/raid1/www/Hosts/bankrupt/TCRAP_Public/210204.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, February 4, 2021, Vol. 24, No. 20
Headlines
A U S T R A L I A
AUCARE DAIRY: First Creditors' Meeting Set for Feb. 11
BILL HICKS: First Creditors' Meeting Set for Feb. 12
DAVID JONES: To Close Wellington Store in June 2022
FORUM PRODUCTIONS: First Creditors' Meeting Set for Feb. 15
FURNISHED PROPERTIES: Second Creditors' Meeting Set for Feb. 11
TUCAN TRAVEL: First Creditors' Meeting Set for Feb. 12
C H I N A
BRIGHT SCHOLAR: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
CHINA FORTUNE: Defaults on CNY5.3 Billion on Bank and Trust Loans
CHINA FORTUNE: Moody's Lowers CFR to Caa1, Alters Outlook to Neg.
GOHO ASSET: Moody's Affirms B1 CFR, Stable Outlook
HNA GROUP: Eyes Private Investors to Help Emerge from Bankruptcy
XINJIANG ZHONGTAI: Fitch Downgrades LongTerm IDRs to 'BB-'
H O N G K O N G
HONG KONG AIRLINES: Fails to Pay Interest on Perpetual Bond
HONG KONG AIRLINES: Risks Losing License Due to Financial Issues
I N D I A
ADITYA AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
ALUBEE DIE: CRISIL Keeps B+ Debt Ratings in Not Cooperating
ANKUR ROLLER: CRISIL Keeps D Debt Ratings in Not Cooperating
BAG POLY: CRISIL Keeps B+ Debt Ratings in Not Cooperating
EAGLE STEEL: CRISIL Lowers Rating on INR15cr Loans to B
FOURTH DIMENSION: CARE Keeps D Debt Ratings in Not Cooperating
FUTURE GROUP: Reliance's $3.4 Billion Deal Temporarily Halted
GODHANI GEMS: CRISIL Keeps D Debt Ratings in Not Cooperating
GRITTON CERAMICS: CRISIL Keeps D Debt Ratings in Not Cooperating
HARI KISHAN: CRISIL Keeps D Debt Ratings in Not Cooperating
HARI KRIPA: CARE Moves D Debt Ratings to Not Cooperating Category
HIMSHILA FERRO: CARE Moves D Debt Rating to Not Cooperating
HOLIDAY VILLAGE: CRISIL Keeps D Debt Ratings in Not Cooperating
INDUSTRIAL PROGRESSIVE: CARE Keeps D Rating in Not Cooperating
JOY GURU: CARE Reaffirms B Rating on INR8.0cr LT Loan
JPM EXPORTS PRIVATE: Insolvency Resolution Process Case Summary
KAILASH TRADING: CARE Keeps D Debt Ratings in Not Cooperating
LAMIYA SILKS: CRISIL Keeps D Debt Ratings in Not Cooperating
MAHA ELECTRONICS: CRISIL Keeps D Debt Ratings in Not Cooperating
MARGDARSHEE HOSPITALITY: CARE Cuts Rating on INR6.78cr Loan to B-
MM PROJECTS: CRISIL Keeps D Debt Ratings in Not Cooperating
MOULIKA INFRA: CRISIL Keeps C Debt Ratings in Not Cooperating
NINANIYA ESTATES: CRISIL Lowers Rating on INR32.5cr Loan to D
NS POLYMER: CARE Moves D Debt Ratings to Not Cooperating Category
NYLES SALES: CRISIL Lowers Rating on INR10cr Cash Loan to D
PIONEER MOTORS: CRISIL Keeps C Debt Ratings in Not Cooperating
PONDY VENKATESWARA: CRISIL Keeps B Ratings in Not Cooperating
PRECISION ENGINEERING: CRISIL Keeps D Ratings in Not Cooperating
R SQUARE SHRI: Insolvency Resolution Process Case Summary
RAAM TWO: CRISIL Keeps B Debt Ratings in Not Cooperating Category
RAIPUR SPECIALITY: CARE Lowers Rating on INR5.61cr LT Loan to B-
SANTOSH WAREHOUSING: CARE Keeps D Debt Rating in Not Cooperating
SARVA MANGALAM: CARE Lowers Rating on INR19.82cr Loan to D
SHAKTHI SEEDS: CARE Reaffirms B Rating on INR8.0cr LT Loan
SHIVAM ENTERPRISE: CRISIL Keeps B Debt Ratings in Not Cooperating
SIDDHARTH ENTERPRISES: CRISIL Keeps B+ Rating in Not Cooperating
UDYOG MANDIR: CRISIL Keeps B+ Debt Ratings in Not Cooperating
UMANG OILS: CARE Lowers Rating on INR10cr LT Loan to B
S I N G A P O R E
SEN YUE: Passport of Non-Executive Chair Impounded Amid CAD Probe
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A U S T R A L I A
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AUCARE DAIRY: First Creditors' Meeting Set for Feb. 11
------------------------------------------------------
A first meeting of the creditors in the proceedings of Aucare Dairy
(Aust) Pty Ltd will be held on Feb. 11, 2021, at 11:00 a.m. at Zoom
video conferencing.
Shane Justin Cremin -- scremin@rodgersreidy.com.au -- of Rodgers
Reidy was appointed as administrator of Aucare Dairy on Feb. 1,
2021.
BILL HICKS: First Creditors' Meeting Set for Feb. 12
----------------------------------------------------
A first meeting of the creditors in the proceedings of Bill Hicks
Jewellery Design Pty Ltd will be held on Feb. 12, 2021, at 10:00
a.m. at the offices of HoganSprowles, Level 9, 60 Pitt Street, in
Sydney, NSW.
Michael Hogan and Christian Sprowles of Hogan Sprowles were
appointed as administrators of Bill Hicks on Feb. 2, 2021.
DAVID JONES: To Close Wellington Store in June 2022
---------------------------------------------------
Otago Daily Times reports that David Jones has decided to close its
Wellington store in June 2022.
A spokesperson confirmed the move, saying it was in line with its
retail network strategy, ODT relays.
According to the report, rumours were rife mid last year that the
store would be closing down, but in May David Jones insisted it had
no plans to change its store operations in New Zealand.
The Australian retail giant first expanded into New Zealand in July
2016 with the opening of its Wellington store in an iconic Lambton
Quay building that once housed the Kirkcaldie & Stains department
store, according to ODT.
Its Auckland store was more than three years in the making after
David Jones had originally planned to enter the market in the City
of Sails but due to real estate availability, launched in the
capital.
The Newmarket store will remain open, the report says.
ODT relates that a David Jones spokesperson said the retailer
remained committed to serving customers in New Zealand and, along
with its Auckland store, looked forward to introducing online
offerings in the second half of 2022.
"As the retail sector continues to transform, including the
accelerated shift to online, the optimisation of our retail network
– through investment in our digital and physical channels, a
focus on right-sizing and where necessary, consolidation of our
physical footprint – is critical to meeting the changing needs of
our customers."
The spokesperson said the decision to close the Wellington store
was not made lightly, the report relays.
"We sincerely thank our customers and our team for their support
and commitment," ODT quotes the spokesperson as saying.
David Jones Pty Limited is an Australian upmarket department store.
FORUM PRODUCTIONS: First Creditors' Meeting Set for Feb. 15
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Forum
Productions Pty Ltd, formerly Trading as Paladarr and Shythaichef,
will be held on Feb. 15, 2021, at 10:00 a.m. via teleconference.
Shelley-Maree Brooks -- sbrooks@rodgersreidy.com.au -- of Rodgers
Reidy were appointed as administrators of Forum Productions on Feb.
2, 2021.
FURNISHED PROPERTIES: Second Creditors' Meeting Set for Feb. 11
---------------------------------------------------------------
A second meeting of creditors in the proceedings of Furnished
Properties Pty Ltd and JKMN Holdings Pty Ltd ATF The Chapman Family
Trust has been set for Feb. 11, 2021, at 12:00 p.m. via virtually
via Microsoft Teams 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 Feb. 10, 2021, at 4:00 p.m.
Bradley John Tonks of PKF was appointed as administrator of
Furnished Properties on Dec. 30, 2020.
TUCAN TRAVEL: First Creditors' Meeting Set for Feb. 12
------------------------------------------------------
A first meeting of the creditors in the proceedings of Tucan Travel
Pty Ltd will be held on Feb. 12, 2021, at 11:00 a.m. at the offices
of Rodgers Reidy, Level 12, The University Centre, 210 Clarence
Street, in Sydney, NSW.
Andrew James Barnden of Rodgers Reidy was appointed as
administrator of Tucan Travel on Feb. 2, 2021.
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C H I N A
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BRIGHT SCHOLAR: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed Bright Scholar Education Holdings
Limited's Long-Term Issuer Default Rating (IDR) and senior
unsecured rating at 'BB-'. The Outlook on the Long-Term IDR is
Stable. The 'BB-' rating on the company's USD300 million 7.45%
senior notes due 2022 has also been affirmed.
The affirmation and Stable Outlook reflect Fitch’s expectation
that Bright Scholar will maintain a solid financial profile as the
resilient domestic K-12 business provides buffer against
deterioration in overseas operations caused by the coronavirus
pandemic. However, rating headroom has reduced following its
overseas expansion, which increased leverage and weakened cash flow
generation.
Fitch believes Bright Scholar's business will be able to recover to
pre-Covid-19 levels given the strength of its brand, close
relationship with Chinese homebuilder Country Garden Holdings
Company Limited (BBB-/Stable) and positive industry dynamics.
The ratings on Bright Scholar reflects the company's solid market
position as the largest operator of international and bilingual
schools that cover kindergarten to 12th grade in China by
enrolment. The ratings also incorporate the education industry's
positive growth prospects and stable cash flow generation, the
company's synergistic relationship with Country Garden. The ratings
are constrained by the company's relatively small operating scale
and lower cash flow generation.
KEY RATING DRIVERS
Resilience on K-12 Education: Fitch believes steady growth in
Bright Scholar's domestic K-12 education business will support its
cash flow and make its credit profile more resilient against
disruptions in its overseas operations due to the pandemic. Its
unutilised capacity of around 25% as of September 2020 and
additional capacity from new schools will provide ample room for
growth.
Increase in Enrolments Domestically: Bright Scholar's close
strategic relationship with Country Garden and operation of most of
its K-12 schools on Country Garden properties supply the education
company with new students. Student enrolment in its K-12 schools
continued to grow over the past few years. The number of students
in its international schools rose by 10.5% in the first quarter of
the financial year ending August 2021 (FY21), in its bilingual
schools by 8.4% and in its kindergartens by 16.3%.
Covid-19 Impact: The coronavirus pandemic in the UK has a large
impact on Bright Scholar's overseas school operations as seven of
its eight overseas schools are in the UK. Fitch expects revenue
from overseas schools to drop sharply in FY21 as a result of a 30%
decrease in student enrolment and loss of the majority of boarding
and meal fees due to the closure of campuses.
In contrast, Bright Scholar's school operations in China returned
to normal in June 2020. Fitch expects revenue to grow by the low
single digits in FY21, driven by stable growth in the domestic K-12
business and complementary education services.
Positive FCF: Fitch expects Bright Scholar to generate positive
free cash flow (FCF) despite the impact of the coronavirus. This is
supported by stable and recurring cash flow from its domestic K-12
schools, growth in its complementary education services and
moderate expansion of schools under an asset-light model, which
limits capex. The company has a clear deleveraging path after the
pandemic, with FFO adjusted net leverage trending towards 2x along
with the recovery in its overseas operations.
