/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/210224.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 Wednesday, February 24, 2021, Vol. 24, No. 34 Headlines A U S T R A L I A ACN 127 015 650: Second Creditors' Meeting Set for March 3 GROCON CONSTRUCTORS: First Creditors' Meeting Set for March 4 GROCON GROUP: First Creditors' Meeting Set for March 4 GROCON GROUP: Goes Into Administration GULF ABORIGINAL: First Creditors' Meeting Set for March 2 PARADIGM RESOURCES: Second Creditors' Meeting Set for March 2 SUNSHINE CITY: First Creditors' Meeting Set for March 4 WINDHOIST AUSTRALIA: First Creditors' Meeting Set for March 4 C H I N A CHINA AOYUAN: Fitch Assigns BB Rating to Proposed USD Notes I N D I A ANNUR SATYA: ICRA Withdraws B- Rating on INR12cr LT Cash Loan ATOM CERAMICS: ICRA Withdraws B+ Rating on INR4.50cr Loan AYAAN TRENDZ: ICRA Lowers Rating on INR6.0cr Cash Loan to D BHARTI AIRTEL: S&P Rates New Sub. Perpetual Securities 'BB' D.S ENTERPRISES: ICRA Withdraws B+ Rating on INR7.50cr Loan GOUR NITYE: ICRA Reaffirms B+ Rating INR3.30cr Cash Loan to B+ GURURAMDAS KNIT: ICRA Withdraws B Rating on INR5.30cr LT Loan HARSH SPECIALITY: Insolvency Resolution Process Case Summary HI RISE INFRATECH: Insolvency Resolution Process Case Summary ISHWAR CABLES: ICRA Lowers Rating on INR6.0cr Cash Loan to D ISHWAR METAL: ICRA Lowers Rating on INR20cr Loan to D JANA SMALL: ICRA Reaffirms D(SO) Ratings on 7 PTCs JUBILANT PHARMA: S&P Upgrades LongTerm ICR to 'BB', Outlook Stable K S INFRA: ICRA Lowers Rating on INR7cr Cash Loan to D K-MARK BIZSOL: Insolvency Resolution Process Case Summary LALITPUR POWER: ICRA Lowers Rating on INR13,363.78cr Loan to D LEXUS GRANITO: ICRA Reaffirms D Rating on INR83.88cr Loans MATESHWARI FOOD: ICRA Keeps B Debt Ratings in Not Cooperating MILSHA AGRO: ICRA Lowers Rating on INR2.0cr Term Loan to B MUKTA INDUSTRIES: ICRA Moves D Debt Ratings to Not Cooperating NANDAN SAHA: ICRA Keeps B+ Ratings in Not Cooperating Category NUEVO POLYMERS: ICRA Keeps B+/A4 Rating in Not Cooperating PEPSU ROAD: ICRA Reaffirms B+ Rating on INR40cr Loans POLESTAR TRADERS: ICRA Keeps D Debt Ratings in Not Cooperating PRAKASH STEEL: ICRA Moves D Debt Ratings to Not Cooperating RIGHILL ELECTRICS: ICRA Lowers Rating on INR3.50cr Loan to D RKM POWERGEN: ICRA Reaffirms D Rating on INR1,029.61cr Loan RSH AGRO: ICRA Keeps B Debt Ratings in Not Cooperating Category SEVOKE MOTORS: ICRA Keeps B+ Debt Ratings in Not Cooperating SHAMBHU TEXTILES: Insolvency Resolution Process Case Summary SHIRDI SAI: ICRA Hikes Rating on INR657cr Loan to B+ SOMATHEERAM AYURVEDIC: ICRA Lowers Rating on INR7.95cr Loan to B+ TULSI OIL: ICRA Reaffirms B+ Rating on INR5.50cr LT Loan UNIQUE STRUCTURES: ICRA Lowers Rating on INR24.25cr Loan to B+ VICHITRA CONSTRUCTIONS: ICRA Keeps C Ratings in Not Cooperating VINAYAK INTERNATIONAL: ICRA Cuts Rating on INR20cr Loan to D N E W Z E A L A N D MAGSONS HARDWARE: Nido to Shut Stores; 60 Jobs to be Axed WHAKATANE MILL: 210 Jobs at Risk as Mill May Shut Down S I N G A P O R E BERLANGA MYANMAR: Placed Under Voluntary Liquidation HIN LEONG MARINE: Court to Hear Wind-Up Petition March 2 HIN LEONG TRADING: Court to Hear Wind-Up Petition March 8 S R I L A N K A DFCC BANK: S&P Withdraws 'CCC+/C' Issuer Credit Ratings - - - - - ================= A U S T R A L I A ================= ACN 127 015 650: Second Creditors' Meeting Set for March 3 ---------------------------------------------------------- A second meeting of creditors in the proceedings of ACN: 127 015 650 Pty Ltd (formerly known as Bernipave Civil Pty Ltd) and ACN 109 109 346 Pty Ltd (formerly known as Bernipave Pty Ltd) has been set for March 3, 2021, at 10:00 a.m. and 11:30 a.m., respectively, 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 March 2, 2021, at 4:00 p.m. Schon Gregory Condon RFD of Condon Associates was appointed as administrator of ACN: 127 015 650 on Nov. 27, 2020. GROCON CONSTRUCTORS: First Creditors' Meeting Set for March 4 ------------------------------------------------------------- A first meeting of the creditors in the proceedings of: - Grocon Constructors (NSW) Pty Ltd - Grocon (St Leonards) Holdings Pty Ltd - QV Custodian Pty Ltd - Grocon (CB) Holdings Pty Ltd - Grocon (CB) Management Pty Ltd - Grocon (Spring Street) Holdings Pty Ltd - GRD Real Estate Pty Ltd - QV Carpark Pty Ltd - Grocon QV Holdings No. 2 Pty Ltd ATF Grocon QV Holding Trust 2 - Grocon QV Holdings No. 3 Pty Ltd ATF Grocon Holding Trust - Grocon QV Holdings No. 4 Pty Ltd ATF Grocon Holding Trust - Grocon QV Holdings No. 5 Pty Ltd ATF Grocon Holding Trust - GPFA Pty Ltd - CR 163 Pty Ltd ATF 163 Canterbury Road Investments Trust - Grocon Capital Pty Ltd - Grocon (Carlton Brewery) Holdings Pty Ltd - Grocon (SQ Stage 2) Holdings Pty Ltd - Grocon (Victoria Street) Holdings Pty Ltd - Grocon (Victoria Street) Developments No.1 Pty Ltd ATF Victoria Street Development Trust No. 1 - Grocon (Gaffney Street, Coburg) Pty Ltd - Grocon Developments VIC Pty Ltd - Grocon International Investments Pty Ltd - Grocon International Pty Ltd - Grocon Media House Investments Pty Ltd - Grocon (Darling Harbour) Developments Pty Ltd ATF Darling Harbour Trust - Grocon (Darling Harbour) Pty Ltd - Grocon (Darling Harbour) Holdings Pty Ltd - Grocon Developments (Parklands) Pty Ltd - Grocon ET 80 Pty Ltd - Grocon ET Apartments Pty Ltd - Grocon Riverside Development Pty Ltd - Grocon Equity Pty Ltd - Grocon (Parklands) Pty Ltd - Grocon (Wickham St) Developer Pty Ltd - Grocon (Burleigh Rd) Developer Pty Ltd - Grocon (288 Exhibition Street) Pty Ltd - Grocon (CB) JV Holdings Pty Ltd - Grocon Constructors (VBRR) Pty Ltd - Grocon (South Melbourne) Developer Pty Ltd - Grocon (South Melbourne) Holdings Pty Ltd - iO Centre for Digital Culture Pty Ltd - A.C.N. 627 016 335 Pty Ltd - Denmark Street Developments Pty Ltd - Denmark Street Holdings Pty Ltd will be held on March 4, 2021, at 10:00 a.m. via videoconference on Microsoft Teams. Craig Peter Shepard and Andrew Knight of KordaMentha were appointed as administrators of Grocon Constructors et al. on Feb. 22, 2021. GROCON GROUP: First Creditors' Meeting Set for March 4 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Grocon Group Holdings Pty Ltd will be held on March 4, 2021, at 10:00 a.m. via videoconference on Microsoft Teams. Craig Peter Shepard, Andrew Knight and Mark Korda of KordaMentha were appointed as administrators of Grocon Group on Feb. 22, 2021. GROCON GROUP: Goes Into Administration -------------------------------------- 7News reports that another 45 companies affiliated with the collapsing Grocon building empire have gone into administration. According to the report, the administrators were appointed on Feb. 22 to oversee Grocon Group Holdings Pty Ltd, Grocon Constructors (NSW) Pty Ltd and 43 other development-specific companies, many of which appear dormant. It follows 42 Grocon companies being placed into administration late last year, with the business citing problems with its Barangaroo construction project in Sydney, the report says. 7News says the Australian property developer giant has been battling Infrastructure NSW over permitted building heights at Barangaroo and was ordered in September to pay $1 million to secure INSW's legal costs. Grocon Group Holdings Pty Ltd is one of the three Grocon companies directly tied up in the Barangaroo litigation. 7News relates that KordaMentha Restructuring's Andrew Knight, one of the three administrator appointees, said the future of the 87 Grocon companies would be decided at a meeting with creditors at the end of March. "We are advised that no further entities are expected to enter administration and that a deed of company arrangement will be proposed to include all 87 Grocon companies," he said in a statement. Chairman and CEO Daniel Grollo said in November he wanted to pay the company's creditors in full, 7News recalls. Grocon was founded in 1954 and has been run by three generations of the Grollo family. Australia-based Grocon engages in development, construction and funds management. GULF ABORIGINAL: First Creditors' Meeting Set for March 2 --------------------------------------------------------- A first meeting of the creditors in the proceedings of Gulf Aboriginal Development Company Limited will be held on March 2, 2021, at 10:30 a.m. at the offices of Worrells Solvency & Forensic Accountants, Level 1, 160 Brisbane Street, in Ipswich, Queensland. Christopher Richard Cook and Adam Francis Ward of Worrells Solvency & Forensic Accountants were appointed as administrators of Gulf Aboriginal on Feb. 18, 2021. PARADIGM RESOURCES: Second Creditors' Meeting Set for March 2 ------------------------------------------------------------- A second meeting of creditors in the proceedings of Paradigm Resources Pty Ltd has been set for March 2, 2021, at 2:00 p.m. via Webinar Facilities only. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by March 1, 2021, at 4:00 p.m. Said Jahani and John Edgar McInerney of Grant Thornton Australia Limited were appointed as administrators of Paradigm Resources on Jan. 25, 2021. SUNSHINE CITY: First Creditors' Meeting Set for March 4 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Sunshine City Developments Pty. Ltd will be held on March 4, 2021, at 10:30 a.m. via telephone conference. Stirling Lindley Horne and Petr Vrsecky of PKF Melbourne were appointed as administrators of Sunshine City on Feb. 22, 2021. WINDHOIST AUSTRALIA: First Creditors' Meeting Set for March 4 ------------------------------------------------------------- A first meeting of the creditors in the proceedings of Windhoist Australia Pty Ltd will be held on March 4, 2021, at 10:00 a.m. via teleconference. John Ross Lindholm and Ryan Reginald Eagle of KPMG were appointed as administrators of Windhoist Australia on Feb. 23, 2021. ========= C H I N A ========= CHINA AOYUAN: Fitch Assigns BB Rating to Proposed USD Notes ----------------------------------------------------------- Fitch Ratings has assigned property developer China Aoyuan Group Limited's (BB/Stable) proposed US dollar senior notes a 'BB' rating. The proposed notes are rated at the same level as Aoyuan's senior unsecured rating because they will constitute its direct and senior unsecured obligations. Aoyuan intends to use the net proceeds from the issue to refinance its existing debt. Aoyuan has maintained a healthy financial profile, and improved its geographical diversification and enlarged its operating scale to be comparable with 'BB' rated peers. Aoyuan has been financially disciplined during its expansion, aided by a fast-churn business model. As a result, its proportionate consolidated leverage remains below 40%. Aoyuan has meaningful exposure to lower-tier cities, where housing demand is more uncertain in an industry slowdown. Significant non-controlling interests (NCI) and the rapid increase in guarantees to joint ventures and associates could increase the volatility of the company's financial profile and constrain its ratings. KEY RATING DRIVERS Larger Scale: Aoyuan's fast-churn model resulted in contracted sales that were one of the fastest-growing among peers in 2016-2019. Its scale is now comparable with that of 'BB' rated peers, such as CIFI Holdings (Group) Co. Ltd. (BB/Stable) and Logan Group Company Limited (BB/Stable). Aoyuan had 320 projects in 90 cities across China and overseas at end-1H20. Fitch estimates Aoyuan's revenue rose by around 40% in 2020. This followed strong attributable contracted-sales growth of 26% to CNY98 billion in 2019, which resulted in a CAGR of 62% in 2016-2019. Controlled Leverage: Fitch expects Aoyuan's leverage - measured as net debt/adjusted inventory on a proportionate consolidation basis - to stay below 40% in 2020-2023. Cash collection from contracted sales worsened slightly in 1H20, but was partly offset by cash from project disposals. Aoyuan's NCI rose to 64% of total equity in 1H20, from 59% in 2019, which also helped it control leverage. Aoyuan's short land-bank life, at 2.5 years (excluding urban renewal projects (URP)), at end-1H20, may limit further deleveraging. Fitch believes the Kinghand Group acquisition will not significantly affect leverage. Increasing Diversification: Aoyuan has improved the geographical diversification of its land bank and reduced its reliance on lower-tier cities over the past few years. Southern China, its largest market, accounted for 40% of land bank by gross floor area in 1H20, compared with 48% in 2018. In addition, Fitch expects more Aoyuan URPs, located in higher-tier Chinese cities, to be launched in 2020-2023, which will improve land-bank quality. This should allow Aoyuan to sustain sales growth and mitigate the impact of city-specific austerity policies. Healthy Profitability: Fitch expects Aoyuan's EBITDA margin, after adding back capitalised interest in cost of goods sold, to stay at above 25% in the short-to-medium term. The company's unbooked revenue had a healthy gross profit margin of more than 25% as of end-1H20, which will support profitability for the next two years. Average land-bank costs at end-1H20 were low, at CNY2,727/sq m, or 28% of Fitch-estimated average selling prices, as the company replenishes land mainly through cost-friendly M&A, which accounted for 63% of newly acquired land in 1H20. Minority Shareholders: Aoyuan's exposure to NCI, at 64% of total equity at end-1H20, is higher than that of 'BB' rated peers. This reflects its reliance on capital contributions from non-controlling shareholders, which are mostly developers and URP fund unitholders, to finance its expansion. This lowers Aoyuan's need for debt funding, but creates the potential for cash leakage. About one-third of the company's NCI is attributable to private funds set up by Aoyuan to gather capital for the URPs it started prior to 2018. Fitch does not treat this as debt, as there is a loss-sharing provision and no fixed return on investment. There may be cash outflow to buy out minority investors of the URPs as they mature, but Fitch believes the amount will be lower than the cost of acquiring the land bank in the open market. Fitch expects NCI as a share of Aoyuan's equity to fall in the medium term when the URPs are gradually completed. More Volatile End-Markets: Aoyuan is more exposed to industry risks due to its more meaningful penetration into lower-tier cities and higher commercial-property exposure than 'BB' peers. Its contracted average selling price of around CNY10,022/sq m is lower than the CNY13,500-17,000/sq m of peers, including CIFI and Logan. This is mitigated by the company holding 55% of its land in lower-tier cities in southern China and the Yangtze River Delta at end-9M20, areas that Fitch believes are more resilient than other regions. Fitch believes Aoyuan's modest exposure to commercial-property sales, which have a lower sell-through rate than residential products and are more susceptible to economic cycles, leaves the company more vulnerable to operational risk than peers that sell only residential projects. Commercial property from its integrated-development projects made up 16% of Aoyuan's contracted sales in 1H20. Fitch expects the product mix to remain stable in the short term, with commercial products accounting for 23% of saleable resources in 2020. DERIVATION SUMMARY Aoyuan's scale and diversification are comparable with that of CIFI, but Aoyuan has slightly lower leverage, while CIFI has better land-bank quality. The majority of CIFI's land is in first- and second-tier cities and the company is focused in the Yangtze River Delta, where the economy is more robust than in the rest of China. Aoyuan's land bank is spread over 90 cities, while CIFI's is spread over 60 cities. Aoyuan's lower economies of scale mean its selling, general and administrative (SG&A) expenses are higher than that of CIFI. Aoyuan has faster growth due to the rapidly expanding Greater Bay Area. It operates a fast-churn model while keeping leverage at 35%-40%, lower than CIFI's around 45%. Aoyuan also has a higher EBITDA margin. Both Aoyuan and Logan focus on Guangdong province, but Logan has better land-bank quality, with an average selling price of CNY13,876/sq m, as it has more exposure in Shenzhen rather than the lower-tier cities of Aoyuan. However, Aoyuan's land bank is more diversified across China. Fitch forecasts leverage at both companies at 35%-40% in 2020-2023. Logan has more land to support its growth and provide more room for deleveraging and its EBITDA margin is also higher at above 30%. Aoyuan and Risesun Real Estate Development Co.,Ltd. (BB-/Stable) have a similar scale, but Aoyuan has a much longer history of keeping leverage at below 38%. Risesun's land bank is more concentrated, with 57% of the gross floor area in the Beijing-Tianjin-Hebei area, which is under stricter scrutiny than other regions. In comparison, 40% of Aoyuan's land bank is in southern China, which has stronger economic prospects. Risesun's available cash/short-term debt ratio was below 1.0x in 2019, which is lower than that of Aoyuan. These factors explain the one-notch difference in their ratings. Aoyuan's contracted sales are larger than the CNY40 billion-60 billion (on an attributable basis) of 'BB-' peers, including Yuzhou Group Holdings Company Limited (BB-/Stable), Times China Holdings Limited (BB-/Stable) and KWG Group Holdings Limited (BB-/Stable). Aoyuan's land bank is more geographically diversified and larger than that of the three peers, which are more regionally based and have operations in fewer than 40 cities. Aoyuan's 2019 proportionate consolidated leverage is lower than Times's 40%-45% and both have similar profitability of 25%-30%. Aoyuan's better business and financial profile is sufficient to support a one-notch higher rating. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- CNY100 billion-103 billion of attributable sales in 2020-2023 -- Land premium accounting for 40%-50% of contracted sales each year on a cash flow basis during 2020-2021 -- Unsold land bank life maintained at around 2.5 years (excluding URPs) -- Cost of newly acquired land at below CNY3,600/sq m in 2020 2023, which is around 32% of the average selling price -- SG&A expenses at 8%-10% of revenue RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Enhancement of Aoyuan's market position in its core market, or material improvement in its business or geographical diversification -- Net debt/adjusted inventory sustained below 30% Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Net debt/adjusted inventory above 40% for a sustained period -- Continued decrease in 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 Adequate Liquidity: Aoyuan had CNY53.8 billion in available cash on hand at end-1H20, sufficient to cover short-term debt of CNY47.5 billion. The group's ratio of available cash (excluding restricted and pledged cash deposits)/short-term debt (excluding the short-term debt that is backed by restricted cash) was 1.5x. The company has multiple funding channels, including onshore and offshore bank loans, and private and public bond issuance. 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 ========= ANNUR SATYA: ICRA Withdraws B- Rating on INR12cr LT Cash Loan ------------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Annur Satya Textile limited (ASTL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Fund 2.80 [ICRA]B-; rating on Watch based Term Loan with Developing Implications; Withdrawn Long term Fund- 12.00 [ICRA]B-; rating on Watch based Cash Credit with Developing Implications; Withdrawn Long term Non- 1.00 [ICRA]B-; rating on Watch Fund based with Developing Implications; Withdrawn Long term/ (4.00) [ICRA]B-/A4; rating on Short term– Watch with Developing Interchangeable Implications; Withdrawn Long term/ 1.48 [ICRA]B-/A4; rating on Short term Watch with Developing Unallocated Implications; Withdrawn Rationale The ratings of ASTL have been withdrawn at the company's request and are based on the receipt of no dues certificate from the banker. The company terminated its operations in the last week of September 2020, after which its assets were liquidated and all dues with the bank settled. The same was confirmed by the banker who has also issued a no-dues certificate asserting the closure of all the accounts. However, as the company has shut down operations, ICRA does not have adequate information to suggest that the credit risk has changed since the time the ratings was last reviewed. Hence, the ratings are withdrawn without reviewal. The Key rating drivers, Liquidity position, Rating sensitivities, Key financial indicators have not been captured as the rated instruments are being withdrawn. ASTL was primarily involved in producing blended (polyester-cotton) yarn. Incorporated in July 1991, the company had an installed capacity of 14,400 spindles at its manufacturing facility in Annur (near Coimbatore, Tamil Nadu). It produced blended yarns in the counts ranging from 30's to 80's. Its customer profile comprised yarn processors and traders in the domestic market. ASTL reported an operating income (OI) of INR21.90 crore and a net loss of INR0.8 crore in FY2020 against an OI of INR33.7 crore and a net loss of INR0.4 crore in FY2019. ATOM CERAMICS: ICRA Withdraws B+ Rating on INR4.50cr Loan --------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Atom Ceramics, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 3.66 [ICRA]B+ (Stable); Withdrawn Term Loan Fund-based 4.50 [ICRA]B+ (Stable); Withdrawn Working Capital Facilities Non-fund Based 0.80 [ICRA]A4; Withdrawn Bank Guarantee Unallocated 0.04 [ICRA]B+(Stable)/[ICRA]A4; Limits Withdrawn ICRA has withdrawn the ratings assigned to the bank facilities of Atom Ceramics at the request of the company and based on the No Objection Certificate received from its banker. However, ICRA does not have information to suggest that the credit risk has changed since the time the rating was last reviewed. The Key Rating Drivers, Liquidity Position, Rating Sensitivities, Key financial indicators have not been captured as the rated instruments are being withdrawn. Established in July, 2009, as a partnership firm, Atom Ceramics commenced commercial production in May, 2010. Its product profile comprises digitally printed ceramic wall tiles of 12"X18" size. Its manufacturing unit is located at Morbi, the ceramic tile manufacturing hub of Gujarat, and is equipped to manufacture ~23,000 metric tonne (MT) of tiles per annum. In FY2019, the company reported a net profit of INR0.06 crore on an operating income of INR13.21 crore compared to INR0.18 crore and INR13.77 crore, respectively, reported in the previous fiscal. In six months of FY2020 (April 2019 to September 2019) the firm reported an operating income of INR12.11 crore and a profit before depreciation and taxation of INR0.30 crore (provisional financials). AYAAN TRENDZ: ICRA Lowers Rating on INR6.0cr Cash Loan to D ----------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Ayaan Trendz Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based/ 6.00 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Rating downgraded from [ICRA]B+ (Stable) and continues to remain in the 'Issuer Not Cooperating' category Fund Based/ 0.47 [ICRA]D ISSUER NOT COOPERATING; Term Loan Rating downgraded from [ICRA]B+ (Stable) and continues to remain in the 'Issuer Not Cooperating' category Non-Fund Based- 20.00 [ICRA]D/[ICRA]D ISSUER NOT Bank Guarantee COOPERATING; Rating downgraded from [ICRA]B+(Stable)/[ICRA]A4 and Continues to remain under 'Issuer Not Cooperating' Category Unallocated 0.03 [ICRA]D/[ICRA]D ISSUER NOT Limit COOPERATING; Rating downgraded from [ICRA]B+(Stable)/[ICRA]A4 and Continues to remain under 'Issuer Not Cooperating' Category Rationale The rating downgrade reflects delays in debt servicing as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in November 2019. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of noncooperation by a rated entity available at www.icra.in. Incorporated in August 2011 by Mr. Anil Agarwal and Mr. Mukesh Agarwal, Ayaan Trendz Private Limited is engaged in manufacturing and domestic sales of embroidered and printed sarees. The company is part of the Vipul Group based in Surat, Gujarat. The group is engaged in the textile business for over three decades through other group companies, including Vipul Industries Private Limited (VIPL). ATPL started commercial production of sarees from November 2011. The company procures grey material from the local suppliers in Surat, outsources the dyeing and printing activities to VIPL while undertaking the embroidery work in-house. BHARTI AIRTEL: S&P Rates New Sub. Perpetual Securities 'BB' ----------------------------------------------------------- S&P Global Ratings assigned its 'BBB-' long-term issue rating to the senior unsecured notes that Bharti Airtel Ltd. (BBB-/Negative/--) proposes to issue. At the same time, S&P assigned its 'BB' long-term issue rating to the proposed subordinated perpetual securities (PERPS) issued by Network i2i Ltd. and guaranteed by Bharti Airtel. Bharti Airtel will use the proceeds for capital expenditure, repayment of existing debt, or any other purpose as allowed by regulations. The proposed PERPS are similar to the existing PERPS, ranking senior only to Bharti Airtel's equity. They will have five-year resettable coupons starting from 5.25 years, with step-ups of 25 basis points after the initial term of 10.25 years, and a further 75 basis points after 25.25 years. Hence, S&P considers the PERPS to have an effective maturity of 25.25 years. S&P said, "Consequently, we assess the proposed PERPS as having intermediate equity content up to the first reset date at 5.25 years. This is because the remaining period until its effective maturity would by then be less than 20 years. The terms of the PERPS allow Bharti Airtel to indefinitely defer coupon payments on a cash cumulative basis, subject to restrictions on shareholder distributions. We rate the PERPS two notches below the issuer credit rating on Bharti Airtel to reflect the subordination of the notes and the company's ability to voluntarily defer coupon payments. "The outlook on Bharti Airtel remains negative because the company's deleveraging path has been hampered by regulatory uncertainties and investments that have exceeded our expectations. On the other hand, earnings growth that is stronger than we anticipated has mitigated immediate ratings downside." D.S ENTERPRISES: ICRA Withdraws B+ Rating on INR7.50cr Loan ----------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of D.S Enterprises (DSE), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term– 2.50 [ICRA]B+ (Stable) ISSUER NOT Fund Based COOPERATING; Withdrawn Cash Credit Long Term- 7.50 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Withdrawn Rationale The bank loan rating assigned to DSE have been withdrawn at the request of the company and upon receipt of no-objection certificate from the bankers. ICRA does not have information to suggest that the credit risk has changed since the time the rating was last reviewed. The Key rating drivers, Liquidity position, Rating sensitivities, Key financial indicators have not been captured as the rated instruments are being withdrawn. DSE is a part of the New Delhi-based MBD Group, which is a reputed publishing group with interests in hospitality and real estate as well. The MBD Group is managed by Ms. Satish Bala Malhotra and her two daughters Ms. Sonica Malhotra and Ms. Monica Malhotra. DSE manufactures stationery under the brand MBD Writewell, which it sells through its own sales and distribution network. GOUR NITYE: ICRA Reaffirms B+ Rating INR3.30cr Cash Loan to B+ -------------------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of Gour Nitye Tea & Industries Limited (GNTIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based– Term Loan 2.92 [ICRA]B+ (Stable); reaffirmed Fund-based– Cash Credit 3.30 [ICRA]B+ (Stable); reaffirmed Unallocated Limit 1.28 [ICRA]B+ (Stable)/ [ICRA]A4; Reaffirmed Rationale The ratings continue to be constrained by the modest scale of operations of GNTIL and moderate quality of tea produced by the company, having a bearing on realisations. The ratings also consider the intensely competitive nature of the industry and the risks associated with tea for being an agricultural commodity as its quality and production volume depend on agro-climatic conditions. Besides, its business remains vulnerable to regulatory changes, wage rate hike etc. ICRA notes that a drop in GNTIL's production volume and significant arrears wage payment led to an operating loss in FY2020, though a sizeable non-operating income (INR3.48 crore) from the sale of land supported its net profit in the year. The company also remains exposed to high geographical concentration risks as its single garden is located in Darrang, Assam. Moreover, domestic tea prices are impacted by the demand-supply situation and prices in the international market, which would continue to have a bearing on the profitability of Indian tea players, including GNTIL. The ratings also factor in the company's high working capital utilisation, exerting pressure on its liquidity position. The ratings, however, factor in the extensive experience of the promoters in the tea industry and a favorable age profile of the bushes, which positively impacts productivity. The Stable outlook on the [ICRA]B+ rating reflects ICRA's opinion that GNTIL will continue to benefit from the extensive experience of its promoters in the tea business. The company's production volume in the current fiscal is likely to decline mainly due to the operational disruptions caused by the Covid-19 pandemic. However, a sharp increase in the average realisations is likely to positively impact GNTIL's financial performance in the current fiscal. Key rating drivers and their description Credit strengths * Extensive experience of promoters in the tea industry along with a prominent position as a producer of green tea: Incorporated in 1912, the company is closely held and managed by the members of the Jalpaiguri (West Bengal) based Kalyani family, who are associated with the tea business for more than 100 years. The Kalyani Group owns four tea estates, spread over 1,200 hectares in Assam and West Bengal, which are operational under four Group companies, including GNTIL. The company has an established position as a producer of green tea which fetches higher realisation and has witnessed increasing demand in the recent years. * Favourable age profile of the bushes supports productivity: The company's tea bushes have a favourable age profile with 81% of the bushes in the age group of 5-50 years, resulting in high productivity. This mitigates the risks associated with the fixed cost intensive nature of the bulk tea industry, to an extent. In FY2020, its productivity stood at 1,912 kg/hectare (considering area under plantation). Nevertheless, the company's production volume in Q1 FY2021 was significantly affected by the lockdown on account of the pandemic and is likely to remain lower by around 15% in FY2021 compared to FY2020. Credit challenges * Modest scale of operations and moderate quality of tea produced: The company's scale of operations remains at a modest level, with a total production of around 0.67 million kg in FY2020, which remained lower than the previous year (0.77 million kg in FY2019). GNTIL sold 0.72 million kg tea in FY2020, translating into an operating income (OI) of INR10.31 crore compared to INR10.74 crore in FY2019. Moderate quality of tea produced by the company affects its realisations to an extent. * High geographical concentration risks: The company has a single garden located in Darrang, Assam. This keeps GNTIL vulnerable to high geographical concentration risks. * Exposed to agro-climatic risks, regulatory changes, wage rate hike etc. as tea is an agricultural commodity: The quality and production volume of tea depend on agro-climatic conditions, pest attacks etc. The sector also remains vulnerable to other factors like regulatory changes, wage rate hike by the Government etc. In FY2020, a decline in GNTIL's production volume and significant arrears wage payment led to an operating loss of INR1.10 crore. However, the company's net profit in FY2020 was supported by a sizeable non-operating income of INR3.48 crore from the sale of land. * Prices of Indian tea, despite its better quality, would remain vulnerable to price fluctuation in the international market, notwithstanding a sharp increase in average realisations in the current fiscal: The average tea realisations have increased sharply in the current fiscal. However, prices of domestic tea, despite its better quality, are impacted by international prices to some extent. Hence, the demand-supply situation in the global tea market, in ICRA's opinion, would continue to have a bearing on the profitability of Indian players, including GNTIL. * High utilisation of working capital limit negatively impacts liquidity position: The company's average fund-based working capital limit utilisation during December 2019 to November 2020 stood at a high level of 98% of the sanctioned limit. This exerted pressure on GNTIL's liquidity position. Liquidity position: Stretched The company's liquidity position is stretched. The company's cash flow from operations stood at a low level of INR0.42 crore in FY2020. Besides, its working capital limit utilisation stood at a high level of 98% of the sanctioned limit during the 12 months period ended in November 2020, with an undrawn working capital limit of INR0.48 crore as on November 30, 2020. GNTIL availed term loans of INR0.99 crore from banks in the current fiscal as a funding support on account of the pandemic. However, the same has led to an increase in its debt service obligation. Rating sensitivities Positive factors - ICRA may upgrade GNTIL's ratings if the company demonstrates a substantial increase in its scale of operations, profits at an absolute level and net worth on a sustained basis. Negative factors - Pressure on GNTIL's ratings may arise if there is a significant decline in realisations and profitability or if any adverse government regulations affect the company's credit profile. GNTIL was incorporated in 1912 and has a tea garden in Darrang district, Assam over a total cultivable area of around 295 hectares. The company produces both crush-tear-curl (CTC) and green tea, which are sold in the domestic market through a mix of auction and private sales depending upon market conditions. GNTIL is a part of the Kalyani Group based in West Bengal. The Group operates four tea estates spread over 1,200 hectares in Assam and West Bengal under four different companies, namely GNTIL, Gurjangjhora Tea & Industries Limited, SRK Tea Processing Industries Limited and Saraswatipur Tea & Industries Limited. GURURAMDAS KNIT: ICRA Withdraws B Rating on INR5.30cr LT Loan ------------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Gururamdas Knit Fab (GKF), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term fund based limits 5.30 [ICRA]B(Stable); Withdrawn Unallocated 2.55 [ICRA]B(Stable)/[ICRA]A4; Amount Withdrawn ICRA has withdrawn the ratings assigned to the bank facilities of GKF at the request of the company and based on the No Objection Certificate received from its banker. However, ICRA does not have information to suggest that the credit risk has changed since the time the rating was last reviewed. The Key Rating Drivers, Liquidity Position, Rating Sensitivities, Key financial indicators have not been captured as the rated instruments are being withdrawn. Gururamdas Knit Fab is a partnership firm established in April 2015, and it manufactures polyester knitted fabrics in its unit in Sachin, near Surat (Gujarat). The commercial production commenced from January 2017 and the current production capacity is 2100 metric tonnes per annum. The main product of the firm is plain knitted fabrics. At present, the firm caters to the garment and furnishing industry in Surat, where it has its registered office. HARSH SPECIALITY: Insolvency Resolution Process Case Summary ------------------------------------------------------------ Debtor: M/s Harsh Speciality Coating Private Limited Shop No. 23, Block-D East of Kailash New Delhi 110065 - and - 34 Babar Lane Bengali Market New Delhi 110001 Insolvency Commencement Date: February 12, 2021 Court: National Company Law Tribunal, New Delhi Bench-VI Bench Estimated date of closure of insolvency resolution process: August 11, 2021 (180 days from commencement) Insolvency professional: Romesh Chander Sawhney Interim Resolution Professional: Romesh Chander Sawhney 850/GH-13, Paschim Vihar New Delhi 110087 E-mail: casawhney@yahoo.co.in - and - 834/GH-13, Paschim Vihar New Delhi 110087 Last date for submission of claims: March 2, 2021 HI RISE INFRATECH: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Hi Rise Infratech Private Limited 79, Paratap Nagar Jail Road, New Delhi Delhi 110064 India Insolvency Commencement Date: February 8, 2021 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: August 7, 2021 Insolvency professional: Mr. Kedarram Ramratan Laddha Interim Resolution Professional: Mr. Kedarram Ramratan Laddha 6/5, Sahyog Apartment B/h Keshavnagar Nr. Subhash Bridge RTO Circle, Keshavnagar Ahmedabad 380027 E-mail: irpkedar@gmail.com ip@kpsjca.com - and - B-1002, Mondeal Square Nr. Prahladnagar Garden SG Highway Ahmedabad 380015 Last date for submission of claims: February 22, 2021 ISHWAR CABLES: ICRA Lowers Rating on INR6.0cr Cash Loan to D ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Ishwar Cables Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 6.