/raid1/www/Hosts/bankrupt/TCRAP_Public/210312.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, March 12, 2021, Vol. 24, No. 46
Headlines
A U S T R A L I A
CITY STEEL: First Creditors' Meeting Set for March 23
GREENSILL CAPITAL: First Creditors' Meeting Set for March 19
GREENSILL CAPITAL: Up to 7,000 Jobs at Risk Following Insolvency
RESIMAC TRIOMPHE 2021-1: S&P Assigns B (sf) Rating to Cl. F Notes
THIESS GROUP: S&P Lowers ICR to BB+ on Parent Downgrade
WEALTH MINING: Second Creditors' Meeting Set for March 19
C H I N A
CHINA FORTUNE: Defaults on Another US$1.3 Billion in Debt
IDEANOMICS INC: Signs Investment Deal with Energica
REDCO PROPERTIES: Fitch Raises LT Foreign-Currency IDR to B+
H O N G K O N G
YANLORD LAND: Moody's Affirms Ba2 CFR on Strong Revenue Growth
I N D I A
BALAJI COTTON: CRISIL Assigns B+ Rating to INR10cr Cash Loan
CAPCO WATER: CRISIL Lowers Rating on INR9cr Loans to D
CLASSIC INDUSTRIES: CRISIL Keeps B+ Ratings in Not Cooperating
CMJ BREWERIES: CRISIL Keeps D Debt Ratings in Not Cooperating
CRANE BETEL: CRISIL Lowers Rating on INR10cr Loan to B
EGIANT AGROCONNECT: CRISIL Moves B+ Rating from Not Cooperating
EKTA ENTERPRISES: CRISIL Keeps B+ Debt Ratings in Not Cooperating
EUROLIFE HEALTHCARE: CRISIL Lowers Rating on INR31.6cr Loan to D
G.A.V. AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
GINGER INFRA: CRISIL Moves D Debt Rating to Not Cooperating
GULF PETROCHEM: CRISIL Lowers Rating on INR98cr Term Loan to D
HIGHLAND PRODUCE: CRISIL Withdraws B Rating on INR6.91cr Cash Loan
HOTEL SHUBH: CRISIL Moves D Debt Rating to Not Cooperating
IRAA CLOTHING: CRISIL Lowers Rating on INR11cr LOC to D
LAKSHMIGRAHA WORLDWIDE: CRISIL Cuts Rating on INR3.5cr Loan to B-
MANPASAND BEVERAGES: Insolvency Resolution Process Case Summary
NEW PASHCHIM: CRISIL Keeps B Debt Ratings in Not Cooperating
NMS ENTERPRISES: CRISIL Lowers Rating on INR4.5cr Cash Loan to D
PARKER TILES: CRISIL Moves D Debt Ratings to Not Cooperating
PREFECT HYDRAULICS: CRISIL Withdraws B+ Rating on INR10cr Loan
R. S. CONSTRUCTION: CRISIL Withdraws B Rating on INR5cr Loans
RAGHAV COTSPIN: CRISIL Withdraws D Rating on INR30cr Loans
RAMKRISHNA COTSPIN: CRISIL Keeps B+ Ratings in Not Cooperating
ROBUST HOTELS: CRISIL Lowers Rating on INR123cr Loan to D
S K MASALA: CRISIL Lowers Rating on INR5.6cr Cash Loan to D
SARE REALTY: Insolvency Resolution Process Case Summary
SHANTDEEP METALS: CRISIL Moves D Debt Ratings to Not Cooperating
SIDDHIVINAYAK DISTRIBUTORS: CRISIL Withdraws B+ Debt Ratings
SREESHA EDUCATIONAL: CRISIL Reaffirms B- Rating on INR15cr Loan
SURYA EXIM: CRISIL Moves D Debt Ratings to Not Cooperating
THAKUR VS: CRISIL Reaffirms B+ Rating on INR11cr Loans
USHA EDUCATIONAL: CRISIL Reaffirms B- Rating on INR20cr Loan
VATIKA TRACOM: CRISIL Withdraws B Rating on INR15cr Cash Debt
I N D O N E S I A
TOWER BERSAMA: S&P Withdraws 'BB+' Issuer Credit Rating
M A L A Y S I A
AIRASIA GROUP: Extends US$40MM Assistance to Philippines AirAsia
N E W Z E A L A N D
FIRST INSURANCE: Fitch Affirms BB+ Insurer Fin'l. Strength Rating
S I N G A P O R E
EAGLE HOSPITALITY TRUST: Has $470M Floor Bid From Monarch
EAGLE HOSPITALITY: Bank of America Seeks Case Dismissal
GLOBAL SPORTS: High Court Approves Judicial Management Application
INTER-PACIFIC PETROLEUM: Court to Hear Wind-Up Petition March 25
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A U S T R A L I A
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CITY STEEL: First Creditors' Meeting Set for March 23
-----------------------------------------------------
A first meeting of the creditors in the proceedings of City Steel
Pty. Ltd will be held on March 23, 2021, at 11:00 a.m. via virtual
facilities.
Shumit Banerjee of Westburn Advisory was appointed as administrator
of City Steel on March 11, 2021.
GREENSILL CAPITAL: First Creditors' Meeting Set for March 19
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Greensill
Capital Pty Limited will be held on March 19, 2021, at 11:30 a.m.
via Webinar/Teleconference only.
Matthew James Byrnes, Philip Campbell-Wilson and Michael McCann of
Grant Thornton were appointed as administrators of Greensill
Capital on March 9, 2021.
GREENSILL CAPITAL: Up to 7,000 Jobs at Risk Following Insolvency
----------------------------------------------------------------
SkyNews.com reports that up to 7,000 Australian manufacturing jobs
are at stake after financing firm Greensill filed for insolvency in
the United Kingdom and Australia.
According to SkyNews.com, Greensill provides up to $6.5 billion in
financing to British billionaire Sanjeev Gupta's GFG Alliance -
$150 million of which applies to Australian operations including
Whyalla Steelworks in South Australia, and a coal mine in NSW.
A creditors meeting will take place in eight business days to
determine the future of GFG Alliance as it desperately searches for
another funder, the report says.
Greensill Capital is an independent financial services firm and
principal investor group. The Company offers structures trade
finance, working capital optimization, specialty financing and
contract monetization.
RESIMAC TRIOMPHE 2021-1: S&P Assigns B (sf) Rating to Cl. F Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its ratings to nine classes of prime
residential mortgage-backed securities (RMBS) issued by Perpetual
Trustee Co. Ltd. as trustee for RESIMAC Triomphe Trust - RESIMAC
Premier Series 2021-1. RESIMAC Triomphe Trust - RESIMAC Premier
Series 2021-1 is a securitization of prime residential mortgages
originated by RESIMAC Ltd. (RESIMAC).
The ratings assigned to the prime fixed- and floating-rate RMBS
reflect the following factors.
The credit risk of the underlying collateral portfolio and the
credit support provided to each class of notes are commensurate
with the ratings assigned. Subordination and lenders' mortgage
insurance (LMI) cover for the rated notes provide credit support.
The credit support provided to the rated notes is sufficient to
cover the assumed losses at the applicable rating stress. S&P's
assessment of credit risk takes into account RESIMAC Ltd.'s
underwriting standards and approval process, which are consistent
with industrywide practices; the strong servicing quality of
RESIMAC; and the support provided by the LMI policies on 19.2% of
the loans in the portfolio.
The rated notes can meet timely payment of interest--excluding
residual class E and class F note interest--and ultimate payment of
principal under the rating stresses.
Key rating factors are the level of subordination provided, the LMI
cover, the cross-currency swaps, the liquidity facility, the
principal draw function, and the provision of an extraordinary
expense reserve. S&P's analysis is on the basis that the notes are
fully redeemed by their legal final maturity date and it does not
assume the notes are called at or beyond the call date. S&P Global
Ratings' rating addresses repayment of class A1 note principal by
the legal final maturity date. It does not address whether
principal payments to the class A1 notes are made in accordance
with the class A1 amortization schedule.
S&P Said, "Our ratings also consider the counterparty exposure to
National Australia Bank Ltd. as cross-currency swap provider and
liquidity facility provider and Westpac Banking Corp. as bank
account provider. A currency swap is provided to hedge the
Australian dollar receipts from the underlying assets and the U.S.
dollar payments on the class A1 notes. The transaction documents
for the swaps and facilities include downgrade language consistent
with S&P Global Ratings' counterparty criteria. Interest-rate swaps
might be provided (subject to RESIMAC's hedging policy) to hedge
the fixed-rate receipts from the mortgage loans and the
floating-rate obligations on the notes.
"We have also factored into our ratings the legal structure of the
trust, which is established as a special-purpose entity and meets
our criteria for insolvency remoteness."
Loss of income for borrowers in the coming months because of
COVID-19 might put upward pressure on mortgage arrears over the
longer term. S&P updated its outlook assumptions for Australian
RMBS in response to changing macroeconomic conditions as a result
of the COVID-19 outbreak. The collateral pool at close for this
transaction will not include any loans where the borrower has
applied for a COVID-19 hardship payment arrangement.
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by
year-end or later. S&P said, "We use these assumptions about
vaccine timing in assessing the economic and credit implications
associated with the pandemic. As the situation evolves, we will
update our assumptions and estimates accordingly."
Ratings Assigned
RESIMAC Triomphe Trust - RESIMAC Premier Series 2021-1
Class A1, US$360.000 million: AAA (sf)
Class A2, A$720.000 million: AAA (sf)
Class A3, A$180.000 million: AAA (sf)
Class AB, A$79.500 million: AAA (sf)
Class B, A$25.500 million: AA (sf)
Class C, A$21.000 million: A (sf)
Class D, A$10.500 million: BBB (sf)
Class E, A$6.000 million: BB (sf)
Class F, A$3.750 million: B (sf)
Class G, A$3.750 million: Not rated
THIESS GROUP: S&P Lowers ICR to BB+ on Parent Downgrade
-------------------------------------------------------
On March 10, 2021, S&P Global Ratings lowered the long-term issuer
credit rating on Australia-based Thiess Group Holdings Pty Ltd.
(Thiess) to 'BB+' from 'BBB-' to reflect the impact of the ACS
downgrade on Thiess' credit quality. S&P also removed the rating
from CreditWatch, where it had placed it with negative implications
on Feb. 23, 2021. Thiess' stand-alone credit profile remains
unchanged at 'bb-'.
S&P said, "The stable outlook reflects our expectation that Thiess
will maintain its leading market position in mining services while
continuing to grow its contract book and earnings in the next two
years. The stable outlook also reflects our expectation that the
company will maintain its strategic importance to the ACS Group."
The ratings on Thiess reflect the company's strategic importance to
CIMIC Group Ltd. (BBB-/Stable/A-3) and its established market
position as one of the world's largest providers of contract mining
services.In our opinion, Thiess' track record and scale of
operations, global geographic diversity, good cash flow generation,
and leading market share in Australia also support its credit
quality.
Thiess' material exposure to coal (particularly thermal coal) mines
in the third and fourth quartile of the cash cost curve and growing
political and social pressure on the use of coal (particularly
thermal coal) temper these strengths. The capital-intensive nature
of the group's activities; exposure to higher risk jurisdictions;
limited contract and commodity diversity; and exposure to the
highly competitive, cyclical, and fragmented contract mining
services industry are added constraints.
Thiess is a newly formed joint venture (JV) between CIMIC and
Elliott Investment Management, L.P. (Elliott). CIMIC and Elliott
have joint control and equal representation on the Thiess board.
The majority of each shareholder's interest in Thiess is held via
preference shares that are expected to pay an annual dividend of
A$360 million (equivalent to a dividend yield of 15.65%). S&P said,
"We view the preference shares as debt-like obligations and the
dividends as akin to interest expense. We note that Thiess is under
no legal obligation to make payments under the preference shares.
The preference shares are subordinated, perpetual, and nonpayment
would not cause a default."
Elliott holds a put option over its stake in Thiess. The put option
enables Elliott to put its shareholding in Thiess back to CIMIC
during the option period of four to six years from transaction
close. The put option exercise price is set at Elliott's purchase
price adjusted for any downward movement in the value of the ASX200
Total Return Index. Accordingly, S&P views the substance of the
sell down to Elliott as a financing transaction for CIMIC, with
CIMIC retaining downside exposure in the event of a fall in the
value of Thiess.
Thiess' 'bb-' stand-alone credit profile encapsulates its material
exposure to thermal coal mining (43% of revenues for the year ended
Dec. 31, 2020) and metallurgical coal (39%).Spot prices for both
coking and thermal coal have been recovering from 2020 lows.
