR0.1 billion), primarily due to impairment costs amounting to
INR99.6 billion. The stage 3 assets stood at 96% as of March 31,
2019. The tier I capital adequacy ratio stood at a negative 520.3%
as of March 31, 2019 due to the elevated exposure to companies in
the same group, which has been adjusted from the net worth. The
recasting of the accounts of IFIN, Infrastructure Leasing &
Financial Services Limited ('IND D') and IL&FS Transportation
Network Limited for FY14–FY18 is in progress.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in a positive rating action.
COMPANY PROFILE
IFIN is a systemically important non-banking finance company that
provides credit and other services such as debt syndication and
corporate advisory.
INDROYAL PROPERTIES: CARE Keeps D on INR23.5 Debt in NonCooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Indroyal
Properties Private Limited (IPPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 23.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 14, 2017, placed the
rating of IPPL under the 'issuer non-cooperating' category as IPPL
had failed to provide information for monitoring of the rating.
Further, vide press release dated December 5, 2019, CARE revised
the rating to CARE D and continued the ratings in issuer
non-cooperation category.
IPPL continues to be non-cooperative despite repeated requests for
submission of information including e-mail dated October 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.
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 on-going delays in debt-servicing by
the company
Detailed description of the key rating drivers
At the time of last rating on the following were the rating
weaknesses (updated for information available from MCA):
Key Rating Weaknesses
* Delays in debt servicing: CARE as part of its due diligence
exercise interacts with various stakeholders of the company
including lenders to the company and as part of this exercise has
ascertained that there are delays in debt servicing.
Trivandrum based Indroyal Properties Private Limited (IPPL) is
engaged in development of real estate projects. The ongoing project
"The Uptown" is a high end luxury residential project comprising of
3 bed room condominiums, penthouses and garden houses and a total
of 213 units. The project was launched in February 2015 and is
located at PMG- Kannammoola Road, Trivandrum.
INFRASTRUCTURE LEASING: Ind-Ra Affirms 'D' Issuer Ratings
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Infrastructure
Leasing & Financial Services Limited's (IL&FS) Long-Term and
Short-term Issuer Rating at 'IND D'.
The instrument-wise rating actions are:
-- INR93,600.8 bil. Long-term debt* (Long term) affirmed with
IND D rating;
-- INR1.0 bil. Subordinated debt^ (Long term) affirmed with
IND D rating;
-- INR12.25 bil. Short-term debt (Short term) affirmed with
IND D rating; and
-- INR3.0 bil. Bank loans (Long term) affirmed with IND D rating.
^Unutilized
*Details in annexure
KEY RATING DRIVERS
The ratings continue to reflect the missed payments on contractual
debt obligations. The IL&FS group has been functioning under a
resolution framework, wherein payments are made mostly to meet
operational expenses to ensure the going concern status of the
company. IL&FS remains in a cash conserving mode while continuing
to make efforts towards asset monetization.
As per the company's media release dated 2October 24, 2020, debt
amounting to INR191 billion had been addressed until September 30,
2020 against the target of INR264 billion. IL&FS could not meet the
target due to pandemic-related disruptions.
The education business has been sold leading to a debt resolution
of INR6.79 billion and there has been a recovery of INR1.55 billion
from loans and investments to non-ILFS group companies. The sale
process has been launched for IL&FS Engineering & Construction,
IL&FS Financial Centre (Bandra Kurla Complex) and for the external
loan book of IL&FS Financial Services ('IND D'). The debt
resolution target until March 2021 is INR503 billion.
IL&FS's FY19 financial accounts have been published. The company
incurred a net loss of INR225 billion in FY19 (FY18: profit of
INR3.3 billion) due to impairment costs of INR194.3 billion. The
recasting of the accounts of IL&FS, IL&FS Financial Services and
IL&FS Transportation Network Limited for FY14-FY18 is in progress.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in a positive rating action.
COMPANY PROFILE
IL&FS operates in India's infrastructure development space. LIC of
India and ORIX Corporation, Japan, together hold 49% stake in the
company. The company had restructured its business in FY08 and
converted itself into a holding company after demerging its lending
and advisory business to its subsidiary, IL&FS Financial Services
Ltd ('IND D'). The company received a core investment company
license in September 2012.
JAGANNATH EDUCATIONAL: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shri
Jagannath Educational Health and Charitable Trust (SJEHCT)
continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 14.29 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 20, 2019, placed the
rating(s) of SJEHCT under the 'Issuer non-cooperating' category as
SJCET had failed to provide information for monitoring of the
rating. SJEHCT continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated October 6, 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 20, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Delays in debt servicing: The trust has delayed on debt
servicing. The delays were primarily due to cash flow mismatches
and the application of accruals for the debt funded establishment
of the poly technic college.
Key rating strengths
* Experience of trustees in the field of academics supported by
qualified professionals: Prior to starting SJCET,
Mr.S.A.Subramanian, Chairman and Managing Trustee was teaching
English in various colleges for twenty years. He hails from a
family of educationalists and has prior experience of running a
small school and a coaching center in his early days. Another
Trustee, Mr.O.M.Manivelu is a practicing civil engineer with
teaching experience in Civil Engineering. However, Mr.Satheesh
Krishnaraj(one of the founder trustees) has been replaced by Mr.
Durgashankar in the current academic year (AY 2011-12).The
day-to-day activities of the college are being managed by Director
Dr.V.Jayaraman, a Post Graduate in Aeronautical Engineering from
IIT Madras and Dr.R.Saravanan, Principal of the college who has
more than 2 decades of teaching and research experience, who has
replaced Dr.G. Subramanian, who retired. The policy decisions such
as starting new college under the same trust, new courses in JCTET
and investment in infrastructure are decided by a committee
comprising of Trustees.
SJEHCT is a non-minority, charitable trust registered under Section
12A of the Income Tax Act. SJEHCT was established in 2008 by Mr. S.
A. Subramanian, along with Mr. O. M. Manivelu and Mr. S. Satheesh
Krishnaraj. However, Mr. Satheesh Krishnaraj resigned from the
Trusteeship and was replaced by Mr. Durgashankar (a BE graduate,
son-in-law of Mr. Subramanian), in AY 2011-12. Mr. Arul Selvan, (Mr
Durga Shankar's brother) is the Vice Chairman and Joint Managing
Trustee (BE, MBA). The dayto-day activities of SJCET are managed by
the executive committee, headed by Mr. S. A. Subramanian (Managing
trustee). The trust operates an engineering college under the name
of JCT College of Engineering & Technology (JCTET) at Coimbatore,
Tamil Nadu, established in AY11-12. JCTET, in its fifth year of
operation, had student strength of 3,800 in AY15-16 (including ME).
In AY14-15, SJCET commenced JCT College of Polytechnic (JCTP) with
a sanctioned intake of 300 students offering Mechanical (120),
Petrochemical (60), Civil (60) and Electrical and Electronic
Engineering (60) courses.
JAGJIT ENTERPRISES: CARE Cuts Rating on INR13cr LT Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jagjit Enterprises Private Limited (JEPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 13.00 CARE D Revised from CARE B;
Facilities Stable
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of JEPL
factors on account of stressed liquidity position and delays in
servicing of its debt obligations availed by the company (not rate
by CARE). The stressed liquidity position of the company increases
the likelihood of default in honouring the other repayment
obligations of the company.
Rating Sensitivities
Positive Factors
* Improvement in the liquidity position of the company by timely
servicing of its debt obligations
Detailed description of the key rating drivers
Key Rating Weakness
* Poor Liquidity position and On-going delays in servicing of debt
obligation: There have been delays reported in the term debt
obligations availed from other financial institutions as per
information provided through the No default statements and
confirmation received from the company. The company has stressed
liquidity position mainly attributed to slowdown in commercial
vehicles industry which increases the likelihood of default in
honouring the other repayment obligations of the company.
Jagjit Enterprises Private Limited (JEPL) was incorporated in July
18, 1994 and is engaged in manufacturing of auto components for
heavy commercial vehicles including Cross Members, Cross Member
Assembly, Bumper Cross Member Assembly, Assy Air Tanks, Power
Steering Brackets and Steering Gearbox Mounting. JEPL is promoted
by directors Mr. Harprem Mann, Mr. Harmeet Mann and Mrs. Satwinder
Kaur Mann. Currently, the present directors are Mr. Harmeet Mann
and Mr. Satwinder Kaur Mann. The company is Tier -1 supplier for
TATA Motors Limited (TATA), Lucknow which in turn sells to TATA.
