/raid1/www/Hosts/bankrupt/TCRAP_Public/210322.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
Monday, March 22, 2021, Vol. 24, No. 52
Headlines
A U S T R A L I A
ACS INSULATION: First Creditors' Meeting Set for March 29
ALEXANDRIA IMEX: First Creditors' Meeting Set for March 26
DALEY GROUP: First Creditors' Meeting Set for March 29
GREENSILL: Creditors Made Over AUD1.75BB in Claims in Australia
MILLENNIUM LTD: First Creditors' Meeting Set for March 26
NEXTECH SOLUTIONS: First Creditors' Meeting Set for March 29
ORDER OF AUSTRALIAN HELLENIC: Unsecured Creditors Get 100% Payment
TBC SUPPLIES: First Creditors' Meeting Set for March 29
WGH HOLDINGS: First Creditors' Meeting Set for March 29
C H I N A
HNA GROUP: Seeks Investors in Step Toward Bankruptcy Restructuring
[*] CHINA: Record Defaults Hit Weak Firms as Liquidity Tightens
I N D I A
A B WAGH: CRISIL Keeps B+ Debt Ratings in Not Cooperating
AADYA MOTOR: CRISIL Keeps D Debt Ratings in Not Cooperating
ACME SAWANT: CRISIL Keeps B+ Debt Ratings in Not Cooperating
AGARWAL DIAM: CRISIL Keeps B+ Debt Ratings in Not Cooperating
AGGARWAL AUTOMOTIVE: CRISIL Keeps B+ Debt Rating in Not Cooperating
ALCOCK ASHDOWN: Insolvency Resolution Process Case Summary
AQUA WORLD: CRISIL Reaffirms B+ Ratings on INR20cr Loans
ARISTOCRAFT PAPERS: CRISIL Keeps D Ratings in Not Cooperating
ATC CHEMICALS: CRISIL Keeps B Debt Ratings in Not Cooperating
C P ISPAT PRIVATE: CRISIL Keeps D Debt Ratings in Not Cooperating
C.P. EXPORTS: CRISIL Lowers Ratings on INR23cr Loans to B
CASVA TILES: CRISIL Keeps B+ Debt Ratings in Not Cooperating
CELITE TYRE: CARE Hikes Rating on INR13.52cr LT Loan to B-
CHENAB INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating
COLUMBIA PETRO: Ind-Ra Keeps 'BB' Issuer Rating in Non-Cooperating
COSMOS BUSINESS: CRISIL Keeps B+ Debt Rating in Not Cooperating
DUTTA AGRO: CARE Moves D Debt Ratings to Not Cooperating
IIERT JUNE 2018: Ind-Ra Cuts ABS Transaction Rating to 'B+'
IIERT MARCH 2018: Ind-Ra Keeps BB- ABS Rating in Non-Cooperating
IIERT OCTOBER 2018: Ind-Ra Cuts ABS Transaction Rating to 'B+'
JAGDAMBA RICE: CARE Lowers Rating on INR15.59cr LT Loan to B
KAUSHAL SHARMA: CARE Lowers Rating on INR15cr LT Loan to B+
KISAN GINNING: CARE Lowers Ratings on INR10cr LT Loan to B+
KJS CEMENT: Ind-Ra Cuts Long-Term Issuer Rating to 'BB'
MAHIMA COLD: CARE Reaffirms B+ Rating on INR6.22cr LT Loan
MALEGAON MANMAD: CARE Raises Rating on INR65.41cr Loan to B
MOHAN IRON: CARE Reaffirms B+ Rating on INR1.78cr LT Loan
MURLI COLD: CARE Reaffirms B+ Rating on INR9.97cr LT Loan
NAGARJUNA OIL: NCLT Approves Haldia's Resolution Plan
SEFL DA SEP 2019 II: Ind-Ra Cuts Guarantee-Backed Rating to 'B+'
SEFL DA SEP 2019 III: Ind-Ra Cuts Guarantee-Backed Rating to B+
SREENAGAR COLD: CARE Lowers Rating on INR7.41cr Loan to B-
TELAWNE POWER: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
VIRTUE MARKETING: CARE Keeps D Debt Ratings in Not Cooperating
WHITE LOTUS: CRISIL Keeps D Debt Ratings in Not Cooperating
S I N G A P O R E
CHINA FISHERY: Kirkland & Ellis Updates on Noteholders
SEN YUE: To Oppose DBS' Judicial Management Applications
T H A I L A N D
THAI AIRWAYS: Disputes US$7.4 Billion of Aircraft Lessor Claims
- - - - -
=================
A U S T R A L I A
=================
ACS INSULATION: First Creditors' Meeting Set for March 29
---------------------------------------------------------
A first meeting of the creditors in the proceedings of ACS
Insulation Pty Ltd will be held on March 29, 2021, at 11:30 a.m. at
the offices of Cor Cordis, 28 The Esplanade, in Perth, WA.
Jeremy Joseph Nipps and Clifford Stuart Rocke of Cor Cordis were
appointed as administrators of ACS Insulation on March 17, 2021.
ALEXANDRIA IMEX: First Creditors' Meeting Set for March 26
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Alexandria
Imex Pty Ltd, trading as SES Fashion, and Avocado Holdings Pty Ltd
will be held on March 26, 2021, at 11:30 a.m. via virtual meeting.
Patrick Loi and John Stevens Chand of Greengate Advisory were
appointed as administrators of Alexandria Imex on March 18, 2021.
DALEY GROUP: First Creditors' Meeting Set for March 29
------------------------------------------------------
A first meeting of the creditors in the proceedings of Daley Group
(WA) Pty Ltd will be held on March 29, 2021, at 12:30 p.m. via
electronic facilities.
Jeremy Joseph Nipps and Clifford Stuart Rocke of Cor Cordis were
appointed as administrators of Daley Group on March 17, 2021.
GREENSILL: Creditors Made Over AUD1.75BB in Claims in Australia
---------------------------------------------------------------
Paulina Duran at Reuters reports that administrators of collapsed
British supply chain financier Greensill said on March 19 that 34
creditors submitted claims of more than AUD1.75 billion (US$1.35
billion) in a meeting with the company's Australian parent,
Greensill Capital Pty.
Reuters relates that Grant Thornton, who were appointed
administrators earlier this month, said in an emailed statement the
claims had not been verified and excluded claims of employees of
the Australian company, 35 of whom had been made redundant.
Greensill's Australian parent provides administration and head
office support to the London-based group that collapsed earlier
this month after losing insurance coverage for its debt repackaging
business, but operates "only in a limited capacity", the statement
said, Reuters relays.
A small number of staff had been kept to support the administrator,
it added.
According to Reuters, a creditors committee had been appointed on
March 19 at the first virtual creditors meeting, which includes
representatives of SoftBank, Credit Suisse, another unnamed
creditor, and a representative of employees.
Japan's SoftBank is a "significant" creditor of the parent, and
Credit Suisse holds security over some of its assets, Reuters
relates citing a March 11 regulatory document filed by Grant
Thornton.
Also present at the meeting were the Australian Taxation Office,
Australia's corporate regulator, the Attorney General's department
and the Association of German banks, Reuters says.
Reuters adds that Grant Thornton also said it would provide a
report to creditors in about three weeks and a second meeting of
creditors would be held on April 22, where they would vote on
whether to liquidate the company or accept a restructuring
proposal.
"The administrators confirmed to creditors that, at this stage,
they had not received a Deed of Company Arrangement proposal for
consideration," the statement said.
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.
Matthew James Byrnes, Philip Campbell-Wilson and Michael McCann of
Grant Thornton were appointed as administrators of Greensill
Capital on March 9, 2021.
MILLENNIUM LTD: First Creditors' Meeting Set for March 26
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Millennium
Ltd will be held on March 26, 2021, at 10:00 a.m. via
teleconference only.
Sule Arnautovic and John Vouris of Hall Chadwick were appointed as
administrators of Millennium Ltd on March 18, 2021.
NEXTECH SOLUTIONS: First Creditors' Meeting Set for March 29
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Nextech
Solutions Pty Ltd will be held on March 29, 2021, at 10:00 a.m. via
teleconference only.
Kathleen Vouris and Richard Albarran of Hall Chadwick were
appointed as administrators of Nextech Solutions on March 18,
2021.
ORDER OF AUSTRALIAN HELLENIC: Unsecured Creditors Get 100% Payment
------------------------------------------------------------------
Sarah Falson at The Leader reports that the administrators of Greek
community group, The Order of the Australian Hellenic Educational
Progressive Association (AHEPA) NSW Inc, have paid a dividend to
the majority of creditors to the sum of over
AUD2 million which represents a 100 cents in the dollar return to
unsecured creditors.
