/raid1/www/Hosts/bankrupt/TCRAP_Public/210211.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, February 11, 2021, Vol. 24, No. 25
Headlines
A U S T R A L I A
FOB FOODS: First Creditors' Meeting Set for Feb. 18
GENESIS CARE: S&P Affirms B Rating Despite Lower Treatment Volumes
MIKCON GROUP: First Creditors' Meeting Set for Feb. 19
NUDIE JUICE: ATO Wins AUD137MM from Binetters' Israeli Banks
SNACKING INVESTMENTS: S&P Assigns 'B' ICR, Outlook Stable
WALEYCORP PTY: Second Creditors' Meeting Set for Feb. 18
C H I N A
FOSUN INT'L: Moody's Affirms Ba3 CFR, Alters Outlook to Stable
HNA GROUP: Units Seek Repayment of Funds Siphoned Off By Parent
XINHU ZHONGBAO: Fitch Affirms B- LongTerm Foreign-Currency IDR
I N D I A
AKAL PIPE: CARE Moves C Debt Rating to Not Cooperating Category
AKSH OPTIFIBRE: CARE Moves D Debt Ratings to Not Cooperating
BAJRANG AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
BHIND MIHONA: CARE Keeps D Debt Rating in Not Cooperating Category
BINA KHIMLASA: CARE Keeps D Debt Rating in Not Cooperating
COLOUR COTTEX: CARE Keeps D Debt Rating in Not Cooperating
EARTHEN TREASURES: CARE Keeps D Debt Rating in Not Cooperating
ESSEL AHMEDABAD: CARE Keeps D Debt Rating in Not Cooperating
ESSEL GWALIOR: CARE Keeps D Debt Rating in Not Cooperating
ESSEL INFRAPROJECTS: CARE Keeps D Debt Rating in Not Cooperating
ESSEL WALAJAHPET: CARE Keeps D Debt Rating in Not Cooperating
GONDIA EDUCATION: CARE Lowers Rating on INR6.0cr LT Loan to C
GOVIND REALTY: CARE Keeps D Debt Rating in Not Cooperating
JAIN IRRIGATION: S&P Withdraws 'D' Long-Term Issuer Credit Rating
KRISHNA REDDY: CARE Keeps D Debt Rating in Not Cooperating
LUDHIANA TALWANDI: CARE Keeps D Debt Rating in Not Cooperating
MANGLAM FOODS: CARE Lowers Rating on INR8.83cr LT Loan to C+
MEHTA AND ASSOCIATES: CARE Keeps D Debt Ratings in Not Cooperating
MHOW GHATABILLOD: CARE Keeps D Debt Rating in Not Cooperating
MUKARBA CHOWK-PANIPAT: CARE Keeps D Debt Rating in Not Cooperating
OSWAL KNITTING: CARE Keeps D Debt Ratings in Not Cooperating
PAAPPAI EXPORTS: CARE Keeps D Debt Rating in Not Cooperating
PLATINA STEELS: CARE Keeps D Debt Rating in Not Cooperating
PRASAD AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
RISHABH CONSTRUCTIONS: CARE Reaffirms D Rating on INR10.50cr Loan
SAGAR DAMOH: CARE Keeps D Debt Rating in Not Cooperating Category
SAI KRIPA: CARE Keeps D Debt Rating in Not Cooperating Category
SEA BLUE: CARE Assigns C (Is) Issuer Rating
SHIVA TEXFABS: CARE Keeps D Debt Ratings in Not Cooperating
SUSHEEL ENGINEERS: CARE Keeps D Debt Ratings in Not Cooperating
J A P A N
ANA HOLDINGS: Egan-Jones Lowers Senior Unsecured Ratings to B-
JAPAN TOBACCO: To Close Tobacco Plant; Shed 3,000 Jobs
NISSAN MOTOR: Trims Full-Year Loss Outlook as Sales Recover
M Y A N M A R
MYANMAR: Braces for More Anti-Coup Protests as Crackdown Looms
N E W Z E A L A N D
[*] NEW ZEALAND: Clamps Down on Property Investors as Prices Soar
S I N G A P O R E
KS ENERGY: Judicial Managers Receive Approval to Wind Up Unit
NO SIGNBOARD: Posts SGD1.68 Million Net Loss for Q1 Ended Dec. 31
SUNVIC CHEMICAL: To Be Delisted from SGX Mainboard
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A U S T R A L I A
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FOB FOODS: First Creditors' Meeting Set for Feb. 18
---------------------------------------------------
A first meeting of the creditors in the proceedings of FOB Foods
Pty Ltd, trading as Co Hanh, will be held on Feb. 18, 2021, at 2:30
p.m. via virtual meeting.
Matthew Kucianski of Worrells Solvency & Forensic Accountants was
appointed as administrator of FOB Foods on Feb. 8, 2021.
GENESIS CARE: S&P Affirms B Rating Despite Lower Treatment Volumes
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' ratings on oncology provider
Genesis Care Pty Ltd. and its rated debt.
S&P said, "The negative outlook reflects our view that
GenesisCare's financial credit metrics will remain under pressure
in the next few quarters. In addition, there is high uncertainty
regarding the pandemic and its continued adverse economic impact.
This is reducing the volume of patient treatments and delaying
improvement in GenesisCare's financial position.
"We expect GenesisCare's credit metrics to remain under pressure.
In our base case, we project leverage to be around 7.5x-7.7x in
fiscal 2021 (ending June 30, 2021) before improving to around the
mid-to-high 6x range in fiscal 2022--absent any additional debt
funded acquisitions or distributions to shareholders, which we have
not factored into our base case.
"In addition, a higher interest expense following the partial
debt-funded acquisition of 21C and increased capital expenditure
will weigh on free operating cash flow (FOCF). We do not expect
FOCF to turn positive until fiscal 2022 (2021 in our previous base
case)."
An increase in COVID-19 cases across GenesisCare's' key markets is
undermining treatment volumes and patient confidence in attending
appointments. The COVID-19 pandemic has seen patient treatment
volumes decrease, particularly across the U.S., U.K., and Spain as
cancer diagnosis volumes have waned. This has been driven by
patients remaining wary of visiting their medical practitioner as
well as medical care becoming unaffordable for many during the
pandemic. S&P said, "We expect patient number throughput to slowly
return as COVID-19 inoculations take effect and the economic
recovery begins. While subdued patient numbers will have a negative
impact on fiscal 2021 results, we expect some pent-up demand to
flow through to fiscal 2022 and 2023 results."
Delays to an effective rollout of the COVID-19 vaccination could
hamper GenesisCare's recovery path. In S&P's view, slow take up of
the vaccine could delay a recovery in patient volumes as well as an
economic recovery. Together they are needed to support job
creation, bolstering household incomes, and encouraging adequate
health insurance coverage. This could result in further depression
of credit metrics outside of our base-case assumptions.
S&P said, "We anticipate GenesisCare's Australian oncology and
cardiology business will continue to perform strongly in fiscal
2021. Community transmission of COVID-19 currently remains low in
Australia, which has seen citizens' lives return to some degree of
normality. The negative impact we are seeing on patient numbers in
GenesisCare's other markets is not being replicated in the
Australian business unit. Therefore, we are forecasting
double-digit revenue growth in both the Australian oncology and
cardiology segments for fiscal 2021. This will also be supported by
public hospitals redirecting oncology patients into the private
sector.
"The negative outlook reflects our view that GenesisCare's
operating challenges and very high financial leverage will likely
persist through fiscal 2021, as it remains focused on the 21C
integration and the COVID-19 pandemic continues to impact treatment
volumes. The outlook also reflects our expectation that the company
has a credible deleveraging path from fiscal 2022 onward with the
company maintaining adequate liquidity.
"We could lower the rating if GenesisCare's operating performance
deteriorates and we do not see a credible path to deleverage the
business over the next 12 months. Rating pressure would be
evidenced by debt to EBITDA remaining above 7.5x, less than
adequate liquidity, or if EBITDA interest coverage is sustained
materially below 2x." These weaker credit metrics could be the
result of:
-- An inability to realize anticipated revenue growth from the
integration of 21C;
-- Failure to realize synergy targets;
-- Further deterioration in patient treatment volumes, impacting
earnings; or
-- The company continuing to pursue an overly aggressive growth
program, including further debt-funded mergers and acquisitions.
S&P could revise the outlook to stable if the company continues to
make solid progress in integrating 21C that facilitates steady
deleveraging over the next six months consistent with its base case
of healthy revenue growth and free cash flow generation. Rating
stability would be supported by debt to EBITDA being expected to
remain sustainably below 7.5x while maintaining adequate
liquidity.
MIKCON GROUP: First Creditors' Meeting Set for Feb. 19
------------------------------------------------------
A first meeting of the creditors in the proceedings of Mikcon Group
Australia Pty Ltd will be held on Feb. 19, 2021, at 10:00 a.m. via
virtual meeting.
Christian Sprowles and Michael Hogan of HoganSprowles were
appointed as administrators of Mikcon Group on Feb. 9, 2021.
NUDIE JUICE: ATO Wins AUD137MM from Binetters' Israeli Banks
------------------------------------------------------------
Neil Chenoweth at The Australian Financial Review reports that two
Israeli banks have paid AUD137 million to draw a curtain on the
expanding pursuit of tax fraud cases related to the Binetter
family, the founders of the Nudie Juice business, in a weekend
settlement.
AFR relates that Israel Discount Bank and its subsidiary,
Mercantile Discount Bank, signed off on the settlement for 343
million Israeli shekels with Australian liquidator John Sheahan on
January 31, the latest dividend in a colourful 16-year pursuit by
the Australian Taxation Office which so far has realised about
AUD210 million in tax payments, penalties and interest.
It is believed to be one of the largest tax settlements by Israeli
banks for a single family client, the Binetters, whom the banks
helped to hide income from the ATO through the use of back-to-back
loans, AFR says. Bank Hapaolim made a US$875 million settlement
with the US Justice Department for similar cases last year and
Mizrahi-Tefahot Bank made a US$195 million settlement in 2019, but
these both involved hundreds of clients.
According to the report, the IDB settlement raises questions over
how many other Australians used similar back-to-back loans through
Israel and elsewhere.
"I suspect this is just the tip of the iceberg," Mr Sheahan, who is
the liquidator of 13 former Binetter family companies, told The
Australian Financial Review.
IDB, which made no admission of culpability in the settlement
agreement, said in a statement that it had appointed a former judge
to conduct an independent inquiry into the conduct of the bank.
IDB's insurer will pay US$55 million of the settlement amount, the
bank said.
AFR relates that Mr. Sheahan, who praised the high level of
expertise and support provided by the Tax Office, said he hoped to
raise further funds for the ATO, which is still owed AUD80 million
to AUD85 million.
"There are some interesting potential claims we're looking at both
in North America and Israel."
The colourful saga of how the fortune founded by Emil and Erwin
Binetter came unstuck began when ATO's Operation Wickenby
investigators found a reference to back-to-back loans for the
Binetters in the laptop of British accountant Philip Egglishaw,
which Australian Federal Police seized in 2004.
Subsequently, several Binetter family members and a former Israeli
bank executive gave sworn evidence that the unsecured loans that
their companies obtained from Israeli banks were arm's length.
The courts have heard colourful allegations of efforts to defeat
ATO inquiries through the courts, including a plan to hire someone
to destroy bank records in Israel.
In 2014 after the ATO obtained bank records through the Israeli
courts which revealed the back-to-back loans – showing that the
Binetters were in effect lending their own money and paying
interest to themselves – the family appointed liquidators to the
AUD2 companies in Australia that held the loans.
The initial liquidator reported that there were no claims that the
companies could pursue.
The ATO replaced the liquidator with insolvency firm Sheahan Lock,
which took the novel tactic of suing the Binetter family members
for breach of directors' duties which had led to the huge tax debt.
This approach has raised AUD210 million to date.
"These cases involved elaborate and complex structures.
Investigating such cases requires specialist skills, dedication,
and tenacity," Assistant Commissioner Aislinn Walwyn said. "The
settlement justifies the efforts of the ATO teams over a number of
years."
Andrew and Michael Binetter made a AUD45 million settlement with
the ATO in October 2018, in an agreement which also required them
to assist in suing Israel Discount Bank.
The ATO is waiting on an appeal dealing with another Binetter
company, to which it could also appoint a liquidator, and Sheahan
remains trustee of the bankrupt estate of Emil Binetter.
SNACKING INVESTMENTS: S&P Assigns 'B' ICR, Outlook Stable
---------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit rating
to Snacking Investments HoldCo Pty Ltd. (SI HoldCo). The outlook is
stable. At the same time, S&P withdrew the issuer credit rating on
SI BidCo.
S&P said, "Our rating and outlook on SI HoldCo reflect the
company's status as the ultimate parent of SI BidCo. SI HoldCo
issues consolidated financial statements for the group. We view SI
Bidco and Snacking Investments US LLC, the debt issuing entities of
the group, as core members of the group.
"We withdrew the 'B' long-term issuer credit rating on SI BidCo
after we assigned a rating to the parent. The outlook was stable at
the time of the withdrawal."
These rating actions have no impact on the 'B' long-term issue
rating and '3' recovery rating on senior unsecured debt issued by
SI Bidco and Snacking Investments US LLC.
WALEYCORP PTY: Second Creditors' Meeting Set for Feb. 18
--------------------------------------------------------
A second meeting of creditors in the proceedings of Waleycorp Pty
Ltd t/as Big Screen Projects has been set for Feb. 18, 2021, at
11:00 a.m. via virtual meeting.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 17, 2021, at 4:00 p.m.
Schon Gregory Condon RFD of Condon Associates was appointed as
administrator of Waleycorp Pty on Jan. 13, 2021.
