/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/210311.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, March 11, 2021, Vol. 24, No. 45 Headlines A U S T R A L I A AUSTRALIA: Spike in Zombie Cos. in Admin. May Fuel Insolvency Wave BAYSIDE GATE: First Creditors' Meeting Set for March 19 BRIMOND INVESTMENTS: First Creditors' Meeting Set for March 19 GLOBAL ONE: First Creditors' Meeting Set for March 17 IMPELUS APAC: First Creditors' Meeting Set for March 17 IMPELUS LIMITED: First Creditors' Meeting Set for March 17 ZIP MASTER TRUST 2020-1: Moody's Upgrades Class E Notes to B1(sf) C H I N A BAOSHANG BANK: Beijing Court Finalizes Liquidation of Bank CHINA: To Put Fin'l. Firms Bankruptcy Laws on Legislative Agenda [*] Moody's Takes Actions on 13 Chinese Securities Companies H O N G K O N G CATHAY PACIFIC: Posts US$2.8 Billion Net Loss in 2020 I N D I A ADITYA HOTELS: CARE Moves D Debt Rating to Not Cooperating AISHWARYA TECHNOLOGIES: CARE Keeps D Ratings in Not Cooperating BAYANTREE DEVELOPERS: Insolvency Resolution Process Case Summary BIPIN ENGINEERS: CARE Lowers Rating on INR5.03cr Loan to B- BUTTA INFRASTRUCTURE: Insolvency Resolution Process Case Summary CLIFFTON LIMITED: Moody's Rates New USD Senior Secured Notes 'Ba3' FPC PETRO: CRISIL Keeps D Debt Ratings in Not Cooperating GANAPATHI SPINNING: CRISIL Cuts Rating on INR18cr Cash Loan to D GOODONE TRADERS: CRISIL Keeps D Debt Ratings in Not Cooperating GRATEFUL BUILDINFRA: Insolvency Resolution Process Case Summary HARRIN POULTRY: CARE Lowers Rating on INR9.32cr LT Loan to D JAYPEE INFRATECH: CARE Reaffirms D Rating on INR6,550cr LT Loan KAVITA EXIM: CARE Moves D Debt Rating to Not Cooperating LEELA BUSINESS: CARE Reaffirms B+ Rating on INR10cr LT Loan MAGNUM AVIATION: Insolvency Resolution Process Case Summary MAHESVARA CASHEW: CARE Lowers Rating on INR12.08cr Loan to C NAVNIT AUTOSPARES: CARE Cuts Rating on INR9.60cr Loan to B- NUTRIONEX MANUFACTURERS: Insolvency Resolution Case Summary PINK ROSE: CRISIL Keeps D Debt Ratings in Not Cooperating RAJASTHAN SYNTEX: CARE Withdraws D Ratings on Various Debts RBD INTERNATIONAL: CRISIL Keeps D Debt Ratings in Not Cooperating ROYAL ALLOYS: CARE Reaffirms B+ Rating on INR6.76cr LT Loan S.K. HATCHERIES: CARE Lowers Rating on INR9.23cr LT Loan to D SAVARIYA AGRO: CARE Lowers Rating on INR7.15cr LT Loan to D SHRI BANKE: Insolvency Resolution Process Case Summary SONI SOYA: CARE Moves D Debt Rating to Not Cooperating Category SUMITA TEX: CRISIL Keeps D Debt Ratings in Not Cooperating SUVEERA AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating TIRUAL BORTIMON: CARE Moves D Debt Rating to Not Cooperating UI FABRICATORS: CARE Keeps D Debt Rating in Not Cooperating V.R.K. ASSOCIATES: CARE Moves D Debt Rating to Not Cooperating VAISHNAV METAL: CRISIL Keeps D Debt Ratings in Not Cooperating VIRAR FABRICS: Insolvency Resolution Process Case Summary VISTACORE INFRAPROJECTS: CARE Keeps D Rating in Not Cooperating VISWAKARMA ROOFINGS: CARE Cuts Rating on INR15cr Loan to C VSP UDYOG: CARE Keeps D Debt Ratings in Not Cooperating Category [*] INDIA: Over 1,100 Firms Ordered for Liquidation Till Dec. 2020 J A P A N SOFTBANK GROUP: Moody's Affirms Ba3 CFR, Alters Outlook to Stable M A L A Y S I A AIRASIA GROUP: Sees More Layoffs Unless Domestic Flights Resume S I N G A P O R E HERCULES PROJECT: Court Enters Wind-Up Order LIU EE CONTRACTORS: Court Enters Wind-Up Order MANAS FOODS: Court Enters Wind-Up Order PANDITA INDUSTRIES: Fitch Affirms Then Withdraws 'B-' IDR SEAH WEE: Creditors' First Meeting Set for March 19 - - - - - ================= A U S T R A L I A ================= AUSTRALIA: Spike in Zombie Cos. in Admin. May Fuel Insolvency Wave ------------------------------------------------------------------ The Australian reports that there are worrying signs company collapses could leap back to historical heights as pandemic-related assistance draws to a close after propping up "zombie" enterprises that would have otherwise failed. According to The Australian, CreditorWatch's latest Business Risk Review data released on March 9 shows external administrations spiked by 61 per cent in February -- the highest they have risen for a year. "This figure is likely to rise again in the coming months, as JobKeeper ends and the three-month reprieve on credit arrangements for struggling smaller businesses comes to a close," The Australian quotes chief executive Patrick Coghlan as saying. The Australian say the federal government implemented a temporary moratorium on insolvent trading last year to allow businesses that were unable to pay their debts prior to the pandemic to trade through it, giving them time to right their operations as the economy normalised. It ended on December 31 but businesses with debts of less than AUD1 million were given extra time to work with an insolvency practitioner to restructure their operations and come to agreements with creditors to allow them to continue trading, the report states. The moratorium ends on March 28, along with the JobSeeker wage subsidy. "This could prompt a rash of insolvencies and, subsequently, redundancies, which could be a destabilising force on the local economy," the report quotes Mr. Coghlan as saying. "The number of arrears and court cases related to bad debts tend to rise before insolvency numbers lift, and whilst there's no evidence of this yet, an increase following the end of government incentives at the end of March is a strong possibility." The number of court cases in February was down 56 per cent compared with a year earlier, while payment times only increased marginally month-on-month, The Australian discloses. Healthcare was by far the worst-performing sector when it came to payments, as it remained focused on the pandemic to the detriment of the health system as a whole, CreditorWatch said, The Australian relays. Administration and support services also suffered as offices remained empty through the health crisis, but the sector is starting to normalise as workers return to offices, the report adds. BAYSIDE GATE: First Creditors' Meeting Set for March 19 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Bayside Gate Frames Pty. Ltd., trading as "Bayside Fencing Products", "Direct Factory Outlet Concrete Sleepers, Landscaping And Building Products" and "Concrete Sleeper Retaining Walls Brisbane", will be held on March 19, 2021, at 10:00 a.m. via virtual meeting technology. Stephen Dixon of Hamilton Murphy Advisory Pty Ltd was appointed as administrator of Bayside Gate on March 9, 2021. BRIMOND INVESTMENTS: First Creditors' Meeting Set for March 19 -------------------------------------------------------------- A first meeting of the creditors in the proceedings of: - Brimond Investments Pty Ltd ATF Brimond Unit Trust; - Brimond Finance Pty Ltd ATF Brimond Finance Unit Trust; and - Brimond Developments Pty Ltd ATF Brimond Developments Unit Trust will be held on March 19, 2021, at 2:00 p.m., 2:30 p.m. and 3:00 p.m., respectively, via virtual meeting technology. Frank Lo Pilato of RSM Australia Partners was appointed as administrator of Brimond Investments on March 9, 2021. GLOBAL ONE: First Creditors' Meeting Set for March 17 ----------------------------------------------------- A first meeting of the creditors in the proceedings of Global One Mobile Entertainment Pty Ltd will be held on March 17, 2021, at 11:30 a.m. via teleconference. David Joseph Levi of Levi Consulting Pty Ltd was appointed as administrator of Global One on March 8, 2021. IMPELUS APAC: First Creditors' Meeting Set for March 17 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Impelus Apac Pty Ltd will be held on March 17, 2021, at 11:30 a.m. via teleconference. David Joseph Levi of Levi Consulting Pty Ltd was appointed as administrator of Impelus Apac on March 8, 2021. IMPELUS LIMITED: First Creditors' Meeting Set for March 17 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Impelus Limited will be held on March 17, 2021, at 11:00 a.m. via teleconference. David Joseph Levi of Levi Consulting Pty Ltd was appointed as administrator of Impelus Limited on March 8, 2021. ZIP MASTER TRUST 2020-1: Moody's Upgrades Class E Notes to B1(sf) ----------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of six classes of Notes issued by Zip Master Trust Series 2019-1 and Zip Master Trust Series 2020-1. The affected ratings are as follows: Issuer: Zip Master Trust Series 2019-1 Class B Notes, Upgraded to Baa1 (sf); previously on Sep 5, 2019 Definitive Rating Assigned Baa2 (sf) Class C Notes, Upgraded to Baa3 (sf); previously on Sep 5, 2019 Definitive Rating Assigned Ba2 (sf) Class D Notes, Upgraded to B1 (sf); previously on Sep 5, 2019 Definitive Rating Assigned B2 (sf) Issuer: Zip Master Trust Series 2020-1 Class C Notes, Upgraded to Baa1 (sf); previously on Oct 22, 2020 Definitive Rating Assigned Baa2 (sf) Class D Notes, Upgraded to Baa3 (sf); previously on Oct 22, 2020 Definitive Rating Assigned Ba2 (sf) Class E Notes, Upgraded to B1 (sf); previously on Oct 22, 2020 Definitive Rating Assigned B2 (sf) RATINGS RATIONALE The rating action reflects the stronger than expected performance of the underlying asset portfolio. It also reflected the resilience displayed by the asset portfolios in 2020 during a time of heightened economic stress. The Zip Master Trust is a revolving cash securitisation of two types of revolving line of credit products with either full or initial interest-free terms, more commonly known as 'buy-now-pay-later' receivables. All receivables were originated and are serviced by zipMoney Payments Pty Ltd (Zip). Zip is an Australian non-bank fintech that was founded in 2013 as a buy-now-pay-later retail credit platform. The strong and stable performance of the receivables, demonstrated by the additional historical data accumulated since each series closing dates in 2019 for Zip Master Trust Series 2019-1 and in 2020 for Zip Master Trust Series 2020-1 has resulted in Moody's revising the portfolio modelling assumptions. In particular Moody's has lowered the long-run charge-off rate and payment rate assumptions which has reduced Moody's assessment of the Aaa loss given sponsor default (LGSD) for the Zip Master Trust portfolio to 42.6% from 47.2%. Since the issuance of Zip Master Trust's 2019-1 series in September 2019, the Master Trust's monthly gross charge-off rates has averaged an annualised 2.6%, portfolio yield has averaged 16.3% and portfolio payment rate has averaged and annualised 13.2%. The coronavirus pandemic has had a significant impact on economic activity. Although global economies have shown a remarkable degree of resilience to date and are returning to growth, the uneven effects on individual businesses, sectors and regions will continue throughout 2021 and will endure as a challenge to the world's economies well beyond the end of the year. While persistent virus fears remain the main risk for a recovery in demand, the economy will recover faster if vaccines and further fiscal and monetary policy responses bring forward a normalization of activity. As a result, there is a heightened degree of uncertainty around Moody's forecasts. Moody's analysis has considered the effect on the performance of consumer assets from a gradual and unbalanced recovery in Australia's economic activity. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The principal methodology used in these ratings was 'Moody's Approach to Rating Credit Card Receivables-Backed Securities' published in June 2020. Factors That Would Lead to an Upgrade or Downgrade of the Ratings Factors that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expectations, and (2) an increase in note subordination available for the notes. Factors that could lead to a downgrade of the ratings include (1) performance of the underlying collateral that is worse than Moody's expectations, (2) a decrease in note subordination available for the notes, and (3) a deterioration in the credit quality of the transaction counterparties. ========= C H I N A ========= BAOSHANG BANK: Beijing Court Finalizes Liquidation of Bank ---------------------------------------------------------- Caixin Global reports that a court in Beijing finalized the bankruptcy liquidation of Inner Mongolia-based Baoshang Bank, ending a nearly two-year effort to clean up the embattled regional lender that became China's first failed bank in decades. Caixin says the Beijing No.1 Intermediate People's Court issued its ruling on Baoshang's liquidation Feb. 7, taking effect immediately, the verdict released on March 9 showed. According to the court document, Baoshang had total assets of CNY447 million (US$68 million) as of the end of October 2020, with net liabilities of about CNY206 billion, meaning it was insolvent, Caixin relays. Baoshang had no actual business and employees as the bankruptcy proceeding started, and none of its creditors demanded restructuring, the court said, adds Caixin. About Baoshang Bank Baoshang Bank Co., Ltd. provides various commercial banking products services to individuals and corporate customers in China. In May 2019, China's financial regulators took control of the small private bank as part of authorities' efforts to break up fallen tycoon Xiao Jianhua's business empire and contain financial risks. The People's Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) announced on May 24, 2019, the takeover of Baoshang Bank Co. for a year. The rare takeover came two years after Xiao, the billionaire founder of conglomerate Tomorrow Holding Group, went missing from a luxury Hong Kong hotel. He is reportedly to have been placed under graft investigation by Chinese authorities. The regulators said the takeover reflects the "severe credit risk" the bank poses and is intended to protect the interests of the bank's depositors and other clients. On Nov. 23, the China Banking and Insurance Regulatory Commission gave its formal approval for Baoshang Bank to start bankruptcy proceedings and asked the bank to report any major issues uncovered during the process, according to Caixin. CHINA: To Put Fin'l. Firms Bankruptcy Laws on Legislative Agenda ---------------------------------------------------------------- Reuters reports that China will put financial institution bankruptcy laws on its legislative agenda for the first time, according to a report by the top legislative body released on March 8. According to Reuters, the absence of a legal bankruptcy framework for Chinese financial institutions has prevented technically insolvent firms from exiting the market effectively. Reuters relates that a slew of laws will be revised including the Enterprise Bankruptcy Law in the five-year legislative programme, said the report, signed off by Li Zhanshu, chairman of the standing committee of the National People's Congress, or parliament. Among 506 proposals submitted by NPC delegates this year, 11 mentioned the revision of the Enterprise Bankruptcy Law to allow specific individual bankruptcy and financial institution bankruptcy laws, according to the report cited by Reuters. The revision is urgently needed, said Guo Xinming, head of the Nanjing branch of the People's Bank of China (PBOC) and also an NPC delegate, Reuters relays. Without such laws to deal with troubled banks or other financial institutions, "bad apples" will keep hindering market efficiency, Guo said in a written reply to Reuters questions. "Some institutions may have exited from the market on paper but, in fact, it is difficult for them to write off debts in a timely and effectively way, which creates hidden dangers that will 'ferment' and become future risk events," he said. In recent years, China's central bank as well as its financial regulators have taken over a number of financial institutions including brokerages, trusts and lenders due to poor governance and the credit risks they contained, according to Reuters. In a high-level takeover, the authorities seized control of troubled regional lender Baoshang Bank in 2019 and allowed it to declare bankruptcy a year later. "We have accumulated valuable experience in risk disposal and formed some good practices, but there is still a gap compared with the requirements of modern and orderly disposal mechanisms," Reuters quotes Guo as saying. The NPC Standing Committee also said individual bankruptcy laws would be added to the legislative agenda, without giving a definite timeline, adds Reuters. [*] Moody's Takes Actions on 13 Chinese Securities Companies ------------------------------------------------------------ Moody's Investors Service has taken rating actions on 13 Chinese securities companies. Specifically, Moody's has upgraded the long-term issuer rating of Huatai Securities Co., Ltd. to Baa1 from Baa2, and raised its standalone assessment to Baa3 from Ba1. The outlook is stable. In addition, Moody's has upgraded the long-term issuer rating and foreign currency senior unsecured debt rating of Orient Securities Company Limited to Baa2 from Baa3, and raised its standalone assessment to Ba1 from Ba2. The outlook is stable. Moody's has also affirmed the ratings with a stable outlook of the following companies and raised their standalone assessment by one notch: Affirmed the Baa1 long-term issuer rating of CITIC Securities Company Limited and raised its standalone assessment to Baa3 from Ba1. At the same time, Moody's has assigned a stable entity-level outlook to CITIC Securities Finance MTN Co., Ltd. Affirmed the Baa1 long-term issuer rating of China International Capital Corporation Limited (CICC) and raised its standalone assessment to Baa3 from Ba1. Affirmed the Baa1 long-term issuer rating and foreign currency senior unsecured debt rating of Guotai Junan Securities Co., Ltd. (GTJA Securities) and raised its standalone assessment to Baa3 from Ba1. Affirmed the Baa1 long-term issuer rating of CSC Financial Co., Ltd. (China Securities) and raised its standalone assessment to Baa3 from Ba1. At the same time, Moody's has affirmed the ratings with a stable outlook of the following companies and maintained their current standalone assessment: Affirmed the Baa1 long-term issuer rating and foreign currency senior unsecured debt rating of China Merchants Securities Co., Ltd. and maintained its standalone assessment of Ba1. Affirmed the Baa2 long-term issuer rating of Shenwan Hongyuan Securities Co Ltd. (SWHY Securities) and maintained its standalone assessment of Ba1. Affirmed the Baa2 long-term issuer rating of Dongxing Securities Co., Ltd. and maintained its standalone assessment of Ba2. Affirmed the Baa3 long-term issuer rating of Zhongtai Securities Co., Ltd. (Zhongtai Securities) and maintained its standalone assessment of Ba2. Affirmed the Baa3 long-term issuer rating of Everbright Securities Company Limited and maintained its standalone assessment of Ba3. Moody's has also affirmed the ratings with a stable outlook of the following Hong Kong SAR subsidiaries of Chinese securities companies: Affirmed the Baa1 long-term issuer rating of China International Capital Corporation (Hong Kong) Limited (CICC HK) and raised its standalone assessment to Baa3 from Ba1. Affirmed the Baa2 long-term issuer rating of Guotai Junan International Holdings Limited (GTJA International) and maintained its standalone assessment of Ba1. A List of Affected Credit Ratings is available at https://bit.ly/38pOOqy The rating actions consider these securities companies' well-established franchises, maintenance of good financial metrics in the past few years, and the material improvement in the operating environment of Chinese securities companies. RATINGS RATIONALE A List of Affected Credit Ratings is available at https://bit.ly/3en02zI Local Market Analyst The rating actions reflect (1) the improvement of the operating environment for Chinese securities companies and (2) for certain companies their consistent and resilient financial performance and credit profile, including good profitability, abundant liquidity and funding, and relatively low leverage compared with global peers. Improvement in the operating environment for Chinese securities companies Moody's has raised the operating environment score for Chinese securities companies to Ba1 from Ba2, mainly due to the increased maturity of China's capital markets. This is indicated by enhanced breadth and depth of the country's capital markets, greater participation from institutional and international investors, and more sophisticated regulatory rules. China's capital markets have grown persistently in recent years to become the world's second largest by market capitalization of outstanding stocks and bonds. The depth of China's capital markets, as measured by market capitalization of listed companies and outstanding balance of bonds divided by GDP, rose to 191% at the end of 2020 from 148% at the end of 2015, narrowing the gap with that of more mature markets. At the same time, liquidity remains abundant along with a larger market size, as reflected in high market turnover. Moody's estimates that the velocity of the A-share market, as measured by trading volume divided by average