However, environmental concerns regarding the use of coal
(particularly thermal coal) remain an ongoing structural headwind
that is likely to impact counterparty risk and demand for Thiess'
coal mining services in the medium to long term. In addition,
diplomatic tensions between Australia and China have disrupted the
Australian coal market, with producers forced to pursue alternate
markets. That said, we expect China's increased demand for
Indonesian coal to support demand for Thiess' services.
S&P said, "We expect Thiess to seek to diversify its commodity
exposure to other minerals and metals, including iron ore and gold,
over time. The company's largest contract exposure of its 25
contracts is to Jellinbah Resources Pty Ltd.'s Lake Vermont mine.
Thiess' top 10 contracts account for 63% of 2020 revenues, which we
view as adequately diversified. Thiess generates about 62% of its
revenue in Australia as of Dec. 31, 2020. We view Thiess' other
jurisdictional exposures, including Indonesia, Botswana, Mongolia,
and Chile, to be higher risk, requiring careful management.
"We expect Thiess' ratio of adjusted debt to EBITDA to be in the
mid-to-high 3x range (including all preference shares as debt) in
the next two years. In our view, the company's capital expenditure
(capex) is likely to be between A$400 million and A$500 million in
2021 and 2022. Thiess targets a ratio of net debt to EBITDA of less
than 2.0x (excluding preference shares as debt). We do not expect
the company to use significant supply chain/traditional factoring
facilities going forward.
"We view Elliott as a financial sponsor for this JV. This reflects
our assessment that we don't expect Elliott to be a long-term
investor in the JV; it is expected to protect its financial returns
over the course of their investment; and Elliott does not have a
material strategic incentive to support the JV in times of stress.
We view Elliott's option to exit its 50% investment in the Thiess
JV between end of year four and year six to be consistent with our
view of a short to intermediate holding period for a financial
sponsor owned company. Further, we consider that the preference
share funding structure ensures a large annual cash flow drain from
the business, which constrains the JV's ability to fund growth
opportunities without additional debt.
"The stable outlook reflects our expectation that Thiess will
maintain its leading market position in mining services and grow
its contract book and earnings over the next two years. This should
enable Thiess to maintain adjusted debt to EBITDA (including
preference shares as debt) in the mid to high 3.0x range.
"The stable outlook also reflects our expectation that Thiess will
remain a strategically important subsidiary of CIMIC and the
broader ACS Group. As a result, the rating on Thiess will be
heavily influenced by any rating changes at ACS.
"We would downgrade Thiess if there is any downgrade of the ACS
group.
"Although less likely, we could also lower the rating if there is a
material deterioration in Thiess' stand-alone credit profile. This
could occur if we expect the company to sustain an adjusted
debt-to-EBITDA ratio above 5.0x. This would likely be precipitated
by a sustained deterioration in the group's market position and
earnings arising from multiple contract losses or counterparty
defaults."
Similarly, an upgrade would most likely be reliant on an upgrade of
the ACS group.
WEALTH MINING: Second Creditors' Meeting Set for March 19
---------------------------------------------------------
A second meeting of creditors in the proceedings of Wealth Mining
Pty Ltd and Bluff PCI Management Pty Ltd has been set for March 19,
2021, at 10:00 a.m. via teleconference facilities.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 18, 2021, at 4:00 p.m.
Tim Michael, Will Colwell, and Peter Gothard of KPMG were appointed
as administrators of Wealth Mining on Nov. 23, 2020.
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C H I N A
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CHINA FORTUNE: Defaults on Another US$1.3 Billion in Debt
---------------------------------------------------------
Caixin Global reports that China Fortune Land Development Co. Ltd.
again defaulted on billions of yuan in debt as it struggled to
scrape together enough cash to meet its commitments amid a
tightening regulatory environment.
Caixin relates that China Fortune said that it and its subsidiaries
have recently failed to repay CNY8.38 billion ($1.3 billion) in
principal and interest on a mishmash of new debt, including bank
loans, trust loans, bonds and other debt financing tools, according
to a March 10 filing to the Shanghai Stock Exchange.
Caxin says the latest defaults add to the property developer’s
already large pool of debt. As of March 10, China Fortune has
defaulted on a total of CNY19.42 billion in principal and interest,
and it is negotiating with related financial institutions to
possibly postpone repayment, it said in the filing.
China Fortune Land Development Co., Ltd. offers real estate
development and investment services. The Company develops
industrial parks and industrial town projects. China Fortune Land
Development also provides related industrial solution services.
IDEANOMICS INC: Signs Investment Deal with Energica
---------------------------------------------------
Energica Motor Company S.p.A. has signed an investment agreement
with Ideanomics, Inc., a company incorporated under the law of
Nevada, listed on the Nasdaq, for the subscription of Euro
10,909,091 equal to 64.17% of the share capital increase, with the
exclusion of the option right pursuant to article 2441, paragraph
5, of the civ. code, approved by the Board of Directors on March 2,
2021 against the issue of no. 6,128,703 Energica ordinary shares.
Upon completion of the subscription of the capital increase, the
investor will hold a stake of at least 20% of the Company's share
capital. The subscription price was determined at Euro 1.78 per
share, as a result of the weighted average of the official price of
Energica shares recorded in the six months prior to the execution
of the transaction.
The settlement of the transaction will take place in the next few
days and will be communicated in accordance with the law.
"We are proud to be part of this unified platform of which we fully
share the vision. The creation of a network of innovative companies
can only accelerate the growth and adoption of new technologies
such as sustainable mobility that sees us among the leaders. We are
confident to make our contribution derived from decades of
experience in the field of high-performing electric motorcycles,"
Energica CEO Livia Cevolini said.
"The investment will give further strength to the Energica growth
already underway in recent years thanks to the innovations brought
to our products within the racing experience in MotoE," the CEO
further said.
"Energica has combined zero emission EV technology with the
pedigree of high-performance mobility synonymous with Italy's Motor
Valley to create a range of exceptional products for the
high-performance motorcycle market. To support its products, it has
developed proprietary EV battery and DC fast-charging in-house that
has applications and synergies with our broader interests in the
global EV sector. We were very impressed with Livia and her team
throughout our discussions, and we are very pleased to support them
through their next phase of growth," Ideanomics CEO Alf Poor said.
The agreement provides for a 90-day lock-up for the investor and a
right of first refusal with respect to any further injections of
risk capital into the Company in order to limit the dilution of the
investors. In addition, an observer appointed by the investor may
attend the meeting of the board of directors. If the assembly
approves the proposal to introduce the right to convert ordinary
shares into multiple voting shares, the investor will not proceed
with the request for registration in the appropriate list.
About Ideanomics
Ideanomics is a global company focused on the convergence of
financial services and industries experiencing technological
disruption. Its Mobile Energy Global (MEG) division is a service
provider which facilitates the adoption of electric vehicles by
commercial fleet operators through offering vehicle procurement,
finance and leasing, and energy management solutions under its
innovative sales to financing to charging (S2F2C) business model.
Ideanomics Capital is focused on disruptive fintech solutions and
services across the financial services industry. Together, MEG and
Ideanomics Capital provide their global customers and partners with
leading technologies and services designed to improve transparency,
efficiency, and accountability, and its shareholders with the
opportunity to participate in high-potential, growth industries.
The company is headquartered in New York, NY, with offices in
Beijing, Hangzhou, and Qingdao, and operations in the U.S., China,
Ukraine, and Malaysia.
Ideanomics reported a net loss of $96.83 million for the year ended
Dec. 31, 2019, compared to a net loss of $28.42 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$138.46 million in total assets, $49.33 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, $7.37 million in redeemable non-controlling interest, and
$80.50 million in total equity.
B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 16, 2020, citing that the Company incurred recurring
losses from operations, has net current liabilities and an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
REDCO PROPERTIES: Fitch Raises LT Foreign-Currency IDR to B+
------------------------------------------------------------
Fitch Ratings has upgraded China-based Redco Properties Group Ltd's
Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B+',
from 'B'. The Outlook is Stable. Fitch has also upgraded Redco's
senior unsecured ratings 'B+', from 'B', with a Recovery Rating of
'RR4'.
The upgrade reflects Redco's expanded attributable contracted
sales, which rose by 49% to CNY21.3 billion in 2020, and adequate
landbank that can sustain attributable contracted sales growth in
2021 that is closer to that of 'B+' rated peers. Redco also
maintained its geographical diversification, with 126 projects in
36 cities. Furthermore, Fitch forecasts leverage, measured by net
debt/adjusted inventory, including proportional consolidation to
joint ventures and associates, to remain below 35%.
Fitch believes Redco can maintain a low leverage ratio as it
continues to build a sufficient land bank size to sustain rising
contracted sales. Redco has saleable resources for around three to
four years of development.
KEY RATING DRIVERS
Continued Strong Growth: Redco continued to build its attributable
sales scale to CNY21.3 billion in 2020, from CNY14.5 billion in
2019. Fitch expects attributable sales of at least CNY26.0 billion
in 2021 and CNY30.0 billion in 2022, closer to that of some 'B+'
category peers. Redco relies on a fast-churn model that entails
swift sales turnover and fast sales growth.
Total contracted sales, including joint ventures, rose by 49% to
CNY41.0 billion in 2020 and by more than 25% in 2019. Attributable
contracted sales accounted for slightly more than half of 2020's
contracted sales, similarly to 2019. Redco maintained its sales
efficiency in 2020, with attributable sales/total debt, including
joint-venture debt, at 1.1x and attributable sales/adjusted
inventory at 0.7x.
Leverage to Stay Low: Fitch expects Redco to continue to acquire
land in order to sustain rising contracted sales to develop a
sustainable market presence, without significant deterioration in
leverage. Leverage rose to 32% in 2020, from 15% in 2019, on higher
land acquisitions, but should remain below 35% in 2021, the level
above which Fitch would consider negative rating action. Redco
spent around 87% of sales receipts for land acquisition in 2020.
Land Bank Supports Growth: Fitch estimates Redco's land bank is
sufficient for around three years of attributable sales. Redco
would need to continue to secure low-cost land to sustain a healthy
land-bank life if it were to reach its higher contracted sales
target. The company boosted its land bank to around 20 million
square metres (sq m) in 2020, from 15 million sq m in 2019 and 10
million sq m in 2018, with the cities of Tianjin, Nanchang, Hefei,
Zhejiang and Jinan accounting for the majority of gross floor
area.
Weakened Profit Margin: Fitch estimates that Redco's EBITDA margin,
excluding capital interest in costs of goods sold, fell to 22% in
2020, from 30% in 2019, as a greater proportion of gross floor area
was delivered for low-margin projects; the average selling price
dropped to CNY8,615, from CNY10,584 in 2019. Fitch expects the
property development EBITDA margin to remain at around 21%-22%, as
Redco delivers an increased proportion of lower-margin fast-churn
projects, while the average selling price is likely to remain
stable.
Redco mainly acquires land through M&A, allowing it to keep the
average cost of unsold land bank at around CNY1,949/sq m.
High Non-Controlling Interests: Redco's non-controlling interests
(NCI) as a percentage of total equity were at 46% in 2019 and Fitch
expects NCIs to rise to 50%-55%, which is above the 'B+' peer
average. This reflects Redco's reliance on cash from contracted
sales and capital contributions from non-controlling shareholders,
which are mainly developers, as a source of financing to expand
scale. This reduces the need for debt funding, but creates
potential cash leakage and reduces financial flexibility. However,
this is partially mitigated by Redco's lower leverage compared with
peers.
DERIVATION SUMMARY
Redco has the lowest attributable contracted sales among 'B+'
peers, at CNY21.3 billion in 2020. This was lower than that of
Fantasia Holdings Group Co., Limited (B+/Stable) and Hong Yang
Group Company Limited (B+/Stable). However, Redco's leverage was
lower than that of both companies. Redco has a similar land-bank
life to Fantasia, while Hong Yang has a longer land bank life.
Redco's EBITDA margin of 22% is lower than that of Fantasia, at
25%. Redco also has higher NCIs/total equity than both peers.
Companies rated one notch above Redco, at 'BB-', generally have
proven sustainable business models, with attributable sales of over
CNY60 billion. Redco's has similar leverage to 'BB-' peers of below
40%, but 'BB-' homebuilders have a stronger nationwide presence and
better regional project diversification.
Compared with 'B' peers, such as Modern Land (China) Co., Limited
(B/Stable) and Jiayuan International Group Limited (B/Positive),
Redco has lower leverage and larger scale than Modern Land, but
similar scale to Jiayuan. Jiayuan has stronger profitability, while
Redco has higher profitability than Modern Land. All three
companies have land bank life of around three to four years.
Jiayuan's ratings are constrained by the presence of large
related-party transactions and tight liquidity.