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C H I N A
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FOSUN INT'L: Moody's Affirms Ba3 CFR, Alters Outlook to Stable
--------------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 corporate family
rating of Fosun International Limited and the Ba3 backed senior
unsecured rating on the bonds issued by Fortune Star (BVI) Limited.
The bonds are unconditionally and irrevocably guaranteed by Fosun.
Moody's has also changed the outlook on the ratings to stable from
negative.
"The change in outlook to stable and ratings affirmation reflect
our expectation that Fosun will sustain its current financial
profile, supported by the stable operating performance of its key
investees and more prudent expansion plan," says Lina Choi, a
Moody's Senior Vice President. "We also expect that Fosun will
continue to maintain its access to funding and gradually improve
its weak liquidity profile at the holding company level over the
next 12-18 months."
RATINGS RATIONALE
Fosun's Ba3 corporate family rating reflects its (1) large and
diversified investment portfolio, (2) proven investment track
record, and (3) holdings of substantial amount of marketable
securities.
However, the rating is constrained by Fosun's (1) high and
increasing leverage at the consolidated level due to its
debt-funded investment strategy, (2) reliance on short-term funding
for long-term investments, (3) weak interest coverage at the
holding company level, and (4) credit contagion risk from some weak
investees, such as Fosun Tourism Group and Shanghai Forte Land
Company Limited.
Moody's expects that COVID-19 will have limited impact on Fosun's
credit profile because most of Fosun's businesses and investments
are in China, except for its tourism and insurance businesses.
Although its tourism business will continue to be affected by the
ongoing COVID-19 crisis in overseas markets, the business only
accounts for a small percentage of Fosun's portfolio and
consolidated revenue. Moody's also expects the credit quality of
Fosun's insurance businesses, which are mostly outside of China, to
remain resilient amid the epidemic.
As a result, Moody's expects Fosun's key credit metrics will remain
stable in 2021, with its market value-based debt leverage (MVL)
ratio staying at around 35% as the company maintains a prudent
investment policy, whereby the majority of its investments are
funded by proceeds from divestures and by new debt to a lesser
degree. In addition, Fosun's weak adjusted (FFO+interest)/interest
coverage ratio at the holding company level will remain below 1x
over the next 12-18 months.
On the other hand, Fosun's adjusted consolidated
debt/capitalization is likely to have increased moderately to
around 56%-57% at end of 2020 from around 53.6% at the end of 2019.
The increase can mainly be attributed to growing debt at Fosun's
major subsidiaries as they sought to preserve cash during
challenging market environment in 2020, as well as the big
investment needs of some key subsidiaries. Although the higher
leverage at these subsidiaries indicate a weakening credit quality,
Moody's does not expect a material increase of credit contagion
risk from this rise and Fosun's adjusted consolidated
debt/capitalization will stay at around 56% over the next 12- 18
months, as the company and its key subsidiaries are not likely
pursue aggressive debt-funded expansion during this period.
Fosun's liquidity profile remains weak as it relies heavily on
short-term debt to fund its long-term investments, and its cash on
hand is insufficient to cover its short-term debt maturing over the
next 12 months. Nevertheless, Fosun has been able to manage its
debt refinancing during 2020, evidenced by its continuous access to
the onshore and offshore bond and loan markets with reasonable
financing costs. Moody's also expects Fosun's management will take
measures to improve the company's liquidity profile, such as
through lengthening its debt maturity profile and relying less on
short-term debts to fund its long-term investments.
In terms of environmental, social and governance (ESG) factors,
Moody's has considered governance risk stemming from the
concentrated ownership of Fosun in its controlling shareholder and
chairman, Mr. Guo Guangchang, who held a 61.19% stake in the
company as of December 31, 2020. Moreover, the company has a
complex and evolving investment portfolio, and there is limited
transparency around its investments in non-listed companies.
These risks are partially mitigated by the company's listing on the
Hong Kong Stock Exchange, and as of Feb 8, 2021, Fosun has
14-member board comprising of three non-executive directors and
five independent non-executive directors. Furthermore, the company
has provided regular training to its directors, and has audit,
remuneration and nomination committees, which are all composed of
independent non-executive directors, to support the functioning of
the board.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook incorporates Moody's expectation that Fosun will
prudently manage its expansion and maintain its access to domestic
and offshore credit markets.
Moody's could upgrade Fosun's ratings if (1) the credit quality of
Fosun's investment portfolio and key investees improves, (2)
Fosun's financial metrics improve, such as its adjusted
consolidated debt/capitalization ratio remains below 50% and
adjusted (FFO+interest)/Interest coverage ratio at holding company
level stays above 1x on a sustained basis, and (3) its liquidity
profile materially strengthens, including a longer debt maturity
profile and much reduced reliance on short-term debt.
Moody's could downgrade Fosun's ratings if (1) the quality of the
company's investment portfolio deteriorates or contagion risk from
its investees rises, (2) its adjusted consolidated adjusted
debt/capitalization stays above 56%-58%, (3) a much reduced
recurring income at the holding company level results in a further
weakening in its adjusted (FFO+interest)/interest, or (4) the
company's reliance on short-term funding increases, which results
in its short-term debt to total reported debt rising above 50%, all
on a prolonged period.
The principal methodology used in these ratings was Investment
Holding Companies and Conglomerates published in July 2018.
Fosun International Limited (Fosun) is headquartered in Shanghai
and was listed on the Hong Kong Stock Exchange in 2007.
Fosun has diversified businesses spanning three broad categories:
(1) integrated finance (Wealth); (2) tourism, leisure and consumer
(Happiness); (3) and pharmaceuticals, medical services and health
products (Health).
The estimated market value of Fosun's investment portfolio totaled
around RMB273 billion at the end of 2020. The consolidated group's
revenue totaled RMB138 billion in LTM June 2020.
HNA GROUP: Units Seek Repayment of Funds Siphoned Off By Parent
---------------------------------------------------------------
Nikkei Asia reports that the three listed HNA Group companies that
last month reported irregular outflows of substantial amounts of
cash have unveiled blueprints to reclaim what they say was taken by
their parent and its affiliates.
According to the Nikkei, Hainan Airlines Group, HNA Infrastructure
Investment Group and CCOOP Group separately announced on Feb. 9
that they have formulated specific plans to seek redress from the
former highflying conglomerate and its subsidiaries.
The Nikkei relates that the trio of companies revealed a different
combination of financial arrangements -- including transferring
debts to the parent, converting capital reserve into shares, and
nullifying responsibilities to fulfill financial guarantees that
previously had been undisclosed to shareholders.
The three disclosed on Jan. 29, hours after HNA Group's startling
revelation that its creditors had filed a petition with the Hainan
Province High People's Court to reorganize the group, that they had
discovered more than CNY100 billion in corporate funds had been
siphoned off through various means.
The Nikkei says the financial damages incurred from the unusual
transactions by HNA Group have led all three companies to expect
substantial losses for 2020, and highlight the previous debt-laden
buying spree by one of China's most-prominent conglomerates.
According to their respective stock exchange filings on Feb. 9, the
companies' plans have received certain degrees of approval by their
parents, creditors and the authorities. Although the feasibility of
the plans hinges on the court's decision to first accept the
bankruptcy petition and then approve the companies' plans, it is
another step forward in the expected restructuring of the
once-acquisitive HNA Group, the Nikkei says.
Hainan Airlines, HNA Group's flagship unit, said the main part of
its plan is to transfer at least CNY72.5 billion of
interest-bearing debt to its direct parent HNA Airlines Holdings
and their ultimate parent, HNA Group, the report relates.
According to the Nikkei, the Shanghai-listed airline's board said
it has sent documents to consult with the creditors' committee
seeking their views on its plan, and that 147 of the 203 committee
members, which hold 81.24% of the total debt, have agreed to it.
HNA Group and HNA Airlines Holdings have submitted a letter of
consent, promising the airline to unconditionally and irrevocably
undertake the obligation to repay the debt being transferred to
them. The airline revealed that there is another layer of safeguard
in that the Hainan provincial government will step in to
"coordinate and push forward" if problems emerge during the debt
transfer process.
For HNA Infrastructure and CCOOP, the core part of their repayment
plans is to introduce an arrangement in which stocks are issued to
existing shareholders by converting capital reserves pooled on
their balance sheets, the report says.
In both cases, the listed companies are demanding that their
parents and some affiliates surrender their shares in the two
listed companies, while allowing others to retain those shares,
according to the Nikkei.
Details of the conversion arrangements were not disclosed, but
Shanghai-listed HNA Infrastructure said that the new shares being
transferred to it will be used to compensate for the
CNY13.271 billion that was part of the irregular outflows.
CCOOP, a Shenzhen-listed retail and wholesale unit, will use these
shares to compensate for the CNY23.962 billion in losses that were
discovered during a self-investigation.
That method of resolving corporate debt problems is not uncommon in
China, the report states. It is one of the options for
Chinese-listed companies with "large capital reserves but tight
cash flow," Sun Lin, a partner at Grandway Law Offices in Shenzhen,
wrote in a report last August, the Nikkei relays.
Indeed, both HNA Infrastructure and CCOOP are running net losses,
but they have abundant capital buffer on a stand-alone basis: HNA
Infrastructure had CNY25.901 billion, as of the end of last
September, and CCOOP had CNY20.982 billion, the report relays.
However, Sun wrote that in order to prevent substantial decreases
of listed companies' assets, the price of capital reserve
conversions needs to be "appropriate."
All three companies also have vowed to abandon part of their
responsibilities of financial guarantees made for borrowings by the
parent and its affiliates that were originally disclosed only at
the end of last month, the Nikkei adds. The guarantees total
CNY17.16 billion, with about two-thirds from Hainan Airlines.
The three companies have separately claimed that they have
sufficient legal backings for the move, and they have "already
obtained approval from the entitled authorities" without naming
which one, the Nikkei adds.
About HNA Group
China-based HNA Group Co. Ltd. offers airlines services. The
Company provides domestic and international aviation
transportation, air travel, aviation maintenance, and aviation
logistics services. HNA Group also operates holding, capital,
tourism, logistics, and other business.
As reported in the Troubled Company Reporter-Asia Pacific on Feb.
1, 2021, Global Times said HNA Group on Jan. 29 declared bankruptcy
and restructuring after a multi-year debt and liquidity crisis. The
company was informed by South China's Hainan High People's Court on
Jan. 29 that "because the company is unable to pay off its debts,
related creditors appealed to the court for the company's
bankruptcy and restructuring," HNA said.
According to Global Times, HNA Group said it will cooperate with
the court for judicial review, carry forward the debt disposal, and
support the court's protection of the legal rights of its creditors
so as to ensure the smooth operations of the company.
XINHU ZHONGBAO: Fitch Affirms B- LongTerm Foreign-Currency IDR
--------------------------------------------------------------
Fitch Ratings has affirmed Xinhu Zhongbao Co., Ltd.'s Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'B-' with a Stable
Outlook. Fitch has also affirmed Xinhu Zhongbao's senior unsecured
rating and senior unsecured notes due 2021, issued by subsidiary,
Xinhu (BVI) 2018 Holding Company Limited, at 'B-' with a Recovery
Rating of 'RR4'.
The ratings of the Chinese homebuilder are constrained by its high
leverage. This is partly mitigated by a better-quality land bank
with higher margins than 'B' category peers. Asset sales to Sunac
China Holdings Limited (BB/Stable) in late 2020 helped to unlock
Xinhu Zhongbao's property asset value and improve short-term
liquidity.
KEY RATING DRIVERS
Strong Margin Mitigates High Leverage: Fitch expects Xinhu
Zhongbao's leverage, defined by net debt/adjusted inventory, to
remain at over 80% for 2020E-2022E, which is above that of
similarly rated peers. However, this is mitigated by its above-peer
EBITDA margin of about 40%, after adding back capitalised interest,
supported by the low land costs of its redevelopment projects
relative to average selling prices. Fitch expects land costs to
account for less than 20% of recognised average selling prices
through to 2023, compared with 20%-40% for the industry.
High Quality Land Bank: Xinhu Zhongbao's higher leverage metric
than that of similarly rated peers is also mitigated by its quality
land bank, as reflected in its strong EBITDA margin. The majority
of Xinhu Zhongbao's land designated for secondary development is in
key cities around the Yangtze River Delta, with about half of its
sellable resources by value located within the Shanghai inner-ring
road, where land supply is limited. Fitch also believes that the
market value of Xinhu Zhongbao's property assets is substantially
higher than the carrying value.
Asset Sales Unlock Value: Xinhu Zhongbao sold stakes in a few
development projects to third-party developers in 2019-2020 for
considerations substantially above the net asset value. . In
November 2020, it sold a 50% stake a redevelopment project in
Shanghai and a 35% stake in a development project in Wenzhou to
Sunac for cash consideration of CNY4.9 billion. This was
substantially higher than the net asset value of less than CNY100
million.
Improved Sales Churn: Fitch expects sales churn, measured by
contracted sales/gross debt, to remain above 0.5x in 2021-2023,
after improving to an estimated 0.4x-0.5x in 2020, from 0.2x in
2019. The improvement was driven by contracted sales growth of
50%-60% in 2020 and a 20%-30% drop in total debt following recent
asset sales. Fitch believes the faster churn may help to improve
leverage in 2021-2023.
Credit for Financial Investment: Fitch continues to take a 60%
haircut to Xinhu Zhongbao's equity investments, which are mainly in
financial institutions, including Xiangcai Securities Co., Ltd.,
Shengjing Bank, Bank of Wenzhou Co., Ltd and China CITIC Bank
Corporation Limited (BBB/Stable). The value of these investments
has been adjusted to reflect recent market volatility that has
affected the prices of some of its large investments.
