/raid1/www/Hosts/bankrupt/TCRAP_Public/210205.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, February 5, 2021, Vol. 24, No. 21
Headlines
A U S T R A L I A
DIAMOND OFFSHORE: Unsecureds Unimpaired in Debt-for-Equity Plan
DOUBLE SUNRISE: Second Creditors' Meeting Set for Feb. 11
HENNOCK & SONS: Second Creditors' Meeting Set for Feb. 11
OZLIFT PTY: Second Creditors' Meeting Set for Feb. 12
PAN PEN: Second Creditors' Meeting Set for Feb. 10
SPEEDCAST INT'L: Court Enters Plan Confirmation Order
SPEEDCAST INT'L: Unsecureds to Get Share of Litigation Trust
TRITON BOND 2021-1: S&P Assigns Prelim B (sf) Rating on F Notes
VIPCORP (AUST): Second Creditors' Meeting Set for Feb. 10
C H I N A
ANT GROUP: Reaches Deal With China Regulators on Restructuring
CHINA FORTUNE: Fitch Cuts LT Foreign-Currency IDR to 'CC'
ZOOMLION HEAVY: S&P Upgrades ICR to 'BB-', Outlook Positive
[*] CHINA: To Improve Policies for Smaller Firms' Bankruptcy
I N D I A
AKS ALLOYS: ICRA Keeps D Debt Ratings in Not Cooperating
AYAAN TRENDZ: ICRA Keeps B+/A4 Debt Rating in Not Cooperating
BARANI FERROCAST: ICRA Keeps B- Debt Ratings in Not Cooperating
DHANDU MARIAMMAN: ICRA Keeps B Debt Ratings in Not Cooperating
DRS INFRATECH: ICRA Keeps B+ Debt Ratings in Not Cooperating
EROS RESORTS: ICRA Reaffirms B+ Rating on INR39cr LT Loan
EVERGREEN VENEERS: ICRA Keeps B Debt Ratings in Not Cooperating
FUTURE GROUP: Fighting Amazon; Retail Unit Staring at Insolvency
GREAT VALUE: ICRA Keeps B+ Debt Ratings in Not Cooperating
HINDUSTHAN MALLEABLES: ICRA Keeps B+ Rating in Not Cooperating
INEXO CAST: ICRA Lowers Rating on INR5.0cr Cash Loan to B+
IRB INFRASTRUCTURE: Fitch Assigns First-Time 'BB' LongTerm IDR
IRB INFRASTRUCTURE: Moody's Assigns First Time Ba1 CFR
J C CONSTRUCTION: ICRA Keeps B+ Debt Ratings in Not Cooperating
KAMALA GINNING: ICRA Keeps B Debt Ratings in Not Cooperating
KIRPA RICE: ICRA Keeps B+ Debt Rating in Not Cooperating Category
KPR AGROS: ICRA Keeps B+ Debt Ratings in Not Cooperating Category
KPR INFRA: ICRA Keeps B+ Debt Ratings in Not Cooperating Category
LAKSHMI POULTRY: ICRA Keeps B+ Debt Ratings in Not Cooperating
LAKSHMI VENKATESWARA: ICRA Keeps B+ Ratings in Not Cooperating
MADHUR ENGINEERS: ICRA Keeps B+ Debt Rating in Not Cooperating
MAHA DURGA: ICRA Keeps C+ Ratings on Watch Developing
MIDAS AGRO: ICRA Keeps B Debt Rating in Not Cooperating Category
NIRWANA HOTELS: ICRA Lowers Rating on INR7.77cr LT Loan to D
PRESIDENCY EXPORTS: ICRA Keeps D Debt Rating in Not Cooperating
R K BABU: ICRA Keeps B+ Debt Ratings in Not Cooperating
RAM SWITCHGEARS: ICRA Reaffirms D Rating on INR49cr Loans
RELIABLE AGENCIES: ICRA Keeps B+ Debt Ratings in Not Cooperating
SOLIDUS HI-TECH: ICRA Keeps B+ Debt Ratings in Not Cooperating
SONRISE TEA: ICRA Lowers Rating on INR9.50cr LT Loan to B+
SRINIDHI REAL: ICRA Keeps B Debt Rating in Not Cooperating
TEEKAY MARINES: ICRA Keeps B Debt Ratings in Not Cooperating
VEER ANJANAYA: ICRA Withdraws B+ Rating on INR7.0cr Loans
I N D O N E S I A
LIPPO KARAWACI: S&P Affirms 'B-' ICR on Reduced Cash Flow Deficit
M Y A N M A R
MYANMAR: Operations Resume for Many Singapore Businesses
N E W Z E A L A N D
MAGSONS INVESTMENTS: Nido-Link Firm Goes Into Liquidation
S I N G A P O R E
SOUTHSEA MARINE: Creditors' Meeting Set for February 9
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A U S T R A L I A
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DIAMOND OFFSHORE: Unsecureds Unimpaired in Debt-for-Equity Plan
---------------------------------------------------------------
Diamond Offshore Drilling, Inc., and its Debtor Affiliates filed
with the U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, a Joint Chapter 11 Plan of Reorganization and a
Disclosure Statement on Jan. 22, 2021.
As of Jan. 22, 2021, Holders of over 70% of the RCF Claims (the
"Consenting RCF Lenders") and over 70% of the Senior Notes Claims
(the "Consenting Noteholders," and together with the Consenting RCF
Lenders, the "Consenting Stakeholders") have already agreed,
subject to the terms and conditions of the Plan Support Agreement
(as defined herein), to vote in favor of the Plan.
The Debtors have documented the terms of the restructuring
contemplated by the Plan Support Agreement, including through the
Plan and this Disclosure Statement. The key terms are summarized
as follows:
* Exit Facilities. On the Effective Date, the applicable
Reorganized Debtors will enter into Exit Facilities consisting of
(a) the $300 million to 400 million aggregate principal amount
first lien, first-out Exit Revolving Credit Facility, (b) the $100
to 200 million aggregate principal amount first lien, last out Exit
Term Loan Facility, and (c) $110 million aggregate principal amount
in first lien, last out Exit Notes, which are pari passu with the
Exit Term Loan Facility. The Exit Revolving Credit Facility
will be fully-committed, with up to $100 million drawn as of the
Effective Date. The $75 million of the Exit Notes (the Funded
Notes) will be issued and outstanding as of the Effective Date,
excluding any Exit Notes issued on account of the Commitment
Premium (as defined in the Backstop Agreement), while $35 million
of the Exit Notes (the Delayed Draw Notes) will remain
fully-committed but undrawn as of the Effective Date and will be
accessible through delayed draw mechanics. The Debtors have
secured commitments from certain RCF Lenders pursuant to a
Commitment Letter that ensures that at least $300 million and up to
$400 million aggregate principal amount of the Exit Revolving
Credit Facility is fully-committed on the Effective Date.
* Funding of the Exit Notes. The Debtors have secured
commitments from certain Holders of the Senior Notes pursuant to a
Backstop Agreement that ensures the Exit Notes are fully-funded or
committed to, as applicable, on the Effective Date through (a)
certain Private Placements set forth in the Backstop Agreement and
(b) two fully-backstopped Rights Offerings pursuant to which
eligible Holders of Senior Notes will receive Subscription Rights
to purchase or commit to purchase the Exit Notes not sold or
committed to pursuant to the Private Placements.
* New Equity. Holders of Senior Notes Claims will receive 70%
of the New Diamond Common Shares, subject to dilution by the MIP
Equity Shares and the New Warrants, on account of the full
equitization of their Senior Notes Claims pursuant to the Plan. The
remaining 30% of the New Diamond Common Shares shall be issued on
the Effective Date to purchasers of the Exit Notes pursuant to the
Private Placements and the Rights Offerings, subject to dilution by
the MIP Equity Shares and the New Warrants.
* New Warrants. Existing Parent Equity Interests will be
canceled pursuant to the Plan, and Holders of Existing Parent
Equity Interests will receive their Pro Rata share of the New
Warrants on the Effective Date. The New Warrants are exercisable
into 7% of the New Diamond Common Shares, subject to dilution by
the MIP Equity Shares, struck at a total enterprise value implying
a 100% recovery to Holders of Senior Notes Claims on the face value
of their Senior Notes Claims (including accrued interest as of the
Petition Date)
Under the Plan, Class 5 consists of all Allowed General Unsecured
Claims. Each Holder of an Allowed General Unsecured Claim will
receive, at the option of the Debtors: (i) payment in full in Cash,
on the later of (w) the Effective Date or as soon as reasonably
practicable thereafter, (x) the date such Claim becomes Allowed or
as soon as reasonably practicable thereafter, (y) the date such
Claim comes due under applicable Law or in the ordinary course of
business in accordance with the terms and conditions of the
particular transaction giving rise to such Claim, or (z) such other
date as agreed between the Debtors or the Reorganized Debtors and
such Holder; (ii) reinstatement; or (iii) such other treatment
sufficient to render such Claims unimpaired. Class 5 is deemed
unimpaired under this Plan.
Class 7 consists of all Allowed Existing Parent Equity Interests.
On the Effective Date, or as soon as reasonably practicable
thereafter, each holder of an Allowed Existing Parent Equity
Interest will receive its pro rata share of the New Warrants,
subject to dilution by the MIP Equity Shares.
Although this Plan is presented as a joint plan of reorganization
for administrative purposes, the Plan does not provide for the
substantive consolidation of the Debtors' Estates, and on the
Effective Date, the Debtors' Estates shall not be deemed to be
substantively consolidated for any reason. Nothing in this Plan,
the Confirmation Order or the Disclosure Statement will constitute
or be deemed to constitute a representation that any one or all of
the Debtors is subject to or liable for any Claims or Interests
against or in any other Debtor. A Claim or Interest against or in
multiple Debtors will be treated as a separate Claim or Interest
against or in each applicable Debtor's Estate for all purposes,
including voting and distribution.
On the Effective Date, all Existing Parent Equity Interests shall
be cancelled and the Reorganized Company shall issue or cause to be
issued the New Diamond Common Shares and New Warrants in accordance
with the terms of the Plan and the Confirmation Order. On the
Effective Date, applicable Holders of eligible Claims or Interests
shall receive the New Diamond Common Shares and New Warrants in
exchange for their respective Claims or Interests as set forth in
the Plan and pursuant to the Rights Offerings. All of the New
Diamond Common Shares and New Warrants issuable under this Plan and
the Confirmation Order, when so issued, shall be duly authorized,
validly issued, fully paid, and nonassessable.
A full-text copy of the Joint Plan of Reorganization dated Jan. 22,
2021, is available at https://bit.ly/39u88nt from PacerMonitor.com
at no charge.
Co-Counsel for Debtors:
PAUL, WEISS, RIFKIND, WHARTON &
GARRISON LLP
Paul M. Basta
Robert A. Britton
Christopher J. Hopkins
Alice Nofzinger
Shamara R. James
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
-and-
PORTER HEDGES LLP
John F. Higgins
Eric M. English
M. Shane Johnson
1000 Main St., 36th Floor
Houston, Texas 77002
Telephone: (713) 226-6000
Facsimile: (713) 226-6248
About Diamond Offshore
Diamond Offshore Drilling, Inc., provides contract drilling
services to the energy industry worldwide. The company operates a
fleet of 15 offshore drilling rigs, including 4 drillships and 11
semi-submersible rigs. It serves independent oil and gas
companies, and government-owned oil companies. The company was
founded in 1953 and is headquartered in Houston, Texas. Diamond
Offshore Drilling is a subsidiary of Loews Corporation. The
company has major offices in Australia, Brazil, Mexico, Scotland,
Singapore, and Norway.
Diamond Offshore Drilling, Inc., along with its affiliates, filed a
voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32307) on April
26, 2020. The petitions were signed by David L. Roland, senior vice
president, general counsel, and secretary.
As of Dec. 31, 2019, the Debtors disclosed $5,834,044,000 in total
assets and $2,601,834,000 in total liabilities.
The case is assigned to Judge David R. Jones.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Porter Hedges LLP
are acting as the Company's legal counsel and Alvarez & Marsal is
serving as the Company's restructuring advisor. Lazard
Frères & Co. LLC is serving as financial advisor to the
Company. Prime Clerk LLC is the claims and noticing agent.
DOUBLE SUNRISE: Second Creditors' Meeting Set for Feb. 11
---------------------------------------------------------
A second meeting of creditors in the proceedings of:
- Double Sunrise Holdings Pty Limited
- Gobel Aviation Pty Ltd
- Soar Aviation (FIAD) Pty Ltd
- Soar Aviation Aircraft Holdings Pty Ltd
- Soar Aviation Holdings Pty Ltd
- Soar Aviation Melbourne Pty Ltd
- Soar Aviation Sydney Pty Ltd
- Soar Maintenance Pty Ltd
has been set for Feb. 11, 2021, at 3:00 p.m. via teleconference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 10, 2021, at 4:00 p.m.
Brendan Richards and James Stewart of KPMG were appointed as
administrators of Double Sunrise et al. on Dec. 29, 2020.
HENNOCK & SONS: Second Creditors' Meeting Set for Feb. 11
---------------------------------------------------------
A second meeting of creditors in the proceedings of Hennock & Sons
Pty Ltd has been set for Feb. 11, 2021, at 11:00 a.m. Creditors can
attend the meeting by electronic facilities via telephone or video
conference.
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.
Andre Lakomy & Alan Walker of Cor Cordis were appointed as
administrators of Hennock & Sons on Dec. 28, 2020.