KEY ASSUMPTIONS
-- Total contracted sales, including joint ventures, reaching
CNY51 billion in 2021 and CNY59 billion in 2022. Attributable
sales at 52% of total contracted sales.
-- Gross profit margin from property development maintained at
between 25%-26% during 2020-2023.
-- Land premium accounting for around 87% of annual sales
receipts in 2020 and about 55%-60% in 2021-2023 and average
land acquisition costs increasing at 3% annually from 2021.
-- Contracted sales average selling price falling by 19% in 2020
and no change in 2021-2023.
-- Construction costs accounting for around 40%-45% of annual
sales receipts in 2020-2023.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that Redco would be liquidated
in a bankruptcy rather than reorganised as a going-concern
because it is an asset-trading company.
-- Fitch assumes a 10% administrative claim.
Liquidation Approach
-- The liquidation estimate reflects Fitch's view of the value of
balance-sheet assets that can be realised in a sale or
liquidation process conducted during a bankruptcy or
insolvency proceeding and distributed to creditors.
-- Cash balance is adjusted such that only cash in excess of the
higher of accounts payable and three months of contracted
sales is factored in.
-- Advance rate of 70% is applied to adjusted inventory, as Redco
has an EBITDA margin of above 20%.
-- Property, plant and equipment advance rate at 60%.
-- Investment property advance rate at 60%.
-- 70% advance rate applied to accounts receivable.
-- Advance rate of 100% applied to restricted cash, which is
mainly guarantee deposits for construction and buyers'
mortgages for pre-sold properties.
Fitch estimates the recovery rate for the offshore senior unsecured
debt to be within the 'RR4' Recovery Rating range, based on Fitch's
calculation of adjusted liquidation value after administrative
claims. The allocation of value in the liability waterfall results
in a recovery corresponding to 'RR1' for the offshore senior notes,
but the recovery is capped at 'RR4', according to Fitch's
Country-Specific Treatment of Recovery Ratings Criteria. This is
because China falls into Group D of creditor friendliness, and the
Recovery Ratings on instruments of issuers with assets in this
group are subject to a cap of 'RR4'.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- No positive rating action is envisaged until attributable
sales scale and geographic diversification increase to be in
line with 'BB-' peers.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Net debt/adjusted inventory above 35% for a sustained period;
-- EBITDA margin, excluding capitalised interest, below 20% for a
sustained period;
-- Continued decrease in attributable contracted sales.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Redco has total cash of CNY14.4 billion,
including restricted cash of CNY4.3 billion, at end-June 2020,
compared with short-term debt of CNY9.8 billion. Available cash of
CNY10.1 billion was also sufficient to cover short-term debt of
CNY9.8 billion.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
=================
H O N G K O N G
=================
YANLORD LAND: Moody's Affirms Ba2 CFR on Strong Revenue Growth
--------------------------------------------------------------
Moody's Investors Service has affirmed Yanlord Land Group Limited's
Ba2 corporate family rating and the Ba3 backed senior unsecured
rating on the bonds issued by Yanlord Land (HK) Co., Limited, a
wholly-owned subsidiary of Yanlord, and guaranteed by Yanlord.
At the same time, Moody's has changed the outlook to stable from
negative.
"The change in outlook to stable from negative reflects our
expectation that Yanlord's credit metrics will continue to improve
over the next 12-18 months, supported by its strong revenue growth
and controlled debt increase," says Cedric Lai, a Moody's Vice
President and Senior Analyst.
Specifically, Yanlord's revenue growth will be driven by its strong
sales execution over the past two years. Its total contracted sales
grew 41% year over year to RMB78.5 billion in the full year of
2020, despite the negative impact from the coronavirus outbreak.
This comes after the company's contracted sales grew 103% year over
year to RMB55.5 billion for the full year in 2019.
"At the same time, the rating affirmation reflects our expectation
that the company will maintain its financial discipline and good
liquidity position over the next 12-18 months," adds Lai.
RATINGS RATIONALE
Yanlord's Ba2 CFR reflects the company's established brand name and
high-quality products, which provide it with strong pricing power.
In addition, the company's sales strategy, aimed at catering to a
broader spectrum of market demand, helps to reduce the negative
impact from regulatory measures that constrain property demand. The
rating also takes into consideration for Yanlord's good liquidity
profile and strong access to onshore and offshore funding.
On the other hand, the rating is constrained by the company's
geographic concentration, moderate debt leverage, and material
exposure to joint venture (JV) businesses, which hinders the
transparency of its credit metrics. However, the latter is
mitigated by the company's reputable JV partners.
Moody's expects Yanlord's debt leverage -- as measured by
revenue/adjusted debt -- will continue improve to 65%-72% over the
next 12-18 months from 49% in 2020 and 30% in 2019. This is driven
by Moody's expectation of Yanlord's strong revenue recognition on
the back of its strong contracted sales growth over the past two
years, as well as its disciplined approach to pursuing growth and
controlling debt increase. Specifically, the company managed to
reduce its total adjusted debt by 22% year on year to RMB48.7
billion as of the end of 2020.
Meanwhile, Moody's expects Yanlord's EBIT/interest coverage will
improve to 3.5x-4.0x over the same period from 3.0x in 2020,
reflecting the effect of revenue growth and declining interest
costs, which will more than offset Moody's expected decline of
gross profit margin. The company's gross profit margin will likely
weaken to around 28% in the next 12-18 months from 36% in 2020, due
to rising land costs and regulatory measures on property selling
prices in its home base.
In addition, the company's adjusted rental income/interest coverage
should improve to 35%-40% in 2021-2022 from 23% in 2020, supported
by rental income growth on the back of recovery for its operations
in its investment properties portfolio in Singapore.
Moody's believes Yanlord's sizable salable resources, strong sales
execution and solid housing demand in the company's core markets
will enable its contracted sales to grow to RMB80 billion--RMB85
billion annually in 2021 and 2022.
The company's Ba3 senior unsecured debt rating is one notch lower
than the CFR, due to structural subordination risk. This risk
reflects the fact that the majority of claims are at the operating
subsidiaries and have priority over Yanlord's senior unsecured
claims in a bankruptcy scenario. In addition, the holding company
lacks significant mitigating factors for structural subordination.
As a result, the likely recovery rate for claims at the holding
company will be lower.
Yanlord's liquidity position is good. The company's cash balance of
RMB17.3 billion covered 2.1x of its short-term debt as of the end
of 2020. Moody's expects the company's cash holdings, together with
operating cash inflow, will be able to cover its maturing
short-term debt, unpaid committed land purchases and dividend
payments over the next 12-18 months.
In terms of environmental, social and governance (ESG) factors,
Moody's has taken into account the concentrated ownership by
Yanlord's largest shareholder and chairman, Mr. Zhong Sheng Jian,
who held approximately 70.457%, direct and indirect, stake in the
company as of the end of December 2020. Moody's has also considered
(1) the presence of five independent non-executive directors on
Yanlord's nine-member board of directors, who also chair the audit,
nominating, remuneration as well as risk management and
sustainability committees; (2) the company's moderate 18%-25%
dividend payout ratio over the past three years; and (3) the
presence of other internal governance structures and standards, as
required under the Corporate Governance Code for companies listed
on the Singapore Stock Exchange.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Yanlord's CFR if it successfully diversifies
the operations geographically and executes its sales plan through
the cycle, while maintaining strong financial and liquidity
profiles.
Specifically, Moody's could upgrade the rating if Yanlord's (1)
revenue/adjusted debt exceeds 85%; and (2) EBIT/interest coverage
is above 4.5x-5.0x, both on a sustained basis.
On the other hand, Moody's could downgrade the rating if (1)
Yanlord's contracted sales growth slows or (2) it pursues
aggressive expansion, such that its credit metrics weaken, with
EBIT/interest coverage falls below 3.25x-3.5x and revenue/adjusted
debt reduces below 60%-65% on a sustained basis; or (3) its
liquidity weakens, as reflected by cash/short-term debt declining
below 125%.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Yanlord Land Group Limited is a real estate developer in China and
Singapore. The company operates across a number of major Chinese
cities, including Shanghai, Nanjing, Suzhou, Hangzhou, Nantong,
Taicang, Yancheng, Shenzhen, Zhuhai, Zhongshan, Tianjin, Tangshan,
Shenyang, Jinan, Haikou, Sanya, Wuhan and Chengdu. Yanlord also has
two residential developments in Singapore.
Yanlord Land Group Limited is listed on the Singapore Stock
Exchange in 2006. The company had a total land bank of 10.6 million
square meters by gross floor area as of December 31, 2020.
=========
I N D I A
=========
BALAJI COTTON: CRISIL Assigns B+ Rating to INR10cr Cash Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable’ ratings to the
long term bank loan facilities of Sri Balaji Cotton Industries -
Husnabad (SBCI).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B+/Stable (Assigned)
The rating reflects SBCI's susceptibility to volatility in cotton
prices and to regulatory framework, modest scale of operation and
working capital intensive operations. These weaknesses are
partially offset by its extensive industry experience of the
promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to volatility in cotton prices and to regulatory
framework: Cotton being an agricultural commodity, its availability
depends on monsoon. Moreover, government interventions and
fluctuations in global cotton output have resulted in sharp
fluctuations in cotton prices. Any abrupt change in regulation can
distort market prices and affect the profitability of players in
the cotton value chain, including ginners.
* Modest scale of operation: SBCIs business profile is constrained
by its scale of operations in the intensely competitive
Textile-Ginning industry. SBCIs scale of operations will continue
limit its operating flexibility
* Working capital intensive operations: Gross current assets are
expected at 151 days at fiscal 21.It's large working capital
requirements arise from its high debtor reflected as in expected
debtor days of 85 days in fiscal 21. It is required to extend long
credit period. Furthermore, due to its business need, it hold large
work in process & inventory.
Strength
* Extensive industry experience of the promoters: The promoters
have an experience of over 10 years in Textile-Ginning industry.
This has given them an understanding of the dynamics of the market,
and enabled them to establish relationships with suppliers and
customers.
Liquidity: Stretched
Cash accruals are expected to be around INR0.29-0.76 crore each
year which are tightly matching against term debt obligations of
INR0.22-0.33 crores over the next two years. However, Bank limit
utilisation is moderate at 41% for the past twelve months ending
December 2020. Current ratio is expected to be healthy at 2.95
times in fiscal 21.
Outlook: Stable
CRISIL Rating believes SBCI will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity factors
Upward factors
* Improvement in scale of operations and sustenance in operating
margins at 3-3.5% range, leading to higher net cash accruals
* Improvement in working capital cycle
Downward factors
* Decline in net cash accruals below INR0.2 crores due to decline
in revenue
* Substantial increase in working capital requirement weakening the
liquidity and financial profile.
SBCI was establish in 2010, it is located in Siddipet, Telangana.
SBCI is owned & managed by Mr. D Malla Reddy and Mr. K Ravinder
Reddy and six other partners. SBCI is engaged in cotton ginning and
pressing business.
CAPCO WATER: CRISIL Lowers Rating on INR9cr Loans to D
------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
Capco Water Solutions Private Limited (CWSPL) to 'CRISIL D/CRISIL
D' from 'CRISIL B+/Stable/CRISIL A4’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 4 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The ratings downgrade reflects the overdue in the cash credit
account beyond 30 days for December 2020 due to cash flow
mismatches.
CWSPL has a weak financial risk profile and the extensive
experience of its promoters in the water solutions business.
Analytical Approach
Unsecured loans have been treated as debt.
Key Rating Drivers & Detailed Description
Weaknesses:
* Delay in servicing of debt: CWSPL has delayed servicing its
interest obligation due to a stretched liquidity, which resulted
from weak cash flow.
* Subdued debt protection metrics: Debt protection metrics were
average, reflected in interest coverage of 1.90 times and net cash
accruals to total debt of 0.27 times in fiscal 2019. It is expected
to be on similar lines on account of moderate profitability and
higher reliance on debt for working capital management.
Strength:
* Extensive experience of the proprietor in the chemical industry:
Over three decades of experience in the chemicals and industrial
solvent manufacturing industry, have enabled the proprietor to
establish healthy relationships with customer and suppliers.
Liquidity: Poor
Liquidity is likely to remain under pressure over the medium term.
Bank limit utilisation is fully utilised in the 12 months through
Dec’20
Rating Sensitivity factors
Upward factor
* Timely repayment of debt obligations for 90 days
* Improvement in liquidity profile
Incorporated in 1995, CWSPL is owned and managed by Mr. M B Kocha
and family. It is based in Mumbai and engaged in the designing,
manufacturing and installation of water disinfection systems and
products such as chlorine gas feed and instrumentation, electro
chlorination and chlorine dioxide generators.