Moderate Linkage With Parent: Fitch assesses the linkage between
Xinhu Zhongbao and Zhejiang Xinhu Group, which has a 40.18% equity
stake in Xinhu Zhongbao, as moderate, reflecting 'Moderate' legal
ties and 'Moderate' operational ties. This is in view of historical
intragroup asset transfers, common control of subsidiaries -
Xiangcai Securities Co., Ltd. and Xinhu Holding Co., Ltd. - some
management overlap between the two entities and guarantees provided
by Xinhu Zhongbao to the parent.
Fitch rates Xinhu Zhongbao in consideration of the consolidated
financial profile of Zhejiang Xinhu Group, as Fitch assesses the
financial profile of the parent as weaker than that of Xinhu
Zhongbao. Xinhu Zhongbao accounts for the majority of Zhejiang
Xinhu Group's operation and debt. Zhejiang Xinhu Group's
consolidated profile does not constrain Xinhu Zhongbao's rating.
DERIVATION SUMMARY
Xinhu Zhongbao's ratings are constrained by its high leverage of
more than 80%, which is above that of most 'B-' rated peers, but is
mitigated by its quality land bank. Compared with Xinyuan Real
Estate Co., Ltd. (B-/Stable) and Guorui Properties Limited
(B-/Rating Watch Negative), Xinhu Zhongbao has a stronger business
profile, with a larger contracted sales scale and higher margin,
although its leverage is higher than that of these peers.
Compared with LVGEM (China) Real Estate Investment Company Limited
(B/Stable), which engages in urban redevelopment projects in
Shenzhen, Xinhu Zhongbao has higher leverage, but a larger sales
scale. LVGEM's rating is also supported by its recurring
EBITDA/interest coverage of about 0.3x.
KEY ASSUMPTIONS
The company will pay down the primary-land development expenditure
for its Shanghai projects in 2021, with limited new land
acquisitions.
Contracted sales (after business tax) at CNY25.5 billion in 2020
and CNY25 billion-30 billion a year in 2021-2023 (2019: CNY16
billion).
EBITDA margin (after adding back capitalised interest) maintained
at around 40% in 2020-2023 (2019: 41%).
Key Recovery Rating Assumptions:
-- The recovery analysis assumes that Xinhu Zhongbao would be
reorganised if liquidated in bankruptcy
-- Fitch assumes 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 processes conducted during bankruptcy or
insolvency proceedings and distributed to creditors
-- An advance rate of 80% is applied to adjusted inventory, as
Xinhu Zhongbao's EBITDA margin is at above 30%
-- Property, plant and equipment advance rate at 60%
-- An advance rate of 80% is applied to investment properties,
which generate a rental yield of around 6%
-- A standard advance rate of 70% is applied to account
receivables
-- An advance rate of 60% is applied to excess cash; that is,
unrestricted cash less minimum cash amounting to three months
of contracted sales
-- An advance rate of 100% applied to restricted cash
-- The allocation of value in the liability waterfall results in
recovery corresponding to an 'RR4' Recovery Rating for the
senior unsecured debt.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Net debt, including guarantees to joint ventures and
associates)/adjusted inventory sustained below 60%, based on
the consolidated financial profile of the parent
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Cash/short-term debt ratio below 0.6x for a sustained period
-- Standalone contracted sales/gross debt below 0.2x for a
sustained period
-- Decline in annual contracted sales
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
Tight but Manageable Liquidity: Xinhu Zhongbao's reported cash of
CNY14.1 billion at end-September 2020 could cover 74% of its
short-term debt, including puttable bonds of CNY19.1 billion. The
company issued CNY820 million in 7.9% corporate bonds due 2024 in
August 2020.
The cash consideration for the company's equity stake sales of
CNY4.9 billion, announced in November 2020, was partly received in
4Q20, with the remainder to be paid in 1H21. Fitch expects the
asset sales to improve liquidity profile in the short term.
The company also had available-for-sale financial investments of
CNY12.7 billion at end-September, and its other high-quality
redevelopment projects in Shanghai may provide additional sources
of financing if necessary.
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.
=========
I N D I A
=========
AKAL PIPE: CARE Moves C Debt Rating to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Akal
Pipe Industries (API) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.86 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating moved to
ISSUER NOT COOPERATING category
Short-term Bank 0.32 CARE A4; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from API to monitor the rating
vide its letter dated January 15, 2021 and numerous e mails
communications dated January 14, 2021, December 31, 2020, December
16, 2020, November 24, 2020, November 13, 2020, and numerous phone
calls. However, despite our repeated requests, the firm has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on Akal Pipe Industries' bank facilities will now be denoted
as CARE C; Stable/ CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating in February 24, 2020 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Intense competition due to exposure to tender driven nature of
business: API's business is tender-based which is characterized by
intense competition resulting in low operating margins for the
firm. The growth of business depends entirely upon the firm's
ability to successfully bid for tenders and emerge as the lowest
bidder. Therefore, the ability of the firm to secure new orders and
successful execution with existing competition remains a
concern.
* Competitive and fragmented nature of business: The business of
the firm is highly fragmented and competitive marked by intense
competition owing to the presence of large number of organized as
well as unorganized players. The highly fragmented nature of the
industry restricts the pricing flexibility and bargaining power of
the players in the market which has a bearing on the operating
margins. Further, the firm has availed the moratorium for the
period of 6 months (from March 2020 to August 2020) in light of
COVID19 pandemic for its interest and principal repayment of term
debt obligation and for interest payment on cash credit limit.
* Constitution of the entity being a partnership firm: API's
constitution as a partnership firm has the inherent risk of
possibility of withdrawal of the partner's capital at the time of
personal contingency and firm being dissolved upon the
death/retirement/insolvency of partners. Moreover, partnership
firms have restricted access to external borrowing as credit
worthiness of partners would be the key factors affecting credit
decision for the lenders.
Key Rating Strengths
* Experienced partner in the manufacturing industry: API's day to
day operations are looked after by Mr. Yadwinder Singh and Mr.
Harpreet Singh. Mr. Yadwinder Singh has an industry experience of
around one and half decade gained through his association with API
and other regional entity engaged in construction activities.
Whereas, Mr. Harpreet Singh has an industry experience of 7 years
gained through his association with API only. The partners are
further supported by well experienced and qualified staff having
experience in technical, finance and marketing aspects of
business.
Akal Pipe Industries (API) was established in 2010 but started its
commercial operations in April 1, 2013 and is currently being
managed by Mr. Yadwinder Singh, Mr. Gurnam Singh, Mr. Harpreet
Singh, Mr. Harbant Singh and Mr. Nazam Singh, as its partners,
sharing the profit and losses in the ratio of 13%, 14%, 13%, 51%
and 9% respectively. API is engaged in the manufacturing of HDPE
(High density Polyethlylene) lined RCC (Reinforced cement concrete)
pipes at its manufacturing unit in Nalagrah, Solan, Himachal
Pradesh with varied installed capacity for different size of pipes.
The firm's products find their application mainly in the irrigation
and sewage sector.
AKSH OPTIFIBRE: CARE Moves D Debt Ratings to Not Cooperating
------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Aksh
Optifibre Limited (AOL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 136.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Short Term Bank 114.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from AOL to monitor the rating
vide e-mail communications dated January 14, 2021, January 13,
2021, January 12, 2021, January 11, 2020, December 12, 2020 and
numerous phone calls. However, despite our repeated requests, the
company has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. Further, Aksh Optifibre Limited has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The rating on Aksh Optifibre Limited's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on April 1, 2020, the following were the
rating strengths and weaknesses.
Key Rating Weaknesses
Liquidity: Stretched
The liquidity continues to remain poor owing to elongated operating
cycle which has led to continuous overdrawals and delay in debt
repayment obligations. The current ratio has deteriorated to 0.83
in FY20 (PY:0.94). The operating cycle stood at 177 days in FY20 as
against 104 days in FY19. The inventory and debtors stood at
INR41.71 cr (PY:Rs 65.56 cr) and INR124.04 cr (PY: INR183.15 cr).
Key Rating Strengths
* Experienced promoters with established track record in the OFC
industry: Incorporated in 1986, the company has over three-decades
of long track record of operations in OFC industry. AOL
manufactures OFC and is also backward integrated to manufacture OF
and FRP rods, which leads to operational efficiencies. The company
started with the manufacturing of OF and OFC in 1994. In 1996-97
AOL acquired FRP business which is a key raw material for OFC. AOL
went public in 2000 and is listed on NSE and BSE. The company also
delivers to egovernance services through its programme 1 Stop Aksh
with the government of Rajasthan. The present Chairman and Managing
Director, Dr. Kailash S. Choudhari, is a key founding member of
AOL. He is MBBS by qualification, gold medallist AIIMS. His father,
Mr. Shantilal Choudhari, was the promoter of Choudhari Metal
Industry (later on renamed CMI Limited) which specializes mainly in
manufacturing of copper cables.
Aksh Optifibre Limited (AOL) was incorporated in March 1986 as a
manufacturer of Poly Vinyl Chloride (PVC) and Polyethylene (PE)
insulated specialty cables. In 1994, the company ventured into
manufacturing of Optical Fibre Cables (OFCs) and did backward
integration in 1995 by setting up a plant for Optical Fibre (OF) in
Bhiwadi, Rajasthan. In 2000, AOL acquired Fibre Reinforced Plastic
Rods (FRP rods) business which is a key raw material for OFC
(mainly used at the strength membrane in OFC). The company is also
undertaking e-governance services, which includes 10,000 plus
eGovernance kiosks in the state of Rajasthan and is also providing
smart city/ turnkey solutions, which includes installation and
managing of OFC turnkey of 350 kms in Jaipur smart city project.
BAJRANG AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Bajrang
Agro Industries (BAI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.59 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 18, 2019, placed
the rating of BAI under the 'issuer non-cooperating' category as
BAI had failed to provide information for monitoring of the rating
as agreed to in its Rating Agreement. BAI continues to be
non-cooperative despite repeated requests for submission of
information through numerous phone calls and email dated October
13, 2020, December 16, 2020 and December 23, 2020, January 8, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on November 18, 2019 following were the
rating weaknesses.
Key Rating Weakness
* Delay in debt servicing obligations: As per the interaction with
the banker during last review, the account was classified as NPA on
account of delays in repayment of term loan and continues
over-drawals in the cash credit account.
Wardha (Maharashtra) based BAI is a partnership firm formed by Mrs.
Vaishali Kharse and Mr. Ishwar Kharse governed by partnership deed
dated November 26, 2015. BAI is a new entrant in cotton ginning and
pressing at its processing facility located at Wardha, Maharashtra,
having an installed capacity of 900 quintals per day. The firm had
commenced its operation in February 2018.
BHIND MIHONA: CARE Keeps D Debt Rating in Not Cooperating Category
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Bhind
Mihona Gopalpur Toll Roads Limited (BMGL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.69 CARE D; ISSUER NOT COOPERATING
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 10, 2019, revised
the rating of BMGL to CARE D; Issuer Not Cooperating from CARE C
(CE); Issuer Not Cooperating due to the delays in debt servicing of
the guarantor and parent company, namely Essel Infraprojects
Limited (EIL) and consequent revision in its rating to 'CARE D;
Issuer Not Cooperating' from 'CARE A4; Issuer Not Cooperating'.
BMGL continues to be non-cooperative despite repeated requests for
submission of information through emails dated August 6, 2020,
October 16, 2020, January 5 and 7, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of ongoing delays in debt
servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in debt servicing obligations: BMGL has not serviced its
debt obligations since June 2019, and continues to be an NPA as
confirmed by lenders during due diligence. Further, CARE has also
not received No Default Statement (NDS) since the month of May
2019.
Liquidity: Very Poor liquidity, account is already NPA.
Bhind Mihona Gopalpur Toll Road Limited (BMGL) is a Special Purpose
Vehicle (SPV) floated by Essel Infraprojects Limited (EIL) for
construction of a 2-lane toll road from Lahar Junction [State
Highway (SH)-2] at Bhind traversing though Mihona and terminating
at Gopalpur (SH-45), a 50.86 km road section, in the state of
Madhya Pradesh under Build, Operate & Transfer (BOT) basis. The
project was awarded to BMGL by Madhya Pradesh Road Development
Corporation Limited (MPRDC) (rated CARE A, March 28, 2019), a
public sector undertaking. The scope of work for the project
highway includes construction, operation and maintenance for a
period of 20 years commencing form the Appointed Date i.e. February
26, 2010 (including two years construction period) provided that
two-laning plus project is undertaken at a subsequent date prior to
12th year from Appointed Date, otherwise the concession period
would be deemed to be 15 years. The COD was at Feb 26, 2012 and the
project commenced operations from March 2011 ahead of schedule. The
total cost of the project was INR108.69 crore & was funded in a DER
of 2.28x. The debt will be repaid in 40 unequal quarterly
instalments commencing June, 2012 and ending on March 2022.
BINA KHIMLASA: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Bina
Khimlasa Malthon Toll Roads Limited (BKML) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 40.87 CARE D; ISSUER NOT COOPERATING
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 10, 2019, revised
the rating of BKML to CARE D; Issuer Not Cooperating from CARE C
(CE); Issuer Not Cooperating due to the delays in debt servicing of
the guarantor and parent company, namely Essel Infraprojects
Limited (EIL) and consequent revision in its rating to 'CARE D;
Issuer Not Cooperating' from 'CARE A4; Issuer Not Cooperating'.