market cap, was 298% in 2020, a level that was significantly higher than that of major stock markets in the world. Another sign of the increasing maturity of China's capital markets is the rising participation of institutional investors, which could help lower market volatility and improve the corporate governance of listed companies. In addition, elevated fund inflow from foreign investors provides additional market liquidity and raises the need for domestic institutions to harmonize their practices with global standards. Furthermore, the China Securities Regulatory Commission (CSRC) and stock exchanges have implemented new regulations since 2015, such as (1) tightened rules on margin financing and stock-pledged lending, (2) reducing stock suspensions, and (3) implementation of the registration-based IPO system. These measures help to (1) limit investors' leverage, (2) lower market volatility, (3) increase market accessibility, and (4) enhance the securities industry's ability to withstand market shocks. Individual companies' ratings rationale Huatai Securities The upgrade of Huatai Securities' long-term issuer rating and standalone assessment reflects its (1) expanded franchise, (2) strong financial performance, and (3) improved operating environment. Over the past few years, Huatai Securities has strengthened its leading position in the brokerage business and made steady progress in its investment banking and asset management businesses. Moody's therefore forecasts the company to report a strong return on average assets (ROAA), supported by its robust fee income and effective cost controls. Moody's also expects that the company will maintains abundant liquidity and funding on its balance sheet. In addition, Huatai Securities has significantly reduced the exposure of its stock-pledged lending business. The consistent growth and improved leverage of AssetMark Financial Holdings, Inc., an entity that Huatai Securities acquired in 2016, also mitigate risks regarding Huatai Securities' overseas expansion. Moreover, Huatai Securities' ratings continue to benefit from a two-notch uplift based on Moody's assumption of a high level of support from the Government of China (A1 stable) in times of stress, considering the company's (1) ownership structure, (2) strategic importance to the Jiangsu provincial government, and (3) leading position in the securities sector nationwide. Orient Securities The upgrade of Orient Securities' long-term issuer rating and standalone assessment reflects the company's (1) more diversified revenue streams, (2) strong liquidity and funding profile, and (3) improved operating environment. Over the past few years, Orient Securities has gradually diversified its business into wealth management and asset management, although its reliance on proprietary trading remains high. The company has built a reputable asset management franchise with most of its assets under management in active strategies, which contributes higher revenue from related fees compared with peers and allows it to efficiently adapt to new asset management regulations. In addition, Moody's expects that the company will continue to maintain a strong liquidity and funding profile; the latter is one of the strongest among domestic peers. Orient Securities has also reduced the exposure of its stock-pledged lending business and increased related provisions. At the same time, the ratings continue to benefit from a two-notch uplift based on Moody's assumption of a high level of support from its parent Shenergy (Group) Co. Ltd. (A1 negative) and the Government of China in times of stress, considering Orient Securities' (1) strategic importance to Shenergy Group, (2) combined ownership by state-owned enterprises, and (3) its position as one of the major securities firms in China. CITIC Securities, CICC, GTJA Securities and China Securities The affirmation of these securities companies' issuer ratings and the upgrade of their standalone assessments consider their continued strong franchises and good financial metrics, as well as the improved operating environment. At the same time, Moody's has narrowed the government-support based rating uplift to two notches from three notches, because their stronger standalone credit profiles reduce the necessity for extraordinary government support. CITIC Securities' standalone assessment reflects the company's continued strong franchise as the leader of securities industry in China despite intense competition. In addition, the company has lower earnings volatility than most of its domestic peers due to its diversified revenue structure and prudent risk appetite. Its leverage ratio remains low compared with that its global peers despite having increased in recent years. CICC's standalone assessment reflects its (1) strong investment banking and wealth management franchises in onshore and offshore markets, (2) abundant liquidity and diversified funding, and (3) low level of proprietary equity investments and stock-pledged lending exposures. These credit strengths mitigate the risks arising from the rapid increase in CICC's total assets and fixed-income securities investments. GTJA Securities' standalone assessment reflects the company's continued strong brokerage franchise despite intense competition, and position as one of the leading firms in investment banking and asset management businesses in China. In addition, the company has lower earnings volatility than most of its domestic peers due to its diversified revenue structure and prudent risk appetite. Its leverage ratio of 5.2x at the end of June 2020, as measured by total assets to equity attributable to holders of ordinary shares, remained low compared with that of its global peers despite having increased in recent years. China Securities' standalone assessment reflects the company's strong investment banking franchise in China despite intense competition. In addition, the company has a good liquidity position with prudent risk management. Its profitability has also benefited from the development of China's capital markets in recent years. China Merchants Securities, SWHY Securities, Dongxing Securities, Zhongtai Securities and Everbright Securities The affirmation of these securities companies' issuer ratings and standalone assessments takes into account their continued stable financial performance and the improved operating environment. In addition, Moody's assesses that their standalone assessments are well positioned at the current level considering their franchises and financial profiles including funding and liquidity, profitability, risk appetite and leverage. The Baa1 long-term issuer rating of China Merchants Securities incorporates its standalone assessment of Ba1; a one-notch uplift based on Moody's assumption of a very high level of support from, and a high level of dependence on, its parent China Merchants Group Limited (CMG); and a two-notch uplift based on Moody's assumption of a high level of support from the Government of China through its parent, in times of need, reflecting (1) the strategic importance of CMG to China's economy, (2) the importance of China Merchants Securities to CMG and (3) China Merchants Securities' position as one of the major securities companies in China. China Merchants Securities' standalone assessment reflects its (1) long history in China's securities industry, (2) ample liquidity, (3) good profitability, and (4) low leverage compared with that of its global peers. Offsetting these credit strengths are the risks arising from the rapid increase in the company's fixed-income investments. SWHY Securities' Baa2 long-term issuer rating incorporates its standalone assessment of Ba1 and a two-notch uplift, based on Moody's assumption of a high level of support from the Chinese government, in times of need, reflecting the government's ownership in the company and SWHY Securities' position as one of the major securities companies in China. The Ba1 standalone assessment reflects SWHY Securities' (1) strong brokerage franchise in China's securities industry, (2) decent liquidity and funding position, (3) stable profitability, and (4) low leverage when compared with global peers. Offsetting these credit strengths are the risks arising from the rapid increase in its fixed-income securities investments and the high credit risk in its stock-pledged lending business. Dongxing Securities' Baa2 long-term issuer rating incorporates (1) the company's standalone assessment of Ba2, (2) a one-notch uplift based on Moody's assumption of high dependence on, and a very high level of support from its parent China Orient Asset Management Co. Ltd (Orient AMC, A3 stable), and (3) a two-notch uplift based on Moody's assumption of a high level of support from the Government of China via its parent, in times of need, reflecting the government's ownership in its parent, its parent's systemic importance and Dongxing Securities' importance to the parent's business strategy. The Ba2 standalone assessment takes into account Dongxing Securities' good funding and liquidity position and low leverage when compared with other globally rated securities firms. Offsetting these strengths are the liquidity and credit risks associated with its bond investment and stock-pledged lending businesses, as well as the company's limited franchise compared with that of other securities firms in China. The links with its parent's distressed asset management business would increase the company's operational challenges and asset quality risk. Zhongtai Securities' Baa3 long-term issuer rating incorporates its standalone assessment of Ba2 and a two-notch uplift, based on Moody's assumption of a high level of support from the Government of China, in times of need, reflecting the company's ownership structure and importance to Shandong province. The Ba2 standalone assessment reflects Zhongtai Securities' (1) strong franchise in the Shandong province with a high brokerage market share and extensive network, (2) low leverage when compared with global peers, and (3) good funding access. Offsetting these credit strengths are its (1) declining brokerage commission rates due to intense competition, (2) high risk appetite when compared with leading Chinese securities companies, and (3) increasing proprietary securities investments. Everbright Securities' Baa3 long-term issuer rating incorporates (1) the company's standalone assessment of Ba3, (2) a one-notch uplift based on Moody's assumption of a very high level of affiliate support from China Everbright Bank Company Limited (Baa2 stable, ba2), and (3) a two-notch uplift based on Moody's assumption of a high level of support from the Government of China, in times of need, reflecting Everbright Securities' position as one of the major securities companies in China and the systemic importance of its parent, China Everbright Group. The Ba3 standalone assessment reflects Everbright Securities' (1) likely improvement in its profitability due to robust market conditions and the company's recovery from the impact of a private equity investment, and (2) high earnings volatility and risks related to its asset expansion and sizable bond investment, despite its solid liquidity and capital position. Everbright Securities recorded total estimated liabilities of around RMB4.6 billion from 2018 to 2020 because of its participation in a private equity investment, which materially lowered its profitability and increased its earnings volatility. Although Everbright Securities improved its internal controls and corporate governance after the incident, it will take some time for it to establish a track record that it maintains good risk management and governance. CICC HK and GTJA International Moody's regards CICC HK as a highly integrated and harmonized entity of its parent. As a result, Moody's aligns its issuer rating and standalone assessment with those of its parent. As the standalone assessment of CICC is raised to Baa3 from Ba1, CICC HK's standalone assessment has also been raised to Baa3 from Ba1. As the primary overseas investment holding platform under CICC, CICC HK is closely aligned with its parent company in providing clients with one-stop investment banking services in domestic and overseas markets. It is vertically managed by CICC, and its operations are highly integrated with that of CICC. GTJA International's Baa2 long-term issuer rating reflects (1) its standalone assessment of Ba1, (2) a one-notch uplift based on Moody's assumption of a very high level of support from its parent GTJA Securities, and (3) a one-notch uplift based on Moody's assumption of a high level of support from the Government of China through its parent, in times of need, reflecting GTJA International's position as the core international business operation of GTJA Securities. GTJA International's standalone assessment of Ba1 reflects its (1) leading position in the niche market of helping individuals from the mainland trade offshore securities business, (2) relatively good and stable profitability, and (3) long track record of operating in Hong Kong. These credit strengths are constrained by its rapid expansion in structured products and securities investments, and its reliance on short-term funding. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS CITIC Securities, CICC, GTJA Securities, China Securities and Huatai Securities The ratings of CITIC Securities, CICC, GTJA Securities, China Securities and Huatai Securities are unlikely to be upgraded because Moody's assesses that a further improvement in their standalone credit profiles would reduce the necessity for extraordinary government support and therefore narrow government support uplift. Their standalone assessments could be upgraded if the entities (1) improve their funding and liquidity by reducing investments in illiquid securities, (2) ensure smooth operations and effective risk controls, (3) maintain good profitability, despite intense competition and market fluctuations, and (4) reduce the volatility of their pretax earnings. Their ratings could be downgraded if Moody's assesses that the government's willingness and ability to support the entities have weakened. Their ratings could also be downgraded if the entities (1) face a significant deterioration in profitability, (2) record a significant weakening in their financial positions, in particular because of a substantial increase in leverage or a deterioration in liquidity and funding, or (3) face regulatory sanctions or risk management missteps that impair their franchises and management stability. China Merchants Securities China Merchants Securities' ratings are unlikely to be upgraded because Moody's assesses that a further improvement in its standalone credit profile will reduce the likelihood of affiliate support. China Merchants Securities' standalone assessment could be upgraded if the company (1) strengthens its franchise, (2) improves its funding and liquidity ratios, (3) maintains its profitability despite intense competition and market fluctuations, and (4) reduces the size of its proprietary investments. China Merchants Securities' ratings could be downgraded if Moody's assesses the willingness and ability of its parent and the Chinese government to support the company have weakened. China Merchants Securities' ratings could also be downgraded if (1) the company's profitability deteriorates substantially, (2) its financial position weakens significantly, for example, because of a substantial increase in leverage or a deterioration in liquidity, or (3) it faces regulatory sanctions or risk management missteps that impair the stability of its franchise and management. Orient Securities Orient Securities' ratings and standalone assessment could be upgraded if the company (1) strengthens its franchise, (2) further diversifies its business mix away from its proprietary trading business, (3) stabilizes its pretax earnings volatility, (4) maintains its strong liquidity profile and (5) keeps its leverage ratio below 6x. Orient Securities' rating could be downgraded if Moody's assesses that the willingness and ability of the Government of China or its parent to support the company have weakened. Orient Securities' rating could also be downgraded if the company (1) faces a significant deterioration in its profitability, (2) experiences a significant weakening in its financial profile, for example, because of a substantial increase in its leverage to above 6x or a deterioration in liquidity and funding, or (3) faces regulatory sanctions or risk management missteps that impair its franchise and management stability. SWHY Securities SWHY Securities' ratings and standalone assessment could be upgraded if the company (1) strengthens its franchise, (2) further improves its funding and liquidity ratios, and (3) maintains its profitability, despite intense competition and market fluctuations. SWHY Securities' ratings could be downgraded if Moody's assesses the willingness and ability of the Chinese government to support the company have weakened. SWHY Securities' ratings could also be downgraded if the company (1) records a significant deterioration in its profitability, (2) experiences a significant weakening in its financial position, for example, because of a substantial increase in leverage or a deterioration in its liquidity, or (3) faces regulatory sanctions or risk management missteps that impair the stability of its franchise and management. Dongxing Securities Dongxing Securities' ratings could be upgraded if parent Orient AMC's rating is upgraded or if there is more explicit support commitment from Orient AMC or the Chinese government. Dongxing Securities' standalone assessment could be upgraded if the company (1) maintains its good funding and liquidity, (2) maintains its profitability despite intense competition and market fluctuations, (3) reduces the size of its proprietary investment business or high risk assets, and (4) ensures smooth operations and effective risk controls as it increases its exposure to its parent's distressed asset management business. Dongxing Securities' ratings could be downgraded if Moody's assesses that the government and its parent's willingness and ability to support the company have weakened or its ownership by Orient AMC has been significantly reduced. Dongxing Securities' ratings could also be downgraded if the company (1) records a considerable deterioration in its profitability, (2) experiences a significant weakening in its financial position because of a substantial increase in its leverage or a deterioration in its liquidity and funding, (3) materially increases its risk appetite and records a substantial deterioration in asset quality, or (4) faces regulatory sanctions or has risk management missteps that impair its operations and management stability. Zhongtai Securities Zhongtai Securities' ratings could be upgraded if the company (1) further enhances its brokerage, investment banking and asset management franchises, (2) lowers its risk appetite by reducing its exposure to risky proprietary securities investments and stock-pledged lending, (3) improves its funding and liquidity ratios, (4) maintains its profitability, despite intense competition and market fluctuations, and (5) strengthens its risk control capability and improves its asset quality. Zhongtai Securities' ratings could be downgraded if Moody's assesses that the government's willingness and ability to support the firm have weakened. Zhongtai Securities' ratings could also be downgraded if the company (1) records a material deterioration in profitability, (2) experiences a material weakening in its financial position, in particular because of a substantial increase in leverage or a deterioration in its liquidity and funding profile, or (3) faces regulatory sanctions or risk management missteps that impair its operations and management stability. Everbright Securities Everbright Securities' ratings could be upgraded if the company (1) improves its track record of risk management, (2) controls the risks associated with business growth without any significant impact on its overall financial profile, and (3) strengthens its market positions. Everbright Securities' ratings could be downgraded if Moody's assesses that the willingness and ability of the government and China Everbright Group and its affiliates to support the company have weakened. The company's ratings could also be downgraded if it (1) encounters further significant risk management issues, (2) faces regulatory sanctions or risk management missteps that impair its franchise and management stability, or (3) experiences a significant weakening in its financial position, for example, because of a substantial increase in leverage or a deterioration in its liquidity. CICC HK As a highly integrated and harmonized entity, CICC HK's rating could be upgraded if its parent company's rating is upgraded. CICC HK's rating could be downgraded if Moody's assesses that CICC HK is becoming more independent from CICC, or the willingness and ability of