The Association, which is one of the oldest in the Greek community
- starting in Australia in 1934 - entered Voluntary Administration
in September 2020 owing AUD3 million to creditors, The Leader
notes.
According to the report, the amount owed related primarily to legal
fees and also for consulting fees connected to a proposal to
redevelop the Bexley Bowling Club.
AHEPA planned to demolish Bexley Bowling Club in Laycock Street,
Bexley North to build a new two-storey registered community club
under a AUD7.43 million proposal.
Michael Hird and Alan Walker of restructuring and insolvency firm,
Cor Cordis, were appointed as administrators.
The Leader relates that Mr. Hird said the majority of unsecured
creditor claims had been paid following the creditors resolving on
December 16, 2020 to vote in favor of a Deed of Company
Arrangement.
"The control of the Association reverted to the Committee of
Management on the signing of the Deed on 18th December 2020," the
report quotes Mr. Hird as saying. "The role of the Deed
Administrators since then has been to administer the Deed,
adjudicate creditors' claims and pay the unsecured creditors their
dividend."
"The Association can now get on with plans for the future."
TBC SUPPLIES: First Creditors' Meeting Set for March 29
-------------------------------------------------------
A first meeting of the creditors in the proceedings of TBC Supplies
QLD Pty Ltd will be held on March 29, 2021, at 10:00 a.m. via Skype
for Business teleconference.
Geoffrey Trent Hancock of PKF was appointed as administrator of TBC
Supplies on March 17, 2021.
WGH HOLDINGS: First Creditors' Meeting Set for March 29
-------------------------------------------------------
A first meeting of the creditors in the proceedings of WGH Holdings
Pty Ltd will be held on March 29, 2021, at 2:30 p.m. at the offices
of Worrells Solvency & Forensic Accountants, Level 4, 15 Ogilvie
Road, in Mount Pleasant, WA.
Mervyn Jonathan Kitay of Worrells Solvency & Forensic Accountants
was appointed as administrator of WGH Holdings on March 17, 2021.
=========
C H I N A
=========
HNA GROUP: Seeks Investors in Step Toward Bankruptcy Restructuring
------------------------------------------------------------------
Huang Rong and Luo Meihan at Caixin Global report that the once
high-flying Chinese conglomerate HNA Group Co. Ltd. is seeking
strategic investors for its airline, airport and retail businesses
after receiving court approval to include the giant and 320 of its
related companies in a single bankruptcy restructuring case.
According to Caixin, HNA's decision, made public March 19 in three
separate announcements by its restructuring team, offers a glimpse
at which parts of the conglomerate's sprawling business empire
might survive restructuring as the company attempts to crawl out
from under the heap of debt it amassed during a global buying
binge. Once one of China's most prominent and prolific dealmakers,
HNA attracted attention for purchases including stakes in New
York-listed hotel giant Hilton Worldwide Holdings Inc. and banking
titan Deutsche Bank AG, which at one point caused its total assets
to balloon to CNY1.2 trillion ($184 billion). Amid a government
crackdown on debt-driven spending, HNA has since 2017 shifted focus
back to its core aviation business.
In one of March 19 announcements, HNA's restructuring team said
that would-be strategic investors will be required keep operations
of the private conglomerate's core airline business unchanged.
Specifically, investors won't be allowed to sell any of HNA's
airlines, such as Shanghai-listed Hainan Airlines Holding Co. Ltd.
whose stock has been slapped with "special treatment" status,
meaning it is in danger of being delisted.
About HNA Group
China-based HNA Group Co. Ltd. offers airlines services. The
Company provides domestic and international aviation
transportation, air travel, aviation maintenance, and aviation
logistics services. HNA Group also operates holding, capital,
tourism, logistics, and other business.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 1, 2021, HNA Group on Jan. 29 declared bankruptcy and
restructuring after a multi-year debt and liquidity crisis. The
company was informed by South China's Hainan High People's Court on
Jan. 29 that "because the company is unable to pay off its debts,
related creditors appealed to the court for the company's
bankruptcy and restructuring," HNA said.
According to Global Times, HNA Group said it will cooperate with
the court for judicial review, carry forward the debt disposal, and
support the court's protection of the legal rights of its creditors
so as to ensure the smooth operations of the company.
On March 15, 2021, a court in Hainan approved the merger and
restructuring of 320 affiliates of HNA Group into the parent
company, paving way for the conglomerate to eventually emerge from
bankruptcy, Caixin Global said.
HNA Group was designated as administrator of the merger, and
creditors will hold their first meeting June 4, according to a
statement issued March 15 by the Hainan High People's Court. The
320 units will be integrated into HNA group's bankruptcy
reorganization, and the group will submit a restructuring plan to
the creditor meeting for approval, the court said.
[*] CHINA: Record Defaults Hit Weak Firms as Liquidity Tightens
---------------------------------------------------------------
Bloomberg News reports that it's becoming clearer which parts of
China's corporate sector are most at risk of credit-market stress
as Beijing pulls back liquidity: property firms, local government
financing vehicles and energy producers.
According to Bloomberg, developers account for a fifth of the $10
billion worth of delinquencies in China this year, while some
concern is growing over local state-linked firms after one based in
Chongqing missed payments on commercial bills. Coal companies in
the country's northeast are struggling to refinance in the wake of
a shock default by a state-owned firm late last year.
Beijing is walking a tightrope of allowing struggling companies to
default while trying to avoid stress spilling over into the broader
credit market, Bloomberg says. The Communist Party is making the
reduction of financial risk a priority this year as a strengthening
economy gives officials room to tackle the nation's debt mountain.
So far its efforts seem to be working: a key indicator of risk
appetite in the broader market has remained robust despite rising
delinquencies.
"As credit policy normalizes, it will be more difficult to roll
over debt and we expect to see more defaults in the quarters to
come," Bloomberg quotes Carol Liao, China economist at Pimco Asia
Ltd, as saying. Industries with overcapacity, signs of overheating
or that are environmentally unfriendly face some of the biggest
risks, she said. They include the coal industry and smaller, highly
leveraged developers with projects concentrated in lower-tier
Chinese cities.
Borrowers have defaulted on some $10 billion of bonds in China's
onshore and offshore credit markets so far in 2021, the highest on
record compared to the same period in previous years, according to
data compiled by Bloomberg.
Bloomberg says a clampdown on leverage in China's debt-bloated
property sector has brought defaults as Beijing looks to curb
borrowing with the "three red lines" effort. The policy limits the
capacity of highly indebted firms to raise fresh capital in the
credit market.
Bloomberg relates that some weaker real estate firms' bonds have
underperformed this year as investors show concern about the
refinancing capability of weaker and highly leveraged developers
after the high-profile delinquency by China Fortune Land
Development Co. and two missed payments by Chongqing Sincere
Yuanchuang Industrial Co.
Listed builders have sold less new onshore debt each month than the
total due since June, according to Bloomberg-compiled data, the
longest negative net financing streak since at least 2015. The
firms entered 2021 having to refinance or repay CNY309 billion ($48
billion) in outstanding local bonds, the highest maturity wall in
at least 11 years, the data show.
Weaker local government-backed borrowers in China are also showing
increased signs of stress, Bloomberg says. While LGFVs have a
so-far-unblemished record in public debt markets, there has been a
default by a local state-linked firm on commercial bills this
year.
Chongqing Energy Investment Group Co.'s dollar note due in 2022
lost more than half its value after it emerged the firm failed to
pay CNY915 million of borrowings, Bloomberg discloses. Analysts are
also flagging rising credit risks among LGFVs in Hunan and Yunnan
provinces while saying local-government credit divergence is set to
accelerate. So-called hidden debt at local levels was elevated to a
"national security" issue at China's annual legislative meetings
this month.
"We definitely will be even more prudent with name selection now as
most of these entities still rely on an active primary market" to
roll over debt and require fresh capital inflows, said Edmund Goh,
Asia fixed-income investment director at Aberdeen Standard
Investments in Shanghai, Bloomberg relays. Focus will now be on
short-term cash coverage and asset quality for local state-owned
enterprises, he added.
According to Bloomberg, S&P Global Ratings currently has a net
negative outlook bias on its rated SOE portfolio, "mainly due to
the unsustainable capital structure for certain companies,
potential weakening of some local governments' fiscal positions and
government support that has become more selective," according to
Chang Li, an analyst at the firm.
Refinancing pressures in China's coal-producing regions are set to
squeeze commodity firms in those locales, Bloomberg notes. The
sector has struggled to restore investor confidence following the
default of Yongcheng Coal & Electricity Holding Group Co. in
November, and already faces challenges as Beijing pursues
consolidation and a national goal of net zero carbon emissions by
2060.