Profitability Under Pressure: Fitch expects weakness in the
overseas operations to weigh on Bright Scholar's overall
profitability, with EBITDA margin narrowing by 3pp to 14.3% in FY21
by Fitch’s estimate. The increasing number of low-profit
kindergartens in the portfolio will pressure profitability in the
medium term. The company has taken steps to reduce costs and
improve operational efficiencies, while utilization increased with
the ramp-up of new schools. These will partly offset the impact of
lower margins from its overseas schools and kindergartens.
Slower Acquisitions: Fitch expects Bright Scholar to be financially
conservative and reduce acquisitions in the next year or two due to
uncertainty related to the coronavirus. The company's recently
acquired businesses overseas have diversified its portfolio, but
weighed on its financial profile given deteriorating performance
amid the Covid-19 pandemic. In the medium term, Fitch expects the
company to seek growth opportunities in complementary education and
overseas schools to complement its K-12 education services.
Regulatory Uncertainty: The private education sector in China is
highly regulated and subject to stringent scrutiny. Fitch expects
current regulations to have limited impact on Bright Scholar's
existing school operations, but regulatory risk exists as the rules
are evolving rapidly.
Proposed regulations will limit Bright Scholar's ability to acquire
kindergartens and schools providing compulsory education as it is a
listed company. In addition, tightened restrictions over
kindergartens' pursuit of profits and the government's goal of
increasing the number of low-profit kindergartens to 80% of the
total will negatively affect the margin of Bright Scholar's
kindergarten business.
DERIVATION SUMMARY
Bright Scholar has slightly smaller EBITDAR scale and weaker
profitability than Chinese private-school operator Wisdom Education
International Holdings Company Limited (BB-/Stable). Bright Scholar
is more diversified than Wisdom Education in terms of school
locations and education formats, but its overseas operation has
been disrupted by the coronavirus and weighs on Bright Scholar's
cash flow generation.
Bright Scholar has stronger FCF generation due to its asset-light
model, supporting its deleveraging path after the pandemic, while
Wisdom Education's leverage is likely to stay high due to negative
FCF.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Single-digit revenue growth in FY21, improving to low-teens in
FY22, driven by organic growth and recovery in overseas
operations
-- EBITDA margin of 14% in FY21 due to the impact of the
coronavirus pandemic, and gradually improve to 19% by FY24
(FY20: 17.1%)
-- CNY300 million in capex in FY21 and CNY500 million-600 million
per year in FY22-FY24 (FY20: CNY150 million)
-- Acquisition payment of CNY50million in FY21
-- No dividend payment
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action is not expected in the medium term
until Bright Scholar achieves a substantially larger operating
scale without material deterioration in its financial profile
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Significant deterioration in operating performance
-- FFO adjusted net leverage sustained above 3.0x (FY20: 2.3x)
-- FFO fixed-charge coverage sustained below 2.0x (FY20: 2.2x)
-- Evidence of greater government, regulatory or legal
intervention leading to an adverse change in the company's
operating and business profile
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Bright Scholar had CNY3.8 billion of cash and
short-term investments as of November 2020, which is more than
sufficient to cover its short-term bank borrowings of CNY945
million. Bright Scholar has demonstrated access to offshore capital
markets. It completed an equity placement in 2018 and issued a
USD300 million bond in 2019.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has chosen to use the multiple approach to capitalise leases
for Bright Scholar and assess leverage on an adjusted leverage
basis. Fitch thinks the multiple approach is more appropriate for
education services companies under the Generic Navigator, like
Bright Scholar, as leasing school and facility premises form a core
element of its operations. A multiple of 8x was used as the company
is based in China.
Bright Scholar typically collects tuition and fees at the beginning
of the semester and there is usually a large "contract liabilities"
on its balance sheet. Fitch has classified part of cash that is not
expected to generate EBITDA (i.e. contract liabilities * (1-EBITDA
margin)) as "not readily available", and this amount is excluded
from net debt calculations.
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.
CHINA FORTUNE: Defaults on CNY5.3 Billion on Bank and Trust Loans
-----------------------------------------------------------------
Caixin Global reports that China Fortune Land Development Co. Ltd.
and its subsidiaries have defaulted on billions of yuan in debt as
the property developer has struggled to scrape together cash amid a
tightening regulatory environment.
The Shanghai-listed company said it has failed to pay CNY5.3
billion (US$813.5 million) in principal and interest on debts that
include bank and trust loans, though not bonds, Caixin discloses
citing a company filing released late on Feb. 1.
Caixin relates that China Fortune said it couldn't come up with the
cash to make the debt payments due to the current economic and
industry conditions coupled with the impact of the Covid-19
epidemic. It added it was trying its best to raise money, and had
reached a consensus with some financial institutions about a
repayment delay.
China Fortune Land Development Co., Ltd., offers real estate
development and investment services. The Company develops
industrial parks and industrial town projects. China Fortune Land
Development also provides related industrial solution services.
As reported in the Troubled Company Reporter-Asia Pacific on Jan.
29, 2021, Fitch Ratings downgraded China-based industrial-park
operator and developer China Fortune Land Development Co., Ltd.'s
(CFLD) Long-Term Foreign-Currency Issuer Default Rating (IDR), its
senior unsecured rating and the ratings on all its outstanding
bonds to 'CCC' from 'B'. The Recovery Rating is 'RR4'. The ratings
have been removed from Rating Watch Negative.
The rating downgrade is driven by a further revision in CFLD's
Standalone Credit Profile (SCP) to 'ccc-' from 'b-', after it was
revised from 'b+' on 14 January 2021. The lowering of the SCP
reflects increasing uncertainty over CFLD's access to financing
after its failure to provide a clear plan to address upcoming debt
maturities. Fitch has applied a one-notch uplift to the SCP due to
moderate linkages with its second-largest shareholder, Ping An Life
Insurance Company of China, Ltd. (Ping An Life), which held a stake
of around 25% in CFLD as of end-2020.
CHINA FORTUNE: Moody's Lowers CFR to Caa1, Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service has downgraded China Fortune Land
Development Co., Ltd.'s (CFLD) corporate family rating to Caa1 from
B2. Moody's has also downgraded to Caa2 from B2 the senior
unsecured bonds issued by CFLD (Cayman) Investment Ltd. and
guaranteed by CFLD.
The ratings outlook has been changed to negative from ratings under
review.
These actions conclude Moody's review for downgrade initiated on
January 13, 2021.
"The downgrade reflects CFLD's high liquidity risk, as reflected by
its missed principal and interest payments on its onshore bank and
trust loans," says Danny Chan, a Moody's Analyst and Assistant Vice
President.
The downgrade of the senior unsecured bond rating to Caa2, which is
one notch below the CFR, is because of the risk of structural
subordination. This subordination risk reflects the fact that the
majority of claims are at the operating subsidiaries and have
priority over claims at the holding company in a bankruptcy
scenario. In addition, the holding company lacks significant
mitigating factors for structural subordination. As a result, the
expected recovery rate for claims at the holding company will be
lower.
The downgrade follows the company's announcement on 2 February 2021
that it has missed RMB5.2 billion in principal and interest
payments for its onshore bank and trust loans, though not involving
its bonds or other debt financing instruments. The company has
formed a steering committee to liaise with its creditors, with an
aim to resolve its imminent debt maturities and honor its remaining
debt obligations [1].
A high level of uncertainty remains over satisfactory resolution on
the loan restructuring. In addition, CFLD's constrained liquidity
could lead to an acceleration of payments relating to the company's
other obligations.
RATINGS RATIONALE
CFLD's Caa1 CFR reflects its weak operating performance, high
exposure to receivable risks and its weak liquidity. However, the
rating takes into consideration the company's track record of
developing and operating industrial parks, and developing
residential properties in the Beijing-Tianjin-Hebei area.
Moody's expects the company's weak liquidity position to persist
over the next 12-18 months as its operating performance will likely
remain weak given heightened liquidity stress. CFLD's access to
onshore and offshore funding will also be constrained by the missed
payments on its onshore debt obligation and the uncertainty
surrounding the resolution on its debt restructuring.
Moody's no longer applies a one-notch rating uplift based on Ping
An Life Insurance Company of China, Ltd. (A2 stable)'s support to
CFLD despite Ping An Life's status as CFLD's largest creditor. This
is because the missed principal and interest payments indicate that
Ping An Life would not provide extraordinary funding support to
CFLD on a timely basis.
With regards to governance considerations, Moody's has considered
CFLD's poor financial policy and liquidity management, as reflected
in its sizable amount of maturing debt obligations in the next 6-12
months, far exceeding its cash holdings and expected operating cash
flow over the same period.
Moody's also regards the coronavirus outbreak as a social risk
under our environmental, social and governance (ESG) framework,
given the substantial implications for public health and safety.
CFLD's weak operations, particularly in its home Hebei market, were
partly due to renewed pandemic-control measures in Hebei, as well
as lockdown or travel ban in some cities in January 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects Moody's concerns over the company's
tight liquidity and ability to arrange timely funding to meet its
obligations, and the potential negative impact on the recovery
prospects of CLFD's creditors due to a lack of progress on the debt
restructuring.
The ratings are unlikely to be upgraded given the negative outlook.
However, a positive rating action could be considered if the
company makes significant progress on its debt restructuring
servicing its debt obligations and improves its liquidity and
capital structure.
Moody's could downgrade CFLD's ratings if principal losses for
CFLD's creditors are likely to increase.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
China Fortune Land Development Co., Ltd. was established in 1998
and listed on the Shanghai Stock Exchange in 2011. The company
engages in residential property development and the investment and
operation of integrated industrial parks. The company's industrial
park businesses include primary land development, infrastructure
development and construction, industry development services, and
property management and public services. CFLD was founded by
Wen-Xue Wang in Hebei province and was listed on the Shanghai Stock
Exchange in 2011. As of September 30, 2020, Wang held 37.20% of
CFLD's shares and, thus, is the largest and controlling shareholder
of the company. Ping An Life is the second-largest shareholder,
with a 25.19% stake.
GOHO ASSET: Moody's Affirms B1 CFR, Stable Outlook
--------------------------------------------------
Moody's Investors Service has affirmed GOHO Asset Management Co.,
Ltd.'s (GOHO AMC) B1 local currency and foreign currency issuer
ratings and B1 corporate family rating.
The entity-level outlook on the company remains stable.
RATINGS RATIONALE
The rating affirmation and stable outlook reflect GOHO AMC's robust
profitability and solid capital adequacy, but balanced by its
uneven debt maturity schedule and high concentration in a small
number of projects. The company maintained stable financial
position in the past few years.
GOHO AMC has an uneven debt maturity schedule, raising refinancing
risk. While the company has increased long-term funding to reduce
asset-liability mismatches, most of these long-term debts and loans
will mature in 2021. The uneven maturity schedule will increase the
company's refinancing risk and liquidity management task to deal
with stress events and any unexpected situations. However, Moody's
expects that refinancing risks can be mitigated given that GOHO AMC
has arranged several facilities to ensure sufficient liquidity to
repay the debts and loans.
Moody's expects GOHO AMC's high concentration risk in distressed
asset projects to likely increase uncertainties regarding its
performance and financial position. According to the company's
interim report for the first half (H1) of 2020, revenue from its
top five clients totaled RMB315.5 million, accounting for around
43.6% of its total revenue. A default of a single project could
materially worsen the company's profitability and asset quality,
although this risk is tempered by the value of the distressed
assets. It also indicates that the company has laxed risk controls
on managing single project concentration.