BKML continues to be non-cooperative despite repeated requests for
submission of information through emails dated August 6, 2020,
October 16, 2020, January 5 and 7, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of ongoing delays in debt
servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in debt servicing obligations: BKML has not serviced its
debt obligations since June 2019, and continues to be an NPA as
confirmed by lenders during due diligence. Further, CARE has also
not received No Default Statement (NDS) since the month of May
2019.
Liquidity: Very Poor liquidity, account is already NPA.
Bina Khimalasa Malthon Toll Roads Limited (BKML) is a Special
Purpose Vehicle (SPV) floated by EIL for construction of a 2 - lane
toll road Bina-Malthon section, a 39.72 km road section, in the
state of Madhya Pradesh under Build, Operate & Transfer (BOT)
basis. The project was awarded to BKML by Madhya Pradesh Road
Development Corporation Limited (MPRDC), a public sector
undertaking. The scope of work for the project highway includes
construction, operation and maintenance for a period of 25 years
including a construction period of 2 years commencing on the
Appointed Date i.e. February 26, 2010. The total cost of the
project was INR81.91 crore & was funded in a Debt Equity ratio
(DER) of 1.96x. Tolling commenced from December 2011. The debt will
be repaid in 48 unequal quarterly instalments commencing June, 2012
and ending on March 2024.
COLOUR COTTEX: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Colour
Cottex Private Limited (CCPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 78.98 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 1, 2019 placed the
rating of CCPL under the 'issuer non-cooperating' category as CCPL
failed to provide information for monitoring of the rating. CCPL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated January 25, 2021. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of the last rating on November 1, 2019, the following
were the weaknesses:
Key Rating Weaknesses
* Ongoing delays in debt servicing: There were ongoing delays in
the servicing of the debt obligations in the past.
* Weak financial risk profile: Though the total operating income of
the company increased by ~11% in FY18 to ~Rs.625 cr., the company
reported losses at PBILDT level in FY18. Further, the company
reported higher net losses of INR2.97 crore in FY18 compared to net
loss of of INR2.56 crore in FY17. The capital structure of the
company remained weak, marked by overall gearing ratio of 2.06x, as
on March 31, 2018 (PY: 1.92x). The debt coverage indicators of the
company also continued to remain weak, as on March 31, 2018.
* Highly fragmented market resulting in intense competition from
unorganized and organised players: The readymade garment industry
in India is highly fragmented and dominated by a large number of
independent and small scale unorganized players leading to high
competition among industry players. Ludhiana is known to be a major
textile hub where many small and medium sized units are operating
and fulfil majority demand of hosiery products in India.
Incorporated in June 2012, Colour Cottex Private Limited (CCPL) is
engaged in the manufacturing and trading of readymade garments
(primarily T-shirts) and knitted cloth. The company is currently
operating with Mr Rajesh Dhanda as the Managing Director. The
manufacturing unit of the company is located in Ludhiana, Punjab
having an installed capacity of 10,80,000 pieces for ready-made
garments and 936 tons for knitted cloth as on March 30, 2016. The
company also engages in trading of garments and cloth.
EARTHEN TREASURES: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Earthen
Treasures Natural Resources Private Limited (ETNRPL) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 20, 2019, placed
the ratings of ETNRPL under the 'issuer non-cooperating' category
as ETNRPL had failed to provide information for monitoring of the
rating as agreed to in its Rating Agreement. ETNRPL continues to be
non-cooperative despite repeated requests for submission of
information through numerous phone calls and emails dated July 8,
2020, October 13, 2020, December 1, 2020 and December 23, 2020. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in November 20, 2019 the following were
the rating weaknesses:
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in debt servicing obligations: As per the interaction with
the banker during March 14, 2017, there were continuous
over-drawals in cash credit facility and the account was classified
as NPA
ETNRPL was established in April 2013. Promoted by Mr Aniket Jai n
and Mr Pratyush Bharatiya, operations of the company began from
April 22, 2013. ETNRPL is currently engaged in quarrying,
production and trading of granite. ETNRPL has leased the quarry
measuring 2.13 acres from M/S Brothers Granite Exporter and has
acquired rights of selling, supplying, and trans porting of black
granite blocks for a lease period of 7 years. The quarry of the
entity is located in Chamrajnagar, Karnataka.
ESSEL AHMEDABAD: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Essel
Ahmedabad Godhra Toll Roads Limited (EAGTRL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 772.64 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019 placed the
rating(s) of EAGTRL under the 'Issuer non-cooperating' category as
EAGTRL had failed to provide information for monitoring of the
rating. EAGTRL continues to be non-cooperative despite repeated
requests for submission of information through emails dated
December 31, 2020; January 4, 2021 and January 6, 2021. CARE
understands that the project has been terminated. However relevant
supporting documents and 'No dues certificate' from lenders have
not been furnished to CARE. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
As per the company, Project has been terminated. However, company
has not furnished 'No Dues Certificate' from the lenders for the
same.
Liquidity: Very poor
Incorporated in 2009-10, EAGTRL is a Special Purpose Vehicle (SPV)
promoted by Essel Infra projects Ltd (EIL), which has a 74 per cent
stake in the SPV; the rest is held by the China Railway 18th Bureau
Group Corporation Ltd. EAGTL was set up to construct, design,
engineer, operate, and maintain the Ahmedabad-Godhra (Gujarat)
stretch on National Highway (NH) 59, which spans 117.6 kilometers,
on a build-operate transfer (BOT) basis. The project involved
turning the two-lane road into a four-lane road. The project was
awarded under Phase III of the NH development plan. EAGTL has been
awarded a concession period of 30 years. The project cost of
INR11,55.4 crore was financed through a term loan of INR799.8
crore, sub-debt of INR65 crore, equity of INR182.6 core, and a
INR108 crore grant from National Highways Authority of India.
EAGTRL has completed the Construction of Project Highway from Km
4.200 (Ahmedabad) to Km 122.420 (Godhra) and NHAI have issued the
Provisional Completion Certificate effective from 30th October 2013
and subsequently provisional completion certificate 2 effective
from 22nd August 2014. The project has been terminated in August
2019.
ESSEL GWALIOR: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Essel
Gwalior Shivpuri Toll Roads Private Limited (EGSTRL) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1,090 CARE D; ISSUER NOT COOPERATING
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 10, 2019, revised
the rating of EGSTRL to CARE D; Issuer Not Cooperating from CARE C
(CE); Issuer Not Cooperating due to the delays in debt servicing of
the guarantor and parent company, namely Essel Infraprojects
Limited (EIL) and consequent revision in its rating to 'CARE D;
Issuer Not Cooperating' from 'CARE A4; Issuer Not Cooperating'.
EGSTRL continues to be non-cooperative despite repeated requests
for submission of information through emails dated August 6, 2020,
October 16, 2020, January 5 and 7, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
EGSTRL has not furnished No Default Statement (NDS) to CARE since
January 2019. As indicated by the company, the project has been
terminated. However, company has not furnished relevant supporting
documents to CARE, including 'No Dues Certificate' from the lenders
towards the same. Liquidity: Very Poor liquidity.
Incorporated in October 13, 2011, Essel Gwalior Shivpuri Toll Roads
Private Ltd (EGSTRL) is a Special Purpose Vehicle (SPV) promoted by
Essel Infraprojects Limited (EIL). The SPV is formed to undertake
four laning of the existing Gwalior - Shivpuri section of NH3 [from
15.600 km of NH-75 to 236.000 km of NH3 (approx 125.3 km stretch)]
in state of Madhya Pradesh under NHDP phase IV on BOT (toll) on
Design, Build, Finance, Operate and Transfer (DBFOT) pattern. As
per the Concession Agreement (CA) signed between National Highways
Authority of India (NHAI) and EGSTRL on January 9, 2012, the
concession period is for 29 years [including a construction period
of 910 days (~2.5 year)] from the Appointed Date (May 16, 2013).
The scheduled project completion date (SPCD) was November 12, 2015
which got lapsed due to delays in obtaining clearances from various
authorities. The management has applied for extension of time (EOT)
to NHAI till May 2018 which is at present awaiting approval from
NHAI.
ESSEL INFRAPROJECTS: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Essel
Infraprojects Limited (EIL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Bank 146.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019 placed the
rating(s) of EIL under the 'Issuer non-cooperating' category as EIL
had failed to provide information for monitoring of the rating. EIL
continues to be noncooperative despite repeated requests for
submission of information through emails dated December 31, 2020;
January 4, 2021 and January 06, 2021. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
As per the lenders interaction with CARE and information available
in public domain there are ongoing delays in the debt servicing.
Further, CARE has not received NDS since the month of January,
2019.
Liquidity: Very poor
Essel Infraprojects Ltd (EIL) was incorporated in July 1987 in the
name 'Essel's Amusement Parks (India) Limited' which was
subsequently changed to 'Essel Infraprojects Limited' in February
2007. Promoted by Mr. Subhash Chandra, EIL is infrastructure arm of
Essel Group with interest in road projects, urban infrastructure,
power, water management and solid waste management. EIL obtains
engineering, procurement and construction (EPC) works for group
companies but majority of them is handled by another Essel Group
company known as Pan India Infraprojects Private Limited. EIL does
not undertake EPC work on its own but sub-contacts entirely to
third parties. Additionally, EIL derives income in form of
consultancy services provided to group companies and interest
income from loans and advances extended to subsidiaries/associates.
ESSEL WALAJAHPET: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Essel
Walajahpet Poonamallee Toll Roads Pvt. Ltd. (EWPTRPL) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 164.17 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019 placed the
rating(s) of EWPTRPL under the 'Issuer non-cooperating' category as
EWPTRPL had failed to provide information for monitoring of the
rating. EWPTRPL continues to be non-cooperative despite repeated
requests for submission of information through emails dated
December 31, 2020; January 4, 2021 and January 6, 2021. The rating
has been reaffirmed on account of nonsubmission of material
information required for our periodic review exercise. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
EWPTRPL has not furnished NDS since June 2019. As per lender
interaction at the time of last review, there have been delays
observed in servicing of its debt obligations. The company has
communicated that term loan has been completely repaid. However,
company has not furnished relevant supporting documents to CARE,
including 'No Dues Certificate' from the lenders towards the same.
Liquidity: Very Poor
EWPTRPL is a special purpose vehicle (SPV) incorporated on May 18,
2012, by EIL. EIL has been awarded the four to six laning of the
Poonamallee (Km 13/8) Walajahpet (Km 106/8) section of NH4 in the
state of Tamil Nadu by National Highway Authority of India (NHAI,
rated CARE AAA/CARE A1+ for instruments) under design build finance
operate and transfer (DBFOT) basis covering a length of
approximately 93.00 km. There are two toll plazas at KM 38(TP1) and
at KM 104(TP2). The project was awarded to EWPTPL based on a
premium INR162.00 crore quoted by EIL. As per the concession
agreement (CA) signed between NHAI and EWP in June 2012, the
concession period is for 17 years [including a construction period
of 910 days (approximately 2.5 year)] from the appointed date (June
1, 2013). The tolling commenced from September 2013 and the
original scheduled project completion date (SPCD) is March 31,
2016. In January 2016, the company approached NHAI for shift in
Scheduled project completion date (SPCD) from March 31, 2016 to
October 31, 2017 and without levying damages considering the
project being “stressed one”. During September 2014, EWPTPL
received approval from NHAI for deferment of premium considering
only 75% of revenue shortfall amount for deferment.
GONDIA EDUCATION: CARE Lowers Rating on INR6.0cr LT Loan to C
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Gondia Education Society (GES), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE C; ISSUER NOT COOPERATING;
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
and Revised from CARE B+; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 4, 2020 placed the
rating of GES under the 'Issuer Non-Cooperating' category as GES
had failed to provide information for monitoring of the rating as
agreed to in its rating agreement. GES continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
January 14, 2021, January 12, 2021, December 31, 2020 and
December 18, 2020. In line with the extant SEBI guidelines, CARE
has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The revision in rating takes into account liquidity stress in the
trust and possible impact on admissions due to COVID-19.
Detailed description of the key rating drivers
At the time of last rating on March 4, 2020 the following were the
rating strengths and weaknesses.
Detailed description of key rating drivers
Key rating Weaknesses
* Drop in scale of operations, profit margins, and debt coverage
indicators during FY18 (audited): The deficit in the TOI is mainly
on account of lower grant and donations received by the institution
during FY18 as compared to the provisional numbers. The income from
grants and donation was considered at INR77.61 crore and INR1.41
crore on the basis of provisional financials. However, as per the
audited financials the grants and donations are recorded at
INR71.35 crore and INR40 lakh respectively. The institution expects
to receive these grants and donation during FY19. In addition to
this the fees/fines have also been lower as per the audited
financials (INR33.01 crore (prov.) vis-à-vis INR27.74 crore
(audited)). The TDGCA of GES stood negative during FY18 (Audited)
as compared to 1.28 times in FY17.
* Presence in highly competitive and regulated industry: The
operating and financial flexibility of the education sector are
limited, as regulations govern almost all aspects of operations,
including fee structure, number of seats, changes in curriculum and
infrastructure requirements. These regulations may put limitations
on operations of GES.
Key Rating Strengths
* Experienced trustee along with long track record of society: GES
was formed by Late Shri. Manoharbhai Patel on December 8, 1958 to
improve the level of education in district of Bhandara in
Maharashtra. GES has a track record of around 60 years which has
helped it in establishing itself in the education sector. GES is
headed by Mrs. Varsha Prafulbhai Patel having an experience of more
than two decades in education sector. The society is having 14
trustees with experience of around two decades in education
sector.
* Diversified portfolio in terms of large number of institutes
offering diverse courses: The society has 34 institutes across
Maharashtra, India offering courses right from Pre-Primary to
Post-Graduate stages. The courses offered by GES are approved by
All India Council for Technical Education (AICTE), Ministry OF
Human Resource Department (MHRD) and Department of Technical
Education (DTE). The large number of institutes along with
diversified courses helps the society to tap opportunity in every
place and stream.