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating downgraded from [ICRA]B Cash Credit (Stable) and continues to remain in the 'Issuer Not Cooperating' category Short Term– 1.00 [ICRA]D ISSUER NOT COOPERATING; Non-Fund Based Rating downgraded from [ICRA] A4 and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade reflects due to Delay in debt repayment as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in November 2019. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. ICPL was established on February 10, 2006 by Mr. Rahul Chaudhary and his family as a private limited company to cater to the cables and wires requirements of its group company IMI. However, in FY2014, the shareholding was transferred to Mr. Arpit Chaudhary and Ms. Sunita Matoria. The firm manufactures high and low voltage wires and cables, mostly used by state power utilities. The manufacturing unit of the firm is located in Jaipur Industrial Area, Rajasthan. ISHWAR METAL: ICRA Lowers Rating on INR20cr Loan to D ----------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Ishwar Metal Industries (IMI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 20.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating downgraded from [ICRA]B+ Cash Credit (Stable) and continues to remain in the 'Issuer Not Cooperating' category Long Term- 0.99 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating downgraded from [ICRA]B+ TL (Stable) and continues to remain in the 'Issuer Not Cooperating' category Short Term– 22.50 [ICRA]D ISSUER NOT COOPERATING; Non-Fund Based Rating downgraded from [ICRA] A4 and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade reflects due to Delay in debt repayment as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in November 2019. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. IMI was established in 1985 as a partnership firm by Mr. Rahul Chaudhary and his family. The firm is involved in manufacturing and installation of substation structures, transformer tanks, core clamps, meter pillar boxes, cables and conductors, electronic meters and electric lamination. The manufacturing unit of the firm is located in Jaipur Industrial Area, Rajasthan. JANA SMALL: ICRA Reaffirms D(SO) Ratings on 7 PTCs -------------------------------------------------- ICRA has reaffirmed the ratings for pass-through certificates under seven microloan securitisation transactions of Jana Small Finance Bank Limited: Amount Trust Name Instrument (INR cr) Ratings ---------- ----------- -------- ------- Smith IFMR PTC Series A2 3.65 [ICRA]D(SO); Reaffirmed Capital 2016 Goldstein IFMR PTC Series A2 2.72 [ICRA]D(SO); Reaffirmed Capital 2016 Syme IFMR PTC Series A2 1.23 [ICRA]D(SO); Reaffirmed Capital 2016 Oceania IFMR PTC Series A3 5.65 [ICRA]D(SO); Reaffirmed Capital 2016 Moses IFMR PTC Series A2 7.17 [ICRA]D(SO); Reaffirmed Capital 2016 Raphael IFMR PTC Series A1 3.42 [ICRA]D(SO); Reaffirmed Capital 2016 PTC Series A2 2.06 [ICRA]D(SO); Reaffirmed Leonardo IFMR PTC Series A2 1.36 [ICRA]D(SO); Reaffirmed Capital 2016 Rationale The rating reflects the inadequacy of the pool collections and the credit enhancement available in the transactions to meet the promised payouts to the pass-through certificate (PTC) investors on the scheduled maturity date. Key rating drivers Credit strengths * Not applicable Credit challenges * Sustained * Pool collections together with available credit enhancement were insufficient to meet the promised payouts to the PTC investors on their respective maturity dates Description of key rating drivers The collection performance of the underlying loans was healthy till the October 2016 collection month. However, post the demonetisation event, the monthly collection levels declined significantly. Collections from overdue contracts have also been poor. Due to the sustained weaker-than-expected pool performances, there was a shortfall in meeting the scheduled payouts to the PTC investors even after the utilisation of the entire credit enhancement available in the transactions. The collections were also impacted in FY2021 due to the Covid-19 pandemic and subsequent lockdowns. However, collections from overdue contracts post default have helped redeem the senior series of PTCs (as well as PTC Series A2 for the Oceania transaction) in six of the seven live transactions. * Performance of past rated pools: ICRA has rated 12 pools originated by Jana Small Finance Bank Limited (erstwhile Janalakshmi Financial Services Ltd) and had ratings outstanding on seven pools as on December 31, 2020. All the live pools have defaulted on the payments promised to the PTC investors. Key rating assumptions Not applicable Liquidity position: Poor On the scheduled maturity dates of these transactions, the CC in all the transactions has been fully utilised. Further repayments would be met through collections from the overdue loan contracts. Considering the collection trend in recent months, the full repayment of the PTCs is unlikely in the near to medium term. Rating sensitivities Not applicable Analytical approach The rating action is based on the analysis of the performance of Jana Small Finance Bank Limited's pools till December 2020, the key characteristics and composition of the current pools, the performance expected over the balance tenure of the pools, and the credit enhancement cover available in the transactions. Jana Small Finance Bank Limited (erstwhile Janalakshmi Financial Services Ltd (JFSL)) is a Bengaluru-based non-banking financial company - microfinance institution (NBFC-MFI) catering to the financial needs of urban poor women through the joint liability mechanism. The company was founded in 2006 by Mr. Ramesh Ramanathan as Janalakshmi Social Services (JSS), whose portfolio was taken over by JFSL in 2008. The promoter shareholding continues to be in JSS (now called Jana Urban Foundation or JUF); the corpus funds in JUF are used for social activities. Jana Small Finance Bank commenced operations as a small finance bank from March 28, 2018. Apart from group loans, the bank offers small business loans, housing loans, gold loans and agri-loans among others. JUBILANT PHARMA: S&P Upgrades LongTerm ICR to 'BB', Outlook Stable ------------------------------------------------------------------ S&P Global Ratings raised its long-term issuer credit rating on Jubilant Pharma Ltd. and the issue rating on the company's senior unsecured notes to 'BB' from 'BB-'. At the same time, S&P assigned its '3' recovery rating to the senior unsecured notes. S&P said, "The stable outlook reflects our expectations that Jubilant Pharma will generate stable operating cash flows, remain prudent in its capital investments and shareholder distributions, and maintain its debt-to-EBITDA ratio well below 2x. "We raised our rating on Jubilant Pharma because we expect the company to generate significant free operating cash flow over the next 12-18 months and continue to deleverage. The just completed demerger of the group's lifescience ingredients business has also strengthened its financial profile." Following the demerger, Jubilant Lifesciences Ltd. (parent of Jubilant Pharma) was renamed Jubilant Pharmova Ltd. The lifescience ingredients business is now held by Jubilant Ingrevia Ltd. There are no crossholdings or operational linkage between Jubilant Ingrevia and Jubilant Pharmova. Therefore, S&P's assessment of Jubilant Pharma's credit profile is now based on Jubilant Pharmova and excludes the lifescience ingredients business. Jubilant Pharma is a wholly owned subsidiary on India-listed Jubilant Pharmova. S&P said, "The elimination of a relatively lower-margin and more volatile lifescience ingredients business will contribute to stronger earnings for Jubilant Pharma, in our view. Post demerger, we expect the company's EBITDA margins to be about 25%, compared to 20%-21% earlier. At the same time, its debt is also likely to drop given the pharmaceuticals business is less reliant on debt-funded working capital compared to the lifescience ingredients business. We estimate Jubilant Pharma's total debt will decline by about Indian rupee (INR) 14 billion in fiscal 2021 (year ending March 31, 2021) compared to a year ago." These benefits offset the slight reduction in the company's operational scale and business diversity due to the demerger. Resilient operating performance will support deleveraging. S&P said, "We estimate Jubilant Pharma will report stable revenues in fiscal 2021 despite tough business conditions, especially for specialty pharmaceuticals, due to a significant dip in hospital visitations through 2020. This is because of good growth in the contract development and manufacturing operations (CDMO) and generics. In fiscal 2022, we forecast the company's revenues will grow more than 10%. This growth will depend on the effective rollout of the COVID-19 vaccines in key markets such as the U.S. and patients returning for elective diagnostic treatments. We also expect CDMO and generics volumes to be supported over the next 12 months by the demand for drugs and vaccines to contain infection rates." Healthy cash flows and sustainable capital structure add to financial strength. Jubilant Pharma is likely to maintain its conservative financial policies on shareholder distributions and accumulate surplus cash over the next two years. S&P estimates the company will generate INR8 billion-INR10 billion annually in operating cash flows in fiscals 2021 and 2022. This will be sufficient to fund its annual capital expenditure of about INR5 billion and discretionary spending (dividends and acquisitions) of INR1 billion-INR3 billion annually over fiscals 2021 and 2022. In S&P's view, Jubilant Pharma will continue to direct accumulated cash surplus toward debt repayment. In January 2021, the company raised about US$150 million through unsecured term loans from banks to refinance its US$200 million senior notes due in October this year. The company has already redeemed US$100 million in January this year and plans to redeem the remaining amount in March. The balance US$50 million will be paid out of accumulated surplus cash; Jubilant Pharma had about US$160 million cash and short-term investments as of Dec. 31, 2020. Post this transaction, the company will not have any material debt maturities until 2024 when about US$300 million is due. With sufficient cash flows to meet its working capital requirements, the company's ratio of debt-to-EBITDA should improve toward 1.5x in fiscal 2022. A weak business position constrains further rating upside. S&P believed the loss of scale (about one-third in revenues) and diversity from an uncorrelated lifescience ingredients business modestly weakens Jubilant Pharma's business position. The company's scalability is constrained because of its presence in a niche specialty pharmaceutical space. Moreover, with the U.S. and Canada contributing about 80% of Jubilant Pharma's revenues, the company's earnings are more susceptible to adverse regulatory changes than its geographically diversified peers. With less than US$1 billion in revenues, S&P views Jubilant Pharma's business position as comparable to peers such as Curium Midco S.a.r.l. (B/Negative/--), which has presence in a similarly niche market--radiopharma. However, it remains weaker than generics player Glenmark Pharmaceuticals Ltd. (BB-/Stable/--), which benefits from a higher operating scale (about US$1.4 billion in revenues) and greater revenue diversity across markets and therapeutic segments, albeit with lower margins. Jubilant Pharma's good market position; limited competition, given high regulatory barriers and infrastructure requirements for handling radioactive ingredients; and healthy profitability will remain supportive of its credit profile. Yet, a significant improvement in the scale of the company's operations will remain critical to achieve a higher rating. S&P said, "The stable outlook on Jubilant Pharma reflects our expectations that the company will generate stable operating cash flows and maintain its healthy financial position over the next 12-18 months. We anticipate that Jubilant Pharma will remain prudent in its capital investments and shareholder distributions and maintain its debt-to-EBITDA ratio well below 2x. "We could lower our rating on Jubilant Pharma if the company's financial profile weakens significantly and its debt-to-EBITDA ratio trends sustainably above 2x possibly due to aggressive capital and growth investments or shareholder distributions. "We are also likely to lower our rating if Jubilant Pharma's earnings and EBITDA margins fall materially below 20% reflecting a weaker business position." S&P is unlikely to upgrade Jubilant Pharma unless its business position improves materially. This could be indicated by a: -- Significant improvement in the company's operating scale with revenues exceeding about US$1.5 billion; and -- Strengthening of its market position in the radiopharma segment, along with greater revenue diversity. -- A higher rating would also require Jubilant Pharma maintaining its debt-to-EBITDA ratio below 2x sustainably. K S INFRA: ICRA Lowers Rating on INR7cr Cash Loan to D ------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of K S Infra Transmission Private Limited (KSIPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 7.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating downgraded from [ICRA]B Cash Credit (Stable) and continues to remain in the 'Issuer Not Cooperating' category Short Term– 2.50 [ICRA]D ISSUER NOT COOPERATING; Non-Fund Based Rating downgraded from [ICRA] A4 and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade reflects due to Delay in debt repayment as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in November 2019. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. KSIPL was established in 2013 and is promoted by Mr. Rahul Chaudhary and his family as a private limited company. The company manufactures fabricated structures such as cross arms, clamps, lattice towers, substation structures and transformer tanks. In addition, it also manufactures line hardware made up of Aluminium Casting and Iron Casting. It caters to the cables and wires requirements of its various state discoms, private sector entities and its group companies. The manufacturing facility of the company is located in Jaipur, Rajasthan. K-MARK BIZSOL: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: K-Mark Bizsol Private Limited Office No. 3, First Floor Ceramic Plaza 1 Morbi, Rajkot Gujarat 363642 Insolvency Commencement Date: February 15, 2021 Court: National Company Law Tribunal, Ahmedabad Bench Estimated date of closure of insolvency resolution process: August 14, 2021 Insolvency professional: Mr. Ashish Shah Interim Resolution Professional: Mr. Ashish Shah 402, 4th Floor, Shaival Plaza Gujarat College Road Ellisbridge Ahmedabad 380006 E-mail: ashish@ravics.com Last date for submission of claims: March 6, 2021 LALITPUR POWER: ICRA Lowers Rating on INR13,363.78cr Loan to D -------------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Lalitpur Power Generation Company Limited (LPGCL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based- 13,363.78 Downgraded to [ICRA]D from Term Loan [ICRA]BB+ (Stable) Fund-based– 2,800.00 Downgraded to [ICRA]D from Cash Credit [ICRA]BB+ (Stable) Non-fund based 1,326.90 Downgraded to [ICRA]D from [ICRA]BB+ (Stable) Rationale The rating downgrade follows the delays in debt servicing by LPGCL owing to the delays in payments from its sole customer – Uttar Pradesh Power Corporation Limited (UPPCL; on behalf of the distribution utilities (discoms) of Uttar Pradesh) for sale of power from its 1980-MW coal-based power project in Uttar Pradesh. While the company realised INR1675 crore from UPPCL in August 2020 under the liquidity support scheme announced by the Government of India, the monthly collections from UPPCL remained low at ~30% of the monthly billing during August'20 – January'21 against our earlier expectations of a gradual improvement. This led to further build-up of receivables and weakened the liquidity position of the company. In addition, the company had additional dues from UPPCL, which were contested by UPPCL before various regulatory and judicial authorities. The company has recently received a favourable order from the Supreme Court of India for a sizeable portion of these dues. A favourable resolution on the balance dues from UPPCL and realisation of the same would be important for the company. The counter-party credit risks for the company remain high given the weak financial health of the discoms in Uttar Pradesh. Further, the rating continues to be constrained by the pending approval for the final project cost by the UPERC; the provisional cost approved was INR14,269 crore against the final project cost of INR17,725 crore (excluding margin money for working capital of INR850 crore). The approval of the final project cost without any disallowances and the consequent increase in capacity charges would improve the debt coverage metrics for the company. While variable cost of generation for the project affects the company's position in merit order dispatch for Uttar Pradesh discoms as also reflected from the moderate plant load factor (PLF) level, the cost-plus based tariff structure of PPA provides a comfort. Further, the operating performance of the plant in terms of efficiency levels like station heat rate and auxiliary consumption has remained satisfactory so far. ICRA also takes note of the high leverage level of the company, with gearing ratio at 2.96 times as on March 31, 2020, given the limited term debt repayments since project commissioning and the high dependence on working capital debt. Further, with reference to compliance of the emission norms prescribed by the Ministry of Environment & Forests (MoEF), Government of India, the company has received an interim relief from the Supreme Court against any coercive action on the company in this regard. Nonetheless, the compliance w.r.t. the emission norms as per timelines set by the MoEF, Government of India and Ministry of Power, Government of India along with timely recovery of any additional capex (if required) towards the same under change in law from UPPCL remains important. The rating takes notes of the presence of long-term (25-year) power purchase agreement (PPA) with UPPCL for the entire capacity under cost-plus tariff principles. The cost-plus tariff allows the recovery of normative capacity charges1 as approved 1 Normative fixed capacity charges comprise of operation & maintenance cost, interest on normative working capital, interest on term loan, depreciation, return on equity, tax and hedging cost if any, as per the prevailing tariff norms set by UPERC under cost-plus tariff principles by the Uttar Pradesh Electricity Regulatory Commission (UPERC), subject to plant availability (PAF) meeting the normative PAF (currently at 85%), and the pass-through of fuel cost, subject to the project meeting the normative operating performance related to station heat rate and auxiliary consumption. Further, ICRA takes note of the fuel supply tied up with subsidiaries of Coal India Limited (CIL) under the SHAKTI scheme for 7.12 million tonnes per annum (MTPA), which would be sufficient to meet 80% of its fuel requirement at 70% PLF assuming a supply rate of 75% from the coal companies. Key rating drivers and their description Credit strengths * Limited demand risks: LPGCL has signed a long-term PPA with UPPCL for the entire 1980 MW project capacity under cost plus tariff principles, thus mitigating demand risks. The two-part tariff structure allows the company to recover capacity charges linked to plant availability and pass-through of fuel costs, subject to achieving the normative operating efficiency. * Fuel supply tied-up with subsidiaries of CIL: The company has tied-up fuel supply agreements (FSAs) with subsidiaries of CIL under the SHAKTI scheme in January 2018 (5.64 MTPA) and September 2020 (1.48 MTPA). The coal under these FSAs at 75% supply rate would be sufficient to meet 80% of the plant's fuel requirement at 70% PLF. Also, the operating performance of LPGCL's project remains satisfactory with availability in line with the normative level since FY2019. Credit challenges * Delays in debt servicing: The company is delaying in servicing its debt obligations because of the delays in receiving payments from its off-taker. The monthly collections from UPPCL remained low over the past six months with collection efficiency of ~30%, adversely impacting the liquidity profile of the company. * High counterparty credit risks as reflected from long delays in payments from UPPCL: The counterparty credit risks remain high for LPGCL because of the exposure to Uttar Pradesh discoms, which have weak financial health. This in turn led to subdued collection efficiency from UPPCL since commissioning, resulting in large outstanding dues of INR3689 crore as of March 2020. While the company realised INR1675 crore from UPPCL in August 2020 under the liquidity scheme announced by the Government of India, the monthly collections from UPPCL remained low at 30% during August'20 – January'21, leading to further build-up of receivables as of January 2021. In addition, the company had additional dues from UPPCL of more than INR3000 crore, which were contested by UPPCL before various regulatory and judicial authorities. The company has recently received a favourable order from the Supreme Court of India for a sizeable portion of these dues. A favourable resolution on the balance dues from UPPCL and realisation of the same would be important for the company. * Pending approval of final project cost and tariff by UPERC: The capital cost for the 1980 MW project of LPGCL increased by 53% to INR18,575 crore against the appraised cost of INR12,112 crore. The company has attributed the increase to the delays in commissioning of the transmission line by the state transmission utility and the additional cost to works executed on behalf of UP discoms. The approval for final project cost and tariff from UPERC are pending, with provisional cost approved at INR14,269 crore. The approval of the final project (Rs. 17,725 crore excluding margin money for working capital of INR850 crore) without any disallowances and the consequent increase in capacity charges would improve the debt coverage metrics for the company. * Variable cost of generation impacts the merit order position of LPGCL: While variable cost of generation for the project impacts the company's position in merit order dispatch for Uttar Pradesh discoms as also reflected from the moderate PLF level, the cost-plus based tariff structure of PPA provides a comfort. Further, the operating performance of the plant in terms of efficiency levels like station heat rate and auxiliary consumption has remained satisfactory so far. * High leverage level: The leverage level for the company remains high, with gearing ratio at 2.96 times as on March 31, 2020, given the limited term debt repayments since project commissioning and the high dependence on working capital debt. Further, the company would have to incur additional capex to comply with emission norms as per timelines set by the Ministry of Environment & Forests, Government of India, which is likely to increase the project leverage. Timely recovery of such additional capex towards the same under change in law from UPPCL remains important. Liquidity position: Poor The liquidity position of the company is constrained by the delays in realising payments from its sole customer - UPPCL. A sustainable improvement in monthly collections from UPPCL along with the realisation of pending dues, including under the liquidity scheme would enable an improvement in the liquidity position of the company. Rating sensitivities Positive factors: The rating could be upgraded if the company is able to service its debt obligations in a timely manner, on a sustained basis. Negative factors: Not applicable LPGCL was originally promoted by Uttar Pradesh Power Corporation Limited (UPPCL) for development of a 1980 MW (3 x 660 MW) thermal power project in the Lalitpur district of Uttar Pradesh (UP) based on supercritical technology. Pursuant to the expression of interest (EoI) call by UPPCL in November 2009 for setting up power generation projects in UP, Bajaj Energy Group was identified as the selected bidder for owning, implementing and operating the project. Accordingly, the Group signed a Memorandum of Understanding (MoU) with the Government of Uttar Pradesh (GoUP) and the ownership of LPGCL was transferred to the Bajaj Energy Group in December 2010. The shareholding of LPGCL is between Bajaj Hindustant Limited, Bajaj Energy Limited and Bajaj Power Ventures Private Limited. LPGCL entered in to a 25-year PPA with the state distribution utilities of UP through UPPCL on a cost-plus tariff principle for 90% of the project capacity in December 2010. Subsequently in May 2011, LPGCL received GoUP's approval for tying up the remaining 10% of the project capacity through long-term PPA with UPPCL. The supplementary PPA for this capacity was signed in June 2011. LPGCL implemented the project through two major packages, with the boiler turbine generator (BTG) package awarded to BHEL and the balance of plant (BoP) package to Carbery Infrastructure Pvt Ltd (CIPL) in May 2011. The first unit of the project was commissioned in December 2015, followed by second unit in October 2016 and third unit in December 2016. The actual cost of the project stood at INR18,575 crore. LEXUS GRANITO: ICRA Reaffirms D Rating on INR83.88cr Loans ---------------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of Lexus Granito (India) Limited (LGIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 26.68 [ICRA]D; reaffirmed and Term Loans removed from 'ISSUER NOT COOPERATING' category Fund-based 36.00 [ICRA]D; reaffirmed and Cash Credit removed from 'ISSUER NOT COOPERATING' category Fund-based (15.00) [ICRA]D; reaffirmed and EPC/FBD removed from 'ISSUER NOT COOPERATING' category Non-fund based 6.20 [ICRA]D; reaffirmed and Bank Guarantee removed from 'ISSUER NOT COOPERATING' category Non-fund based (0.75) [ICRA]D; reaffirmed and Credit Exposure removed from 'ISSUER NOT Limit COOPERATING' category Non-convertible 6.40 [ICRA]D; reaffirmed and Debentures (NCD) removed from 'ISSUER NOT COOPERATING' category Proposed NCD 8.60 [ICRA]D; reaffirmed and removed from 'ISSUER NOT COOPERATING' category Rationale The rating reaffirmation continues to factor in the continued delays in debt servicing (including bank loans and non- convertible debentures) by LGIL given its poor liquidity position. The liquidity depleted by the delayed payments from customers as well as high inventory levels. Moreover, the pressure on liquidity is evident from the almost full utilization of the working capital limit and the availed funding of INR9.93 crore under the COVID-19 relief package form the lenders. The rating also takes note of the restructuring of the NCD repayments. The ratings also consider the below-average financial risk profile, marked by moderate debt coverage indicators and high working capital intensity of operations. Further, the cyclical nature of the real estate industry (the main end-user sector), the intense competition and the exposure of the company's profitability to volatility in raw material and fuel (piped natural gas and coal) prices are other credit concerns. However, the ratings derive comfort from the extensive experience of the promoters in the ceramic tile industry and the company's proximity to raw material sources because of its presence in Morbi (Gujarat). As part of its process and in accordance with its rating agreement with LGIL, ICRA has been sending repeated reminders to the entity for payment of surveillance fee for NCDs that became due. However, despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite cooperation and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the company's rating for NCDs continues to remain under "Issuer Not Cooperating" category. The rating action stands in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Key rating drivers and their description Credit strengths * Extensive experience of promoters in tile industry: Incorporated in 2010, LGIL is managed by its key promoters, Mr. Babulal Detroja, Mr. Anil Detroja, Mr. Nilesh Detroja and Mr. Hitesh Detroja. They have more than a decade of experience in the ceramic tile industry via their association with Group entities in the ceramic tile business. * Favourable location for raw material procurement: The company's manufacturing facility is in the ceramic tile manufacturing hub of Morbi, which provides easy access to quality raw materials and allows savings in transportation cost. Cheaper raw material procurement improves cost competence of LGIL. Credit challenges * Continuous delays in debt servicing: The liquidity position remained poor because of the decline in revenues, the elongation of receivables and the increase in inventory levels. Accordingly, there was a delay in servicing the term-debt obligations and the company also failed to make its interest payment on the NCDs as well. The rating also takes note of the restructuring of the NCD repayments that the company has requested and the same is under process. * Moderate scale of operations and intense competition: LGIL's scale of operations continues to be modest – the revenue declined by ~26% to INR103.54 crore in FY2020 from INR140.47 crore in FY2019. The dip in revenue was attributed to the temporary decline in production capacity of vitrified tiles for approximately three months as the machinery was reconfigured to undertake production of Glazed Vitrified Tiles (GVT) from Double Charged Vitrified Tiles (DCVT). Moreover, the spread of COVID-19 in key export destination reduced the order inflows in Q4FY2021, consequently impacting the revenue. The company resumed its business operations from May 2020 and reported revenue of INR32.87 crore in H1FY2021. LGIL is estimated to achieve healthy revenue growth over H2FY2021, supported by healthy off-take from both the domestic and the export markets. The company's exposure to intense competition from large number of organised as well as unorganised tile manufacturers limits its scale and profitability. * Below-average financial risk profile: The company's financial risk remained below-average as evident from the moderately leveraged capital structure and the below-average debt coverage debt indicators. LGIL availed funding under COVID-19 relief package during H1FY2021, which is estimated to elevate the debt level in FY2021. Accordingly, the leverage ratio is estimated to increase marginally to ~1.20 times as on March 31, 2021 against less than 1 times as on March 31, 2020. Due to moderate profitability, the debt-coverage metrics are estimated to remain below average as evident from the interest coverage and DSCR of less than 1x in FY2021. * Vulnerability of profitability to adverse fluctuations in raw material and coal prices: The company's margins are primarily affected by raw material and coal price fluctuations. Any adverse movement in these prices could have an adverse impact on the margins, considering the company's limited ability to pass on the price hike due to intense competition. The price fluctuations also impact the company's realisation. Liquidity position: Poor LGIL's liquidity position is poor as evident from the delay in repayment of the term-debt and interest servicing of the NCD. However, the liquidity is supported to some extent by the unsecured loans that are infused intermittently by the promoters to meet the working capital requirement. The company's uptake of the INR9.93 crore term loan under the COVID-19 package declared by the RBI has supported the liquidity requirement to some extent. The average utilisation of working capital limit stood high at ~96% over the past 12 months (January 19-December 20). Going forward, the timely realisation of receivables and the infusion of unsecured loans along with the receipt of enhancement in working capital limit will remain crucial for ensuring liquidity. Rating sensitivities Positive factors - ICRA could upgrade LGIL's ratings if the company repays its debt obligations in a timely manner on a sustained basis. Negative factors - Not applicable Incorporated in 2010, Lexus Granito (India) Limited is an established player in the ceramics industry with presence in the domestic and the international markets. The company manufactures vitrified tiles and operates through its own plant in Morbi with an installed capacity to produce 48,00,000 boxes of vitrified tiles per annum in three sizes - 600x600 mm, 1200x600 mm and 800x1200 mm. In June 2017, the company commenced the manufacture of wall tiles (which was earlier manufactured under its Group concern, Lexus Ceramic Private Limited). The wall tiles manufacturing unit is in LGL's existing facility. The unit has an installed capacity to produce 24,00,000 boxes of wall tiles per annum in three sizes - 300X600 mm and 300X450 mm. The company is managed by Mr. Babulal Detroja, Mr. Anil Detroja, Mr. Nilesh Detroja and Mr. Hitesh Detroja. MATESHWARI FOOD: ICRA Keeps B Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA said ratings for the INR24.00 crore bank facilities of Mateshwari Food Stuff Private Limited continue to remain under 'Issuer Not Cooperating' category'. The