However, Moody's expects GOHO AMC to maintain its high capital
adequacy ratio which can also mitigate the concentration risk. Its
higher than peers capitalization is supported by moderate asset
growth and good internal capital generation. For example, GOHO AMC
uses its internally generated resources to fund new projects and
caters to a strong demand for its distressed asset management
services, without relying on increasing leverage. As a result, GOHO
AMC's tangible common equity/tangible total asset ratio remained at
around 30% over the past few years.
Moody's also expects GOHO AMC to maintain its healthy profit level
over the next one to two years. GOHO AMC's profits have grown
strongly over the past three years, mainly driven by robust demand
in its distressed asset management business. While the
profitability will be volatile due to the high project
concentration, it helps support capital adequacy and generate
repayment ability.
In terms of environmental, social and governance (ESG)
considerations, Moody's has considered the company's concentrated
ownership in its founder Mr. Li Houwen, who held a 50.02% stake as
of June 2020. However, this risk is mitigated by GOHO AMC's
diversified board structure and experienced senior management team.
As a result, governance risk does not have a material impact on the
company's B1 issuer ratings.
Given that GOHO AMC is a privately-owned enterprise, Moody's has
not incorporated any assumption of government support into the
company's ratings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade GOHO AMC's ratings if the company (1)
maintains its good profitability and capital adequacy without
significantly increasing its asset risk; (2) enhance its risk
management framework to reduce project concentration risk; and (3)
improves its liquidity management so as to have an evenly spread
out maturity schedule.
Moody's could downgrade GOHO AMC's ratings if the company's (1)
provisions increase significantly because of asset-quality
deterioration; (2) tangible common equity/tangible managed assets
ratio declines below 20%; (3) corporate governance or shareholders
face difficulties in reducing its debt-servicing needs; or (4)
business and earnings are significantly affected by changing
regulations.
Moody's could also downgrade the company's rating if its
refinancing plans face any difficulties and are postponed.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
GOHO Asset Management Co., Ltd. is headquartered in Hefei, Anhui
Province, and reported total assets of RMB13.8 billion (US$2.1
billion) as of June 30, 2020.
HNA GROUP: Eyes Private Investors to Help Emerge from Bankruptcy
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Reuters reports that China's embattled HNA Group is looking for
private investors to help it emerge from bankruptcy, a person with
knowledge of the matter said, but bankers and analysts say
restructuring may be challenging due to its debt pile and opaque
corporate structure.
Reuters says the creditors' move to file for bankruptcy came after
HNA was put under a restructuring exercise led by the Hainan
government to resolve its liquidity risks stemming from years of
aggressive acquisitions abroad.
HNA, whose flagship business is Hainan Airlines, used a $50 billion
global acquisition spree, mainly fuelled by debt, to build an
empire with stakes in businesses from Deutsche Bank to Hilton
Worldwide.
According to Reuters, the person close to the restructuring process
said while the courts will process creditors' bankruptcy filings,
HNA's work group led by its newly-elected party secretary Gu Gang
will simultaneously work on bringing in strategic investors.
He said the group was targeting private sector investors, including
for its Hainan Airlines business, rather than state-owned ones,
adding that some existing shareholders will exit in the process,
Reuters relays.
Shares in listed companies linked to HNA slumped on Feb. 1, after
the troubled conglomerate disclosed that its creditors had applied
for its bankruptcy and that nearly $10 billion had been embezzled
by shareholders of its three units, Reuters notes.
Hainan Airlines, HNA Innovation, CCOOP Group, HNA Technology and
Bohai Leasing tumbled between 5% and 10%.
"HNA is in a messy situation. I don't think the restructuring is
going to be easy," Reuters quotes a senior banker based in Hong
Kong, who has had dealings with HNA in the past, as saying.
Beijing has been putting more pressure in recent years on opaque
corporate structures, excess debt and deals it sees as overly
aggressive as it tried to control capital outflows and keep its
economy on an even keel.
"Fundamentally a bigger but very old story at play - if you expand
your business by borrowing money . . . you better have the money to
pay for all this," Reuters quotes Fraser Howie, an independent
commentator and author of books about China's financial system, as
saying.
Noting China's past history of acquisitive conglomerates, he said:
"Every one of them has been dismembered, dismantled and restricted
to varying degrees. That type of company is gone and not coming
back."
Unlisted HNA's acquisition of marquee assets was also followed by
intense pressure from the regulators overseas to provide greater
clarity about who owns the conglomerate, adding to its financial
problems, according to Reuters.
HNA, which has been struggling with liquidity issues in the last
couple few years, has $27.5 billion worth of outstanding bonds in
various currencies and another $20 billion in loans, Reuters
discloses citing data compiled by Dealogic.
"We are not optimistic with the credit situation of HNA Group, and
reckon the possible result of the restructuring is the sale,
spin-off of its core assets, and forced debt-to-equity swaps," said
D.E. Institute, a think tank that focuses on credit outlook and
default analysis, Reuters relays.
In recent years, HNA sold assets such as airport services company
Swissport and electronics distributors Ingram Micro, Reuters
notes.
According to Reuters, the Hainan government would prefer to keep
Hainan Airline as a private carrier due to its own limited
financial resources, said Huang Zhenda, a senior co-partner at
Beijing Deheng Law Offices and a former HNA executive.
Law firm King & Wood Mallesons has been hired to lead the
restructuring, according to two sources with knowledge of the
matter, including the first person cited above by Reuters. The
whole bankruptcy restructuring process is expected to conclude
within 2021, said the first person, adds Reuters.
About HNA Group
China-based HNA Group Co. Ltd. offers airlines services. The
Company provides domestic and international aviation
transportation, air travel, aviation maintenance, and aviation
logistics services. HNA Group also operates holding, capital,
tourism, logistics, and other business.
As reported in the Troubled Company Reporter-Asia Pacific on Feb.
1, 2021, Global Times said HNA Group on Jan. 29 declared bankruptcy
and restructuring after a multi-year debt and liquidity crisis. The
company was informed by South China's Hainan High People's Court on
Jan. 29 that "because the company is unable to pay off its debts,
related creditors appealed to the court for the company's
bankruptcy and restructuring," HNA said.
According to Global Times, HNA Group said it will cooperate with
the court for judicial review, carry forward the debt disposal, and
support the court's protection of the legal rights of its creditors
so as to ensure the smooth operations of the company.
XINJIANG ZHONGTAI: Fitch Downgrades LongTerm IDRs to 'BB-'
----------------------------------------------------------
Fitch Ratings has downgraded China-based Xinjiang Zhongtai (Group)
Co., Ltd.'s (XJZT) Long-Term Foreign-Currency and Local-Currency
Issuer Default Ratings (IDR) to 'BB-', from 'BB+'. The Outlook is
Stable. Fitch has also downgraded the rating on XJZT's USD380
million 7.0% senior unsecured notes due 2022 to 'BB-', from 'BB+'.
The downgrade reflects a lower support score of 17.5, from 22.5
previously, resulting in a change to a bottom-up approach with a
three-notch uplift from the Standalone Credit Profile (SCP). This
comes after Fitch revised the socio-political implication attribute
to 'Weak', from 'Moderate', to better reflect the company's larger
exposure to commercial operations.
XJZT was established in 2012 and is wholly owned by the Xinjiang
Uygur Autonomous Region. It is positioned as a strategic
investment-holding company, with the key mission of optimising the
value of state-owned assets and promoting Xinjiang's main policy
objectives of economic development and employment.
KEY RATING DRIVERS
'Very Strong' Status, Ownership and Control: Fitch believes the
government's direct ownership and very strong control over XJZT
continue to underpin the assessment. XJZT is wholly owned by the
Xinjiang State-owned Assets Supervision and Administration
Commission (SASAC). The Xinjiang government has direct control over
XJZT through the appointment of six out of seven board members and
its strategic direction. The Xinjiang SASAC supervises the
company's investments and financial planning, while all major
decisions require government approval.
'Moderate' Support Record: XJZT has historically received support
mostly via asset injections of important state-owned assets, in
line with the company's role as an investment-holding company. In
addition, the government has provided some recurring support such
as subsidies and cash injections at the subsidiary level, as well
as other preferential policies. However, the size and frequency of
the support have not been material and were the main constraints
against an attribute strength higher than 'Moderate'.
'Weak' Socio-Political Implications of Default: Fitch lowered the
attribute from 'Moderate' to reflect its larger exposure to its
commercially driven chemical subsidiary relative to the
parent-level policy business. XJZT's transformation into a
strategic holding company began in 2016, although the size of the
policy business has not increased as much as Fitch previously
anticipated. As of end-2019, the listed chemical subsidiary
accounted for more than half of the consolidated assets.
The combined group has approximately 24,000 employees, making it
one of the largest employers among the local GREs. However, the
repercussions of a default may be somewhat diluted in light of
XJZT's smaller policy business and the potential ring-fencing with
its subsidiaries. In addition, the region has similar
investment-holding companies that may be potential substitutes for
XJZT's policy role, if needed.
'Moderate' Financial Implications of Default: XJZT is the largest
GRE under the direct supervision of the Xinjiang SASAC by
consolidated assets and debt. However, the size of the company's
parent-level operations, which are mostly policy driven, is small
relative to the sponsor. This was a major constraint against a
higher assessment. Fitch believes a failure by the government to
provide timely support to the company could damage the credibility
of the region, and the availability and cost of financing options
for the region's other key GREs.
SCP of 'b-': Fitch has assessed XJZT's SCP on a parent level, as it
is a holding company and there is potential ring-fencing between
the parent and its subsidiaries. XJZT's SCP is driven by Fitch’s
expectations of a 'Weaker' financial profile, with net adjusted
debt/cash flow available for debt servicing of above 80x at
end-2019, in line with Fitch’s forecast period through 2024.
XJZT's weaker liquidity relative to a high percentage of short-term
debt resulted in the lower SCP of 'b-' in comparison with similar
highly leveraged peers with a stronger liquidity profile.
'Weaker' Revenue Defensibility: XJZT's parent-level profit
comprises financial income and investment income from subsidiaries.
The 'Weaker' assessment considers the impact of the macroeconomic
uncertainty on XJZT's income as most of its dividends are from the
chemical industry. XJZT has some control over its subsidiaries'
payouts, although the dividends are low relative to parent-level
net debt.
'Midrange' Operating Risk: XJZT has limited operating risk due to
its role as an asset manager, with well-defined cost drivers such
as financial expense and limited staff with only 74 employees at
the parent company as of end-2019. Hence, Fitch does not expect
parent-level costs to change significantly during a downturn, apart
from financial expense.
DERIVATION SUMMARY
XJZT's parent-level SCP was assessed under Fitch's Public Sector,
Revenue-Supported Entities Rating Criteria, considering the
company's revenue defensibility, operating risk and financial
profile.
Fitch applied a three-notch uplift from the SCP to derive the final
IDR. This reflects the application of the Government-Related
Entities Rating Criteria and Fitch’s assessment of the strength
of linkage and incentive to provide support.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A positive change in Fitch's credit view of the Xinjiang
government's ability to provide subsidies, grants or other
legitimate sources allowed under China's policies and
regulations;
-- Upgrade to the company's standalone profile, including an
improved liquidity profile;
-- Expansion of the company's policy role, resulting in an
increase in the overall support score to 20
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Deterioration in Fitch's credit view of the Xinjiang
government's ability to provide subsidies, grants or other
legitimate sources allowed under China's policies and
regulations;
-- Downgrade to the company's standalone profile;
-- Weakening of the government's incentive to support
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
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
=================
HONG KONG AIRLINES: Fails to Pay Interest on Perpetual Bond
-----------------------------------------------------------
The Standard reports that Hong Kong Airlines failed to pay interest
on a US$683 million (HK$5.32 billion) perpetual bond again on Feb.