its parent company or the Government of China to support the firm have weakened. GTJA International GTJA International's ratings and standalone assessment could also be upgraded if the firm (1) improves its funding and liquidity ratios, (2) maintains good profitability, despite intense competition and market fluctuations, and (3) reduces its risk appetite and leverage by slowing asset growth. GTJA International's ratings could be downgraded if the willingness and ability of its parent company or the Chinese government to support the firm have weakened. The firm's ratings could also be downgraded if (1) its financial position weakens significantly, for example, because of a substantial increase in leverage or a deterioration in its liquidity, (2) its profitability weakens significantly, or (3) regulatory sanctions or risk management missteps impair its franchise and management stability. The principal methodology used in these ratings was Securities Industry Market Makers Methodology published in November 2019. Huatai Securities Co., Ltd. is headquartered in Nanjing with consolidated assets of RMB692 billion as of the end of September 2020. Orient Securities Company Limited is headquartered in Shanghai with consolidated assets of RMB294 billion as of the end of September 2020. CITIC Securities Company Limited is headquartered in Beijing with consolidated assets of RMB1,044 billion as of the end of September 2020. China International Capital Corporation Limited is headquartered in Beijing with consolidated total assets of RMB485 billion as of the end of September 2020. Guotai Junan Securities Co., Ltd. is headquartered in Shanghai with consolidated assets of RMB693 billion as of the end of September 2020. CSC Financial Co., Ltd. is headquartered in Beijing with consolidated assets of RMB354 billion as of the end of September 2020. China Merchants Securities Co., Ltd. is headquartered in Shenzhen with consolidated assets of RMB479 billion as of the end of September 2020. Shenwan Hongyuan Securities Co Ltd. is headquartered in Shanghai with consolidated assets of RMB405 billion as of the end of June 2020. Dongxing Securities Co., Ltd is headquartered in Beijing with consolidated assets of RMB87 billion as of the end of September 2020. Everbright Securities Company Limited is headquartered in Shanghai with consolidated assets of RMB229 billion as of the end of September 2020. Zhongtai Securities Co., Ltd is headquartered in Jinan with consolidated total assets of RMB164 billion as of the end of September 2020. China International Capital Corporation (Hong Kong) Limited reported HKD145 billion of total assets, excluding segregated cash, as of the end of June 2020, which accounted for 35% of CICC's adjusted total assets, excluding segregated cash from clients. Guotai Junan International Holdings Limited is headquartered in Hong Kong with consolidated assets of HKD125 billion as of the end of June 2020. ================= H O N G K O N G ================= CATHAY PACIFIC: Posts US$2.8 Billion Net Loss in 2020 ----------------------------------------------------- Will Davies at Bloomberg News reports that Cathay Pacific Airways Ltd. reported a net loss of HK$21.65 billion ($2.8 billion) for 2020, a period the carrier described as "the most challenging 12 months of its more than 70-year history" as the coronavirus pandemic brought unprecedented disruption to global air travel. The outlook isn't much better, according to the airline's Chairman Patrick Healy, who said in a statement "it is by no means clear how the pandemic and its impact will develop," Bloomberg relays. Hong Kong has largely closed its borders to non-residents and imposed 21-day mandatory quarantine on those who return. Cathay expects to operate at well below 50% passenger capacity in 2021, Bloomberg says. According to Bloomberg, the company said it will persist with cash preservation measures, which include maintaining executive pay cuts through this year. And it has asked employees to sign up for another "special leave program" in the first half of 2021, to which 80% have agreed. Previous programs have involved staff taking three weeks of unpaid leave over a designated period. Cathay raised HK$39 billion in a recapitalization in July, and its available unrestricted liquidity stood at HK$28.6 billion at the end of 2020, Bloomberg discloses. It also issued HK$6.74 billion in convertible bonds this year to secure more funds. Last year started fairly promisingly for Cathay with a slight pickup in traffic after a tough second half of 2019, when anti-government protests rocked Hong Kong and hit the city's visitor numbers. But the carrier's position worsened drastically with the onset of Covid-19 in Wuhan in late January, says Bloomberg. At that point, on Jan. 22, Cathay took the unusual step of issuing a press release with the first sentence all in bold: "Due to the evolving information from health authorities, we will allow crew members and front-line airport employees to wear surgical face masks when on duty at their discretion," it said. Bloomberg says strange as it might seem now that masks are ubiquitous, the policy was well ahead of its time -- and an omen of the chaos about to hit global air travel. A day later, regional unit Cathay Dragon suspended flights to and from Wuhan for a month. On Jan. 26, the suspension was pushed to the end of March, and then matters snowballed as the pandemic took hold, ripping travel plans and the aviation industry apart. The extent of the damage from 2020 on Hong Kong's flag carrier was revealed shortly after midday on March 10, according to Bloomberg. The airline had already warned the numbers wouldn't be pretty following a first-half loss of HK$9.87 billion. For the July-December period the loss was even bigger, at HK$11.8 billion. The loss was net HK$2.7 billion of Covid-related government grants, Bloomberg discloses. It included impairment and related charges of HK$4.1 billion on 34 aircraft unlikely to reenter meaningful service again before being retired or returned to lessors, as well as subsidiaries' assets and HK$4.0 billion of restructuring costs, including a HK$1.6 billion write-off of a deferred tax asset at Cathay Dragon. Even after a recapitalization in July and cost-reductions through layoffs, pay cuts and a skeleton flight schedule, Cathay is still burning through HK$1.5 billion or more a month and its share price sank 29% in 2020. Passenger traffic has slumped 99% from pre-pandemic levels, Bloomberg notes. According to Bloomberg, Cathay said it reached an agreement with Airbus SE to defer delivery of A350-900s and A350-1000s from to 2020-23, and A321neos to 2020-25. The airline is also in advanced negotiations with Boeing Co. on the deferral of 777-9 deliveries. Cathay took delivery of 10 new aircraft in 2020, including its first A321neo, and partially converted four Boeing 777-300ER passenger aircraft to provide additional cargo-carrying capacity. The company is transferring certain aircraft from Cathay Dragon to Cathay and low-cost unit HK Express. Bloomberg relates that Andrew Lee, an analyst at Jefferies, said he expects Cathay to remain loss-making until travel and quarantine restrictions ease and international travel returns, noting that 82 of the carrier's planes are parked in locations outside Hong Kong. "However, we maintain Buy with our HK$8.00 PT as we estimate CX is close to the bottom given January passenger traffic was already -99% lower y-y," Lee wrote in a note. The downbeat 2020 results followed the pattern of monthly reports last year as the pandemic showed no signs of easing up. "Our passenger business continues to face significant challenges," Bloomberg quotes Chief Customer and Commercial Officer Ronald Lam as saying in a statement on Cathay's December traffic figures. One optimistic note came in an October release amid plans to open a travel corridor with Singapore, which Lam described as "a hugely encouraging development." That was soon snuffed out though as the plan was shelved due to a virus flareup in Hong Kong. About Cathay Pacific Cathay Pacific Airways Ltd., also known as Cathay Pacific or Cathay, is the flag carrier of Hong Kong, with its head office and main hub located at Hong Kong International Airport. Cathay operates scheduled airline services. As reported in the Troubled Company Reporter-Asia Pacific on Sept. 10, 2020, Egan-Jones Ratings Company, on Sept. 3, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Cathay Pacific Airways Limited to CC from CCC. EJR also downgraded the rating on commercial paper issued by the Company to D from C. ========= I N D I A ========= ADITYA HOTELS: CARE Moves D Debt Rating to Not Cooperating ---------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Aditya Hotels And Hospitalities Private Limited (AHHPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 11.16 CARE D; ISSUER NOT COOPERATING; Facilities Rating moved to ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information from AHHPL to monitor the ratings vide e-mail communications dated October 6, 2020, November 3, 2020, November 19, 2020, December 3, 2020, December 22, 2020, January 6, 2021, January 14, 2021, January 19, 2021, February 10, 2021 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on AHHPL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The rating assigned to the bank facilities of AHHPL takes into account the delays in repayment of debt obligations. Detailed description of the key rating drivers At the time of last rating on December 20, 2019, the following were the rating weaknesses: Key Rating Weaknesses * Delays in debt servicing obligations: As per banker feedback during last review, there were delays in servicing debt obligation in the term loan facility. Satara (Maharashtra) based, Aditya Hotels & Hospitalities Private Limited (AHHPL) was incorporated in December 26, 2016 and is currently being run by Mr. Shriram Krishan Surve, Mrs. Rutja Shriram Surve and Mr. Akshay Shriram Surve. AHHPL has been set up with an aim to provide catering services (on marriage and other occasions) and lodging facilities along with restaurant. AHHPL has been operating its facility (hotel) in an area of 3,55,000 sq ft (leased), in Satara, Maharashtra. The resort cum hotel has 42 A/C deluxe rooms, 1 banquet hall, 1 garden restaurant, 2 wedding halls and 2 conference halls. The commercial operations of fitness club commenced in June 2018 and hotel operations commenced in June 2019. AISHWARYA TECHNOLOGIES: CARE Keeps D Ratings in Not Cooperating --------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Aishwarya Technologies and Telecom Ltd (ATTL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 7.11 CARE D; ISSUER NOT COOPERATING Facilities Rating continues to remain under ISSUER NOT COOPERATING Category Long Term/ 6.00 CARE D/CARE D; ISSUER NOT Short Term COOPERATING; Rating continues Bank Facilities to remain under ISSUER NOT COOPERATING Category Short Term 4.50 CARE D; ISSUER NOT COOPERATING Bank Facilities Rating continues to remain under ISSUER NOT COOPERATING Category Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 3, 2017; placed the ratings of ATTL under the 'Issuer Non-Cooperating' category as ATTL had failed to provide information for monitoring of the rating. ATTL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated January 5, 2021 and February 4, 2021. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The ratings factor in stretched liquidity position with continued delays in debt service obligation. Detailed description of the key rating drivers At the time of last rating on December 3, 2019; the following were the rating strengths and weaknesses (updated for financials for FY20 published on BSE): Key rating weakness * Subdued financial performance in FY20 and stretched liquidity: The total operating income of the company for FY20 has been in line with FY19 (Rs.11.32 crore vis-à-vis INR13.15 crore). Low operating income led to the under-recovery of expenses and ATTL reported operating loss of INR7.32 crore in FY20 against operating loss of INR19.40 crore in FY19. The company continues to report net loss and cash loss. The stretched liquidity has resulted in continued delays in debt servicing. * Initiation of Corporate Insolvency Resolution Process (CIRP): The Interim Resolution Professional (IRP) of ATTL has intimated the BSE that CIRP has been initiated based on the order dated 01.08.2018 passed by NCLT, Hyderabad bench against a petition filed by an operating creditor of the company with a request to initiate CIRP at the back of non-payment of approx. INR1.73 crore outstanding as on September 12, 2017 along with interest amount of INR0.09 crore for the delay in payment. The amount was so due against the invoice raised by the creditor for the purchase made by ATTL in different occasions. However, as per published Annual Report of FY19 on the Stock Exchange, the company has made settlement with operational creditors and hence, is out of CIRP proceedings as per order passed on September 19, 2018. * Small Scale of operation: The scale of operation of the company has remained moderate with a net worth base of INR25.07 crore as on March 31, 2018 (Rs.33.96 crore in FY17). Due to high loss incurred, the net-worth base eroded significantly as on March 31, 2018. The same further deteriorated to INR5.09 crore as on March 31, 2020 (INR11.08 crore as on March 31, 2019) due to continues loss. * Stretched working capital cycle: The operating cycle stretched further to 393 days in FY18 compared to 167 days in FY17 due to high collection period (308 days in FY18). This further elongated to 502 days during FY19 due to high collection period (395 days in FY19). Key Rating Strengths * Experienced promoters: The promoters of ATTL, Mr. G Rama Krishna Reddy, Rama Manohar Reddy and Mrs. G Amulya Reddy have more than two decades of experience in the telecom sector. * Exclusive distributorship from reputed clients: ATTL has exclusive distributorship from Sumitomo Electric Industries, Japan for India, Bangladesh & Sri Lanka for entire range of splicing machines. The company has further appointed re-sellers in various parts of India, Sri Lanka & Bangladesh, for promoting these splicing machines. Aishwarya Technologies & Telecom Limited (ATTL) was promoted by Mr. G Rama Manohar Reddy and Mrs. G Amulya Reddy as a partnership firm named Advanced Electronics & Communications System. ATTL was formed by taking over the business of the said partnership firm. ATTL is an ISO 9001:2008 certified company, which manufactures testing & measuring equipment like fiber, data and copper cable fault locators for telephone service providers, defense sector, cable TV operators and railways. The company has its manufacturing facilities situated at Hyderabad and it supplies a wide range of telecom & fiber optic products to Bharat Sanchar Nigam Limited, Tata Tele Services, Bharati Airtel, Mahanagar Telephone Nigam Limited, railways & defense sectors in India. BAYANTREE DEVELOPERS: Insolvency Resolution Process Case Summary ---------------------------------------------------------------- Debtor: Bayantree Developers Private Limited Registered office: 310, 3rd Floor Vardham Taru Plaza L.S.C. Block-CU Pitam Pura Delhi 110034 Insolvency Commencement Date: March 1, 2021 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: August 28, 2021 Insolvency professional: Anil Tayal Interim Resolution Professional: Anil Tayal 201, Sagar Plaza District Centre Laxmi Nagar, New Delhi National Capital Territory of Delhi 110092 E-mail: caaniltayal@gmail.com cirp.bayantree@gmail.com Last date for submission of claims: March 16, 2021 BIPIN ENGINEERS: CARE Lowers Rating on INR5.03cr Loan to B- ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Bipin Engineers Private Limited (BEPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 5.03 CARE B-; ISSUER NOT COOPERATING; Facilities Rating continues to remain Under ISSUER NOT COOPERATING category and Revised from CARE B+; Stable Detailed Rationale, Key Rating Drivers and Detailed description of the key rating drivers CARE had, vide its press release dated December 10, 2019, placed the rating of BEPL under the 'issuer non-cooperating' category as BEPL had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. BEPL continues to be non-cooperative despite repeated requests for submission of information through numerous phone calls and emails dated January 20, 2021, February 2, 2021, February 11, 2021. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The revision in the rating assigned to the bank facilities of BEPL takes into account no due-diligence conducted and nonavailability of information due to non-cooperation by BEPL with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. The revision in rating also factors in decline in revenue, operating and net losses reported, and deterioration in solvency position of the company in FY19. Detailed description of the key rating drivers At the time of last rating on December 10, 2019 the following were the rating strengths and weaknesses: Key Rating Weakness * Modest scale of operations and losses registered in FY19: The scale of operations of BEPL as reflected by total operating income declined and stood modest at INR9.35 crore in FY19 (Audited: refers to the period from April 1 to March 31). Also, company has booked operating and net loss of INR1.48 crore and INR2.28 crore in FY19. Further, the company's net worth base eroded and stood low at INR0.82 crore on March 31, 2019 due to losses registered. The small scale of operations of company restricts its financial flexibility in times of stress and deprives it of scale benefits. * Leveraged capital structure and weak debt coverage indicators: The capital structure of BEPL deteriorated and stood leveraged owing to the high reliance on external borrowings to fund working capital requirements and low net worth base. The overall gearing ratio stood at 8.95x as on March 31, 2019. Furthermore, the debt protection indicators were also weak. Stretched liquidity position: The liquidity position of the company remained stretched marked by gross current asset days of 239 days as at the end of FY19 with finds blocked majorly in receivables. * Susceptibility of profitability margins to commodity price fluctuation: The major inputs required by BEPL contribute ~90%-95% of total inputs. The prices of these materials are highly volatile in nature as they depend on global demand and supply scenario. Hence, exposing the profitability margins to any adverse fluctuation in raw material prices. Key Rating Strengths * Established track record and experience of the promoters in poultry industry: The directors of BEPL have gained an average experience of more than four decades in manufacturing of solar and steel products through their association with BEPL and group entities engaged in similar line of business. Being in the industry for such a long period has helped the promoters in gaining adequate acumen about the industry which aids the company in running its operations smoothly. * Moderate and diversified order book position: The company has a moderate and diversified outstanding order book (OB) position reflecting 3.18x of total operating income of FY17, to be executed for construction, railways and food segment over a period of one year. The moderate order book position indicates revenue visibility over the medium term, whereas diversified order book position cushions the company against slowdown operating in single industry. * Association with reputed suppliers and customers: The company caters to well reputed domestic customers Indian Railways, Railway Coach Factory, Tetra Pack India Private Limited and Nanded City Development & Construction Company Limited. The long track record of operations of BEPL has helped it in gaining repeated orders from reputed clientele which limits the counterparty risk. Bipin Engineers Private Limited (BEPL) was incorporated in September 1996 and is based out of Pune (Maharashtra). The company is engaged in the manufacturing of solar products and food processing machines. BUTTA INFRASTRUCTURE: Insolvency Resolution Process Case Summary ---------------------------------------------------------------- Debtor: Butta Infrastructure Private Limited Registered office: H.No. 4/14, Butta House KPHB Road, Madhapur Hyderabad Telangana 500081 Insolvency Commencement Date: March 1, 2021 Court: National Company Law Tribunal, Hyderabad Bench Estimated date of closure of insolvency resolution process: August 27, 2021 Insolvency professional: Krishna Komaravolu Interim Resolution Professional: Krishna Komaravolu House No. 7-1-214, Flat No. 409 Vamsikrishna Apartments Dharam Karan Road, Ameerpet Hyderabad 500016 E-mail: kkvolu@gmail.com rp.butta@gmail.com Last date for submission of claims: March 17, 2021 CLIFFTON LIMITED: Moody's Rates New USD Senior Secured Notes 'Ba3' ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba3 rating to the proposed 4.6-year USD senior secured notes to be issued by Cliffton Limited. The outlook on the