JEPL has manufacturing unit and registered office situated at
Lucknow, Uttar Pradesh. The Raw material is HR sheets which is
being procured from TATA Steel Ltd and SR Steel and other traders.
KIRAN GLOBAL: CARE Keeps D Ratings in Not Cooperating Category
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Kiran
Global Chem Limited (KGCL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 93.15 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long-term/ 108.50 CARE D/CARE D; ISSUER NOT
Short-term COOPERATING Rating continues to
Bank Facilities Remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 3, 2020, placed the
rating(s) of KGCL under the 'issuer non-cooperating' category as
KGCL had failed to provide information for monitoring of the rating
and had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. KGCL continues to be
non-cooperative despite repeated requests for submission of
information through e-mail dated October 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 takes in account on-going delays in the debt servicing
by the company
Detailed description of the key rating drivers
At the time of last rating on April 03, 2020 the following was the
rating weakness and it continues to remain the same.
Key Rating Weaknesses
CARE as a part of its due diligence exercise interacts with various
stakeholders of the company including lenders to the company and as
a part of its exercise ascertained that there are delays in debt
servicing.
Established in 1989, Chennai based KGCL is one of India's leading
manufacturer of sodium silicate. KGCL is the flagship company of
the MS Jain group which is engaged in various businesses such as
manufacturing and trading of chemicals, food processing and
shipping and logistics.
KPC MEDICAL: CARE Keeps D on INR99.39cr Loans in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of KPC Medical
College & Hospital continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 89.39 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short term Bank 10.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 29, 2018, placed the
rating(s) of KPC Medical College & Hospital under the 'issuer
non-cooperating' category as KPC Medical College & Hospital had
failed to provide information for monitoring of the rating and had
not paid the surveillance fees for the rating exercise as agreed to
in its Rating Agreement. KPC Medical College & Hospital continues
to be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated
November 3, 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 takes into account ongoing delays in debt servicing.
Detailed description of the key rating drivers
At the time of last rating on August 12, 2019 the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
* Delays in debt servicing: There are ongoing delays in servicing
of its debt obligations.
* Capital intensive nature of business: KPC Medical College, has
been incurring capex regularly to maintain its existing facility
and to add facilities for the newly introduced courses. During FY16
& FY15, aggregate capex incurred was INR19 crore (approx.) and
INR22 crore (approx.). Such capex were funded in a mix of both debt
and equity and were mainly on account of setting up of additional
facilities for the newly introduced post graduate courses.
* High vulnerability to treatment-related and operating risks:
Healthcare sector is highly sensitive to patient/case mishandling
or doctor's/staff's negligence which can affect the brand
image and lead to distrust among the masses. Hence, careful &
diligent monitoring of each case and maintenance of high operating
standard to avoid the occurrence of any unforeseen incident which
can damage the reputation of the hospital is very important.
* Regulatory Risks: In India, Medical Colleges are closely governed
by Medical Council of India (MCI). The overall organisational set
up as well as the operations has to be strictly in line with the
guidelines issued by MCI from time to time failing which there
exists a risk of non-renewal of license which in turn can obstruct
the operations of an entity. Furthermore, on the revenue side,
since fees for students in medical colleges are strictly controlled
by the respective State Governments, the mechanism of shifting the
cost burden on the customers is limited.
Key Rating Strengths
* Experienced Founder: Dr. K. P Chaudhuri is a Bachelor of
Medicine, Bachelor of Surgery (MBBS) & Doctor of Medicine (MD) from
the National Medical College in Kolkata and has practiced in
various countries like India, Malayasia, USA, Canada & UK. Dr.
Chaudhuri has over 30 years of experience and is a renowned
orthopedic surgeon. He has been consistent in infusing funds into
the society by the way of unsecured loans for meeting capex
requirements, repayment of debt and other supporting operations.
High student enrolment ratio for medical college & moderate
occupancy rate for hospital Student enrolment ratio of the
institute remained high at 100% due to sufficient demand for
medical college in West Bengal. Occupancy rate for hospital
improved from 60% in FY15 to around 70% in FY16.
* Moderate financial-risk profile with improving performance: The
financial-risk profile of the society which is on an improving
trend stood moderate. In FY16, the entity bagged an approval for
five new post graduate courses followed by additional two in
9MFY17; this, coupled with increase in the occupancy rate of the
hospital from 60% in FY15 to 70% in FY16 led to an increase in
revenue by around 14.90% vis-à-vis the revenue registered in FY15.
PBILDT margin which stood at 39.20% reduced to 31.19% in FY16 due
to increase in salaries of staff followed by introduction of
specialized post-graduation courses during the year. Overall
gearing ratio which stood at 2.97x as on 31st March 2015 improved
to 2.38x as on March 31, 2016. Total term debt which stood at
INR110.89 crore as on March 31, 2015 reduced to INR92.57 crore as
on 31st March 2016.
Established in August, 2003 under the West Bengal Societies
Registration Act, 1961, KPC was formed by Dr. K.P. Chaudhuri to
promote and run a medical college in Jadavpur area of Kolkata. As a
prerequisite for medical college, KPC is also having an 820-bedded
hospital which commenced operations in FY08. The college is also
permitted by Medical Council of India (MCI) to
conduct several post graduate courses. Besides the hospital and the
medical college, KPC also has a B.Sc Nursing college and General
Nursing & Midwifery (GNM) Nursing school in the same campus with
batch size of 160 students.
KRISHNA STEELAGE: Ind-Ra Moves BB Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shri Krishna
Steelage Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR130 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR40 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
November 12, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2004, Shri Krishna Steelage Private Limited,
managed by Vinod Gautam and Surender Kumar, is engaged in the
manufacturing of heavy gauge stainless steel cold patti products
derived from stainless steel flats. The company's manufacturing
facility is located in Sirmour (Himachal Pradesh) and has annual
installed capacity of 9,000 ton per annum. Bulk of the revenue is
derived from manufacturing of steel and around 10% from the trading
of stainless steel.
KUBS SAFES: CARE Keeps D on INR28.76cr Loans in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Kubs Safes
and Locks Private Limited (KSLPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 28.76 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 23, 2019, placed the
rating(s) of KSLPL under the 'Issuer non-cooperating' category as
KSLPL had failed to provide information for monitoring of the
rating. KSLPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated November 3, 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 23, 2019 the following were
the rating strengths and weaknesses updated for the information
available from Registrar of Companies).
Key Rating Weakness
* Delay in debt servicing: The company has been incurring cash
losses leading to weak liquidity position. On account of this the
company had delayed its debt servicing in the recent past.
* Financial risk profile marked by cash losses, weak debt
protection metrics and elongated working capital cycle: The company
has reported weak financial profile marked by high cash losses for
the three audited financial years ended FY19 and weak debt coverage
indicators which stood stressed owing to operating losses. Further,
the operated cycle of the company remains elongated, however
improved in FY19 marked by 129 days as against 151 days in FY18.
Key Rating Strengths
* Experience of the promoters in trading of security equipment: The
promoters have nearly 10 years of experience in marketing and
distribution of physical security products in the Middle East. Mr.
Bhasi Pazhat, one of the promoters, has experience of over three
decades in managing various lines of business in the Middle East.
He is ably assisted by Mr. P. Somasundaran and Mr. Venugopalan, who
possess four decades of experience, primarily with Al Nabooda
Group. The directors of KSL have interests in other entities such
Al Nabooda Interiors LLC (Dubai), Al Nabooda Insurance Brokers LLC
(Dubai), Toli Floor Middle east LLC (Dubai), Total Offis Interiors
& Solutions LLP (Bangalore) and Hospitality Catering LLC (Abu
Dhabi).
* Improved scale of operations: The scale of operations of the
company remains small, however improved compare to previous year.
It is marked by total operating income of INR17.96 Crore in FY19 as
against INR11.84 Crore in FY18.