CLASSIC INDUSTRIES: CRISIL Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Classic
Industries (CI) continue to be 'CRISIL B+/Stable Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.75 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Cash 2.25 CRISIL B+/Stable (Issuer Not
Credit Limit Cooperating)
Term Loan 8.00 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CI 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 CI, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CI is
consistent with 'Assessing Information Adequacy Risk’. Based on
the last available information, the ratings on bank facilities of
CI continues to be 'CRISIL B+/Stable Issuer Not Cooperating’.
Haridwar-based CI was established as a partnership between Mr
Sushil Goyal and Mr Pawan Goyal with operations commencing from
2015. The company manufactures and supplies plastic caps and
containers. CI is setting up another factory in Manesar; this plant
will be dedicated to manufacturing plastic automotive components.
CMJ BREWERIES: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of CMJ Breweries
Private Limited (CMJ) continue to be 'CRISIL D Issuer Not
Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 54.4 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 11.4 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 164.3 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CMJ 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 CMJ, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CMJ
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of CMJ continues to be 'CRISIL D Issuer Not Cooperating’.
CMJ, incorporated in November 2007, is promoted by the
Meghalaya-based Jain family, which is engaged in businesses such as
structural steel, cement, household implements, stone products, and
food processing. The company began setting up a greenfield brewery
in 2009, which commenced operations in November 2011 with installed
capacity of 100,000 HL per annum (hlpa). It expanded capacity to
200,000 hlpa by April 2013, and to 300,000 hlpa by December 2014.
It completed its canning line in December 2014 at New Industrial
Area in Byrnihat, Meghalaya. It has also set up a
100-kilolitres-per-day grain-based distillery for extra-neutral
alcohol, a 200,000-cases-per-month bottling unit for Indian-made
foreign liquor, a 4.2-megawatt captive power plant, a
6000-litre-per-day malt spirit manufacturing unit, and a carbon
dioxide recovery plant. The distillery commenced operations in
October 2014.
CRANE BETEL: CRISIL Lowers Rating on INR10cr Loan to B
------------------------------------------------------
CRISIL Ratings has downgraded the ratings on bank facilities of
Crane Betel Nut Powder Works (Crane) to 'CRISIL B/Stable Issuer Not
Cooperating' from 'CRISIL BB+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING)
Proposed Long Term 5 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with Crane for
obtaining information through letters and emails dated August 22,
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 Crane, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on Crane
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of Crane Revised to ’CRISIL B/Stable Issuer Not Cooperating’
from 'CRISIL BB+/Stable Issuer Not Cooperating’.
Crane was set up in 1957, by, Mr Grandhi Subba Rao (father of
current proprietor Mr. G Kantha Rao). The firm processes and sells
betel nut. It is based at Guntur, Andhra Pradesh.
EGIANT AGROCONNECT: CRISIL Moves B+ Rating from Not Cooperating
---------------------------------------------------------------
Due to inadequate information and in line with the Securities and
Exchange Board of India guidelines, CRISIL Ratings had migrated the
ratings on the bank facilities of eGiant Agroconnect Private
Limited (EAPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'. However, the management has started sharing the
information necessary for carrying out a comprehensive review of
the ratings. Consequently, CRISIL Ratings is migrating the rating
to 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Packing Credit 7 CRISIL A4 (Migrated
from 'CRISIL A4 ISSUER NOT
COOPERATING')
Proposed Cash
Credit Limit 3 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
The ratings continue to reflect the company's modest scale of
operations in the intensely competitive agricultural commodities
trading business, and its weak financial risk profile. These
weaknesses are partially offset by the extensive business
experience of the promoters and moderate working capital
requirement.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations in intensely competitive industry:
EAPL's business risk profile is constrained by its modest scale of
operations in the intensely competitive agricultural commodities
trading business. Topline declined sizeably to INR15.18 crore in
fiscal 2020 on account of disruptions in business due to lockdown
imposed amid the pandemic also with company strategic decision to
focus on profit making commodities which led to large dip in sales.
However, sales is expected to bounce back to INR35 crores in FY21
due to huge demand for agriculture products post lockdown.
* Weak Financial Risk Profile: The weak financial risk profile is
reflected in gearing of 2.4 times and total outside liabilities to
adjusted networth ratio of 2.7 times as on March 31, 2020. Debt
protection metrics have been weak in the past on account of high
gearing and low cash accrual. Interest coverage and net cash
accrual to total debt ratios were 1.52 times and 0.02 time,
respectively, in fiscal 2020.
Strengths:
* Extensive experience of the promoters: The promoters' experience
of around a decade supports the business risk profile of the
company.
* Moderate working capital requirement: Gross current assets,
estimated at 130 days as on March 31, 2020, reflect the company's
efficient working capital management. This is majorly on account of
moderate inventory and receivables, estimated at 60 days and 28
days, respectively, as on March 31, 2020.
Liquidity: Stretched
The liquidity remains average. Bank limit utilization was moderate
at 46% on an average during the 7 months through December 2020.
Cash accrual is expected to be modest at INR16-18 lakh, but will be
adequate in the absence of debt obligation. The sanctioned limit of
the company has reduced from INR7 crores to INR5 crores in February
2020 due to lower business in FY20; while company will apply for
enhancement looking at the FY21 performance
Outlook: Stable
CRISIL believes EAPL will continue to benefit from the extensive
business experience of its promoters
Rating Sensitivity factors
Upward factors
* Sharp and sustained increase in revenue and consistent annual
cash accrual of over INR0.5 crore
* Increase in networth and strengthening of capital structure
Downward factors
* Lower-than-expected revenue growth or profitability and annual
cash accrual lower than INR0.1 crore
* Stretch in working capital cycle or large debt-funded capital
expenditure, weakening the liquidity further
Incorporated in September 2013 and promoted by Mr. Prashant Ramesh
Chincholkar and Mr. Nishant Ramesh Chincholkar, EAPL trades in and
exports commodities such as spices, food grains, cereals, oilseeds,
and dry fruits.
EKTA ENTERPRISES: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Ekta
Enterprises - Kala Amb (Ekta) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Cash 3 CRISIL B+/Stable (Issuer Not
Credit Limit Cooperating)
Proposed Fund- 4 CRISIL B+/Stable (Issuer Not
Based Bank Limits Cooperating)
CRISIL Ratings has been consistently following up with Ekta for
obtaining information through letters and emails dated August 22,
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 Ekta, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on Ekta
is consistent with 'Assessing Information Adequacy Risk’. Based
on the last available information, the ratings on bank facilities
of Ekta continues to be 'CRISIL B+/Stable Issuer Not
Cooperating’.
Established in 2006 as a partnership firm between Mr. RL Chaudhary
and Mr. BS Chhikara, Ekta manufactures lead alloy, lead suboxide,
and refined lead, which are used for manufacturing automobiles,
batteries, and inverters. It is based at Kala Amb (Himachal
Pradesh).
EUROLIFE HEALTHCARE: CRISIL Lowers Rating on INR31.6cr Loan to D
----------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the bank facilities of
Eurolife Healthcare Private Limited (EHPL) to 'CRISIL D/CRISIL D
Issuer Not Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'. The downgrade reflects delays by EHPL in servicing of
debt obligations.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 18.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
External 31.6 CRISIL D (ISSUER NOT
Commercial COOPERATING; Downgraded from
Borrowings 'CRISIL B+/Stable ISSUER NOT
COOPERATING')
Letter of Credit 4 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
Packing Credit 3.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
Proposed Long Term 3.4 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with EHPL for
obtaining information through letters and emails dated July 25,
2020, January 1, 2021 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 EHPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on EHPL
is consistent with 'Assessing Information Adequacy Risk
CRISIL Ratings has downgraded its rating on the bank facilities of
EHPL to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL
B+/Stable/CRISIL A4 Issuer Not Cooperating'. The downgrade reflects
delays by EHPL in servicing of debt obligations.
EHPL, incorporated in 1987 by Mr. S S Toshniwal and Mr. Mahendra
Singhi, manufactures pharmaceutical formulations. The company
started operations in 2001 and has its manufacturing facilities at
Roorkee in Uttarakhand and at Waluj in Maharashtra.
G.A.V. AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of G.A.V. Agro
Private Limited (GAVPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 10 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GAVPL for
obtaining information through letters and emails dated August 22,
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 GAVPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GAVPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GAVPL continues to be 'CRISIL D Issuer Not Cooperating'.
GINGER INFRA: CRISIL Moves D Debt Rating to Not Cooperating
-----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Ginger
Infrastructure Private Limited (GIPL) to 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 30 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
CRISIL Ratings has been consistently following up with GIPL for
obtaining information through letters and emails dated February 09,
2021 and February 15, 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 GIPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GIPL
is consistent with 'Assessing Information Adequacy Risk’.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of GIPL to 'CRISIL D Issuer not cooperating'.
GIPL, incorporated in 2014, has constructed a commercial complex
and a hotel-cum-banquet hall at Nagpur. Operations are managed by
Mr. Mohd. Arshad Sheikh.
GULF PETROCHEM: CRISIL Lowers Rating on INR98cr Term Loan to D
--------------------------------------------------------------
CRISIL Ratings has removed its rating on the bank facilities of
Gulf Petrochem India Private Limited (GPIPL) from 'Rating Watch
with Negative Implications' and downgraded it to 'CRISIL D’ from
'CRISIL B-'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long 98 CRISIL D (Downgraded from
Term Bank 'CRISIL B-'; Removed from
Loan Facility 'Rating Watch with Negative
Implications')
Term Loan 135 CRISIL D (Downgraded from
'CRISIL B-'; Removed from
'Rating Watch with Negative
Implications')
CRISIL Ratings has resolved the watch following lender’s denial
of the request for one-time restructuring (OTR), under Reserve Bank
of India (RBI) guidelines issued on August 06, 2020-'Resolution
Framework for COVID-19-related Stress' of its term loans made by
the GPIPL. The application was made on September 14th 2020 and was
subsequently denied by the bank during December 2020.
The rating downgrade reflects the poor liquidity profile marked by
delays in payment of its term debt installments, the installment
due on January 01, 2021 remains overdue as of February 22, 2021.
Key Rating Drivers & Detailed Description
Weakness:
* Delays in servicing of debt: The Company has delayed the
servicing of its term debt obligations. The term debt instalment
due on January 1, 2021 remains overdue as of February 22, 2021.
* Weak financial risk profile: Debt protection metrics were weak,
indicated by interest coverage and net cash accrual to total debt
ratios of 0.4 time and 0.0 time, respectively, in fiscal 2020
because of low accrual and high debt. The metrics are expected to
remain weak over the medium term.
Strengths:
* Modern infrastructure and locational advantage: The company is
owned by the GP Global group, which has significant experience in
running and operating terminal operations all over the world. The
terminal is located in the Pipavav port in Gujarat, which is a
commercial hub.
Liquidity: Poor
Liquidity is poor as reflected in ongoing delays in servicing of
term debt instalments
Rating Sensitivity Factors
Upward Factors
* Track record of timely debt servicing for 90 days or more
* Improvement in the financial risk profile, driven by increase in
accrual leading to interest cover of over 1 time on a sustained
basis
GPIPL was incorporated by GPFZC as its wholly owned subsidiary in
2011. GPIPL started commercial operations of its 250,000-kilolitre
capacity at the Pipavav port in October 2015; this will be used for
storage and distribution of bulk petroleum, oil and lube liquids.
The primary business is leasing of storage tanks to third parties.
HIGHLAND PRODUCE: CRISIL Withdraws B Rating on INR6.91cr Cash Loan
------------------------------------------------------------------
CRISIL Ratings said the ratings on the bank facilities of The
Highland Produce Co. Limited (Highland) continue to be 'CRISIL
B/Stable/CRISIL A4 Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.75 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 6.91 CRISIL B/Stable (Issuer Not
Cooperating/Withdrawn)
Long Term Loan 4.00 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with Highland for
obtaining information through letters and emails dated January 14,
2020 and July 17, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Highland. This restricts CRISIL
Ratings’ ability to take a forward looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on Highland is consistent with 'Assessing Information Adequacy
Risk’. CRISIL Ratings has Continues the ratings on the bank
facilities of HIGHLAND to 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating'.
CRISIL Ratings has withdrawn its rating on INR6.91 Crore Cash
Credit of Highland on the request of the company and after
receiving no objection certificate from the bank. The rating action
is in-line with CRISIL Rating's policy on withdrawal of its rating
on bank loan facilities
Established in 1925, Highland is a part of the AV Thomas group of
companies, which has interests in plantations, agricultural
commodities, rubber, leather, bio-technology, solvent extraction,
and software. The company mainly produces the crush-tear-curl (CTC)
variety of tea. Highland sells around 60% of its produce to AV
Thomas and Company Ltd (Flagship Company of the AV Thomas group)
and the remainder at auctions. Apart from tea business (Plantation
segment), Highland operates a wood division in which it
manufactures doors and panels and a small portion of revenue is
also derived from the sale of cardamom.