2 after previously deferring the semi-annual interest payment due
on July 26, 2020, Blue Skyview Company announced on Feb. 1.
The total interest due is now nearly US$95.23 million, and the rate
has risen to 15.76 percent as a result of the latest default, the
report notes.
The rate includes the original fixed interest rate plus the US
Treasury bond interest rate and a penalty interest rate of 5
percent.
This means the company has to pay around US$108 million in interest
a year.
According to The Standard, the rate had increased to 12.125 percent
after the indebted airline did not redeem the bonds on maturity in
2020 and failed to pay interest on time in July.
Blue Skyview, the financing unit of Hong Kong Airlines, issued the
bond with a size of around US$683 million in 2017, with interest to
be paid every six months, the report notes.
Hong Kong Airlines was founded in 2007. It offers passenger and
cargo services. It is the third biggest carrier based in Hong Kong.
HONG KONG AIRLINES: Risks Losing License Due to Financial Issues
----------------------------------------------------------------
Wei Yiyang and Luo Meihan at Caixin Global report that Hong Kong
Airlines Ltd. (HKA) may again face the risk of losing its flying
license due to financial concerns, a little more than a year after
getting a reprieve from the local aviation authority.
Caixin relates that the 14-year-old airline's dilemma has emerged
as the low-cost carrier's major stakeholder, the once high-flying
conglomerate HNA Group Co. Ltd., is dealing with its own financial
problems.
HKA is just the latest firm pushed to the brink of crisis by HNA
Group's struggles under a mountain of debt incurred during its
early global spending spree that at its peak boosted total assets
to CNY1.2 trillion (US$186 billion), Caixin says.
Hong Kong Airlines was founded in 2007. It offers passenger and
cargo services. It is the third biggest carrier based in Hong
Kong.
=========
I N D I A
=========
ADITYA AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Aditya Agro -
Chhindwara (Aditya Agro) continue to be 'CRISIL D Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Term 0.28 CRISIL D (Issuer Not
Loan Cooperating)
Term Loan 6.44 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with Aditya for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Aditya Agro, which restricts
CRISIL Ratings’ ability to take a forward looking view on the
entity's credit quality. CRISIL Ratings believes that rating action
on Aditya Agro is consistent with 'Assessing Information Adequacy
Risk’. Based on the last available information, the ratings on
bank facilities of Aditya Agro continues to be 'CRISIL D Issuer Not
Cooperating’.
Aditya Agro, a partnership firm set up in 2013, is promoted by
Suryawanshi family of Chhindwara, Madhya Pradesh. It is
constructing a warehouse with capacity of 27,000 tonnes for
agricultural products in Chhindwara.
ALUBEE DIE: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Alubee Die
Casters (ADC) continue to be 'CRISIL B+/Stable Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Long Term 3 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 18 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ADC for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ADC, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ADC
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of ADC continues to be 'CRISIL B+/Stable Issuer Not
Cooperating’.
Established in the year 2004 by the brothers Mr. G. Prabhuram Mr.G.
Sairam and G. Veerarragavan, ADC is engaged in the business of
designing and manufacturing die and high pressure die castings of
aluminium alloys and zinc which finds its application in
electrical, industrial, and automobiles.
ANKUR ROLLER: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Ankur Roller
Flour Mills Private Limited (HGPPL) continue to be 'CRISIL D/CRISIL
D Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 30 CRISIL D (Issuer Not
Cooperating
Letter of Credit 20 CRISIL D (Issuer Not
Cooperating
Proposed Long Term 30 CRISIL D (Issuer Not
Bank Loan Facility Cooperating
CRISIL Ratings has been consistently following up with HGPPL for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HGPPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HGPPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of HGPPL continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
The Hitech group is managed by Mr. Naresh Mittal, and his two sons
Mr. Vipul Mittal and Mr. Kapil Mittal, with the support of a team
of professionals, who have experience of over 35 years in
processing and trading in pulses and other food products. The group
sells a majority of its products under the Hitech Pulses brand.
HGPPL, incorporated in 2001, processes pulses at its plant at
Lawrence Road, New Delhi. ARPL, incorporated in 2004, also
processes pulses, at its facility in Haryana. HAPL and AI (a
proprietorship firm) were set up in 2004. These entities trade in
food grain and pulses in New Delhi.
BAG POLY: CRISIL Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Bag Poly
Enterprises (BPE) continue to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.04 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
Proposed Cash
Credit Limit 3.00 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 2.14 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 2.82 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with BPE for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BPE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BPE
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BPE continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Established in June 2014 as a partnership firm by Mr. Pramod Mittal
and Mrs Pinki Mittal, BPE manufactures PP and HDPE woven sacks,
fabrics, and tarpaulins, which are used for packaging. The firm's
manufacturing facility is located in Panipat, Haryana and
operations commenced in August 2014.
EAGLE STEEL: CRISIL Lowers Rating on INR15cr Loans to B
-------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of Eagle
Steel Industries Private Limited (ESIPL) to 'CRISIL B/Stable Issuer
Not Cooperating’ from 'CRISIL BB-/Stable Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable' ISSUER
NOT COOPERATING)
Proposed Cash
Credit Limit 2 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable' ISSUER
NOT COOPERATING)
Proposed Long Term 1 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB-/Stable' ISSUER
NOT COOPERATING)
CRISIL Ratings has been consistently following up with ESIPL for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ESIPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ESIPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of ESIPL Revised to ’CRISIL B/Stable Issuer Not Cooperating’
from 'CRISIL BB-/Stable Issuer Not Cooperating’.
Ahmedabad, Gujarat-based ESIPL was established as a partnership
firm, Eagle Steel, by Mr. Rafiq Ghanchi and Mr. Ilyas Ghanchi. The
firm was reconstituted as a private limited company with the
present name in 2006. It straightens, cuts, and trades in hot- and
cold-rolled steel coils.
FOURTH DIMENSION: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Fourth
Dimension Solution Limited (FDSL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 30.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
LT/ST Bank 70.00 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 November 25, 2019, placed
the rating of FDSL under the 'issuer non-cooperating' category as
FDSL had failed to provide information for monitoring of the
rating. FDSL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated November 17, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 25, 2019 the following were
the rating weaknesses.
Key Rating Weaknesses
* Delays in debt servicing: There have been on-going delays by
Fourth Dimension Solution Limited in servicing of its debt
obligations.
Fourth Dimension Solution Limited (FDSL) was incorporated in June,
2011 and was converted into public limited company in May, 2015.
The company is listed on NSE EMERGE (SME Exchange Platform of
NSEIL) w.e.f January 22, 2016. FDSL is an India based Information
technology (IT) company engaged in sale of IT products and
services. Its business activities include trading of IT &
electronic products (like tablets, TV, Mobile Phones, etc.) and
providing infrastructure support services, technical support
services and operations outsourcing services. FDSL caters to
various verticals including smart governance projects, education,
BFSI, telecom, power & utilities, security & surveillance,
healthcare, etc. The customer base of the company comprises private
corporates including Lava International, Twinstar Industries, etc.
spread across various industries and also local/state/central
government bodies. The company also has a wholly owned subsidiary
Thumb speed Tech Solutions Private Limited which is engaged in IT
related business.
FUTURE GROUP: Reliance's $3.4 Billion Deal Temporarily Halted
-------------------------------------------------------------
Upmanyu Trivedi at Bloomberg News reports that Future Retail Ltd.'s
dollar bonds plunged on an Indian court temporarily restraining
parent Future Group from selling its retail assets to Reliance
Industries Ltd., after Future's partner Amazon.com Inc. had sought
the suspension.
According to Bloomberg, the Delhi High Court on Feb. 2 ordered the
Future Group and Indian authorities to ensure the status of the
indebted Indian retailer's assets are maintained as is, putting on
hold any further steps toward completing the $3.4 billion sale to
billionaire Mukesh Ambani's Reliance conglomerate. Future Retail's
dollar bond due January 2025 tumbled 7.4 cents to 78.8 cents on
Feb. 3, the sharpest drop in three months, Bloomberg relays.
Bloomberg relates that Amazon, which is opposing the deal with an
eye to dominating a large and vital consumer market, alleges that
the plan violates its own contract with Future Group. It had filed
an urgent petition last week seeking the suspension. The order can
be challenged in a higher court.
According to Bloomberg, the freeze bolsters the Jeff Bezos-led
e-commerce giant, which had also urged the court to jail Future
Group's founder and seize its assets for violating an October order
from the Singapore arbitration court. The cash-strapped Indian
retailer -- it risks bankruptcy if the deal with Reliance fails --
is caught between two of the world's richest men as they compete
for dominance in India's estimated $1 trillion consumer retail
market, Bloomberg notes.
The Indian court said it was of the prima facie view that the
Singapore tribunal order, which asked Future Retail to not proceed
with the deal, is enforceable in India.
Future Retail will "explore all legal remedies and take appropriate
steps to pursue the scheme of arrangement," it said in a stock
exchange filing on Feb. 2, Bloomberg relays. Amazon appreciates the
court's order, it said in an emailed statement.
The stakes are high, Bloomberg notes. For Amazon, which has
struggled to gain traction in China where local giants dominate the
e-commerce sector, India with a population of 1.3 billion is the
only other market of similar size that can boost the company's
growth. Blocking Reliance, which is already the country's biggest
brick-and-mortar retailer, is key. Acquiring Future's assets will
double Reliance's retail footprint -- an advantage Amazon is not
willing to cede, according to Bloomberg.
Bloomberg says the Indian retailer's lawyer Darius Khambata told
the court that Future Group wasn't willing to hold talks with
Amazon to explore an amicable out-of-court settlement. Khambata
said Future does not want to complicate matters as it has sought
regulatory approvals for the asset sale deal. Amazon's lawyer said
the e-tailer was willing to talk, without giving up its rights in
the case.
"The Singapore arbitration decision places Future Group in an
unenviable position with no immediate resolution in sight,"
Bloomberg quotes Utkarsh Sinha, managing director at consultancy
Bexley Advisors, as saying. A probable option now is bankruptcy
court "where residual value could be unlocked, which in Future
Group's case would be significant. The key question is who that
value accrues to," he said.
Bloomberg adds that Amazon, in its recent petition, alleged that
Future had displayed deliberate and willful disobedience of the
overseas arbitration court's order. The e-tailer owns a minority
stake in one of Future Group's firms and has accused the latter of
violating a contract when it agreed to the deal with Reliance.
The legal victory for Amazon comes after its letters to Indian
regulators seeking to stop approvals for the deal were
unsuccessful, Bloomberg says. The antitrust regulator gave its
approval in November. The stock exchanges earlier this month
reported no adverse observations.
Future Retail Ltd., the group's flagship firm, missed a Jan. 22
deadline to make an interest payment on its dollar bond and
proposed to meet the obligation in a month, Bloomberg recalls. The
court order threatens its ability to repay.
Future Group operates multi-branded retail outlets. The company's
retail chains include department stores, outlet stores, sportswear,
home improvement and consumer durables, supermarket, and
convenience stores as well as food parks.
GODHANI GEMS: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Godhani Gems
Private Limited (GGPL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Post Shipment 101.73 CRISIL D (Issuer Not
Credit Cooperating)
Proposed Long Term 58.58 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Proposed Short Term 3 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 6 CRISIL D (Issuer Not
of Credit Cooperating)
Export Packing 43.69 CRISIL D (Issuer Not
Credit Cooperating)
CRISIL Ratings has been consistently following up with GGPL for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of GGPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GGPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of GGPL continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
GGPL, set up in 1995 as a partnership firm by Mr. Ramesh V Godhani,
Mr. Vinod V Godhani, and their family members, was reconstituted as
a private limited company in 2011. The company cuts and polishes
diamonds.