KSLPL is engaged in the business of manufacturing and trading of
various physical security equipment such as safe deposit lockers
and boxes, record protection filing cabinets, fire resistant data
storage cabinets, fire resistant vault doors and similar
space-saving storage equipment. These products are primarily used
by jewellers, corporate houses, banks, financial institutions and
government establishments. KSL was incorporated on October 13, 2009
by a group of entrepreneurs who are involved in the distribution of
physical security equipment of reputed global majors in the Middle
East, since 2004. The firm has setup a warehouse at Oragadam,
Chennai, for storing the inventory. KSL has an associate concern
KUBS Impex Private Limited, established in 2010, which is engaged
in trading of office products such as shredders, laminating and
binding machines. The company has availed moratorium on its
existing bank facilities from March to August 2020 amid COVID-19
RBI guidelines.
MAHARAJA PAPER: CARE Keeps C Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Maharaja
Paper Industries Private Limited (MPIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 14.06 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short term Bank 3.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 19, 2019 placed the
rating(s) of MPIPL under the 'issuer non-cooperating' category as
MPIPL had failed to provide information for monitoring of the
rating. MPIPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated from January 2020 to October 14, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating continues to be constrained by elongated working capital
cycle days and decline in total operating income coupled with net
losses during FY19. The rating continues to be underpinned by
experienced promoters.
Detailed description of the key rating drivers
At the time of last rating on August 19, 2019 the following were
the rating strengths and weaknesses
Key Rating Weakness
* Decline in total operating income and operating and net losses
during FY19: The total operating income declined to INR0.13 crore
in FY19 as against INR38.50 crore in FY18.
* Elongated Working capital cycle days: The operating cycle
continues to be elongated in FY19, since there were no operations.
* Decrease in PBILDT margin: Since there were no operations in the
company for FY19, the company reported operational and cash
losses.
Key Rating Strengths
* Experienced promoters and long standing track record: MPIPL is
promoted by Mr. P. V. Ramakrishna Raju and their relatives. Mr. P.
V. Ramakrishna Raju has a more than decade of experience in paper
industry.
Maharaja Paper Industries Private Limited (MPIPL) was incorporated
in the year 1999 and promoted by Mr. P. V. Ramakrishna Raju and
their relatives. The company was incorporated as Rolex Paper Mills
Limited and later on, the name was changed to current nomenclature.
MPIPL is engaged in the production of paper of all varieties viz.
newsprint, cream wove and kraft papers. The
manufacturing facilities are located at Chintaparru, Palakol
Mandal, West Godavari District, Andhra Pradesh.
MBE COAL: CARE Lowers Rating on INR9.75cr LT Loan to D
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of MBE
Coal & Mineral Technology India Private Ltd (MCMT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 9.75 CARE D Revised from CARE C;
Facilities Stable
Long term Bank 8.50 CARE D Reaffirmed
Facilities
Long term/Short 7.50 CARE D/CARE D Revised from
term Bank CARE C; Stable/CARE A4
Facilities
Detailed Rationale & Key Rating Drivers
The ratings assigned to bank facilities (a) and (c) above of MCMT
have been revised on account of stretched liquidity leading to
delay in debt servicing. The rating assigned to the bank facilities
(b) continues to take into account the delays in debt servicing of
the facilities by the company. The ratings are constrained due to
weak financial performance albeit improvement in FY20 (refers to
the period April 1 to March 31), vulnerable capital structure and
debt protection metrics, working capital intensive nature of
operations, relatively small sized company and volatility in the
prices of raw materials. The rating, however, derives strength from
experienced promoter and diversified group and moderate order book
position.
Rating Sensitivities
Positive Factors - Factors that could lead to positive rating
action/upgrade:
* Default free track record of 90 days
* Increase in order book and turnaround in operating
profitability
* Timely execution of the order book and timely receipt
of contract proceeds
* Overall gearing below 2x and Total debt to gross
cash accruals reducing below 14x
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in debt servicing: Due to stretched liquidity, there are
overdrawals for more than 30 days in cash credit account.
* Weak financial performance albeit improvement in FY20: The total
operating income improved y-o-y by ~35% to INR33.29 crore in FY20.
However, the company incurred operating loss of INR3.06 crore in
FY20 vis-à-vis operating loss INR7.66 crore in FY19 mainly on
account of under absorption of fixed overheads. The company has
serviced interest and principal repayment out of realization from
long term debtors. The company reported cash loss of INR2.78 crore
in FY20. In Q1FY21, the company reported loss of INR1.70 crore on
total operating income of INR3.83 crore.
* Vulnerable capital structure and debt protection metrics: Overall
gearing ratio of the company although continued to be vulnerable,
however improved from 8.95x as on Mar 31, 2019 to 7.68x as on Mar
31, 2020. The debt protection metrics remained negative as on March
31, 2020.
* Working capital intensive nature of operations: MCMT operations
are highly working capital intensive in nature. The tenure of
Operation and Maintenance (O&M) contracts is minimum 3 years, while
the delivery cycle for Centrifuge machine manufacturing and selling
is 3-4 months. Further, EPC contracts for Coal and Mineral
beneficiation plants have a delivery period of around 6-8 months.
The operating cycle although improved from 334 days in FY19 to 192
days in FY20, it continued to remain high. The improvement in
operating cycle was primarily on account of improvement in
collection period.
* Relatively small sized company: MCMT was incorporated in August,
2009 as a separate company through the demerger of the coal and
minerals division of Humboldt Wedag India Pvt Ltd (HWIPL; operating
since 1976). Even then, MCMT continues to be a small company with
total capital employed of INR12.89 crore as on March 31, 2020.
* Volatility in the prices of raw materials: The company is exposed
to volatility in prices of raw materials and finished goods as
majority of the contracts are on fixed price basis.
Key Rating Strengths
* Experienced promoter and diversified group: MCMT belongs to
Kolkata based B.M. Khaitan group, which is a well-diversified
industrial house having interest in dry batteries, tea, chemicals,
construction etc. with Eveready Industries (India) Ltd being the
flagship company. Given the long track record of the B.M. Khaitan
group in construction & construction equipment business, technical
and business support is available to the company.
* Moderate order book position: MCMT has an outstanding order book
of INR35.40 crore as on August 31, 2020 (1.06x of the total
operating income for FY20) as against INR29.97 crore as on Dec 31,
2019.
Liquidity: Poor
Poor Liquidity is marked by fully utilization of bank limits in the
last 12 months ended Oct'20 and modest cash balance of Rs.0.19
crore as on March 31, 2020 vis-à-vis INR2.43 crore as on March 31,
2019. There are various instances of overdrawals in cash credit
account for more than 30 days. The company has availed the
deferment of its interest payments for their fund based working
capital limits.
MCMT belongs to B.M. Khaitan Group of Kolkata. It is a subsidiary
of McNally Sayaji Engineering Ltd. The company is engaged in
turnkey engineering & project execution of coal and mineral
beneficiation plants, manufacturing of various material handling
equipment and trading of material handling equipment.
METTU CHINNA: CARE Keeps D on INR7.5cr Loans in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Mettu
Chinna Mallareddy Godowns (MCMG) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.27 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short term Bank 0.23 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 13, 2019, placed the
ratings of MCMG under the 'issuer non-cooperating' category as MCMG
had failed to provide information for monitoring of the rating.
MCMG continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated from January 2020 to October 14, 2020 In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 13, 2019, the following were
the key rating strengths and weaknesses.
Key Rating Weakness
* Ongoing delays in meeting of debt obligations: The firm was
unable to generate sufficient cash flows leading to strained
liquidity position resulting in ongoing delays in meeting its debt
obligations in time.
Andhra Pradesh based, Mettu Chinna Mallareddy Godowns (MCMG) was
established as a partnership firm in the year 2011 and promoted by
Mr. Ch. Venkata Krishna Rao and Mrs. Ch. Lakshmi. The firm is
engaged in providing ware house for lease rental purpose to Andhra
Pradesh State Warehousing Corporation. The property is built on
total land area of 18 acres comprising of nine godowns having
storage capacity for food crops like paddy around 45000 MT and each
godown having storage capacity of 5000MT.
RAKE POWER: CARE Moves D Rating on INR10cr Loans to Not Cooperating
-------------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Rake
Power Ltd (RPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating moved to ISSUER NOT
COOPERATING Category
Long Term/Short 3.00 CARE D/CARE D; ISSUER NOT
Term Bank COOPERATING; Rating moved to
Facilities ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RPL to monitor the ratings
vide e-mail communications dated July 22, 2020 and October 20, 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 best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on RPL's 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(s).