rating is negative. Cliffton Limited, a newly formed special-purpose vehicle for the proposed transactions, will use the proceeds to subscribe to Indian rupee senior secured non-convertible debentures (INR NCDs) to be issued by Delhi International Airport Limited (DIAL, Ba3 negative). DIAL, in turn, will use the proceeds of the INR NCDs to fund its planned capital spending (up to USD165 million) and to refinance its USD288 million bond maturing in February 2022. DIAL will not have any ownership interest in or control over Cliffton. Cliffton's USD noteholders will benefit from a first-ranking charge over its accounts and swap arrangements as well as a pledge over all of Cliffton's shares, but not the INR NCD issued by DIAL, which will be held by an onshore custodian. As the holder of the NCD issued by DIAL, Cliffton will benefit from a security package that includes DIAL's rights under certain project documents to the extent permitted by the concession agreement, and a charge on the airport's revenue and receivables as well as cash accounts. Cliffton will share these securities with other senior secured lenders of DIAL on a pari passu basis. To manage its exposure to INR depreciation, Cliffton will use redemption premiums, and enter into coupon-only swaps and credit spread options covering through to the call period of the proposed bond. The Ba3 rating is predicated on the execution of the final transaction documentation, including the currency hedging mechanism and issuance of the INR NCDs, in line with the draft documentations reviewed by Moody's. RATINGS RATIONALE "The Ba3 rating assigned to the proposed notes reflects DIAL's underlying credit quality, given Cliffton's reliance on cash flow from the NCD repayments to meet the debt-servicing requirements of its USD notes, and the limits on Cliffton's ability to undertake other activities beyond the proposed transaction," says Spencer Ng, a Moody's Vice President and Senior Analyst. DIAL's Ba3 rating, in turn, considers the strong market position of Indira Gandhi International Airport (IGIA) and its regulated aeronautical revenue stream, which supports the airport's long-term commercial viability. These credit strengths are counterbalanced by the airport's high financial leverage and weak liquidity due to the pandemic and the airport's debt-funded expansion, as well as its low EBITDA margin because of its obligation to pay 45.99% of its revenue to the Airports Authority of India (AAI) as concession payment. The negative outlook on the notes reflects downside risks in the next 12-18 months, given (1) the uncertainty of the airport's traffic recovery, which will directly affect DIAL's revenue and cash flow, and (2) the potential negative impact from an adverse outcome in the arbitration process relating to DIAL's force majeure claims under its concession agreement, or in the completion of its land monetization transaction with Bharti Realty. In addition, DIAL has sizable funding tasks in the coming months, given its planned capital spending and bond maturing in February 2022. DIAL's liquidity benefits from the temporary suspension of its revenue share payment obligations by the Delhi High Court relating to the ongoing force majeure arbitration process. The airport has around INR20 billion in cash and short-term investments on hand as of the end of December 2020, which should provide DIAL sufficient liquidity to continue its expansion while the suspension remains in place, until the February 2022 bond maturity. Therefore, an early decision by the court or the arbitration tribunal to resume revenue share payments will significantly strain DIAL's liquidity. The proposed bond is one of the initiatives by DIAL's management to address the airport's near-term liquidity and funding requirements for its expansion. Although IGIA's strategic market position supports DIAL's ability to raise additional funds, the sizable debt the airport will likely require and its weakened financial profile because of the pandemic have increased fundraising complexity. A failure to refinance by the end of June 2021 could result in significant negative pressure on DIAL's rating. IGIA is India's busiest airport and a domestic and international gateway. Its strategic importance supports the gradual recovery in DIAL's passenger traffic as the pandemic subsides. "Since the resumption of commercial travel in June, IGIA's monthly domestic passenger traffic has gradually recovered to around 55% of 2019 levels through to the end of December. That said, our traffic scenarios assume that overall passenger traffic will not return to pre-pandemic levels until 2023, given the uncertainties in traffic recovery, particularly international traffic," says Ng. At the same time, underpinning DIAL's long-term revenue profile is its right to earn a return over its regulated asset base, under India's fundamentally supportive regulatory framework. However, the airport will not receive any near-term support in the form of tariff increases, given the regulator's decision to keep tariffs at the current level until March 2024 in light of the over-collected tariffs from the previous period that the airport will need to return to its users. Over the next 2-3 years, DIAL's funds from operations (FFO) will remain negative under Moody's base-case scenario, driven by the incremental debt still needed for the airport's expansion and the associated increase in interest expense. The total debt required for the expansion had increased due to funds diverted to cover operating cash flow shortfalls during the pandemic. This will keep the airport's metrics weak, despite a likely revenue recovery as traffic rebounds. DIAL is undertaking a major debt-funded expansion of IGIA, which its management expects will cost INR98 billion. The airport has extended the project's target completion to June 2023 to reflect delays caused by the pandemic. Upon completion, the airport's passenger handling capacity will increase to 100 million passengers per year, up from around 66 million. The rating also considers the following environmental, social and governance (ESG) factors. The coronavirus pandemic is a social risk, given the substantial implications for public health and safety in Delhi, and the risk of continued spread of the virus within the state. Due to the pandemic, passenger traffic and airport revenue fell by 75% and 57%, respectively, in the nine months ended December 2020. The weak performance also captured DIAL's decision to cease accruing the annual rental fee from its 2019 land monetization transaction with Bharti Realty, which is yet to be finalized. Moody's has used its joint default analysis approach for government-related issuers in assessing DIAL's ratings, because the company is more than 20% government-owned through the AAI, a government agency. DIAL's Ba3 CFR combines (1) the company's Baseline Credit Assessment (BCA) of ba3, and (2) the low likelihood of support that Moody's believes the Government of India (Baa3 negative) will provide to DIAL in times of need, resulting in the absence of uplift support in the company's BCA. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade of the Ba3 rating on Cliffton's proposed notes is unlikely over the next 12-18 months, given the negative outlook and the ongoing pandemic. Nevertheless, Moody's could change the outlook to stable if DIAL's operating performance recovers, enabling it to reduce leverage over time; and if the airport secures the funding needed to refinance its bond maturity and complete its expansion. Moody's could downgrade Cliffton's Ba3 rating if DIAL's ratings are downgraded, given Cliffton's reliance on cash flow from DIAL under the INR NCD to meet its own debt servicing requirements. DIAL's ratings, in turn, could come under pressure if (1) the airport is unable to secure committed funding to refinance the February 2022 bond and extend its liquidity position by the end of June 2021; or (2) if there are signs of liquidity stress, which could arise from the resumption of revenue share payments or a delay in the completion of the Bharti Realty transaction beyond the next six months. DIAL's ratings could also be downgraded if (1) the expansion project's costs increase or if it experiences significant delays; or (2) operating conditions deteriorate, such as a delay in the India's coronavirus vaccination rollout or a failure of key domestic airlines, which could delay the return of DIAL's FFO to positive levels. The principal methodology used in this rating was Privately Managed Airports and Related Issuers published in September 2017. Cliffton Limited, which was incorporated in Mauritius in December 2020, is held by a trust. DIAL has no ownership interest in or control over Cliffton Limited. Delhi International Airport Limited (DIAL) is the concessionaire for the Indira Gandhi International Airport, which is located in the political capital of India, and operates under an Operations, Management and Development Agreement, concluded in 2006 with the Airports Authority of India, a government agency. The concession is for a 30-year period, and DIAL has the option to extend it for another 30 years, subject to the company meeting defined performance criteria. FPC PETRO: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of FPC Petro Energy Private Limited (FPC) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 1.5 CRISIL D (Issuer Not Cooperating) Letter of Credit 12.0 CRISIL D (Issuer Not Cooperating) Proposed Cash 6.5 CRISIL D (Issuer Not Credit Limit Cooperating) CRISIL Ratings has been consistently following up with FPC for obtaining information through letters and emails dated July 25, 2020 and January 19, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of FPC, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on FPC is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of FPC continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. FPC (formerly, Fortrec Petrochem Pvt Ltd) was promoted in 2002 by Mr. Surya Kumar Shikha. The company trades in petrochemical products, mainly heavy aromatics and toluene, and is based in Hyderabad. GANAPATHI SPINNING: CRISIL Cuts Rating on INR18cr Cash Loan to D ---------------------------------------------------------------- CRISIL Ratings has downgraded its rating on the long term bank facilities of Ganapathi Spinning Mill (GSM) to 'CRISIL D' from 'CRISIL BB-/Stable'. The downgrade reflects the delays by GSM in repaying the principal obligation on the term loan due to weak cash flow. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 18 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Key Rating Drivers & Detailed Description Weaknesses * Delays in debt repayment: There have been delays by GSM in servicing the principal repayment on the term loan. * Modest scale of operations and exposure to intense competition: Revenue of INR69.74 crore in fiscal 2019 indicates the firm's modest scale of operations. The fabric manufacturing segment is fragmented on account of low entry barriers and low capital requirement. This restricts bargaining power with customers and suppliers. Strengths * Extensive experience of the promoters in the textile industry and established customer relationships: The promoters' experience of around 30 years in the textile industry has helped develop strong relationships with suppliers and customers. This has led to steady increase in revenue to INR69.74 crore in fiscal 2019 from INR60.27 crore in fiscal 2015. Liquidity: Poor GSM has weak liquidity reflected by delay in servicing of debt obligations. Rating Sensitivity Factors Upward Factors: * Track record of timely debt servicing for at least over 90 days * Sustained improvement in scale of operations while profitability is maintained. Set up in 1997, GSM manufactures grey cotton fabric in Palladam, Tamil Nadu. The firm is managed by Mr Shantakumar and his family members. GOODONE TRADERS: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Goodone Traders Private Limited (GTPL, part of the RBD group) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Foreign Bill 19 CRISIL D (Issuer Not Purchase Cooperating) Packing Credit 6 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with GTPL for obtaining information through letters and emails dated July 31, 2020 and January 30, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of GTPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on GTPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of GTPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. The RBD group started trading in 1993. All the entities in the group were trading in readymade garments (more than 80 percent of revenue), hosiery, handicrafts, fabrics, leather goods, and miscellaneous products. They have common customers and suppliers, and also the same banker, Punjab National Bank, and auditors. For arriving at the rating, CRISIL Ratings has combined the business and financial risk profiles of Goodone Traders Pvt Ltd, Welldone Exim Pvt Ltd, High Value Exim Pvt Ltd, Attire Designers Pvt Ltd, and RBD International. This is because all these entities, together referred to as the RBD group, have the same board of directors and senior management team with common procurement, marketing, and finance functions. GRATEFUL BUILDINFRA: Insolvency Resolution Process Case Summary --------------------------------------------------------------- Debtor: Grateful Buildinfra Private Limited G-123, Ramanuj Path Shyam Nagar Jaipur 302019 Rajasthan Insolvency Commencement Date: March 2, 2021 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: August 29, 2021 Insolvency professional: Shailesh Dayal Interim Resolution Professional: Shailesh Dayal 2/6A, LGF Jungpura-A New Delhi 110014 E-mail: shaileshdayal@gmail.com ip.gbipl@gmail.com Last date for submission of claims: March 19, 2021 HARRIN POULTRY: CARE Lowers Rating on INR9.32cr LT Loan to D ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Harrin Poultry Farm (HPF), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 9.32 CARE D Revised from CARE BB-; Facilities Stable Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of HPF continue to be constrained by delays in servicing its debt obligations due to stressed liquidity position. Rating sensitivities Positive Factors * Improvement in liquidity position and delay free track record for a minimum period of consecutive three months Detailed description of the key rating drivers Key Rating Weaknesses * Delays in servicing debt obligations: The firm is unable to generate sufficient cash flows leading to strained liquidity position resulting in on-going delays in meeting its debt obligations. * Decline in total operating income: The firm has reported decline in total operating income (HPF & HF) by 11% to INR85.42 crore in FY20 as against INR96.17 crore in FY19 i.e. in Harrin Poultry Farm the TOI has increased by 40% to INR23.24 crore in FY20 as against INR16.61 crore in FY19 on account of increase layer bird batches which increased in production of eggs coupled with increase in market price of egg during the period whereas in Harrin Feeds, the total revenue has dropped by 22% to INR62.18 crore in FY20 as against INR79.55 crore in FY19 due to decrease in order inflow from the existing customers. The firm has recorded revenue of INR83.25 crore (i.e. INR17.10 crore of HPF and INR66.15 crore of HF) in ten months of FY21(Prov.). * Leveraged capital structure and weak debt coverage indicators: The cumulative debt levels of the firm stood at INR17.67 crore in FY20 inclusive of term loan of INR9.73 core and cash credit of INR4.00 crore pertains to Harrin Poultry Farm and remaining amount of INR3.94 crore pertains to Harrin Feeds. Increase in debt quantum backed by additional borrowings of working capital limit coupled with vehicle loans for the purpose of purchase of vehicle to transport eggs and feeds has resulted in deterioration of overall gearing which continues to remain leveraged at 2.79x as on March 31, 2020 as compared to 2.01x as on March 31, 2019 respectively. The cumulative interest and finance charges of the firm stood at INR1.54 crore in FY20 i.e. INR1.24 crore pertains to HPF and remaining pertains to Harrin Feeds. With increase in debt levels backed by additional borrowings of vehicle loans coupled with increase in working capital limits utilization as against decrease in cash accruals, has resulted in deterioration of TD/GCA to 12.70x in FY20 as against 8.31x in FY19 respectively. On the other hand, the PBILDT interest coverage also deteriorated to 1.92x in FY20 from 2.16x in FY19 on account of increase in interest and finance charges however the same stood satisfactory. On account of aforementioned facts, the debt coverage indicators stood weak during the review period as compared to previous year. * Competition from more established integrated players in the poultry industry: Indian poultry industry is largely unorganized with very few integrated players having presence across the value chain. The economics of the commercial poultry farming business is largely dependent on the realizations of eggs, broilers and the cost of feed. The prices of large integrated poultry players act as a yardstick for small poultry players. * Inherent risk in poultry in terms of disease outbreaks:The margins are susceptible to the volatility associated with the realizations of eggs and inherent risk of disease outbreak associated with the poultry industry which can lead to demand collapse. Commercial poultry operations especially in the broiler segment tend to be highly volatile, given the low level of capital investment required in the business and the fragmented nature of the industry. Changes in the prices of live birds, table eggs and feed costs have a strong impact on the profitability and cash flows of the companies operating in poultry industry. Further there are large variations in the production and consumption of poultry meat and egg in India across various states. The consumption is affected by various factors including taste preferences, religious practices, per capital income, urbanization, etc. Key Rating Strengths * Experience of proprietor in the similar line of business: The firm is managed by Mr. Senthil Kumar, who has around two decades of experience in the similar line of business and overall administration activities are supported by a team of supervisors. * Improved PBILDT margin in FY20: The PBILDT margin (HPF & HF) of the firm has raised by 44bps to 3.46% in FY20 as against 3.02% in FY19 owing to decrease in cost of raw materials followed by employee costs, power and fuel costs. Further, during FY20 the PAT margin of the firm (HPF & HF) remained thin and stable at 0.13% in line with previous fiscal. This is mainly due to increase in PBILDT in absolute terms. * Satisfactory operating cycle: Since the firm is engaged in perishable industry, the eggs are to be sold on day to day basis. The firm's operating cycle stretched however stood satisfactory at 22 days in FY20 as compared to 6 days in FY19. This elongation is mainly due to stretched inventory period at 25 days in FY20 (PY:13 days) and the firm stocks eggs for 7 days and medicines, feeds and raw materials upto 30 days as per the demand from customers. The frim allows credit period upto 20-30 days to its customers while it avails credit period upto 25-35 days from its suppliers. Stretched Liquidity Liquidity is stretched marked by tightly matched accruals of INR1.39 crore in FY20 to repay its term debt of INR11.91 crore as on March 31, 2020 and the cash and bank balance of the firm (HPF & HF) stood low at INR0.03 crore as on balance sheet date. The current and quick ratio stood at 1.25x and 0.63x respectively in FY20. As per RBI announcements, the firm has not availed COVID-19 moratorium for its bank facility. Analytical approach: Combined For the purpose of analysis, CARE has combined the financials of Harrin Poultry Farm (HPF) and Harrin Feeds (HF); proprietary concern. The firm engaged in similar line of business, have common proprietor along with having significant operational linkages. Harrin Poultry Farm (HPF) is promoted by Mr. Senthil Kumar as a Proprietorship firm. HPF is engaged in poultry farming for the production of eggs. HPF's chick shed construction was completed in March 2017 after which the first batch of 50,000 birds were purchased and housed in the chick shed for 10 weeks (chicks up to 10 weeks), grower shed for another 10 weeks (chicks upto 20 weeks old chicks) after which they were ready for laying eggs (chicks above 20 weeks upto 80 weeks). After 80 weeks, the birds are sent for culling. The birds are purchased through brokers in Namakal, Tamil Nadu and then sold to wholesalers. HPF supplies 90% of egg to the associate concern namely; Harrin Feeds and remaining 10% are supplied to their customers located at Tamil Nadu and Kerala through brokerage. The poultry farm is located at Kattuputtur, Namakal, Tamil Nadu. HPF procures feeds (100%) from Harrin Feeds (HF), for which eggs are transferred as consideration. Harrin feeds engaged in