OZLIFT PTY: Second Creditors' Meeting Set for Feb. 12
-----------------------------------------------------
A second meeting of creditors in the proceedings of Ozlift Pty Ltd
has been set for Feb. 12, 2021, at 10:30 a.m. by teleconference
only due to the COVID-19 pandemic.
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. 11, 2021, at 5:00 p.m.
Michael Quin of Bent & Cougle Pty Ltd was appointed as
administrators of Ozlift Pty on Dec. 30, 2020.
PAN PEN: Second Creditors' Meeting Set for Feb. 10
--------------------------------------------------
A second meeting of creditors in the proceedings of Pan Pen Pty
Limited, trading as Panarottis Penrith; Panarottis Pitza Pasta;
Panas Italian Ristorante, and Hunga Busters Pty Ltd, has been set
for Feb. 10, 2021, at 2:00 p.m. via teleconference facilities.
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. 9, 2021, at 5:00 p.m.
Jason Porter and Joshua Lee Robb of SV Partners were appointed as
administrators of Pan Pen on Dec. 29, 2020.
SPEEDCAST INT'L: Court Enters Plan Confirmation Order
-----------------------------------------------------
Judge Marvin Isgur has entered findings of fact, conclusions of law
and order approving Disclosure Statement on a final basis and
confirming Third Amended Joint Chapter 11 Plan of SpeedCast
International Limited and its debtor-affiliates.
The entry of the Plan Confirmation Order will constitute the
agreement reached by the Debtors, Centerbridge and Black Diamond
resolving, among other things, the Black Diamond Objection and the
Black Diamond Adversary Proceeding (the "Plan Settlement
Agreement").
All other objections to final approval of the Disclosure Statement
or confirmation of the Plan have been settled, withdrawn, resolved,
or overruled in their entirety on the merits by this Court.
Black Diamond's agreement to withdraw the Black Diamond Objection
in connection with the Plan Settlement Agreement does not signify
Black Diamond's renouncement of such allegations, but instead
reflects Black Diamond's assessment that the comprehensive
settlement reflected in the Plan Settlement Agreement and the
modified Plan now before the Bankruptcy Court for confirmation are
in the best interests of the Debtors, their Estates, and creditors
at this time, and that the Court is making factual findings to
confirm such Plan.
The Plan (including all documents necessary to effectuate the Plan)
was negotiated in good faith and at arm's length among the Debtors,
the Debtors' non-Debtor affiliates, the DIP Lenders, the
Prepetition Lenders, the Creditors' Committee, the other Released
Parties, and the Plan Sponsor.
A Settlement Agreement was made and entered into as of Jan. 20,
2021, by and among the Debtors, Black Diamond Commercial Finance,
L.L.C., in its capacity as administrative agent, collateral agent
and security trustee under the Syndicated Facility Agreement (the
"SFA Agent"), Black Diamond Capital Management, L.L.C., and
Centerbridge Partners, L.P. Pursuant to the SEttlement, the
parties agreed that:
* Centerbridge will purchase, and Black Diamond will sell, all
of Black Diamond's term loan Syndicated Facility Claims, which
Black Diamond represents (i) are in the principal amount of
$263,117,989 and (ii) constitute 100% of Black Diamond's term loan
Syndicated Facility Claims, for $63,221,738.
* Centerbridge will purchase, and Black Diamond will sell, all
of Black Diamond's revolver Syndicated Facility Claims, which Black
Diamond represents (i) are in the principal amount of $37,206,400
and (ii) constitute 100% of Black DIamond's revolving Syndicated
Facility Claims and commitments, for $8,447,824.
* Centerbirdge will pay to Black DIamond a settlement payment
in the amount of [____] {amount redacted}, which payment shall be
due and payable upon the Term Loan Settlement Date.
A full-text copy of the Plan Confirmation Order dated Jan. 22,
2021, is available at https://bit.ly/2NVEhfl from PacerMonitor.com
at no charge.
Counsel for the Debtors:
WEIL, GOTSHAL & MANGES LLP
Alfredo R. Perez
Brenda L. Funk
Stephanie N. Morrison
700 Louisiana Street, Suite 1700
Houston, Texas 77002
Telephone: (713) 546-5000
Facsimile: (713) 224-9511
- and -
WEIL, GOTSHAL & MANGES LLP
Gary T. Holtzer
David N. Griffiths
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
About SpeedCast International
Headquartered in New South Wales, Australia, SpeedCast
International Limited and its affiliates provide remote and
offshore satellite communications and information technology
services. SpeedCast's fully-managed service is delivered to more
than 2,000 customers in 140 countries via a global, multi-access
technology, multi-band, and multi-orbit network of more than 80
satellites and an interconnecting global terrestrial network,
bolstered by on-the-ground local support from more than 40
countries. Speedcast services customers in sectors such as
commercial maritime, cruise, energy, mining, government, NGOs,
enterprise, and media.
SpeedCast International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-32243) on April 23, 2020. At the time of the filing, the
Debtors each had estimated assets of between $500 million and $1
billion and liabilities of the same range.
Judge David R. Jones oversees the cases.
Speedcast is advised by Weil, Gotshal & Manges LLP as global legal
counsel and Herbert Smith Freehills as co-counsel. Michael Healy
of FTI Consulting, Inc., is Speedcast's Chief Restructuring
Officer, and FTI Consulting, Inc., is Speedcast's financial and
operational advisor. Moelis Australia Advisory Pty Ltd and Moelis
& Company LLC are Speedcast's investment bankers. KCC is
Speedcast's claims and noticing agent.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in Debtors' bankruptcy cases. The committee is
represented by Hogan Lovells US, LLP.
On August 13, 2020, the Debtor received a $395 million equity
commitment from Centerbridge Partners, L.P. and its affiliates, one
of its largest lenders.
SPEEDCAST INT'L: Unsecureds to Get Share of Litigation Trust
------------------------------------------------------------
SpeedCast International Limited and its Debtor Affiliates filed the
Third Amended Joint Chapter 11 Plan dated January 21, 2021.
CACIB's Claim of $800,000, referred to as the Priority Recovery
Amount in the CACIB Settlement Agreement, is deemed Allowed, and
was deemed Allowed pursuant to the CACIB Settlement Order. On the
Effective Date, CACIB will receive, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange
for the Priority Recovery Amount, Cash in an amount of $800,000.
Class 4A consists of Unsecured Trade Claims. On the Effective
Date, or as soon as reasonably practicable thereafter, except to
the extent that a holder of an Allowed Unsecured Trade Claim agrees
or has agreed to different treatment in full and final
satisfaction, settlement, release, and discharge of and in exchange
for each Allowed Unsecured Trade Claim, each holder of an Allowed
Unsecured Trade Claim shall receive its Pro Rata share of the Trade
Claim Cash Amount in Cash.
Class 4B consists of Other Unsecured Claims. Each holder of an
Allowed Other Unsecured Claim shall receive its Pro Rata share of
the Litigation Trust Distributable Proceeds from the Litigation
Trust as and when provided for in the Litigation Trust Agreement.
For the avoidance of doubt, this Class 4B (Other Unsecured Claims)
shall include the Syndicated Facility Deficiency Claim.
On the Effective Date, all Parent Interests shall be deemed
valueless, shall not receive or retain any property or distribution
under the Plan and shall be discharged, cancelled, released, and
extinguished.
On the Effective Date, at the option of the Reorganized Debtors, in
consultation with the Plan Sponsor, all Allowed Intercompany
Interests shall either remain unaffected by the Plan and continue
in place or be cancelled (or otherwise eliminated) and holders of
such cancelled Intercompany Interests shall not receive or retain
any property under the Plan.
Plan distributions of Cash shall be funded from the Debtors' Cash
on hand as of the applicable date of such Plan Distribution and
from the proceeds of the Direct Investment.
The provisions of the Plan and the Settlement Agreement shall
constitute a good faith compromise and settlement of all Claims,
Interests and controversies relating to the contractual, legal and
subordination rights that a holder of a Claim or Interest may have
with respect to any Allowed Claim or Allowed Interest or any Plan
Distribution on account thereof. The comprehensive compromise and
settlement will be binding on the Debtors, the Reorganized Debtors,
and the Speedcast Entities, as applicable, on all Persons who have
asserted or could assert any potential Causes of Action, the
Creditors' Committee, the Class 3 Trustee or Litigation Trustee, as
applicable, the Prepetition Lenders, and the Prepetition Secured
Parties concerning such claims compromised and settled under the
Plan.
The Plan shall be implemented through a substantive consolidation
of the assets and liabilities of certain Debtors. The Confirmation
Order will contain findings supporting the conclusions providing
for limited substantive consolidation for purposes of distribution
to holders of Claims and Interests at the Substantively
Consolidated Debtors on the terms of the Plan.
A full-text copy of the Third Amended Joint Plan dated Jan. 21,
2021, is available at https://bit.ly/3csEyAN from PacerMonitor.com
at no charge.
Counsel for the Debtors:
WEIL, GOTSHAL & MANGES LLP
Alfredo R. Perez
Brenda L. Funk
Stephanie N. Morrison
700 Louisiana Street, Suite 1700
Houston, Texas 77002
Telephone: (713) 546-5000
Facsimile: (713) 224-9511
- and -
WEIL, GOTSHAL & MANGES LLP
Gary T. Holtzer
David N. Griffiths
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
About SpeedCast International
Headquartered in New South Wales, Australia, SpeedCast
International Limited and its affiliates provide remote and
offshore satellite communications and information technology
services. SpeedCast's fully-managed service is delivered to more
than 2,000 customers in 140 countries via a global, multi-access
technology, multi-band, and multi-orbit network of more than 80
satellites and an interconnecting global terrestrial network,
bolstered by on-the-ground local support from more than 40
countries. Speedcast services customers in sectors such as
commercial maritime, cruise, energy, mining, government, NGOs,
enterprise, and media.
SpeedCast International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-32243) on April 23, 2020. At the time of the filing, the
Debtors each had estimated assets of between $500 million and $1
billion and liabilities of the same range.
Judge David R. Jones oversees the cases.
Speedcast is advised by Weil, Gotshal & Manges LLP as global legal
counsel and Herbert Smith Freehills as co-counsel. Michael Healy
of FTI Consulting, Inc., is Speedcast's Chief Restructuring
Officer, and FTI Consulting, Inc., is Speedcast's financial and
operational advisor. Moelis Australia Advisory Pty Ltd and Moelis
& Company LLC are Speedcast's investment bankers. KCC is
Speedcast's claims and noticing agent.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in Debtors' bankruptcy cases. The committee is
represented by Hogan Lovells US, LLP.
On August 13, 2020, the Debtor received a $395 million equity
commitment from Centerbridge Partners, L.P. and its affiliates, one
of its largest lenders.
TRITON BOND 2021-1: S&P Assigns Prelim B (sf) Rating on F Notes
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to 10 classes
of prime residential mortgage-backed securities (RMBS) to be issued
by Perpetual Corporate Trust Ltd. as trustee for Triton Bond Trust
2021-1 Series 1.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed portfolio,
which means no further loans will be assigned to the trust after
the closing date.
-- S&P's view that the credit support is sufficient to withstand
the stresses t applies. This credit support comprises mortgage
insurance covering 37.0% of the loans in the portfolio, as well as
note subordination for all rated notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing liquidity
facility equal to 1.0% of the invested amount of all notes subject
to a floor of 0.10%, principal draws, and a loss reserve that
builds from excess spread, are sufficient under our stress
assumptions to ensure timely payment of interest.
-- The extraordinary expense reserve of A$150,000, funded from day
one by Columbus Capital Pty Ltd., available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
-- The benefit of a fixed- to floating-rate interest-rate swap
provided by National Australia Bank Ltd. to hedge the mismatch
between receipts from any fixed-rate mortgage loans and the
variable-rate RMBS, should any be entered into after transaction
close.
-- That loss of income for borrowers because of COVID-19 might put
upward pressure on mortgage arrears over the longer term. In 2020
S&P updated its outlook assumptions for Australian RMBS in response
to changing macroeconomic conditions as a result of the COVID-19
outbreak. The collateral pool at close for this transaction will
not include any loans where the borrower has applied for a COVID-19
hardship payment arrangement.
As vaccine rollouts in several countries continue, S&P Global
Ratings believes there remains a high degree of uncertainty about
the evolution of the coronavirus pandemic and its economic effects.
Widespread immunization, which certain countries might achieve by
midyear, will help pave the way for a return to more normal levels
of social and economic activity. S&P said, "We use this assumption
about vaccine timing in assessing the economic and credit
implications associated with the pandemic. As the situation
evolves, we will update our assumptions and estimates
accordingly."
PRELIMINARY RATINGS ASSIGNED
Triton Bond Trust 2021-1 Series 1
Class Rating Amount (mil. A$)
A1-MM AAA (sf) 50.00
A1-AU AAA (sf) 315.00
A1-5Y AAA (sf) 60.00
A2 AAA (sf) 35.00
AB AAA (sf) 20.50
B AA (sf) 8.00
C A (sf) 6.00
D BBB (sf) 2.60
E BB (sf) 1.40
F B (sf) 0.70
G NR 0.80
NR--Not rated.
VIPCORP (AUST): Second Creditors' Meeting Set for Feb. 10
---------------------------------------------------------
A second meeting of creditors in the proceedings of VIPcorp (Aust)
Pty Ltd, trading as Royal Pavilion Seafood Restaurant, has been set
for Feb. 10, 2021, at 11:00 a.m. via Webinar facilities only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 9, 2021, at 4:00 p.m.
Philip Campbell Wilson and John McInerney of Grant Thornton
Australia Limited were appointed as administrators of VIPcorp
(Aust) on Dec. 24, 2020.