The ratings take into account continued stretched liquidity
position of the company with net loss and cash loss reported during
FY19 (refers to period April 1 to March 31) along with delayed
receipt of payment from the off-taker resulting in continued delays
in debt servicing.
Detailed description of the key rating drivers
At the time of last rating on September 5, 2019; the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Stressed liquidity position: RPL has reported subdued operational
and financial performance during FY19. The power generation has
been on the lower side due to lack of availability of raw materials
and adequate working capital required to generate & sell power
units. Consequently, the Total Operating Income (TOI) of the
company declined significantly by 35.33% to INR20.38 crore during
FY19 (Provisional) from INR31.60 crore in FY18 and the company
reported net loss and cash loss during the year. This apart, the
company has been facing delayed recovery of bills from the
off-taker, Maharashtra State Electricity Distribution Company
(MSEDCL) which has strained the cash flow position resulting in
delays in debt servicing.
* Counter-party credit risk; albeit firm off-take agreement: RPL
had entered into Energy Purchase Agreement with MSEDCL for a tenor
of 13 years from COD (July 25, 2008) at a fixed tariff of INR6.73
per kWh and provides revenue visibility for only next two years.
However, the company is exposed to associated counter party credit
risk and has been facing delayed payment recovery from the
off-taker.
Key Rating Strengths
* Experienced promoters: RPL is a part of Hyderabad-based
Shalivahana group and is a subsidiary of Shalivahana Green Energy
Limited (SGEL) which is a flagship company of Shalivahana group.
The promoters have established track record in managing the
business of the group. The promoter of RPL; Mr. Malka Naveen Kumar
(Managing Director) has graduated in Electrical Engineering and has
experience of almost a decade in power sector and looks after
day-to-day operations of RPL.
* Strategic location of unit: The plant is strategically located at
Village Patgowari, Ramtek Tahsil, Nagpur, Maharashtra. RPL's unit
is designed to use non-fossil fuel & is spread over 17 acres of
land in vicinity of biomass fuel (such as agroindustrial residues,
crop residues, forest residues etc.) availability with 50 km radius
from unit and water requirements are met from river pench, 8 km
from plant location.
Rake Power Limited (RPL) incorporated on June 20, 2000, is a
subsidiary of Shalivahana Green Energy Limited (SGEL) and has Setup
a biomass-based 10.00 MW power plant at Ramtek Tehsil, Nagpur,
Maharashtra. The project achieved Commercial Operations Date (COD)
on July 25, 2008 and the project was completed at total cost of
INR41 crore. The company has entered in to Energy Purchase
Agreement (EPA) with Maharashtra State Electricity Distribution
Company (MSEDCL) for a period of 13 years from COD. At present, the
company is billing as per the tariff of INR6.73 per kWh. Hyderabad
based Shalivahana group has multiple business operations in
construction, real estate, power generation and education. RPL is
currently in talks for liquidation, however, the same has not been
finalized yet.
RAVI TEJA: CARE Keeps D on INR4.82cr Loans in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ravi Teja
Textiles (RTT) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 4.82 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 16, 2019, placed the
rating(s) of RTT under the 'issuer noncooperating' category as RTT
had failed to provide information for monitoring of the rating. RTT
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated from January 2020 to October 14, 2020 In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 16, 2019, the following were
key rating weaknesses and strengths.
Key Rating Weakness
* Delay in debt servicing: The firm has delays in servicing of debt
obligations owing to the stretched liquidity position of the firm.
* Stressed financial risk profile: The overall gearing of the firm,
although improved from 5.02x as on March 31, 2014 to 4.56x as on
March 31, 2015 on account of accretion of profits to reserves,
remained stressed.
* High dependency on leveraged capital and deterioration in cash
accrual levels has led to deterioration of already stressed: debt
coverage indicators, total debt to GCA and interest coverage. Total
debt to GCA has deteriorated from 11.34x during FY14 to 13.96
during FY15 while interest coverage ratio declined from 2.09x
during FY14 to 1.71x during FY15. The working capital cycle of the
firm has been stressed during the review period on account of high
inventory period. The firm being a cloth and textile showroom, it
has to maintain specific level of inventory at any given point of
time during the year resulting in stressed inventory period. Also,
the additional showroom added in Piduguralla has increased the
inventory further from 148 days during FY14 to 178 days during
FY15. The collection period pertain to credit sales made to known
customers and relatives.
* Relatively small scale of operations: RTT was established in 1990
and has track record of more than two decades. However, the scale
of operations remains relatively small with total operating income
at INR12.60 crore during FY15. Furthermore, the low net worth base
of INR0.80 crore as on March 31, 2015 restricts the firm's
flexibility in the time of distress.
* Fragmented nature of Industry and intense competition among
numerous unorganized players: Retail cloth and textile industry is
predominantly unorganized with the presence of many small
participants. The industry is characterized by low entry barriers
due to minimal capital requirements resulting in proliferation of
large number of small players, spread across the country. Need to
extend discounts to counter the competitors have put downward
pressure on already stressed margins of the firms operating in the
industry which derive their revenue through trading activity.
* Constitution of the entity as a proprietorship firm: Constitution
as a proprietorship firm has the inherent risk of possibility of
withdrawal of the proprietors' capital at the time
of personal contingency which can adversely affect its capital
structure. This was reflected in the balance sheet as on March 31,
2015 when the capital to the tune of INR0.03 crore was withdrawn to
meet personal contingency. Further, proprietorship firms have
restricted access to external borrowings as credit worthiness of
the partners would be key factors affecting credit decision for the
lenders.
Key Rating Strengths
* Experienced proprietor with established track record of the firm:
RTT was established in 1990 by Mr. D. Sarveswara Rao who has more
than four decades of experience in retail cloth trading
industry. The firm has established track of more than two decades
in the industry and over the course of business, the proprietor has
established healthy relationship with key suppliers and customers
facilitating the smooth functioning of business.
* Healthy growth in total operating income albeit declining
profitability margins: The total operating income of the firm has
increased from INR8.46 crore during FY14 to INR12.60 crore during
FY15 registering Y-o-Y growth of 49% on account of increased
spending of people on clothes. The profitability margins of the
firm have been fluctuating and remained low during the review
period (FY13-FY15) on account of trading nature of operations.
Furthermore, the fortunes of the firm are tied up to level of
disposable income with public. The PBILDT margin of the firm
deteriorated from 7.37% during FY14 to 5.64% during FY15 on account
of increase in the employee cost at the back of additional showroom
in Piduguralla, A.P. Furthermore, PAT margin also deteriorated from
1.49% during FY14 to 1.06% during FY15 on account of lower PBILDT
margin coupled with increased interest cost. The firm has achieved
the sales of about INR15.00 crore with PAT of about INR0.17 crore
during FY16 (Provisional).
Ravi Teja Textiles (RTT) was established as a proprietorship
concern by Mr. D. Sarveswara Rao in the year 1990. The firm is
engaged in the trading of sarees and ladies dress materials. The
firm has two showrooms, one located in Ongole while the other
located in Piduguralla, Andhra Pradesh. While the showroom in
Ongole has been operating since 1990, the new showroom in
Piduguralla was started during the end of FY14.
In FY15, RTT had a surplus of INR0.13 crore on a total operating
income of INR12.60 crore, as against PAT and TOI of INR0.12 crore
and INR8.46 crore, respectively, in FY14.
S S INFRASTRUCTURE: CARE Withdraws C Rating on Bank Facilities
--------------------------------------------------------------
CARE has reaffirmed and withdrawn the outstanding ratings of 'CARE
C (issuer not cooperating) & CARE A4 Issuer not cooperating
assigned to the bank facilities S S Infrastructure Development
Consultants Limited with immediate effect.
The rating withdrawal is at the request of S S Infrastructure
Development Consultants Limited and 'No Objection Certificate'
received from the banker that have extended the facilities rated by
CARE.
The company has availed RBI moratorium period during March 2020 to
August 2020.
Detailed description of the key rating drivers
At the time of last rating dated October 23, 2020, the following
were the strengths and weaknesses
Key Rating weakness
* Small scale of operations and decrease in total operating income
in FY20: The scale of operations of the company stood small with
moderate net worth base of INR50.19 crore. The Total operating
income of the company has decreased by 10.58% during FY20 and stood
at INR25.44 crore as compared to 28.45 crore in FY19.