manufacturing of feeds by using raw materials such as maize, broken rice, soya cake, groundnut cake, etc. The manufacturing unit is located at Kathapally, Namakkal, Tamil Nadu. JAYPEE INFRATECH: CARE Reaffirms D Rating on INR6,550cr LT Loan --------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Jaypee Infratech Limited (JIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank Facilities 6,550.00 CARE D Reaffirmed Non Convertible Debentures 211.95 CARE D Reaffirmed Detailed Rationale and key rating drivers The ratings assigned to the bank facilities and instruments of JIL continue to factor in delays in debt servicing by the company due to its weak financial performance and stretched liquidity position. Key Rating Sensitivity Positive Factors * Timely repayment of its debt on timely basis. Detailed description of the key rating drivers Key Rating Weaknesses * Weak financial performance and stretched liquidity position The liquidity position of the company continues to remain weak on account of weak financial performance, leading to ongoing delays in debt servicing. JIL is a special purpose vehicle promoted by Jaiprakash Associates Ltd (JAL, rated 'CARE D'), holding 60.98% stake as on December 31, 2019, to develop and operate a 165-km six-lane (extendable to eight lanes) access-controlled toll expressway between Noida and Agra in Uttar Pradesh (E'way project). The E'way project achieved Commercial Operations Date (COD) and commenced toll collection in August 2012, post receipt of substantial completion certificate. Also, JIL has been granted rights by Yamuna Expressway Development Authority (YEDA), a state government undertaking, for the development of approximately 6,175 acres of land (443.30 mn sq ft of real estate) along expressway in five different parcels in Uttar Pradesh for residential, commercial, amusement, industrial and institutional development. The land for real estate development is provided on 90-year lease. On account slowdown in real estate sales and high debt levels, the company's financial performance in FY19 (refers to the period April 1 to March 31) was weak, resulting in weak liquidity position and ongoing delays in debt servicing as discussed with the company and confirmed with bankers. The company is currently under the Corporate Insolvency Resolution Process by virtue of the order dated August 9, 2017 of National Company Law Tribunal (NCLT), Allahabad Bench Mr. Anuj Jain as Interim Resolution Professional (IRP). Recently the NCLT in its order declared a PSU viz. NBCC Ltd as successful bidder to take over the assets of Jaypee Infratech Limited. KAVITA EXIM: CARE Moves D Debt Rating to Not Cooperating -------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Kavita Exim Private Limited to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 12.00 CARE D; ISSUER NOT COOPERATING Facilities Rating moved to ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information from Kavita Exim Private Limited to monitor the ratings vide e-mail communications/ letters dated January 19, 2021, January 27, 2021, February 5, 2021, February 12, 2021 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Kavita Exim Private Limited bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating takes into account non-availability of requisite information and no due-diligence conducted due to noncooperation by Kavita Exim Private Limited with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers Key Rating Weaknesses * Continuous overdraws for more than 30 days: There have been instances of over utilizations of working capital limits for more than consecutive 30 days and on-going delays in the servicing of interest obligations due to stressed liquidity position. The company has availed moratorium as provided by bank in lines with RBI guidelines in wake of COVID-19 pandemic. Delhi based Kavita Exim Private Limited (KEPL) was incorporated by Mr. Ashu Jain and his family members in October, 2013. The company has succeeded erstwhile business operations of two proprietorship entities– Kavita Overseas and Sonia Enterprises. Both the firms were in the industry for more than a decade. KEPL is engaged in trading of fabrics (mostly cotton based). Also, the company is engaged in plastic printing of clothes which is mainly done through job work. KEPL procures the fabrics from manufacturers located across India, predominantly from Mumbai. The company caters to wholesalers' located Delhi, Punjab, and Rajasthan etc. The company operates its business in the name "Kavita Exim" through its three showrooms located Gandhi Nagar, Delhi. LEELA BUSINESS: CARE Reaffirms B+ Rating on INR10cr LT Loan ----------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Leela Business Venture Private Limited (LBVPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 10.00 CARE B+; Stable Reaffirmed Facilities Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of LBVPL remains constrained by its small scale of operation with moderate profitability, leveraged capital structure and weak debt coverage indicators along with its stretched liquidity in FY20 (Audited, refers to period from April 1 to March 31). The rating also continues to remain constrained on account of its linkages to cyclical real estate industry. The ratings, however, continue to derive comfort from vast experience of promoters as well as presence in established Leela Group in ship recycling, tours and travels, logistics, hospitality, refurbishing and reselling of real estate development and print media businesses with its diversified portfolio of businesses. Rating Sensitivities Positive Factors * Increasing revenue on sustained basis on the back of increase sale of unsold units from completed real estate project with maintaining PAT margin in the range 14-15% * Improvement in capital structure marked by overall gearing ratio of 1.10 times Negative factors * Significant decrease in selling prices of constructed flats by more than 40% resulting into pressure on the operating margins of the company * Deterioration in debt coverage parameters marked by interest coverage ratio below unity with total debt to GCA ratio of above 50 times Detailed description of the key rating drivers Key Rating Weaknesses * Small scale of operations with moderate profitability Total Operating Income (TOI) of LBVPL declined marginally by 8.25% and remained small at INR2.10 crore during FY20 due to lower proceeds from sale of land during the year. Sales constitute proceeds from constructed flats of already completed residential real estate project (named "Leela Naano" which completed in September 2013, with total project cost of INR16.81) as well as gains on the land transaction (earned through sub plotting). * Profit margins remain moderate: PBILDT margin has improved and continued to remain comfortable at 77.95% during FY20 (73.65% during FY19). The improvement was mainly on account of no fresh construction activities and selling of already constructed units as well as plots during the year. However, due to higher depreciation and finance costs, PAT Margin has declined and remained moderate at 5.76% (13.65% during FY19). Till November 30, 2020, company achieved TOI of around INR2.20 crore. * Leverage Capital Structure and weak debt coverage indicators: Capital structure of LBVPL has improved but continued to remain leveraged marked by overall gearing of 1.53 times as on March 31, 2020 (2.13 times as on March 31, 2019). The improvement was mainly on account of improvement in tangible net worth level as well as decline in total debt level backed by lower utilization of working capital borrowings as on March 31, 2020. Further, debt coverage indicators have continued to remain weak marked by total debt to GCA ratio of 45.33 years during FY20 (45.23 years during FY19) and interest coverage ratio of 1.22 times during FY20 (1.43 times during FY19). The marginal decline in interest coverage was mainly on account of lower PBILDT during FY20. * Linkage to competitive and cyclical real estate industry: The real estate industry in India is highly fragmented with most of the real estate developers having a city-specific or egionspecific presence. The risks associated with real estate industry are - cyclical nature of business (drop in property prices) and interest rate risk etc. Key Rating Strengths * Vast experience of promoters and presence in well-established Leela Group: LBVPL has been promoted by Mr. Komalkant Sharma, Ms. Purnima Sharma and Mr. Vijay Bhatt. All the promoters are holding healthy diversified business experience of more than two decades. LBVPL is part of Bhavnagar (Gujarat) based Leela Group. Leela Group has established business presence in Bhavnagar for more than three decades through its travel agency, logistics, ship recycling/ refurbishing & reselling, real estate development and print media businesses. Liquidity: Stretched The liquidity position of LBVPL is stretched marked by elongated in operating cycle, moderate working capital utilization and low cash and bank balance. Utilization of working capital limits remained moderate at around 60% for the past 12 months ended January 2021. Operating cycle elongated to 6192 days during FY20 (3102 days during FY19) mainly on account of large inventory position comprising unsold flats of completed real estate project as well as purchasing of new plots. LBVPL has reported GCA of INR0.30 crore as against nil debt obligation. Further, as on March 31, 2020, LBVPL had cash and bank balance of INR0.31 crore. CARE also takes cognizance of the impact of COVID-19 pandemic on the business operations of the company. The company was not operational between March 24, 2020 to April 21, 2020 during nationwide lockdown declared by Government on account of COVID-19 pandemic. Company has not availed the moratorium benefit in line with RBI announcement on wake of COVID-19 pandemic. Bhavnagar-based (Gujarat), Leela Business Venture Private Limited (LBVPL) is a private limited company incorporated in May, 2004 by Mr. Komalkant Sharma and his family members as a Natraj Logistics and Services Private Limited (NLSPL). Subsequently during August 20, 2015, name was changed to LBVPL from NLSPL. Till September 2016, LBVPL was engaged in the business of providing tour and travel related services like booking of air tickets, hotel booking and tour package, car rental services, booking of rail tickets, visa services, passport services, foreign exchange and other travel related services. However from October 2016, LBVPL has de-merged its tours and travel business into a partnership firm in the name of Global Travel Solutions (GTS). Currently LBVPL is engaged into real estate development activities such as residential projects. LBVPL is part of Bhavnagar (Gujarat) based Leela Group (LG) which is promoted by Mr. Komalkant F. Sharma and his family. LG has established business presence in Bhavnagar since more than three decades in ship recycling (Sarvag Shipping Services Pvt. Ltd, Leela Ship Recycling Pvt. Ltd, tours and travels, logistics, hospitality (Leela Trade-link Pvt. Ltd – CARE BB; Stable), refurbishing & reselling of real estate development and print media businesses. MAGNUM AVIATION: Insolvency Resolution Process Case Summary ----------------------------------------------------------- Debtor: Magnum Aviation Private Limited Registered office: 8/134, A Block Mehram Nagar Village New Delhi 110010 IN Corp. office: 68 AC, Noida Special Economic Zone Phase II, Noida U.P. 201305 Insolvency Commencement Date: March 3, 2021 Court: National Company Law Tribunal, Bench-III, New Delhi Estimated date of closure of insolvency resolution process: August 30, 2021 (180 days from commencement) Insolvency professional: Gaurav Rohilla Interim Resolution Professional: Gaurav Rohilla B1A/51-A, Janakpuri Near Sai Baba Temple New Delhi 110058 E-mail: adv.gauravrohilla@gmail.com - and - Immaculate Resolution Professionals Private Limited Unit No. 112, First Floor Tower-A, Spazedge Commercial Complex Sector-47, Sohna Road Gurgaon 122018 E-mail: cirp.magnum@gmail.com Last date for submission of claims: March 19, 2021 MAHESVARA CASHEW: CARE Lowers Rating on INR12.08cr Loan to C ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Mahesvara Cashew Industries (MCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 12.08 CARE C; Stable; ISSUER NOT Facilities COOPERATING; Revised from CARE B-; and moved to ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information to carry out annual surveillance of MCI to monitor the rating(s) vide e-mail communications dated December 10, 2020, February 10, 2021, February 19, 2021 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the information for monitoring the requisite ratings. Hence, CARE has carried out the review on the basis of best available information of such bank facilities. In such a case, the credit rating symbol will be accompanied by the suffix "ISSUER NOT COOPERATING" and will indicate that the rating is "BASED ON BEST AVAILABLE INFORMATION". Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating has been revised on account of non-availability of requisite information due to non-cooperation by Mahesvara Cashew Industries with CARE's efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers At the time of last rating on March 20, 2020, the following were the key rating strengths and weaknesses: Key Rating Weaknesses * Small scale of operations: The scale of operations marked by the total operation income had increased from INR20.71 crore in FY18 to INR22.69 crore in FY19 due to increase in repeated orders from clients. Further, MCI had registered a total operating income of INR12.08 crore for 11MFY20 (Prov.). * Financial risk profile marked by operating and cash losses resulting in erosion of net worth: The firm had registered operating and cash losses during FY19 due to increase in raw material cost coupled with decline in the sales price during the year. Due to unabsorbed operating, net and cash losses, the net worth of the firm eroded and stood negative as on March 31, 2019, which resulted in negative capital structure and negative debt coverage indicators. The debt profile of the firm constituted of working capital loan of INR10.90 crore, term loan of INR0.69 crore and unsecured loans of INR0.75 crore as on March 31, 2019. * Working capital intensive nature of operations: There was improvement in operating cycle from 171 days in FY18 to 97 days in FY19 due to improvement in inventory holding period due to fast movement of finished products on the back of increased TOI. The firm had maintained high inventory levels in order to mitigate the raw material price fluctuation coupled with seasonality associated with the raw material availability. The firm provided credit of 0-15 days to its customers and availed credit of 0-30 days from its suppliers. * Firm's exposure to price fluctuation risk and foreign exchange risk: The products dealt by the firm are cashew kernel which includes cashew and other related products etc. The products being cultivation based are highly volatile by nature and affected by regular fluctuations in the prices. However, the firm being engaged in manufacturing of the same, the profitability is subject to the fluctuating cost of the cashew kernel. Further, the firm imported around 90% of the total raw materials which resulted in foreign exchange fluctuation risk. They import raw cashew nuts from Singapore, Dubai and UAE countries. The firm enters into contract with the supplier for purchase of raw material and the firm receives them at the customs port within 45 days from the date of contract. The firm makes payment in foreign currency (USD) within 15 days once the raw material reaches the port. The firm has no hedging policy there by exposing the payables to foreign exchange fluctuation risk. * Constitution of the entity as partnership firm with inherent risk of withdrawal of capital: The partners typically make all the decisions and run the entire business operation. If they become ill or disabled, there may be nobody else who can step in and keep the business going. Constitution as a partnership firm has the inherent risk of possibility of withdrawal of the capital at the time of personal contingency which can adversely affect its capital structure. The partners of the firm had withdrawn INR0.74 crore in FY19. Key Rating Strengths * Reasonable track record of operations and experienced partners in cashew industry: MCI has operational track record of around ten years in processing of cashew kernel. The managing partner, Mr. Gopinath Bhat is actively managing the day to day activities of the business and has experience of more than a decade in the operations. * Stable Outlook of cashew industry: India has been the top exporter in global shelled cashew trade, accounting for more than 15% of the export in the last four years. Indian cashew caters to UAE, Japan, Netherlands, Saudi Arabia and others. With the increasing demand for cashew globally, the exports are increasing from India. This factor is helping to enhance the production capacities of cashew in India. As cashew market in India is export oriented, there is an immense opportunity for the growth of the market. In India, cashew is grown in an area of 1.02 million hectare, with a productivity of 706 kg/ha. The major cashew growing Indian states are Maharashtra, Andhra Pradesh, Odisha, Kerala and Karnataka. Mahesvara Cashew Industries (MCI) was established in the year 2010 and promoted by Mr.Gopinath Bhat, Mr. Udaya Shetty, Mr. Chiranjitha Ajila, Mrs. Arundathi Ajila, and Mrs. Namitha Shetty. The firm is engaged in processing of raw cashew nuts. The firm sells the processed cashew nuts in Karnataka, Gujarat and Mumbai. The firm procures raw cashew nuts from international market places like South Africa and Tanzania. Currently, the day to day operations of the firm are managed by the Mr. Gopinath Bhat (Managing Partner). NAVNIT AUTOSPARES: CARE Cuts Rating on INR9.60cr Loan to B- ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Navnit Autospares (Nagpur) Private Limited (NANPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 9.60 CARE B-; ISSUER NOT COOPERATING; Facilities Rating continues to remain Under ISSUER NOT COOPERATING category and Revised from CARE B; Stable Detailed Rationale, Key Rating Drivers and Detailed description of the key rating drivers CARE had, vide its press release dated December 10, 2019, placed the rating of NANPL under the 'issuer non-cooperating' category as NANPL had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. NANPL continues to be non-cooperative despite repeated requests for submission of information through numerous phone calls and emails dated January 20, 2021, February 2, 2021, February 11, 2021. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The revision in the rating assigned to the bank facilities of NANPL takes into account no due-diligence conducted and nonavailability of information due to non-cooperation by NANPL with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers At the time of last rating on December 10, 2019 the following were the rating strengths and weaknesses: Key Rating Weakness * Deterioration in scale of operations coupled with product and geographical concentration risk: The total operating income (TOI) of the company declined by approximately 19% in FY18 (Audited: referring to a period from April 1 to March 31) to Rs.27.69 crore (as against INR34.41 crore in FY17). Further, the scale of operations remains small with low capital employed of Rs 26.43 as on March 31, 2018(Audited), thus depriving it of scale benefits. The company is exposed to geographical and product concentration risk owing to company sells only Tata Motors's products in Vidarbha region of Maharashtra. * Moderate profitability margins: The nature of operations of NANPL involves limited value addition and volatile procurement costs, owing to which its profit margins remained moderate, as reflected by PBILDT margin in the range of 7%-10% and PAT margin in the range of 0.50%-2.00% for the past three years ended FY18. * Leveraged capital structure albeit funding support from promoters: The relatively high debt profile of the company as against the low net worth base resulted in leveraged capital structure for the company. Furthermore, high debt profile and low profitability resulted in weak debt coverage indicators. However, promoters infused significant amount of unsecured loans in business to support NANPL's operations. * Stretched liquidity position: The liquidity position of the company remained stretched with funds being mainly blocked in inventory and debtors as reflected by high gross current asset days of 307 days as at the end of FY18 (Audited). The same resulted in high utilization of its working capital limits. Key Rating Strengths * Long track record of company along with extensive experience of promoters in auto ancillary industry: The company is in the business of distribution of commercial vehicle spare parts since 2002 and has been able to establish itself in the highly competitive auto ancillary industry. Moreover, the promoters have an experience of around four decades in auto ancillary industry through Navnit Group i.e. Navnit Cars Private Limited and Navnit Automobiles which aids them in making day to day decision. * Locational advantage to NANPL coupled with long association with customer: The servicing facility of NANPL is located in MIDC Hingna (Nagpur, Maharashtra) which are amongst the automobile hubs of India with presence of OEMs. The proximity to customers and strong network aids NANPL in increasing its clientele base. * Association with reputed brand albeit limited bargaining power sole principal supplier: NANPL has an agreement with Tata Motors Limited and deals only in Tata Motors Products and services. This exposes the company to supplier concentration risk. Furthermore, the company has a low bargaining power with the principle and may have to agree with any revised terms on contract renewal. * Growth directly linked to the demand in automobile sector: The growth of the auto ancillary sector is closely linked to auto sector. Demand swings in any of the segments (cars, two-wheelers, commercial vehicles) have a direct impact on auto ancillary demand. Navnit Autospares (Nagpur) Private Limited (BEPL) was incorporated in 2002 and is engaged in the distribution of commercial vehicle spare parts of Tata Motors Limited. NUTRIONEX MANUFACTURERS: Insolvency Resolution Case Summary ----------------------------------------------------------- Debtor: Nutrionex Manufacturers Limited (Previously known as Shri Lal Mahal Limited) Registered office: B-16 Bhagwan Dass Nagar New Delhi 110026 Insolvency Commencement Date: February 25, 2021 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: August 28, 2021 Insolvency professional: Mr. Sanjeev Ahuja Interim Resolution Professional: Mr. Sanjeev Ahuja B-231 (LGF), Saraswati Vihar Pitampura, New Delhi 110034 E-mail: ssmr.ahuja@gmail.com - and - 308, 3rd Floor, Pearls Business Park Netaji Subhash Place, New Delhi National Capital Territory of Delhi 110034 E-mail: claims.lalmahal@gmail.com Last date for submission of claims: March 15, 2021 PINK ROSE: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Pink Rose Lingerie Private Limited (PRLPL) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 9 CRISIL D (Issuer Not Cooperating) Letter of Credit 2.5 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with PRLPL for obtaining information through letters and emails dated July 25, 2020 and January 19, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of PRLPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on PRLPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of PRLPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. PRLPL is a private limited company incorporated in 2008. The company is engaged in manufacturing of women's lingerie undergarments in woven, knitted and hosiery fabric under its own brands 'Laavian' and contract manufacturing for other leading brands in the country. The group is promoted by Bangalore based Mr Santosh Kumar and has been in the business for over past 2 decade. The registered office of the company is Bangalore where its manufacturing facility is located. RAJASTHAN SYNTEX: CARE Withdraws D Ratings on Various Debts ----------------------------------------------------------- CARE has reaffirmed and withdrawn the outstanding ratings (referred in serial no. I & II) of CARE D/CARE D assigned to the bank facilities of Shree Rajasthan Syntex Limited (SRSL) with immediate effect. The action has been taken at the request of SRSL and 'No Objection Certificate' received from the bankers that has extended the facilities rated by CARE. Moreover, CARE has reaffirmed and withdrawn the outstanding ratings (referred in serial no. V) of CARE D (FD) assigned to the FD instrument of SRSL with immediate effect, in line with CARE's withdrawal policy. Further, SRSL has not paid the surveillance fee for the rating exercise as agreed to in its rating agreement. The ratings on SRSL's balance bank facilities (referred in serial no. III & IV) will now be denoted as CARE D/CARE D; ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- I Long-term Bank Facilities - Reaffirmed at CARE D; and subsequently withdrawn II Short-term Bank Facilities - Reaffirmed at CARE D; and subsequently withdrawn III Long-term Bank Facilities 20.35@ CARE D; ISSUER NOT COOPERATING; Based on best available information IV Short-term Bank Facilities 29.50@ CARE D; ISSUER NOT COOPERATING; Based on best available information V Fixed Deposits (Instrument) - Reaffirmed at CARE D; and subsequently withdrawn @ The reduction in rated exposure is on account of withdrawal of bank facilities extended by two of the lenders followed by No Objection Certificates received from the lenders along with the request of the company for withdrawal of rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The ratings for the bank facilities and instruments of SRSL continue to take in to account the on-going delays in servicing of its debt obligations. Key Rating Weakness * On-going delays in servicing of debt obligations: There are on-going delays in servicing of SRSL's debt obligations owing to continued weak financial performance of the company in FY20 and 9MFY21, resulting in inadequate cash flows to meet operational and debt servicing requirements. Incorporated in 1979, SRSL is engaged in the manufacturing of synthetic (grey as well as dyed) blended yarn, cotton yarn and Polypropylene Multi Filament (PPMF) yarn. SRSL manufactures yarn in the range of 18-30 counts. As on March 31, 2019, SRSL had an installed capacity of total 79,800 spindles for synthetic blended yarn and cotton yarn and 2,400 Metric Tonnes Per Annum (MTPA) for PPMF yarn at its Dungarpur, Rajasthan based manufacturing facility. RBD INTERNATIONAL: CRISIL Keeps D Debt Ratings in Not Cooperating ----------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of RBD International continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Foreign Bill 16 CRISIL D (Issuer Not Purchase Cooperating) Packing Credit 4 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with RBD International for obtaining information through letters and emails dated July 25, 2020 and January 30, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of RBD International, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on RBD International is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of RBD International continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. The RBD group started trading in 1993. All the entities in the group were trading in readymade garments (more than 80 percent of revenue), hosiery, handicrafts, fabrics, leather goods, and miscellaneous products. They have common customers and suppliers, and also the same banker, Punjab National Bank, and auditors. ROYAL ALLOYS: CARE Reaffirms B+ Rating on INR6.76cr LT Loan ----------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Royal Alloys (RA), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank Facilities 6.76 CARE B+; Stable Reaffirmed Detailed Rationale & Key Rating drivers The rating assigned to the bank facilities of RA continues to remain constrained by the short track record of operations, presence of the firm in a highly competitive & fragmented industry, regulatory risks, inherent cyclicality and susceptibility of profitability margins to raw material price volatilities. The rating is further constrained by low PBILDT margins and leveraged capital structure. The rating, however, derives strength from the experienced promoters and favorable location of operations of the firm. Rating Sensitivities Positive Factors * Improvement in capital structure, with overall gearing ratio of ~1.75x or below * Steady scale-up of operations with operating income remaining more than INR100 Cr. on a sustained basis Negative Factors * PBILDT margins falling to ~2% and remaining their on a sustained basis. * Any major debt funded capex, capital withdrawal or increased reliance on working capital borrowings resulting in deterioration of overall gearing ratio to more than 4x on a sustained basis. Key Rating Weaknesses * Short track record of operations: The commercial operations of the firm started from June 18, 2018. In the ~10 months of operations in FY19, the firm achieved a total income of INR88.55 cr. FY20 being the first full year of operations, the operating income of the firm stood at INR98.64 cr. during the year. Low PBILDT margins along with leveraged capital structure: The PBILDT margins of the firm remained at a low level of 3.68% in FY20. The same, however, improved marginally from 3.28% in FY19, on account of lower raw materials expenses. Subsequently, and on account of lower depreciation expenses, the PAT margins improved from 0.45% in FY19 to 1.01% in FY20. The capital structure of the firm continued to remain leveraged with overall gearing ratio of 2x, as on March 31, 2020. However, the same improved from 3.95x, as on March 31, 2019, on the back of infusion of capital by the partners, accretion of profits to the net worth, repayment of term debt and lower working capital utilization at the end of the year. * Fragmented and competitive nature of industry and susceptibility of margins to volatility in raw material prices: The steel industry in which the firm operates is highly fragmented and competitive marked by the presence of numerous players with large number of players being unorganized. Hence, the players in the industry have low pricing power. RA has no long-term contract for procurement of raw materials and the firm has to source the same on need basis at market-linked rates. Thus, any adverse volatility in the prices of the same has bearing on the profitability of the firm. * Cyclicality inherent in the steel industry with regulatory risks: The steel industry is sensitive to the shifting business cycles, including changes in the general economy, interest rates and seasonal changes in the demand and supply conditions in the market. Apart from the demand side fluctuations, the highly capital intensive nature of steel projects along with the inordinate delays in the completion hinders the responsiveness of supply side to demand movements. In the recent past, several steps have been taken by the Indian Government like imposing of MIP (minimum import prices) to protect domestic players from the onslaught of imports from China, Korea etc. These moves have led to reduced imports and have stabilized steel prices thereby improving realizations. Key Rating Strength * Experienced promoters: Mr. Jatin Sood, Mr. Sachin Sood (brother of Mr. Jatin Sood), Ms. Kirti Sood, Ms. Meenakshi Sood, Mr. Sanjay Gupta, Ms. Radhika Gupta, Mr. Parveen Kumar Data, Mr. Jayant Data and Mr. Manu Data who have long experience in the steel business promote the firm. Mr. Jatin Sood has more than a decade of experience in the steel industry through his association with with various entities of the group engaged in the similar line of business. The other partners are having experience ranging between 5-10 years in the industry through their association with the group concerns/related parties of the firm. The partners collectively look after the overall operations of the firm. The partners have infused additional capital amounting to INR1.13 crore in FY20 to support the business operations of the firm. * Favorable location of operations: RA's manufacturing facility is located in Mandi Gobindgarh, Punjab which is in close proximity to various manufacturers of billets and ingots, the main raw material for manufacturing of its products. Further, the firm mainly markets its products through its sales team, dealers and distributors to Punjab, Madhya Pradesh and the NCR region. * Proximity of the plant to source of raw-material and the customer base results in savings of transportation cost. Liquidity: Adequate The firm has a total debt repayment obligation of INR0.49 Cr. only in FY21, which is proposed to be met through internal accruals. The average utilization of the working capital limits also stood at a satisfactory level of ~57% for the 12 month period ended December-2020. The current ratio of the firm remained moderate at 1.05x, while the quick ratio stood at 0.64x, as on March 31, 2020. The firm had free cash and bank balances of INR0.62 crore, as on March 31, 2020. The operating cycle of the firm has remained at a satisfactory level of ~34 days, as on March 31, 2020 (20 days, as on March 31, 2019). The elongation in the same on a year-on-year basis was mainly on the back of increase in average collection period and average inventory days. The firm had not availed moratorium from the bank in light of COVID-19 pandemic for servicing of its debt obligations. However, they have availed emergency line of credit of INR1.06 cr. Established in October-2016, Royal Alloys (RA) is a partnership firm based in Mandi Gobindgarh, Punjab. However, the commercial operations of the firm started from June 18, 2018. The firm is engaged in the manufacturing of steel products i.e. flats and bars with an aggregate installed capacity of 30,000 MTPA, as on March 31, 2020. The sole manufacturing facility of the firm is situated at Mandi Gobindgarh, Punjab. Besides RA, the partners are also involved in other group concerns/related parties namely Royal Ispat Udyog (rated 'CARE BB; Stable; Issuer Not cooperating') established in 2008 and engaged in the manufacturing of steel flats and bars; Royal Steel Rolling Mills, established in 1980 and engaged in the manufacturing of steel flats; Royal Industries, established in 1993 and engaged in manufacturing of steel flats; and, Royal Concast, established in 2018 and engaged in manufacturing of steel ingots and billets. S.K. HATCHERIES: CARE Lowers Rating on INR9.23cr LT Loan to D ------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of S.K. Hatcheries (SKH), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 9.23 CARE D Revised from CARE BB-; Facilities Stable Detailed Rationale and key rating drivers The revision in the ratings assigned to the bank facilities of SKH factors on account of delays in servicing of its debt obligations due to stressed liquidity position. Rating Sensitivities Positive Rating Sensitivities * Improvement in the liquidity position of the firm by timely servicing of its term debt obligations. Detailed description of the key rating drivers Key rating weakness * Ongoing Delays: As per the bank statements, there have been delays in repayment of term debt obligation in relation to the servicing of interest and principal repayment for term loan in the months of March'2020, September'2020, November'2020 and January 2021. The penal interest has been also been charged in the month of March' 2020 and september'2020. * Stretched Liquidity: Liquidity is stretched marked by fully utilized bank limits during the past 12 months ending January 31, 2021. The firm also have tightly matched accruals to repayment obligations. The firm has repayment obligations of INR0.53 crores as against gross cash accruals of INR1.03 crores. The current ratio and quick ratio also stood low at 0.59x and 0.36x respectively as on March 31, 2020 (A). The cash balance as on March 31, 2020(A) is also stood low at INR0.07 crores. The firm has availed moratorium and deferment of interest facility as provided by the bank in lines with RBI guidelines in wake of COVID-19 from April 2020 to August 2020. S. K. Hatcheries (SKH) was established in 2005 by Mr. Ramehar Singh as a proprietorship firm and is engaged in poultry farming of egg laying poultry birds (chicken) and trading of broiler hen in the poultry farm located in Village Jatauli, Haryana. Firm procures feeding material i.e. maize, millets, soyabean, DCP (Di Calcium Phosphate), vitamins and medicines etc. from suppliers based in Delhi NCR. Currently, the firm has 40,000 broiler parent (hen giving eggs) and 7,00,000 broilers (hen giving chicks). SKH has one associate concern namely Om Feed Meal which is engaged in similar line of business. SAVARIYA AGRO: CARE Lowers Rating on INR7.15cr LT Loan to D ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Savariya Agro Commodities (SAC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 7.15 CARE D Revised from CARE B; Facilities Stable Detailed Rationale & Key Rating Drivers The revision in rating assigned to the bank facilities of SAC takes into account delays in debt obligation. Rating Sensitivities Positive Factors: Factors that could lead to positive rating action/upgrade * Improvement in liquidity position and timely repayment of debt obligation * Demonstration of default free track record of over 90 days Detailed Rationale & Key Rating Drivers Key Rating Weaknesses * Delays in servicing of debt obligation: As per bank statements received, there are instances of penal interest charges in term loan account and cash credit account with respect to delays in servicing of debt obligation. Liquidity: Poor Poor liquidity marked by lower accruals when compared to repayment obligations. Further, there are frequent overdrawals in the cash credit facility during the last twelve months ended in February 22, 2021. This has constrained the ability of the company to repay its debt obligations on a timely basis. Savariya Agro Commodities (SAC) is a proprietorship firm established by Mr. Gajendra Bhati on April, 2018. The operations also commenced in April, 2018. The firm is engaged in processing of raw walnuts, almonds and pistachios and converting them into edible form with the help of shelling, roasting, grading and packaging. The processing takes place at a facility located near Jalore, Rajasthan with an installed capacity of 5000 kilos per day. SHRI BANKE: Insolvency Resolution Process Case Summary ------------------------------------------------------ Debtor: Shri Banke Bihari Cotfab Private Limited Registered office: Unit No. 511, Fifth Floor Ring Road Mall Manglam Place Sector 3 Rohini Dehi 110085 Work Place: Plot No. 268, Sector 17 Footwear Park HSIIDC Bahadurgarh 124507 HR IN Insolvency Commencement Date: February 19, 2021 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: August 18, 2021 (180 days from commencement) Insolvency professional: Raj Kumar Gupta Interim Resolution Professional: Raj Kumar Gupta S-203, 2nd Floor Plot No. 1, Ajnara Tower-1 LSC, Savita Vihar Nr. Yojna Vihar New Delhi 110092 E-mail: rkgassociat@gmail.com cirp.shribankebiharicotfab@ gmail.com Last date for submission of claims: March 9, 2021 SONI SOYA: CARE Moves D Debt Rating to Not Cooperating Category --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Soni Soya Products Limited (SSPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 12.00 CARE D; ISSUER NOT COOPERATING Facilities Rating moved to ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information from SSPL to monitor the rating vide email communications dated October 12, 2020, December 8, 2020, January 12, 2021, January 18, 2021 and February 11, 2021 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the ratings on the basis of the best available information which, however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on SSPL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on November 23, 2020, the following were the rating strengths and weaknesses. (Updated for the FY20 (A) financials available on stock exchange) Key Rating Weakness * Irregularities and overdrawls in debt servicing as cited vide resignation letter of auditor: As per SSPL's letter to stock exchange, the company had given intimation about the resignation of its statutory auditor wherein the reasons for resignation, as provided by statutory auditor to SSPL, mentions about irregularities and overdrawl in loan account with bank and NBFCs owing to its poor liquidity. Further, the company had not paid its major income tax liability for the financial year ended on March 31, 2019 and not paid/short paid its income tax liability, TDS liability and other outstanding for the year ended March 31, 2020 as cited by the statutory auditor. Also, the auditor had stated that with above cited issues and lake of transactions, pending litigations and liquidity crises during the current period created uncertainty into the affairs of the company which might affect the going concern status of the entity as a part of reason for the resignation of statutory auditor from his services. Further, as per audited financials of FY20 auditor has mentioned about irregularities in its loan accounts. During the last rating action done on August 12, 2020, the banker had informed about the moratorium availed by the company for interest payment towards its cash credit facility starting March-2020 till August-2020. Analytical approach: Consolidated Consolidated financials of the company include financials of Soni Soya Products Limited (SSPL) and its subsidiary i.e. Soni Soya Products LLC (SSP) (Holding 51%). SSPL is engaged in trading and processing of organic and non-GMO agricultural products while SSP is engaged in providing warehousing services for