GRITTON CERAMICS: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Gritton
Ceramics Private Limited (GCPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 8.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GCPL for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of GCPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GCPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of GCPL continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
Incorporated in 2014, GCPL is promoted by Ahmedabad, Gujarat-based
Mr. Ashok Garg, Mr. Pervinderkumar Mechu, and Mr. Rameshbhai Patel.
The company manufactures ceramic wall tiles.
HARI KISHAN: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Hari Kishan
Tejmal and Company (HTC) continue to be 'CRISIL D Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
Warehouse Receipts 7 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HTC for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HTC, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HTC
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of HTC continues to be 'CRISIL D Issuer Not Cooperating’.
Established in 2006, HTC is engaged into trading of agro
commodities mainly including wheat, soyabean, sarso, paddy, rice,
urad, maize and dhania. The firm is also engaged into it is also
engaged in grading of wheat. The day to day operations of the firm
are managed by Mr. Rajesh Nyati.
HARI KRIPA: CARE Moves D Debt Ratings to Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Hari
Kripa Business Venture Private Limited (HKBVPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 23.42 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Short Term Bank 3.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key rating Drivers
CARE has been seeking information from HKBVPL to monitor the
ratings vide email communications dated June 10, 2020, June 15,
2020, June 30, 2020, July 15,2020, July 22, 2020, August 10, 2020,
September 22, 2020, January 8, 2021 and January 13, 2021, and
numerous phone calls. However, despite 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 HKBVPL'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).
Detailed description of the key rating drivers
At the time of last rating on February 26, 2020 the following were
the rating strengths and weaknesses (Updated for the information
available from banker interaction):
Key Rating Weakness
* Delay in debt servicing owing to poor liquidity position: As per
banker interaction, the factory is closed and the account is NPA
Jaipur (Rajasthan) based, HKBVPL was incorporated in 2008 by Mr.
Mahendra Kumar Agrawal along with his family members. HKBVPL is
engaged in the business of manufacturing of MS ingots/billets,
flats and pipes. The company is also engaged in trading of MS
billets and ingots. The manufacturing unit of the company is
located at Kaladera Industrial Area, Jaipur with combined total
installed capacity of 60000 Metric Tons Per Annum (MTPA) as on
March 31, 2019. The company mainly procure raw material i.e. sponge
iron from Jharkhand and Bihar and sells its products in Rajasthan
and Uttar Pradesh.
HIMSHILA FERRO: CARE Moves D Debt Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Himshila
Ferro Alloys Private Limited (HFAPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.53 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from HFAPL to monitor the rating
vide e-mail communications/letters dated July 27, 2020, October 19,
2020, November 5, 2020, December 18, 2020 and January 11, 2021 and
numerous phone calls. However, despite repeated requests, the
company has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. Further, Himshila Ferro Alloys Private
Limited has not paid the surveillance fees for the rating exercise
as agreed to in its Rating Agreement. The rating on HFAPL'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 ratings.
Detailed description of the key rating drivers
At the time of last rating in December 24, 2019 the following were
the rating weaknesses and strengths: (updated the information
available from Ministry of Corporate Affairs).
Key Rating Weaknesses
* Delay in debt servicing: There are on-going delays in the term
debt servicing of the company owing to inadequate accruals from
operations.
Liquidity Indicator
Liquidity: Poor - Poor liquidity marked by lower accruals when
compared to repayment obligations, fully utilized bank limits and
low cash balance. This could constrain the ability of the company
to repay its debt obligations on a timely basis. The cash and cash
equivalent stood at INR0.03 crore as on March 31, 2019. Further,
the company has availed moratorium on EMI's repayment of term loan
and interest on cash credit from March 2020 to August 2020 as per
the RBI circular.
Incorporated in July 2009, Himshila Ferro Alloys Private Limited
(HFAPL) was promoted by Mr. Chinmoy Mondal and Mrs. Soma Ghosh for
setting up an iron castings unit in Burdwan, West Bengal. The
company has started its commercial operations from June 2017 at its
plant located at Dewandighi, Burdwan, West Bengal with an installed
capacity of 200 metric tons per month (MTPM). The company has been
engaged in manufacturing of high duty grey iron castings and
ductile iron castings.
HOLIDAY VILLAGE: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Holiday
Village Resorts Private Limited (HVRPL) continue to be 'CRISIL D
Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (Issuer Not
Cooperating)
Term Loan 15.12 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HVRPL for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HVRPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HVRPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of HVRPL continues to be 'CRISIL D Issuer Not Cooperating’.
HVRPL, based in Gandhidham (Gujarat), was incorporated in 2001. It
operates a three-star ethnic resort, Holiday Village Resorts, and a
club, Holiday Club.
INDUSTRIAL PROGRESSIVE: CARE Keeps D Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Industrial
Progressive (India) Limited (IPIL) 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 November 25, 2019, placed
the rating of IPIL under the 'issuer non-cooperating' category as
IPIL had failed to provide information for monitoring of the
rating. IPIL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated November 17, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 25, 2019 the following were
the rating weaknesses:
Key Rating Weaknesses
* Delays in debt servicing: There have been on-going delays by
Industrial Progressive (India) Limited in servicing of its debt
obligations.
Industrial Progressive (India) Limited (IPIL), promoted by Mr.
Subash Goel and his associates, was incorporated on 19th November
1984 as a public limited company. However, the company started its
operations from 1992 onwards with initial capacity of 2 lakh litres
per day (LLPD) of milk. Mr. Rajesh Gandhi, MD looks after the
operations of the company. The original promoter Mr. Goel had sold
his stake to Mr. Gandhi in Sept 2010. The company is engaged in the
manufacturing of various Milk products under the brand name "Doaba"
and "Milk Country". "Doaba" caters to North India especially
Haryana and Rajasthan whereas "Milk Country" caters to the demand
of Andhra Pradesh, Kerala and Tamil Nadu. The manufacturing
products range of the company includes Ghee, Skimmed Milk Powder
(SMP), Butter, Casein, Whey Powder and Liquid Milk.
JOY GURU: CARE Reaffirms B Rating on INR8.0cr LT Loan
-----------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of Joy
Guru Cold Storage Private Limited. (JGCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 8.00 CARE B; Stable Reaffirmed
Short Term Bank
Facilities 0.07 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of JGCSPL continue to
be constrained by its, small scale of operation along with low
profitability margins; regulated nature of business, seasonality of
business with susceptibility to vagaries of nature, risk of
delinquency in loans extended to farmers, competition from other
local players, leveraged capital structure with weak debt coverage
indicators. However, the aforesaid constraints are partially
offset by its experienced promoters and long track record of
operations, proximity to potatoes growing area.
Key Rating Sensitivities
Positive Factors
* Sizeable increase in scale of operations from present level
(Total Operating Income above INR10.00 crore) and improvement in
cash profit level (Gross Cash Accruals of INR1.00 crore) of the
entity on a sustained basis.
* Improvement in capital structure with overall gearing ratio
reaching comfortable below 1.00x on a sustained basis.
Negative Factors
* Any sizeable de-growth in scale of operations from present level
(total operating income below INR2.00 crore on a sustained basis.
* Deterioration in capital structure with overall gearing ratio
reaching higher than the level of 3.00x on a sustained basis.
Detailed Rationale & Key Rating Drivers
Key Rating Weaknesses
* Small scale of operation along with low profitability margins:
Joy Guru Cold Storage Private Limited continues to be a small
player in the cold storage industry with a low PAT of INR0.08 crore
(FY19: INR0.01 crore) on total operating income of INR2.13 crore
(FY19: INR2.47 crore) in FY20. The TOI declined by around 14 % in
FY20 over FY19 mainly on account of low portion of income from
trading of potato during the said period. The small size restricts
the financial flexibility of the company in times of stress and
deprives it from economies of scale. The profitability margins
remained low marked by PBILDT and PAT margins of 28.53 %( FY19:
33.02%) and 3.55% (FY19:0.23%), respectively, in FY20. Further the
company has achieved revenue of INR2.10 crore during 9MFY21. The
company expects to achieve INR2.50 crore of turnovers during FY21.
Moreover, the company has not availed moratorium of repayment of
interest on working capital facilities for the months of March,
2020 to August 2020 which could be availed under the terms of
recent RBI circular. However, the company has applied for COVID
loan INR1.50 crore which is not yet disbursed.
* Regulated nature of business: In West Bengal, the basic rental
rate for cold storage operations is regulated by the state
government through West Bengal State Marketing Board. The rent of
these cold storages is decided by taking into account political
considerations, not economic viability. Due to severe government
intervention, the cold storage facility providers cannot enhance
rental charge commensurate with increased power tariff and labour
charge.
* Seasonality of business with susceptibility to vagaries of
nature: JGCSCPL's operation is seasonal in nature as potato is a
winter season crop with its harvesting period commencing in March.
The loading of potatoes in cold storages begins by the end of
February and lasts till March. Additionally, with potatoes having a
preservable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period between December to February.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
* Risk of delinquency in loans extended to farmers: Against the
pledge of cold storage receipts, JGCSPL provides interest bearing
advances to the farmers & traders. Before the closure of the season
in November, the farmers & traders are required to clear their
outstanding dues with the interest. In view of this, there exists a
risk of delinquency in loans extended, in case of downward
correction in potato or other stored goods prices, as all such
goods are agro commodities.
* Competition from other local players: In spite of being capital
intensive, the entry barrier for new cold storage is low, backed by
capital subsidy schemes of the government. As a result, the potato
storage business in the region has become competitive, forcing cold
storage owners to lure farmers by providing them interest bearing
advances against stored potatoes which augments the business risk
profile of the companies involved in the trade.
* Leveraged capital structure with weak debt coverage indicators:
Overall gearing ratio decline from 2.41x as on Mar. 31, 2019 to
2.58x as on March 31, 2020 mainly on account of increase in debt
levels as on balance sheet date which as due to higher utilization
of cash credit limits. Moreover, the debt coverage indicators
represented by total debt to GCA has remained weak and improved due
to decrease in debt level to 20.93x in FY20 over 25.52x in FY19.
Moreover, the Interest coverage ratio improved marginally 1.65x in
FY20 from 1.45x in FY19 on account of decline in interest expenses
vis-à-vis decline in PBILDT level.
Key Rating Strength:
* Experienced management and long track record of operations:
JGCSPL started its commencement from 1990 and thus has long track
record of operations. Mr. Rajat Subhra Nandi and Mr. Sanjib Kundu
looks after overall management of the company. Mr. Rajat Subhra
Nandi has more than three decades of experience in cold storage
business and is supported by other directors and a team of
experienced professionals who have rich experience in the same line
of business.
* Proximity to potato growing area: JGCSPL's storing facility is
situated in the Bankura district of West Bengal which is one of the
major potato growing regions of the state. The favourable location
of the storage unit, in close proximity to the leading potato
growing areas provides it with a wide catchment and making it
suitable for the farmers in terms of transportation and
connectivity.
Liquidity: Adequate - Liquidity is marked by sufficient cushion in
accruals vis-a-vis repayment obligations. However, cash balance
stood low at INR1.06 crore as on March 31, 2020. The average
utilization of working capital limit remained moderately utilized
at around 60-70% during last 12 month ended December 31, 2020. The
current ratio remained below unity at 0.96x as on March 31, 2020.
However, the operating cycle remained high marked by 587 days as on
March 31, 2020 as the company is primarily engaged in the cold
storage business and also undertakes trading activities of
potatoes; accordingly its operation is working capital intensive.
The average inventory holding period remained high during FY20
mainly on account of closing stock of potatoes remained unsold as
on March 31, 2020.