* Marginal decline in profitability margins in FY20: The PBILDT
margin has decreased by 887 bps from 37.00% in FY19 to 28.13% in
FY20. Whereas, the PAT margin has decreased by 1009 bps from 21.96%
in FY19 to 11.87% in FY20 on account of decrease in PBILDT in
absolute terms.
* Elongated operating cycle: The operating cycle days of the
company has been elongated from 291 days in FY19 to 503 days in
FY20 due to increase in average collection period from 287 days in
FY19 to 392 days.
* Tender based nature of operations: The company receives most of
the work orders from government organizations. All these are
tender-based and the revenues are dependent on the company's
ability to bid successfully for these tenders. Profitability
margins could also come under pressure because of competitive
nature of the industry. However, the promoters' long industry
experience around two decades mitigates this risk to some extent.
Key rating strengths
* Experience of the partners for two decades in architecture
planning: S S Infrastructure Development Consultants Private
Limited (SSIDCL) was established in the year 2007 and has been in
the service of design and architecture for the last two decades.
The company is managed by Mr. Sundar Satyanarayana and Mr. Palle
Seshagiri Rao. Mr. Sundar Satyanarayana is a qualified graduate and
has two decades of experience in the architectural and engineering
activities. Due to long experience of promoters, he was able to
establish long term relationship with Chief Construction Engineer
(R&D) of various state governments, Ministry of Defense, GoI and
various private sector companies which has helped in developing his
business and bag new orders.
* Comfortable capital structure and debt coverage indicators: The
capital structure remained comfortable marked by overall gearing
which deteriorated marginally and stood at 0.09x as on March 31,
2020 (as against 0.08x as on March 31, 2019) due to increase in
total debt levels and substantial increase in net worth. The debt
coverage indicators of the company have deteriorated marked by
PBILDT interest coverage ratio and total debt/GCA, however remained
moderate at 5.83x and 1.04x in FY20 respectively (as against 16.03x
& 0.52x in FY19).
Telangana based, Integrated Infrastructure Development Solution
Provider was established in the year 1997 as a partnership firm,
promoted by Mr. Sundar Satyanarayana and Mr. Palle Seshagiri Rao.
Later in the year 2007, the constitution of the entity was changed
to Private Limited Company viz., S S Infrastructure Development
Consultants Private Limited. Post in the year 2017, the
constitution of the entity was changed to Limited company viz., S S
Infrastructure Development Consultants Limited. The company offers
various kinds of consultancy services which includes architectural
& interior Designing, civil/structural designs, project management,
repairs and rehabilitation, electrical, HVAC and other services for
different types of projects. The company has four branches at
various locations namely Bengaluru, Mumbai, New Delhi and
Visakhapatnam. The company got listed on April 12, 2018 on NSE
(Source: NSE website).
SE FORGE: CARE Raises Rating on INR180.85cr LT Loan to C
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of SE
Forge Limited (SEFL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
facility-Term
Loan 180.85 CARE C Revised from CARE D
Long term Bank
facility–Fund
Based Working
capital limits 46.45 CARE C Revised from CARE D
Short term Bank
Facility-Non
Fund based
working capital
limits 96.00 CARE A4 Revised from CARE D
Detailed Rationale & Key Rating Drivers
The revision in ratings assigned to the bank facilities of SEFL is
on account of improvement in performance of company in FY2020,
diversification of customers and clearing of dues in the month of
March, 2020 and timely repayment of debt obligations post
moratorium period. The rating also factors in the repayment of debt
obligations for the month of November 2020 prior to the scheduled
repayment date. The rating, however, continues to be constrained by
weak financial profile of SEFL, inherent risk related to dependence
on wind energy sector and susceptibility of profitability due to
variation in raw material prices. The rating also factors the
slowdown of business operation with respect to execution and
receipt of orders during the year due to impact of COVID 19
pandemic.
Rating Sensitivities
Positive Factors
* Timely collection of dues from customers in less than 30 days.
* Improvement in revenue growth rate above 20% and Improvement in
PBILDT margins above 30% on sustained basis.
Negative Factors
* Decline in revenues resulting into deterioration of debt
coverage ratios
Detailed description of the key rating drivers
Key Rating Weaknesses
* Moderate and fluctuating scale of operations and poor financial
metrics coupled with low capacity utilization: While the income
from operations improved from INR362.8 crore in FY19 to INR435.8
crore in FY20, the revenue remained low in 4MFY21 at INR84.78 crore
due to the impact of COVID-19. The capacity utilisation of SEFL has
remained low; 10% for forging and 17% for foundry unit in H1FY21 as
compared to 19% for forging and 26% for foundry unit in H1FY20.
PBILDT margins improved marginally to 11.75% in FY20 as against
10.5% in FY19, however, PBILDT margins remain contracted in
comparison to 18.87% in FY18 and 30.81% in FY17.
* Impact of COVID-19: Due to the implementation of guidelines
under lock-down, SEFL had to shut its production units from March
end to April 2020. Even though, the company commenced its
operations gradually from the month of May, the plants have been
operating at a lower capacity since May 2020. In order to combat
the effects of the lock-down, SEFL had availed moratorium
for the period of March - August 2020; however, certain interest
repayments have been made during this period too.
* Dependency on wind energy sector: SEFL was primarily
incorporated to meet the captive requirement of Suzlon group which
has its operations concentrated in the wind energy sector. The
Company has tried to diversify into the international wind energy
markets by focusing on exports sales. The company is trying to
widen its customer base to non-wind energy sector as well; however,
the same remains negligible in the sales of the company.
* Susceptibility to raw materials price variability: The major
raw materials required for its foundry unit are pig iron, CRCA
steel and sand. Pig Iron is mostly imported from Russia while CRCA
steel scrap is procured locally. Since the supply order pricing is
usually fixed at the time of the order placement, the company may
not be able to pass on any increase in raw materials prices to its
customers.
Key Rating Strengths
* Experienced Promoters: Manufacturing facilities of SEFL was
created as per the backward integration plan of SEL. The foundry
unit of SEFL has huge installed capacity of 120000 MTPA; however
the overall output is constrained on account of machining capacity
of 55000 MTPA. The forging unit of SEFL has huge installed capacity
of 42,000 rings per annum. The forging unit is capable of
manufacturing large capacity rolling rings with diameters ranging
from 500 mm to 5000 mm. These types of rings are also suitable for
use as bearings for industries like wind energy, petrochemicals,
aerospace, construction and mining equipment, heavy machinery
industries and material handling industries.
* Reducing dependence on Suzlon Energy Limited and steady
improvement in order book position: SEFL was primarily incorporated
to meet the captive requirement of Suzlon group which has its
operations concentrated in the wind energy sector. The company
generated about 35% of its revenue from sales to its parent Suzlon
Energy Ltd (SEL) (rated CARE D) in H1FY21, 36% in FY19 (44% in
FY18, 53% in FY17). The company's order book position has shown an
increasing trend from FY19 onwards on account of increase in export
orders. The company has got export orders from key international
wind players like GE USA, Gamesa, Senvion etc. The order book
stands at INR253 crore as on September 30,
2020.
Liquidity: Poor
The liquidity position remained poor marked by fluctuating working
capital cycle which remained elongated at 126 days in FY18, 109
days in FY19 and improved to 65 days in FY20. Average utilization
of its working capital facilities stood at 60% during past 12
months period ended September, 2020. Further, cash and bank balance
remained at INR0.01 crore as on September 30, 2020. As on September
30, 2020, SEFL has nearly INR16.5 crore unutilized, which will
provide cushion in case of cash flow mismatches.
SE Forge Ltd. (SEFL), incorporated in June 2006, is a wholly owned
subsidiary of Suzlon Energy Ltd. SEFL was established by SEL as a
backward integration to its Wind Turbine Generators (WTGs) design
and manufacturing facilities. SEFL is engaged in the business of
manufacturing Iron Castings and Forged products, primarily used as
components in the WTGs and other related equipment. SEFL has a
Forging unit with an installed capacity of approx. 42,000 rings per
annum at Vadodara in Gujarat and a Foundry unit with an installed
capacity of approx. 1,20,000 MTPA at Coimbatore in Tamil Nadu, both
situated in Special Economic Zones (SEZs).