HOTEL SHUBH: CRISIL Moves D Debt Rating to Not Cooperating
----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Hotel
Shubh In (HSI) to 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 6.5 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
CRISIL Ratings has been consistently following up with HSI for
obtaining information through letters and emails dated February 9,
2021 and February 15, 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 HSI, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HSI
is consistent with 'Assessing Information Adequacy Risk’.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of HSI to 'CRISIL D Issuer not cooperating'.
Set in 2016 by Bhopal (MP) based Ankit Sharma and Darshan Chawla
families, HIS operates a 45 room and 1 conference room hotel near
Habibganj railway station.
IRAA CLOTHING: CRISIL Lowers Rating on INR11cr LOC to D
-------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
IRAA Clothing Private Limited (IRAA) to 'CRISIL D/CRISIL D' from
'CRISIL BB-/Negative/CRISIL A4’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Downgraded from
'CRISIL BB-/Negative')
Letter of Credit 11 CRISIL D (Downgraded from
'CRISIL A4 ')
Line of Credit 3.75 CRISIL D (Downgraded from
'CRISIL BB-/Negative')
Long Term Loan 3.84 CRISIL D (Downgraded from
'CRISIL BB-/Negative')
Proposed Long Term 6.41 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB-/Negative')
CRISIL Ratings has taken cognizance of application made by IRAA for
restructuring of its bank facilities under Reserve Bank of India
(RBI) guidelines issued on August 06, 2020-'Resolution Framework
for COVID-19-related Stress'. However final approval for same it
still pending.
The downgrade reflects poor liquidity profile marked by
overutilization of cash credit facility and interest being overdue
for over 30 days, even prior to the application for restructuring.
There were also instances of delay in repayment of term loans.
The ratings continue to reflect large working-capital requirement
and below-average debt protection metrics. These rating weaknesses
are partially offset by extensive experience of the promoters and
established relationships with customers
Key Rating Drivers & Detailed Description
Weakness:
* Delays in debt servicing: Poor liquidity has resulted in delays
in servicing of interest on fund based working capital facilities
for over 30 days as well as in delays in servicing of term loan.
* Working capital intensive operations: Gross current assets (GCA)
have remained in range of 178-237 days over past 3 years ended
March 31, 2020 driven by large receivables and inventory. Gross
current are expected to remain high.
* Moderate scale of operations: Company’s scale of operation is
moderate indicated by revenue of INR88.98 crore in fiscal 2020.
Further, the company's performance during April to August 2020 was
severely constrained due to the impact of the lockdown imposed in
the domestic and export markets and same is expected result in fall
in revenue and operating margin. Benefits from the new rentals
associated with washing segment remains to be seen.
Strengths:
* Extensive experience of the promoters and established
relationships with large players in the denim market: IRAA benefits
from the extensive industry experience of its promoters of more
than 3 decades and their established relations with large customers
such as Reliance Retail, Raymond among others, thereby ensuring a
steady offtake of the company's products. Further, promoters have
provided need based fund support to company in form of unsecured
loan (Rs 11.1 crore as on March 31, 2020) which is expected to
continue over the medium term.
Liquidity: Poor
Liquidity is poor as reflected by delays in debt servicing. Company
is expected to incur cash loss in fiscal 2021. CRISIL Ratings had
taken into cognizance, moratorium being granted by the bankers
until August 31, 2020 in debt servicing (of term loan as well as
working capital facilities) & conversion of outstanding non-fund
based facility to fund based working capital limits under COVID
emergency line, as permitted by the Reserve Bank of India (RBI).
CRISIL Ratings has also taken cognizance of application made by
IRAA for restructuring of its bank facilities under Reserve Bank of
India (RBI) guidelines issued on August 06, 2020-'Resolution
Framework for COVID-19-related Stress'.
Rating Sensitivity factors
Upward factors
* Track record of timely debt servicing for 90 days or more
* Significant improvement in liquidity due to restructuring of debt
or infusion of equity or a significant improvement in operating
performance
Incorporated in 2005 as Shagun Clothing Pvt Ltd, the company was
renamed IRAA Clothing Pvt. Ltd on May 05, 2016. The unit, located
in Maharashtra, processes denim garments from fabric. Mr. Sunil
Biyani and family manage operations.
LAKSHMIGRAHA WORLDWIDE: CRISIL Cuts Rating on INR3.5cr Loan to B-
-----------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Lakshmigraha Worldwide Inc (LW) to 'CRISIL B-/Stable’ from
'CRISIL B/Stable’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.5 CRISIL B-/Stable (Downgraded
from 'CRISIL B / Stable')
The rating downgrade reflects weakened business risk profile as
reflected by operating income of INR17.65 crore in FY 2020 compared
to INR18.05 crore in the previous fiscal. Capital structure is
highly leveraged as showcased by gearing of more than 9 times in FY
2020. The same has happened due to low networth of less than INR1
crore. Debt protection metrics continues to remain weak with
interest coverage of less than 1 times in fiscal 2020.
The ratings continue to reflect the modest scale of operations and
weak debt protection metrics. However, the rating weaknesses is
partially offset by the extensive experience of the partners.
Key Rating Drivers & Detailed Description
Strengths:
* Extensive experience of the partners: The partners has an
extensive experience of around three decades in the textile and
automobile industry. LW will continue to derive benefit from the
experience of the partners in the medium term.
Weakness:
* Modest scale of operations: The firm has reported a modest scale
of operations as indicated by operating income of around INR18
crores in 2019. Going forward, the topline is expected to gradually
improve in the medium term.
Further owing to suspension of operations during lockdown imposed
to curb covid 19 spread in the current fiscal, revenue growth rate
is expected to remain muted over the medium term.
* Weak debt protection metrics: With interest coverage and NCATD at
around 0.65 times and (5)% in fiscal 2020, debt protection metrics
is weak. The same is due to reduced net cash accruals owing to
muted revenue growth rate and fall in operating margin. Further,
with expected impact of lockdown in the business risk profile, debt
protection metrics is expected to remain at similar levels over the
medium term.
Liquidity: Stretched
Average month end bank limit utilization for the last 12 months
ended on January 2021 is modest at around 95%. Net cash accruals is
modest owing to muted revenue growth rate and modest operating
margin, however, the same along with need based unsecured loan
support remains sufficient against no major repayment obligations.
Current ratio was moderate at around 1 times as on March 31, 2020.
Outlook: Stable
CRISIL Ratings believes LW will continue to benefit from its
established position as a manufacturer of home textile products for
Reliance Industries Ltd (RIL) in South India.
Rating Sensitivity factors
Upward Factors:
* Net cash accruals of more than INR0.3 crore backed by improvement
is scale of operations while sustaining the operating margin
* Efficient working capital management and maintenance of moderate
capital structure
Downward Factors:
* Significant decline in operating income or operating margin
falling below 1.8%
* Larger than expected working capital requirement or significant
debt funded capex
Set up in 2017, LW is a partnership firm managed by Ms R Nandini
and Mr. Gopi Kumar. The firm is a distributor of RIL home textile
products and other related products. Also, the firm is also engaged
in the trading of TATA spare parts for commercial vehicle.
MANPASAND BEVERAGES: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Manpasand Beverages Limited
1768 & 1774 Paiki 1
Village: Manjusar
Tal: Savli
Vadodara 391775
Gujarat India
Insolvency Commencement Date: March 1, 2021
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: August 28, 2021
Insolvency professional: Mr. Arpan Maheshkumar Shah
Interim Resolution
Professional: Mr. Arpan Maheshkumar Shah
301, Shoppers Plaza-4
Opp BSNL, C G Road
Navrangpura
Ahmedabad 380009
Gujarat
E-mail: arpan@caarpanshah.com
cirpmbl@gmail.com
Last date for
submission of claims: March 20, 2021
NEW PASHCHIM: CRISIL Keeps B Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on the bank facilities of New
Pashchim Maharashtra Patra Depot (NPMPD) continue to be 'CRISIL
B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (Issuer Not
Cooperating/Withdrawn)
Cash Credit 26.49 CRISIL B/Stable (Issuer Not
Cooperating)
Long Term Loan 6.80 CRISIL B/Stable (Issuer Not
Cooperating/Withdrawn)
Proposed Long Term 20.71 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating/Withdrawn)
CRISIL Ratings has been consistently following up with NPMPD for
obtaining information through letters and emails dated January 14,
2020 and July 17, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.’
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NPMPD. This restricts CRISIL
Ratings’ ability to take a forward looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on NPMPD is consistent with 'Assessing Information Adequacy
Risk’. CRISIL Ratings has Continues the ratings on the bank
facilities of NPMPD to 'CRISIL B/Stable Issuer not cooperating'.
CRISIL Ratings has withdrawn its rating on INR6 Crore Cash Credit,
INR6.8 Crore Long Term Loan and INR20.71 Crore Proposed Long Term
Bank Loan Facility of NPMPD on the request of the company and after
receiving no objection certificate from the bank. The rating action
is in-line with CRISIL Rating's policy on withdrawal of its rating
on bank loan facilities.
Established in 1994, NPMPD is a proprietorship firm of Mr. Prashant
Bedmutha. The firm primarily manufactures steel roofs at its plant
in Sangli, Maharashtra, which has a capacity of 2,500 tonnes per
month. These are marketed under its own brand, Duratuff. The firm
has recently diversified into mild steel and electric resistance
welded pipes the manufacturing plant for these is at Pune,
Maharashtra.
NMS ENTERPRISES: CRISIL Lowers Rating on INR4.5cr Cash Loan to D
----------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
NMS Enterprises Limited (NMSEL) to 'CRISIL D/CRISIL D’ from
'CRISIL BB-/Stable/CRISIL A4+’.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL D (Downgraded from
'CRISIL A4+')
Cash Credit 4.5 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 4.5 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB-/Stable')
The ratings downgrade reflects the overdue in the cash credit
account beyond 30 days between October to December 2021 due to cash
flow mismatches.
The ratings also reflect large working capital requirements and
average financial risk profile. These weaknesses are partially
offset by promoters’ extensive industry experience.
Key Rating Drivers & Detailed Description
Weaknesses
* Overdue in the Cash credit account: NMSEL has availed cash credit
facility amount of INR4.50 crores from the Canara Bank. There has
been overdue in the Cash credit account for the duration of
Oct’20 to dec’20 due to cash flow mismatches.
* Large working capital requirements: The working capital-intensive
operations are indicated by gross current assets (GCAs) of 128 days
as on March 31, 2020, primarily on account of large receivables of
43 days large related to manpower service and large inventory at
around 51 days related to construction business.
* Average financial risk profile: Capital structure is leveraged
marked by total outside liability to total net worth (TOLTNW) of
1.69 times, as on March 31, 2020, due to modest networth of around
INR5.24 crore. CRISIL Ratings expects the TOLTNW will increase over
the medium term as company has availed the GECL loan amount of
INR99 lakhs in fiscal 2021.
Strength
* Extensive industry experience of the promoters: The key
promoters, Mr. Sanjay Gupta and Mr. Pankaj Chander, have been
associated with the manpower supply industry for more than two
decades. Hence, they have a sound understanding of the local market
and have established a healthy relationship with customers and
suppliers.
Liquidity: Poor
Liquidity is likely to remain under pressure over the medium term,
mainly due to large working capital requirement. Bank limit
utilisation is fully utilised in the 12 months through Dec’20.
Rating Sensitivity factors
Upward factors
* Track record of timely payment of interest and regularisation of
cash credit for three months.
* Improvement in scale of operations along with profitability.
NMSEL was incorporated in 1991 to provide payroll management
services for telecom companies in India. Subsequently, the company
diversified into fields of construction and skill development
services. Operations are managed by Mr. Pankaj Chander and Mr.
Sanjay Gupta.
PARKER TILES: CRISIL Moves D Debt Ratings to Not Cooperating
------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Parker
Tiles Private Limited (PTPL) to 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.5 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
Cash Credit 13.0 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
Letter of Credit 1.0 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
Term Loan 10.24 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
CRISIL Ratings has been consistently following up with PTPL for
obtaining information through letters and emails dated February 9,
2021 and February 15, 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 PTPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PTPL
is consistent with 'Assessing Information Adequacy Risk’.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of PTPL to 'CRISIL D/CRISIL D Issuer not
cooperating'.