The refinancing ratio, which measures the level of monthly issuance
relative to maturing debt, weakened the most in neighboring Shanxi
and Hebei provinces, according to data compiled by Bloomberg of
corporate bonds issued in China. Companies in Shanxi, one of
China's biggest coal producers, only raised enough money to cover
25% of February's maturing debt, the least in nearly three years
and versus 184% in December. February's figure for Hebei firms was
18%, compared with 124% in December.
=========
I N D I A
=========
A B WAGH: CRISIL Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of A B Wagh (AH)
continue to be 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2.6 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 2.0 CRISIL B+ /Stable (Issuer Not
Cooperating)
Proposed Bank 0.4 CRISIL B+ /Stable (Issuer Not
Guarantee Cooperating)
Proposed Cash 3.0 CRISIL B+ /Stable (Issuer Not
Credit Limit Cooperating)
CRISIL Ratings has been consistently following up with AH for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 AH, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AH is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of AH
continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
AH, incorporated in 2009, is a Mandi (Himachal Pradesh)-based
hospital, promoted by Dr. Arun Chandel and Dr. Bandna Chandel. AH
currently manages a 50-bed multi-specialty hospital in Mandi
offering specialisation in Orthopaedics, Gynaecology and
Obstetrics, and Physiotherapy and Radiology.
AADYA MOTOR: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Aadya Motor
Company India Private Limited (AMCPL) continue to be 'CRISIL
D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 12 CRISIL D (Issuer Not
Cooperating)
Working Capital 20 CRISIL D (Issuer Not
Facility Cooperating)
CRISIL Ratings has been consistently following up with AMCPL for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 AMCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AMCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AMCPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
Incorporated in 2012, AMCPL, promoted by Mr. V Ramanand Rao, is the
authorised dealer for Porsche, with its showroom in Mumbai. The
company began operations in September 2012. The promoter also has
interests in auto dealerships of other brands through group
entities.
ACME SAWANT: CRISIL Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of ACME Sawant
Ventures (ACME) continue to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Project Loan 8 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Long Term 10 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with ACME for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 ACME, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ACME
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ACME continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Set up in 2012, ACME is a partnership firm promoted by Mr. Abhay
Desai, Mr. Rajeev Sawant, and Mr. Vijay Mundphane for developing
residential real estate projects.
AGARWAL DIAM: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Agarwal Diam
Expo Private Limited (ADEPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Cash 0.5 CRISIL B+/Stable (Issuer Not
Credit Limit Cooperating)
CRISIL Ratings has been consistently following up with ADEPL for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 ADEPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ADEPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ADEPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 2011, Mumbai-based ADEPL is promoted by Bansal
family. The company trades in polished diamonds.
AGGARWAL AUTOMOTIVE: CRISIL Keeps B+ Debt Rating in Not Cooperating
-------------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Aggarwal
Automotive Private Limited (AAPL) continues to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Inventory 19 CRISIL B+/Stable (Issuer Not
Funding Facility Cooperating)
CRISIL Ratings has been consistently following up AAPL for
obtaining information through letters and emails dated August 22,
2020 and February 27, 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 AAPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AAPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AAPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
AAPL was incorporated in 2014 by the Delhi-based Bansal family.
AAPL runs a HMIL dealership in Delhi. AAPL has two sales showrooms
along with one service and spares workshop. Mr. Harsh V Bansal is
the director in the company, actively managing the company's
operations. AAPL is a part of the Unity group based in Delhi,
having extensive presence in the commercial real estate sector. It
started operations in February 2015.
ALCOCK ASHDOWN: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Alcock Ashdown (Gujarat) Limited
Old Port, Bhavnagar
Gujarat 364001
India
Insolvency Commencement Date: March 8, 2021
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: September 4, 2021
Insolvency professional: Sunit Jagdishchandra Shah
Interim Resolution
Professional: Sunit Jagdishchandra Shah
303, 3rd Floor, Abhijeet-1
Opp. Bhuj Mercantile Bank
Mithakhali Six Roads
Navrangpura, Ahmedabad 6
E-mail: sunit78@gmail.com
cirp.aagl@gmail.com
Last date for
submission of claims: March 22, 2021
AQUA WORLD: CRISIL Reaffirms B+ Ratings on INR20cr Loans
--------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Aqua World Exports Private Limited
(AWEPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 0.2 CRISIL B+/Stable (Reaffirmed)
Export Packing
Credit 19.8 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the company's exposure to customer
concentration risk and its below-average financial risk profile.
These weaknesses are partially offset by the extensive experience
of promoters in the seafood export business.
Key Rating Drivers & Detailed Description
Weakness:
* Exposure to customer concentration risk: AWEPL derives 40%
revenue from a single client, Lulu International group, rendering
the business vulnerable to customer concentration. Any vendor
rationalisation effort by the client could weaken the company's
business.
* Below-average financial risk profile: Financial risk profile will
likely remain below average due to a leveraged capital structure,
resulting from large payables and working capital debt. Total
outside liabilities to tangible networth (TOLTNW) ratio was high at
6.90 times as on March 31, 2020. Debt protection metrics were
moderate, as indicated by interest coverage of 2.09 times and net
cash accrual to adjusted debt ratio of 0.07 time in fiscal 2020.
Strengths:
* Extensive experience of the promoters: Key promoter, Mr. S
Haridas, has been associated with the seafood export business for
more than three decades, and has established healthy relationships
with customers and suppliers.
Liquidity: Stretched
Fund based limit of INR19.8 was fully utilised over the 12 months
through January 2021. The company does not have any debt obligation
in Fiscal 2021. Cash accrual is expected at INR1.5-2 crore over the
medium term and will be adequate to meet debt obligation of INR0.7
crore in Fiscal 2022 and Rs.1.17 crore in Fiscal 2023.
Outlook: Stable
CRISIL Ratings believes AWEPL will continue to benefit from the
experience of the promoters.
Rating Sensitivity factors
Upward factors
* Improvement in capital structure marked by decline in TOLTNW
ratio to below 5 times
* Increase in revenue with stable operating margin, leading to
better accrual
Downward factors
* Decline in revenue or in operating profitability leading to cash
accrual of less than INR1 crore
* Weakening of financial risk profile because of debt contracted
for working capital or capital expenditure.
Established in 2003 and based in Chennai, AWEPL exports marine
products such as shrimp, squid, octopus, groupers, and various
varieties of fish. The company has capacity to process 40 tonne of
marine products per day. Mr. S Haridas and Ms Anupama Haridas are
the promoters.
ARISTOCRAFT PAPERS: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Aristocraft
Papers Private Limited (APPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.5 CRISIL D (Issuer Not
Cooperating)
Proposed Long 0.5 CRISIL D (Issuer Not
Term Bank Cooperating)
Loan Facility
Term Loan 5.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with APPL for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 APPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on APPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
APPL continues to be 'CRISIL D Issuer Not Cooperating'.
APPL was incorporated in 2008, promoted by Mr. Sanjay Kumar Jain,
Mr. Praveen Kumar Jain, Mr. Praveen Kumar Singhal, and Mr. Naresh
Kumar Jain. The company manufactures kraft paper at its facility in
Muzzafarnagar (Uttar Pradesh).
ATC CHEMICALS: CRISIL Keeps B Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of ATC Chemicals
India Private Limited (ATCIPL) continue to be 'CRISIL B/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B/Stable (Issuer Not
Cooperating)
Long Term Loan 1.52 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term
Bank Loan Facility 0.48 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ATCIPL for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 ATCIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
ATCIPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of ATCIPL continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Incorporated in 2004, ATCIPL manufactures leather chemicals. The
manufacturing facility is based in Pondicherry. The managing
director of the company is Mr. J B Gualino.
C P ISPAT PRIVATE: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of C P Ispat
Private Limited (CPIPL) continue to be 'CRISIL D/CRISIL D Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.2 CRISIL D (Issuer Not
Cooperating)
Cash Credit 12.0 CRISIL D (Issuer Not
Cooperating)
Term Loan 7.8 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CPIPL for
obtaining information through letters and emails dated August 31,
2020 and February 27, 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 CPIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CPIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CPIPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
CPIPL, incorporated in 2006, manufactures sponge iron. The company
commenced commercial production in July 2009 at its facility in
Durgapur, West Bengal. CPIPL was promoted by the Kolkata-based
Chawla family and was earlier managed by Mr. Amarjeet Chawla.
However, in September 2013, the Chawla family leased out the plant
to the Durgapur-based Jayshree group owned by Mr. Amit Agarwal and
his family. Since September 15, 2013, operations of the plant have
been managed by the Jayshree group. In February 2014, the Jayshree
group entered into an agreement with the Chawla family to purchase
CPIPL with effect from April 2014.