* Comfortable Capital structure and debt protection metrics: GES
debt profile is marked by nominal debt and moderate debt protection
metrics. The overall gearing of the society deteriorated from 0.07x
as on March 31, 2017 to 0.19x as on
March 31, 2018 (Audited).
Gondia Education Society (GES) was established on December 8, 1958.
The society was formed by Late Shri Manoharbhai Patel in the region
of Bhandara and Gondia district of Maharashtra. Currently, the
society is managed by its president Mrs. Varsha Prafulbhai Patel
who has around 20 years of experience in the field of education.
GOVIND REALTY: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shri Govind
Realty Private Limited (SGRPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 18.76 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SGRPL to monitor the ratings
vide e-mail communications/letters dated August 20, 2020, September
25, 2020, October 9, 2020, November 23, 2020, December 23, 2020,
January 4, 2021, January 08, 2021, January 21, 2021, January 22,
2021, January 25, 2021 and numerous phone calls. However, despite
our repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the ratings on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The ratings on SGRPL's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings assigned to the bank facilities of SGRPL have been
revised on account of on-going delays in debt servicing.
Detailed description of the key rating drivers
At the time of last rating on December 12, 2019 the following were
the rating strengths and weaknesses (updated for information
available from lender):
Detailed description of key rating drivers
Key Rating Weaknesses
* Ongoing delays in debt servicing: SGRPL is irregular in debt
servicing of term loan obligations due to weak liquidity position
of the company. Further, client has availed moratorium for its term
loan facility from March, 2020 to August, 2020.
Bhopal (Madhya Pradesh) based, Shri Govind Realty Private Limited
(SGRPL) was incorporated in April 2008 with an objective to carry
out real estate business. SGRPL has developed shopping cum
commercial mall “Aashima Mall” located at Hoshangabad Main road
Bhopal which is one of the prime and centre location of Bhopal. The
mall got operational from April 2012. Aashima Mall has a saleable
area of around 3.50 lakh square feet (sq ft) and is divided into
two areas, one for the retail shops and other in corporate office
zone. Out of total area till November 20, 2019, it has sold around
1,24,914 sq ft (against 80,000 sq ft till August 21, 2018) and
leased around 224119(against 2,09,000 sq ft till August 21, 2018).
Aashima Mall houses some of the leading brands and entertainment
outlets including Reliance Market, Reliance Trends & Reliance
Footprint, Reliance Digital, Adidas, Woodland, Bata, Mochi,
Cinepolis, Dominos, Nokia and Café Coffee Day and so on.
JAIN IRRIGATION: S&P Withdraws 'D' Long-Term Issuer Credit Rating
-----------------------------------------------------------------
S&P Global Ratings withdrew its 'D' long-term issuer credit rating
on Jain Irrigation Systems Ltd. at the company's request. S&P also
withdrew the 'D' rating on Jain Irrigation's US$200 million
guaranteed senior unsecured notes issued by its subsidiary Jain
International Trading BV.
Jain Irrigation is an India-based company engaged in the
manufacture of plastics-based micro-irrigation piping and plumbing
systems.
KRISHNA REDDY: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Krishna
Reddy Rural Godowns (KRRG) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.30 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 3, 2019 placed the
rating(s) of KRRG, under the 'issuer non-cooperating' category as
KRRG had failed to provide information for monitoring of the
ratings. KRRG continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and emails dated January 2020 to January 8, 2021. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on December 3, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Delays in debt servicing: The firm has stressed liquidity
position hence couldn't able to meet debt obligation on time.
Telangana based, Krishna Reddy Rural Godown (KRRG) was established
as a proprietorship firm in the year 2017 and promoted by Mr. P.
Krishna Reddy. The firm is engaged in providing ware house on lease
rental to Avenue Supermarts Limited ((D- Mart). The property is
built on total land area of 165000 square feet and comprises of 4
godowns, with an aggregate storage capacity of around 24406 MT
(Metric Tons), for agricultural products, fertilizers, consumer
goods etc.
LUDHIANA TALWANDI: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ludhiana
Talwandi Toll Roads Pvt. Limited (LTTRPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 523.95 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2019 placed the
rating(s) of LTTRPL under the 'Issuer non-cooperating' category as
LTTRPL had failed to provide information for monitoring of the
rating. LTTRPL continues to be non-cooperative despite repeated
requests for submission of information through emails dated
December 31, 2020; January 4, 2021 and January 6, 2021. The rating
has been reaffirmed on account of nonsubmission of material
information required for our periodic review exercise. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
LTTRPL has not furnished NDS since January 2019. As per lender
interaction at the time of last review, there have been delays
observed in servicing of its debt obligations.
Liquidity: Very Poor
Incorporated in January 2011, LTTRPL is a special purpose vehicle
(SPV) promoted by Essel Infraprojects Limited and Pan India Network
Limited (PINL) - holding 74% and 26% equity stake respectively, to
undertake the four laning of the Ludhiana to Talwandi section of
NH-95 from 92 km to 170 km under the National Highway Development
program (NHDP) Phase III on Design, Build, Finance, Operate and
Transfer (DBFOT) toll basis. NH-95 runs from Chandigarh (Kharar) to
Firozpur entirely in the State of Punjab. As per the Concession
Agreement (CA) signed between National Highway Authority of India
(NHAI) and LTL as on January 20, 2011, the concession period is for
29 years from the Appointed Date (including a construction period
of 910 days). The appointed Date for the project was fixed at March
26, 2012 and the Scheduled Four-Laning Date/ Scheduled project
completion date (SFLD/ SPCD) was September 26, 2014. However, there
has been delays in the completion of the project due to a
combination of factors viz change in EPC contractors and delays in
obtaining requisite clearances from various authorities.
MANGLAM FOODS: CARE Lowers Rating on INR8.83cr LT Loan to C+
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Manglam Foods (MGF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.83 CARE C+; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues to
remain under ISSUER NOT
COOPERATING category and Revised
from CARE B-; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 10, 2020 placed the
ratings of MGF under the 'issuer non-cooperating' category as MGF
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. MGF continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and emails dated January 7, 2021,
January 11, 2021 and January 13, 2021. In line with the extant SEBI
guidelines, CARE has reviewed the ratings on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings assigned to the bank facilities of MGF have been
revised on account of non-availability of requisite information as
well as CARE's inability to carry out due diligence exercise with
its lender. The rating assigned to the bank facilities of MGF takes
into account its modest scale of operations in the highly
competitive and seasonal nature of the industry coupled with weak
financial risk profile marked by thin profitability margins and
leveraged capital structure. The rating, further, continue to
remain constrained on account of constitution as proprietorship
concern and project implementation risk associated with it. The
rating, however, continue to derive strength from the MGF's
experienced management.
Detailed description of key rating drivers
At the time of last rating on February 10, 2020 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Modest scale of operation: The firm has witnessed continuous
growth in Total Operating Income (excluding rental income and other
income) during last three financial years ended FY18 however stood
modest at INR26.63 crore. Till December 2018, the firm has achieved
TOI of INR23 crore. Apart from the revenue from MGF, the
proprietorship firm has also generated income from renting of two
warehouses to Madhya Pradesh Warehousing and Logistics Corporation
(MPWLC) on renewal nature basis on every year.
* Financial risk profile marked by thin profitability and leveraged
capital structure: Being presence in trading of agro commodity, the
profitability of the firm stood thin marked by PBILDT and PAT
margin of 3.18% and 1.09% respectively in FY18. Further, with small
scale of operation and low operating margin, PAT level and GCA
level stood thin at INR0.29 crore and INR0.33 crore respectively.
Further, owing to low (standalone) net worth base of INR0.66 crore,
the capital structure of the firm stood highly leveraged with an
overall gearing of 9.68 times as on March 31, 2018. The debt
service coverage indicators of the firm stood weak with total debt
to GCA of 19.28 times as on March 31, 2018 and interest coverage
ratio stood 1.63 times in FY18.
* Project implementation risk: In June 2018, the firm undertook a
project for setting up of processing plant of parboiled rice having
overall capacity of 100 Tonne Per Day. The firm had envisaged total
cost of INR3.01 crore which is to be funded through term loan of
INR2.00 crore and remaining from promoters fund in the form of
capital and unsecured loan. Hence, there would be risk related to
completion of project within envisaged time and cost along with
project stabilization risks.
* Seasonality associated with agro commodities in highly fragmented
and government regulated industry: As the firm is engaged in the
business of trading and processing of agriculture commodities, the
prices of agriculture commodities remained fluctuating and depend
on production yield, demand of the commodities and vagaries of
weather. Hence, profitability of the firm is exposed to
vulnerability in prices of agriculture commodities. The rice
milling industry is characterized by limited value addition, highly
fragmented and competitive in nature as evident by the presence of
numerous unorganized and few organized players. Further, the
industry is characterized by high degree of government control both
in procurement and sales for rice.
* Constitution as a proprietorship concern: The low net worth base
makes its operations highly susceptible to any business shock,
thereby limiting its ability to absorb losses or financial
exigencies. Further, its constitution as a proprietorship concern
led to risk of withdrawal of capital.
Key Rating Strengths
* Experienced management: Mrs. Sapna Agrawal, Proprietor has vast
experience of more than three decade in the agro commodity industry
through family business. Further, the overall affairs of the firm
are managed by her sons Mr. Rahul Agrawal and Mr. Shiv Hari Agrawal
who also associated with this firm since inception.
Jabalpur (Madhya Pradesh) based Manglam Foods (MGF) was formed in
2013 as a proprietorship concern by Mrs. Sapna Agrawal. Earlier MGF
was mainly engaged in the processing of rice for government
department on job work basis and was also engaged in trading of
agricultural commodities such as rahar, urad, wheat, murgi dana
etc.
MEHTA AND ASSOCIATES: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Mehta and
Associates Fire Protection Systems Private Limited (MAFPSPL)
continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Long Term/ 8.00 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Short Term Bank 2.25 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 11, 2020 placed the
ratings of MAFPSPL under the 'issuer non-cooperating' category as
MAFPSPL had failed to provide information for monitoring of the
ratings as agreed to in its Rating Agreement. MAFPSPL continues to
be non-cooperative despite repeated requests for submission of
information through phone calls and emails dated January 7, 2021,
January 11, 2021 and January 13, 2021. In line with the extant SEBI
guidelines, CARE has reviewed the ratings on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of key rating drivers
At the time of last rating on February 11, 2020 the following were
the rating strengths and weaknesses: (Updated for publically
available information)
Key Rating Weaknesses
* On-going delays in debt servicing: As per banker interaction,
there are on-going delays in debt servicing for its bank facilities
availed by the company.
Ahmedabad-based (Gujarat), MAFPSPL was incorporated in October 1984
as a private limited company primarily promoted by Mr. Jayant
Mehta. Later Mr. Kunal Mehta and Mr. Kaushal Mehta joined MAFPSPL
as directors in 2001 and 2005 respectively. MAFPSPL imparts service
of designing fire detection and protection system as per the
requirement of clients and later implements the same by assembling,
erecting and commissioning fire suppression system, fire detection
system, fire fighting system and allied products mainly designed
for heavy power equipment. MAFPSPL also carries out research and
development (R & D) activities pertaining to fire protection system
from its R & D centre situated in Ahmedabad, Gujarat. It mainly
caters to power sector industries which include government as well
as private entities spread across India.
MHOW GHATABILLOD: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Mhow
Ghatabillod Toll Roads Private Limited (MGL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 200.10 CARE D; ISSUER NOT COOPERATING
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 10, 2019, revised
the rating of MGL to CARE D; Issuer Not Cooperating from CARE C
(CE); Issuer Not Cooperating due to the delays in debt servicing of
the guarantor and parent company, namely Essel Infraprojects
Limited (EIL) and consequent revision in its rating to 'CARE D;
Issuer Not Cooperating' from 'CARE A4; Issuer Not Cooperating'. MGL
continues to be non-cooperative despite repeated requests for
submission of information through emails dated August 6, 2020,
October 16, 2020, January 5 and 7, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed on account of ongoing delays in debt
servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in debt servicing obligations: MGL has not furnished No
Default Statement (NDS) to CARE since January, 2019. As per lender
interaction at the time of last review, there have been delays
observed in servicing of its debt obligations and the account
continues to be classified as NPA.
Liquidity: Very Poor liquidity, account is already NPA.
Mhow Ghatabillod Toll Roads Private Limited (MGL) is a special
purpose vehicle (SPV) promoted by Essel Infra projects Limited
(EIL) and group entities for four laning of the Mhow Ghatabillod
section (on SH-27) from km 1.500 to km 28.500 in the state of
Madhya Pradesh on a design, build, finance, operate and transfer
(DBFOT) toll basis. As per the concession agreement (CA) signed
between Madhya Pradesh Road Development Corporation Limited (MRPDC)
and MGL as on September 07, 2011, the concession period is for 23
years from the appointed date (including a construction period of
730 days) i.e. March 04, 2012. The expected commercial operations
date (COD) for the project was March 04, 2014. However, the tolling
commenced from Dec ember 31, 2012 which is almost 14 months before
the stipulated COD. The project was bid on a premium/ revenue
sharing basis starting at INR14.58 crore in the first year of
operation i.e. FY13 thereafter an increment of 5%
y-o-y.