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C H I N A
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ANT GROUP: Reaches Deal With China Regulators on Restructuring
--------------------------------------------------------------
Reuters reports that Ant Group Co has agreed a restructuring plan
with Chinese regulators under which the fintech giant will become a
financial holding company, a person with direct knowledge of the
matter said, potentially easing founder Jack Ma's regulatory woes.
According to Reuters, the plan calls for putting all of Ant's
businesses into the holding company, including its payment
processing and technology offerings in areas like blockchain and
food delivery, the person said, declining to be named due to
confidentiality constraints.
Bloomberg News first reported Ant had reached an agreement with
Chinese regulators about the proposed restructuring, Reuters
notes.
An announcement about the restructuring, which will result in the
company being subject to capital requirements similar to those for
banks, could come before the start of China's Lunar New Year
holiday on Feb. 11, Bloomberg, as cited by Reuters, said.
An agreement on the restructuring of Ant, an affiliate of
e-commerce giant Alibaba Group, would ease investor concerns about
a regulatory crackdown on billionaire Ma's business empire, Reuters
says.
Reuters relates that the catalyst for Ma's current woes was an Oct.
24 speech in which he blasted China's regulatory system, leading to
the suspension of Ant's $37 billion initial public offering just
days before its dual-listing in Hong Kong and Shanghai.
Regulators have since launched an anti-trust probe into the tech
sector with Alibaba taking much of the heat, besides pushing Ant to
revamp its business structure to bring it under tighter regulatory
supervision, according to Reuters.
Ma, who is not known for shying away from the limelight,
subsequently disappeared from the public eye for about three
months, triggering frenzied speculation about his whereabouts. He
re-emerged last month with a 50-second video appearance.
Reuters adds that despite the agreement with the regulator on
revamping Ant, whose businesses include consumer lending and
insurance products distribution, the anti-trust probe into Alibaba
would continue to cloud the outlook for Ma's empire.
According to Reuters, Bloomberg's report said that Ant was still
exploring opportunities to revive its stock market listing, citing
one person familiar with the matter. It said it was unclear how
long authorities would need to sign off on a listing.
Ant's financial holding structure is expected to weigh on its
valuation, as the fintech firm was valued as a technology firm in
its previous fundraising rounds. Typically, valuations are much
higher on technology firms than on financial companies.
Alibaba's Hong Kong-listed shares closed 0.4% higher on Feb. 4.
They had tumbled early in the session after the company reported
third-quarter results and warned it faced a near-term challenge
from changing regulations, Reuters notes.
It also warned that Ant's business prospects and IPO plans "are
subject to substantial uncertainties".
"Currently, we are unable to make a complete and fair assessment of
the impact that these changes and uncertainties will have on
Alibaba Group," it said.
Ant Group Co., Ltd. develops online payment platforms. The Company
produces credit system and financial services platforms which
provide consumers and small businesses with safe and convenient
inclusive financial services globally. Ant Group provides its
services worldwide.
CHINA FORTUNE: Fitch Cuts LT Foreign-Currency IDR to 'CC'
---------------------------------------------------------
Fitch Ratings has 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
'CC' from 'CCC'. The Recovery Rating is 'RR4'.
The rating downgrade follows CFLD's announcement that it has missed
payments on multiple loans amounting to more than CNY5.3 billion
and negotiating with lenders to restructure the debt. It is unclear
whether these missed payments constitute a default as the terms of
the loans are non-public. CFLD has not missed payments on its
capital-market debt, but Fitch believes it will face significant
refinancing risks with its USD530 million offshore bond maturing
February as well as its domestic bond and perpetual loan maturities
in March 2021, which Fitch estimates at around CNY14 billion.
KEY RATING DRIVERS
Missed Payments: CFLD announced on 1 February 2021 that it missed
more than CNY5.3 billion in payments on bank and trust loans. It is
currently negotiating to extend the loan maturities and may resort
to debt restructuring, as around 75% of its outstanding debt is
non-bank financing. Market reports indicate a creditor committee
has been set up in February to address CFLD's liquidity issues.
Minimal Unrestricted Cash: CFLD also disclosed that, from 4Q20 till
the announcement date, its net cash outflow excluding shareholders'
support was CNY37.1 billion after taking into account debt
maturities of CNY55.9 billion. Its unrestricted cash balance was
CNY800 million as of 31 January 2021, while restricted cash
amounted to CNY22.8 billion. Fitch believes CFLD's unrestricted
cash is insufficient to service its upcoming debt due within 12
months, in the absence of extraordinary intervention from a third
party.
Large Short-Term Maturities: CFLD has sizeable short-term bond
maturities after redeeming a CNY1.5 billion domestic bond on 20
January. Nevertheless, there remains a lack of visibility over
CFLD's liquidity position in the near term as there remains the
USD530 million offshore bond maturing 28 February and Fitch
estimates CNY14 billion in bonds will mature or have put options
that are exercisable in March, including perpetual bonds, with
another CNY13 billion in April-June and CNY10 billion in 2H21.
DERIVATION SUMMARY
CFLD's current ratings are driven by its stressed liquidity and
high refinancing risks.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Consolidated contracted sales of around CNY40 billion in 2020.
-- Government-related revenue to increase to CNY41 billion in
2020 and CNY46 billion in 2021
Recovery Rating Assumptions:
-- The recovery analysis assumes that CFLD would be liquidated
rather than reorganised as a going-concern in bankruptcy.
-- Fitch has assumed a 10% administrative claim.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance-sheet assets that can be realised in a sale or liquidation
process conducted during a bankruptcy or insolvency proceeding and
distributed to creditors.
-- 100% advance rate to cash after Fitch includes CNY46 billion
intrade payables in the debt waterfall
-- 80% adjusted inventory advance rate, corresponding to an
estimated 30% EBITDA margin of property-development-related
assets
-- 85% accounts receivable advance rate, higher than the standard
70% rate because all of the accounts receivable are from the
government and mostly from the pan-Beijing regional
government.
-- Offshore bonds are all issued by CFLD's offshore SPV and
directly guaranteed by CFLD so they are ranked at the same
level as onshore senior unsecured debt.
-- The allocation of value in the liability waterfall results in
a recovery corresponding to 'RR2' for the offshore senior
unsecured guaranteed notes, but the recovery is capped at
'RR4', according to Fitch's Country-Specific Treatment of
Recovery Ratings Criteria.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Restored capital-market access and sufficiently addressed
liquidity needs.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Evidence of a default or default-like process
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
Stressed Liquidity: CFLD may not have the liquidity to repay its
upcoming debt maturities based on its total cash of CNY23.6 billion
at end-January 2021, of which available cash was only CNY800
million while the rest was restricted cash. Fitch has also not
received details of a short-term refinancing plan.
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.
ZOOMLION HEAVY: S&P Upgrades ICR to 'BB-', Outlook Positive
-----------------------------------------------------------
On Feb. 3, 2021, S&P Global Ratings raised its long-term issuer
credit rating on Zoomlion Heavy Industry Science and Technology Co.
Ltd. and the long-term issue rating on the company's guaranteed
unsecured notes to 'BB-' from 'B+'.
The positive outlook indicates rating upside, which could
materialize if Zoomlion prudently manages its working capital and
spending while sustaining profit such that its debt-to-EBITDA ratio
drops well below 3x over 2021-2022.
S&P said, "We expect Zoomlion's financial leverage to stay largely
stable in 2021-2022, after significantly improving in the past two
years. We estimate the company's adjusted debt-to-EBITDA ratio
further trended down to 2.8x-3.0x in 2020, from 3.5x in 2019 and 6x
in 2018, on rapid profit expansion and continued free cash inflow.
Zoomlion's revenue increased 50% in 2020 by our estimate, despite
the COVID-19 pandemic, mainly because of strong construction
demand, rising replacement needs, and steady improvement in its
market share." Robust revenue growth led the company's adjusted
EBITDA to more than double to an estimated Chinese renminbi (RMB)
8.5 billion–RMB9 billion in 2020, from RMB3.8 billion in 2018.
Profit expansion more than offset heavier capital expenditure
(capex) and higher net working capital outflow relative to
increasing credit sales, keeping free cash flow positive.
Zoomlion's earnings could contract moderately in 2021 with industry
demand gradually waning. S&P said, "However, incorporating the
company's RMB6.2 billion equity placement, which we expect to be
completed in the first quarter, we anticipate that its
debt-to-EBITDA ratio could be 3.0x-3.2x in the next 12-24 months.
This is an improved level compared to our previous estimate of
3.3x-3.8x. In our view, Zoomlion may use the fresh capital to fund
higher capex needs and alleviate pressure from rising receivables,
which will enhance the company's financial headroom."
Zoomlion's growing market share and expansion in new areas could
partly help counter a potential industry downturn. S&P said, "We
still expect demand for construction machinery to decline 5%-15%
annually over 2021-2022. In our view, most replacement needs for
equipment sold in the past cycle were already met in 2017-2020 and
material fleet expansion will be less likely." The implementation
of new emission standards could also discourage sales after the
July 1, 2021, roll out date.
Demand for Zoomlion's products is likely to be more resilient
relative to most peers in the next 12-24 months, when the cycle
potentially turns. Zoomlion's major product exposure is in
mid-to-late cycle products and it has been steadily gaining market
share with upgraded models and category expansion. Therefore, the
company's growth outpaced the industry's in 2019-2020, when the
industry was at the late stage of the current upcycle, in S&P's
view.
Zoomlion's market share is likely to further expand, supported by
its technology and brand advantages. The company will ramp up new
product sales, such as excavators and aerial working platforms,
after the completion of its new facilities in the next 12-24
months. These factors will help smooth the impact of industry
cyclicality on Zoomlion. As such, S&P's base case assumes that the
company's revenue dip will be contained at a moderate 3%-7% in
2021-2022.
S&P said, "We anticipate that Zoomlion's profitability will
stabilize at 12%-13% in the next two to three years. The company is
exposed to the vagaries of a highly volatile industry. Its adjusted
EBITDA margins were well below 10% during the downcycle in
2014-2017, characterized by weak sales and high impairment. Margins
then rebounded to 13.3% in 2018 and 14.2% in 2019 due to economies
of scale from demand recovery and prudent cost management.
"We estimate that Zoomlion's adjusted EBITDA margin dipped slightly
to 13%-14% in 2020. The impact of product mix change, intensified
research and development spending to boost capabilities, and a
moderate increase in the provision ratio largely absorbed lower
selling, general, and administrative expenses and higher government
subsidy.
"Despite potential market volatilities, we believe that Zoomlion
can maintain its adjusted EBITDA margin above 12% over the next two
years, largely on par with the average for global capital goods
peers. The company's operational efficiency gains and increased
self-sufficiency for key parts provide cushion against competitive
pressure. We anticipate Zoomlion will generate more than RMB7
billion in adjusted EBITDA in 2021-2022, well above the RMB4
billion-RMB6 billion in 2018-2019."
Robust operating results and financial management have led to
enhanced liquidity for Zoomlion. Thanks to continued free cash
inflow and refinancing of short-term obligations, the company has
meaningfully enhanced its liquidity position. The ongoing equity
placement could further replenish its cash reserve and enhance the
liquidity buffer. In the past few years, Zoomlion has taken
measures, such as the temporary suspension of dividends, to protect
its liquidity. S&P expects the company to remain financially
prudent and maintain its liquidity position in the next 12-24
months.
Working capital management and spending discipline remain key
determinants of Zoomlion's financial strength. Receivables
collection, in particular, has a large bearing on leverage due to
the company's heavy reliance on credit sales. Zoomlion has stepped
up credit risk management compared to the last upcycle, such as
adopting more stringent down payment requirements and tighter
customer credit checks. S&P estimates that the company financed
well over two thirds of sales in 2020 with captive finance leasing
and installment payments.
Zoomlion is likely to continue to issue asset-backed securities or
notes to accelerate receivables turnover. S&P said, "However, we
treat the company's RMB3 billion asset-backed securities issued in
2020 (with accounts receivables being the underlying assets) as
debt because we view them to be in lieu of borrowing. We have
factored in a similar level of receivables financing for 2021-2022
in our base case."
S&P said, "Meanwhile, we forecast Zoomlion's annual capex will
double to RMB3 billion-RMB4 billion in 2021, given the company's
plan to construct new facilities for key machinery and components.
This spending will only be partly funded by the equity placement
proceeds and will therefore exert pressure on the company's free
cash flow.
"The positive outlook reflects our expectation that Zoomlion could
continue to strengthen its competitive position in the next 12-24
months despite the potential industry downcycle. We also forecast
the company's debt-to-EBITDA ratio will stay largely stable at
close to 3x in 2021-2022, with the equity placement alleviating
pressure from working capital and increased capex.
"We may raise the rating if Zoomlion maintains a prudent financial
policy and reduces its debt-to-EBITDA ratio to well below 3x for a
sustained period. This could happen if: (1) the company continues
to generate healthy free cash flows by further strengthening its
market position, and growing revenue and profit; and (2) it
implements effective risk management without significantly relaxing
its commercial terms for credit sales."
S&P may revise the outlook to stable if Zoomlion's debt-to-EBITDA
ratio approaches 3.5x. This could happen due to:
-- Sales or margins that are weaker than it expects because of
slowing construction demand;
-- A deterioration in customer creditworthiness, causing
significant delays in receivable collection or even higher
provision; or
-- Large debt-funded acquisitions or capex that is much higher
than S&P's base-case assumption.
[*] CHINA: To Improve Policies for Smaller Firms' Bankruptcy
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Reuters reports that China will improve policies to help medium-to
small and micro companies deal with bankruptcy more smoothly, state
broadcaster reported on Wednesday, citing the state council
meeting.