C.P. EXPORTS: CRISIL Lowers Ratings on INR23cr Loans to B
---------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of C.P.
Exports (CPE) to 'CRISIL B/Stable Issuer Not Cooperating' from
'CRISIL BB-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 2 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 3 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Cash Credit/ 18 CRISIL B/Stable (ISSUER NOT
Overdraft facility COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with CPE for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 CPE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CPE
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CPE Revised to 'CRISIL B/Stable Issuer Not Cooperating' from
'CRISIL BB-/Stable Issuer Not Cooperating'.
Set up in 1994 as a partnership firm by Mr. C Eswaran and Mr. C
Shunmugapriya, CPE processes and trades in coffee beans.
CASVA TILES: CRISIL Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Casva Tiles
Private Limited (CTPL) continue to be 'CRISIL B+/Stable/CRISIL A4
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.13 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 3 CRISIL B+ /Stable (Issuer Not
Cooperating)
Proposed Long 2.57 CRISIL B+ /Stable (Issuer Not
Term Bank Cooperating)
Loan Facility
Term Loan 6.8 CRISIL B+ /Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CTPL for
obtaining information through letters and emails dated August 22,
2020 and February 27, 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 CTPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CTPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CTPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Incorporated in 2013, CTPL is promoted by Morbi, Gujarat-based Mr.
Arvind Aghara and Mr. Chamanlal Aghara. The company produces
digital wall tiles and started commercial operations in July 2014.
CELITE TYRE: CARE Hikes Rating on INR13.52cr LT Loan to B-
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Celite Tyre Corporation (CTC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 2.38 CARE B-; Stable Revised from
Facilities CARE D; Stable outlook assigned
Long Term Bank 13.52 CARE B-; Stable Revised from
Facilities CARE D; Stable outlook assigned
Short Term Bank
Facilities 12.75 CARE A4 Revised from CARE D
Detailed Rationale & Key Rating Drivers
The revision in the ratings for the bank facilities of CTC takes
into account establishment of track record of regular servicing of
its debt obligations for over the last 90 days with no instance of
overdrawal in its fund-based limits exceeding 30 days. The ratings
for CTC continue to remain constrained on account of its modest
scale of operations, weak leverage and debt coverage indicators and
stretched liquidity along with working capital intensive
operations. The ratings also continue to remain constrained on
account of CTC's constitution as proprietorship firm and exposure
of its profitability to volatility in prices of traded goods as
well as foreign exchange rates. The ratings, however, continue to
draw strength from the experience of the proprietor in the tyre
trading industry, longstanding track record of CTC's operations and
its established distribution network.
Rating Sensitivities
Positive Factors
* Volume driven growth in scale of operations along with
improvement in operating profitability (PBILDT margin) beyond 8% on
a sustained basis
* Improvement in overall gearing to below 2.00x on a long-term
basis with reduced reliance on external borrowings to fund working
capital requirements
Negative Factors
* Deterioration in liquidity with continued reliance on bank
borrowings to fund working capital requirements
* Further increase in inventory holding or any major write-off of
outstanding inventory
Detailed description of the key rating drivers
Key Rating Weaknesses
* Modest scale of operations: During FY20, CTC reported growth of
~14% y-o-y in its total operating income (TOI) to INR73.11 crore,
compared with TOI of INR64.23 crore in FY19, which was largely on
account of increase in demand for its products. However, its TOI
continued to remain modest during FY20. CTC's profitability
continued to remain moderate marked by PBILDT margin of 6.99% for
FY20, which declined by 183 bps from 8.82% for FY19 largely on
account of increase in employee and other costs during the year.
CTC's PAT margin continued to remain thin at 1.07% for FY20 (1.47%
for FY19) on account of its high interest costs.
* Weak capital structure and debt coverage indicators: CTC's
overall gearing improved during FY20, however continued to remain
high, marked by overall gearing of 3.39x as on March 31, 2020
(5.02x as on March 31, 2019). The improvement in overall gearing
was largely on account of decline in unsecured loans from related
parties during FY20. CTC's debt coverage indicators continued to
remain weak, marked by total debt /GCA continued of 28.67x as on
March 31, 2020 (27.09x as on March 31, 2019) and its interest
coverage of 1.24x for FY20 (1.28x for FY19).
* Vulnerability of profitability to adverse fluctuation in forex
rates: CTC is exposed to unfavourable movement in forex rates due
to its import of tyres, which forms about 50% of its total
purchase. Also, as CTC does not have any exports, there is no
natural hedge for its import payables. Further, despite sizeable
exposure to forex risk, it does not have any active hedging policy
in place, underlining the inherent risk.
* Proprietorship nature of its constitution: CTC's constitution as
a proprietorship firm restricts its overall financial flexibility
in terms of limited access to external funds for business
requirements. Further, there is inherent risk of possibility of
withdrawal of capital and dissolution of the firm in case of
death/insolvency of proprietor.
* Stretched liquidity: CTC's liquidity continues to remain
stretched marked by almost full utilization of its working capital
limits at around 90-95% for the last 12 months ended January 2021,
largely on account of its sizeable inventory holding which it needs
to keep to readily serve its customers as well as to avail quantity
discount from the suppliers, along with high receivable days;
resulting in an elongated operating cycle of 126 days in its
trading of tyres business. Moreover, CTC's inventory increased as
on FY20 end, which it was unable to liquidate due to the imposition
of nationwide covid induced lockdown and as a result its cash
credit (CC) limits remained overdrawn for more than 30 days during
select months of CY2020. CTC had availed the moratorium of 6 months
from March 2020 to August 2020 offered by RBI as a COVID-19 relief
measure from its lenders. Further, CTC also received sanction for
additional working capital limit i.e. COVID-19 Emergency Credit
Line (CECL) facility of around INR2.38 crore.
Key Rating Strengths
* Extensive experience of proprietor: Mr. Kamlesh Mehta, proprietor
of CTC, has more than two decades of experience in the tyre trading
industry. He looks after overall business operations of the entity
and takes all the key decisions. Mr. Kamlesh Mehta is also
associated with another group entity 'Celite Tyre Private Limited'
(CTPL), which trades in premium branded tyres.
* Established distribution network: CTC is the authorized
distributor for various brands of tyres such as Achilles, Goodyear,
Birla, Apollo and JK tyres. These tyres find application in diverse
industries such as automobile, mining, cement, steel and
infrastructure. CTC operates from its warehousing facility located
at Vadodara with a storage capacity of more than 50,000 tyres and
has distribution network as well as stocking points spread across
14 different locations in India. With its established distribution
network, CTC sells off the road (OTR) tyres directly to the end
customers while commercial vehicle tyres are sold through dealers
as well as own sales network.
Established in 1996, CTC is a Vadodara, Gujarat, based
proprietorship firm established by Mr. Kamlesh Mehta. CTC is the
authorized distributor for various tyres such as off the road (OTR)
tyres, commercial vehicle tyres and passenger vehicle tyres. CTC
operates from its warehousing facility located at Vadodara and has
distribution network as well as stocking points spread across
India. Mr. Kamlesh Mehta is also associated with another group
entity 'Celite Tyre Private Limited', which trades in premium
branded tyres.
CHENAB INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Chenab
Industries Private Limited (CIPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 4 CRISIL D (Issuer Not
Cooperating)
Proposed Cash 5.5 CRISIL D (Issuer Not
Credit Limit Cooperating)
CRISIL Ratings has been consistently following up with CIPL for
obtaining information through letters and emails dated August 22,
2020 and February 27, 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 CIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CIPL continues to be 'CRISIL D Issuer Not Cooperating'.
Promoted by Mr. Kush Aggarwal and Mr. D S Rana, CIPL is setting up
a plant in Govindsar Industrial Area in Kathua, Jammu, to
manufacture nylon and poly propylene yarn. Operations begun in
April 2017.
COLUMBIA PETRO: Ind-Ra Keeps 'BB' Issuer Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Columbia Petro
Chem Private Limited's Long-Term Issuer Rating of 'IND BB (ISSUER
NOT COOPERATING)' in the non-cooperating category and has
simultaneously withdrawn it.
The instrument-wise rating actions are:
-- INR1.930 bil. Non-fund-based limits# maintained in non-
cooperating category and withdrawn;
-- INR120 mil. Fund-based limits* maintained in non-cooperating
category and withdrawn;
-- INR500 mil. Proposed short-term bank facility* maintained in
non-cooperating category and withdrawn; and
-- INR340 mil. Proposed long-term bank facility** maintained in
non-cooperating category and withdrawn.