Joy Guru Cold Storage Private Limited. (JGCSPL), incorporated in
the year 1989, is a Bankura (West Bengal) based company, promoted
by the Nandi and Kundu family. It is engaged in the business of
providing cold storage services to potato growing farmers and
potato traders, having an installed storage capacity of 200,000
quintals in Bankura district of West Bengal. This apart, the
company is also engaged in potato trading activities which
constituted around 3.24% of revenue in FY19.
JPM EXPORTS PRIVATE: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: JPM Exports Private Limited
Infinity Benchmark, 12th Floor
Office No. 1202, Block-GP
Sector-V, Salt Lake City
Kolkata 700091
Insolvency Commencement Date: January 27, 2021
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: July 26, 2021
(180 days from commencement)
Insolvency professional: Mr. Avishek Gupta
Interim Resolution
Professional: Mr. Avishek Gupta
CK-104, Sector II
Salt Lake City
Kolkata 700091
E-mail: avishek@optimusresolution.net
jpmexports.cirp@gmail.com
Last date for
submission of claims: February 10, 2021
KAILASH TRADING: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Kailash
Trading Corporation (KTC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.75 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 5.65 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 12, 2020, placed the
ratings of KTC under issuer non-cooperation category as KTC had
failed to provide information for monitoring of the rating. KTC
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 ratings.
Detailed description of the key rating drivers
At the time of last rating on March 12, 2020 the following were the
rating strengths and weaknesses:
Key Rating Weakness
* Delays in debt servicing: CARE had as part of its due diligence
exercise interacts with various stakeholders of the company
including lenders to the firm. As part of this exercise, at the
time of last review, CARE had ascertained delay in debt servicing.
Post the last review, CARE has not been able to obtain any feedback
on the timely debt servicing of the firm.
KTC established in 2001 by Mr K Chandrasekhar is engaged in trading
of engineering and commodity plastics. On the commodity plastics
segment KTC acts as a consignment agent of LG and on the
engineering plastics segment it imports polymers like hostaform,
celanex and sells them to Tier 1 and Tier 2 OEM's of automobile and
electronic industries. The firm operates out of Chennai and has a
warehouse of capacity 4000 sq.ft Status of non-cooperation with
previous CRA: ICRA has conducted the review on the basis of best
available information and has classified Kailash Trading
Corporation as "Not Cooperating" vide its press release dated
December 16, 2019.
LAMIYA SILKS: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Lamiya Silks
(LS) continue to be 'CRISIL D Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 1.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with LS for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of LS, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on LS is
consistent with 'Assessing Information Adequacy Risk’. Based on
the last available information, the ratings on bank facilities of
LS continues to be 'CRISIL D Issuer Not Cooperating’.
LS is based out of Kerala and is engaged in the retailing of
readymade garments. The firm was established in 2008 by Mr.Abdul
Jabbar. The firm has 6 showrooms in Kerala.
MAHA ELECTRONICS: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Maha
Electronics Private Limited (MEPL) continue to be 'CRISIL D Issuer
Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with MEPL for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of MEPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MEPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of MEPL continues to be 'CRISIL D Issuer Not Cooperating’.
MEPL was set up as a partnership firm, Maha Electronics Service, in
1994 by Mr. S Venkateswarulu and his wife Mrs. S Punyavathy; the
firm was reconstituted as a private limited company and it got its
current name in 2002. MEPL is an authorized service partner for HP
and has also started erection and installation of towers. The
company is based out of Hyderabad, Telangana.
MARGDARSHEE HOSPITALITY: CARE Cuts Rating on INR6.78cr Loan to B-
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Margdarshee Hospitality and Retails Private Limited (MHRPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.78 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from MHRPL to monitor the rating
vide e-mail communications/letters dated December 7, 2020, December
9, 2020 and December 11, 2020 and numerous phone calls. However,
despite repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
MHRPL's bank facilities will now be denoted as CARE B-; Stable;
ISSUER NOT COOPERATING*. Further, due diligence with
the banker and auditor could not be conducted.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the rating takes into account the significant
decline in net profit level along with deterioration in debt
coverage indicators and operating cycle during FY19 (refers the
period from April 1 to March 31). Moreover, the rating continues to
remain constrained by small scale of operation with low profit
margins, working capital intensive nature of operation, weak
capital structure and debt coverage indicators, cyclical and
competitive nature of hotel industry and intense competition in the
trading industry. However, the rating continues to derive strength
from experienced promoters and strategically located properties.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operations with low profit margins: The scale of
operations of the company remained small marked by total operating
income of INR15.85 crore (INR15.88 crore in FY18) with a PAT of
INR0.01 crore (INR0.19 crore in FY18) in FY19. The profitability
margins of the company also remained low marked by operating margin
of 7.02% (8.08% in FY18) and PAT margin of 0.08% (1.20% in FY18) in
FY19.
* Working capital intensive nature of operations: The operating
cycle of the company elongated and remained high at 176 days in
FY19 as against 114 days in FY18.
* Weak capital structure and debt coverage indicators: The capital
structure of the company remained weak marked by overall gearing
ratio of 5.03x as on March 31, 2019. The debt coverage indicators
deteriorated and remained weak marked by interest coverage ratio at
1.20x and total debt to GCA at 45.04x in FY19.
* Cyclical and competitive nature of hotel industry: The Indian
hotel industry is highly fragmented in nature with presence of
large number of organized and unorganized players spread across
various regions. Further, the hotel industry is regionbased and is
highly sensitive to the untoward events such as slowdown in the
economy. Cyclical nature of the hotel industry and increasing
competition from already established branded hotels may impact the
performance of MHRPL.
* Intense competition in the trading industry: The Company faces
intense competition in the trading industry due to low value
addition and presence of huge players. Due to intense competition
in the industry, the company faces margin pressure and the
profitability of the company remained under pressure.
Key Rating Strengths
* Experienced promoters: MHRPL is into trading industry since 2014
and recently started hotel business since April 2017. However, in
hospitality industry FY18 was the first year of operations for the
company. Moreover the key promoter; Mr. Manas Ranjan Swain who has
more than two decades of experience in the same industry through
his family business, looks after the day to day operations of the
company supported by the other directors Ms. Margdarshee Manas and
Mrs. Madhujyotsna Swain along with a team of experienced
professional.
* Strategically located properties: MHRPL's properties enjoy the
benefit of locational advantage. The properties are strategically
located in the prime locations of Odisha i.e. Jagatsinghpur,
Paradeep which is well connected through railway station and
airport and attracts tourists and corporates.
Incorporated in August 2014, Margdarshee Hospitality and Retails
Private Limited (MHRPL) was promoted by Mr. Manas Ranjan Swain, Ms.
Margdarshee Manas and Mrs. Madhujyotsna Swain based out of Odisha.
Since its inception, the company is into trading of home
appliances, crockery, utensils, fast moving consumer goods and
readymade garments through its three shops located at Paradeep and
Rahama, Odisha. For diversify its business profile, MHRPL has come
out with a hotel business during FY18. The company has already set
up a hotel 'Hotel Shakti Residency' which became operational from
April 2017. The hotel of the company is a premium category hotel
located in prime location at Paradeep, in Odisha. The hotel
consists of 24 rooms, multi cuisine restaurant, banquet and
conference halls.
MM PROJECTS: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of M. M.
Projects (MMP) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 1 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with MMP for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of MMP, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MMP
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of MMP continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
MMP was set up in 2007 as a proprietorship firm by Mr. Mutchu
Mithi. The firm undertakes construction of roads and bridges and is
based in Itanagar, Arunachal Pradesh.
MOULIKA INFRA: CRISIL Keeps C Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Moulika Infra
Developers (India) Limited (Moulika) continue to be 'CRISIL
C/CRISIL A4 Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3.5 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 7.5 CRISIL C (Issuer Not
Cooperating)
Proposed Long Term 4.0 CRISIL C (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with Moulika for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Moulika, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Moulika is consistent with 'Assessing Information Adequacy Risk’.
Based on the last available information, the ratings on bank
facilities of Moulika continues to be 'CRISIL C/CRISIL A4 Issuer
Not Cooperating’.
Incorporated in the year 2010 as a partnership firm, Moulika Infra
Developers (India) Limited (Moulika) was converted into a limited
company in February 2014. The company was promoted by Mr. Jayant
Patel, Mr. Arvind Patel, Mr. Raja Gopal Reddy and Mr. Pratap Reddy.
The company is involved in undertaking civil construction works
like construction of Canals and Bridges.
NINANIYA ESTATES: CRISIL Lowers Rating on INR32.5cr Loan to D
-------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facility of Ninaniya Estates Ltd (NEL) to 'CRISIL D Issuer not
cooperating’ from 'CRISIL B/Stable; Issuer not cooperating’
factoring in the delay in term debt repayment by the company over
the past three months.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 32.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with NEL for
obtaining information through letters and emails (dated February
12, 2020, and August 15, 2020, among others), apart from telephonic
communication. However, the issuer has remained non-cooperative.
Investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the entity. Such
non-cooperation by a rated entity may be a result of deterioration
in its credit risk profile. Ratings with 'ISSUER NOT COOPERATING'
suffix lack a forward-looking component.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings has not received any information on either the financial
performance or strategic intent of NEL, which restricts the ability
of CRISIL Ratings to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes the rating action on NEL is
consistent with 'Assessing Information Adequacy Risk'.
Based on the best available information, CRISIL Ratings has
downgraded its rating on the long-term bank facility of NEL to
'CRISIL D Issuer not cooperating’ from 'CRISIL B/Stable; Issuer
not cooperating’ factoring in the delay in term debt repayment by
the company over the past three months.
Incorporated in fiscal 2005 and promoted by Mr. Vijay Singh Rao,
NEL operates in the real estate development and construction
industry. It is developing two projects, Prism and Prism Portico,
in Gurugram, Haryana. Prism comprises Tower A (commercial space),
Tower B (hotel), and Tower C (executive suites). The hotel will
have 162 rooms for which the company has pre-defined agreements
with M/s Starwood Hotels and Resorts Pte Ltd, Singapore, for use of
its registered brand, Four Points by Sheraton.
NS POLYMER: CARE Moves D Debt Ratings to Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of N. S.
Polymer (NSP) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.48 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Short Term Bank 0.35 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from NSP to monitor the ratings
vide letters/e-mails communications dated July 6, 2020, November
10, 2020, November 24, 2020, January 4, 2021
January 20, 2021 and numerous phone calls. However, despite
repeated requests, the entity has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the ratings on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at fair rating. The rating on N. S.
Polymer's bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING. Further, banker could not be contacted.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating assigned to the bank facilities of N.S. Polymer take
into account the on-going delays in debt servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Ongoing delays in debt servicing: There are on-going delays in
servicing of term loans in the account. The delays were due to
lower accruals from business operations and higher dependence on
external borrowings.
N. S. Polymer was established in December 2016 with an objective to
enter into the manufacturing of plastic products (Plastic chair,
table and other plastic household products) business. The
manufacturing unit of the entity is located at Vill: Talai, P.O:
Jarur, PS: Raghunathganj, Dist: Murshidabad, West Bengal: 742235
with an installed capacity of 3264 tons per annum. The entity
started its operation from August 2018. Mr. Nawab Hossain (Partner)
along with other partners Mrs. Sufia Bibi (Partner) and Mr. Imran
Hossain (Partner) are looking after the day to day operation of the
entity who have significant experienced in similar line of
business.