China will also crack down on such firms dodging repayment
obligations for defaulted bonds in order to protect the interests
of workers, creditors and investors, the cabinet said.
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I N D I A
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AKS ALLOYS: ICRA Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------
ICRA has retained the ratings for the bank facilities of AKS Alloys
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D/D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 14.00 [ICRA]D ISSUER NOT COOPERATING;
Rating Continues to remain under
the 'Issuer Not Cooperating'
category
Non-Fund Based 10.00 [ICRA]D ISSUER NOT COOPERATING;
Rating Continues to remain under
the 'Issuer Not Cooperating'
category
Fund based (5.00) [ICRA]D ISSUER NOT COOPERATING;
(sublimit) Rating Continues to remain under
Facility the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of noncooperation by a rated entity available at
www.icra.in.
Incorporated in 2000, AKS Alloys Private Limited is engaged in
manufacturing steel ingots and trading steel scrap/ingots. The
Company operates a steel ingot manufacturing facility with a
capacity of 18,000 tonnes per annum (TPA), at Pondicherry.
AYAAN TRENDZ: ICRA Keeps B+/A4 Debt Rating in Not Cooperating
-------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Ayaan
Trendz Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+ (Stable)/[ICRA]A4 ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 14.11 [ICRA]B+ (Stable)/[ICRA]A4
Short Term- ISSUER NOT COOPERATING;
Fund Based Rating continues to remain
under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of noncooperation by a rated entity available at
www.icra.in.
Incorporated in August 2011 by Mr. Anil Agarwal and Mr. Mukesh
Agarwal, Ayaan Trendz Private Limited is engaged in manufacturing
and domestic sales of embroidered and printed sarees. The company
is part of the Vipul Group based in Surat, Gujarat. The group is
engaged in the textile business for over three decades through
other group companies, including Vipul Industries Private Limited
(VIPL). ATPL started commercial production of sarees from November
2011. The company procures grey material from the local suppliers
in Surat, outsources the dyeing and printing activities to VIPL
while undertaking the embroidery work in-house.
BARANI FERROCAST: ICRA Keeps B- Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Barani
Ferrocast Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B- (Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 3.65 [ICRA]B-(Stable) ISSUER NOT
Cash Credit COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
Fund based- 5.72 [ICRA]B-(Stable) ISSUER NOT
Term Loan COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
Unallocated 4.63 [ICRA]B-(Stable) ISSUER NOT
COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the
credit risk profile of the entity. The rating action has been taken
in accordance with ICRA's policy in respect of noncooperation by a
rated entity available at www.icra.in.
BFPL is involved in the business of manufacturing ferrous castings
using green sand molding and no bake molding process, based on the
customer requirements. The company was incorporated in FY2011 and
started commercial operations from FY2014. The company is led by
Mr. T K Karuppannasamy and Mr. K Devaraj whose experience in the
metal industry spans over two decades. The company has a production
shop floor area of 2020 sq. mt. and services floor area of 210 sq.
mt. to carry out the molding process. The company focuses on
manufacturing intricate engineering parts that caters to various
sectors like
automobiles, power, general machinery etc.
DHANDU MARIAMMAN: ICRA Keeps B Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Dhandu
Mariamman Steels in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 5.50 [ICRA]B (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
Unallocated 0.50 [ICRA]B (Stable) ISSUER NOT
COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of noncooperation by a rated entity
available at www.icra.in.
Dhandu mariamman Steels is a trader in ferrous and nonferrous scrap
which is widely used in foundries; the firm supplies metal scrap to
some of the leading foundries located in and around Coimbatore,
Tamilnadu. The firm mainly deals in trading of cast iron scrap that
is suited for foundries catering to manufacturing of pumps,
automotive parts and general machineries. The firm commenced
operations in the year 2007 and is managed by M. P. Mohanraj who is
the sole proprietor.
DRS INFRATECH: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of DRS
Infratech Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+(Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.00 [ICRA]B+ (Stable); ISSUER NOT
Fund Based COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 24.00 [ICRA]B+ (Stable); ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term– 1.00 [ICRA]B+(Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of noncooperation by a rated entity available at
www.icra.in.
DRS Infratech Private Limited (DRSIPL) is a Hyderabad based
infrastructure and engineering construction company providing
services in the field of Water supply works, Construction of school
buildings and Road works. The company was started as a
proprietorship concern in 1991 under the name of DRS Engineers and
Contractor and subsequently converted to a private limited company
in 2007 under the name of DRS Infratech Private Limited. DRSIPL is
being promoted by Mr. D Raja Sekhar, a civil engineer having an
experience of 2 decades in construction industry.
EROS RESORTS: ICRA Reaffirms B+ Rating on INR39cr LT Loan
---------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Eros
Resorts and Hotels Private Limited's (ERHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit-LT 5.00 [ICRA]B+ (Stable); reaffirmed
Term Loan-LT 39.00 [ICRA]B+ (Stable); reaffirmed
Unallocated-LT/ST 6.00 [ICRA]B+ (Stable)/[ICRA]A4;
Reaffirmed
Rationale
The ratings take into account the expected weakening in ERHPL's
performance in FY2021 due to the impact of the Covid-19
pandemic-related lockdown, travel restrictions and safety concerns.
Since the pan-India lockdown from March 24, 2020, the hotel has not
been open for business and reported nil revenues during April to
July 2020. With demand hitting multi-year lows and recovery still a
few quarters away and contingent upon a cure or vaccine, ICRA
expects ERHPL to witness a sharp fall in its revenues and margins
in FY2021, despite its significant cost saving measures. As a
result, the company's accruals and liquidity position are
likely to weaken materially in FY2021. This is, however,
accompanied with continuous support from promoters in terms of
unsecured loans infused in FY2020 and in the current fiscal to
cover fixed costs and debt servicing.
The ratings continue to be constrained by the company's weak
financial profile with net loss of INR4.12 crore and weak coverage
indicators, coupled with a stretched liquidity position. Moreover,
sustained net losses have eroded its net worth, which stood at
negative INR58.43 crore in FY2020. ICRA also notes the intense
competition from other established reputed properties in the
Delhi-NCR market constraining its operating performance to a
certain extent. The rating continues to be constrained by the
single location of ERHPL's operations and the cyclical nature of
revenue generation owing to economic or seasonal cycles.
The ratings, however, positively factor in the long track record of
promoters in the hospitality industry and the consistent infusion
of funds by promoters to meet the funding requirements towards
operating losses and debt servicing. This apart, the ratings
consider the presence of management tie-ups with reputed brands
such as InterContinental Hotels Group (IHG).
The Stable outlook on [ICRA]B+ rating reflects the fact that ERHPL
would continue to draw support from the longstanding experience of
its promoters in the hotel industry, along with the continued
financial support in the form of unsecured loans.
Key rating drivers and their description
Credit strengths
* Experienced promoters and management with long track record in
Delhi hotel industry: The promoters and their families have been
involved in the hospitality business for more than three decades
and have gained a thorough knowledge of the market. Such a long
presence in the industry has helped the company in understanding
the industry dynamics and establishing strong relationships with
the key service providers. The Group also owns a hotel property –
Hotel Eros – in Nehru Place, Delhi.
* Association with international hotel chain providing access to
global reservation system and brand recognition: The company
benefits from its management partnership with one of the leading
global chains – IHG– in terms of enhanced visibility and higher
occupancies.
* Demonstrated track record of funding support from the promoters:
The promoters of the company have consistently supported the entity
by way of fund infusion over the years in the form of unsecured
loans, debentures and preference shares.
Credit challenges
* Sharp revenue decline and operating losses in FY2021 due to
pandemic: The extended pan-India lockdown since March 24, 2020 has
resulted in a sharp fall in occupancy for the company, with demand
declining to the lowest levels that the industry has ever
witnessed. With the start of recovery likely to be a few quarters
away and contingent upon a cure or vaccine, ICRA expects ERHPL to
post a sharp decline in revenues and incur operating losses in
FY2021, despite several cost saving measures.
* Weak financial profile characterised by low profitability: The
company's overall financial profile has remained weak with net loss
of INR4.12 crore and high TD/OPBIDTA of 17.23 times, coupled with
low DSCR of 0.87 times in FY2020.
* Revenues susceptible to adverse market conditions and stiff
competition: ERHPL's revenues are susceptible to adverse market
conditions as its operations are limited to one geography (East
Delhi) and a single sector (hospitality). The hotel industry is
typically susceptible to a wide range of adverse market conditions
like demand-supply dynamics, tourism industry, foreign tourist
arrival, etc. This apart, the company faces stiff competition from
other five-star hotels located in Delhi-NCR such as Holiday Inn,
Fraser Suites, Park Inn by Radisson, etc.
Liquidity position: Stretched
ERHPL's liquidity position is stretched. The impact of the Covid-19
pandemic on its operations will constrain the liquidity profile in
FY2021. With limited buffer in cash balance and undrawn overdraft
facility buffer, the promoters have continued to provide financial
support to the company. The withdrawal of financial support by the
promoters would have an adverse impact on ERHPL's liquidity and
financial position.
Rating sensitivities
Positive factors – Upgrade in the ratings is unlikely in the near
term given the Negative outlook on the industry due to the severe
impact of the Covid-19 pandemic on the travel and tourism sector.
Nonetheless, sustained improvement in operational metrics such as
RevPAR and profitability margins and/or infusion of equity leading
to reduction in leverage and coverage metrics, could be a trigger
for a change in rating.
Negative factors – Negative pressure on ERHPL's ratings could
arise if there is withdrawal or absence of timely financial support
by the promoters, or if any major capital expenditure is carried
out by the company. Besides, a prolonged impact of the pandemic and
longer-than-expected recovery, leading to any deterioration in the
company's liquidity and credit metrics, may lead to a rating
downgrade.
ERHPL has been promoted by the erstwhile Eros Group, a Delhi-based
Group promoted by the Sood family. The company is present in the
real estate and hospitality businesses in the National Capital
Region (NCR). ERHPL is a closely-held company with its entire share
capital held by the directors, the relatives of the directors and
the Group entities. It owns a premium five-star hotel property in
Mayur Vihar, Delhi under the brand name Crowne Plaza (earlier Hotel
Hilton). The hotel property has been operational since October 2011
and has a management contract with the Intercontinental Hotels
Group. Earlier, ERHPL used to own a four-star hotel in Mayur Vihar
under the brand name Holiday Inn (erstwhile Double Tree by Hilton).
However, the hotel was demerged into a separate company in a
restructuring exercise completed in May 2015.
EVERGREEN VENEERS: ICRA Keeps B Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Evergreen
Veneers Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B (Stable); ISSUER NOT
Fund Based CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short term– 13.00 [ICRA]A4 ISSUER NOT
Non-Fund based COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
Long term/ 3.05 [ICRA]B(Stable)/[ICRA]A4
Short term– ISSUER NOTCOOPERATING;
Unallocated Rating continues to remain
under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/ limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of noncooperation by a rated entity
available at www.icra.in.
EVPL is a private limited company incorporated in 1992. The
promoters and directors, Mr. Vijay Gupta and Mr. Ashok Kumar
Aggarwal, have extensive experience in manufacturing plywood, face
veneer, core veneer and trading in timber. At present, it is
involved in the manufacturing of core veneer, plywood, resin and
block board. The company started its operations with one peeling
machine, one hot press and one dryer initially. Over the years, the
capacity has been increased to four peeling machines (large), four
peeling machines (small), two hot presses, six dryers and four
thermo fluid heaters (boilers). It also has a resin manufacturing
unit on the premises. It established a full-fledged laboratory on
the premises for R&D and quality checks. EVPL received
ISO-9001:2008 certification form the bureau of Indian standards.
All the products of the company are certified with IS 303, IS 710 &
IS 1659 by the Bureau of Indian Standards.
FUTURE GROUP: Fighting Amazon; Retail Unit Staring at Insolvency
----------------------------------------------------------------
Reuters reports that if India's Future Group cannot sell assets, $4
billion in bank loans and debentures will be at risk, pushing its
retail unit into insolvency, the company said in a court filing on
Feb. 3 against Amazon.com Inc, which wants to block the sale.
A court in New Delhi blocked Future Group's sale of retail assets
to Reliance Industries on Feb. 2 after Amazon raised objections to
the deal, Reuters relates.
Reuters says the corporate battle has embroiled sprawling
businesses led by two of the world's richest men: Amazon's Jeff
Bezos and Reliance's Mukesh Ambani.
Amazon had argued that Future breached contracts by selling retail
assets to Reliance. The court sided with the U.S. firm, saying an
earlier order from an arbitrator that put the Future-Reliance deal
on hold was valid, Reuters says.
Reuters relates that Future - which had argued the arbitrator's
order was not binding - on Feb. 3 filed a challenge against the
court's ruling, saying the company's creditors would be at
"significant risk" if the Reliance deal fails.
Other than an estimated INR300 billion ($4.1 billion) hit to bank
loans and debentures, the deal's failure would also impact
livelihoods of 50,000 employees and 6,000 small- and medium-sized
vendors, it said.
"It is inevitable that FRL (Future Retail) will go into liquidation
. . . The magnitude of damage that may be caused to the public at
large is unimaginable," Future said the court filing, seen by
Reuters.
The appeal was set to be heard on Feb. 4 before a bigger two-judge
bench in New Delhi.
Reuters says the Delhi court on Feb. 2 asked Indian authorities to
maintain status quo on the transaction, effectively putting the
Future-Reliance deal on hold.
Indian stock exchanges and the country's antitrust watchdog had
already cleared the deal, though it was awaiting approval from a
law tribunal, the report notes.