#Maintained at 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn
*Maintained at 'IND BB (ISSUER NOT COOPERATING)'/'IND A4+ (ISSUER
NOT COOPERATING)' before being withdrawn
**Maintained at 'IND BB (ISSUER NOT COOPERATING)' before being
withdrawn
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-objection certificate from the lenders. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017 for credit rating agencies.
COMPANY PROFILE
Established by Kuldeep Halwasiaya in 1987 in Kolkata, Columbia
Petro Chem Private Limited manufactures liquid paraffin, white oil
and transformer oil at its facilities in Taloja (Maharashtra and
Silvassa . Its facilities have a total manufacturing capacity of
305,000 tons per year.
COSMOS BUSINESS: CRISIL Keeps B+ Debt Rating in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Cosmos
Business Machines (CBM) continues to be 'CRISIL B+/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CBM for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 CBM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CBM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CBM continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
About the Group
CBM, established in 1994, is a partnership firm engaged in
distribution, installation, and maintenance of telecom, security,
and audio-visual systems for corporates, government organisations,
and multinational corporations.
CBMPL, established in 2004, is a super distributor for the complete
range of telecom and security products of Panasonic India in Goa,
Maharashtra, Gujarat and Madhya Pradesh.
The group is promoted and managed by Mr. Aniruddha Telang and Mr.
Vivek Birje and is based in Mumbai.
DUTTA AGRO: CARE Moves D Debt Ratings to Not Cooperating
--------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Dutta
Agro Plantations Private Limited (DAPPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.89 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING Category
Short Term Bank 0.35 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING Category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from DAPPL to monitor the rating
vide email communications/letters dated October 21, 2020, November
5, 2020, November 26, 2020, December 18, 2020, February 10, 2021
and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at a fair rating. Further, DAPPL has not
paid the surveillance fees for the rating exercise as agreed to in
its Rating Agreement. The rating on DAPPL's bank facilities will
now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in June 26, 2020, the following were the
rating weaknesses and strengths (Updated the information available
from Ministry of Corporate Affairs).
Key Rating Weaknesses
* Ongoing delays in debt servicing: There are on-going delays in
term loan servicing of the entity.
Dutta Agro Plantations Private Limited (DAPPL) was incorporated in
1998 by Mr. Sanjay Dutta. Earlier the company was into trading of
tea leaves till October 2015. However, the company has set up its
tea processing plant and started processing and sale of tea from
November 2015 onwards. The processing plant of the company is
located at Chaoaphali Basti, Jalpaiguri, West Bengal with an
processing capacity of 10,00,000 kgs per annum. DAPPL owns three
tea estates in Jalpaiguri, West Bengal. The aggregate area under
cultivation is 1000 acre; having yielding capacity of 30.00 lakh kg
per annum of green leaves. The tea estate meets about 90% of
DAPPL's annual requirement of green leaves; the rest is procured
from other local gardens. The company mainly sells its products in
domestic market through auction, agents and private brokers.
IIERT JUNE 2018: Ind-Ra Cuts ABS Transaction Rating to 'B+'
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded rating of IIERT
June 2018 (an asset-backed security transaction) to 'IND B+ (SO)'
from 'IND BB- (SO)' while maintaining it on Rating Watch Negative
(RWN).
The detailed rating action is:
-- INR135.4 mil. Series A pass-through certificates (PTCs) issued
on June 28, 2018 coupon rate 8.35% due on December 2022
downgraded; Maintained on RWN with IND B+(SO)/RWN rating.
* The maturity date is subject to change due to transaction
amendments, as a consequence of COVID-19 regulatory relief in the
form of moratorium granted to borrowers in the pool.
^Balance after February 16, 2021 payout date
The construction equipment and tractor loan pool assigned to the
trust is originated by SREI Equipment Finance Limited (SEFL, the
originator or seller, collection and processing agent (CPA)).
The downgrade is primarily driven by the weakened credit and
liquidity profile of the CPA, continued utilization of credit
enhancement (CE) in the PTC transaction after the moratorium, due
to lower collection efficiency than the pre-COVID-19 levels. The
last three months' cumulative collection efficiency (last three
months collections divided by last three months billing) was 6.0%,
posing a significant liquidity risk to the transaction.
Furthermore, the monitoring of the rating has been impeded by
limited sharing of loan level and overall portfolio level
performance data by the originator as consequence of the
operational hindrances due to the COVID-19, as informed by the
CPA.
The rating has been maintained on RWN in view of the continued
uncertainty around the timely transfer of the collected cash flow
from the trust and retention account (TRA) to the securitization
trust account. The RWN also indicates the possibility of a further
rating downgrade in the event of a further CE utilization.
KEY RATING DRIVERS
Impact on Servicing Capabilities: The rating action reflects
fluctuations in the servicing, collection and recovery expertise of
SEFL because of its weakened credit profile. Although the PTCs are
issued through special purpose vehicles, SEFL continues to be the
CPA. The collection efficiency of the transaction had been
significantly impacted by SEFL's ongoing arrangement with its
consortium of creditors, wherein all the securitized loan
collections are being routed through the TRA, maintained by the
lead bank.
Liquidity Indicator - Poor: Assuming a base case default scenario
and considering collateral cash flow at end-January 2021, the
stressed cash flow along with the internal and external CE, provide
a liquidity coverage ratio of less than 1.25x of monthly payment
obligations.
Availability of External Credit Support: According to the payout
report dated February 16, 2021, the available CE of INR47.1
million, increased to 34.8% of the current PTC principal
outstanding (POS) from 11.91% as on the date of issuance. The CE is
in the form of fixed deposits with ICICI Bank Limited and
transferred in the name of the trust. The CE was utilized in all
the months post moratorium because of lower collection efficiency
of 0.0%, 12.25% and 0.96% in the payout months of December 2020,
January 2021 and February 2021, respectively. The current CE would
be sufficient to cover next two months of interest and principal
payment in the event of nil pool collection.
According to the payout report dated 16 February 2021, the PTC
interest and principal obligation had been met by utilizing INR25.5
million from the available CE.
Key Pool Characteristics: At end-January 2021, the pool had been
amortized by 90.83%, indicating a significant repayment track
record of the underlying borrowers. The agency has not received
pool level performance details, including ageing buckets and future
pool cash flow in the recent trustee payout reports.
Key Assumptions: At the time of the initial rating, Ind-Ra derived
a base case gross default rate (90+ days past due) in the range of
7.0%-7.5%. The agency had analyzed the characteristics of the pool
and established its base case assumptions through four key
performance variables, which collectively affect the credit risk in
a transaction – default rate, recovery rate, recovery timeline
and prepayment rate.
Ind-Ra stressed the above variables for the rating level as per the
'Rating Criteria for Indian Asset-Backed Securitizations'. Based on
the rating level, the agency also has made an adjustment for the
borrowers carrying the highest interest rate loans, assuming they
will either prepay or default. To model the impact of the COVID-19
pandemic on the rating, the agency typically adjusts the base case
default rate and collection efficiency as detailed in Revised
Sensitivity Assumptions For Securitization Transactions Amid
COVID-19 Led Disruptions. Given the operational hurdle the
transaction is undergoing, these sensitivity tests may not be
applicable for the transaction.
RATING SENSITIVITIES
The RWN indicates that the rating may be either downgraded or
affirmed. Ind-Ra will resolve the RWN on timely receipt of cash
flow in the securitization trust account from the TRA and
collection efficiency reaching its pre-COVID level. Ind-Ra will
also monitor the progress on the National Company Law Tribunal
proceedings and the originator's credit profile on an ongoing
basis. In the event of further utilization of CE or impediments in
payout to investors, the agency will take an appropriate rating
action to reflect the increased risk in the transaction.
COMPANY PROFILE
SEFL is engaged in financing of construction, IT, medical and
agriculture-based farm equipment. It operates through 78 branches,
92 satellite locations and 153 SREI entrepreneur partners spread
across 21 states in India. SEFL's revenue increased to INR50.79
billion during FY20 (FY19: INR43.78 billion) and gross stage III
asset increased to INR33.2 billion (INR16.7 billion), while profit
after tax decreased to INR0.56 billion (INR3.06 billion).
In 1HFY21, the company reported profit after tax of INR0.22
billion. On 30 September 2020, SEFL had an asset under management
of INR356.32 billion, of which 10.16% are in stage III asset
category.
IIERT MARCH 2018: Ind-Ra Keeps BB- ABS Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained IIERT March
2018's (an asset-backed securities transaction) rating of 'IND
BB-(SO)' on Rating Watch Negative (RWN).
The detailed rating action is:
-- INR98.3 mil. Series A pass-through certificates (PTCs) issued
on March 26, 2018 coupon rate 7.80% due on July 2022
maintained on RWN with IND BB-(SO)/RWN.