NYLES SALES: CRISIL Lowers Rating on INR10cr Cash Loan to D
-----------------------------------------------------------
CRISIL Ratings has downgraded the rating of Nyles Sales &
Infraprojects Private Limited (NSIPL) to 'CRISIL D/CRISIL D Issuer
not cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating', as there are continuous delays in servicing debt
obligations, informed by reliable third party source.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Letter of credit 5 CRISIL D (ISSUER NOT
& Bank Guarantee COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with NSIPL for
obtaining information through letters and emails dated March 17,
2020 and September 16, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NSIPL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL Ratings believes that the information available for
NSIPL is consistent with Assessing Information Adequacy Risk.
NSIPL, incorporated in 2014, is based in Pune (Maharashtra). NSIPL,
formerly known as Nyles Sales Agencies Pvt Ltd, is promoted by Mr.
Ramsingh Raiji and his wife- Krishna Raiji and was earlier engaged
in readymade garments business. The company in fiscal 2018 started
undertaking EPC contract for setting up substations and
transmission lines for Maharashtra State Electricity Distribution
Company Limited (MSEDCL) and repair and maintenance work for
private players.
PIONEER MOTORS: CRISIL Keeps C Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pioneer
Motors (Kannur) Private Limited (PMPL) continue to be 'CRISIL C
Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL C (Issuer Not
Cooperating)
Inventory 3 CRISIL C (Issuer Not
Funding Facility Cooperating)
Long Term Loan 0.4 CRISIL C (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PMPL for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PMPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PMPL
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of PMPL continues to be 'CRISIL C Issuer Not Cooperating’.
PMPL, incorporated in 1997, is an authorised dealer of vehicles and
spare parts manufactured by Piaggio and HMSI. Wayanad Vehicles, a
subsidiary of PMPL, is one of the dealers for Piaggio vehicles. The
group is based in Kannur (Kerala).
PONDY VENKATESWARA: CRISIL Keeps B Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pondy
Venkateswara Modern Rice Mill (Pondy) continue to be 'CRISIL
B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 0.5 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL Ratings has been consistently following up with Pondy for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Pondy, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on Pondy
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
Pondy continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Established as a proprietorship firm in 1992 and based in
Ariyankuppam (Puducherry) under the proprietorship of Mrs. P
Premavati, Pondy is engaged in milling and processing of paddy into
rice, rice bran, broken rice and husk. The day to day operations
are managed by Mr. Govindaraju who is the son of the proprietor,
Mrs.P Premavathi.
PRECISION ENGINEERING: CRISIL Keeps D Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Precision
Engineering Corporation (PEC) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 7 CRISIL D (Issuer Not
Cooperating)
Cash Credit 9 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 2 CRISIL D (Issuer Not
Cooperating)
Term Loan 2 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PEC for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PEC, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PEC
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of PEC continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating’.
PEC was originally set up as a proprietorship concern by Mr. H D
Gupta in 1982, as an ancillary to Bhilai Steel Plant; it gradually
added other customers. In 2010, it was reconstituted as a
partnership firm after the founder's son, Mr. Vaibhav Gupta, joined
the business. PEC manufactures heat exchanger coils used in boilers
in power plants. Its manufacturing facility and office are in
Bhilai (Chhattisgarh).
R SQUARE SHRI: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: R Square Shri Sai Baba Abhikaran Private Limited
32, Royal Bunglow
Nipania, Indore
MP 452010
IN
Insolvency Commencement Date: January 18, 2021
Court: National Company Law Tribunal, Indore Bench
Estimated date of closure of
insolvency resolution process: July 16, 2021
(180 days from commencement)
Insolvency professional: Ms. Teena Saraswat Pandey
Interim Resolution
Professional: Ms. Teena Saraswat Pandey
387F 114 Scheme Part 1
Behind Diksha Boys Hostel
Sant Nagar, Indore
Madhya Pradesh 452010
E-mail: teenasaraswat@yahoo.co.in
ip.rsquaresai@gmail.com
Last date for
submission of claims: February 9, 2021
RAAM TWO: CRISIL Keeps B Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Raam Two
Wheelers India Private Limited (RTW) continue to be 'CRISIL
B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Inventory 7 CRISIL B/Stable (ISSUER NOT
Funding Facility COOPERATING)
Long Term 3 CRISIL B/Stable (ISSUER NOT
Bank Facility COOPERATING)
Proposed Cash 3 CRISIL B/Stable (ISSUER NOT
Credit Limit COOPERATING)
CRISIL Ratings has been consistently following up with RTW for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of RTW, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RTW
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RTW continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
RTW was originally set up in 2011 as a sole proprietorship firm by
Mr. Nalla Amith Reddy; this firm was reconstituted as a private
limited company with the current name in 2015. The company is an
authorised dealer for Honda Motorcycle and Scooter India Pvt Ltd's
two-wheelers in Hyderabad.
RAIPUR SPECIALITY: CARE Lowers Rating on INR5.61cr LT Loan to B-
----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Raipur Speciality Steels Private Limited (RSSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.61 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RSSPL to monitor the rating
vide e-mail communications/letters dated December 23, 2020,
December 28, 2020, December 30, 2020 and numerous phone calls.
However, despite repeated requests, the Entity has not provided the
requisite information for monitoring the rating. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which, however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
RSSPL's bank facilities will now be denoted as CARE B-; Stable;
ISSUER NOT COOPERATING. Further, the banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operation with low profitability margins: RSSPL is
a small player in steel trading business with revenue and PAT of
INR23.59 crore and INR0.06 crore respectively in FY19. Furthermore,
the total capital employed was also modest at INR8.52 crore as on
March 31, 2019. The small scale restricts the financial flexibility
of the company in times of stress.
* Susceptibility to fluctuation in traded products price: The major
traded products, like Iron & Steel, are highly price volatile. The
purchase cost of the traded product accounted for about 96.84% of
the total cost in FY19. Accordingly, any volatility in the prices
of the traded products is likely to have an impact on the
profitability of the company.
* Intensely competitive nature of the industry with presence of
many unorganised players: Iron and steel trading industry is highly
fragmented and competitive due to presence of many players
operating in this sector owing to its low entry barriers, due to
low capital and technological requirements. Chhattisgarh and nearby
states are emerging as a major residential and industrial
developing area in the country. High competition restricts the
pricing flexibility of the industry participants and has a negative
bearing on the profitability.
* Working capital intensive nature of business: Due to the trading
nature of business, the operation of the company is working capital
intensive marked by moderately high working capital cycle of 89
days during FY19. The working capital cycle is high due to long
collection period on account of high credit period offered to the
customer to retain them in the competitive market.
* Moderate financial risk profile marked by low profit margins,
leveraged capital structure and moderate liquidity position:
Financial risk profile of the company has been low over the years.
The PBILDT margin was low at 4.39% during FY19 and the PAT margin
is low at 0.26% during the same period. The capital structure of
the company is leveraged marked by overall gearing ratio at 2.88x
as on March 31, 2019. Interest coverage ratio was adequate at 1.55x
during FY19. Current ratio remained adequate as on March 31, 2019.
Key Rating Strengths
* Experienced promoters with long track record: RSSPL is currently
managed by Mr. George Mathew, Managing Director, having over three
decades of experience in similar line of business. These apart, all
other two directors are also having over a decade of experience in
similar industry. The company has started its operation from March
2004, thus having long track record of operation of over a decade.
Raipur Speciality Steels Private Limited (RSSPL), incorporated in
March 2004 by one Mr. George Mathew of Raipur, is in the business
of iron and steel products trading. The company trades the products
like TMT bar, HR Sheet, MS Angle, MS Flat, wires etc. During
December 2016, the company took over a local proprietorship firm
named by "Royal Grand Cable Industries". Mr George Mathew,
Director, looks after the day to day operations of the company with
adequate support from other two directors and a team of experienced
personnel.
SANTOSH WAREHOUSING: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Santosh
Warehousing Limited (SWL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 23.00 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 November 25, 2019, placed
the rating of SWL under the 'issuer non-cooperating' category as
SWL had failed to provide information for monitoring of the rating.
SWL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated November 17, 2020. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of
the best available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 25, 2019 the following were
the rating weaknesses
Key Rating Weaknesses
* Delays in debt servicing: There have been on-going delays by
Santosh Warehousing Limited in servicing of its debt obligations.
Santosh Warehousing Ltd (SWL) was established in the year 2012 by
Mr Suniil Mittal and Neena Mittal. The company is engaged in
providing warehouse services. It has one warehouse located at
Sikandrabad (Uttar Pradesh) with an area of 4.84 lakhs sq. ft.
SARVA MANGALAM: CARE Lowers Rating on INR19.82cr Loan to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sarva Mangalam Gajanan Steel Private Limited (SMGS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 19.82 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE BB-; Stable
Short Term Bank 0.20 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SMGS to monitor the rating
vide e-mail communications/letters dated December 30, 2020, January
4, 2021 and January 6, 2021 and numerous phone calls. However,
despite repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. Further,
Sarva Mangalam Gajanan Steel Private Limited has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The rating on SMGS'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.
Detailed description of the key rating drivers
The revision in the ratings takes into account the on-going delay
in debt servicing of the company.
Key Rating Weaknesses
* On-going delay in debt servicing: There are on-going delays in
the debt servicing of the company.
Sarva Mangalam Gajanan Steel Private Limited (SMGS) incorporated in
2004 was promoted by the Kedia family of Asansol, West Bengal. SMGS
is engaged in manufacturing of steel angles, flats, bars, rounds
and channels with its sole manufacturing facility located at
Kalipahari (Asansol) with an installed capacity of 36,000 metric
ton per annum (MTPA). The company procures raw materials (Ingot and
scrap) from open market through local players and sales its product
in the states of West Bengal, Assam and Tripura. Further the
company has not availed any moratorium from its lender.
SHAKTHI SEEDS: CARE Reaffirms B Rating on INR8.0cr LT Loan
----------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Shakthi Seeds Private Limited (SSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 8.00 CARE B; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SSPL continues to be
tempered by Small scale of operations with low net worth base,
Leveraged capital structure and weak debt coverage indicators,
Working capital intensive operations and Highly fragmented industry
with intense competition from large number of players. The rating
also factors in Satisfactory profitability margins albeit PAT
margin declined marginally in FY20 (Prov.,). The rating however,
derive its strengths from established track record of the company
and vast experience of promoters in the industry.
Rating Sensitivities
Positive Factors
* Increase in scale of operations marked by total operating income
increasing beyond INR50.00 crores while improving its profitability
margins leads to substantial increase in GCA.
* Improve the gearing ratio to below 1.50x on a sustained basis.
* Improvement in realisation of collection period to below 200
days
Negative Factors
* Significant decline in profitability margin marked by PBILDT
margin falling below 5% in future.
* Any major debt funded capex resulting to deterioration in capital
structure with overall gearing leveraging beyond 4.00
times in any of the future years.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operations with low net worth base: The scale of
operations of the firm stood small and remained same at INR23.01
crore in FY20 (Prov.,) with a moderate net worth base of INR7.52
crore as on March 31, 2020 (Prov.,) as compared to other peers in
the industry.
* Leveraged capital structure and weak debt coverage indicators:
The capital structure of the firm marked by overall gearing ratio
improved from 3.29x as on March 31, 2019 to 3.08x as on March 31,
2020 (Prov.,) on account of decrease in total debt due to repayment
of short term loans & advances. The total debt/GCA has improved
from 134.32x in FY19 to 126.42x in FY20 (Prov.,) due to decrease in
total debt.The PBILDT/Interest coverage ratio has marginally
deteriorated from 1.10x in FY19 to 1.07x in FY20 (Prov.,) due to
increase in interest cost during FY20.The total debt/CFO has
improved from 11.42x in FY19 to 6.67x in FY20 (Prov.,).