Future in its appeal said the Delhi court order "rendered
stillborn" the approvals.
"The sole and sheer intent" of Amazon was to prevent Reliance -
which is also venturing into e-commerce - from acquiring Future's
assets, the Indian firm argued in the filing, Reuters relays.
Amazon, which had its sights set on ultimately owning part of
Future's retail assets itself, has argued a 2019 deal it had with a
unit of Future contained clauses prohibiting the Indian group from
selling them to anyone on a "restricted persons" list, including
Reliance, Reuters states.
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.
GREAT VALUE: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Great
Value Fuels Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term 113.10 [ICRA]B+ (Stable) ISSUER NOT
Fund based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Long term– 10.00 [ICRA]B+ (Stable) ISSUER NOT
Non Fund COOPERATING; Rating continues
Based to remain under 'Issuer Not
Cooperating' category
Long Term 16.90 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
Great Value Fuels Private Limited (GVF) was incorporated in 2008
and had entered into an agreement with Department of Transport
(DoT), Government of Delhi to run public buses in Delhi. The DoT
Govt of Delhi has launched a scheme to corporatize the Private
Stage Carriage operation of buses in Delhi and appointed Delhi
Integrated Multi Modal Transit System Limited (DIMTS) as Integrated
Mechanism for the Private stage carriage buses corporatisation
scheme.
HINDUSTHAN MALLEABLES: ICRA Keeps B+ Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Hindusthan
Malleables & Forgings Ltd in the 'Issuer Not Cooperating' category.
The ratings are denoted as "[ICRA]B+(Stable); ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 8.00 [ICRA]B+ (Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Incorporated in 1959, Hindusthan Malleables & Forgings Limited
(HMFL) manufactures graded, malleable iron and steel castings,
catering mainly to the automobile, steel and power sectors. The
current management took over the operations of the company in 2003.
The manufacturing facility of the company is located at Bhuli, in
Dhanbad, Jharkhand and has an annual capacity of 7,560 metric
tonnes per annum (MTPA).
INEXO CAST: ICRA Lowers Rating on INR5.0cr Cash Loan to B+
----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Inexo
Cast Metal Solutions Pvt Ltd (ICMS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 5.00 [ICRA]B+ (Stable) ISSUER NOT
Cash credit COOPERATING; Rating downgraded
from [ICRA]BB(Stable) and
continues to remain in the
'Issuer Not Cooperating'
Category
Rationale
The rating downgrade is because of lack of adequate information
regarding ICMS performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade. ICRA has
been trying to seek information from the entity so as to monitor
its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of noncooperation by a rated entity available at
www.icra.in.
Inexo Cast Metal Solutions Private Limited is engaged in the
manufacture of foundry chemicals such as Exothermic Sleeves,
Insulating Sleeves, Coating Agents and other foundry products. The
entity was started as partnership firm with Mr Ramasamy Jagan as a
founding Partner in the year 1989 under the name of Inexo Feed
Industries. The partnership firm was converted into a private
limited company in the year 1997 under the name Inexo Chemicals
Private Limited and in 2005 the company was renamed as Inexo Cast
Metal Solutions Private Limited.
IRB INFRASTRUCTURE: Fitch Assigns First-Time 'BB' LongTerm IDR
--------------------------------------------------------------
Fitch Ratings has assigned India-based IRB Infrastructure
Developers Ltd a Long Term Issuer Default Rating (IDR) of 'BB' with
a Stable Outlook. Fitch has also assigned an expected rating of
'BB(EXP)' to the proposed senior secured notes to be issued by
India Toll Road with a Stable Outlook
The final rating is contingent upon the receipt by Fitch of final
documents conforming to information already received as well as the
final pricing and financial close on the proposed notes.
RATING RATIONALE
IRB's ratings reflect Fitch’s expectation of robust traffic
performance across its diverse and strategically located portfolio
of toll roads, supported by a concession framework that provides
visibility on upcoming tariff increases. The ratings also take into
account the company's record in operating and maintaining the
group's asset base to a high standard, with expertise provided by
its in-house engineering, procurement and construction (EPC)
business. Fitch's rating case forecasts the group's consolidated
debt service coverage ratio (DSCR) at an average of 1.4x in the
financial year ending March 2021 (FY21) to FY29, with a profile
DSCR of 1.3x between FY22-FY25. This is consistent with a 'BB'
rating.
Fitch fully consolidates IRB's wholly owned contracting and
concession activities and include dividend cash flow contributions
from its infrastructure investment trust (InVIT) in accordance with
Fitch’s view of moderate parent and subsidiary linkages.
The proposed notes will be issued by India Toll Roads, a financing
vehicle with no linkage with IRB - an orphan SPV. Issue proceeds
will be used by the issuer to subscribe to non-convertible
debentures issued by IRB. Noteholders will be senior ranking, in
line with other secured creditors at the holding company, leading
Fitch to rate the proposed notes at the same level as IRB's IDR.
IRB will utilise the majority of the net proceeds to repay some
term loans and an overdraft facility, extend sub-debt to certain
SPVs and for general corporate purposes, including issuance
expenses.
The coronavirus pandemic and related government containment
measures worldwide create an uncertain global environment for the
transportation sector. IRB's performance data indicates some
short-term impairment, in line with the lower revenues and steady
fixed costs across the transportation sector. Fitch's ratings are
forward-looking in nature. Fitch will monitor how the pandemic's
duration and severity affects the sector and will incorporate
revised base- and rating-case qualitative and quantitative inputs
based on Fitch’s forecast performance and assessment of key
risks.
KEY RATING DRIVERS
Toll Road Concessions Revenue Risk
Diversified Portfolio, Robust Fundamentals - Revenue Risk (Volume):
Stronger
IRB wholly owns six projects, which extend across nearly 500km in
the states of Maharashtra and Gujarat. The toll roads are largely
located at or adjacent to key corridors in India's national highway
network. Historical data suggests reasonably robust local and
long-distance traffic fundamentals, with a diversified mix of
users. However, the toll roads exhibit a larger share of commercial
traffic compared with peers and face some competition from other
roads. Fitch assesses the toll rates as low and the wider portfolio
has exhibited limited price elasticity to rate increases.
IRB is exposed to traffic risk on 16 build-operate-transfer
projects through its ownership shares in IRB Infrastructure Trust
and IRB InvIT Fund. Fitch regards the risk profile of these
projects as consistent with IRB's fully owned assets. Most InvIT
concessions consist of project corridors that form part of the
golden quadrilateral; the national highway network connecting
India's major industrial, agricultural and cultural centres. The
projects are geographically diversified and cater for a mix of car
and commercial traffic, but are subject competition from free
alternative routes.
Formula-Linked Tariff Increases - Revenue Risk (Price): Midrange
IRB's wholly owned concessions permit pre-defined toll-rate
increases that are regulated by the National Highways Authority of
India (NHAI) and Maharashtra State Road Development Corporation, as
applicable. The concession agreement provides for a toll-rate
increase of 18% every third year until FY24 for the Mumbai-Pune
Expressway and 16% every third year until the end of the concession
period for NH48. Tolls on projects underpinned by NHAI concessions
are determined by reference to base fees and an indexation formula.
User fees are set on an all-India basis under, where a base fee,
calculated by rupees per vehicle per trip, is escalated annually at
3% plus 40% of the increase in the wholesale price index. Fitch
expects both the Mumbai-Pune rate hike mechanism and the NHAI
indexation formula to track Fitch’s CPI expectations in the long
run.
The central government suspended all tolling on national highways
for a 25-day period between 26 March 2020 to 19 April 2020 due to
the pandemic. The NHAI has since extended concession periods to
compensate toll-road operators. There have been no previous
instances of legislative or political interference in
rate-adjustments observed on any project. The concession agreement
allows the maturity date to be extended or shortened based on
thresholds that are linked to revenue, mitigating the risk of price
escalation, in addition to traffic risk.
Construction Business
IRB's contracting activities represented an average of around 40%
of reported group EBITDA in FY17-FY20. Contractual income from
IRB's SPVs typically reflects income from highway construction and
from operation and maintenance, including routine and periodic
maintenance. The captive EPC business has a demonstrated record of
executing over 14,000 lane kms of projects to date. IRB's strategy
is to use its EPC capabilities for in-house projects, and it does
not bid for third-party contracts. All EPC and operation and
maintenance (O&M) contracts are executed on a fixed-price,
date-certain basis. There have been no significant delays or cost
overruns attributable to the concessionaire to date.
IRB intends to continue to expand its orderbook, following a
slowdown in projects bid out by the authority in FY21 due to the
pandemic. Visibility around projected construction revenue is high,
since the EPC contracts relate only to in-house developments. Fitch
does not incorporate upside in the form of EBITDA contributions
from newly constructed greenfield projects in its financial
projections , in line with the sponsor case.
Well-Developed Capital Plan - Infrastructure Development and
Renewal: Stronger
The company has a well-developed capital and maintenance plan for
each road and undertakes inhouse O&M works for each SPV. The
concession agreements provide for periodic inspections to monitor
performance against objectives, with all assets evaluated at least
"very good" under NHAI's highway rating criterion. Capacity is
above the consultant's medium-term traffic forecasts and ongoing
capex requirements are met through internal accruals for all
projects. The concession agreements do not specifically provide for
the recovery of maintenance expenditure through higher rates, but
the tariffs incorporate an escalation factor of 40% of wholesale
price index inflation, providing some protection against rising
costs. The risk is also contractually mitigated, since many O&M
agreements cover the entire concession life.
Mostly Fully Amortising - Debt Structure: Midrange
The group's secured borrowings consist of corporate loans,
non-convertible debentures and SPV-level term loans. The repayment
schedules of all SPV debt and most holding company debt are
structured to fully amortise, while IRB remains exposed to some
residual refinancing risk at the holding company level, including
in relation to the proposed US-dollar notes. The issuing entity for
the proposed notes is a typical offshore SPV structure that is
commonly used in India. The proposed notes will pay a fixed coupon
and Fitch expects exchange-rate risk to be mitigated through a
foreign-currency hedging arrangement. The proposed notes' covenant
package is adequate, and includes limitations on additional
indebtedness and restricted payment conditions applicable on a
consolidated group basis. The proposed notes also benefit from a
six-month interest service reserve account and a dedicated escrow
account at the IRB level.
PEER GROUP
The main peer for IRB's business model is Vinci S.A. (A-/Stable), a
French concessions and contracting group. The Fitch rating case
projects net leverage to average 3.6x between 2020 and 2024,
somewhat lower than IRB's consolidated average net leverage. Vinci
has a global footprint and a more diversified portfolio of toll
roads and airports. It also has a higher level of liquidity
compared with upcoming debt maturities, with cash on hand in excess
of debt maturities due in 2021 and 2022. These factors, in
combination with Vinci's demonstrated superior access to loan and
bond markets, account for the rating differential with IRB.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Consolidated DSCR profile forecast to be consistently in
excess of 1.35x under Fitch's rating case.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Sustained deterioration in consolidated DSCR to below 1.25x
due to higher costs, traffic underperformance or a change in
IRB's financial and dividend policy.
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.
FINANCIAL ANALYSIS
Fitch's base case is aligned with the sponsor case, which assumes,
among other things, a blended traffic growth average of 5.3% on the
Mumbai-Pune toll road, the consultant's "most likely" case for the
private InvIT and a 25% EBITDA margin for the EPC business. Fitch's
rating case incorporates further stress, including the consultant's
"conservative" case for the private InvIT, a lower EBITDA margin
for the EPC business and a stressed interest-rate assumption.
The Fitch rating case forecasts consolidated DSCR to average 1.4x
between FY21 and FY29, with a profile DSCR that averages at 1.3x
between FY22 and FY25, reflecting the group's scheduled debt
repayments.
Fitch assumes the proposed notes are partially refinanced at
maturity and fully amortised over the remaining life of the
Mumbai-Pune concession. The coverage profile also considers a
prudent financial policy and strengthening liquidity position,
which should mitigate refinancing risk. The weaker near-term
profile constrains the expected rating to 'BB(EXP)', despite
Fitch’s expectation for improved coverage beyond FY25. The Fitch
rating case leverage profile declines from a peak of 5.5x in FY21
to 3.6x in FY25.
Fitch has developed a stress case that assumes a 1pp reduction in
traffic growth rates across all toll-road assets, a stressed all-in
bond coupon assumption, as well as a reduction in the EPC EBITDA
margin from 25% to 15%. The DSCR profile is most sensitive to the
EPC margin, with Fitch's stress case average coverage of 1.2x from
FY22 to FY30. This risk is mitigated by IRB's prudent selection
process for new projects and record of maintaining healthy EBITDA
margins for the EPC business to date.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3'. This
means that the other 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.
IRB INFRASTRUCTURE: Moody's Assigns First Time Ba1 CFR
------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba1 corporate
family rating to IRB Infrastructure Developers Limited (IRB). At
the same time, Moody's has assigned a first-time (P)Ba2 rating to
the proposed 3.5-year USD senior secured notes to be issued by
India Toll Roads (ITR).
The outlook for the ratings is stable.
The proceeds from the USD issuance will be used principally to fund
ITR's purchase of onshore senior secured non-convertible debentures
(INR NCDs) to be issued by IRB. IRB, in turn, will use the proceeds
of the INR NCDs mainly to refinance existing debt, to fund capital
expenditure and for general corporate purposes.
ITR is held by a trust and its ownership is not related to IRB. ITR
will not undertake any other business activity other than investing
in the proposed INR NCDs.