US based customers of SSPL. The company has prepared consolidated financials for SSPL for the first time in FY19 including its subsidiary company namely Soni Soya Products LLC (SSP). Indore based (Madhya Pradesh) Soni Soya Products Limited (SSPL, CIN: L51225MP2014PLC033203) was incorporated by Mr. Dilip Kumar Soni. The company, however, was originally incorporated as "Soni Soya Products Private Limited" on September 17, 2014. Subsequently, the company was converted into Public Limited Company on August 02, 2017 and name changed to Soni Soya Products Limited (SSPL). The company got listed on SME NSE on April 12, 2018. The company is primarily engaged in processing and trading of organic as well as Non-Genetically Modified Organism (non-GMO) and agricultural products such as Soya, Maize, Wheat, and Flax seeds, Mustard Oil, Rice, Pulses, Herb and Spices etc. The company exports its product to Canada, Dubai, South Korea, Sri Lanka and USA. Further, its subsidiary company namely Soni Soya Products LLC was incorporated in June 15, 2018 and is engaged in business of warehousing, selling and marketing of Soya and Soya Products in USA as well as trading and processing of agro products. SUMITA TEX: CRISIL Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Sumita Tex Spin Private Limited (Sumita) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 2.5 CRISIL D (Issuer Not Cooperating) Cash Credit 17 CRISIL D (Issuer Not Cooperating) Funded Interest 6.77 CRISIL D (Issuer Not Term Loan Cooperating) Letter of Credit 2.5 CRISIL D (Issuer Not Cooperating) Long Term Loan 25.39 CRISIL D (Issuer Not Cooperating) Proposed Long Term 102.28 CRISIL D (Issuer Not Bank Loan Facility Cooperating) Working Capital 43.56 CRISIL D (Issuer Not Term Loan Cooperating) CRISIL Ratings has been consistently following up with Sumita for obtaining information through letters and emails dated July 25, 2020 and January 19, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of Sumita, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on Sumita is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of Sumita continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. Sumita was set up in 1982 by Mr. Anurag Poddar, Mr. Omprakash Poddar, and their family members. The company manufactures texturised yarn from partially-oriented yarn, and its manufacturing unit is in Silvassa (Dadra and Nagar Haveli). SUVEERA AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of Suveera Agro Industries (SAR) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3 CRISIL D (Issuer Not Cooperating) Cash Credit 5 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with SAR for obtaining information through letters and emails dated July 31, 2020 and January 19, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of SAR, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SAR is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SAR continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. Set up in 2010, SAR is a partnership firm of Mr NVV Prasada Rao, Mr Gadde Srinivasa Rao, Mr Gadde Chakradhar and Mr Naga Bhirava Krishna Phanendra. The mill, located in Hanuman Junction (Andhra Pradesh), processes paddy into rice, bran, broken rice and husk. TIRUAL BORTIMON: CARE Moves D Debt Rating to Not Cooperating ------------------------------------------------------------ CARE Ratings has migrated the rating on bank facilities of Tirual Bortimon Tea Estates Pvt. Ltd. (TBTEPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 24.51 CARE D; ISSUER NOT COOPERATING Facilities Rating moved to ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information from TBTEPL to monitor the rating vide e-mail communications/letters dated July 6, 2020, October 16, 2020, November 5, 2020, January 8, 2021, February 18, 2021 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Further, TBTEPL has not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. The rating on TBTEPL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Further, banker could not be contacted. Detailed description of the key rating drivers Key Rating Weaknesses * On-going delay in debt servicing: There are ongoing delays in servicing of term loan. The term loan instalment of INR4.07 crore was due as on December 31, 2019 which was not repaid as on January 29, 2020. TBTEPL was incorporated in 1973 by Mr. Laxminath Hanue. Mr Bhaskar Baruah acquired TBTEPL in 2006. TBTEPL was initially engaged in production of green leaf and manufacturing of black tea (CTC). TBTEPL is based out of Johrat, Assam, and currently has four tea garden and four plants for processing of green tea leaves to produce black tea (CTC) located at Nakachari, Sapekati, Borhulla and Dibrugarh having an installed capacity of 2500 MTPA. The company sells through auction, agent and private brokers of Assam. Mr. Bhaskar Baruah (Managing Director) who has more than two decades of experience looks after the day to day operation of the company. He is also supported by other directors Mr. Apurba Baruah, and Mrs. Angshumali Bruah along with a team of experience professional who are having long experience in similar line of business. UI FABRICATORS: CARE Keeps D Debt Rating in Not Cooperating ----------------------------------------------------------- CARE Ratings said the rating for the bank facilities of UI Fabricators Private Limited (UIFPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 12.00 CARE D; ISSUER NOT COOPERATING Facilities Rating continues to remain under ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information from UIFPL to monitor the ratings vide e-mail communications/letters dated February 8, 2021, February 9, 2021, February 10, 2021, February 11, 2021 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on UI Fabricators Private Limited's bank facilities will now be denoted as CARE D, ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers (At the time of last rating on December 18, 2019, the following were the rating strengths and weaknesses. Updated with FY20 (A) financials received from MCA website) Key rating Weakness * Delay in debt servicing: Company has defaulted in repayment of borrowings to bank of INR0.43 crore as per audit report FY20 dated December 07, 2020 signed by auditor Mr. Manish Mehrotra, Partner of M/s Manish Mehrotra & co. Nascent stage of business operations: Company has achieved total operating income of INR8.41 crore ion FY20 vis-à-vis INR10.22 crore in FY19. However, company has reported net loss of INR0.93 crore in FY20 vis-à-vis net loss INR2.33 crore in FY19. * Leverage capital structure and weak debt coverage indicator: Tangible net worth of the company remained low and eroded to INR0.08 crore as on March 31, 2020 vis-à-vis INR1.01 crore due to losses incurred by the company. However debt level remained high in form of term loan, unsecured loans and working capital bank borrowings due to which capital structure of the company remained highly leveraged at 207.66x as on March 31, 2020 vis-à-vis 16.74x as on March 31, 2019. Due to above mentioned reason, debt coverage indicators also remained weak with interest coverage ratio of 1.01x in FY20 vis-à-vis 0.09x in FY19 due to low PBILDT and weak total debt to gross cash accruals due to negative gross cash accruals in FY20. * Tender driven nature of business operation: UIFPL procures orders through tenders and after successful bidding it received orders. The nature of business is tender driven and based on requisite milestone to accomplish the order within the requisite time frame. * Present in competitive nature of industry: UIFPL is engaged into manufacturing process which is highly fragmented with a high level of competition from both the organized and largely unorganized sector, along with the susceptibility of margins to volatile raw material prices. * Susceptibility of margins to volatile raw material prices: Prices of raw materials (i.e. steel) are primarily dependent on market demands which are volatile in nature. Considering UIFPL's raw material requirement, any adverse volatility in the raw material prices may hamper the firm's margins. Key Rating Strengths * Experienced and resourceful promoters: The promoters of UIFPL have more than two decades of experience in automobile industry. The promoters have resourceful track record in the market and they look after the overall management of the company. Incorporated in the July 2016, UI Fabricators Private Limited (UIFPL) is engaged into business of manufacturing of LPG cylinders (domestic as well as industrial cylinder). The company has undertaken to manufacture LPG cylinders in September 2016 with installed capacity of 432,000 cylinders per annum at its plant located at Sitarganj district, Uttarakhand. The overall cost of the project is INR10.57 crore which was funded through promoters amounting to INR5.07 crore, and bank debt amounting to INR5.50 crore. The project was started on Sept. 2016 and currently trail run is going on which is expected to be completed by June end. The proportion of cylinders' capacities varies depending upon the order position & demand and actual capacity is being proposed to be 258, 000 cylinders per annum during FY17-18. The key raw material i.e. steel is sourced from local suppliers (namely from Tata Steel Limited) and orders are procured through tender-bidding process (namely from Indian Oil, Hindustan Petroleum and Bharat Petroleum). V.R.K. ASSOCIATES: CARE Moves D Debt Rating to Not Cooperating -------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of V.R.K. Associates Private limited (VRK) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 12.00 CARE D; ISSUER NOT COOPERATING Facilities Rating moved to ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE has been seeking information from VRK to monitor the ratings vide e-mail communications/letters dated January 14, 2021, January 19, 2021, January 27, 2021, February 5, 2021, February 12, 2021 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on V.R.K. Associates Private Limited bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating takes into account non-availability of requisite information and no due-diligence conducted due to noncooperation by V.R.K. Associates Private Limited with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers Key Rating Weaknesses * Ongoing Delays: There has been an ongoing delay in the interest servicing of the working capital borrowings due to stretched liquidity position. Uttar Pradesh based V.R.K. Associates Private limited (VRK) is a private limited company and was incorporated in February 2001 and managed by Mr. Vijay Prakash, Mr. Vaibhav Gupta, Ms. Rashmi Kesarwani and Ms. Shanti Devi. The company is involved in various activities which include running a hotel in Sarnath, Uttar Pradesh by the name of "Buddha Resort", Indane Gas Agency business by the name "VRK Indane service" and a retail jewelry shop for the Gitanjali Group by the name "VRK Jewells". In November 2019, company has started a new Hotel, Hotel Pinnacle Gate. VAISHNAV METAL: CRISIL Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Shree Vaishnav Metal and Power Private Limited (SVMPPL) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1 CRISIL D (Issuer Not Cooperating) Cash Credit 15 CRISIL D (Issuer Not Cooperating) Letter of Credit 10 CRISIL D (Issuer Not Cooperating) Proposed Long Term 31.27 CRISIL D (Issuer Not Bank Loan Facility Cooperating) Term Loan 22.73 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with SVMPPL for obtaining information through letters and emails dated July 25, 2020 and January 19, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of SVMPPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SVMPPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SVMPPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. SVMPPL, incorporated in 2005 by the Agarwal family, is engaged in galvanisation and fabrication. Its manufacturing facilitates are in Wada (Maharashtra) and registered office is in Mumbai. VIRAR FABRICS: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: Virar Fabrics Private Limited Ratna Jyoti Appartment-C Floor-04, 4 Ravidham Sankul Panjara Pole, Ghod Dod Road Surat GJ 395007 IN Insolvency Commencement Date: March 1, 2021 Court: National Company Law Tribunal, Surat Bench Estimated date of closure of insolvency resolution process: August 28, 2021 Insolvency professional: CA Kailash Thanmal Shah Interim Resolution Professional: CA Kailash Thanmal Shah 505, 21st Century Business Centre Near World Trade Centre Ring Road, Surat 395002 Mobile: 9824150365 E-mail: ipktshah@gmail.com cirp.virar@gmail.com Last date for submission of claims: March 17, 2021 VISTACORE INFRAPROJECTS: CARE Keeps D Rating in Not Cooperating --------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Vistacore Infraprojects Private Limited (VIPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 30.00 CARE D; ISSUER NOT COOPERATING Facilities Rating continues to remain under ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated December 2, 2019, placed the rating of VIPL under the 'issuer non-cooperating' category as VIPL had failed to provide information for monitoring of the rating as agreed to in its Rating Agreement. VIPL continues to be non-cooperative despite repeated requests for submission of information through email letter dated July 31, 2020, October 13, 2020, February 1, 2021 and February 11, 2021 and numerous phone calls. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on December 2, 2019 the following were the rating weaknesses: Key Rating Weaknesses * Delay in debt servicing obligations: There were continuous overdrawals of more than 60 days in the cash credit facility VIPL is promoted by the Patil family with Mr. Utkarsh B. Patil heading the operations of the company. Earlier, the company was established as a proprietorship concern in the name of "Vista core Infra-projects" in 2008. Subsequently, it was reconstituted as a private limited company in 2015 with its name changed to the current one. VIPL carries out civil construction work for buildings, roads, bridges, tunnels, culverts, highways, water treatment plants, industrial structures, powerhouses, water supply distribution schemes and others. VIPL is a part of the Vistacore group, which was founded in the year 2002. VISWAKARMA ROOFINGS: CARE Cuts Rating on INR15cr Loan to C ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Viswakarma Roofings (India) Private Limited (VRPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 15.00 CARE C; ISSUER NOT COOPERATING; Facilities Rating continues to remain Under ISSUER NOT COOPERATING category and Revised from CARE B- Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated November 28, 2019, placed the ratings of VRPL under the 'issuer non-cooperating' category as VRPL had failed to provide information for monitoring of the rating. VRPL continues to be non-cooperative despite repeated requests for submission of information through emails, phone calls and email dated January 20, 2021, February 2, 2021, February 10, 2021. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The ratings have been revised on account of no due diligence conducted and non-availability of information due to noncooperation by VRPL with CARE's efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk Detailed description of the key rating drivers At the time of last rating on November 28, 2019, the following were the rating strengths and weaknesses (Updated for latest available information from Registrar of companies). Key Rating Weaknesses * Modest scale of operations with short track record of the firm: VRPL was incorporated in the year 2009; while the commercial operations of the company started from February, 2016. The same has an installed capacity of 1,20,000 MT per annum. The operations have recently commenced and therefore uncertainties surrounding operational stability shall continue to remain. The company has an operational track record three years. The scale of operations remains modest as reflected by the total revenue from operations of INR3.62 crore with a completely eroded net-worth as on March 31, 2018. * Stretched liquidity profile: The liquidity profile of the company is stretched on account as reflected by the high gross current asset days of 45 days during FY18. Further, the accumulated losses have resulted into net worth deficit as on March 31, 2018. * Threats of restrictions on the usage of asbestos on account of its hazardous nature: Asbestos fibre is an important raw material required for AC sheet manufacturing. Mining of asbestos and use of asbestos related products have been banned, due to its hazardous effects on health. While mining of asbestos and trade in asbestos waste (dust and fibre) is banned in India, the use of asbestos is permitted in related products (AC sheets), although it has been a matter of litigation. Thus regulatory issues pertaining to asbestos use and the activities of "Ban asbestos lobby" instigated by the manufacturers of substitute products continue to remain a matter of concern. * Vulnerability of margins to fluctuations in raw material prices and foreign exchange fluctuations: Major raw material required to manufacture AC sheets are asbestos fibre, cement and fly ash. Due to ban on mining of asbestos in India, Indian players are dependent on the asbestos exporting nations like Russia, Brazil, Canada, China and others. The continuous increase in the price of inputs is a cause of concern. As asbestos mining is totally banned in India, 100% of the asbestos fibre is imported. Imported raw material makes the industry vulnerable to forex fluctuation risks. Key Rating Strengths * Experienced promoters: Established in 2009, VRPL is promoted by Mr Rahul Tupe and Mr V Laxminarayan Rao, who have an experience of more than two decades in the similar industry. Another director of company, Mr V Laxminarayan Rao carries 25 years of experience in companies engaged in asbestos cement sheet division. * Rising demand for Asbestos cement sheets from rural markets: The Indian cement roofing sheet industry has a capacity of 4 million MT and the industry is growing at a steady rate of 8-10% annually on the back of strong demand from the rural markets. ACC sheets are primarily used as roofing material in the rural areas. Asbestos fibre cement sheets are preferred over other roofing options mainly because of its characteristics like weather-proof, non-corrosive, strong and durability. * Strategic Location of plant: The manufacturing unit of the company is located around Bhojpur Industrial Estate, Bihar. The company has a location advantage as its manufacturing facilities are strategically located in terms of close proximity to key raw materials such as fly ash and cement as well as its customers within the geographical area of bihar, Orissa, Eastern Uttar Pradesh. Bihar based, VRPL, was incorporated in November, 2009. The company is involved in the manufacturing of asbestos cement sheets and operates under a rented facility taken on lease by VRIPL from Nibhi Industries Private Limited and has an installed capacity of 1,20,000 MTPA and production of 75.18 running meter of standard width AC sheet. The operations of the entity have commenced since February, 2016. VSP UDYOG: CARE Keeps D Debt Ratings in Not Cooperating Category ---------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of VSP Udyog Private Limited (VUPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 200.31 CARE D; ISSUER NOT COOPERATING Facilities Rating continues to remain under ISSUER NOT COOPERATING category Short Term Bank 29.00 CARE D; ISSUER NOT COOPERATING Facilities Rating continues to remain under ISSUER NOT COOPERATING category Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated February 27, 2017, placed the rating(s) of VUPL under the 'issuer non-cooperating' category as VSP had failed to provide information for monitoring of the rating and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. VUPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email letter dated January 13, 2021. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating takes into account on-going delays in debt servicing. Detailed description of the key rating drivers At the time of last rating on December 9, 2019 the following were the rating strengths and weaknesses: Key rating Weaknesses The bankers have categorized VUPL's account as NPA. VUPL incorporated in 2002 by Mr. Om Prakash Agarwala, had been engaged in the manufacturing of billets & TMT bars/rounds at Durgapur, West Bengal. In 2005, VUPL had set up its first induction furnace for manufacturing billets with a capacity of 22,800 MTPA. The company had been operating billet capacity of 1,15,200 MTPA and TMT bar/rounds capacity of 2,23,000 MTPA. [*] INDIA: Over 1,100 Firms Ordered for Liquidation Till Dec. 2020 ------------------------------------------------------------------ Telangana Today reports that bankruptcy courts have sent more than 1,100 companies for liquidation under the Insolvency and Bankruptcy Code (IBC) ever since the code came into force in 2017. Citing data from the Insolvency and Bankruptcy Board of India (IBBI), the Minister of State for Corporate Affairs, Anurag Thakur told the Lok Sabha that a total of 1,126 companies have been ordered for liquidation as of December 31, 2020, Telangana Today relates. Further, as of last year 317 cases resolution plans have been approved and the realizable value for creditors from the approved resolution plans of 317 cases is INR2.01 lakh crore which is 39.37 per cent of total admitted claims of INR5.11 lakh crore, the report discloses. Government has suspended the admission of new IBC cases in view of the pandemic the pandemic and the suspension is scheduled to end on March 24, according to Telangana Today. There is anticipation that no further extension would be made in terms of the suspension of the new insolvency cases. Further, several experts and stakeholders have also raised concerns of rising stress and bankruptcy cases once the suspension is lifted, Telangana Today says. The IBC has evolved a lot in the past three years and soon India is likely to have a prepackaged insolvency framework. Further, a separate insolvency framework for MSMEs is also in the making, the report adds. ========= J A P A N ========= SOFTBANK GROUP: Moody's Affirms Ba3 CFR, Alters Outlook to Stable ----------------------------------------------------------------- Moody's Japan K.K. has affirmed the Ba3 corporate family rating and senior unsecured rating of SoftBank Group Corp. (SBG), as well as its B2 subordinate rating. Moody's has also changed the outlook to stable from negative. RATINGS RATIONALE The change in the outlook to stable from negative reflects the progress of SBG's asset monetization program since it was announced in March 2020. The company has completed a number of asset sales totaling JPY 5.6 trillion that have increased clarity on the value of the core components in its investment portfolio. Additionally, favorable stock market conditions have bolstered the value of its portfolio and facilitated the execution of its asset sales and investments. Compared with its initial plan of JPY 4.5 trillion, the company is currently above its asset sales target, although it is below target in applying those proceeds almost equally toward share repurchases and reducing its net debt. The affirmation of SBG's Ba3 ratings reflects its good liquidity at the holding company level, which can cover scheduled debt maturities over the next two years, as well as its ownership of its highly valuable investment portfolio, including a 40% stake in SoftBank Corp. and a 25% stake in Alibaba Group Holding Limited (Alibaba, A1 stable). These strengths are balanced against the ongoing substantial changes in SBG's credit profile as a result of its large investments and divestments, which could alter the value and quality of its investment portfolio, as well as its capital structure. The company's interest coverage is low at below 1x, although it has significant liquid resources on which it can draw to supplement income. The ratings also consider SBG's aggressive financial policy and associated governance concerns. While the company has maintained enough cash to cover two years of debt maturities, which is appropriate for its rating level, it has not materially increased its cash on hand (around JPY2 trillion) from its asset sales because it has reinvested much of the proceeds. Moody's estimates that most of the reinvestment went into tradeable shares of listed US technology companies through SB Northstar LP. The stable outlook reflects Moody's expectation that SBG's portfolio value is not deteriorating but changing, with its market value-based leverage (MVL) expected to range between 23% and 29%, and that the company will maintain good liquidity with its substantial cash balance. Governance is a key rating consideration, with concerns that include (1) the scope and pace of changes on its balance sheet as strategies shift; (2) SBG's strong appetite for investments, which could be funded by complex financial arrangements with limited transparency; and (3) its dependence on its CEO and founder Masayoshi Son when it comes to key investment decisions, which presents key-person risk. Mr. Son owns about 26.9% of SBG and coinvests in SBG's investment vehicles, including SB Northstar. Mr. Son owns 33% of SB Northstar and SBG owns the remaining 67%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's will consider upgrading the ratings if SBG (1) resolves the above governance concerns; (2) establishes a track record of debt repayment -- particularly secured debt -- with asset sale proceeds; (3) adopts a simpler, more stable and transparent capital structure; and (4) sustains interest coverage above 1.5x and MVL around 20%. SBG's CFR remains constrained by its investment approach and dominant leadership of its CEO. Moody's will consider downgrading the ratings if the credit quality and transparency of SBG's investee companies deteriorate, including a further decline in the company's ownership of (1) its dividend-paying SoftBank Corp. subsidiary, without a commensurate increase in stable dividends from other sources; or (2) Alibaba, without an increase in other liquid assets. In addition, Moody's will consider a downgrade if cash held at the holding company level diminishes, such that SBG's cash on hand no longer covers two years of scheduled debt maturities; or if the company's total debt increases or the proportion of secured debt rises. Downgrade pressure will also arise if material legal or other contingent obligations crystallize or governance concerns rise further. The principal methodology used in these ratings was Investment Holding Companies and Conglomerates (Japanese) published in August 2018. Headquartered in Tokyo, SoftBank Group Corp. is a Japanese holding company with subsidiaries in various businesses, including telecommunications, internet and other technology businesses. The following ratings are affected by the rating action: Issuer: SoftBank Group Corp. LT Corporate Family Rating, Affirmed at Ba3 Senior Unsecured Regular Bond/Debenture (Foreign Currency), Affirmed at Ba3 Subordinate Regular Bond/Debenture (Foreign Currency), Affirmed at B2 Outlook, Changed To Stable From Negative =============== M A L A Y S I A =============== AIRASIA GROUP: Sees More Layoffs Unless Domestic Flights Resume --------------------------------------------------------------- Nikkei Asia reports that low-cost carrier AirAsia is ready to furlough more workers unless domestic coronavirus travel curbs end next month, even as the company speeds expansion of its non-airlines business to fill an earnings hole, top executives told Nikkei Asia. The airline founded by local tycoon Tony Fernandes and its budget model have been hammered by the drop in international air travel, while movement restrictions between states in Malaysia are also choking revenue. AirAsia Group President Bo Lingam said in an interview with Nikkei that it is critical for internal routes to reopen. "We would prefer [this] as soon as possible, but I think the green states can be opened first, and we would appreciate if it's by next month," he said, referring to the end of April. Green states are those with lower new COVID-19 cases, namely Melaka, Pahang, Terengganu, Sabah and the federal territories of Putrajaya and Labuan. According to Nikkei, the Malaysian government has not said when it will reopen domestic travel nationwide despite pressure from lobby groups, including hotels, tour operators and airlines. If the interstate travel ban remains into May, the company would have to dismiss more employees on a furlough basis, Bo said, adding to 3,000 mostly pilots and back-office staff already hit by the measure, Nikkei relays. Furloughed workers receive medical and travel benefits until called back to work. "We will pay them medical benefit[s] in full just like pre-COVID-19 and they would be first to be recalled once we fly our airplanes again," said Bo, who has been with the company for over 21 years Nikkei relates that the carrier is ready to begin domestic or international travel when allowed, he said. "All necessary safety checks are always done and we have standby employees to be recalled, so we are ready anytime," he said. AirAsia's finances are clearly hurting, Nikkei says. It suffered a net loss of MYR2.7 billion (US$650 million) for the first nine months of 2020 compared with a net profit of MYR80.7 million the previous year, Nikkei discloses. Revenue fell 68% to 2.9 billion ringgit from 9.1 billion ringgit. Fourth-quarter results are expected this month, with analysts forecasting a turn to profitability not before 2022. Nikkei relates that Bo said the airline is no longer accepting new jet deliveries from its primary supplier, Airbus. AirAsia is the European manufacturer's largest customer in the single-aisle segment and was supposed to receive a combined 46 planes in 2020 and 2021 -- mostly new A321s. "We have stopped taking in any deliveries because we have no place to park anymore and it's a waste of resources," Nikkei quotes Bo as saying. "We plan to take five aircraft next year only if the situation improves." According to Nikkei, the carrier, known for its bright red and white fleet, is currently raising MYR2.5 billion as working capital, which includes a loan of MYR300 million from Sabah state-owned Sabah Development Bank. It is also seeking a guaranteed loan from the federal government aimed at companies hurt by COVID-19. Nikkei relates that the airline also completed the first tranche of its private placement of up to 20% of the group's total issued shares last month, raising over MYR250 million. With the outlook for air travel uncertain, AirAsia Digital -- the holding company for its growing non-airline businesses -- may spinoff within the next 3 to 5 years, Aireen Omar, the AirAsia Group president who manages it, told Nikkei in a separate interview. Aireen said the group is trying to lure new investment by bolstering core businesses, which include restaurants, food delivery and courier services, Nikkei relays. About AirAsia AirAsia Berhad provides low-cost air carrier service. The company provides services on short-haul, point-to-point domestic and international routes. AirAsia, headquartered in Malaysia, operates from hubs in Malaysia, Thailand, Indonesia, Philippines and India. As reported in the Troubled Company Reporter-Asia Pacific on July 9, 2020, auditor Ernst & Young said the carrier's ability to continue as a going concern may be in "significant doubt." In a statement to the Kuala Lumpur stock exchange, Ernst & Young said AirAsia's current liabilities already exceeded its current assets by MYR1.84 billion at the end of 2019, a year when it posted a MYR283 million net loss, Bloomberg News disclosed. That was before the coronavirus crisis, which has further hit the carrier's financial performance and cash flow. ================= S I N G A P O R E ================= HERCULES PROJECT: Court Enters Wind-Up Order -------------------------------------------- The High Court of Singapore entered an order on March 5, 2021, to wind up the operations of Hercules Project Logistics Pte Ltd. Maybank Singapore Limited filed the petition against the company. The company's liquidator is: Gary Loh Weng Fatt c/o BDO Advisory Pte Ltd 600 North Bridge Road #23-01 Parkview Square Singapore 188778 LIU EE CONTRACTORS: Court Enters Wind-Up Order ---------------------------------------------- The High Court of Singapore entered an order on March 5, 2021, to wind up the operations of Liu EE Contractors & Trading Pte Ltd. Maybank Singapore Limited filed the petition against the company. The company's liquidator is: Gary Loh Weng Fatt c/o BDO Advisory Pte Ltd 600 North Bridge Road #23-01 Parkview Square Singapore 188778 MANAS FOODS: Court Enters Wind-Up Order --------------------------------------- The High Court of Singapore entered an order on March 5, 2021, to wind up the operations of Manas Foods Pte Ltd. DBS Bank Ltd filed the petition against the company. The company's liquidator is: Mr. Ng Kian Kiat Ms. Oon Su Sun c/o RSM Corporate Advisory Pte. Ltd. 8 Wilkie Road #03-08 Wilkie Edge Singapore 228095 E-mail: ngkiankiat@RSMSingapore.sg oonsusun@RSMSingapore.sg PANDITA INDUSTRIES: Fitch Affirms Then Withdraws 'B-' IDR --------------------------------------------------------- Fitch Ratings has affirmed Pandita Industries Limited's Issuer Default Rating at 'B-'. The Outlook is Stable. Simultaneously, Fitch has chosen to withdraw the ratings on Pandita Industries for commercial reasons and the 'B-' ratings on Pandita Industries' proposed bond, as earlier plans to issue the bonds did not materialise. The affirmation reflects Fitch's view of the downstream chemical producer's privately owned status with one large shareholder, multi-layered group structure and imminent debt maturities. These negatives are mitigated by the company's strong presence and market share in south-east Asia's downstream chemical industry. The Stable Outlook reflects Fitch's expectations that Pandita Industries' operations have recovered after a 2Q20 trough amid the coronavirus pandemic, with operating performance on the mend. Fitch expects the company to duly refinance or redeem its 2021 debt maturities, either through shareholder loans or via issuance of new medium-term notes (MTN). Fitch Ratings has chosen to withdraw the ratings of Pandita Industries for commercial reasons. Fitch Ratings is withdrawing Pandita Industries' bond ratings as the bonds were cancelled. KEY RATING DRIVERS Looming Debt Maturities: Pandita Industries' 72.5% listed subsidiary, PT Tridomain Performance Materials Tbk (TPM), has USD66.5 million in MTN notes due in 2021; USD29.0 million is due 27 April, USD20.0 million 18 May and USD17.5 million 4 July. Fitch estimates total group cash at end-September 2020 was USD40 million, which was insufficient to cover the impending debt maturities in the next 12 months. However, TPM has kickstarted the process to issue new domestic MTN notes to refinance its debt and expects to receive approval by end-March 2021. It also plans to utilise a shareholders loan if the MTN process is delayed. Fitch believes there is incentive for shareholders to support TPM, as it accounts for 60% of group revenue. Complex Organisational Structure: The group's cash fungibility is uncertain due to Pandita Industries' private ownership with a single owner controlling a complex structure with multiple intermediate holding companies. The group has a history of intra-group transactions and loans. Small Scale, Niche Player: Pandita Industries' rating captures its small scale compared with global downstream chemical companies. Nevertheless, it is a market leader in south-east Asia for plasticisers and acrylamides, as well as for intermediate products, such as phthalic anhydride and 2-ethylhexanol. The company's production capacity of intermediate and downstream chemicals was 352,000 tonnes a year at end-2019 and the group's consolidated operating EBITDA was USD75 million. Recovery from Pandemic: Fitch believes Pandita Industries' performance was at its weakest in 2Q20 due to the pandemic, leading to a 20% yoy drop in EBITDA to USD61 million for 2020 on lower production volume and prices. However, operations have since improved, with 3Q20 revenue of USD280 million at about 68% of Fitch's full-year forecast. Near-term performance remains intact, with volume and prices likely to improve and EBITDA recovering to around USD80 million by end-2022 in light of tight supply and the company's capacity expansion. Rising Utilisation; Working Capital: Fitch expects working capital to increase once the pandemic ebbs. The company will operate at more than 90% utilisation and will continue to aggressively pursue market share. This could come from extending customer credit to boost sales and paying suppliers in advance to ensure uninterrupted raw material supplies and better pricing. Concurrently, Fitch expects Pandita Industries to expand its production capacity. PIL has an ESG Relevance Score of '4' for Governance Structure given the closely-held nature of the company with decision making in the hands of the promotor, with limited board independence. PIL also has an ESG Relevance Score of '4' for Financial Transparency given it is a closely-held company with less timely financial reporting than public companies with more limited disclosures. The company also has a ESG Relevance Score of '4' for its Group Structure on account of the somewhat complex group ownership structure with several intermediate holding companies. Each and all of these factors may have a negative impact on PIL's credit profile. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). DERIVATION SUMMARY The IDR of Pandita Industries can be compared with that of PT Chandra Asri Petrochemical Tbk (CAP, BB-/Stable). CAP is rated three notches higher to reflect its stronger business profile as Indonesia's largest petrochemical producer, accounting for about 35% of the country's olefin and polymer production capacity. Its market position is aided by better-integrated operations than those of domestic peers, as well as a diverse product offering and customer base. This, together with its plant being located close to key customers with pipeline connectivity to some, supports its higher selling prices and product spreads. CAP also has a stronger financial profile; Fitch expects its leverage to remain below 1.0x over the next few years. Pandita Industries can also be compared with Petkim Petrokimya Holdings A.S. (B/Stable). Pandita Industries has a smaller operating scale, but both companies are exposed to market concentration, with the bulk of Petkim's operations located in Turkey and Pandita Industries' in Indonesia. Petkim has less flexibility to increase its debt, as Fitch expects its FFO/net adjusted leverage to remain above 3.5x in the medium term. TPC Group Inc (B-/Negative) is smaller than Pandita Industries, with just one manufacturing plant. The Negative Outlook on TPC reflects heightened cash flow risk following its Port Neches Plant explosion. A number of TPC's products are used to produce synthetic rubbers and fuel additives, the demand for which has dropped due to the pandemic. Fitch believes TPC's liquidity position will be more stressed than Pandita Industries' after the pandemic, as it will use its cash inflow to reconstruct Port Neches over the next four to five years. KEY ASSUMPTIONS -- Revenue decline of 15% in 2020 on the back of lower volume and some weakening in product spreads. This will recover in 2021, with a revenue growth of 12% as production capacity resumes; -- Production capacity to remain stable at 352,000 MT in 2020 and 2021; -- Production volumes to decline to about 312,000 MT in 2020 and but revert to 336,000MT in 2021 (2019: 322,000 MT); -- Capacity utilisation rate of 89% in 2020 and 95% in 20210 (2019: 92%); -- EBITDA to decline to increase to USD61 million in 2020 but improve to USD72 million in 2021 (2019: USD75 million); -- Dividends to remain modest in the next three years; -- No improvements in the working capital cycle given the pandemic in 2020 and a gradual recovery thereafter. RATING SENSITIVITIES Rating sensitivities are no longer relevant as the ratings have been withdrawn 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 Stretched Liquidity Position: The company has medium term notes issued by its 72.5% owned and listed subsidiary, TDP, with USD66.5 million and USD30.5 million due in 2021 and 2022, respectively. Fitch estimates that cash available as at end-September 2020 was USD40 million and that Pandita Industries will need to rely on a shareholder loan or a timely issuance of new MTN to redeem the imminent maturities. ESG CONSIDERATIONS Pandita Industries Limited: Group Structure: 4, Governance Structure: 4 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. SEAH WEE: Creditors' First Meeting Set for March 19 --------------------------------------------------- Creditors of Seah Wee Jye Pte Ltd will hold their first meeting on March 19, 2021, at 11:00 a.m., via video-conference and/or tele-conference. At the meeting, Muk Siew Peng, the company's provisional liquidator, will: a. present a statement on the Company's affairs showing the assets and its estimated realisable value, together with a list of creditors and the estimated amount of the claims; b. confirm the appointment of the Liquidators; c. appoint a committee of inspection; and d. any other resolutions. Keoy Soo Earn and Ms. Muk Siew Peng of Deloitte & Touche Financial Advisory Services Pte. Ltd. were appointed as Joint & Several Provisional Liquidators of the company on March 5, 2021. The Liquidators can be reached at: Keoy Soo Earn Ms. Muk Siew Peng Deloitte & Touche Financial Advisory Services Pte. Ltd. 6 Shenton Way OUE Downtown 2 #33-00 Singapore 068809 E-mail: skeoy@deloitte.com spmuk@deloitte.com ********* 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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