MUKARBA CHOWK-PANIPAT: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Mukarba
Chowk-Panipat Toll Roads Limited (MCPTL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1,375.00 CARE D; ISSUER NOT COOPERATING
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 10, 2019, revised
the rating of MCPTL to CARE D; Issuer Not Cooperating from CARE C
(CE); Issuer Not Cooperating due to the delays in debt servicing of
the guarantor and parent company, namely Essel Infraprojects
Limited (EIL) and consequent revision in its rating to 'CARE D;
Issuer Not Cooperating' from 'CARE A4; Issuer Not Cooperating'.
MCPTL continues to be non-cooperative despite repeated requests for
submission of information through emails dated August 6, 2020,
October 16, 2020, January 5 and 7, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
MCPTL has not furnished No Default Statement (NDS) to CARE since
April 2019. As indicated by the company, the loan accounts have
been closed. However, company has not furnished relevant supporting
documents to CARE, including 'No Dues Certificate' from the lenders
towards the same.
Liquidity: Very Poor liquidity.
MPTRL is a special purpose vehicle (SPV) incorporated in August
2015 and a wholly owned by EIL. EIL has been awarded the project
for carrying out eight laning from existing 6/8 lane of Mukarba
Chowk (Km 15.5) to Panipat section (Km 86.0) of NH 1 in the state
of Haryana under National Highways Development Project (NHDP) phase
IV by National Highways Authority of India (NHAI, rated 'CARE AAA'
for instruments) under design, build, finance, operate and transfer
(DBFOT) – toll basis covering a length of approximately 70 kilo
meter (km). During FY16, due to change in design from
concretization to Bitumen has reduced total estimated project cost
from INR2,343 crores to INR2,122 crore, which will be funded
through a DER of 1.84:1 (Debt of INR1375 crores and equity of
INR558 crore along with NHAI grant of Rs189 crore). The project was
awarded to MPTRL based on a lowest grant of INR189 crore quoted by
EIL.
OSWAL KNITTING: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Oswal
Knitting and Spinning Industries Limited (OKS) continues to remain
in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Short Term Bank 1.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 31, 2019 placed the
rating of OKS under the 'issuer non-cooperating' category as OKS
failed to provide information for monitoring of the rating. OKS
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated January 25, 2021. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of the last rating on October 31, 2019 the following
were the rating weaknesses (updated for the information available
from the Registrar of Companies):
Key Rating Weaknesses
* Ongoing delays in debt servicing: OKS's bank accounts have been
classified as Non-Performing Assets (NPA) in the past.
* Weak financial risk profile: The total operating income declined
by 99% to INR0.01 Cr. in FY19. The company reported a cash loss of
INR0.15 crore in FY19 as compared to cash loss of INR0.33 crore in
FY18. The capital structure remained weak and debt coverage
indicators also remained weak, as on March 31, 2019.
* Susceptibility to raw material price volatility: Primary raw
materials for the company are various types of yarn, prices of
which depend on the prices of crude oil and cotton, both of which
have remained volatile in the past. Presence in a competitive
industry limits the ability of the company to pass on price
fluctuations to the customers.
* High competition from organised/unorganised players: The
readymade garment industry in India is characterized by the
presence of a large number of small and big players in the
organized sector as well as unorganised sector which leads to a
highly fragmented industry structure having high level of
competition and intense pricing pressures.
Promoted by Oswal family of Ludhiana, Oswal Knitting and Spinning
Industries Limited (OKS), was incorporated in 1992. OKS is engaged
in the trading of various types of yarn and fabric as well as
manufacturing of hosiery and woolen apparels for men and women at
its manufacturing facility located at Ludhiana, Punjab. The company
sells its readymade garments under the brand name of 'Oswal'
through its exclusive showrooms and through various wholesalers and
retailers.
PAAPPAI EXPORTS: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Paappai
Exports (PE) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.69 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 4, 2020 placed the
rating(s) of PE under the 'issuer noncooperating' category as PE
had failed to provide information for monitoring of the rating. PE
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated November 17, 2020. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on March 04, 2020 the following were the
rating weakness;
Key Rating Weakness
* On-going delays in debt servicing: The lender informed that
packing credit facility was overdrawn for more than 30 days.
Paappai Exports (PE) was established on, 2008 and promoted by Mr V
Suryanarayanan, as Managing Partner and C Leelakrishnan, D
Vijayakumar, D Sivakumar, L Sumathi and L Pradeep Kannan as
partners. The firm is mainly engaged in manufacturing and exports
of knitted and woven garments. since inception. The firm purchase
yarn and converting into fabric by giving job work. The
manufacturing process contains knitting, bleaching, and dyeing are
executed by job work basis. Cutting and stitching and printing of
garments done by PE. The main products of the firm are hosiery
garments from which the firm is generating more than 95% of the
total operating income derived through exports to countries like
France, UK, and Dubai.
PLATINA STEELS: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Platina
Steels Private Limited (PSPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 17.16 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 18, 2019 placed the
rating(s) of PSPL under the 'issuer non-cooperating' category as
PSPL had failed to provide information for monitoring of the
ratings. PSPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and emails dated January 2020 to January 19, 2021. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on December 18, 2019 the following were
the rating strengths and weaknesses.
Key Rating Weakness
* Delay in debt servicing: Platina Steels Private Limited has been
facing liquidity issues hence couldn't able to meet its debt
obligations on time.
Incorporated in June 2011, PSPL is engaged in the manufacturing of
stainless steel rerolling mill with plant located at Thimmapuram,
Guntur District, Andhra Pradesh with an installed capacity of 4,200
metric tonnes per annum (MTPA). The company is currently procuring
its raw materials from Jindal Steel and Power Limited and Rohit
Ferrotech Limited and is supplying through agents to various
manufacturing entities. In FY15, PSPL had a Profit after Tax (PAT)
of INR-0.57 crore on a total operating income of INR23.52 crore, as
against PAT and TOI of INR0.07 crore and INR11.55 crore,
respectively, in FY14.
PRASAD AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Prasad Agro
Industries. (PAI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 17.20 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key rating drivers
CARE had, vide its press release dated November 28, 2019, placed
the rating of PAI under the 'issuer non-cooperating' category as
PAI had failed to provide information for monitoring of the rating
for the rating exercise as agreed to in its Rating Agreement. PAI
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and emails
dated July 15, 2020, August 4, 2020, November 10, 2020, December
24, 2020. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed Description of the key rating drivers
At the time of last rating on November 28, 2019, the following were
the rating weaknesses:
Key Rating Weaknesses
Detailed description of the key rating drivers:
Key Rating Weaknesses
* Delays in servicing of debt obligations: As per the interaction
with the banker dated November 26, 2019, the cash credit account
was overdrawn for more than 30 days and the account was classified
under SMA1 category.
Prasad Agro Industries (PAI) was established in November 2013 and
is based out of Latur, (Maharashtra). The firm is engaged in the
business of processing of Toor dal at its processing facility
located at Latur with an installed capacity of 50 metric tons Dal
per annum (MTPA).
RISHABH CONSTRUCTIONS: CARE Reaffirms D Rating on INR10.50cr Loan
-----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Rishabh Constructions Private Limited (RCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.50 CARE D Rating removed from
Facilities ISSUER NOT COOPERATING category
and Reaffirmed
Long Term/ 67.74 CARE D/CARE D Rating removed
Short Term Bank from ISSUER NOT COOPERATING
Facilities category and Reaffirmed
Detailed Rationale & Key Rating Drivers
The reaffirmation of the rating assigned to bank facilities of RCPL
takes into account on-going delays in servicing of debt obligations
on account of poor liquidity. CARE also takes cognizance of the
RCPL availing the moratorium granted by one of its lender as a
Covid relief measure (as permitted by the Reserve Bank of India)
for a period commencing from March 2020 to May 2020 for debt
obligations.
Rating Sensitivities
Positive Factors - Factors that could lead to positive rating
action/upgrade:
* Improvement in overall liquidity position of the company along
with timely repayment of its debt obligations
Negative Factors - Factors that could lead to negative rating
action/downgrade: Not applicable
Detailed description of the key rating drivers
Key Rating Weaknesses
* On-going delays in debt servicing: There are on-going delays in
servicing of debt obligations by the company due to poor
liquidity.
Liquidity - Poor
Liquidity is poor marked by delay in raising bill along with
delayed realisation of payment from its customers. The construction
segment is inherently working capital intensive primarily due to
funding requirement towards the security deposit, retention amount
and margin money which is evinced by around 95-100% utilisation of
non-fund-based facilities by RCPL during the trailing 12 month
period ended December 2020. Further, utilisation of fund based
working capital limits remained full with various instances of
overdrawing during the last 12 months ending December, 2020 which,
as per the banker, were regularised within 30 days time. Apart from
working capital bank borrowing limits, the company also avails
mobilisation advances (interest bearing) from the customers and
unsecured loans for meeting its working capital requirements.
Further, the company has also been sanctioned limits of INR5 crore
for working capital limits under raw material assistance scheme
from NSIC. Operating cycle of the company remained elongated at 138
days in FY20 due to high quantum of work in progress inventory as
well as unsold area of City Square Mall of INR27.27 crore as on
March 31, 2020. Current ratio and quick ratio of the company stood
at 2.08 times and 0.54 times respectively as on March 31, 2020 with
free cash and bank balance of INR1.50 crore as on March 31, 2020.
Further, its cash flow from operating activities increased from
INR5.67 crore in FY19 to INR7.81 crore due to decrease in inventory
level. The company has availed covid emergency loan of INR0.75
crore (10% of FB limits) and Covid loan of INR3.06 crore under
guaranteed emergency credit line scheme announced by RBI.
* Impact of COVID-19 pandemic: The Covid-19 pandemic had halted the
operations of the company as construction work were halted at its
all the sites from March 22, 2020 upto May 31, 2020. With the
relaxation in lockdown on construction activities; the execution
work resumed gradually with effect from June, 2020 on its
construction sites after taking requisite approvals from respective
authorities. Even though the work on the sites have resumed, the
pace of work execution was adversely affected during 8MFY21 owing
to mass migration of labour and supply chain disruptions which is
evident from the lower TOI of INR29.50 crore reported in 8MFY21.
There has been gradual recovery in pace of execution and as
articulated by the management currently the company is not facing
issues with respect to labour shortage, raw-material
procurement/logistics services. The company was granted moratorium
by one of its lenders for debt obligation for the period from
March, 2020 to May, 2020.
Jaipur (Rajasthan) based RCPL, incorporated in November 1984 and
promoted by Mr. Mahendra Kumar Sethi and Mr. Madan Lal Sethi. RCPL
is engaged in execution of civil construction contract works with
major focus on construction of buildings,
refurbishment/modification of buildings, hospitals, sophisticated &
complex laboratories, water supply & sewage disposal and electrical
engineering works. It is a 'SS' (highest in the scale of SS to E)
class approved contractor from Military Engineer Services (MES) and
'AA' class approved contractor from Central Public Work Department
(CPWD). The company also undertakes civil construction work for
private clients. It also has a wind mill in Jaisalmer with a total
installed capacity of 1.25.
SAGAR DAMOH: CARE Keeps D Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sagar Damoh
Toll Roads Limited (SDL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 41.95 CARE D; ISSUER NOT COOPERATING
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 10, 2019, revised
the rating of SDL to CARE D; Issuer Not Cooperating from CARE C
(CE); Issuer Not Cooperating due to the delays in debt servicing of
the guarantor and parent company, namely Essel Infraprojects
Limited (EIL) and consequent revision in its rating to 'CARE D;
Issuer Not Cooperating' from 'CARE A4; Issuer Not Cooperating'. SDL
continues to be non-cooperative despite repeated requests for
submission of information through emails dated August 6, 2020,
October 16, 2020, January 5 and 7, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
Key Rating Weaknesses
SDL has not furnished No Default Statement (NDS) to CARE since May
2019. As indicated by the company, the loan accounts have been
closed. However, company has not furnished 'No Dues Certificate'
issued by its lenders for the same.
Liquidity: Very Poor liquidity.
Sagar Damoh Toll Roads Limited (SDL) is a Special Purpose Vehicle
(SPV) floated by Essel Infraprojects Limited, for two lanin g of
existing road from the Sagar city and terminating at Teen Gulli
Chuoraha in Damoh, on the SH-14 section, a 68.81-km road section in
the state of Madhya Pradesh under Build, Operate & Transfer (BOT)
basis. The project was awarded to SDL by Madhya Pradesh Road
Development Corporation Limited (MPRDC), a public sector
undertaking. The scope of work for the project highway includes
construction, operation and maintenance for a period of 18 years
commencing form the Appointed Date i.e. February 26, 2010 provided
that two-laning plus project is undertaken at a subsequent date
prior to ninth year from Appointed Date, otherwise the concession
period would deemed to be 12 years. The expected COD for the
project was February 26, 2012. Tolling at one of plazas started
from 5th December 2011 whereas at the other plaza tolling commenced
from 5th May 2012. The debt was to be repaid in 32 unequal
quarterly instalments commencing from June, 2012.
SAI KRIPA: CARE Keeps D Debt Rating in Not Cooperating Category
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sai Kripa
Industries (SKI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.69 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 28, 2020 placed the
ratings of SKI under the 'issuer non-cooperating' category as SKI
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. SKI continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and emails dated January 7, 2021,
January 11, 2021 and January 13, 2021. In line with the extant SEBI
guidelines, CARE has reviewed the ratings on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of key rating drivers
At the time of last rating on February 28, 2020 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Delay in debt servicing: As per banker interaction during last
review, there were delays and defaults in debt servicing. However,
we were unable to contact banker during current review.
Jabalpur-based (Madhya Pradesh), SKI was established as
proprietorship firm in March 2015 by Mr. Narendra Kumar Bulani,
having more than 3 decades of experience in rice processing
industry.