In the context of the INR NCD transaction, IRB and its subsidiaries
form a restricted group (RG) as defined by the INR NCDs' debenture
trust deed. The proposed RG will include the following IRB entities
and assets (among others):
(1) IRB Infrastructure Developers Limited
(2) Modern Road Makers Pvt Ltd
(3) IRB MP Expressway Private Limited
(4) IRB Ahmedabad Vadodara super express tollway private limited
The provisional status of the rating is predicated on Moody's
satisfactory review of the final transaction documentation,
including the currency hedging mechanism, and issuance of the INR
NCDs.
RATINGS RATIONALE
"IRB's credit quality reflects (1) India's fair concession and
regulatory framework; (2) its large asset portfolio in a country
with robust demand dynamics; and (3) its established track record
of fundraising and project execution," says Ray Tay, a Moody's
Senior Vice President.
"However, the rating also takes into consideration (1) IRB's high
debt load relative to its cash generation in the next few years,
which is a key rating constraint; (2) its complex capital structure
with secured debt being the dominant class in the capital
structure," adds Tay.
Over the next four years, Moody's expects the company's funds from
operations (FFO)/adjusted debt to be in the range of 3%-6% and cash
interest coverage between 1.3x and 1.5x, positioning IRB at the
lower end of its rating. However, the rating incorporates an
expectation that IRB's credit metrics will continue to improve as
traffic ramps up on new and soon-to-be completed projects.
IRB's assets benefit from long-term concession agreements with the
National Highways Authority of India (NHAI, Baa3 negative) and
state counterparties. The long remaining lives facilitate cash-flow
predictability and refinancing. The weighted average life remaining
for all concessions is around 22 years.
Although IRB's portfolio is large and there are variations in
specific terms, Moody's regards the concessions as fair in terms of
risk allocation. IRB entities have also demonstrated their ability
to implement contracted tariff hikes on a timely basis, which is
credit positive. Moody's regards NHAI as a supportive regulator
that provides timely and clear guidance to the sector, as
demonstrated through its actions during the COVID-19 pandemic and
related government containment measures.
IRB's scale as India's largest privately-owned toll road operator
gives the company certain advantages in terms of cost efficiencies,
diversification and also helps with refinancing. India's toll road
traffic has demonstrated resilience in the face of COVID-19,
rebounding quite strongly from the traffic declines resulting from
India's containment measures. With projected economic recovery in
India and continued growth of the middle class, demand dynamics
should be robust for 2021 and beyond.
IRB's fully integrated toll road operations are credit positive
given the long concession lives, since this facilitates a lifecycle
approach to asset construction and maintenance. IRB has project
construction capability in addition to operations and maintenance.
The company has demonstrated access to institutional capital via
fundraising at the listed group level, as well as innovative
transactions such as the listed Infrastructure Investment Trust
(IRB InvIT Fund) and the unlisted private InvIT (IRB Infrastructure
Trust) with GIC, a sovereign wealth fund of Singapore (Aaa
stable).
Moody's expects IRB's credit metrics to improve materially as
projects are completed and as traffic growth and toll adjustments
kick in for the portfolio as a whole. At the same time, IRB's
credit metrics in the coming years will be weighed down by its high
debt-funded capital spending needs. The expected improvement in
IRB's credit metrics is sensitive to IRB's future investment
decisions regarding new capital expenditure.
Moody's expects India will require significant additional toll road
infrastructure in the next decade, especially post-COVID, to
support its economic recovery. However, IRB has historically been
selective in its investments and has also undertaken deleveraging
measures, as indicated by its strong credit metrics in the past
three financial years before the pandemic.
IRB's capital structure is complex, comprising entirely of secured
debt at various levels of the debt capital structure. The complex
capital structure may lead to subordination risks for creditors,
depending on the priority of claim and underlying security. IRB's
CFR is based on a single class of debt and a single consolidated
legal entity structure. The rating assumes that IRB's plans to
refinance all IRB InvIT Fund's SPV debt at the trust level will be
executed in a timely manner.
IRB's complex capital structure and its leading roles in project
construction and operation, as well as in private and public
investment in infrastructure trusts (InvITs), put greater focus on
governance considerations. IRB's corporate governance benefits from
regulations in relation to its listing as well as the InvIT
regulations of the Securities and Exchange Board of India. External
directors comprise the majority of IRB's board and the company has
limited related party transactions. Nonetheless, IRB did declare
certain compliance and reporting shortcomings during the 2008
initial public offering. These were resolved expeditiously and no
corporate governance issues have been reported since then.
The (P)Ba2 rating for the proposed USD bonds factors in
subordination risks for USD bondholders primarily because: (1) debt
service is reliant on holdco cash flows; and, (2) security provided
for the INR NCD is in relation to a key asset which already has
project finance debt. Security at the USD bonds level comprises a
share pledge of 100% of the equity of ITR as well as a floating
charge over all assets of ITR except the INR NCDs. Security at the
INR NCD comprises among other items, a 49% share pledge of the
equity of IRB MP Expressway Pvt Ltd (IRB MPEPL) and a charge of the
subordinated debt from IRB to IRB MPEPL.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that IRB will: (1)
gradually improve its credit metrics as traffic on new assets
(including in the private InvIT) grows in line with Moody's
projections; (2) maintain a disciplined approach to capital
spending; and (3) execute the construction of new projects within
time and cost budgets.
Given the expectation that financial metrics will only recover from
a trough during the next two years, an upgrade in IRB's CFR is
unlikely in the next 12 to 18 months. Nonetheless, an upgrade is
possible if IRB's financial metrics materially strengthen such that
FFO/debt rises above 11% and cash interest coverage above 2.2x on a
sustained basis. ITR's secured notes rating will also be upgraded
if IRB's CFR is upgraded.
IRB's CFR can be downgraded if its financial metrics fall short of
Moody's projections on a sustained basis, due for example to
corporate actions by IRB and/or an extended material capital
expenditure program. Metrics indicative of a downgrade includes
FFO/debt falling below 4% and cash interest coverage below 1.3x on
a sustained basis. ITR's secured notes rating will also be
downgraded if IRB's CFR is downgraded.
The principal methodology used in these ratings was Privately
Managed Toll Roads Methodology published in December 2020.
IRB Infrastructure Developers Limited is a listed company and one
of India's largest toll road operators. As of December 2020, the
company operated a portfolio of 22 assets spanning 12,537 lane
kilometers.
Other than assets held directly by IRB, the company also holds (1)
a 51% stake in IRB Infrastructure Trust, a private investment in
infrastructure trust and (2) a 16% stake in IRB InvIT Fund, a
listed InvIT. In the fiscal year ending March 2020, 52% of IRB's
EBITDA was derived from its toll road business and the remaining
48% from its in-house engineering and construction business.
As of the end of March 2020, the weighted average concession life
remaining for IRB's portfolio was 22 years. The National Highways
Authority of India is the regulator for the industry and the
concession counterparty for most of IRB's concessions.
J C CONSTRUCTION: ICRA Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of J C
Construction Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B+ (Stable)/A4 ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 3.00 [ICRA]B+ (Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based– 2.00 [ICRA]B+ (Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Non Fund based 11.00 [ICRA]A4 ISSUER NOT
Bank Guarantee COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
The entity was promoted by Mr. J C Hazarika in 1974 as a
proprietorship firm to undertake civil construction works. In 1999,
the firm was converted into a private limited company and was
renamed as J C Construction Private Limited. It is involved in
civil construction works, particularly in road construction and is
registered as a class I contractor with major Government
departments in Assam. JCCPL's day-to-day operations are being
presently looked after by the director Mr.Amitabh Hazarika, son of
Mr J C Hazarika.
KAMALA GINNING: ICRA Keeps B Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Kamala
Ginning And Oil Industries Private Limited in the 'Issuer Not
Cooperating' category. The ratings are denoted as "[ICRA]B(Stable)
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 30.00 [ICRA]B (Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Unallocated 2.00 [ICRA]B (Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in.
Kamala Ginning and Oil Industries Private Limited (KGOIPL), located
at Bhainsa in Adilabad district of Telangana, was incorporated as a
private limited company in April 2012.Earlier it was operating as a
partnership firm namely Kamala Ginning and Oil Industries since
1983.The company is primarily engaged in ginning and oil
extraction. KGOIPL's manufacturing facility includes 60 gins, 12
expellers and 1 press.
KIRPA RICE: ICRA Keeps B+ Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the long-term ratings for the bank facilities of
M/S Kirpa Rice Mills in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 29.00 [ICRA]B+(Stable) ISSUER NOT
COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
KRM, established in 1998, processes and sells Basmati rice. Its
facility in Ladhu Ka (district Firozpur), Punjab, has milling and
sorting capacity of 4 tonne per hour.
KPR AGROS: ICRA Keeps B+ Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the long-term ratings for the bank facilities of
K.P.R. Agros Poultries Private Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]B+(Stable)
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 13.00 [ICRA]B+(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based- 3.50 [ICRA]B+(Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Unallocated 4.50 [ICRA]B+(Stable)/[ICRA]A4;
ISSUER NOT COOPERATING;
Rating continues to remain
in the 'Issuer Not
Cooperating' category
Fund based-
Term Loan 1.50 [ICRA]B+(Stable); ISSUER NOT
Rating continues to remain in
the 'Issuer Not Cooperating'
category
Unallocated 5.50 [ICRA]B+(Stable); ISSUER NOT
Rating continues to remain in
the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in.
K.P.R. Agro Poultries Private Limited (KPRAPPL) was promoted by Mr.
K. Bhaskar Raghu Rama Reddy in 2008 as a proprietorship firm named
K P R Agro. In 2012, the constitution of the firm was changed to
private limited and name was changed to K.P.R. Agro Poultries
Private Limited. The company is engaged in the business of
commercial layer poultry farming. The company operates through its
unit located at Hagarai Bommanahalli (capacity of 529000 layers),
Bellary district of Karnataka and is involved in sales of table
eggs.
KPR INFRA: ICRA Keeps B+ Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Sri Kpr
Infra & Projects Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.67 [ICRA]B+(Stable); ISSUER NOT
Fund Based TL COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term- 6.00 [ICRA]B+(Stable); ISSUER NOT
Fund Based CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term- 5.86 [ICRA]B+(Stable); ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term- 10.00 [ICRA]A4; ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term– 10.00 [ICRA]A4; ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
SKIPL was incorporated in 2007-08 as a 100% subsidiary of Sri
Venkateswara Pipes Limited (SVPL) for undertaking civil
construction contracts primarily in water supply works in Andhra
Pradesh. Consequent to the merger of SVPL with Sri KPR Industries
Limited (SKIL) with effect from April 02, 2012 in which the latter
took over the entire operations of SVPL together with its assets
and liabilities at book values – SKPRIAPL is now a wholly owned
subsidiary of Sri KPR Industries Limited. SKPRIL is engaged in
manufacture of Asbestos cement pressure pipes which is largely used
by civil contract.
LAKSHMI POULTRY: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Sri
Lakshmi Poultry Complex Private Limited in the 'Issuer Not
Cooperating' category. The ratings are denoted as
"[ICRA]B+(Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 32.00 [ICRA]B+(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based- 3.50 [ICRA]B+(Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Unallocated 4.50 [ICRA]B+(Stable)/[ICRA]A4;
ISSUER NOT COOPERATING;
Rating continues to remain
in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in.
Sri Lakshmi Poultry Complex Private Limited started as a
partnership firm in 1989 and subsequently incorporated as a private
limited company in October 2014. The company is engaged in
commercial layer poultry farming. The total installed capacity of
1316912-layer birds is spread across five farms in different
locations in Devangere district in Karnataka.
LAKSHMI VENKATESWARA: ICRA Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Sri
Lakshmi Venkateswara Modern Rice Industry in the 'Issuer Not
Cooperating' category. The ratings are denoted as
"[ICRA]B+(Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 9.25 [ICRA]B+(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Non Fund Based 0.50 [ICRA]A4 ISSUER NOT
COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
Unallocated 0.25 [ICRA]B+(Stable) ISSUER NOT
COOPERATING/[ICRA]A4 ISSUER
NOT COOPERATING; Rating
continues to remain in the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in.
Sri Lakshmi Venkateswara Modern Rice Industry (SLVMRI) was
incorporated as a partnership firm in the year 2007. The firm had
setup a rice mill with production capacity of 57600 TPA to produce
raw & boiled rice. The Firm operates in three shifts per day. The
firm is located at Nellore district of Andhra Pradesh. The firm's
operations are overseen by the partner Mr. K. Mallikarjuna Naidu,
who is also the managing partner of the firm. All the partners are
from the same family. The family members have been involved in rice
milling business from last 11 years.
MADHUR ENGINEERS: ICRA Keeps B+ Debt Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Madhur
Engineers Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 60.00 [ICRA]B+ (Stable); ISSUER NOT
Fund Based CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
Madhur Engineers Private Limited (MEPL) is a trader of special
purpose carbon /alloy steel and bright bars. The company purchases
steel from JSW Steel and supplies it to forging and machining
companies located in the state of Maharashtra. The company also
operates a dedicated warehouse for JSW to store steel inventory for
all the steel to be sold at Alandi (Maharashtra) and Chennai.