Incorporated in 2003, PTPL was registered as Nova Gold Floor Tiles
Pvt Ltd and was renamed Nova Gold Sanitaryware Pvt Ltd in 2005. The
company got its present name in 2011. Initially, it manufactured
sanitary ware. The business was discontinued in fiscal 2012 and the
company replaced machinery with that for manufacturing digitally
printed wall tiles. The unit is at Muli near Surendranagar, and has
installed capacity of 10,000 square metre per day. The company
manufactures digitally printed glazed wall tiles of various sizes
which are sold under the SOL brand.
PREFECT HYDRAULICS: CRISIL Withdraws B+ Rating on INR10cr Loan
--------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities of
Prefect Hydraulics (PH) and simultaneously withdrawn the ratings at
firm's request and on receipt of no-objection certificate and no
dues certificate for overdraft facility of INR2.5 crores from the
banker. The withdrawal is in line with CRISIL's policy on
withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2.5 CRISIL A4 (Rating reaffirmed
and Withdrawn)
Foreign Letter 10 CRISIL B+/Stable (Rating
of Credit reaffirmed and Withdrawn)
Overdraft Facility 2.5 CRISIL A4 (Rating reaffirmed
and Withdrawn)
PH is owned & managed by Dilip Ramakrishna. PH is engaged in
manufacturing of hydraulic power packs, hydraulic cylinders, test
rigs, special purpose machines and various solutions in aerospace
and marine application.
R. S. CONSTRUCTION: CRISIL Withdraws B Rating on INR5cr Loans
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on bank facilities of R.
S. Construction - Mumbai (RSC) and simultaneously withdrawn the
rating at the firm's request and on receipt of no-objection
certificate from its banker. The withdrawal is in line with
CRISIL's policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5 CRISIL A4 (Rating Reaffirmed
and Withdrawn)
Cash Credit 1 CRISIL B/Stable (Rating
Reaffirmed and Withdrawn)
Proposed Long Term 4 CRISIL B/Stable (Rating
Bank Loan Facility Reaffirmed and Withdrawn)
RSC, set up as a partnership firm in 2011, undertakes civil
construction for buildings, gardens, roads, and bridges. Located in
Mumbai, it executes contracts for Mumbai Metropolitan Region
Development Authority (MMRDA), Municipal Corporation of Mumbai,
Thane Municipal Corporation and other state government authorities.
The partners, Mr. Rajesh Shah and Mr. Bhavesh Shah, manage
operations.
RAGHAV COTSPIN: CRISIL Withdraws D Rating on INR30cr Loans
----------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Raghav Cotspin Private
Limited (RCPL) to 'CRISIL D Issuer not cooperating'. CRISIL Ratings
has withdrawn its rating on bank facility of RCPL following a
request from the company. Consequently, CRISIL Ratings is migrating
the ratings on bank facilities of RCPL from 'CRISIL D/Issuer Not
Cooperating' to 'CRISIL D'. The rating action is in line with
CRISIL Ratings' policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Migrated from
'CRISIL D ISSUER NOT
COOPERATING'; Rating Withdrawn)
Term Loan 22 CRISIL D (Migrated from
'CRISIL D ISSUER NOT
COOPERATING'; Rating Withdrawn)
Incorporated in 2013, RCPL is promoted by the Gondal
(Gujarat)-based Gajera family. The company is setting up a unit to
spin cotton yarn of 30s count, which was expected to commence
operations in April 2016.
RAMKRISHNA COTSPIN: CRISIL Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Ramkrishna
Cotspin Private Limited (RCPL) continues to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3.75 CRISIL A4 (Issuer Not
Cooperating/Withdrawn)
Cash Credit 5.50 CRISIL B+/Stable (Issuer Not
Cooperating/Withdrawn)
Cash Credit 2.00 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 21.00 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RCPL for
obtaining information through letters and emails dated February 12,
2020 and August 15, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'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 RCPL. This restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes information available on
RCPL is consistent with 'Assessing Information Adequacy Risk’.
Based on the last available information, the rating on bank
facilities of RCPL continues to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
CRISIL Ratings has withdrawn its ratings on INR3.75 Crore Bank
Guarantee Facility, INR40 Crore Long Term Loan, INR5.5 Crore of
Cash Credit and INR0.75 Crore of Proposed Long Term Bank Loan
Facility of RCPL on the request of the company and receipt of a no
objection certificate from State Bank of India. The rating action
is in line with CRISIL's policy on withdrawal of its ratings on
bank loans.
Incorporated in 2015, RCPL is promoted by Mr. Hasmukhbhai Patel
'with two decades of experience in the cotton ginning and trading
industry. RCPL is setting up a plant for the manufacture of cotton
yarn, primarily 30s count, used for knitting and weaving. The plant
is expected to commence production in December 2016.
ROBUST HOTELS: CRISIL Lowers Rating on INR123cr Loan to D
---------------------------------------------------------
CRISIL Ratings has removed its rating on the bank facilities of
Robust Hotels Pvt Ltd (RHPL) from 'Rating Watch with Developing
Implications' and downgraded it to 'CRISIL D/CRISIL D’ from
'CRISIL BB/CRISIL A4+'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6.12 CRISIL D (Downgraded from
'CRISIL A4+'; removed from
'Watch with Developing
Implications')
Cash Credit 5 CRISIL D (Downgraded from
'CRISIL BB'; removed from
'Watch with Developing
Implications')
Long Term Loan 123 CRISIL D (Downgraded from
'CRISIL BB'; removed from
'Watch with Developing
Implications')
Proposed Long 16.69 CRISIL D (Downgraded from
Term Bank 'CRISIL BB'; removed from
Loan Facility 'Watch with Developing
Implications')
The ratings on RHPL were placed on watch on December 14, 2020,
because the management, along with its bankers, confirmed applying
for restructuring of term loans by the end of August 2020, under
the guidelines issued by the Reserve Bank of India on August 6,
2020, called Resolution Framework for Covid-19-related stress.
CRISIL Ratings has understood that after discussing with the bank,
RHPL did not pursue the restructuring request and instead opted for
additional credit under the Emergency Credit Line Guarantee Scheme
(ECLGS) 2.0. The ECLGS was disbursed at the end of February 2021.
Meanwhile, the company did not pay the term loan installment
outstanding for the quarter ended December 31, 2020, and the
interest on the term loan.
The downgrade reflects poor liquidity and delay in debt servicing.
The ratings reflect poor liquidity risk profile and susceptibility
to economic downturns. These weaknesses are partially offset by the
promoters' experience in the hospitality industry and association
with the Hyatt brand.
Analytical Approach
Unsecured loan of INR37.2 crore as on 31, March 2020, from the
promoters has been treated as neither debt nor equity as the loan
is expected to be retained in the business over the medium term.
Key Rating Drivers & Detailed Description
Weakness:
* Delays in debt servicing: The company was unable to meet its debt
obligation due to poor liquidity. Liquidity weakened because of
decline in operating performance due to the impact of the Covid-19
pandemic.
* High revenue concentration and susceptibility to economic
downturns: Entire revenue comes from the hotel in Chennai.
Dependence on a single asset exposes the company to any adverse
change in demand-supply situation and event risks. Moreover, the
hospitality industry is susceptible to downturn in the overall
economy. During a weak period, revenue per available room for
premium and mid-segment hotels is more acutely affected than
revenue of economy hotels.
Strengths:
* Strong market position: The promoters have experience of more
than three and a half years in the hotel industry. The company
benefits from its association with the Hyatt brand, which bring
along its existing clientele. Increasing proportion of corporate,
foreign and NRI clients should augur well for average room rate
(ARR) on account of differential tariffs. RHPL also benefits from
Hyatt's large network and global marketing strategies. The brand
denotes luxury and high quality, which are critical differentiating
factors in the premium hotel segment
Liquidity: Poor
Liquidity is weak, as reflected in delays in meeting term debt and
interest obligations.
Rating Sensitivity factors
Upward factors
* Track record of timely debt servicing for 90 days or more
* Higher occupancy, leading to improvement in the business risk
profile
* Improved liquidity and adequate cash accrual to meet debt
obligation
Incorporated in 2007 and promoted by Mr. Radhe Shyam Saraf and his
family members, RHPL operates a five-star hotel property under the
brand Hyatt Regency in Chennai. The hotel has 325 rooms, including
28 suits, and is equipped with swimming pool, fitness centre,
business centre, banquet hall, salon and restaurants. RHPL is a
wholly owned subsidiary of Asian Hotels (East) Ltd; it started
commercial operations in fiscal 2012.
S K MASALA: CRISIL Lowers Rating on INR5.6cr Cash Loan to D
-----------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
S. K. Masala and Foods Limited (SK Masala) to 'CRISIL D/Issuer Not
Cooperating' from 'CRISIL B+/Stable; Issuer Not Cooperating'. The
downgrade reflects delays by S K Masala in servicing of its debt
obligations.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.6 CRISIL D (ISSUER NOT COOPERATING;
Downgraded from CRISIL B+/Stable
ISSUER NOT COOPERATING')
CRISIL Ratings has been consistently following up with SK Masala
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 while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
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 S K Masala which restricts
CRISIL Ratings’ ability to take a forward looking view on the
entity's credit quality. CRISIL Ratings believes that rating action
on S K Masala is consistent with 'Assessing Information Adequacy
Risk'.
CRISIL Ratings has downgraded its ratings on the bank facilities of
S K Masala to 'CRISIL D/Issuer Not Cooperating' from 'CRISIL
B+/Stable; Issuer Not Cooperating'. The downgrade reflects delays
by S K Masala in servicing of its debt obligations.
CRISIL Ratings has also taken in to cognizance that corporate
insolvency resolution process had been initiated against S K Masala
as directed by National Company Law Tribunal and subsequently, the
Committee of Creditors have resolved with majority to file an
application for liquidation of the entity, under the relevant
sections of the Insolvency and Bankruptcy Code.
SK Masala was established as a partnership firm named M/s S
Khusaldas and Co. over four decades ago by Panjwani family and was
reconstituted as a closely held limited company with the present
name in March 2017. The company manufactured, processed and traded
blended spices, grounded spices, flour, Instant ' ready mix food,
pickle and ghee' sold under the brand name of 'SK Masala'. The
manufacturing facility is located near Surat, Gujarat.
SARE REALTY: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Sare Realty Projects Private Limited
6, 383C Bank Street
Munirka South Delhi
New Delhi 110067
Insolvency Commencement Date: March 5, 2021
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: September 1, 2021
(180 days from commencement)
Insolvency professional: Pawan Kumar Goyal
Interim Resolution
Professional: Pawan Kumar Goyal
P K Goyal & Associates
304 D.R. Chamber
12/56, DB Gupta Road
Karol Bagh
New Delhi 110005
E-mail: ca.pawangoyal@gmail.com
cirpsrppl@gmail.com
Classes of creditors: Real Estate Allottee
Insolvency
Professionals
Representative of
Creditors in a class: Mr. Anurag Goel
Mr. Kamlesh Kumar Gupta
Mr. Anil Kumar Khicha
Last date for
submission of claims: March 22, 2021
SHANTDEEP METALS: CRISIL Moves D Debt Ratings to Not Cooperating
----------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Shantdeep Metals Private Limited (SMPL) to 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
Proposed Long 1 CRISIL D (ISSUER NOT COOPERATING;
Term Bank Rating Migrated)
Loan Facility
Term Loan 10 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
CRISIL Ratings has been consistently following up with SMPL for
obtaining information through letters and emails dated February 9,
2021 and February 15, 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 SMPL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SMPL
is consistent with 'Assessing Information Adequacy Risk’.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of SMPL to 'CRISIL D Issuer not cooperating'.
SMPL, incorporated in 2009, is promoted by Mr. Pradeep Chaudhary,
Ms Sanjot Chaudhary, and Mr. Prashant Rahane. The company provides
heat treatment services for automotive components on a job-work
basis. In 2013, it started manufacturing gears for two-wheelers at
its facility in Aurangabad, Maharashtra.
SIDDHIVINAYAK DISTRIBUTORS: CRISIL Withdraws B+ Debt Ratings
------------------------------------------------------------
CRISIL Ratings has migrated the ratings on the bank facilities of
Siddhivinayak Distributors (SD) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.9 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL B+/Stable'; Rating
Withdrawn)
Long Term Loan 1.1 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL B+/Stable'; Rating
Withdrawn)
CRISIL Ratings has been consistently following up with SD for
obtaining information through letters and emails dated January 30,
2021, February 16, 2021 and February 22, 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 SD. This restricts CRISIL
Ratings’ ability to take a forward looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on SD is consistent with 'Assessing Information Adequacy Risk’.