* The maturity date is subject to change due to transaction
amendments, as a consequence of COVID-19 regulatory relief in the
form of moratorium granted to borrowers in the pool
^Balance after February 16, 2021 payout date
The construction equipment and tractor loan pool assigned to the
trust has been originated by SREI Equipment Finance Limited (SEFL;
originator or seller, collection and processing agent (CPA)).
Ind-Ra has maintained the rating on RWN in view of the continued
uncertainty around the timely transfer of the collected cash flow
from the trust and retention account (TRA) to the securitization
trust account. The RWN also indicates the possibility of a further
rating downgrade in the event of further credit enhancement (CE)
utilization.
The rating is primarily driven by the CE build-up of 67.38% of the
current principal outstanding (POS) and collection deposit of
INR23.1 million in the securitization trust account. However, the
rating is constrained by weakened credit and liquidity profile of
the CPA, continued utilization of CE in the PTC transaction after
the moratorium, due to lower collection efficiency than the
pre-COVID-19 levels. The last three months' cumulative collection
efficiency (last three month collections divided by last three
months billing) is equal to 5.8%, posing a significant liquidity
risk to the transaction. Furthermore, the monitoring of the rating
has been impeded by limited sharing of loan level and overall
portfolio level performance data by the originator as a consequence
of the operational hindrances due to the COVID-19, as informed by
the CPA.
KEY RATING DRIVERS
Impact on Servicing Capabilities: The rating action reflects
fluctuations in the servicing, collection and recovery expertise of
SEFL because of its weakened credit profile. Although the PTCs are
issued through special purpose vehicles, SEFL continues to be the
CPA. The collection efficiency of the transaction has been
significantly impacted by SEFL's ongoing arrangement with its
consortium of creditors, wherein all the securitized loan
collections are being routed through the TRA, maintained by the
lead bank.
Liquidity Indicator - Stretched: Assuming a base-case default
scenario and considering the collateral cash flow at end-January
2021, the stressed cash flow along with the internal and external
CE provides a liquidity coverage ratio in the range of 1.25x-1.50x
of monthly payment obligations.
Availability of External Credit Support: According to the payout
report dated February 16, 2021, the available CE of INR66.2
million, increased to 67.38% of the current PTC principal
outstanding from 12.25% as on the date of issuance. The CE is in
the form of fixed deposits with ICICI Bank Ltd and transferred in
the name of the trust. The CE was utilized in all the months post
moratorium because of lower collection efficiency of 0.0%, 11.76%
and 2.91% in the payout months of December 2020, January 2021 and
February 2021, respectively. The current CE would be sufficient to
cover the next two months of interest and principal payments in the
event of nil pool collection.
According to the payout report dated February 16, 2021, the PTC
interest and principal obligation were met by utilizing INR28.3
million from the available CE.
Key Pool Characteristics: At end-January 2021, the pool was
amortized by 94.28%, indicating a significant repayment track
record of the underlying borrowers. The agency has not received the
pool level performance details, including ageing buckets and future
pool cash flow in the recent trustee payout reports.
Key Assumptions: At the time of the initial rating, Ind-Ra derived
a base case gross default rate (90+dpd) of 7%-8%. The agency had
analyzed the characteristics of the pool and established its base
case assumptions through the four key performance variables that
collectively affect the credit risk in a transaction - default
rate, recovery rate, recovery timeline and prepayment rate.
Ind-Ra stressed the above variables for the rating level as per the
'Rating Criteria for Indian Asset-Backed Securitizations'. Based on
the rating level, the agency also has made an adjustment for the
borrowers carrying the highest interest rate loans, assuming they
will either prepay or default. To model the impact of the COVID-19
pandemic on the rating, the agency typically adjusts the base case
default rate and collection efficiency as detailed in Revised
Sensitivity Assumptions For Securitization Transactions Amid
COVID-19 Led Disruptions. Given the operational hurdle the
transaction is undergoing, these sensitivity tests may not be
applicable for the transaction.
RATING SENSITIVITIES
The RWN indicates that the ratings may be either downgraded or
affirmed. Ind-Ra will resolve the RWN once there is timely receipt
of cash flow in the securitization trust account from the TRA and
collection efficiency reaches its pre-COVID level. Ind-Ra will also
monitor the progress on the National Company Law Tribunal
proceedings and originator's credit profile on an ongoing basis,
and in the event of a further utilization of CE or impediments in
payout to investors, will take appropriate rating action to reflect
the increased risk in the transaction.
COMPANY PROFILE
SEFL is engaged in the financing of construction, information
technology, medical and agriculture-based farm equipment. It
operates through 78 branches, 92 satellite locations and 153 SREI
entrepreneur partners spread across 21 states in India. SEFL's
revenue was INR50.79 billion during FY20 (FY19: INR43.78 billion),
profit after tax was INR0.56 billion (INR3.06 billion) and gross
stage-III asset was INR33.2 billion (INR16.7 billion).
In 1HFY21, the company reported profit after tax of INR0.22
billion. On September 30, 2020, SEFL had an asset under management
of INR356.32 billion, of which 10.16% were in the gross stage-III
asset category.
IIERT OCTOBER 2018: Ind-Ra Cuts ABS Transaction Rating to 'B+'
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded the rating of
IIERT October 2018's (an asset-backed securities (ABS) transaction)
to 'IND B+ (SO)' from 'IND BB-(SO)' while maintaining it on Rating
Watch Negative (RWN).
The detailed rating action is:
-- INR149.40 mil. Series A pass-through certificates (PTCs)
issued on November 20, 2018 coupon rate 10.60% due on
February 2023 downgraded; maintained on RWN with IND B+
(SO)/RWN.
* The maturity date is subject to change due to transaction
amendments, as a consequence of the COVID-19 regulatory relief in
the form of a moratorium granted to borrowers in the pool.
^Balance after February 18, 2021 payout date
The construction equipment and tractor loan pool assigned to the
trust has been originated by SREI Equipment Finance Limited (SEFL;
collection and processing agent (CPA), originator/seller).
The downgrade is primarily driven by the weakened credit and
liquidity profile of the CPA, and continued utilization of credit
enhancement (CE) in the PTC transaction after the moratorium, due
to lower collection efficiency than the pre-COVID-19 levels. The
last three-month's cumulative collection efficiency (last three
months collections divided by last three months billing) was 7.2%.
Furthermore, the monitoring of the rating has been impeded by
limited sharing of loan level and the overall portfolio level
performance data by the originator as a consequence of the
operational hindrances due to the COVID-19, as informed by the
CPA.
The rating has been maintained on RWN in view of the continued
uncertainty around the timely transfer of the collected cash flow
from the trust and retention account (TRA) to the securitization
trust account. The RWN also indicates the possibility of a further
rating downgrade in the event of a further CE utilization.
KEY RATING DRIVERS
Impact on Servicing Capabilities: The rating action reflects
fluctuations in the servicing, collection and recovery expertise of
SEFL because of its weakened credit profile. Although the PTCs are
issued through special purpose vehicles, SEFL continues to be the
CPA. The collection efficiency of the transaction had been
significantly impacted by SEFL's ongoing arrangement with its
consortium of creditors, wherein all the securitized loan
collections are being routed through the TRA, maintained by the
lead bank.
Liquidity Indicator - Poor: Assuming a base-case default scenario
and considering collateral cash flow at end-January 2021, the
stressed cash flow, along with the internal and external CE
provides a liquidity coverage ratio of less than 1.25x of monthly
payment obligations.
Availability of External Credit Support: According to the payout
report dated 18 February 2021, the available CE was INR47.0
million, which increased to 31.5% of the current PTC principal
outstanding (POS) from 14.20% at issuance. The CE is in the form of
fixed deposits with ICICI Bank Limited in the name of the
originator, with a lien marked in favor of the trustee. The CE had
been utilized in all the months post moratorium because of
volatility in collection efficiency to 0.0%, 16.9% and 0.0% in the
payout months of December 2020, January 2021 and February 2021,
respectively. The current CE would be sufficient to cover next two
months of interest and principal payment in the event of nil pool
collection.
According to the payout report dated February 18, 2021, the PTC
interest and principal obligations were met only by utilizing
INR20.9 million from the available CE.
Key Pool Characteristics: At end-January 2021, the pool was
amortized by 87.48%. The agency has not received the pool level
performance details, including ageing buckets and future pool cash
flow in the recent trustee payout reports.
Key Assumptions: At the time of the initial rating, Ind-Ra derived
a base case gross default rate (90+days past due) in the range of
7%-8%. The agency had analyzed the characteristics of the pool and
established its base case assumptions through four key performance
variables, namely default rate, recovery rate, recovery timeline
and prepayment rate, which collectively affect the credit risk in a
transaction.