SEA BLUE: CARE Assigns C (Is) Issuer Rating
-------------------------------------------
CARE Ratings has assigned CARE C (Is) Issuer Rating to Sea Blue
Shipyard Limited (SBS).
Detailed Rationale & Key Rating Drivers
The issuer rating assigned to Sea Blue Shipyard Limited (SBS) are
tempered by delays in debt servicing in the past, small scale of
operations amidst stiff competition, working capital intensive
nature of operations and stressed liquidity position. The issuer
rating however derive strength from experienced promoter in ship
building industry, well-established business relations with reputed
customers and moderate order book position, turn around in net
profits during FY20 (April 1–March 31) along with comfortable
capital structure and debt coverage indicators.
Key Rating Sensitivities
Positive Factors
* Increase in the scale of operation with a total operating income
exceeding INR40 crore with and maintaining profitability margins
from the present level on a sustained basis
* Improvement in the liquidity position with current ratio
exceeding 1.50x on a sustained basis
Negative Factors
* The Issuer Ratings would be subjected to overall gearing will
remain below 0.75 times and debt coverage indicators with interest
coverage ratio reaching below 2x and total debt to gross cash
accruals exceeding 4x on a sustained basis.
* Deterioration in the collection period and exceeding 120 days on
a sustained basis
Key rating weaknesses
* Delays in debt servicing in the past: SBI has classified SBS into
NPA category on July 4, 2020 on account of delays in debt
servicing. Despite cash losses reported during FY18 & FY19, the
company was continued to repay its debt obligations with delays and
irregularities through the realization of receivables from its
debtors. In addition, during FY20, the company has reported cash
profit of INR6.10 Crore. All aforesaid facts enabled the entity to
repay its debt obligations. Further, the company has closed all its
liabilities with SBI through one time settlement scheme. The
company has settle the loans by arranging the funds by the way of
rights issues, unsecured loans from promoters, receivables from its
clientele, and partial refinancing from NBFC.
* Small scale of operations amidst stiff competition: The company
has reported smaller size of operations, however scaling up during
the review period i.e. FY18-FY20 at a CAGR of 24.58% .The total
operating income stood small at INR15.66 crore in FY20 however
improved from INR3.97 Crore in FY19. SBS faces huge competition
from strong industry major like Cochin Shipyard Limited located at
Cochin port with strong technical prowess and other small
unorganized players for afloat repairs.
* Working capital intensive nature of operations: Operations of the
company are working capital intensive mainly on account of funds
being blocked in receivables (avg. debtor's period is 120 days in
FY20 vis-à-vis 737 days in FY19). Normally a small ship building
process takes around 18 months to complete and the payment is
received stage wise from clients. For manufacturing and sale of
products, SBS follow stage wise payment for projects with long
tenure. Once the bill is raised its takes an average of 60 days
tenure for collection from government entity and 30 days tenure
from private entity. At times, the collection goes beyond 60 days
from government entity due to inspection and delay in passage of
bills. Due to long tenure and delay in payment of bills raised has
resulted in elongation of average collection period which was 120
days in FY20; however the same has improved from previous year (737
days in FY19). As on March 31, 2020, out of the total debtors, 42%
were due for more than 180 days. SBS follows Just-in-time (JIT)
mechanism for ship building and manufacturing of goods, however the
company is required to hold minimum set of inventory required for
ship repair and other services, where
the average inventory period stood at 47 days in FY20. The Company
holds inventory of low value spares and consumables in its
container mainly for repairing business and thus inventory period
stood low. Furthermore, company receives credit period from
creditors of two months which resulted in average creditor's period
of 66 days in FY20 vis-a-vis 70 days in FY19. On account of
aforesaid fact, operations are relied highly on working capital
bank borrowings, marked by the operating cycle of the company stood
at 101 days in FY20 as against 762 days in FY19.
Key Rating strengths
* Experienced promoter in ship building industry and long track
record of operations: The promoters have good experience in ship
building and repairing industry. Mr. OC John, Promoter and Managing
Director, is a post graduate in commerce and a graduate in law. He
joined a ship building and repairing firm in Kochi in 1983 and
resigned from the firm in 2002 as Chief Executive Officer and
promoted SBS in 2003 along with four other technocrats. Mr. E
Tojen, promoter and director, is a marine engineer by profession,
has 21 years of experience in shipping industry and merchant navy.
Further the entity derives support from well qualified
professionals business viz Mr. Jilish G Kanippilly (Director HR &
IT), Mr. P.G. Vinayan (Chief Finance Officer), Ms. R. Raji (Company
Secretary with adequate experience relevant line of business. The
entity is operating since 2003 and thereby registering long track
record of operations.
* Well-established business relations with reputed customers and
moderate order book position: Over the last few years the company
is able to registered as well established player in manufacturing
of ship parts and other shipping equipments business for reputed
clients such as Goa Ship Yard Ltd, Indian Navy Coast Guard,
Shipping Corporation of India, Dredging Corporation of India,
Cochin Shipyard Limited among others. Furthermore the company is
maintainaing long term with reputed customers as its operating more
then a decade. SBSL has an order book of INR16.06 crore as of
December 31, 2020 with average execution tenure from 1 month to 3
years. Some of the key orders are Improvement of Thottappally
spillway, wooden deck renewal - Ins Tarangini, complete dry
docking and Lay-up repairs, dry docking and allied repairs-SRP
Balshil, Performing Dry docking of barge FACT Pragatiyan and
expected to receive more orders in the remaining period of this
fiscal year.
* Turn around in net profits during FY20 along with comfortable
capital structure and debt coverage indicators: The company has
reported net losses for the two fiscals ended FY18 and FY19 due to
high operational costs (material and employee costs). However the
company has reported a net profit of INR4.57 crore during FY20 on
account of revenue realized from new work orders received for ship
repairments, and executed during said period coupled with
offsetting operational costs. The company's capital structure
remained comfortable marked by the overall gearing stood at 0.26x
as at March 31, 2020 as against 0.43x as at March 31, 2019.
As on March 31, 2020, debt profile stood at 8.12 Crore as against
good networth base of INR31.69 Crore. The interest coverage stood
negative during FY18 & FY19 on account of operating losses reported
during the period by the company. The operating performance has
improved in FY20, and has enabled the company to report sufficient
operating profit to service the interest obligations of the
company. The same stood at 16.49x during FY20. Similarly the TD/GCA
though stood at negative during FY18 and FY19 owing to the cash
losses reported, it improved and stood at comfortable at 1.33x
during FY20 due to significant cash profits earned by the company
coupled with y-o-y decline in total debt levels.
Liquidity: stressed
The current ratio and quick ratio stood weak at 0.69x and 0.61x
respectively as on March 31, 2020 (vis-àvis 0.47x and 0.41x
respectively as on March 31, 2019). The cash and bank balances
stood at INR0.22 Crore as on March 31, 2020. However, the loan
facilities with SBI has been closed and there are no bank
borrowings. With the cash accruals envisaged to be generated to be
satisfactory which will aqdequate to meet out the operations going
forward. Company has not availed moratorium for its bank facilities
amid COVID-19 announced by RBI.
Sea Blue Shipyard Limited (SBS), incorporated on December 8, 2003,
is an ISO:9001-2008 certified public limited company engaged in
ship building, ship repairs, general engineering, wharfage and
berthing, tug boat services and hire charges activities. Initially
the company was established under the name of Sea Blue Marine
Engineering (Pvt.) Ltd. and later converted into a Public Limited
Company in 2009, with its new name SBS.
SBS has a yard, located at Vypin, having necessary infrastructure
facilities like 200 meters long wharfs, slipways and workshop for
undertaking above works. SBS has a branch office in Goa,
established during 2009 with a view to expand its business
activities along the Western Coastal belt. It undertakes
contractual work of Goa Ship Yard Ltd, Indian Navy Coast Guard,
Shipping Corporation of India, Dredging Corporation of India,
Cochin Shipyard Limited etc. and other private agencies operating
in the Western region for specialized jobs. SBS is registered with
Navel Ship Repair Yard, Kochi for undertaking all types of repairs
of their vessels which extended upto November 2023.
SHIVA TEXFABS: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shiva
Texfabs Limited (STL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 933.93 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Short Term Bank 11.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 31, 2019 placed the
ratings of STL under the 'issuer non-cooperating' category as STL
failed to provide information for monitoring of the rating. STL
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated January 25, 2021. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of the last rating on October 31, 2019, the following
were the rating weaknesses (updated for the information available
from the Registrar of Companies):
Key Rating Weaknesses
* Ongoing delays in debt servicing: STL's bank accounts had been
classified as Non-Performing Assets (NPA) in the past.
* Weak financial risk profile: The company continued to remain in
losses at the net level in FY19. This in turn led to a weak
overall solvency position.
* Deteriorating working capital cycle: The operating cycle of the
company stood at ~52 days as on March 31, 2019 (~73 days as on
March 31, 2018).
The company was initially incorporated in 1993 as 'Shiva
Fabricators Pvt. Ltd.' and subsequently renamed Shiva Texfabs
Limited (STL). It is the flagship company of the Ludhiana-based
'Shiva Group'. The commercial operations of the company commenced
in 1995. The company is engaged in recycling of p-cPET containers
and bottles to manufacture synthetic fibres, yarns and fabrics. STL
operates from its two manufacturing units, both located in Ludhiana
having a total installed capacity of 38,112 spindles, as on March
31, 2015. The company also has a dyeing capacity of 10,850 MTPA
(metric tonnes per annum) and a recycling capacity of 82,500 MTPA
by weight for p-cPET bottles as on September 30, 2015.
SUSHEEL ENGINEERS: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Susheel
Engineers (SE) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Short Term Bank 2.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale, Key Rating Drivers and Detailed description of
the key rating drivers
CARE had, vide its press release dated November 8, 2019, placed the
rating of SE under the 'issuer noncooperating' category as SE had
failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. SE continues to be
non-cooperative despite repeated requests for submission of
information through numerous phone calls and emails dated June 22,
2020, June 24, 2020, June 29, 2020, July 24, 2020, August 31, 2020,
October 7, 2020, October 20, 2020, October 27, 2020
December 3, 2020, January 13, 2021. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on November 8, 2019 the following were
the rating weaknesses
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in servicing of debt obligations: There were overdrawals in
the cash credit facility for more than 30 days and also there
were invocation of Bank guarantee, and devolvement in Letter of
credit.
SE was established in 1994 by Mr. Sidram. G. Sidrure and is engaged
in manufacturing and servicing of boiler components, steel casing,
industrial chimney, collector columns, industrial duct etc. The
manufacturing facility of SE is located at Bhosari, Pune
(Maharashtra).
=========
J A P A N
=========
ANA HOLDINGS: Egan-Jones Lowers Senior Unsecured Ratings to B-
--------------------------------------------------------------
Egan-Jones Ratings Company, on February 5, 2021, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Ana Holdings Inc. to B- from B+. EJR also downgraded
the rating on commercial paper issued by the Company to B from A3.
Headquartered in Tokyo, Japan, Ana Holdings Inc. provides a variety
of air transportation-related services.
JAPAN TOBACCO: To Close Tobacco Plant; Shed 3,000 Jobs
------------------------------------------------------
The Japan Times reports that Japan Tobacco Inc. said Feb. 9 it will
shut down a plant and shed 3,000 jobs as the company is
restructuring its domestic tobacco operations to meet falling
demand.
JT will close its tobacco plant in Chikushino, Fukuoka Prefecture,
southwestern Japan, at the end of March 2022, according to the
report. It will also shut down a tobacco filter plant run by a
subsidiary in Tagawa in the same prefecture, at the same time.
The company will shed about 20% of its 13,500 workers, the report
discloses. It will offer buyout packages to 1,000 full-time and 150
postretirement workers while asking about 1,600 part-timers to
quit. All of them are expected to leave the company at the end of
March 2022.
JT's restructuring comes as Japanese people are becoming more
health-conscious. "We made this tough decision as the Japanese
market has kept shrinking," President and CEO Masamichi Terabatake
said in an online news conference, The Japan Times relays.
According to The Japan Times, the company will consolidate its
domestic and overseas tobacco businesses, while unifying its
headquarters functions into Geneva in January 2022. The Japanese
headquarters will be left with domestic marketing and product
development functions.
In Japan, JT will reorganize its operations into 47 branch offices
from the current combination of 15 branch offices and 145 outposts
covering smaller areas.
JT said its sales fell 3.8% to JPY2.09 trillion in 2020 from the
previous year. The coronavirus pandemic dragged down tobacco sales
at airport duty-free shops, while restaurant demand for processed
food products sagged, The Japan Times discloses.
Net profit dropped 10.9% to JPY310.2 billion, although the company
booked JPY41.3 billion in proceeds from the sale of its old
headquarters building, The Japan Times relays.
Japan Tobacco, Inc. engages in the manufacture and sale of tobacco,
pharmaceutical and processed food products. It operates through the
following divisions: Japanese Domestic Tobacco, International
Tobacco, Pharmaceutical, and Processed Food. The Japanese Domestic
segment deals with the production and sale of tobacco products in
domestic areas. The International Tobacco segment manufactures and
markets tobacco products worldwide. The Pharmaceutical segment
develops, manufactures, and sells prescription drugs. The Processed
Food segment offers processed food, bakery products and seasonings.
NISSAN MOTOR: Trims Full-Year Loss Outlook as Sales Recover
-----------------------------------------------------------
River Davis and Tsuyoshi Inajima at Bloomberg News report that
Nissan Motor Co. trimmed its loss outlook for the fiscal year and
posted a surprise operating profit for the most recent quarter, a
sign the beleaguered automaker is beginning to recover from the
worst of the pandemic's impact on its already depressed sales.