MAHA DURGA: ICRA Keeps C+ Ratings on Watch Developing
-----------------------------------------------------
ICRA has retained the ratings for the bank facilities of Maha Durga
Charitable Trust (MDCT) on watch with developing implications.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Fund 60.08 [ICRA] C+; continues to be
based- TL on watch with developing
implications
LT-Fund based- 10.92 [ICRA] C+; continues to be
Unallocated on watch with developing
implications
Rationale
Maha Durga Charitable Trust (MDCT) sought approval for availing
loan restructuring relief under the resolution framework for
Covid-19 related stress, made available by the Reserve Bank of
India (RBI), as on 27th August 2020. Subsequently, the bank
conditionally invoked Restructuring Plan (RP) as on 31st December
2020 subject to approval from bank's competent authority/RBI and
further decision on restructuring would be taken after getting
clarification w.r.t. eligibility of the company in the circular for
Resolution Framework for Covid-19 related stress by the banks from
their respective competent authority. Prior to that, the company
had availed moratorium till August 2020, provided as relief from
Covid-19 stress by the banks.
ICRA took note of the request placed by the company and subsequent
bank's conditional approval of invocation of RP before the deadline
of 31st December 2020. ICRA will continue to monitor the
developments regarding the clarification sought for implementation
of the RP and its impact on the credit profile of the company and
will accordingly take suitable rating action, in case warranted.
MDCT is registered under Societies Registration Act XXI, 1860 since
1995. It has set up a 100-bedded multi-super specialty hospital,
named MD City Hospital at North Ex, Model Town. OPD admissions were
started in the hospital in September 2018 and IPD admissions were
started in September 2019. The super specialties in the hospital
include - Cardiology, Nephrology, Joint Replacement, Uro Surgery,
General and Laparoscopic Surgery, Gastroenterology and Medical
Oncology.
MIDAS AGRO: ICRA Keeps B Debt Rating in Not Cooperating Category
----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Midas Agro
Foods Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based 9.76 [ICRA]B (Stable) ISSUER NOT
Limits COOPERATING; Rating Continues
to remain under Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
Midas Agro Foods Pvt. Ltd. (MAFPL) took over SRGM on August 26th,
2016, along with all its assets and liabilities. MAFPL is primarily
engaged in the milling of Rice with an installed capacity of 12 tph
which is situated in Moga (Punjab). The company has 3 sortex plants
with capacity of 3 tons/hour each.
NIRWANA HOTELS: ICRA Lowers Rating on INR7.77cr LT Loan to D
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Nirwana
Hotels and Resorts Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 2.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based/CC Rating downgraded from [ICRA]B
(Stable) and continues to remain
in the 'Issuer Not Cooperating'
category
Long Term- 7.77 [ICRA]D ISSUER NOT COOPERATING;
Fund Based TL Rating downgraded from [ICRA]B
(Stable) and continues to remain
in the 'Issuer Not Cooperating'
category
Long Term– 0.02 [ICRA]D ISSUER NOT COOPERATING;
Non-Fund Based Rating downgraded from [ICRA]B
(Stable) and continues to remain
in the 'Issuer Not Cooperating'
category
Rationale
The rating downgrade factors in the delay in debt-servicing, as
confirmed by the banker. The rating is based on limited information
on the entity's performance since the time it was last rated in
February 2020. The company had delayed in repayment of principal
and/or interest on any fund-based bank facility which has a clear
mention of due date like term loan/ working capital demand loan.
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 1993, NHRPL is engaged in hospitality services
through a single, 59-room resort, "Hoysala Village Resort" ("the
resort") located in Hassan, Karnataka, about 200 km from Bangalore.
The resort is spread over seven acres completely owned by the
promoters, with about 30 cottages, 10 suites, nine villas and 10
palace rooms. Apart from lodging, Hoysala Village Resort offers a
variety of other facilities to its guests like a swimming pool,
indoor sports, massage and trekking options. The resort also has
multi-cuisine restaurant, a spa, a souvenir shop and a café to
cater to varied preferences of its domestic and foreign guests. The
company is promoted by Mr. K. R Alwa and his family. The promoters
have a presence across real estate and agricultural businesses
through their other companies, such as Civic India Housing Private
Limited and Civic India Mphar Private Limited.
PRESIDENCY EXPORTS: ICRA Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA has retained the long-term ratings for the bank facilities of
Presidency Exports & Industries Ltd in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]D/[ICRA]D ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 13.00 [ICRA]D/[ICRA]D ISSUER NOT
bank limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Presidency Exports & Industries Ltd, promoted by Kolkata based
Bajoria family, was incorporated in the year 1919. The company had
been engaged in the export of iron ore fines from the year 2007
onwards. However, unfavourable changes in the Government policies
related to iron ore mining in the past few years adversely impacted
its revenues from this segment. The company also exports onion and
rice to Bangladesh. It also has a warehouse in Rishra which has
been leased to the corporate.
R K BABU: ICRA Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------
ICRA has retained the ratings for the bank facilities of R K Babu
Trading Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+ (Stable)/A4 ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 1.20 [ICRA]B+ (Stable); ISSUER NOT
Fund Based TL COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term- 11.00 [ICRA]B+ (Stable); ISSUER NOT
Fund Based CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term-
Non-Fund Based 2.00 [ICRA]A4 ISSUER NOT
COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/ limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 2012, RK Babu Trading Private Limited ('RKB', 'the
Company') is based out of Jalna (Maharashtra), involved in trading
of cement and fertilizers and has distributorship of renowned
fertilizer and cement manufacturing companies. The
company is promoted by Mr. Rajendra Jindal who has experience of
more than two decades in fertilizers and cement trading business.
Till FY2013, Mr. Jindal was operating the distributorship business
under his own proprietorship concern however the business has been
transferred to RKB from FY2014 onwards.
RAM SWITCHGEARS: ICRA Reaffirms D Rating on INR49cr Loans
---------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Shri Ram
Switchgears Limited (SRSL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-
Cash Credit 17.00 [ICRA]D; Reaffirmed
Non-fund based-
Bank Guarantee 32.00 [ICRA]D; Reaffirmed
Rationale
The rating reaffirmation factors in the continued irregularities in
servicing of bank dues on the non-fund based facilities by SRSL,
owing to its stretched liquidity. Furthermore, the financial risk
profile of the company remains weak because of a decline in its
scale of operations and losses at the net level. In addition to
this, the debt protection metrics and coverage indicators remain
under pressure. The ratings are further constrained by the high
working capital intensity of SRSL, as can be seen from NWC/OI of
~230% in FY2020. The company's receivables have been highly
stretched, resulting in the increased working capital intensity.
ICRA notes that the business growth of SRSL is dependent upon
successful bidding for tenders for EPC contracts floated by the
Madhya Pradesh electricity board. Notably, these contracts account
for most of SRSL's revenues. Thus, its customer concentration
remains high as more than 80% of the revenues have been contributed
by a single customer.
The business profile of the company, however, is supported by
experienced promoters with a track record of more than three
decades in the industry, which has helped them in maintaining
healthy relations with customers and suppliers. ICRA also notes
healthy order book of ~INR60 crore at the end of December 2020,
which provides near to medium term revenue visibility.
Key rating drivers and their description
Credit strengths
* Experienced promoters with established track record of
operations: The promoters of the company have been involved in
transformer manufacturing business for the past three decades.
Their extensive experience helps the company in maintaining healthy
relations with customers and suppliers.
* Healthy order book provides revenue visibility: SRSL has healthy
orders in hand of ~INR60 crore, which are expected to be completed
soon, thus providing near-to-medium term revenue visibility. This
in turn is expected to support the scale of the
company.
Credit challenges
* Irregularities in debt servicing: There has been irregularities
in servicing of non-fund based facilities due to liquidity issues
as the company's receivables have been stretched with limited
buffer in its fund-based limits.
* Weak financial profile due to decline in scale of operations and
losses at net levels; debt coverage indicators remain under
Pressure: The company's financial risk profile has remained on a
weaker side as its scale has been declining considerably for the
last two fiscals, leading to losses at the net level as seen in
FY2020 and H1 FY2021. Moreover, the company's debt protection
metrics and coverage indicators remain under stress.
* High working capital intensity: The highly stretched working
capital cycle of the company is reflected by NWC/OI of ~230% in
FY2020. Hence, its liquidity profile remains under pressure.
* High customer-concentration risk: The client-concentration risk
of the company is high, given that most of the revenues is
contributed by single client (the top customer accounted for more
than 80% of revenues in FY2020) in the past couple of years.
* Business growth dependent upon successfully bidding for
tenders/orders: The company faces stiff competition from many
organised and unorganised players in the transformer industry.
Also, SRSL has to successfully bid for tenders/orders (primarily
from the Madhya Pradesh electricity board) for business growth.
Liquidity position: Poor
SRSL has poor liquidity profile, given its negative cash accruals
and high working capital cycle. Buffer from free cash and working
capital limits too remained negligible.
Rating sensitivities
Positive factors - ICRA could upgrade the rating if the company
services its debt obligations in a timely manner on a sustained
basis.
Shri Ram Switchgears Limited (SRSL), promoted by the Jhalani family
of Ratlam (Madhya Pradesh) since 1985, manufactures electrical
items such as distribution transformers, switchgear, meter boxes,
feeder pillars, distribution boxes, and junction boxes used in the
distribution of power and also undertake erection, installation,
and operation and maintenance of these items for its customers. Its
manufacturing units are located in Ratlam. SRSL's customer profile
mainly consists of power discoms in Madhya Pradesh and Mumbai.
RELIABLE AGENCIES: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Reliable
Agencies in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 0.30 [ICRA]B+(Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based- 5.21 [ICRA]B+(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Unallocated 4.49 [ICRA]B+(Stable)/[ICRA]A4;
Limits ISSUER NOT COOPERATING;
Rating continues to remain
under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/ limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Reliable Agencies was established in the year 1972 by Mr.
M.Venkataraman with the objective of engaging in the business of
distributing welding equipment and consumables. Over the years the
entity has expanded its business into distribution of all the
reputed brands of welding equipment and consumables. The firm
currently has exclusive distribution rights for the products of
Ador, D&H Secheron and Schutz Carbon in the Hyderabad region of
Telangana.
SOLIDUS HI-TECH: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Solidus
Hi-Tech Products Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B+ (Stable)/A4 ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 7.17 [ICRA]B+(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term- 4.25 [ICRA]A4 ISSUER NOT
Non-Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term/ 15.50 ICRA]B+ (Stable)/[ICRA]A4
Short Term- ISSUER NOT COOPERATING;
Fund Based Rating continues to remain
under 'Issuer Not Cooperating'
category
Long Term/ 0.08 [ICRA]B+ (Stable)/[ICRA]A4
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating continues to remain
under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/ limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Solidus Hi-Tech Products Private Limited (SHTP) is a part of Pune
Metagraph group of companies and is engaged in manufacturing of
Press Metal components, Aluminium Heat Sinks and Copper Bus Bars.
The company started with supplying the above parts to Schneider
Electric India Pvt. Ltd. (earlier known as American Power
Conversion India Limited) for their UPS (Uninterrupted Power
supply) equipments for industries and gradually grew with them as
the scale of operations of Schneider increased.
The company currently has manufacturing facilities at Pune and
Bangalore. The customer profile of the company is comprised of
reputed companies such as Schneider Electric India Private Limited,
ABB India Limited, John Deere India Private Limited, Tyco
Electronics Corporation India and John Deere USA.
SONRISE TEA: ICRA Lowers Rating on INR9.50cr LT Loan to B+
----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Sonrise
Tea Processing Company Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 9.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based– COOPERATING; Rating downgraded
Cash Credit from [ICRA]BB- (Stable) and
continues to remain under
'Issuer Not Cooperating'
Category
Short Term– 1.00 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding Sonrise Tea Processing Company Private Limited
performance and hence the uncertainty around its credit risk. ICRA
assesses whether the information available about the entity is
commensurate with its rating and reviews the same as per its
"Policy in respect of non-cooperation by a rated entity" available
at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade" As part
of its process and in accordance with its rating agreement with
Sonrise Tea Processing Company Private Limited, ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with the aforesaid policy of
ICRA, a rating view has been taken on the entity based on the best
available information.
Incorporated in 1996 by the third generation of the Gadre family
Sonrise is engaged in tea processing & blending. The company along
with its group companies procures tea from the north-eastern and
southern states of India and markets them on a wholesale basis in
Maharashtra, Karnataka and Goa. The blended tea is marketed under
different brands across states through company owned branches and
also through the group companies namely; Harry & Company Private
Limited.
SRINIDHI REAL: ICRA Keeps B Debt Rating in Not Cooperating
----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Srinidhi
Real Estate And Constructions in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B (Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Unallocated 8.00 [ICRA]B (Stable) ISSUER NOT
COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in.
Srinidhi Real Estate and Constructions was incorporated as a
partnership firm on 19 November 2012 with 18 partners under Indian
Partnership Act 1932 with Registrar of Firm, Adilabad. The firm is
involved in development of real estate (acquiring land and
developing by plotting and constructing structures, apartments,
independent houses, etc). The promoters have earlier experience in
real estate and have completed Manjunath Apartment (a G+3 floor
apartment) in Mancherial in the past.
TEEKAY MARINES: ICRA Keeps B Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Teekay
Marines Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B (Stable)/A4 ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based– 10.00 [ICRA]B (Stable) ISSUER NOT
Export Packing COOPERATING; Rating continues
Credit (EPC) to remain under 'Issuer Not
Cooperating' category
Fund based– 3.00 [ICRA]B (Stable) ISSUER NOT
Foreign Bill COOPERATING; Rating continues
Discounting (FBD) to remain under 'Issuer Not
Cooperating' category
Fund based– 1.50 [ICRA]B (Stable) ISSUER NOT
Standby Line COOPERATING; Rating continues
Of Credit (SLC) to remain under 'Issuer Not
Cooperating' category
Non-fund based– 0.30 [ICRA]A4 ISSUER NOT
Credit Exposure COOPERATING; Rating continues
Limit to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
TMPL was incorporated in April, 2001 and is involved in the
processing and export of different varieties of shrimp andother
seafood. The company's processing facility is located at the
Chandaka Industrial Estate in Bhubaneswar, Odisha. TMPL is
promoted by Mr. T. K. Narayanan and his family.