STERLING CAST: CARE Keeps C on INR5.35cr Loans in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sterling
Cast and Forge (SCF) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 3.35 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short term Bank 2.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 4, 2019, placed
the rating of SCF under the 'issuer non-cooperating' category as
SCF had failed to provide information for monitoring of the
ratings. SCF continues to be noncooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated October 15, 2020, October 14, 2020,
October 13, 2020, and October 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.
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 susceptible to volatility
in raw material prices, foreign exchange fluctuation risk, highly
fragmented and competitive nature of the industry, partnership
nature of its constitution. The rating, however, drives strength
from experienced promoters.
Key Rating Weaknesses
* Susceptible to volatility in raw material prices: The main raw
materials of the firm are steel and iron alloys. The prices of
steel are driven by the international prices which had been
volatile in past.
* Foreign exchange fluctuation risk: With cash outlay for
procurement in Indian currency and sales realization in foreign
currency, the firm is exposed to the fluctuation in exchange
rates.
* Highly fragmented and competitive nature of the industry: SCF is
also exposed to high fragmentation in the hand tools industry,
which has numerous players at the bottom of the value
chain due to low entry barriers, low capital and technology
requirements.
* Partnership nature of its constitution: SCF's constitution as a
partnership firm has the inherent risk of possibility of withdrawal
of the partner's capital at the time of personal contingency and
firm being dissolved upon the death/retirement/insolvency of
partners
Key Rating Strengths:
* Experienced promoters: Mr. Subhash Chander and Mrs. Anjana Shoor
have total work experience of around four decades and three & a
half decades respectively in the manufacturing of hand tools. Both
the partners have accumulated this experience though their
association with SCF and other regional entities engaged in similar
business.
Sterling Cast and Forge (SCF) was established in April, 2010 as a
partnership firm with Mr. Subash Chander (aged 62 years) and Mrs.
Anjana Shoor (aged 57 years) as its partners sharing profits and
losses equally. The firm is engaged in manufacturing of hand tools
such as spanners, hammers, pliers, wrenches etc at its
manufacturing facility located in Jalandhar, Punjab with installed
capacity of manufacturing 1400 tonne of hand tools per annum. The
raw materials required for manufacturing of tools are steel and
iron alloys which are procured from Punjab. The firm exports its
hand tools under the brand name of "Metaque" and covers the market
of Egypt, UAE, USA, South Africa etc. (exports constituted ~75% of
the total sales in FY14). The remaining portions of the finished
products are sold to various wholesalers and retailers located in
Punjab, Delhi and Maharashtra under the brand name of 'Sterling'.
SUSEE PREMIUM: CARE Keeps D on INR14.4cr Loans in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Susee
Premium Automobiles Private Limited (SPAPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.48 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 20, 2019, placed the
rating(s) of SPAPL under the 'Issuer non-cooperating' category as
SPAPL had failed to provide information for monitoring of the
rating SPAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated November 4, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 20, 2019, the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Ongoing delays in meeting debt obligations: The company was
unable to generate sufficient cash flows leading to strained
liquidity position resulting in delays in meeting its debt
obligations in time in the past.
Susee Premium Automobiles Private Limited (SPAPL) was incorporated
in the year 2008 by Mr. S. Jeyabalan, Mr. J. Rajiv Subramanian and
Ms. J. Nirmala. SPAPL is the authorised dealer of Ford India
Private Limited (FIPL rated IND AAA; stable/IND A1+) for vehicles
and spare parts. It has two operating showrooms named Rockcity Ford
in Trichy and Salem, Tamil Nadu. The company procures the vehicles
and spare parts directly from FIPL's manufacturing units in Gujarat
and Chennai. The registered office is located in Madurai, Tamil
Nadu. The company has availed moratorium from March to August 2020
from one of their lender as per COVID-19 RBI guidelines.
VISHNU GRANITES: Ind-Ra Moves B+ Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sri Vishnu
Granites Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR47.5 mil. Fund-based limits migrated to non-cooperating
category with IND B+ (ISSUER NOT COOPERATING) rating; and
-- INR6 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
November 14, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Sri Vishnu Granites was incorporated in 1986 as a private limited
company and reconstituted as a limited company in 1994 in
Secunderabad, Telangana. The company processes rough granite blocks
into granite slabs and exports them. Kishan Agarwal, Kiran Agarwal
and Naman Agarwal are the promoters.
YUVARAJ CABLE: CARE Lowers Rating on INR5.87cr Loan to C
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Yuvaraj Cable Networks (YCN), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.87 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B; ISSUER NOT COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 19, 2019 placed the
rating(s) of YCN, under the 'issuer non-cooperating' category as
YCN had failed to provide information for monitoring of the
ratings. YCN continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and emails dated November 4 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the non-availability
of requisite information due to non-cooperation by Yuvaraj Cable
Networks 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 on August 19, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Elongated operating cycle due to high inventory holding and
working capital intensive nature of operations: The operating cycle
of the firm was high at 241 days in FY15 compared to 375 days in
FY14. High operating cycle of firm over the years was mainly on
account of high average inventory days. The firm is required to
hold inventory to meet customers demand and adhere to operational
procedures like activation, verification and other internal checks
of set top boxes. The firm makes the payment to set top box
supplier mostly in advance while receives payment depending on the
services subscribed by the customers (like monthly, quarterly and
annually). Due to the above said factor, the business operations of
the firm are highly dependent on working capital bank borrowings.
The average utilization of the working capital limit is around 90%
for the last 12 month ended February 29, 2016. Leveraged capital
structure and weak debt coverage indicators The overall gearing
ratio of the firm deteriorated to3.39x as on March 31, 2014 as
compared to 1.46x as on March 31, 2013 due to the fact that the
firm availed term loans coupled with enhancement in working capital
borrowings. However, the capital structure of the firm improved to
2.74x as on March 31, 2015 on account of repayment of term loan
installments coupled with increase in tangible networth. The
capital structure of the firm continues to be leveraged due to low
networth base and high debt levels. The debt coverage indicators of
the firm marked by PBILDT interest coverage ratio deteriorated from
16.90x in FY13 to 1.45x in FY15 due to year-on-year significant
increase in interest expenses compared to moderate growth in
PBILDT. Furthermore, the total debt/GCA of the firm, though
improved from 70.72x in FY14 to 14.70x in FY15 at the back of
increase in cash accruals, continues to remain weak due to high
debt levels.
* Constitution of the entity as a partnership firm: YCN, being a
partnership firm, is exposed to inherent risk of the partner's
capital being withdrawn at time of personal contingency and firm
being dissolved upon the death/retirement/insolvency of the
partners. Moreover, partnership firm business has restricted
avenues to raise capital which could prove a hindrance to its
growth.
Key Rating Strengths
* Experience of the partners for around two decades in the cable
network business: YCN is promoted by Mr. D Ramachandra Rao, his
family members and friends. Mr. D RamachandraRao and Mr. L Sridhar
have around seventeen years of experience in providing cable
television services. The firm is providing television services
through installation of set top boxes to six circles located in and
around Kovvur, Andhra Pradesh Growth in total operating income
along with increasing PBILDT margin during the review period The
total operating income of the firm increased at a compounded annual
growth rate (CAGR) of 84.15% from INR0.92 crore in FY13 to INR3.12
crore in FY15. The firm used to provide television cable services
till FY14.However, from FY15 onwards, the firm started generating
revenues from cable television services through rental income as
well as sale of set top boxes through installation of set top boxes
(each of INR1750/-)after Government of India (GoI) had amended the
Cable Television Networks (Regulation) Act in 2011 making it
mandatory for cable television subscribers to install set top boxes
for viewing television which resulted in substantial increase in
total operating income to INR3.12 crore in FY15 compared to INR0.93
crore in FY14. Furthermore, the firm achieved sales of INR7.00
crore during 11MFY16 (Provisional) due to increase in sale of set
top box. The PBILDT margin of the firm has been increasing y-o-y
and increased from 3.63% in FY13 to 15.68% in FY15 due to
relatively higher profit margin associated with the sale of set top
box service (i.e., installation of set top box and providing
television services) and absorption of fixed overheads due to
increase in scale of operations. However, the PAT margins of the
firm remained fluctuating year-on-year due to increase in financial
changes over the years. The PAT margin increased by 60 bps to 4.00%
in FY14 over FY13 on account of healthy PBILDT resulting in
absorption of financial charges. However, the PAT margin decreased
by 232 bps to 1.68% in FY15 over FY14 due to substantial increase
in financial charges which remained unabsorbed in spite of increase
in PBILDT. There was enhancement of bank facilities in the month
of February 2014 to support increase in scale of operations which
led to substantial increase in interest expenses during FY15.