CRISIL Ratings has migrated the ratings on the bank facilities of
SD to 'CRISIL B+/Stable Issuer not cooperating'.
CRISIL Ratings has withdrawn its rating on the bank facilities of
SD on the request of the company and after receiving no objection
certificate from the bank. The rating action is in-line with CRISIL
Rating's policy on withdrawal of its rating on bank loan
facilities.
Set up in 2013 as a proprietary concern by Mr. Atul Kawade, SD is
an authorised distributor of LG and VIVO. The firm is based out of
Nasik, Maharashtra.
Incorporated in October 2018, Siddhivinayak Digital Pvt Ltd (SDPL)
is an authorised distributor of Xiaomi. The company is based out of
Nashik and is promoted by Mr. Atul Kawade and Mr. Pandurang
Bhausaheb Borade.
SREESHA EDUCATIONAL: CRISIL Reaffirms B- Rating on INR15cr Loan
---------------------------------------------------------------
CRISIL Ratings has removed its rating on the long-term bank
facility of Sreesha Educational Services LLP (Sreesha; part of the
Sreesha group) from 'Rating Watch with Developing Implications' and
has reaffirmed the rating at 'CRISIL B-', while assigning a
'Stable' outlook.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL B-/Stable (Removed
from 'Rating Watch with
Developing Implications;
Rating Reaffirmed)
CRISIL Ratings had, on December 17, 2020, placed the rating on
'Watch with Developing Implications' following the decision of the
Sreesha group to apply for one-time restructuring (OTR) of its term
loans availed of from Canara Bank under the guidelines issued by
the Reserve Bank of India (RBI) on August 06, 2020, titled
'Resolution Framework for Covid-19-related Stress'. The OTR was
invoked by lenders before December 31, 2020.
The lender has now approved the restructuring of the term loan, and
the company has been granted 12 months of moratorium for the
principal repayments. The revised repayment schedule should support
the liquidity. Revenue and profitability are expected to improve in
the coming months, along with with revival in occupancy levels and
improvement in fee collections, which remain key monitorables.
The rating continues to reflect modest scale of operations of the
group and exposure to intense competition, stringent regulations
and weak financial risk profile. These weaknesses are partially
offset by the extensive experience of the promoters in the
education services industry.
Analytical Approach
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of Sreesha and Usha
Educational Foundation (Usha). This is because both the entities,
together referred as the Sreesha group, are in the same industry
and have operational and financial linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and exposure to intense competition:
The business risk profile of the group is constrained by its modest
scale in the intensely competitive education services industry. The
schools are based out of Bengaluru and face competition from many
other institutions in the city. The group generated revenue of
INR2.10 crore in fiscal 2020. On account of the Covid-19 pandemic,
fee collections are expected to remain muted in the current year.
The group's scale of operations will continue to limit its
operating flexibility.
* Exposure to stringent regulations: Establishment and operations
of educational institutions are regulated by various governmental
and quasi-governmental agencies, such as the University Grants
Commission, All India Council for Technical Education, Central
Board of Secondary Education, universities and state governments.
Each body has detailed procedures for granting permission to set up
institutions, and approvals need to be renewed every three or five
years. Any non-compliance will result in cancellation of
affiliation and/or license, leading to loss of reputation for the
college and revenue for the group.
* Weak financial risk profile: The schools have been operational
since 2019 and are yet to become profitable; this has resulted in
erosion of networth. Furthermore, the group has availed of external
debt for funding the capex. With low accretion to reserve and high
reliance on external borrowings, the financial risk profile is
expected to remain weak over the medium term.
Strength
* Extensive experience of the partners: The decade-long experience
of the partners and their strong understanding of the market
dynamics has enabled them to establish visibility for the group’s
schools in Bengaluru.
Liquidity: Stretched
Cash accrual is expected to remain negative in fiscals 2021 and
2022 but should improve in fiscal 2023. Repayments are expected to
commence in fiscal 2022. Liquidity is partially supported by
unsecured loans from the partners. The group had applied for OTR as
per the RBI policy, which has been approved by the lender. Timely
debt servicing remains critical.
Outlook: Stable
CRISIL believes the group will continue to benefit over the medium
term from the management’s extensive experience in the sector.
Rating Sensitivity factors
Upward factors
* Significant increase in occupancy resulting in
higher-than-expected revenue and substantial increase in cash
accrual to over INR1 crore
* Improvement in the financial risk profile
Downward factor
* More-than-expected delay in receipt of fees leading to liquidity
mismatch
* Decline in occupancy to below 50%
Established in 2018 as a limited liability partnership, Sreesha
runs a school from grades 1-8. It is based in Bengaluru. Mr. Mahesh
Reddy and Ms Usha Reddy are partners in the firm.
SURYA EXIM: CRISIL Moves D Debt Ratings to Not Cooperating
----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Surya
Exim Limited (SEL) to 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 7 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
Bill Discounting 9 CRISIL D (ISSUER NOT COOPERATING;
under Letter Rating Migrated)
of Credit
Cash Credit 76.25 CRISIL D (ISSUER NOT COOPERATING;
Rating Migrated)
Letter of 172.5 CRISIL D (ISSUER NOT COOPERATING;
Credit Rating Migrated)
Proposed Long 12.25 CRISIL D (ISSUER NOT COOPERATING;
Term Bank Rating Migrated)
Loan Facility
CRISIL Ratings has been consistently following up with SEL for
obtaining information through letters and emails dated February 9,
2021 and February 15, 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 SEL, which restricts CRISIL
Ratings’ ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SEL
is consistent with 'Assessing Information Adequacy Risk’.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of SEL to 'CRISIL D/CRISIL D Issuer not
cooperating'.
SEL, incorporated in 1989, is a Surat (Gujarat)-based company that
processes and trades in products such as coal, specialised yarn,
and polymer resins; it also provides logistic services and is an
authorised distributor of Indian Oil Corporation Ltd for selling
plastic granules. The operations are managed by Mr. J P Saboo.
THAKUR VS: CRISIL Reaffirms B+ Rating on INR11cr Loans
------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Thakur V. S. Bidi Works, Poona
(TBWP).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.5 CRISIL B+/Stable (Reaffirmed)
Working Capital
Term Loan 3.5 CRISIL B+/Stable (Reaffirmed)
The rating factors in TBWP's weak financial risk profile, large
working capital requirement, and susceptibility to volatile raw
material prices, regulatory risks, and intense competition. These
weaknesses are partially offset by the partners' extensive
experience in the bidi industry and their funding support.
Analytical Approach
Of the total unsecured loans of INR6.29 crore provided by the
partners as on March 31, 2020 75% has been treated as equity and
the remaining as debt. That is because these loans are subordinated
to external debt, carry lower-than-market interest rate, and should
be retained in the business in the long term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak financial risk profile: The weak financial risk profile is
reflected in total outside liabilities to adjusted networth ratio
of 5.3 times as on March 31, 2020. Debt protection metrics have
been weak in the past on account of low cash accrual amid low
profitability and capital withdrawals. Interest coverage and net
cash accrual to total debt ratios were 1.67 times and 0.07 time,
respectively, in fiscal 2020.
* Large working capital requirement: Operations are working
capital-intensive, indicated by gross current assets of 197 days as
on March 31, 2020, driven by large inventory of 159 days and
moderate receivables of 28 days.
* Susceptibility to volatile raw material prices, regulatory risk,
and intense competition: Sales and profitability are susceptible to
the availability of tobacco and tendu patta and intense competition
from other bidi manufacturers and substitute products, such as
cigarettes. Furthermore, the firm is exposed to changes in
government regulations.
Weaknesses:
* Extensive experience of the partners and their funding support:
Benefits from the five-decade-long experience of the partners,
their strong understanding of the local market dynamics, healthy
relations with customers and suppliers, and timely, need-based
unsecured loans should continue to support the business.
Liquidity: Stretched
Liquidity is expected to weaken over the medium term, as projected
cash accrual of INR0.4-0.55 crore per annum will be barely
sufficient to meet yearly maturing debt of INR0.56-0.78 crore. Bank
limit utilization averaged 36.6% over the 12 months through
December 2020.The cushion in bank limits will support the repayment
obligation in near term. Also unsecured loan from partner’s aids
overall liquidity position of firm.
As the partners regularly withdraw capital, the quantum of
withdrawal and its impact on financial flexibility would remain key
rating sensitivity factors.
Outlook: Stable
CRISIL Rating believes TBWP will continue to benefit from the
partners' experience.
Rating Sensitivity factors
Upward factors
* Significant growth in revenue and sustained operating margin,
leading to net cash accrual of over INR1.2 crore
* Improved working capital management
Downward factors
* Fall in operating margins to below 1.5% leading to lower than
expected net cash accruals.
* Further stretch in working capital cycle.
Established as a partnership firm in 1999, Pune-based TBWP
manufactures bidis, which it sells mainly in Rajasthan, Uttar
Pradesh, Gujarat, and Madhya Pradesh under its 'Langar' and
'Taurus' brands. Operations are managed by Mr. Vijaykumar S Thakur
and Mr. Parikshat V Thakur.
USHA EDUCATIONAL: CRISIL Reaffirms B- Rating on INR20cr Loan
------------------------------------------------------------
CRISIL Ratings has removed its rating on the long-term bank
facility of Usha Educational Foundation (Usha; part of the Sreesha
group) from 'Rating Watch with Developing Implications' and has
reaffirmed the rating at 'CRISIL B-' while assigning a 'Stable'
outlook.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 20 CRISIL B-/Stable (Removed
from 'Rating Watch with
Developing Implications;
Rating Reaffirmed)
CRISIL Ratings had, on December 17, 2020, placed the rating on
'Watch with Developing Implications' following the decision of the
Sreesha group to apply for one-time restructuring (OTR) of its term
loans availed of from Canara Bank under the guidelines issued by
the Reserve Bank of India (RBI) on August 06, 2020, titled
'Resolution Framework for Covid-19-related Stress'. The OTR was
invoked by lenders before December 31, 2020.
The lender has now approved the restructuring of the term loan, and
the company has been granted 12 months of moratorium for the
principal repayments. The revised repayment schedule should support
the liquidity. Revenue and profitability are expected to improve in
the coming months, along with with revival in occupancy levels and
improvement in fee collections, which remain key monitorables.
The rating continues to reflect modest scale of operations of the
group and exposure to intense competition, stringent regulations
and weak financial risk profile. These weaknesses are partially
offset by the extensive experience of the promoters in the
education services industry.
Analytical Approach
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Usha and Sreesha Educational Services
LLP (Sreesha). This is because both the entities, together referred
as the Sreesha group, operate in the same industry and have
operational and financial linkages.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations and exposure to intense competition:
The business risk profile of the group is constrained by its modest
scale in the intensely competitive education services industry. The
schools are based out of Bengaluru and face competition from many
other institutions in the city. The group generated revenue of
INR2.10 crore in fiscal 2020. On account of the Covid-19 pandemic,
fee collections are expected to remain muted in the current year.
The group's scale of operations will continue to limit its
operating flexibility.
* Exposure to stringent regulations: Establishment and operations
of educational institutions are regulated by various governmental
and quasi-governmental agencies, such as the University Grants
Commission, All India Council for Technical Education, Central
Board of Secondary Education, universities and state governments.
Each body has detailed procedures for granting permission to set up
institutions, and approvals need to be renewed every three or five
years. Any non-compliance will result in cancellation of
affiliation and/or license, leading to loss of reputation for the
college and revenue for the group.
* Weak financial risk profile: The schools have been operational
since 2019 and are yet to become profitable; this has resulted in
erosion of networth. Furthermore, the group has availed of external
debt for funding the capex. With low accretion to reserve and high
reliance on external borrowings, the financial risk profile is
expected to remain weak over the medium term.
Strength
* Extensive experience of the partners: The decade-long experience
of the partners and their strong understanding of the market
dynamics has enabled them to establish visibility for the group’s
schools in Bengaluru.
Liquidity: Stretched
Cash accrual is expected to remain negative in fiscals 2021 and
2022 but should improve in fiscal 2023. Repayments are expected to
commence in fiscal 2022. Liquidity is partially supported by
unsecured loans from the partners. The group had applied for OTR as
per the RBI policy, which has been approved by the lender. Timely
debt servicing remains critical.
Outlook: Stable
CRISIL Ratings believes the group will continue to benefit over the
medium term from the management’s extensive experience in the
sector.
Rating Sensitivity factors
Upward factor
* Significant increase in the occupancy resulting in higher than
expected revenues and substantial increase its accruals to over
INR1 cr
* Improvement in financial risk profile
Downward factor
* More-than-expected delay in receipt of fees leading to liquidity
mismatch
* Decline in occupancy to below 50%.