VEER ANJANAYA: ICRA Withdraws B+ Rating on INR7.0cr Loans
---------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of Sri
Veer Anjanaya Agro Foods (Veer Anjaneya), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.50 [ICRA]B+ (Stable); ISSUER NOT
Cash Credit COOPERATING Withdrawn
Long Term- 2.50 [ICRA]B+ (Stable); ISSUER NOT
Term Loan COOPERATING Withdrawn
Rationale
The ratings assigned to Veer Anjanaya have been withdrawn at the
request of the company and based on the no-objection certificate
provided by its bankers and in accordance with ICRA's policy on
withdrawal and suspension.
ICRA is withdrawing the rating and that it does not have
information to suggest that the credit risk has changed since the
last time the rating was last reviewed.
Key Rating Drivers
Key rating drivers has not been captured as the rated instruments
are being withdrawn.
Liquidity Position:
Liquidity position has not been captured as the rated instruments
are being withdrawn.
Rating Sensitivities
Rating sensitivities have not been captured as the rated
instruments are being withdrawn.
Incorporated in 2015, Sri Veer Anjanaya Agro Foods (Veer Anjaneya)
is a partnership firm managed by Mr. M R Vasanth and Mr. M R
Prathik. The firm is engaged in milling and trading of rice, broken
rice, bran and husk. The firm's manufacturing facility is located
in Raichur in Karnataka with an aggregate installed capacity of 4
tons per hour of milling. The firm procures majority of its raw
material requirements from farmers located in Raichur and its
neighbouring districts in Karnataka and sells them in the domestic
market. The firm sells Sona Masuri rice in bulk quantities under
different brand names such as Yoddha, Amrit, SV Gold, Choice India,
Little drops, etc. and has presence mainly in Karnataka and Tamil
Nadu.
=================
I N D O N E S I A
=================
LIPPO KARAWACI: S&P Affirms 'B-' ICR on Reduced Cash Flow Deficit
-----------------------------------------------------------------
On Feb. 3, 2021, S&P Global Ratings affirmed its 'B-' long-term
issuer credit rating on PT Lippo Karawaci Tbk. and the 'B-'
long-term issue rating on the company's guaranteed senior unsecured
notes.
Excluding asset sales, cash flow deficit at Lippo's holding company
to stay significant in 2021, albeit reduced from 2020. S&P
forecasts the operating cash flow deficit at Lippo's holding
company (excluding one-off events like asset sales or share
disposal) to reduce to Indonesian rupiah (IDR) 1.6 trillion in
2021, from about IDR2.5 trillion in 2020. However, net proceeds
from the sale of Puri Mall will help alleviate the cash burn to
about IDR600 billion this year, assuming no further asset sales.
This is based on S&P's expectation that Lippo will collect IDR1.8
trillion–IDR2.0 trillion in cash from property sales this year.
S&P said, "In addition, we forecast Lippo's total rental expense,
including rental support, will decrease to about IDR800 billion in
2021, from about IDR1 trillion. A hospital lease restructure with
First REIT will reduce Lippo's rental payment by about IDR350
billion in 2021, followed by an annual escalation of 4.5% in 2022.
However, the reduction is partially offset by additional rental
support to Lippo Malls Indonesia Retail Trust (LMIRT) as part of
the agreement in the sale of Puri Mall, which we estimate at about
IDR150 billion annually.
"We expect cash collection from property sales and dividends will
only cover about half of the company's large cash outflow,
including IDR2 trillion for interest and rental expense, and IDR1.6
trillion-IDR1.7 trillion in construction costs. Although the net
proceeds from the sale of Puri Mall will help to alleviate the
operating cash flow deficit this year, we believe Lippo needs time
to ramp up its property sales and dividends from subsidiaries and
investments, so as to reduce its reliance on asset sales to fund
its annual cash deficit.
"After the Puri Mall sale, we believe there is a limited number of
sizable assets that Lippo could monetize on a timely basis to make
up the sales shortfall.
"In addition, we expect the company to roll over its IDR970 billion
short-term loans due this year to maintain its cash buffer."
A sustainable reduction in operating cash flow deficit will be
contingent upon a sharp pick-up in marketing sales and cash
collection at Lippo's holding company amid a challenging operating
environment.
S&P said, "In our view, further reduction of operating cash flow
deficit at Lippo's holding company to IDR300 billion-IDR400 billion
in 2022 will require the holding company's annual marketing sales
to almost double from 2020 levels. We believe this will test the
company's execution capability, as buyer sentiment will be highly
dependent on the roll-out and effectiveness of the Indonesian
government's vaccination efforts."
The reduction in operating cash flow deficit is also dependent on
Lippo's ability to manage its construction costs and operating
expenses. The high construction cost is associated with the
company's legacy high-rise projects scheduled for completion by
first half of 2021. S&P believes Lippo's net operating cash flow
could improve in the second half of 2021, as most of the company's
construction costs will stem from landed housing projects, which
enjoy a higher cash margin of 50%-60%.
S&P said, "We estimate Lippo needs to achieve marketing sales of at
least IDR2.5 trillion for its cash flow to almost break even and
reduce reliance on asset monetization. A 20% lower departure from
our forecast on marketing sales will delay the company's cash flow
breakeven."
Liquidity in Lippo's holding company remains sufficient,
underpinned by the completion of the Puri Mall disposal.
S&P said, "We estimate the 2020 year-end cash balance at Lippo's
holding company to stand at IDR2.3 trillion-IDR2.4 trillion. The
IDR1 trillion net proceeds from the Puri Mall sale will partially
ease the IDR1.6 trillion operating cash flow deficit we anticipate
for 2021. This is assuming Lippo receives the repayment of IDR424
billion for vendor financing this year. While the net proceeds
after vendor financing are lower than our previous estimate, this
is partially offset by expectation of higher sales and lower rental
expenses as mentioned above.
"Lippo's shareholding of LMIRT increased to 58.3% from 32% after
the Puri Mall sale. We believe Lippo has the flexibility to
monetize the shares of LMIRT in times of liquidity stress.
Nevertheless, we believe Lippo will balance the need for cash with
maintaining an inflow of dividends from the REIT.
"The negative outlook reflects our view that Lippo's operating cash
flow deficit at the holding company level remains significant for
the next 12 months. We also expect execution risk to remain, given
the company's plans to double its marketing sales at the holding
company in 2021 from 2020 levels to reduce its operating cash flow
deficit.
"We could lower the ratings if Lippo cannot maintain a liquidity
cushion that allows it to service interest and rental charges for
more than a year. Evidence of rating pressure includes the sum of
the holding company's cash balance and operating cash flow falling
below IDR2 trillion. This could happen if Lippo fails to collect at
least IDR1.5 trillion from property sales, or if the company fails
to roll over its short-term loans.
"We could also lower the ratings if we believe the improvement in
property sales at the holding company level is unsustainable, such
that Lippo requires continued asset monetization to sustain its
cash balance.
"We could revise the outlook to stable if we expect Lippo to
materially reduce its operating cash flow deficit, and trend toward
breaking even its cash flow at the holding company level, thereby
reducing reliance on asset monetization. Cash collection from
property sales of at least IDR2.5 trillion annually, and dividend
income of at least IDR800 billion annually could indicate a
sustainable capital structure."
Lippo is the property arm of the Lippo conglomerate. The company's
key business divisions include property development, operation of
hospitals and commercial properties (hospitality and retail malls),
as well as the management of Singapore-listed LMIRT. Lippo mainly
targets the Indonesian middle- to upper-class segment in its
property development and healthcare businesses. Two key listed
subsidiaries generate the bulk of Lippo's revenue: PT Lippo
Cikarang Tbk., a property developer; and PT Siloam International
Hospitals Tbk., the largest hospital operator in Indonesia.
=============
M Y A N M A R
=============
MYANMAR: Operations Resume for Many Singapore Businesses
--------------------------------------------------------
Channel News Asia reports that operations have mostly resumed for
Singapore businesses in Myanmar, recovering from temporary
disruptions earlier in the week after a military coup in the
country.
But many declined comment on their outlook for the long term,
citing uncertainty over the evolving situation and political
sensitivities, and are monitoring developments closely, the report
says.
The Singapore Business Federation (SBF) told CNA that it has
reached out to Singapore companies with a presence in Myanmar.
"The situation in Myanmar is fluid and still unfolding. SBF is in
touch with Singapore companies with operations in Myanmar," said
SBF's CEO Lam Yi Young in an emailed response, CAN relays. "The
companies we have spoken to shared that they are monitoring the
situation to see how it evolves."
According to CNA, Myanmar's military seized power on early Feb. 1
in a coup against the democratically elected government of Nobel
laureate Aung San Suu Kyi, who was detained along with other
leaders of her National League for Democracy (NLD) party.
CNA relates that the military, which declared a one-year state of
emergency in Myanmar, said it had carried out the detentions in
response to "election fraud" in the general election held last
November, which the NLD won in a landslide.
Media reports on Wednesday night [Feb. 3] said Myanmar police had
filed charges against Aung San Suu Kyi for allegedly illegally
importing communications equipment and she will be detained until
Feb. 15.
=====================
N E W Z E A L A N D
=====================
MAGSONS INVESTMENTS: Nido-Link Firm Goes Into Liquidation
---------------------------------------------------------
Stuff.co.nz reports that another company connected to ambitious
Auckland furniture mega-store Nido has gone into liquidation.
Magsons Investments, a property company, went into liquidation on
January 28. The company dates back to 2000, and held a stake in the
joint venture which owns the unfinished Nido building and property,
Stuff discloses.
It was the guarantor of a NZD25 million-plus loan owed to the
development's mortgagee.
Nido itself remains open, although its trading company Magsons
Hardware went into receivership in December.
Vijay Holdings, the construction company which was building the
mega-store, was the first to collapse, in November last year, with
the building incomplete and owing NZD2.6 million.
All three companies had a common sole director, Nido founder Vinod
Kumar, the report notes.
According to Stuff, Magsons Investments' liquidators, Daran Nair
and Heiko Draht of Greenlane Chartered Accountants, said the
company owned was a part owner of Nido's property at 158-160
Central Park Drive in Auckland.
The company entered into a joint venture with Central Park Property
Investment, and the venture was registered as Everest Central
Investments Limited (ECIL).
Initially Magsons Investments had a 20% stake in ECIL but over time
the other partner, Central Park, acquired some of Magsons' shares.
Company records show it no longer holds any.
While ECIL was the borrower, the report said Magsons made
guarantees to the mortgagee, mezzanine lender Pearlfisher Trustee
Limited, for a NZD25 million loan.
Meanwhile, Kare Johnston of Magsons Hardware's receivers, Mcgrath
Nichol, said there was no fresh update to be made, Stuff reports.
"We are continuing to trade and the sale process is ongoing," the
report quotes Ms. Johnston as saying.
Stuff says Vijay's creditors voted to change liquidators and the
new liquidator, Greg Sherriff of Waterstone Insolvencies, said his
first report wasn't due for a few months.
He said he could not go into details.
"As far as Vijay is concerned, our investigations continue to
identify assets belonging to the company and certain recovery
actions. A demand has already been made to recover funds as a
result of this."
=================
S I N G A P O R E
=================
SOUTHSEA MARINE: Creditors' Meeting Set for February 9
------------------------------------------------------
A meeting of the creditors of Southsea Marine Pte Ltd will be held
on Feb. 9 at 4:00 p.m. via video-conference and/or tele-conference
in line with the COVID-19 (Temporary Measures) Act 2020.
The details of the meeting will be circulated to creditors who have
filed a Proof of Debt and indicated their interest in attending the
meeting.
To be entitled to attend, nominate and vote at the meeting, a Proof
of Debt and form of proxy must be lodged with the liquidator no
later than Feb. 5, 2021 at 4:00 p.m.
The purpose of the meeting is to:
* approve the terms of the Deed of Novation and Assignment dated
August 7, 2020 pursuant to the Set-off and Settlement Agreement
("SOSA") dated June 29, 2020 entered into between Swiber Holdings
Limited (Judicial Managers Appointed), Vallianz Holdings Limited
and Swiber Offshore Construction Pte Ltd (Judicial Managers
Appointed) to settle the owings outstanding between various
Vallianz entities and Swiber entities as at December 31, 2016;
* approve the terms of the Letter Agreement dated August 7, 2020
entered into between Southsea Marine Pte Ltd (In Compulsory
Liquidation) and SHL to record their agreement in connection with
SHL's assumption of liabilities and the assignment of receivables
to SHL under the Deed of Novation and Assignment;
* appoint a Committee of Inspection ("COI") pursuant to Section
277(1) of the Companies Act (Cap 50);
* approve the Liquidator's first interim billing and
disbursements;
* propose giving the Liquidator power to appoint solicitors;
* consider any other matter which may properly be brought before
the meeting.
The appointed liquidator can be reached:
Andrew Grimmett
Deloitte & Touche LLP
c/o 6 Shenton Way
OUE Downtown 2 #33-00
Singapore 068809
Southsea Marine Pte. Ltd. and Swiber Atlantis Pte. Ltd. were placed
into liquidation under section 254(1)(e) of the Companies Act (Cap
50) on May 5, 2017. Messrs Tam Chee Chong and Andrew Grimmett, of
Deloitte & Touche LLP, have been appointed as the joint and several
liquidators of Southsea Marine Pte. Ltd. and Swiber Atlantis Pte.
Ltd.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***