rating is denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Fund 6.50 [ICRA]B (Stable) ISSUER NOT bases-Term Loan COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Long-Term Fund 17.50 [ICRA]B (Stable) ISSUER NOT Based-Cash COOPERATING; Rating continues Credit to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in May 2014, Mateshwari Foodstuff Private Limited (MFS) is promoted by Mr. Ramdeep Sharma and family. The company is engaged in milling and processing of basmati rice. The plant is located at Bundi (Rajasthan) and has a processing capacity of 22,000 MTPA. The commercial production commenced from May 2015 majorly in line with the schedule. The company procures paddy from the local mandi in Bundi and sells its products to basmati rice exporters in Gujarat, Punjab and Delhi. The company has setup a rice processing unit at Bundi, Rajasthan with a total installed capacity of 22,000 MTPA. MILSHA AGRO: ICRA Lowers Rating on INR2.0cr Term Loan to B ---------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Milsha Agro Exports Pvt. Ltd. (MAEPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based– 2.00 [ICRA]B (Stable); downgraded Term Loan From [ICRA]B+ (Stable) Fund Based– Packing Credit 12.00 [ICRA]A4; reaffirmed Fund Based– Foreign Bills Discount Against Letter of Credit 5.00 [ICRA]A4; reaffirmed Non-fund Based– Forward Contract 1.00 [ICRA]A4; reaffirmed Rationale The downward revision in the long-term rating considers the significant decline in the company's scale of operations over the past two years and likely increase in its working capital intensity, primarily driven by the elevated inventory levels of MAEPL. The ratings are constrained by the highly fragmented and low value-additive nature of shrimp processing industry with intense competition from domestic as well as international players, limiting the margins. The ratings consider the inherent risks in the industry including susceptibility to disease outbreak, which could impact the demand-supply dynamics. The ratings are impacted by the weak financial profile of MAEPL with low profitability, a leveraged capital structure and poor liquidity position. The ratings further consider MAEPL's exposure to forex risk in the absence of any formal hedging mechanism. The ratings, however, favorably consider the more than four decades of experience of its promoter in the seafood industry. The ratings also factor in the location-specific advantage derived from the company's proximity to the major aquaculture regions of West Bengal. The Stable outlook on the [ICRA]B rating reflects ICRA's opinion that MAEPL will continue to benefit from the vast experience of the promoter in the seafood industry. Key rating drivers and their description Credit strengths * Vast experience of promoter in seafood industry: MAEPL's promoter, Mr. Ram Milan Singh, has an experience of more than 40 years in the seafood industry. The promoter's extensive experience mitigates the operational risk to an extent. * Proximity to major aquaculture region of West Bengal: The company's processing plant is located in proximity to the major aquaculture regions of West Bengal, resulting in regular and easy availability of raw materials at a lower transportation cost. Credit challenges * Significant decline in scale of operations and increase in working capital intensity: The company's operating income (OI) witnessed a fall (YoY) of around 36% to INR52.01 crore in FY2020 from ~ INR80.98 crore in FY2019. The top line is likely to register a further decline in FY2021 compared to the previous fiscal. Due to lower sales, there has been a significant rise in inventory holding, which is likely to adversely impact the working capital intensity of operations. High working capital intensity of operations would exert pressure on its liquidity. * Highly fragmented industry, given low entry barriers, exerts pressure on margins: The Indian seafood export industry is highly fragmented. The company faces stiff competition from other organised and unorganised domestic and international players in the absence of entry barriers, which limits its pricing flexibility and bargaining power with customers, thereby putting pressure on its revenues and margins. In addition to the intense domestic competition, Indian exporters face competition from countries such as Ecuador, Indonesia and Vietnam, which are major global producers of Vannamei shrimp. * Highly leveraged capital structure and depressed coverage indicators: The company's capital structure continued to remain highly leveraged, depicted by a gearing of 2.78 times as on March 31, 2020 (2.82 as on March 31, 2019). High debt levels and low profitability kept the coverage indicators depressed, NCA/total debt of 12% and TD/OPBDITA of 5.13 times in FY2020. The coverage indicators are expected to deteriorate further in FY2021. * Inherent risks in seafood industry: The risk of extreme climatic conditions and disease outbreaks are inherent in shrimp farming. Extreme climatic condition would result in adverse farming conditions, which could affect mortality rates and the quality of shrimp farmed. Moreover, the seafood industry is impacted by the volatility in international prices of seafood. Any such situation would affect the availability of raw materials. * Foreign exchange rate fluctuation risk: The company generates its entire revenue from export sales. This exposes MAEPL to foreign exchange rate fluctuation risk in the absence of a formal hedging mechanism. Liquidity position: Poor The working capital limits of the company remained almost fully utilised over the last 15 months. ICRA notes its long-term debt servicing obligations in the near to medium term, which would continue to exert pressure on its cash flows. The expected increase in working capital intensity of operations would adversely impact its liquidity. In view of the likely weak cash flow from operations and high working capital requirement, MAEPL's liquidity position would continue to remain poor, going forward. Rating sensitivities Positive factors - ICRA could upgrade MAEPL's ratings if the company is able to substantially increase its revenue and profitability, while improving its liquidity profile and coverage indicators on a sustained basis. Negative factors - Pressure on MAEPL's rating could arise if the company reports a lower-than-expected turnover and profitability. Any major debt-funded capital expenditure and/or any deterioration in the working capital cycle, which could adversely impact the company's liquidity position, may also result in a rating downgrade. Incorporated in 2009, Milsha Agro Exports Pvt. Ltd. (MAEPL) is involved in processing and export of shrimps. Its processing unit is in Kolkata with an installed processing capacity of 30 tonnes per day and a storage capacity of 180 tonnes. The business was started by Mr. Ram Milan Singh in the 1970s through a partnership firm, Veejay Impex. MUKTA INDUSTRIES: ICRA Moves D Debt Ratings to Not Cooperating -------------------------------------------------------------- ICRA Ratings has migrated the rating on bank facilities of Mukta Industries Private Limited (MIPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based– 25.00 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Rating moved to 'issuer not cooperating category' Non-fund Based– 5.00 [ICRA]D ISSUER NOT COOPERATING; Letter of Credit Rating moved to 'issuer not cooperating category' Unallocated 5.00 [ICRA]D/[ICRA]D; ISSUER NOT Limits COOPERATING; Rating moved to 'issuer not cooperating category' ICRA has moved the ratings for the INR35.00 crore bank facilities of MIL to the 'ISSUER NOT COOPERATING' category. The rating is now denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING". ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in 1994 as a private limited company, Mukta Industries Private Limited (MIPL) is a metal trading company involved in various metal products, which include alloy steel bars and rods, billets, channels, wire rods and plates of different alloy grades. The Mukta Group of Industries consists of other entities namely Prakash Steel Corporation (PSC), Vastupal Bearing Races Limited (VBRL), Mukta Automation Private Limited (MAPL) and Vastupal Sales & Services LLP (VSSL). While PSC manufactures bright bars using different grade of stainless steel, alloy steel and carbon steel, VBRL manufactures forged and machined bearing used in ball bearing, roller bearings, taper bearings and auto ancillary industry. MAPL manufactures machined items as per customer's specifications and VSSL provides financial services. 3 In FY2019, on a provisional basis, the company reported a net profit of INR0.44 crore on an operating income of INR80.80 crore, as compared to a net profit of INR0.24 crore on an operating income of INR133.44 crore in the previous fiscal. NANDAN SAHA: ICRA Keeps B+ Ratings in Not Cooperating Category -------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Nandan Saha Steel Private Limited in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 53.80 [ICRA]B+(Stable) ISSUER NOT Limits COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 16.20 [ICRA]B+(Stable)/[ICRA]A4 Limits ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of noncooperation by a rated entity available at www.icra.in. Incorporated in 2003, Nandan Saha Steel Private Limited trades in construction materials like TMR rebars, stirrups, footings, cement, concrete blocks; consumer electronics and mobile handsets; tractor and other goods like steel doors and pigments. The company is an authorised distributor of Tata Steel Limited (for Tata Tiscon and Tata Pravesh brands), Tata International Limited (for Tata Stryder brand), Tata Pigments Limited, Samsung Mobiles and consumer electronics, and UAL Industries Limited (for AAC Blocks). It is also an authorised dealer of Mahindra Tractors and C&F agent of ACC Cements in different areas in West Bengal. NUEVO POLYMERS: ICRA Keeps B+/A4 Rating in Not Cooperating ---------------------------------------------------------- ICRA said the ratings for the INR35.00 crore bank facilities of Nuevo Polymers Private Limited continue to remain under 'Issuer Not Cooperating' category'. The rating is denoted as "[ICRA]B+ (Stable)/A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based/ 35.00 [ICRA]B+ (Stable)/A4 ISSUER Cash Credit NOT COOPERATING; Rating Limits continues to remain under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. NPPL was formed in March 2012, to provide consultancy work for the guar gum manufacturers and traders. Later in 2012-13, NPPL entered into a joint venture contract with Engenium Chemical Corporations, ECC (Canada-based trader of guar gum) and established its manufacturing facility in Jhajjar, Haryana for producing industrial grade guar gum powder 2 from guar splits. The company has further added a new product Catonic Guar, the manufacturing of which began in April 2015. The total combined capacity of the company is 7500 metric tonnes per annum (MTPA). The Dadoo family, with two other family-owned companies - namely Kamakya Vincom Private Limited and Efficient Technology Private Limited, owns 70% shares of NPL with the remaining 30% being held by ECC. PEPSU ROAD: ICRA Reaffirms B+ Rating on INR40cr Loans ----------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of Pepsu Road Transport Corporation (PRTC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based– 25.0 [ICRA]B+(Stable); reaffirmed Cash Credit and removed from Issuer not Cooperating category Long-term/ 15.0 [ICRA]B+(Stable); reaffirmed Unallocated and removed from Issuer not Cooperating category Rationale The rating continues to take into consideration the PRTC's strategic importance to the Government of Punjab (GoP) as a provider of passenger transport services in the southern region of Punjab, the regular fare revisions during the last three years and the support extended by the GoP in the form of grants for capital expenditures and retention of Special Road Tax Liabilities, which supported PRTC's liquidity position to a large extent. While the upward fare revision implemented for the last three years has resulted in operating profits for the PRTC, the extent of future fare hikes in relation to the rising cost of operations will remain a key determinant for its comfortable financial position in future. The rating is however constrained by the increased financial stress owing to the Covid-19-induced challenges, which resulted in a significant shortfall in PRTC's revenues during 9M FY2021. Further, the rating also looks into the delays in the ramp up of its operations post the lockdowns once restrictions were gradually lifted, amidst the high fixed cost environment within which PRTC operates, to result in higher-than-expected losses during FY2021 and the impact on its liquidity, notwithstanding the timely revenue subsidy advances received from the Government of Punjab (GoP). The lower-than-expected earnings during the current year (FY2021) has increased the PRTC's dependence on grants from the state government and external borrowings to meet critical revenue expenditures like salaries to employees. ICRA also notes that, although the PRTC's fixed costs have been funded in a timely manner during the nationwide lockdown amidst the Covid-19 pandemic, its financial profile is likely to be adversely impacted in the medium term, given the large payables towards retiring employees, high employee costs, volatile fuel prices and lower traffic revenues. ICRA notes that the increase in long-term debt levels during the current year followed by the expected erosion in net worth, is likely to impact its capital structure and coverage metrics to a large extent. Key rating drivers and their description Credit strengths * Strategic importance of PRTC to the state government; financial flexibility derived from being a state-owned entity: The PRTC is owned by the GoP (93% shareholding) and the Government of India (7% stake) and is responsible for providing road transport infrastructure and services to the passengers in the southern districts of the state. Its operations are supervised by its Board of Directors (BoDs) appointed by the GoP, which also extends financial support, with grants funding a considerable portion of its capital expenditure programme. Further, the GoP has allowed the corporation to retain the Special Road Tax Liability and Motor Vehicle Tax till PRTC reaches break even, providing a liquidity cushion. * Track record of upward fare revisions and timely support of the GoP during the pandemic support the financial profile of PRTC: The state government approved upward fare revisions twice during FY2019 and the last one in July 2020. Consequently, the corporation has been able to report operating profits since the last five years and was also able to clear some of its liabilities towards retiring employees with timely receipt of subsidy reimbursements. Moreover, revenue expenditure requirements like payment of salaries/pensions etc. to the employees for the month of April, May and June 2020 too have been met through the release of subsidies in a timely manner from the GoP. However, timely approval of future fare revisions in relation to the cost of operations would remain critical for the comfortable financial position of the PRTC. Credit challenges * Increased financial stress on account of the pandemic and deteriorating operating profile to result in large losses during FY2021: The PRTC's operating and financial performance is likely to be impacted adversely during FY2021, owing to the shrinking traffic and non-traffic revenues due to the limited operations with modified routes during the current year, amidst the pandemic. The PRTC is likely to report an operating loss of ~Rs. 30.0 crore during FY2021, its first in the recent history, despite a large advance revenue subsidy released from the GoP. The operating metrics have started to show gradual improvement over the last few months and is expected to attain pre-covid levels over the next few months. * Delays in ramp up of operations post the lockdowns were lifted have led to significant shortfall in revenues: Due to the Covid-19 pandemic, a nationwide lockdown was announced by the Government of India in March 2020, which has impacted the traffic revenues of the PRTC adversely. Although a slow and gradual improvement in traffic revenues was expected, post the periodic relaxations in the lockdowns since May 2020, interstate connectivity issues and lack of permissions to operate interstate routes impacted the PRTC's operations significantly. This resulted in a total traffic revenue of just over INR128.54 crore in the nine months ended December 31, 2020. Although, support from the GoP in the form of a revenue subsidy (~ INR 79.68-crore as on December 31, 2020) to meet critical fixed expenses (salaries and pension to employees) provided significant comfort, the PRTC's liquidity position is likely to remain stretched in the near term on account of the high fixed costs and low traffic revenues. Moreover, fresh long-term loans from banks and depleting net worth position impacted the PRTC's capital structure adversely. * Adverse capital structure: The PRTC had a negative net worth as on March 31, 2020 on account of accumulated losses from the previous years. Its total debt of INR68.55 crore as on March 31, 2020 includes INR16.81-crore term loans from the bank, INR23.75 crore loan from the GoP and working capital loans amounting to INR27.99 crore. The annual repayment obligations of around INR11.5 crore, remain within the comfortable limits of the corporation, although its capital structure is significantly impacted due to large outstanding debt. * Large shortfall in retirement benefit fund of employees: The PRTC had a liability