According to Bloomberg, Japan's second-largest carmaker forecast a
net loss of JPY530 billion (AUD5.1 billion) for the year through
March, narrower than the previously expected JPY615 billion. Nissan
posted an operating profit of JPY27.1 billion for the three months
through December. Analysts had on average predicted a JPY46.8
billion loss.
Last quarter saw a recovery for the global auto market as a whole,
with retail sales hitting the previous year's levels in the U.S.
and exceeding them in China, Nissan Chief Operating Officer Ashwani
Gupta said at a briefing on Feb. 9. "We are gaining momentum," he
said.
Nissan is about nine months into an aggressive turnaround plan that
involves slashing its global production capacity by around a fifth
and churning out 12 new models in the 18 months through November to
refresh its aging lineup and rouse stagnating consumer interest,
Bloomberg relays.
Sales of new models like the Rogue SUV, which debuted in the U.S.
in October, have been charting higher, limiting the drop in
Nissan's overall global sales to less than 10% year-on-year in
November and December, compared with a more than 30% decline in the
first half of 2020.
"These new models will be key" for the automaker, said Bloomberg
Intelligence analyst Tatsuo Yoshida. "Nissan should pick up a bit
because of the new products coming out in markets like the U.S.,
but right now things are still dire."
Sales for the quarter through December fell 11% to JPY2.2 trillion,
Nissan said in its earnings statement Feb. 9. For the full year,
Nissan is forecasting sales of JPY7.7 trillion, slightly shy of the
JPY7.8 trillion analysts expect, Bloomberg discloses.
Global auto sales are forecast to recover steadily this year to
84.4 million units from 76.8 million vehicles in 2020, Bloomberg
discloses citing IHS Markit data. Challenges remain, not least the
shortage of semiconductors that's causing automakers worldwide to
trim their output.
According to Bloomberg, Nissan has set a global full-year sales
target of around 4 million units, a little down on previous
expectations for 4.2 million cars, as the company forecasts
lingering coronavirus-related disruptions and an inability to
produce to demand due to the chip shortage.
In September, Chief Executive Officer Makoto Uchida said he
expected the company to return to profitability in 2021 if momentum
kept up in markets like China, where Nissan also plans to expand,
he said, Bloomberg recalls.
"We recognize we are still in the negative," Bloomberg quotes Mr.
Uchida as saying. "We're realistic and aware of foreseeable risks,
but we're determined to successfully execute Nissan's business
transformation plan."
About Nissan Motor
Nissan Motor Company Ltd, usually shortened to Nissan, is a
Japanese multinational automobile manufacturer headquartered in
Nishi-ku, Yokohama, Japan.
As reported in the Troubled Company Reporter-Asia Pacific on July
16, 2020, Egan-Jones Ratings Company, on July 6, 2020, downgraded
the foreign currency and local currency senior unsecured ratings on
debt issued by Nissan Motor Co., Ltd. to BB- from BB. EJR also
downgraded the rating on commercial paper issued by the Company to
B from A3.
=============
M Y A N M A R
=============
MYANMAR: Braces for More Anti-Coup Protests as Crackdown Looms
--------------------------------------------------------------
Bloomberg News reports that anti-coup protesters returned to the
streets of Myanmar's largest cities on Feb. 10, preparing to face
off against an increasingly hostile security forces now using
rubber bullets, tear gas and water canons to push back
demonstrators.
Live broadcasts show civil servants from different ministries in
the capital Naypyidaw gathered near the city's Central Market,
chanting "Don't go to the office", in defiance of military chief
Min Aung Hlaing's warning to government workers not to engage in
politics, according to Bloomberg. At least one protester, a
20-year-old computer science student, remains in a critical
condition in Naypyidaw after use of force by police of Feb. 9.
In the commercial center of Yangon, demonstrators began gathering
in front of the United Nations offices and embassies including the
U.S., Japan, China, Korea and India, many of them sitting in small,
rubber pools in a statement against police use of water canons
against protesters on Feb. 9, Bloomberg relates.
It's the fifth day of street protests that have been building since
the military took power in a coup on Feb. 1, says Bloomberg. The
youth-led movement has used social media to mobilize supporters
with three main demands: the release of civilian leaders including
Aung San Suu Kyi, recognition of the 2020 election results won by
her party and a withdrawal of the military from politics.
According to Bloomberg, Thurein Win, a protester in Mandalay, said
as many as 100,000 may join the demonstrations Feb. 10, including
monks from the city's biggest monastery, students, teachers and
workers.
"The military junta is trying to portray peaceful demonstrators as
instigators on state media," Bloomberg quotes Thurein Win as
saying. "So, we'll make sure to avoid confrontations in all our
protests today."
At least 20 protesters were injured after police used rubber
bullets Naypyidaw during the most serious clashes on Feb. 9,
according to a network of medics supporting the protests. In the
northern city of Mandalay, witnesses said security forces blasted
tear gas and water cannons and detained 36 people. Four police
officers were also injured, according to the office of the
Commander in Chief of Defense Services, Bloomberg relays.
Suu Kyi's National League for Democracy denounced the police
actions against demonstrators. "The NLD strongly condemn the
crackdowns, as they are acts of violence on barehanded people by
armed forces," the party said in a statement Feb. 10, relays
Bloomberg. "We urge authorities concerned to act immediately not to
occur such kind of violences again."
On Feb. 8, Min Aung Hlaing defended the military takeover of the
government by repeating claims of voter fraud in November's
election that have been disputed by the election commission,
international observers and Suu Kyi's party, Bloomberg says. He
also reiterated that the army would hold an election after the
yearlong state of emergency and respect the outcome, Bloomberg
relates.
=====================
N E W Z E A L A N D
=====================
[*] NEW ZEALAND: Clamps Down on Property Investors as Prices Soar
-----------------------------------------------------------------
Matthew Brockett at Bloomberg News reports that New Zealand is
clamping down on property investors in an attempt to rein in
spiraling house prices.
Bloomberg relates that the central bank said on Feb. 9 it will
reinstate mortgage lending restrictions on March 1 and tighten them
further for investors from May 1. Finance Minister Grant Robertson
also said Feb. 9 the government will unveil measures soon to curb
housing demand, "particularly from those who are speculating."
"A growing number of highly indebted borrowers, especially
investors, are now financially vulnerable to house price
corrections and disruptions to their ability to service the debt,"
Bloomberg quotes Reserve Bank Deputy Governor Geoff Bascand as
saying in a statement. "Highly leveraged property owners, in
particular investors, are more prone to rapid ‘fire sales' that
potentially amplify any downturn."
Bloomberg says the RBNZ removed lending restrictions last year to
ensure they didn't get in the way of policy responses to the
coronavirus pandemic, but predictions of falling house prices never
came to pass. Instead, prices soared as New Zealand's economy
performed much better than expected and record-low mortgage rates
encouraged demand.
The reintroduced lending restrictions mean that most
owner-occupiers will need a 20% deposit to get a mortgage, while
investors will need 30%. From May 1, the required down-payment for
investors will rise to 40%, the RBNZ said.
According to Bloomberg, New Zealand house prices continued to soar
in January, gaining 12.8% from a year earlier. That's the fastest
pace since March 2017.
Several banks have already moved to tighten requirements for
investors amid concerns about the rapid growth in lending volumes.
"We are now concerned about the risk a sharp correction in the
housing market poses for financial stability," Mr. Bascand said.
"There is evidence of a speculative dynamic emerging with many
buyers becoming highly leveraged."
Bloomberg says the red-hot housing market has become politically
charged as first-time buyers are locked out, widening social
inequalities. The government last year called on the RBNZ to take
house prices into account when setting monetary policy -- a
suggestion the central bank has rebuffed.
Bloomberg relates that Mr. Robertson said that the government will
soon unveil and range of measures to address the housing crisis.
"The first of those will be on the demand side measures which will
come in late February," he said in a speech. "We all know that
building more houses, particularly affordable houses, is critical.
But we also can do more to manage demand, particularly from those
who are speculating."
Possible measures include extending the period in which profits on
the sale of investment property are taxable, and making changes to
tax deductibility of rental property expenses to make them a less
attractive investment vehicle, Bloomberg discloses.
=================
S I N G A P O R E
=================
KS ENERGY: Judicial Managers Receive Approval to Wind Up Unit
-------------------------------------------------------------
Rae Wee at The Business Times reports that the judicial managers
(JMs) of KS Energy have received approval from creditors to take
the necessary steps to dispose of the assets of KS Drilling, as
well as to discharge themselves and wind up KS Drilling after the
satisfactory disposal of its assets, the company said in a bourse
filing on Feb. 9.
BT relates that the JMs will also be allowed to consider any
reasonable proposal from potential investors keen to list on the
Singapore Exchange Securities Trading Limited (SGX-ST) by way of a
proposed acquisition, transfer of the listing status of the
company, or any related transactions.
Additionally, they also received approval to seek a further
extension of the judicial-management order for the purpose of the
proposed transaction and to seek for an extension of time from
SGX-ST to submit a resumption proposal, BT relays.
In the event that the time extension is not granted or a
transaction cannot be arranged, the JMs will then have to take the
necessary steps to discharge themselves and wind up the company,
and form a committee of creditors.
The approvals come following a creditors' meeting of the company
and KS Drilling held on January 27, the report notes.
"The JMs will provide further updates on material developments as
and when is appropriate," said JMs Andrew Grimmett and Lim Loo
Khoon in the statement.
About KS Energy
Headquartered in Singapore, KS Energy Limited operates as an energy
services provider primarily to the oil and gas, marine, and
petrochemical industries in Kurdistan, Egypt, Pakistan, Vietnam,
Indonesia, Malaysia, and internationally. KS Energy Limited is a
subsidiary of Pacific One Energy Limited.
On Oct. 13, 2020, the Singapore High Court appointed Deloitte &
Touche's Andrew Grimmett and Lim Loo Khoon as judicial managers of
KS Energy and a key operating subsidiary KS Drilling (KS
Companies). Both were earlier, on Aug. 31, appointed the group's
interim judicial managers (IJMs).
In August, OCBC applied to place the mainboard listed firm and its
unit under JM after it sent letters of demand to the firms as well
as six other subsidiaries for a US$230.7 million term loan and a
SGD5 million bridging loan to KS Drilling. KS Drilling is an
80.09%-owned subsidiary of KS Energy, which has provided US$150
million in guarantee for the term loan.
NO SIGNBOARD: Posts SGD1.68 Million Net Loss for Q1 Ended Dec. 31
-----------------------------------------------------------------
Rae Wee at The Business Times reports that Catalist-listed
restaurant group No Signboard Holdings sank further into the red in
its first quarter of FY2021, as it posted a net loss of SGD1.68
million, a 38.6 per cent decrease from the year-ago period.
Its revenue saw a steeper decline of 58.8 per cent year-on-year to
SGD2.47 million, based on results announced Feb. 9.
For its first quarter ended Dec. 31, 2020, seafood restaurants
sales accounted for 30 per cent of No Signboard's total revenue,
compared with 60 per cent in the previous corresponding period.
Meanwhile, hotpot sales contributed to 40 per cent of the total
revenue, up from 17 per cent in the year-ago period. Quick-serve
restaurants also contributed to a greater percentage of the group's
revenue for the quarter; it stood at 25 per cent, compared with 6
per cent in Q1 FY2020.
However, its beer business was "significantly impacted" for the
quarter, as most of the outlets where the group's beer is
distributed had been closed during the circuit breaker and remained
closed as at end last year.
Employee benefits and other operating expenses in Q1 fell 31.7 per
cent and 43.6 per cent in from the year-ago period respectively.
However, rental expense rose 28.7 per cent y-o-y.
About No Signboard
No Signboard Holdings Ltd., an investment holding company, manages
and operates food and beverage outlets in Singapore. The company
operates a chain of seafood restaurants under the No Signboard
Seafood brand that serve various seafood cuisine prepared in
Chinese and Singapore styles. It owns and operates three
restaurants, as well as operates one restaurant under a franchise
agreement. The company also produces, promotes, and distributes
beer under the Draft Denmark brand; and distributes various third
party brands of beer, as well as operates as an OEM beer supplier
for third party brands. In addition, it produces and distributes
ready meals through a network of vending machines. Further, the
company engages in leasing financial intangible assets, such as
patents, trademarks, brand names, etc.
SUNVIC CHEMICAL: To Be Delisted from SGX Mainboard
--------------------------------------------------
Claudia Chong at The Business Times reports that Sunvic Chemical
Holdings will be delisted from the mainboard of the Singapore
Exchange, following Harrier Group's intention to exercise its right
to compulsorily acquire all the shares of the shareholders who have
not accepted its voluntary general offer.
According to BT, Harrier Group is an investment holding company
whose sole director and shareholder is private investor Song
Wuying. The group intends to acquire all the shares of the
dissenting shareholders at SGD0.028, the offer price for each
share.
BT relates that the offer price represents a premium/(discount) of
about 21.7 per cent, (3.4 per cent), 16.7 per cent and (12.5 per
cent) over/to the volume weighted average price per share for the
one-month, three-month, six-month and 12-month periods
respectively, and a premium of 27.3 per cent to the closing price
on the last trading day.
Shares in watchlisted Sunvic Chemical have been suspended since
Jan. 14, 2019, BT notes.
As at 6:00 p.m. on Feb. 9, 2021, the offeror received valid
acceptances that amount to 91.26 per cent of the total number of
issued shares, other than those already held by the offeror, its
related corporations or their respective nominees, BT adds.
Based in Singapore, SunVic Chemical Holdings Limited (SGX:A7S), an
investment holding company, manufactures and sells intermediate
chemical products.
*********
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
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***