Ind-Ra stressed the above variables for the rating level as per the
'Rating Criteria for Indian Asset-Backed Securitizations'. Based on
the rating level, the agency has also made an adjustment for the
borrowers carrying the highest interest rate loans, assuming they
will either prepay or default. To model the impact of the COVID-19
pandemic on the rating, the agency typically adjusts the base case
default rate and collection efficiency as detailed in Revised
Sensitivity Assumptions For Securitization Transactions Amid
COVID-19 Led Disruptions. Given the operational hurdle the
transaction is undergoing, these sensitivity tests may not be
applicable for the transaction.
RATING SENSITIVITIES
The RWN indicates that the rating may be either downgraded or
affirmed. Ind-Ra will resolve the RWN on timely receipt of cash
flow in the securitization trust account from the TRA, and the
collection efficiency reaching its pre-COVID-19 level. Ind-Ra will
also monitor SEFL's credit profile on an ongoing basis. In the
event of a further utilization of the CE or impediments in payout
to investors, the agency will take an appropriate rating action to
reflect the increased risk in the transaction.
COMPANY PROFILE
SEFL is engaged in the financing of construction, IT, medical and
agriculture-based farm equipment. It operates through 78 branches,
92 satellite locations and 153 SEFL entrepreneur partners spread
across 21 states in India. SEFL's revenue increased to INR50.79
billion during FY20 (FY19: INR43.78 billion) and gross stage III
asset to INR33.2 billion (INR16.7 billion), while the profit after
tax decreased to INR0.56 billion (INR3.06 billion).
In 1HFY21, the company reported profit after tax of INR0.22
billion. On September 30, 2020, SEFL had assets under management of
INR356.32 billion, of which 10.16% were in stage III asset
category.
JAGDAMBA RICE: CARE Lowers Rating on INR15.59cr LT Loan to B
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Jagdamba Rice Mills (SJRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.59 CARE B; Stable; ISSUER NOT
Facilities COOPERATING Revised from
CARE B+; Stable and moved to
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SJRM to monitor the rating
vide letter dated February 26, 2021 and e mail communications dated
February 25, 2021, January 15, 2021, January 8, 2021 and numerous
phone calls. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on Shree Jagdamba Rice Mills
will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The rating has been revised by taking into account non-cooperation
by Shree Jagdamba Rice Mills with CARE'S efforts to undertake a
review of the rating outstanding. CARE views information
availability risk as a key factor in its assessment of credit risk.
The rating assigned to Shree Jagdamba Rice Mills continues to
remain constrained due to Susceptibility to fluctuation in raw
material prices and monsoon dependent operations, fragmented nature
of industry coupled with high level of government regulation and
partnership nature of constitution. The rating, however, derive
strength from experienced partners.
Key Rating Weaknesses
* Susceptibility to fluctuation in raw material prices and
monsoon-dependent operations: Agro-based industry is characterized
by its seasonality, due to its dependence on raw materials whose
availability is affected directly by the vagaries of nature.
Adverse climatic conditions can affect their availability and leads
to volatility in raw material prices. Any sudden spurt in raw
material prices may not be passed on to customers completely owing
to firm's presence in highly competitive industry. The firm has
availed moratorium period for its term debt principle and interest
payments as well as cash credit interest payments due from March,
2002- August, 2020 offered by RBI in light of COVID-19.
* Partnership nature of constitution: SJRM's constitution as a
partnership firm has the inherent risk of possibility of withdrawal
of the partner(s) capital at the time of personal contingency and
firm being dissolved upon the death/retirement/insolvency of
partner(s). Moreover, partnership firms have restricted access to
external borrowing as credit worthiness of partner(s) would be the
key factors affecting credit decision of the lenders.
* Fragmented nature of industry coupled with high level of
government regulation: The commodity nature of the product makes
the industry highly fragmented with numerous players operating in
the unorganized sector with very less product differentiation.
Furthermore, the raw material (paddy) prices are regulated by
government to safeguard the interest of farmers, which in turn
limits the bargaining power of the rice millers.
Key Rating Strengths:
* Experienced partners: SJRM's operations are currently being
managed by Mr. Om Prakash Garg, Mrs Sunita Garg, Mr Pankaj Kumar
and Mr. Pardeep Garg, a family run business. Mr. Om Prakash Garg
has an experience of more than four decades through his association
with this entity and its group concern. He is ably supported by his
two sons, namely Mr. Pankaj Kumar and Mr. Pardeep Garg having an
experience of one decade through their association
with this entity.
Shree Jagdamba Rice Mills (SJRM) was established in June 2008 as a
partnership firm. SJRM is engaged in processing of paddy with an
installed capacity of 60,000 tonnes per annum (TPH) of paddy at its
unit located at Kaithal, Haryana. The firm is also engaged in
milling and trading of rice. The firm procures the raw material
(paddy) from grain markets in Haryana, Delhi and Uttar Pradesh
through commission agents and sells its product to wholesalers and
traders located in Rajasthan, Maharashtra, Karnataka, West Bengal,
Delhi, Uttar Pradesh, Punjab & Gujarat.
KAUSHAL SHARMA: CARE Lowers Rating on INR15cr LT Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kaushal Sharma (KS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING Revised from
CARE BB-; Stable and moved to
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from KS to monitor the rating
vide letters/e-mails communications dated October 10, 2020,
November 5, 2020, January 7, 2021, March 3, 2021 and numerous phone
calls. However, despite CARE's repeated requests, the entity has
not provided the requisite information for monitoring the rating.
In line with the extant SEBI guidelines, CARE has reviewed the
ratings on the basis of the publicly available information which,
however, in CARE's opinion, is not sufficient to arrive at fair
rating. Further, KS has not paid the surveillance fees for the
rating exercise as agreed to in its Rating Agreement. The rating on
KS's bank facilities will now be denoted as CARE B+; Stable; ISSUER
NOT COOPERATING. Further, banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating assigned to the bank facilities of small scale of
operation, operating profit, profit after tax, cash profit level
during FY19. However, the rating assigned to the bank facilities of
Kaushal Sharma (KS) continues to be constrained by its constitution
as a proprietorship entity, small size of operations with moderate
profitability margin, risk associated with participating in tenders
and intense competition in the industry, working capital intense
nature of business, volatility associated with fluctuation in input
prices and leveraged capital structure. However, the aforesaid
constraints are partially offset by its experienced management and
satisfactory track record of operations, satisfactory order book
position and satisfactory debt coverage indicators.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Constitution as a proprietorship entity: Kaushal Sharma, being a
proprietorship entity, is exposed to inherent risk of the
proprietor capital being withdrawn at time of personal contingency
and entity being dissolved upon the death/insolvency of the
proprietor. Furthermore, proprietorship entities have restricted
access to external borrowing as credit worthiness of proprietor
would be the key factors affecting credit decision for the
lenders.
* Small size of operation with moderate profitability margin M/S
Kaushal Sharma is a moderate player in construction industry with a
PAT of INR4.81 crore on total operating income of INR79.89 crore in
FY19. The TOI increased by 192.85% in FY19 vis-Ã -vis FY18 on
account of higher execution of work along with higher inflow of
work orders. Capital base of the entity remained moderate at
INR14.68 crore as on March 31, 2019. The moderately small size
restricts the financial flexibility of the entity in terms of
stress and deprives it from benefits of economies of scale. The
profitability margins also remained moderate marked by PBILDT and
PAT margins of 14.00% and 6.02%, respectively. Further, the entity
has booked revenue of INR54.52 crore with a PBILDT and PAT level of
INR10.83 crore and INR3.54 Crore and a GCA of INR9.33 crore during
11MFY20.
* Volatility associated with fluctuations in input prices: The
major input materials for the entity are bolder, bitumen, cement,
TMT bar, bricks, sand etc. the prices of which are volatile.
Further, the orders executed by the firm does not contain price
escalation clause on orders. This apart, any increase in labor
prices will also impact its profitability being present in a highly
labor-intensive industry.
* Working capital intensive nature of business: The operations of
the entity remained working capital intensive as the entity
executes orders mainly for public sector units and govt.
departments. The average inventory period remained moderately on
the higher side during FY19 as the payment comes around one to two
months from the date of bill raised. Due to its working
capital-intensive nature of operations, the entity stretches its
suppliers of around three to six months. Accordingly, the average
utilization of working capital was on the higher side at around 95%
during last 12 months ended February 2020.
* Risk associated with participating in tenders and intense
competition in the industry: The entity has to bid for the
contracts based on tenders opened by the various governments and
public sector units. Upon successful technical evaluation of
various bidders, the lowest bid is awarded the contract. The entity
receives projects which majorly are of a short to medium tenure
(i.e. to be completed within maximum period of one to two years).