of around INR56.00 crore towards benefits of the employees due for retirement. Payment of such a large amount, though in phases, would adversely impact the liquidity of the corporation. Moreover, if such payments are funded by fresh loans, the profitability as well as capex plans of the corporation are likely to be impacted. Further, the corporation had tax liabilities of INR267 crore payable to different authorities as on March 31, 2020. Liquidity position: Adequate The liquidity position of the entity has remained stretched with free cash and bank balances of less than INR7 crore as on March 31, 2020 and an annual repayment obligation of more than INR11 crore. Although the average working capital limit utilisation since April 2020 has been low at ~30% during FY2021, supported by timely receipt of subsidies from the GoP, the overall liquidity position is likely to remain stretched in the medium term given the slow improvement in traffic revenues and large fresh debt of INR30.0 crore availed during Q4FY2021. Rating sensitivities Positive factors - ICRA could upgrade the rating if the operating profits of PRTC increase substantially after traffic operations are normalised completely. Negative factors - ICRA could downgrade the rating if there is a delay in timely upward fare revision and/or in case the financial profile of the state government deteriorates significantly, affecting the timely transfer of subsidies to the PRTC and impacting its liquidity profile further. Parent/Group Support The assigned rating factors in the importance that the PRTC holds for the state government as an institution for providing public transportation services in the state, which has induced it to extend timely financial support to the rated entity. Pepsu Road Transport Corporation (PRTC) was established by the GoP in October 1956 under the provision of the Road Transport Corporations (RTC) Act, 1950 with a view to provide efficient, adequate, economic and properly co-ordinated operation system of Road Transport Services in the southern region (erstwhile PEPSU - Patiala and East Punjab States Union) of Punjab. Apart from providing services in the districts of Patiala, Bathinda, Kapurthala, Barnala, Sangrur, Budhlada, Faridkot and Ludhiana, it also provides interstate services to the neighbouring states of Haryana, Himachal Pradesh, Rajasthan, Jammu & Kashmir, Uttar Pradesh, Uttaranchal, Delhi and Chandigarh. As on September 30, 2020, the PRTC had a fleet strength of 1113, which also includes 150 hired buses. Currently, the PRTC has a total staff of around 3,970, of which around 80% are contractual. POLESTAR TRADERS: ICRA Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Polestar Traders Private Limited in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D/D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 8.00 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under 'Issuer Not Cooperating' Category Fund Based- 1.50 [ICRA]D ISSUER NOT COOPERATING; Letter of Credit Rating continues to remain under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Polestar Traders Private Limited was incorporated in March 2013 by Mr. Umesh Vrajlal Damania and Mr. Manish Babel.The company started operations by taking over the asset and liabilities of M/s Polestar Industries, a proprietorship concern established by Mr. Umesh Vrajlal Damania. The company is engaged in trading of various ferrous and non ferrous metals. It predominantly deals in trading of various types of stainless steel like pipes, plates, sheets, wire rods etc. The company has its registered office in Mumbai and warehouse in Navi Mumbai. PRAKASH STEEL: ICRA Moves D Debt Ratings to Not Cooperating ----------------------------------------------------------- ICRA Ratings has migrated the rating on bank facilities of Prakash Steel Corporation (PSC) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based– 15.00 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Rating moved to 'issuer not cooperating category' Non-fund Based– (4.00) [ICRA]D ISSUER NOT COOPERATING; Letter of Credit Rating moved to 'issuer not cooperating category' Unallocated 1.00 [ICRA]D/[ICRA]D; ISSUER NOT Limits COOPERATING; Rating moved to 'issuer not cooperating category' ICRA has moved the ratings for the INR16.00 crore bank facilities of PSC to the 'ISSUER NOT COOPERATING' category. The rating is now denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING". ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Prakash Steel Corporation (PSC) is a part of the Mukta Group of Industries and was established as a proprietorship concern by Mr. Babulal Shah in 1975 in Ahmedabad. The firm is owned and managed by Mr. Pankaj Shah. The firm manufactures bright bars for different grades of stainless steel, alloy steel and carbon steel of different diameters, ranging between 7 mm and 70 mm, which goes up to 150 mm in certain cases. The firm also trades other steel products such as plates of different alloy grades, flate steel and commercial grade round steel bars. The product range finds application in automobile, engineering, capital goods and other allied industries. The Mukta Group of Industries consists of other entities namely Mukta Industries Private Limited (MIPL), Vastupal Bearing Races Limited (VBRL), Mukta Automation Private Limited (MAPL) and Vastupal Sales & Services LLP (VSSL). While MIPL trades alloys steel bars and rods, billets, channels, wire rods and plates of different grades, VBRL manufactures forged and machined bearing used in ball bearing, roller bearings, taper bearings and auto ancillary industry. MAPL manufactures machined items as per customer's specifications and VSSL provides financial services. In FY2019, on a provisional basis, the firm reported a net profit of INR0.35 crore on an operating income of INR24.97 crore, as compared to a net profit of INR0.37 crore on an operating income of INR62.06 crore in the previous fiscal. RIGHILL ELECTRICS: ICRA Lowers Rating on INR3.50cr Loan to D ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Righill Electrics Private Limited (REPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 3.50 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating downgraded from [ICRA]B- Cash Credit (Stable) and continues to remain in the 'Issuer Not Cooperating' category Short Term– 1.50 [ICRA]D ISSUER NOT COOPERATING; Non-Fund Based Rating downgraded from [ICRA] A4 and continues to remain in the 'Issuer Not Cooperating' Category Long Term/ 3.00 [ICRA]D/[ICRA]D ISSUER NOT Short Term COOPERATING; Rating downgraded Unallocated from [ICRA]B- (Stable)/[ICRA]A4 and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade reflects overdrawing of Accounts as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in November 2019. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. REPL was incorporated in 1993 as a private limited company by Mr. Ashutosh Shukla and Mr. Vinod Sapre. The company designs and manufactures control systems and assemblies for various applications, including oil field equipment. It also manufactures parts and assemblies like electronic control modules, printed circuit boards (PCBs), plug and socket connectors etc. REPL specialises in designing and manufacturing controls and electric parts for oil rigs. Most revenue is derived from the sale of rig equipment, and thus the revenues primarily depend on the rigging activity and in turn on crude oil prices. It also provides services pertaining to repairs and maintenance and offers annual maintenance contracts (AMC) to customers. The manufacturing facility of the company is located at Bhopal in Madhya Pradesh. RKM POWERGEN: ICRA Reaffirms D Rating on INR1,029.61cr Loan ----------------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of R K M Powergen Private Limited (RKMPPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Term Loan 846.06 [ICRA]D; reaffirmed Non-fund based facility 1,029.61 [ICRA]D; reaffirmed Fund-based Cash Credit 436.32 [ICRA]D; reaffirmed Rationale The reaffirmation of rating assigned to RKMPPL factors in the delays in servicing the debt obligations to one of the working capital lenders, owing to a pending dispute between the lenders in the consortium. Nonetheless, the project lenders have implemented the resolution plan in September 2020 involving conversion of outstanding debt (INR15,141.74 crore) into sustainable debt (INR5600 crore), unsustainable debt (INR8597.05 crore) and equity (26% shareholding). Further, the company has cleared the interest payments on the long-term debt in a timely manner for the quarter ending December 2020 and the repayment of the principal portion is scheduled from July 2021. The company expects to clear the overdue payments to the working capital lender shortly. RKMPPL is currently supplying power generated by the 1440-MW coal-based power project to the Uttar Pradesh distribution utilities (discoms) under a long-term (25-year) power purchase agreement (PPA) for 350 MW through tariff-based competitive bidding and to the Telangana discoms under a 3-year PPA with PTC India Limited (PTC; intermediate procurer) for 550 MW. The company is also selling power in the short-term power market. While the plant load factor (PLF) for the project remained low, at 17.2% in FY2020 because of the non-operationalisation of the PPA with Chhattisgarh State Electricity Board (CSEB) and constraints in securing working capital funding, the PLF is expected to improve with the commencement of supply under the PPA with PTC in February 2020 and the implementation of the resolution plan, leading to improved working capital funding. Going forward, a sustainable improvement in PLF levels remains key to the success of the resolution plan, which in turn is dependent on the company's ability to renew /tie up new PPAs, post the expiry of the medium-term PPA with PTC. Further, ICRA takes note of the counterparty credit risks arising out of its exposure to the Uttar Pradesh discoms, with weak financial health, as also reflected from the large receivable position of INR864.66 crore as of December 2020. Nonetheless, payments from PTC remain timely. Furthermore, ICRA takes note of the fuel supply and the pricing risks for the project from exposure to open market purchases, given that the quantum available under the fuel supply agreements (FSAs) signed with South Eastern Coalfields Limited (SECL) is not adequate to meet the entire fuel requirement of the plant. The dependence on open market purchases for fuel and the lack of railway siding adversely impact the cost competitiveness of the tariffs offered by the project, thereby affecting its merit order position of discoms and ability to secure PPAs for the untied capacity. Further, ICRA notes that the company's ability to secure funding for additional capex to complete auxiliary works related to railway siding and towards complying with the revised emission norms over the next two to three years remain important. Key rating drivers and their description Credit strengths * Operational coal-based project having long-term PPA with Uttar Pradesh discoms and medium-term PPA with PTC: The entire 1440-MW power generation capacity of RKMPPL was commissioned by March 2019. The company is supplying power to Uttar Pradesh discoms under a 25-year long-term PPA for 350 MW and to PTC India Limited (in turn to Telangana discoms) under a medium-term PPA (3-year) for 550 MW, secured through the competitive bidding route. These PPAs constitute 68% of the project's net capacity. The fuel for the project is met through a mix of linkage coal and e-auction coal. * Implementation of resolution plan with lenders: The company has signed a resolution plan agreement with the lenders in September 2020, with 37% of the outstanding debt converted into sustainable debt and the balance unsustainable portion converted to OCDs and equity (26% shareholding). The servicing of the sustainable portion of the debt has commenced from the quarter ending December 2020. Credit challenges * Delays in servicing the working capital debt: While the company is servicing the obligations under the long-term debt (following the implementation of the resolution plan in September 2020) in a timely manner, the servicing of the working capital debt to one of the lenders is delayed, because of a pending dispute between the lenders. The company expects the issue to be resolved shortly. * Subdued PLF because of inadequate power off-take: The PLF levels for the project remain subdued, with an average PLF of ~17.2% in FY2020, because of inadequate power off-take. This is owing to the non-operationalisation of the long-term PPA signed with the Chhattisgarh state utility. However, the medium-term PPA signed with PTC has been operationalised since February 2020, which is expected to improve the PLF, going forward. Nonetheless, a sustainable improvement in PLF levels is linked to the company's ability to renew /tie up new PPAs, post the expiry of the medium-term PPA with PTC. * High counterparty credit risks: The counterparty credit risk remains high for RKMPPL because of the exposure to Uttar Pradesh discoms, which have weak financial health, leading to payment delays. The overall pending dues, including disputed dues, remained high at INR864.66 crore as of December 2020. Nonetheless, the payments from PTC remain timely. * Relatively weak cost competitiveness of tariff offered by the project: The variable cost of generation for the company is relatively high due to the dependence on open market purchases for a portion of the fuel requirement, lack of railway siding and moderate operating efficiencies in terms of station heat rate and auxiliary consumption. This affects the cost competitiveness of tariffs offered by the project, thereby impacting the merit order position of the discoms and their ability to secure the PPAs for the untied capacity. * Capex required to comply with the revised emission norms and complete pending auxiliary works: The company is required to incur an additional capex to complete auxiliary works related to railway siding and also towards complying with the revised emission norms over the next two to three years. The company's ability to tie up the requisite funding for the capex remains important. Liquidity position: Poor The liquidity position of the company is constrained by the suboptimal power generation of its project and large receivable position. While the implementation of the resolution plan by the project lenders and the commencement of supply under the medium-term PPA is expected to improve the liquidity profile, the disbursement of the balance working capital funding, receipt of pending overdues from UPPCL along with resolution of dispute between lenders on the payment of the interest overdues to one of the working capital lenders remains important. Rating sensitivities Positive factors - The rating could be upgraded if the company is able to service all its debt obligations in a timely manner, on a sustained basis. Negative factors - Not applicable. RKMPPL is a special purpose vehicle promoted by the Chennai-based R.K. Powergen Group, Malaysia-based Mudajaya Group and Enerk International Holdings Limited for the development of a 1440-MW domestic coal-based power project in Janjgir Champa district of Chhattisgarh. The first unit of the project was commissioned in November 2015, followed by unit-2 in February 2016, unit-3 in November 2017 and unit-4 in March 2019. The project cost stood at INR13827.71 crore (Rs. 9.60 crore per MW) as on March 2019 against the appraised cost of INR6653.60 crore (Rs. 4.62 crore per MW). The project cost is expected to increase further because of pending works, including railway siding and installation of equipment to comply with revised environmental norms. The project used BTG sourced from Chinese players—boiler from China Western Power Industrial Company and turbine generator set from Harbin Power Engineering Company. The project has a long-term PPA for 350 MW with Uttar Pradesh Power Corporation Limited (UPPCL) and a medium-term PPA for 550 MW with PTC India Limited for a period of three years. While the company also signed a PPA with the Chhattisgarh State Utility for 30% of its gross capacity under the implementation agreement with the state government, the PPA remains non-operational. The company has signed FSAs with SECL for 4.07 MTPA (million tonnes per annum). RSH AGRO: ICRA Keeps B Debt Ratings in Not Cooperating Category --------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of R. S. H. Agro Products Pvt Ltd in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based 5.00 [ICRA]B (Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Fund Based 10.00 [ICRA]B (Stable) ISSUER NOT Limit–Cash COOPERATING; Rating continues Credit to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of noncooperation by a rated entity available at www.icra.in. Incorporated in 2012, RSH Agro Products Private Limited has recently commenced manufacturing of mustard oil and oil cake by crushing mustard seeds, since April 2015 at is facility located in Assam. The company is managed by the Harlalka family, and is a part of the Harlalka Group which operates other companies in agro products, coke etc. SEVOKE MOTORS: ICRA Keeps B+ Debt Ratings in Not Cooperating ------------------------------------------------------------ ICRA has retained the ratings for the bank facilities of Sevoke Motors Private Limited in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based 12.50 [ICRA]B+ (Stable) ISSUER NOT Limit–E-DFS COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Fund Based 5.00 [ICRA]B+ (Stable) ISSUER NOT Limit–Cash COOPERATING; Rating continues Credit to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of noncooperation by a rated entity available at