* Long track record of operations resulting in strong customer base
albeit supplier concentration risk: YCN was established in 1999 and
has a track record of seventeen years. Over the years, the firm was
able to build relationships with the customers located at Kovvur,
Chagallu, Tallapudi, Gopalapuram, Polarvarm and Devarapalliin
Andhra Pradesh. YCN has approx. 40,000 members as on February 29,
2016. However, the firm is exposed to supplier concentration risk
since YCN purchases entire set top box from single supplier i.e.
M/s Cyber Optic Solution Private Limited.
* Stable demand outlook for digital television services: The
Direct-to-home (DTH) industry growth in India has surpassed all
expectations by growing at an unprecedented pace, recently. The
market has outpaced the analogue cables market in the country due
to a soaring number of televisions in households, introduction of
high definition (HD) services and various government interventions.
This recent momentum has made way for a possibility that Indian DTH
industry may supersede other global DTH markets in terms of the
number of subscribers in near future. On the backdrop of all the
above factors, the Indian DTH market is expected to grow with a
CAGR of around 16% during the forecast period of 2016 to 2020.
According to the "Indian DTH Market Outlook 2020", report, rising
competition amongst various players in Indian DTH market has led to
a fall in installation prices and availability of a wide range of
channel subscription options for users. The decline in Set-Top Box
(STB) prices has also made DTH services more viable for the Indian
users. Besides, the mandated introduction of digitization of
distribution has proved promising in bringing a large number of
urban households within the ambit of digital domain.
Yuvaraj Cable Networks (YCN) was established in the year 1999 and
promoted by Mr. D RamachandraRao, his family members and friends.
The firm is engaged in the business of providing television
services through installation of set top boxes (local cable
network) in and around Kovvur, Andhra Pradesh. The firm provides
television services to six circles (covering 80 villages) in A.P.
namely Kovvur, Chagallu, Tallapudi, Gopalapuram, Polarvarm and
Devarapalli.
=========
J A P A N
=========
JTB CORP: Posts Largest 1st-Half Net Loss; To Cut 6,500 Jobs
------------------------------------------------------------
Japan Today reports that JTB Corp said Nov. 20 it will reduce its
global workforce by 6,500 under broad restructuring, as it reported
its largest-ever net loss for a fiscal first half on slumping
tourism demand caused by the coronavirus pandemic.
JTB posted a record net loss of JPY78.17 billion for the
April-September period, compared with a net profit of JPY4.35
billion in the first half last year, the report discloses.
Japan Today relates that the company also plans to reduce 115
outlets in Japan and close over 190 overseas, while cutting
employees' annual salaries by 30 percent on average in the next
fiscal year starting April.
The envisaged reduction of 6,500 employees, equivalent to 20
percent of its total workforce, from the end of fiscal 2019 will
consist of 2,800 in Japan and 3,700 overseas, according to Japan
Today.
"We will thoroughly reduce costs to return to profitability in the
next business year," JTB President Eijiro Yamakita told a press
briefing, Japan Today relays.
According to Japan Today, the company expects a record pretax loss
of around JPY100 billion for the current business year through
March, highlighting the severity of the hit to tourism from the
pandemic that has led to travel restrictions globally.
By offering early retirement and forgoing the recruitment of new
graduates, JTB aims to reduce its total personnel to 22,500 by
March 2022, the report notes.
Japan-based JTB Corp. offers travel services. The Company provides
tourist resort development, ticket and hotel booking, travel
information supply, and other services. JTB also operates real
estate marketing, printing, and other businesses.
=====================
N E W Z E A L A N D
=====================
HAD GARMENTS: Ex-Liquidator Jailed for 4 Years for Theft, Perjury
-----------------------------------------------------------------
Sam Hurley at The New Zealand Herald reports that a former Auckland
liquidator has been jailed for four years after stealing NZD130,000
from two companies he was acting for, committing perjury and
obstructing a Serious Fraud Office investigation.
Geoffrey Martin Smith, 67, was sentenced on Nov. 19 following a
judge-alone trial in the Auckland District Court earlier this year,
the Herald says.
After defending himself during the proceeding, Mr. Smith was found
guilty by Judge Russell Collins in September of two charges of
theft by a person in a special relationship, two counts of perjury
and two charges of obstructing an investigation.
The Herald relates that Mr. Smith, who claimed he was immune from
prosecution and the SFO had defamed him, was found to have stolen
about NZD130,000 from two companies, HAD Garments and HB Garments,
after being appointed liquidator in 2013.
The companies were known as truck shops and sold goods out of
lorries on credit terms requiring small payments over many months.
The Herald says Mr. Smith's perjury charges were over documents he
filed in civil proceedings concerning the same liquidation
activities.
The obstruction charges were for his intentional failure to comply
with two separate notices issued by the SFO during its
investigation.
After Nov. 19's sentencing, SFO director Julie Read said Smith
abused his position of trust to defraud the two companies.
"He also actively misled the court in proceedings relating to those
companies and obstructed an SFO investigation," she said in a
statement, the Herald relays. "These offences resulted in
additional public funds being spent to resolve this case. The SFO
welcomes the court's sentencing decision, which recognised the
seriousness of the perjury and obstruction charges."
INTERSTAR NZ 2004-A: S&P Assigns B Rating on Tranche 3 Debt
-----------------------------------------------------------
S&P Global Ratings affirmed its ratings on two classes of notes
issued by Trustees Executors Ltd. as trustee for Interstar NZ
Millennium Series 2004-A Trust.
The rating actions take account of the notes' exposure to
long-dated arrears and pool concentration from the underlying
mortgages. S&P said, "We expect the pool to become further
concentrated and increasingly exposed to nonperforming loans as the
underlying collateral amortizes down. We note the timing and level
of interest and principal recoveries is uncertain for the
long-dated arrears portfolio because Challenger Securitisation
Management Pty Ltd. has amended the original terms and conditions
for a portion of the asset pool."
The pool has high levels of borrower concentration, which S&P would
expect to increase as the collateral continues to amortize. As of
Aug. 31, 2020, the asset pool consisted of 52 consolidated loans,
with a total loan balance of about NZ$6.8 million. Approximately
33.3%, or NZ$2.2 million, of the remaining pool balance is to
borrowers who are in long-dated arrears, with a further 1.3% of the
pool more than 90 days in arrears. Therefore, about 34.6% of the
underlying collateral is in arrears greater than 90 days as of Aug.
31, 2020. As of July 2020, approximately 4% of the pool are under
COVID-19 hardship arrangements.
S&P said, "Our view on significantly reduced assets is that as a
pool amortizes, tail-end risk will take greater precedence in the
rating analysis. The largest borrower exposure in the portfolio is
13.9% and the top 10 borrowers in the portfolio comprise 46.3% of
the pool balance. Accordingly, we have assessed it using our
borrower concentration analysis in our "New Zealand RMBS Rating
Methodology And Assumptions," published on Sept. 14, 2011."
Tranche 2 continues to benefit from the sequential pay structure,
with increased credit support in the form of subordination of
Tranche 3 notes. However the loans that are in long-dated arrears
will only continue to represent a larger proportion of the overall
pool, even as the performing loans amortize down. This could
constrain the overall yield position and mismatch of assets and
liabilities, leading to increasing tail-end risk. S&P said, "In our
cash-flow analysis of Tranche 2, however, we have assumed there to
be no cash inflow from the long-dated arrears, and our analysis
shows that the transaction has sufficient income to support the
timely payment of coupon and ultimate repayment of principal for
the Tranche 2 notes at the current rating stress."
As the lowest-ranking class of notes, the timely payment of coupon
and ultimate principal repayment of Tranche 3 is not only reliant
on excess spread and lenders' mortgage insurance, but also on the
successful repayment of the loans that are in long-dated arrears.
We believe the latter is highly uncertain, and that there is
limited ability for Tranche 3 to withstand stress.