Established in 2017, Usha operates a pre-primary school in
Bengaluru, which commenced operations in June 2019.
Established in 2018 as a limited liability partnership, Sreesha
runs a school from grades 1-8. It is based in Bengaluru. Mr. Mahesh
Reddy and Ms Usha Reddy are partners in the firm.
VATIKA TRACOM: CRISIL Withdraws B Rating on INR15cr Cash Debt
-------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Vatika Tracom Private
Limited (VTPL) to 'CRISIL B/Stable Issuer not cooperating'. CRISIL
Ratings has withdrawn its rating on bank facility of VTPL following
a request from the company and on receipt of a 'no dues
certificate' from the banker. Consequently, CRISIL Ratings is
migrating the ratings on bank facilities of VTPL from 'CRISIL
B/Stable Issuer Not Cooperating to 'CRISIL B/Stable'. The rating
action is in line with CRISIL Ratings' policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING'; Rating Withdrawn)
Set up in 1992 in Jaipur, the Bihani group comprises BE, VTPL,
TVIPL, and BIPL, which are authorised dealers of products
manufactured by Tata Steel Ltd across Rajasthan and Uttarakhand.
=================
I N D O N E S I A
=================
TOWER BERSAMA: S&P Withdraws 'BB+' Issuer Credit Rating
-------------------------------------------------------
S&P Global Ratings withdrew the 'BB+' issuer credit rating on PT
Tower Bersama Infrastructure Tbk. (TBIG) at the issuer's request.
The issuer has no outstanding debt rated by S&P Global Ratings,
after it called its US$350 million senior unsecured notes due 2022
on Feb. 22, 2021.
TBIG is the second-largest independent telecommunications tower
operator in Indonesia.
===============
M A L A Y S I A
===============
AIRASIA GROUP: Extends US$40MM Assistance to Philippines AirAsia
----------------------------------------------------------------
flightglobal.com reports that AirAsia Group has disclosed that it
extended approximately $40 million in advances and corporate
guarantees to Philippines AirAsia in November-December.
The low-cost airline group on November 19 provided a $19.1 million
corporate guarantee to Filipino bank BDO Unibank. This was in
relation to the restructuring of a three-year, $35 million loan to
Philippines AirAsia, the group says in a February 26 disclosure to
Bursa Malaysia, flightglobal.com relates.
On December 29, AirAsia Group through AirAsia Berhad provided
AirAsia Inc with a corporate guarantee and cash advances amounting
to PHP991 million ($20.4 million), with Citibank Philippines as the
beneficiary, the report says. In support of that move, AirAsia
Group pledged one of AirAsia Berhad's spare engines for an
uncommitted short-term revolving credit facility applied for by
Philippines AirAsia.
AirAsia Group's latest annual report for 2019 indicates that
AirAsia Berhad is the legal name for the Malaysia-based LCC
AirAsia, and AirAsia Inc refers to the AirAsia Philippines airline.
The same report stated that AirAsia Group's effective equity
interest in the Filipino carrier stood at 40%, according to
flightglobal.com.
flightglobal.com relates that the group said in its latest
disclosure that the financial assistance was provided "in the
ordinary course of business and to facilitate the running of the
operations and financial affairs" of AirAsia Philippines.
It added that these do not have any material effect on its earnings
per share, net assets per share and gearing of the company and its
subsidiaries, flightglobal.com 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.
=====================
N E W Z E A L A N D
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FIRST INSURANCE: Fitch Affirms BB+ Insurer Fin'l. Strength Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed New Zealand-based First Insurance
Limited's (FIL) Insurer Financial Strength (IFS) Rating at 'BB+'
(Moderately Weak). The Outlook is Stable.
KEY RATING DRIVERS
FIL's rating reflects the insurer's 'Moderately Weak' financial
performance and earnings, 'Good' capitalisation and leverage, and
'Less Favourable' business profile. It also incorporates
operational benefits from being fully owned by First Credit Union
(FCU, BB/Stable), one of New Zealand's largest credit unions by
assets.
Gross premiums were down by 12% in the first-half ended December 31
(1H21), based on the unaudited accounts, due to lower lending
volume at FCU amid government measures aimed at slowing the spread
of Covid-19. Falling business volume is a key threat to FIL's
profitability and is exacerbated by its small scale. However, Fitch
thinks this risk is somewhat mitigated by FIL's ability to quickly
reprice products and also due to a lean cost base.
Fitch thinks FIL's earnings will also come under pressure as it
addresses recommendations made by regulators following an
industrywide review of conduct and culture. FIL has revisited its
funeral insurance product to improve customer value, and
strengthened internal policies and procedures to limit conduct
risk. In addition, low interest rates will also constrain
investment income. FIL could see a spike in redundancy and
disability claims costs, but Fitch thinks this risk is manageable,
because of New Zealand's relative success at containing Covid-19.
The insurer has weak profitability, but Fitch expects profitability
metrics to remain within tolerances for the rating level, given
FIL's ability to raise premiums. Return on equity averaged 1.1% in
the last two years, within Fitch's criteria guideline for 'BB'
rated insurers.
Fitch expects FIL to be capitalised adequately, considering
management's intention to maintain a buffer of NZD1 million above
the minimum regulatory requirement of NZD5 million. However, Fitch
thinks FIL's low absolute capital level leaves the insurer
susceptible to external shocks and remote operational risks. These
factors weigh heavily in Fitch's rating assessment of small
insurers such as FIL.
Fitch ranks FIL's business profile as 'Less Favourable' against
other insurers in New Zealand due to the modest market presence,
limited product offering and dependence on the parent's member base
to sell products. FIL had gross premiums of NZD2.1 million in FY20
and total assets of NZD7.0 million. As such, Fitch scores the
business profile at 'bb' under Fitch's credit-factor scoring
guidelines.
FIL started operations in June 2018. It underwrites LPI and funeral
insurance for FCU's members. LPI includes life, disability,
hospital, redundancy, bankruptcy and trauma protection benefits in
respect of personal loans taken out by FCU members. FIL's products
are distributed by FCU and FIL has no direct employees - all
services are performed by FCU for a fee.
FIL's investment risk is low. The insurer's investments mirror
those of FCU's liquidity portfolio - term deposits with New
Zealand-registered banks. All investments are in the form of
high-quality short-term deposits and cash.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A reduction in FIL's operational synergies with FCU; for
example, the franchise may be damaged in the event that FIL
becomes less important to FCU and access to its distribution
channels is restricted;
-- Regulatory capital ratio falling below 115% (FYE20: 123%)
without management plans to rectify this;
-- Financial performance significantly below expectations with
return on equity sustained below 0.2%.
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Improvements in the business profile, which will be evident
from greater operational scale, a stronger business franchise
and more diverse distribution channels, while maintaining
strong financial performance and capitalisation metrics.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond 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.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
=================
S I N G A P O R E
=================
EAGLE HOSPITALITY TRUST: Has $470M Floor Bid From Monarch
---------------------------------------------------------
Ameya Karve of Bloomberg News reports that Eagle Hospitality Trust
and its entities, which have sought Chapter 11 bankruptcy
protection, obtained a bidder for their hotel properties that
values them at a floor price of $470 million.
Madison Phoenix LLC, a so-called stalking-horse bidder and
affiliate of Monarch Alternative Capital LP, submitted a proposal
superior to all the others received to date, Singapore-listed EHT
said in a filing Tuesday, March 9, 2021. The company got 29
proposals mostly related to the purchase of all or some of the
Chapter 11 properties, it said.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021. EHT US1 estimated
$500 million to $1 billion in assets and liabilities as of the
bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases
on Feb. 4, 2021. The committee is represented by Morris James, LLP
and Kramer Levin Naftalis & Frankel, LLP.
EAGLE HOSPITALITY: Bank of America Seeks Case Dismissal
-------------------------------------------------------
Vivienne Tay of The Business Times reports that the Bank of America
(BOA) has filed a motion to dismiss the Chapter 11 cases of Eagle
Hospitality Real Estate Investment Trust (EH-Reit) and Eagle
Hospitality Trust (EHT) Singapore entities Eagle Hospitality Trust
S1 and Eagle Hospitality Trust S2.
BOA is the administrative agent of EH-Reit's US$341 million (SGD454
million) prepetition syndicated credit agreement, the trustee of
EHT said on March 1 in a bourse filing.
BOA's move comes as the US bankruptcy court approves a US$100
million debtor-in-possession (DIP) term loan facility with Monarch
Alternative Capital.
The court approval allows entities of EHT which have filed for
Chapter 11 bankruptcy in the US, including EH-Reit, to borrow up to
US$100 million for use under an approved budget. This amount can be
increased up to US$125 million under certain conditions.
EHT's trustee said the proceeds will be used for working capital
needs such as funding critical operating expenses, as well as
general corporate and other purposes, including funding the costs
of the Chapter 11 cases.
This is to facilitate any restructuring of the Chapter 11 entities
- including EH-Reit and the EHT Singapore entities, as well as
provide sufficient time for any value-maximising strategies or
propositions.
If BOA succeeds in dismissing the bankruptcy protection cases of
EH-Reit and the EHT Singapore entities, EH-Reit and the Singapore
entities will not be able to access the DIP financing facility.
The hearing for BOA's motion has been scheduled for April 2021 at
10 a.m., New York time. Objections are due by March 22, 2021 at 4
p.m. in the same time zone.
EHT's trustee said on Tuesday that it has instructed Moelis &
Company -- the financial adviser of the Chapter 11 entities -- to
commence a sale process for 15 EHT properties.
These properties, together with Delta Woodbridge (DW), Hilton
Houston Galleria Area (HHG) and Crowne Plaza Dallas Near
Galleria-Addison, are all the properties in EHT's portfolio owned
by certain Chapter 11 entities.
EHT's Reit trustee is exploring all options available in respect of
DW and HHG and their respective mortgage loans.
The lender of the HHG mortgage loan had filed a foreclosure notice
and sent a notice of a foreclosure sale for HHG held on March 2, in
response to HHG's master lessor's default in payment of the debt
secured by HHG.
Wells Fargo, the lender of the DW mortgage loan, filed a complaint
to seek an order for the foreclosure and possession of DW, among
others. It also filed an application for the appointment of a rent
receiver to take charge and manage DW, as well as collect and
receive rent.
Meanwhile, Crowne Plaza Dallas Near Galleria-Addison will be put up
for auction in early April 2021.
EHT is a hospitality stapled group comprising EH-Reit and Eagle
Hospitality Business Trust (EH-BT).
The stapled group lost its manager last year following a directive
from the Monetary Authority of Singapore to remove the incumbent
manager Eagle Hospitality Reit Management. A proposal to appoint a
new manager failed to get the necessary support from stapled
security holders at an extraordinary general meeting on Dec. 30,
2020.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021. EHT US1 estimated
$500 million to $1 billion in assets and liabilities as of the
bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases
on Feb. 4, 2021. The committee is represented by Morris James, LLP
and Kramer Levin Naftalis & Frankel, LLP.
GLOBAL SPORTS: High Court Approves Judicial Management Application
------------------------------------------------------------------
The High Court of Singapore entered an order on March 8, 2021, to
place Global Sports Commerce Pte Ltd under judicial management.
Crest Investment Holdings Pte. Ltd. filed the petition against the
company on Oct. 13, 2020.
The company's Judicial Manager is:
Tam Chee Chong
c/o 204B Telok Ayer Street
Singapore 068640
Singapore-based Global Sports Commerce Pte. Ltd. (GSC) --
http://www.globalsportscommerce.com/-- operates as a sports,
technology, and management company. The Company offers cutting edge
technology solutions for digital LED signage technology, sports
scoring software, and connectivity, as well as provides strategic
consulting, client management, and other related services. GSC
serves customers worldwide.
INTER-PACIFIC PETROLEUM: Court to Hear Wind-Up Petition March 25
----------------------------------------------------------------
A petition to wind up the operations of Inter-Pacific Petroleum Pte
Ltd will be heard before the High Court of Singapore on March 25,
2021, at 10:00 a.m.
Andrew Grimmett and Lim Loo Khoon of Deloitte & Touche, the
company's judicial managers, filed the petition against the company
on Feb. 24, 2021.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
6, 2019, Deloitte & Touche said on Sept. 5 it has been appointed by
Singapore's high court to act as interim judicial manager for
Inter-Pacific Group Pte (IPG) in an application for a court-led
debt restructuring process. The appointment, following a
nomination by IPG, comes more than two months after IPG unit
Inter-Pacific Petroleum Pte (IPP) had a licence to operate bunker
fuel tankers suspended by Singapore's Maritime Port Authority
(MPA). The MPA detected operational irregularities during an
inspection.
*********
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
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
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