www.icra.in. Incorporated in 2007, Sevoke Motors Private Limited (SMPL) is involved in the sale of passenger vehicles as an authorised dealer of Maruti Suzuki India Limited (MSIL) in Siliguri, West Bengal. Apart from the sale of new passenger vehicles, the company also sells pre-owned vehicles, spare parts and does service/repair of vehicles. The company has a show room cumservice centre in Siliguri and has five branch offices to generate sale from various districts in north Bengal. In April 2016, the company has opened a new showroom dealing in NEXA variant of MSIL vehicles. The company has also set-up two registered sales outlets in Jaigaon and Kurseong in November 2015 and April 2016, respectively. SHAMBHU TEXTILES: Insolvency Resolution Process Case Summary ------------------------------------------------------------ Debtor: Shambhu Textiles Mills Private Limited Ranipur Nr Ranipur Bus Stand Narol Ahmedabad GJ 383405 IN Insolvency Commencement Date: May 28, 2020 Court: National Company Law Tribunal, Ahmedabad Bench Estimated date of closure of insolvency resolution process: November 24, 2020 (180 days from commencement) Insolvency professional: Mr. Kedarram Ramratan Laddha Interim Resolution Professional: Mr. Kedarram Ramratan Laddha 6/5, Sahyog Apartment B/h Keshavnagar Nr. Subhash Bridge RTO Circle, Keshavnagar Ahmedabad 380027 E-mail: ip@kpsjca.com - and - B-1002, Mondeal Square Nr. Prahladnagar Garden SG Highway Ahmedabad 380015 E-mail: kedarladdha66@gmail.com Last date for submission of claims: June 20, 2020 SHIRDI SAI: ICRA Hikes Rating on INR657cr Loan to B+ ---------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Shirdi Sai Electricals Limited (SSEL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term/Short- 657.00 [ICRA]B+(Stable)/[ICRA]A4; term Non Fund- upgraded from [ICRA]C+/ based Facilities [ICRA]A4 Long-term Fund- 107.00 [ICRA]B+(Stable); upgraded Based Working from [ICRA]C+ Capital Rationale The rating upgrade factors in the improvement in receivables collection by SSEL, evident from the INR621-crore collection from key counterparties, namely state power distribution utilities (discoms) of Andhra Pradesh and Bihar since April 2020. Collection of receivables has enabled the company to service its debt obligations in a timely manner in the last 11-month period. ICRA further notes that the company completed the Indotech Transformers Limited (ITL) acquisition in September 2020 and that the promoters had brought in their share of equity for the transaction. Further, SSEL plans to avail additional facilities under the Emergency Credit Line Guarantee Scheme to improve its liquidity position. ICRA also notes that the company has benefitted from the release of bank guarantees (to the extent of project completion) along with the associated margin money as part of the Atmanirbhar Bharat package. The rating further positively factors in the established presence of SSEL in the distribution transformer manufacturing segment and its close to two-decade experience as an EPC contractor. The company has been able to forge strong relationship with its client base as evident from the receipt of repeat orders from discoms of Andhra Pradesh, Bihar, Madhya Pradesh etc. SSEL benefits from its technology tie-up with Hitachi Metals Limited, which helps it to manufacture energy efficient amorphous core-based transformers. Furthermore, backward integrated operations and in-house manufacture of ~70% transformer subparts provide the company with higher control on both cost and quality. ICRA also takes note of the company's healthy order book position, INR1831 crore as of January 1, 2021, which is expected to provide revenue visibility in the near to medium term. In addition, acquisition of ITL is expected to entail synergistic benefits and aid SSEL to cater to private enterprise requirement. The rating, however, remains constrained by the company's stretched receivable position as a significant portion of it is withheld or kept as retention money particularly by Bihar discoms. While ICRA notes that the projects undertaken in Bihar have achieved significant progress and are nearing completion, timely realisation of retention/withheld money remains crucial. The rating further remains tempered by the high geographical and customer concentration risks, given that Andhra Pradesh and Bihar state power distribution utilities(discoms) together contribute to over 90% of the company's revenue as well outstanding order book. In addition, the rating is impacted by the vulnerability of profitability to volatility in commodity prices, mitigated to some certain extent by the price escalation clauses in the contracts. In addition, the fragmented nature of the transformer industry results in pricing pressure to some extent. ICRA further takes note that SSEL has won solar power projects of 2200 MW in February 2021 from Andhra Pradesh Green Energy Corporation Ltd (APGECL). While the matter of project allotment is currently subjudice, ICRA will monitor the development closely. Moreover, the tie-up of requisite power purchase agreements (PPAs) and tie-up of project funding remain the key monitorables, given the large scale of the projects, the significant investment outlay, and the company's limited experience in execution of solar power projects. Key rating drivers and their description Credit strengths * Long track record in the transformer industry: SSEL is one of the prominent players in the distribution transformer manufacturing industry and has emerged as an EPC contractor in the segment over the years. The company's major clients include state power distribution utilities across Andhra Pradesh, Bihar, Madhya Pradesh, Odisha etc. * Technological tie-up with Hitachi Group for manufacturing energy efficient transformers: SSEL has signed an agreement with Metglas Inc (Hitachi Group) for manufacturing amorphous core-based transformers. As per the agreement, the Hitachi group provides SSEL with AMT (amorphous metal), which is used in manufacturing energy efficient transformers. These materials have high magnetic susceptibility, very low coercivity and high electrical resistance, and reduce losses in the transmission segment. The company does not pay any royalty to use this technology. * Backward integrated operations provide cost and quality control: SSEL's backward integration into core, conductor, winding and tank fabrication operations aids in healthy profitability. While several transformer manufacturers outsource production of these parts, in-house manufacturing of about 60-70% of transformer parts provides the company with significant cost control opportunities and ensures quality control. Satisfactory order book position: SSEL has an outstanding orderbook of INR1831 crore as on January 1, 2021, which provides revenue visibility going forward. Credit challenges * High working capital intensity: SSEL's working capital intensity remains high because of stretched receivables, and retention money and inventory holding requirements. This coupled with delays in project execution in Bihar due to rains had delayed the servicing of debt obligations (LC devolvements) in the past. However, the projects in Bihar are nearing completion, which in turn would enable the company to realize the retention money and ease its liquidity position. * High customer and geographical concentration risks: The customer and geographical concentration risks remain high as Andhra Pradesh and Bihar state power distribution utilities contribute to over 90% of the company's revenue and outstanding orderbook. ICRA, however, notes that the projects undertaken by SSEL are funded by central/multilateral agencies. Also, the company reported collections of INR621 crore from discoms in 9MFY2021. * Profitability exposed to volatility in raw material prices: SSEL's profitability remains exposed to volatility in raw material prices; however, most contracts have price escalation clauses based on published indices Execution risks associated with orders: Ability to execute the orders within the budgeted costs and time remains important for the overall performance of the company. * High competitive intensity: Highly fragmented nature of the transformer industry results in high competitive intensity, which in turn translates to pricing pressure to a certain extent. Liquidity position: Stretched SSEL's liquidity position remains stretched given the nominal free cash balances compared to the sizeable LC maturities in the near term. Further, the company's debt servicing ability completely hinges on the timeliness of receivable receipt, given the limited cushion available in terms of unused working capital facilities. Rating sensitivities Positive factors - Rating could be upgraded in case of [a] sustained track record from payments from discoms with withheld/retention money received from Bihar discoms in a timely manner and [b] improvement in liquidity buffer available with the company. Negative factors - Rating could witness a downward revision in case of delays in receipt of payments/release of retention money from discoms which would further impact the liquidity position of the company arriving at the rating, ICRA has consolidated the financials of SSEL and ITEL w.e.f September 3, 2020(date of acquisition). Incorporated in 1994, Shirdi Sai Electricals Limited (SSEL) manufactures power and distribution transformers (up to 20 MVA, 66 kV). The company has a transformer manufacturing facility in Kadapa, Andhra Pradesh. The company designs and manufactures power and distribution transformers to cater to the needs of electricity utilities as well as private enterprises. SSEL also provides solutions for power transmission and distribution systems through its turnkey projects division. SOMATHEERAM AYURVEDIC: ICRA Lowers Rating on INR7.95cr Loan to B+ ----------------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Somatheeram Ayurvedic Hospital and Yoga Centre Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term–Fund 2.25 [ICRA]B+ (Stable) ISSUER NOT Based/Cash Credit COOPERATING; Rating downgraded from [ICRA]BB and moved to the 'Issuer Not Cooperating' category Long Term–Fund 4.80 [ICRA]B+ (Stable) ISSUER NOT Based/Term Loan COOPERATING; Rating downgraded from [ICRA]BB and moved to the 'Issuer Not Cooperating' category Long Term– 7.95 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Rating downgraded from [ICRA]BB and moved to the 'Issuer Not Cooperating' category Rationale The rating downgrade is because of lack of adequate information regarding Somatheeram Ayurvedic Hospital and Yoga Centre Private Limited's performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by a rated entity" available at www.icra.in. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Somatheeram Ayurvedic Hospital and Yoga Centre Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, a rating view has been taken on the entity based on the best available information. Incorporated in 1994, Somatheeram is a strong brand in the Ayurvedic tourism segment and runs an Ayurvedic resort in Chowara, South of Kovalam, Trivandrum. The resort has 80 cottages, including 10 rooms in the nearby property, Samana, and has other amenities like a private beach, swimming pool, yoga centres etc in its property. The company offers several Ayurvedic treatment packages such as those for slimming, rejuvenation, anti-ageing, skin diseases and body purification to name a few. It has 16 doctors for Ayurvedic treatments, 51 therapists and three yoga masters, apart from 200 administrative staff. Bookings are made online on the company's website and through the marketing arm in Germany or through its agents. Almost the entire clientele is from overseas, with over 60% of them from Germany, primarily from the high-income category. Apart from Somatheeram, the promoters have interest in four other entities - two private limited companies and two partnership firms. Two of these entities are shell entities without any operations – one operates an Ayurvedic shop inside the Somatheeram campus, and the other owns cardamom plantations in Munnar. Status of non-cooperation with previous CRA: Not applicable Any other information: The company had applied for restructuring its bank lines with State Bank of India in September 2020 and the restructuring proposal submitted has been invoked by the bank in December 2020. TULSI OIL: ICRA Reaffirms B+ Rating on INR5.50cr LT Loan -------------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of Shri Tulsi Oil Products (STOP), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term– 5.50 [ICRA]B+ (stable); reaffirmed Fund Based Working Capital Rationale The rating reaffirmation of STOP continues to favorably factor in the extensive experience of the partners in the solvent extraction industry and the location benefits of having its manufacturing facilities in the vicinity of the country's cotton growing regions, giving it easy access to raw materials and customers. The ratings, however, remain constrained by the firm's modest scale of operations along with its stretched financial profile characterised by low profit margins, high gearing level, consequent weak coverage indicators and elevated working capital intensity owing to high inventory in the business. Further, the rating factors in STOP's exposure to intense competition in the edible oils industry, and the susceptibility of its revenues and profitability to price movements of cottonseeds. ICRA also notes the partnership nature of STOP's constitution, thus any significant withdrawals from the capital account could impact its net worth and, hence, its capital structure. Key rating drivers and their description Credit strengths * Extensive experience of the partners in the solvent extraction industry: STOP's partners have close to 20 years' experience in the solvent extraction industry. The daily operations of the firm are managed by its managing partner, Mr. Chetan Chopda. Mr. Chopda is also associated with Shri Tulsi Industries and Shri Tulsi Krupa Agro Tech Private Limited, both based out of Khamgaon, Maharashtra, as a partner and director, respectively. Both entities are involved in the same solvent extraction business. * Strategic location in proximity to cotton growing region as well as customer base: The firm's manufacturing unit is located in Buldhana district of Maharashtra, which lies in the vicinity of key cotton producing regions of eastern Maharashtra, as well as of Gujarat and Telangana. Further, its customers, chiefly edible oil refiners, animal feed manufacturers, farmers and dairies, are located close to its manufacturing unit. Credit challenges * Modest scale of operations: STOP's scale over the past fiscals has remained modest with revenues in the range of INR25.00– 28.00 crore. The firm's revenues have historically been dominated by cottonseed deoiled cake (DOC) (75% of total revenues), followed by cotton seed oil. Revenue growth in FY2020 over the previous fiscal has been steady with revenues of INR28.20 crore over INR27.46 crore in FY2019. The sales have remained at INR19.78 crore in the April–November 2020 period. * Stretched financial risk profile characterised by low profit margins, high gearing and weak debt coverage indicators: STOP's operating profit margins (OPM) remain low owing to the limited value addition in the nature of its operations. Further, the net profit margins also remain low, given the low OPM and sizeable interest charges. The OPM remained at 2.81% in FY2020 from 2.78% in FY2019 mainly because of the increase in seed procurement costs. The capital structure continued to remain leveraged with a gearing of 3.30 times as on March 31, 2020, compared to 3.77 times in FY2019, marked by some decrease in debt levels. The coverage metrics also continued to remain stretched in FY2020 as in the past, owing to limited profitability and high debt levels, with interest coverage of 1.32 times, TD/OPBDITA of 7.18 times, NCA/TD of 4% and TOL/TNW of 3.76 times as on March 31, 2020. * High working capital intensity driven mainly by stretched inventory position: The working capital intensity continues to remain high in FY2020 given the stretched yearend inventory position. While the inventory days have remained at 70 days in FY2020, the same were at 79 days in FY2019. The working capital intensity has remained at 23% in FY2020 against 25% in FY2019. * Vulnerability of profitability to commodity price movements regulatory changes, as well as exposure to high competition in edible oil industry: Being an agro commodity, the firm remains vulnerable to price movements of cottonseeds. Further, price movements as well as demand for substitute oilseed products influence the firm's revenue growth and profitability. The edible oil industry in India is characterised by intense competition and fragmentation with a large number of units, given its low entry barriers. The same limits the pricing power and, hence, the operating profitability of the company. * Risk of capital withdrawal associated with partnership firm: STOP is a partnership firm and any significant withdrawals from the capital account could impact its net worth and, hence, the capital structure, as witnessed in past fiscals. Liquidity position: Stretched STOP's liquidity position remains stretched as evidenced by its modest cash flows from operations, cash balance of INR0.02 crore as on March 31, 2020 and limited cushion available in the form of undrawn working capital limits. The company's average monthly utilisation of fund-based working capital limits stood high at 84% during the 13-month period ended December 2020 (Rs.2.22 crore). As on March 31, 2020, the long-term borrowings mostly comprised interest bearing unsecured loans without any fixed scheduled repayments. Along with the absence of any