S&P said, "Since our previous review, in December 2019, we have
observed that the performance of the remaining loans in the pool
has remained relatively stable and the excess spread in the
transaction has remained high. In our view, as the pool becomes
more concentrated there may be lumpy cash flows and more
variability in the income to the transaction. This increases the
reliance of meeting timely payment of coupon and ultimate repayment
of principal on the performance of a handful of loans (as opposed
to a portfolio of loans). We could lower our ratings on the Tranche
2 or Tranche 3 notes if the concentrations evolve such that we
believe the risk level is materially higher or if loan performance
deteriorates. This could include the failure of COVID-19-related
hardship arrangements to revert to performing loans and the lack of
resolution of the loans that are in long-dated arrears."
RATINGS AFFIRMED
Interstar NZ Millennium Series 2004-A Trust
Class Rating
Tranche 2 BBB- (sf)
Tranche 3 B (sf)
=====================
P H I L I P P I N E S
=====================
PAL HOLDINGS: Posts PHP7.92-BB Net Loss in Q3 Ended Sept. 30
------------------------------------------------------------
BusinessWorld Online reports that PAL Holdings, Inc., operator of
flag-carrier Philippine Airlines, saw its net loss for the third
quarter widen to PHP7.92 billion, as the global health crisis
continues to ravage the air-travel sector.
The company incurred a net loss of PHP5.16 billion in the same
period last year.
In a disclosure to the stock exchange, PAL Holdings reported a
76.9% drop in its total revenues for the third quarter to PHP8.47
billion, BusinessWorld discloses.
BusinessWorld says the flag carrier operator saw its passenger
revenues for the quarter go down by 80% to PHP6.30 billion. The
company's cargo revenues declined 23.5% to PHP1.84 billion,
ancillary revenues dropped 87.5% to PHP338.25 million, and revenues
from its other business segments decreased 52.1% to PHP2.05
million.
These brought the company's nine-month total revenues to PHP45.29
billion, down 61.6% from last year's PHP117.85 billion.
In the nine months through September, PAL Holdings' net loss to
parent equity holders hit PHP28.85 billion, or more than three
times the PHP8.49 billion recorded a year ago, BusinessWorld says.
Passenger revenues for the three quarters dropped 65.4% to PHP35.56
billion. Cargo revenues declined 12.2% to PHP6.05 billion.
Ancillary revenues decreased 55.5% to PHP3.68 billion, while its
other business segments generated PHP6.93 million, 76.9% lower than
last year's figure.
"The group's performance was severely affected by the economic
condition of the country due to COVID-19 (coronavirus disease 2019)
pandemic," PAL Holdings said, BusinessWorld relays.
The company said its total assets as of Sept. 30 this year went
down 10.5% to PHP284.37 billion from PHP317.83 billion as of Dec.
31, 2019, BusinessWorld discloses.
"The decrease was primarily brought about by the reduction in cash
and cash equivalents and property and equipment offset by the
effect of remeasurement to fair value of outstanding fuel deals and
increase in receivables," PAL Holdings, as cited by BusinessWorld.
said.
Its consolidated total liabilities decreased 1.4% or PHP4.43
billion from PHP312.93 billion as of Dec. 31, 2019 to PHP308.50
billion as of Sept. 30 this year.
"This was due to the decrease in total non-current liabilities by
10.2% or PHP21.49 billion partly offset by the increase in total
current liabilities by 16.6% or PHP17.05 billion," the company
noted.
According to BusinessWorld, PAL Holdings' consolidated total equity
went down by PHP29.03 billion from PHP4.90 billion as of Dec. 31,
2019 to capital deficiency of PHP24.13 billion as of Sept. 30 this
year.
BusinessWorld adds that the company attributed the decline to the
"increase in deficit brought about by the total comprehensive loss
for the nine months ended Sept. 30, 2020."
"The disruption in the group's operations due to the repercussions
brought about by the COVID- 19 crisis had a negative impact on its
equity position at the end of the period," it added.
PAL Holdings, Inc. is a holding company. The Company is engaged in
purchasing, subscribing, acquiring, holding, using, managing,
developing, selling, assigning, exchanging or disposing of real and
personal property, including shares of stocks, debentures, notes
and other securities of any domestic or foreign corporation. It is
engaged in airline business. The Company, through Philippine
Airlines, Inc. (PAL), which is the Philippine national flag
carrier, is engaged in air transport of passengers and cargo within
the Philippines and between the Philippines and various
international destinations. PAL flies to domestic jet routes and
international and regional points. PAL's route network covers
approximately 30 points in the Philippines and over 40
international destinations. PAL's international route network
covers approximately 40 cities in over 20 countries. PAL's domestic
network, including those operated by partner PAL Express, covers
over 30 cities and towns in the Philippines.
=================
S I N G A P O R E
=================
NOVENA GLOBAL: Wind-Up Proceeding Sought by DBS
-----------------------------------------------
Fiona Lam at The Business Times reports that DBS is seeking to wind
up scandal-hit Novena Global Healthcare Pte Ltd (NGHPL), co-founded
by Singaporean cousins Terence and Nelson Loh.
The bank has filed a winding-up application with the Singapore High
Court, the report says.
In a statement on Nov. 20, Mr. Terence Loh said that he understands
that DBS is requesting that insolvency professionals from
accounting firm RSM be named as joint and several liquidators of
NGHPL.
NGHPL is believed to have owed DBS millions of dollars, The Straits
Times (ST) reported, BT relays.
DBS declined to comment on the matter when approached by The
Business Times (BT).
According to the report, NGHPL is the Singapore subsidiary of the
Cayman Islands-incorporated Novena Global Healthcare Group (NGHG),
which has been in the limelight since Ernst & Young (EY) filed a
police report alleging its unauthorised signatures had appeared on
NGHG's financial statements.
The police are not the only ones looking into matters related to
the duo, the report says. In August, Singapore's Accounting and
Corporate Regulatory Authority told BT that it will take
enforcement action after it was discovered that entities linked to
the Lohs had not filed annual returns. These entities included
NGHPL and Novena Life Sciences Pte Ltd.
RSM was recently appointed as special accountant for NGHG by the
latter's supervisory committee, BT notes. Mr. Terence Loh said this
appointment was "made at the behest of the five lender banks of
NGHG, including DBS".
He believes a potential liquidation of the Singapore unit "may not
necessarily result in the demise" of the parent company.
"I will continue to engage with RSM until any liquidation occurs,
and will assist any appointed liquidators to recover value," BT
quotes Mr. Terence Loh as saying in the statement.
In October, he legally severed all business links with his cousin
and former business partner Mr. Nelson Loh.
Under the agreement, Mr. Nelson Loh would transfer all his shares
in NGHG, Dorr Global Healthcare International Pte Ltd and Rock Star
Advisors Pte Ltd to his cousin for S$1, and then resign as director
of the three entities.
Mr. Terence Loh, meanwhile, would transfer his shares in
Singapore-incorporated Bellagraph Nova Pte Ltd (BN Sg) to his
cousin for S$1 and step down as its director, BT relates.
He remains a director of NGHG at the holding level and of NGHPL.
On Nov. 20, Mr. Terence Loh said that he understands RSM has been
in touch with potential investors for the parent company, and some
of these investors are conducting due diligence on NGHG, according
to BT.
He noted that he has been assisting RSM to facilitate discovery of
financial transactions, documentation and shareholding of NGHG, and
to expedite the corporate recovery of the group's key businesses
"to salvage value for all stakeholders," BT relates.
BT says NGHG's board in September set up a special committee -
which does not include the duo - to investigate EY's allegations
that the audit signatures on NGHG's accounts were forged, and to
"restructure and scrutinise its affairs".
Regarding EY's allegations and other discrepancies that came to
light recently at NGHG, Mr. Terence Loh on Nov. 20 said he feels
"deeply betrayed" by his cousin, who has left Singapore and
"appears to have no intention to sort out this terrible mess we are
left with".
The Lohs this year formed Bellagraph Nova Group (BN Group), with
Evangeline Shen, the report notes. The new group, which is led
chiefly by Ms Shen and is bidding for the Newcastle United football
club, has drawn scrutiny after it was found to have doctored photos
of former US president Barack Obama in its marketing materials.
BT adds that Mr. Terence Loh said last month that he was not given
a specific role at BN Sg and was unaware of the entities of BN
Group. He also resigned from BN Group then.
Novena Global Healthcare Pte. Ltd. provides management consultancy
services to the health care organizations.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***