* Working capital intensive operations: The operating cycle of the
company remained elongated however improved from 798 days in FY19
to 744 days in FY20 (Prov.,). The company receives the payment from
its customer within 1 year depending on the quantum of sales made.
Furthermore, the company makes the payment to its single supplier
(Farmers) within 5-6 months. The company sometimes avail extension
in credit period from its suppliers due to long standing
relationship and the company maintains an average inventory of 4
months for anticipation of better sales realization. Since, the
life span of seed is for three years, hence the company maintains
high inventory to meet the customers requirement as on need basis.
* Highly fragmented industry with intense competition from large
number of players: Indian Agro Industry is highly fragmented in
nature with several organized and unorganized players. High
dependence on agro sector, Lower productivity, Unfavorable Labor
Laws are a few drawbacks of the industry from which it has to
overcome. The biggest challenge facing the Indian agro industry is
competition from the other low cost neighboring countries which
attract more business from the international market because of
lower production costs, ease in doing business and easier trade
routes.
Key Rating Strengths
* Established track record of the company and vast experience of
promoters in the agro industry: Shakthi Seeds Private Limited
(SSPL) was incorporated in 1988 and promoted by Mr. Vidyanath Reddy
along with his family members and friends. The promoters have
around 30 years of experience in trading of seeds. Through their
vast experience in trading business, they have established healthy
relationship with key suppliers, customers, local farmers, dealers
and also with the brokers facilitating the ease in sale of
products. Satisfactory profitability margins albeit declined
marginally in FY20 (Prov.,). The Profitability margins of the firm
continues to remain satisfactory marked by PBILDT margin of the
firm has increased from 10.88% in FY19 to 11.03% in FY20 on account
of decrease in selling expenses and employee costs in FY20 (Prov.,)
and the PAT margin of the firm remained below unity at 0.75% in
FY20 (Prov.,) as compared to 0.83% in FY19 due to increase in
interest cost during the review period.
* Healthy demand outlook of seed market: Global Seeds market to
grow at a CAGR of 11.04 percent during the period 2014-2019. Seed
is the most basic unit for cultivation of crops. It is a fertilized
ripened ovule, capable of reproducing and developing into a plant.
Seeds include cereals, pulses, vegetables, and fruits. Innovations
in technology have improved the quality of seeds and provided a
wide variety with desired characteristics and suited to specific
conditions and geographies. This development is necessary for
ensuring the best-quality crop production and meeting the growing
demand for food worldwide. The Global Seeds market is highly
dependent on the demand for agricultural products. With a rise in
global population, a 60 percent increase in food production is to
be attained by 2050 to keep up with the food demand.
Liquidity: Stretched
The liquidity profile of the firm stood stretched. The firm has
cash balance of INR0.05 crore. Furthermore, the current ratio of
the firm stood at 1.56x as on March 31, 2020 (Prov.,). The average
utilization of working capital by firm is 95% for the last twelve
months ended December 31, 2020. The firm has availed moratorium
period from March to August 2020.
Telangana based, Shakthi Seeds Private Limited (SSPL) was
established as a private limited in 1988 by Mr. Vidyanath Reddy
along with his family members and friends. SSPL is engaged in
trading of certified seeds like paddy, maize, Jowar, bajra,
vegetables seeds among others. The company procures the different
varieties of seeds from its associate concerns (Anila Seed
Processing Industries). The company sells its products to customers
located in Uttar Pradesh, Chhattisgarh, Jharkhand, Haryana, Bihar,
Karnataka, etc., through dealers in the name of Shakthi Seeds.
SHIVAM ENTERPRISE: CRISIL Keeps B Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shivam
Enterprise - Morbi (SE) continue to be 'CRISIL B/Stable Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 4.5 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL Ratings has been consistently following up with SE for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SE, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SE is
consistent with 'Assessing Information Adequacy Risk’. Based on
the last available information, the ratings on bank facilities of
SE continues to be 'CRISIL B/Stable Issuer Not Cooperating’.
SE, based in Morbi, Gujarat, was established in 2012. The firm
trades in coal, wall tiles, ink, Abrasive, and oil lubricants used
in the ceramic machinery. It started commercial operations in
December 2013.
SIDDHARTH ENTERPRISES: CRISIL Keeps B+ Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Siddharth
Enterprises - Raipur (SE) continues to be 'CRISIL B+/Stable Issuer
Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit/ 7 CRISIL B+/Stable (Issuer Not
Overdraft Cooperating)
facility
CRISIL Ratings has been consistently following up with SE for
obtaining information through letters and emails dated June 29,
2020 and December 18, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SE, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SE is
consistent with 'Assessing Information Adequacy Risk’. Based on
the last available information, the ratings on bank facilities of
SE continues to be 'CRISIL B+/Stable Issuer Not Cooperating’.
Based in Raipur and set up in 2012, SE is a proprietorship firm of
Mr. Babulal Patel. The firm trades in iron and steel products. It
also trades in timber; however, over 90% of the revenue is
contributed from the iron and steel trading activity.
UDYOG MANDIR: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Udyog Mandir
(UDM) continue to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 14 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
Working Capital 0.17 CRISIL B+/Stable (ISSUER NOT
Term Loan COOPERATING)
CRISIL Ratings has been consistently following up with UDM for
obtaining information through letters and emails dated June 29,
2020 and December 29, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of UDM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on UDM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
UDM continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
UDM, established in 1987, is a partnership firm that manufactures
edible oil, mainly refined groundnut oil and refined cottonseed
oil, and mustard oil. The firm has been selling its products under
the Natural brand since 1997. It is managed by Mr. Vijay Naulakha
and Mr. Basant Kumar Naulakha. It sells to exporters and local
dealers.
UMANG OILS: CARE Lowers Rating on INR10cr LT Loan to B
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Umang Oils Private limited (UOPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated Nov 28, 2019, placed the
rating(s) of UOPL under the 'issuer non-cooperating' category as
UOPL had failed to provide information for monitoring of the
rating. UOPL continues to be non-cooperative despite repeated
requests for submission of information through e-mail
communications/ letters dated January 8, 2021, January 7, 2021,
January 5, 2021, January 4, 2021, Dec. 31, 2020 and numerous phone
calls. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. Further, the bankers could not be contacted. The rating on
the company's bank facilities will now be denoted as CARE B;
Stable; 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 have been revised by taking into account
non-availability of information and no due-diligence conducted due
to non-cooperation by UOPL with CARE'S efforts to undertake a
review of the rating outstanding. CARE views information
availability risk as a key factor in its assessment of credit risk.
The ratings has been revised by taking into account its small scale
of operations, weak debt service coverage indicators, working
capital intensive nature of operations, and competitive nature of
business. Further, the rating draws comfort from experienced
promoters.
Detailed description of the key rating drivers
At the time of last rating on Nov 28, 2019 the following were the
rating weaknesses and strengths:
Key Rating Weakness
* Small scale of operations: Total operating income declined to
INR24.04 cr in FY20 from INR31.82 crore in FY19. GCA also declined
to INR0.27 cr in FY20 as against INR0.39 crore in FY19. The small
scale limits the company's financial flexibility in times of stress
and deprives it from scale benefits.
* Weak Debt service coverage indicators: The capital structure of
the company stood leveraged owing to high dependence on the
external borrowings to support the growing scale of operations
coupled with lower net-worth base. Overall gearing remains stable
at 2.92x in FY20 (2.96x in FY19). Owing to low profitability
coupled with high debt the coverage indicators remained weak as
marked by interest coverage ratio and total debt to GCA of below
1.34x and above 40x respectively for FY20.
* Working capital intensive nature of operations: The operations of
the company are working capital intensive in nature as marked by
operating cycle of 171 days (PY: 122 days) for FY20. The elongation
is majorly on account of increase in inventory days as well as
collection days which stood at 102 days and 103 days respectively
in FY20.
* Competitive nature of business: The specific food habits of
different regions in India have led to preferences of different
types of edible oil. Coconut oil is used widely in the south,
mustard and palm in the north, and groundnut in the west. The urban
centres have witnessed greater demand for sunflower, soya and
rice-bran oils. Thus, localization of product offerings has
fragmented the industry and lowered capacity utilization, due to
large number of players and limited availability of raw material.
Key rating strengths
* Experienced promoters: The company is managed by Mr Sanjay Kumar
Mansinghka and his wife, Ms Sangeeta Mansinghka. Both the directors
are graduates by qualification and have an experience of more than
a decade in the manufacturing industry through their
association with UOPL.
Umang Oils Private Limited (UOPL) was incorporated in 2006 and is
currently being managed by Mr Sanjay Kumar Mansinghka and Ms
Sangeeta Mansinghka. The company is engaged in the extraction of
rice bran oil from rice bran at its processing facility located in
Varanasi, Uttar Pradesh with an installed solvent extraction
capacity of 18250 metric tonnes of rice bran oil per annum as on
February 28, 2018. The company manufactures rice bran oil which is
sold to whole sellers on PAN India basis. Furthermore, the company
also sells its by product i.e. residual of rice bran cake to cattle
feed manufacturers, soap manufacturers etc. The main raw material
is rice bran which is mainly procured from rice millers located in
nearby region. Furthermore, the company has one group concerns,
namely, Mansingh Agency engaged in trading of edible oil since
1990.
=================
S I N G A P O R E
=================
SEN YUE: Passport of Non-Executive Chair Impounded Amid CAD Probe
-----------------------------------------------------------------
The Business Times reports that Sen Yue Holdings on Feb. 3 said the
passport of its non-executive chairman Koh Mia Seng has been
impounded.
However, the waste-management group understands that he has not
been formally charged or arrested by the Commercial Affairs
Department (CAD), it said in a bourse filing, BT relays.
The CAD did not impose other restrictions or conditions on Sen
Yue's employees, executive officers or directors, the group added.
It has requested Mr. Koh to keep the board updated on the progress
of the investigations.
On Jan. 27, Sen Yue announced it was ordered by the CAD to produce
certain documents and information for the financial years ended
Sept 30, 2015 to 2020, BT recalls.
According to BT, the move came after Sen Yue chief executive and
executive director Neo Gim Kiong, and audit committee chairman Chim
Suan Kit Mark filed a report with the CAD on Jan. 5 over matters
highlighted in a recent independent review.
The review, conducted by Foo Kon Tan Advisory Services (FKT),
supposedly found that customers of Sen Yue's wholly-owned
subsidiary SMC Industrial (SMCI) had ties to Mr. Koh, BT relates.
SMCI provides industrial waste solutions in Asia, with a niche in
electronic-waste management and recycling solutions.
BT says Mr. Koh was suspended from all executive functions on
Jan. 8 and redesignated as non-executive chairman on Jan 13.
Mr. Neo took over Mr. Koh's duties and responsibilities in the
group.
The board said it is preparing an update to shareholders about the
FKT report findings, an executive summary and Mr. Koh's responses.
It will release a further announcement on the matter, BT relays.
Sen Yue called for a trading halt in April 2020, before converting
it to a suspension in May. Its shares last traded at 2.2 Singapore
cents on April 27, the report notes.
About Sen Yue
Sen Yue Holdings Limited is an investment holding company. The
Company is principally engaged in three business verticals: e-waste
management solutions, commodities trading, and surface coating and
related services. The Company provides holistic e-waste management
solutions to local and overseas customers. It offers e-waste
management solutions in Singapore to recycle lithium-ion batteries.
The Company's commodities trading and processing business
activities is an extension of its e-waste management business by
creating new value in metal scraps. Its surface coating and related
services offer protection from corrosion and extend the service
life of its customers' products and components, while staying
environmentally friendly.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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Editors.
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