major debt-funded capital expenditure plan, this provides some comfort to the company's liquidity position. Rating sensitivities Positive triggers: ICRA could upgrade STOP's rating on healthy increase in its overall scale of operations and profitability, which in turn strengthens its net worth. Negative triggers: Negative pressure on STOP's rating could arise if lower than expected accruals due to decline in revenues and/or profitability, and/or any sizeable unanticipated debt-funded capex and/or deterioration in working capital cycle or any large withdrawals impact the liquidity of the firm. Shri Tulsi Oil Products is a partnership firm promoted by Mr. Chetan Chopda and his wife, Mrs. Payal Chopda. It commenced operations from 2008. The firm is engaged in crushing cottonseeds for producing cotton oil and cotton DOC. Cotton oil is sold to oil refineries, while the DOC is sold to farmers and dairies as cattle feed. The firm's manufacturing units are located in Buldhana district of Maharashtra with a total installed production capacity of 10,000 metric tonne per annum. UNIQUE STRUCTURES: ICRA Lowers Rating on INR24.25cr Loan to B+ -------------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Unique Structures & Towers Limited (USTL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based– 24.25 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Ratings downgraded from [ICRA]BB (Negative) and moved to 'issuer not cooperating category Fund Based– 1.39 [ICRA]B+ (Stable) ISSUER NOT Term Loan COOPERATING; Ratings downgraded from [ICRA]BB (Negative) and moved to 'issuer not cooperating category Non-fund Based 92.70 [ICRA]A4 ISSUER NOT COOPERATING; Rating moved to 'issuer not cooperating Category ICRA has moved the ratings for the INR118.34 crore bank facilities of USTL to Issuer Not Cooperating Category. The rating is now denoted as '[ICRA]B+(Stable)/A4; ISSUER NOT COOPERATING'. As part of its process and in accordance with its rating agreement with USTL, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. USTL, formerly known as Unique Rolling Mills Private Limited, started as a steel rerolling mill at Raipur (Chhattisgarh) in 1985. The company established a galvanised steel structure fabrication unit in 1995, especially for extra high voltage (EHV) transmission lines and sub-stations/switchyards. Since then, it has been regularly supplying galvanised steel structures to various SPUs and PSUs such as the Power Grid Corporation of India Limited, the Indian Railways, the Department of Telecommunications, corporate customers, etc. Apart from manufacturing, USTL has ventured into the field of turnkey erection of EHV transmission lines in 2006. The company exited the rolled products business in FY2014. At present, it is executing turnkey projects in Madhya Pradesh, Chhattisgarh and Meghalaya. The company's manufacturing facility is located in Urla Industrial Area, Raipur. VICHITRA CONSTRUCTIONS: ICRA Keeps C Ratings in Not Cooperating --------------------------------------------------------------- ICRA said the ratings for the INR12.00 crore bank facilities of Vichitra Constructions Private Limited continue to remain under 'Issuer Not Cooperating' category'. The rating is denoted as "[ICRA]C ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Fund 3.00 [ICRA]C ISSUER NOT COOPERATING; bases-Term Loan Rating continues to remain under 'Issuer Not Cooperating' category Long-Term Fund 3.00 [ICRA]C ISSUER NOT COOPERATING; Based-Cash Rating continues to remain Credit under 'Issuer Not Cooperating' category Long-Term Non 6.00 [ICRA]C ISSUER NOT COOPERATING; fund based/ Rating continues to remain Bank guarantee under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of noncooperation by a rated entity available at www.icra.in. Vichitra Group of Companies had its inception in the year 1980 under the leadership of Mr. R.N. Aggarwal. We established the first unit of RCC Pipes- Durgesh Hume Pipes at Najafgarh, Delhi. After having Expertise in RCC Pipes Manufacturing, we established another Unit- Pragati Concrete Udyog also at Najafgarh, Delhi in 1982. We took over M/s U.P. Concrete Products (P) Ltd. at Hapur road, Ghaziabad (U.P.) in 1986. We shifted towards laying of all types of underground Telephone cables such as PIJF, Coaxial Cable, Optical Fibre Cable and Construction of Cable Duct works for the Deptt., of Telecom, govt. of India and established M/sVichitra Constructions Pvt. Ltd., during October- 1982. At present, it is registered with the various Govt. Dept.,/Public Sector, agencies such as MTNL, HCL, RITES, ITI, DMRC, Railways, DOT& PWD- Punjab for executions works. VINAYAK INTERNATIONAL: ICRA Cuts Rating on INR20cr Loan to D ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Vinayak international, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 20.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating downgraded from [ICRA]B+ Cash Credit (Stable) and continues to remain in the 'Issuer Not Cooperating' category Short Term– 10.00 [ICRA]D ISSUER NOT COOPERATING; Non-Fund Based Rating downgraded from [ICRA] A4 and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade reflects overdrawings in cash credit limits as per publicly available sources. The rating downgrade is because of lack of adequate information regarding Vinayak International performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by a rated entity" available at www.icra.in. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade". As part of its process and in accordance with its rating agreement with Vinayak International, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, a rating view has been taken on the entity based on the best available information Please refer to the following link for the previous detailed rationale that captures Key rating drivers and their description, Liquidity position, Rating sensitivities, Incorporated in the year 2005, Vinayak international is a proprietorship concern of Mr. Vikas Agarwal engaged in manufacturing and processing of (i) Cold rolled sheets (CR sheets/coils) used in manufacturing of bicycles, furniture, electrical panels etc as CR sheets have high strength, dent resistance and tensile property (ii) Hot rolled sheets (HR sheets/coils) mainly used in construction industry, manufacturing of bicycles frames, engineering and military equipment's, LPG cylinders, Shuttering plates etc (iii) Galvanized Plain Coils (GP Coils) used in manufacturing of automobiles, washers , vending machines, microwaves etc. Along with this, the firm is also engaged in generation of wind energy having installed capacity of 600 Kw located at Khala site in Jaisalmer which has been recently started by the firm in November 2015. ===================== N E W Z E A L A N D ===================== MAGSONS HARDWARE: Nido to Shut Stores; 60 Jobs to be Axed --------------------------------------------------------- The New Zealand Herald reports that Nido, New Zealand's biggest homeware store, has announced it will shut after attempts to find buyers failed. A statement from receivers of trading business Magsons Hardware told how 60 jobs will be lost, the Herald says. According to the Herald, McGrathNicoll said trading had continued at the Henderson big-box outlet while parties explored a possible sale of the business as a going concern. "Unfortunately, despite initial positive interest from a number of parties, a sale of Nido as a going concern is unable to be achieved. As a result, the receivers will now commence a closing-down sale of Nido and the stock, with the store expected to close in as little as three weeks," McGrathNicol said. "We are incredibly grateful for the support of staff during this difficult time, with all of the team working hard to preserve the business while options for the business were explored. Unfortunately, as a sale of Nido as a going concern was unable to be achieved, we have commenced a closing down sale of stock and, as a result, redundancies will need to be made with the doors closing," the Herald quotes Kare Johnstone, a receiver, as saying. "However, customers will benefit from the closing-down phase, which will include significant discounts in-store, with new stock being put on the shelves. Customers should get in quickly, as stock is limited," she said. "The intention is to trade the Nido store for approximately a further two to three weeks and sell the remaining stock at significant discounts. The closing-down sale has commenced with immediate effect and separate advertising with further details for customers will follow shortly and be provided throughout the closing-down period. There are approximately 60 staff affected," the statement said. According to the Herald, the announcement follows the liquidation of Nido's builder Vijay Holdings in November, leaving creditors crying out for money from the business which built the giant store and only partly finished its 650-space carpark. Vinod Kumar of Lynfield is a director of Magsons and Vijay and he founded the Nido concept, set to rival Ikea as this country's largest homeware store. But the financial trouble at the store and its builder endangers a NZD62 million funding arrangement behind the property's NZD59 million development, the Herald says. The Herald relates that retired farmers contributed some of the NZD59 million poured into a proportional share ownership scheme to buy the homeware store. Last month, they were worried after the shop's builder went into liquidation. Two ex-farmers in their late 70s and mid 80s from the Hawera and New Plymouth areas expressed concerns about their approximate NZD1 million investment each into Nido, which opened in early June last year. Pearlfisher Capital also contributed short-term debt finance of NZD25 million, the Herald says. WHAKATANE MILL: 210 Jobs at Risk as Mill May Shut Down ------------------------------------------------------ The New Zealand Herald reports that more than 200 staff at the Whakatane Mill have been presented with a proposal to close the mill. According to the report, General Manager Juha Verajankorva said in a statement that, faced with the loss of its biggest customer, the plant was no longer economic. "We have begun consultation with staff on a proposal to wind up the business and close the mill," the Herald quotes Mr. Verajankorva as saying. The mill employs just over 210 staff and has produced paper and packaging products, latterly mostly for export, for more than 80 years. Under the proposal, all staff at the mill would be made redundant, the plant decommissioned, and the site remediated, the report notes. The Herald relates that Mr. Verajankorva said the business has been in a challenging position for a number of years, and had been exploring options to remain viable, including seeking a new owner, but no other option offered a pathway to continue operations. He said the mill has struggled to produce Liquid Paper Board for its parent company, SIG Combibloc, at a competitive cost. Despite this, SIG had continued to invest in the company for some time, and had become its major customer, accounting for approximately 80 per cent of its output. Recently, however, SIG had decided to source the Liquid Paper Board provided by Whakatane Mill from its existing third-party suppliers, meaning the mill's operation was no longer viable, he said. The business case for further investment in the mill by SIG was not economic. "We continue to explore all options with our advisors Deloitte, including seeking a buyer for the business, but we are in a position where we must put this proposal to staff, as we are reaching a point where there may be no other option," said Mr. Verajankorva, the Herald relays. "The volumes we produce are modest by global standards, and our costs-per-unit can no longer compete with bigger plants overseas," he added. The Herald adds that the company's focus in the coming weeks would be to work with staff through the consultation process. "This is a hard proposal to put forward, given how much a part of the Bay of Plenty community this company has become. Should closure proceed, we will do everything we can to support our people and all our stakeholders," he said. After considering feedback from staff and all information arising from the consultation process, the company's decision would be shared with stakeholders and the market, the Herald says. ================= S I N G A P O R E ================= BERLANGA MYANMAR: Placed Under Voluntary Liquidation ---------------------------------------------------- Members of Berlanga Myanmar Pte Ltd on Feb. 10, 2021, passed a resolution to voluntarily wind up the company. At a creditors' meeting held on Feb. 10, the following resolutions were passed: - the company be wound up voluntarily; - the liquidator of the company be authorised to exercise any or all of the powers given by the Insolvency, Restructuring and Dissolution Act 2018; and It was also resolved that Mr. Saw Meng Tee of EA Consulting Pte Ltd, be appointed as the Liquidator for the purpose of winding up. The liquidator may be reached: EA Consulting Pte Ltd 1 North Bridge Road #23-05 High Street Centre Singapore 179094 HIN LEONG MARINE: Court to Hear Wind-Up Petition March 2 -------------------------------------------------------- A petition to wind up the operations of Hin Leong Marine International (Pte.) Ltd. will be heard before the High Court of Singapore on March 2, 2021, at 10:00 a.m. Mr. Lim Oon Kuin and Mr. Lim Chee Meng, contributories of the Company, filed the petition against the company on Nov. 1, 2020. The Petitioners' solicitors are: Davinder Singh Chambers LLC 1 Wallich Street #20-02 Guoco Tower Singapore 078881 About Hin Leong Marine International Pte Ltd./ Hin Leong Trading Hin Leong Trading (Pte.) Ltd., provides petroleum products and transportation services. The Company offers oil, lubricants, grease, and diesel products, as well grants storage, terminalling, trucking, and marine logistics services. Hin Leong Trading serves customers globally. Hin Leong Marine International Pte Ltd. is a subsidiary of Hin Leong Trading (Pte.) Ltd. Hin Leong Trading and shipping unit Ocean Tankers (Pte.) Ltd. filed for court protection from creditors on April 17, 2020, as the former struggles to repay debts of almost US$4 billion. Hin Leong posted a positive equity of US$4.56 billion and net profit of US$78 million in the period ended October 31, 2019, according to the people, who asked not to be identified as the matter is sensitive, Bloomberg News reported. But Hin Leong told its creditors that total liabilities reached US$4.05 billion as of early April, while assets were just US$714 million, leaving a hole of at least US$3.34 billion, according to screenshots of the presentation to a group of bankers seen by Bloomberg News. The balance sheet of the company showed no equity at all as of April 9, 2020, and warned that "figures obtained from the company are subject to verification," Bloomberg News added. On April 27, 2020, the Company was granted interim judicial management by the Singapore High Court. Goh Thien Phong and Chan Kheng Tek of PricewaterhouseCoopers Advisory Services (PwC) have been appointed as interim judicial managers. Ernst & Young (EY), has been appointed interim judicial manager for Ocean Tankers. HIN LEONG TRADING: Court to Hear Wind-Up Petition March 8 --------------------------------------------------------- A petition to wind up the operations of Hin Leong Trading (Pte.) Ltd. will be heard before the High Court of Singapore on March 8, 2021, at 10:00 a.m. Goh Thien Phong and Chan Kheng Tek, the joint and several Judicial Managers of the company, filed the petition against the company on Feb. 5, 2021. The Petitioners' solicitors are: Rajah & Tann Singapore LLP 9 Straits View #06-07 Marina One West Tower Singapore 018937 About Hin Leong Trading Hin Leong Trading (Pte.) Ltd. provides petroleum products and transportation services. The Company offers oil, lubricants, grease, and diesel products, as well grants storage, terminalling, trucking, and marine logistics services. Hin Leong Trading serves customers globally. Hin Leong Trading and shipping unit Ocean Tankers (Pte.) Ltd. filed for court protection from creditors on April 17, 2020, as the former struggles to repay debts of almost US$4 billion. Hin Leong posted a positive equity of US$4.56 billion and net profit of US$78 million in the period ended October 31, 2019, according to the people, who asked not to be identified as the matter is sensitive, Bloomberg News reported. But Hin Leong told its creditors that total liabilities reached US$4.05 billion as of early April, while assets were just US$714 million, leaving a hole of at least US$3.34 billion, according to screenshots of the presentation to a group of bankers seen by Bloomberg News. The balance sheet of the company showed no equity at all as of April 9, 2020, and warned that "figures obtained from the company are subject to verification," Bloomberg News added. On April 27, 2020, the Company was granted interim judicial management by the Singapore High Court. Goh Thien Phong and Chan Kheng Tek of PricewaterhouseCoopers Advisory Services (PwC) have been appointed as interim judicial managers. Ernst & Young (EY), has been appointed interim judicial manager for Ocean Tankers. ================= S R I L A N K A ================= DFCC BANK: S&P Withdraws 'CCC+/C' Issuer Credit Ratings ------------------------------------------------------- S&P Global Ratings withdrew its public 'CCC+' long-term and 'C' short-term issuer credit ratings on Sri Lanka-based DFCC Bank at the bank's request. The outlook on the long-term rating was stable at the time of the withdrawal. ********* 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. 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