Furthermore, orders are generally tender driven floated by
government units indicating a risk of non-receipt of contract in
a competitive industry.
* Leveraged capital structure: The capital structure of the firm
deteriorated and remained leveraged as on March 31, 2019 marked by
overall gearing ratio of 2.14x as against 1.29x as on March 31,
2018 on account of availment of equipment and vehicle loans for
purchase of equipment and vehicle to be used for construction
purpose along with capital withdrawal by proprietor.
Key Rating Strength:
* Experienced management & satisfactory track record of operations:
M/S Kaushal Sharma started its business from the year 2006 and thus
has satisfactory track record of operations. It is a professionally
managed Class 'I' entity managed by Mr.Kaushal Sharma (Proprietor)
who has a long experience in similar line of business. He is ably
supported by a team of experienced professionals look after the day
to day activities of business.
* Satisfactory order book position of the entity: The entity has
satisfactory order book position of INR198.53 crore (which is 2.49x
of FY19 turnover) as on March 14, 2020, which is expected to be
completed by October 2022.
* Satisfactory debt coverage indicators: The debt coverage
indicators remained satisfactory marked by total debt to GCA ratio
of 3.36x and comfortable satisfactory interest coverage ratio of
7.31x in FY19. The Interest coverage ratio improved to 7.31x in
FY19 from 4.50x in FY18 on account of higher increase in PBILDT
level vis-Ã -vis increase in interest charges.
M/S Kaushal Sharma was established in the year 2006with its office
located at Ambikagiri Roy Chowdhury Road, behind Hotel Highway,
Hijiguri, Tinsukia, Assam-786125. Since its inception, the entity
has been engaged in civil construction business in the segment like
bridges and roads. Further, the entity is also classified as class
'I (A)' contractor in civil (B&R) under the department of PWD
Government of Assam. Class 'I' contractor can bid for all types and
higher value of contracts of Public Works Department (PWD) in
Assam. The entity is also engaged in contractor business with PWD
Government of Arunachal Pradesh and RWD Government of Arunachal
Pradesh.
Mr. Kaushal Sharma (Proprietor) has almost two decades of
experience in civil construction industry. He looks after the day
to day operations of the entity along with other technical and
non-technical professionals who are having long experience in this
industry.
KISAN GINNING: CARE Lowers Ratings on INR10cr LT Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kisan Ginning & Pressing (AF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE BB-; Stable and moved to
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from AF to monitor the rating
vide e-mail communications/letters dated February 3, 2021, February
5, 2021, February 15, 2021, February 16, 2021 and numerous phone
calls. However, despite CARE's repeated requests, the firm has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information, which, however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on Kisan Ginning & Pressing(KGP) bank facilities will now be
denoted as CARE B+; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised on account of no due-diligence
conducted with the auditor and non-availability of information due
to non-cooperation by KGP with CARE's efforts to undertake a review
of the ratings outstanding. CARE views information availability
risk as a key factor in its assessment of credit risk.
The rating continues to remain constrained by firm's modest scale
of operations with low profit margins, moderate capital structure
and moderate debt coverage indicators, and stretched liquidity
position due to seasonal nature of business. The rating also
factors in the susceptibility of margins to fluctuations in cotton
prices, presence in fragmented industry with susceptibility to
government regulations and the partnership nature of constitution
The ratings, however, draws support from experienced promoters and
locational advantage emanating from proximity to raw material.
Detailed description of the key rating drivers
At the time of last rating on July 16, 2020, the following were the
rating strengths and weaknesses (Updated for latest available
information)
Key Rating Weaknesses
* Modest scale of operation with low profitability margins: KGP
commenced commercial operation in 2014. Despite being in the
business for almost 6 years, the scale of operation of the entity
remained modest with total operating income (TOI) of Rs.44.31 crore
and capital employed of INR 9.38 crore as on March 31, 2019.
Further, the firm has booked revenue of INR35.5 crore during
FY20(as indicated by management). Furthermore, the profitability
margins remained low with PBILDT and PAT margins at 4.07% and 1.43%
respectively in FY19 owing to limited value addition nature of
operations. The entity has booked revenue of INR35.5 crore during
FY20 ended March 31, 2020.
* Moderate solvency position: The capital structure of the entity
remained moderate with high utilization of cash credit limit to
support the operations. The overall gearing stood at 1.99x as on
March 31, 2019. Moreover, due to low accruals and moderate gearing
levels, the debt coverage indicators of the firm also stood
moderate as reflected by interest coverage ratio of 2.79x and total
debt to GCA of 5.39 times as at the end of FY19.
* Presence in seasonal and fragmented industry: Operation of cotton
business is highly seasonal in nature, as the sowing season is from
March to July and the harvesting season is spread from November to
February. Furthermore, the cotton industry is highly fragmented
with large number (approx 80%) of players operating in the
unorganized sector. Hence, KGP faces stiff competition from other
players operating in the same industry, which further result in its
low bargaining power against its customers.
* Susceptibility to adverse changes in government policies and
climatic condition: The price of raw cotton is highly volatile in
nature owing to its seasonal nature and the price is regulated
through function of MSP (Minimum Support Price) by the government
along with export of cotton. Hence, any adverse change in
government policy and climatic condition may negatively impact the
prices of raw cotton in domestic market and could result in lower
realizations and profit for KGP. Partnership nature of
constitution: Being a partnership firm, KGP is exposed to the risk
of withdrawal of capital by partners due to personal exigencies,
dissolution of firm due to retirement or death of partners and
restricted financial flexibility due to inability to explore
cheaper sources of finance leading to limited growth potential.
Key Rating Strengths
* Experienced promoters: The entity is managed by the partners Mr.
Radhesham Adaniya and Mr. Gopal Adaniya, having an average
experience of more than two and half decades, in various industries
including jewelry retailing, packaging, and property dealing and
have recently forayed into the cotton ginning and pressing
business. The partners look after the day to day affairs of the
business with adequate support from a team of experienced
personnel. With the long standing business experience, the partners
were able to establish strong relations with its customers and
suppliers.
* Locational advantage emanating from proximity to raw material:
The manufacturing facility of the entity is located at Chandrapur
region, Maharashtra. Maharashtra produces around 21% of total
cotton production of India. Hence, raw material is available in
adequate quantity. Furthermore, the presence of the entity in
cotton-producing region also fetches a location advantage of lower
logistics expenditure also, the Chandrapur region is famous for its
cotton production.
Liquidity: Stretched
The liquidity position of the entity remained stretched on account
of highly utilized cash credit facility with average utilization of
the last twelve months ended January 31, 2020 stood at 100% and
modest cash balance at INR0.54 crore as on March 31, 2019. Further,
the liquidity ratios marked by current and quick ratio stood at
1.01x and 0.44x respectively as on March 31, 2019. KGP has not
availed moratorium from its lender (Covid-19 Regulatory Package
announced by RBI) for interest payments of working capital limits
and term loans.
Kisan Ginning & Pressing (KGP) is a Chandrapur based, partnership
firm, established by Mr. Radhesham Adaniya and Mr. Gopal Adaniya in
2014. The entity is engaged in the business of cotton ginning &
pressing and extraction of oil at its manufacturing facility
located at Chandrapur, Maharashtra having an installed capacity to
process 300 bales per day and 500 quintal of oil per day.
KJS CEMENT: Ind-Ra Cuts Long-Term Issuer Rating to 'BB'
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded KJS Cement (I)
Limited's (KJS) Long-Term Issuer Rating to 'IND BB (ISSUER NOT
COOPERATING)' from 'IND BBB- (ISSUER NOT COOPERATING)' and has
simultaneously withdrawn it. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency.
The instrument-wise rating actions are:
-- The 'IND BB' rating on the INR5,608.8 bil. Term loans* due on
March 2038 downgraded and withdrawn;
-- The 'IND BB' rating on the INR300 mil. Fund-based facilities**
downgraded and withdrawn; and
-- The 'IND A4' rating on the INR200 mil. Non-fund-based
facilities# downgraded and withdrawn.
*Downgraded to 'IND BB (ISSUER NOT COOPERATING)' before being
withdrawn
**Downgraded to 'IND BB (ISSUER NOT COOPERATING)'/'IND A4+(ISSUER
NOT COOPERATING)' before being withdrawn
#Downgraded to 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best-available information
KEY RATING DRIVERS
The downgrade is pursuant to the SEBI Circular
SEBI/HO/MIRSD/CRADT/CIR/P/2020/2 dated January 3, 2020. As per the
circular, any issuer with an investment-grade rating remaining
non-cooperative with the rating agency for more than six months
should be downgraded to a sub-investment grade rating.
The downgrade to 'IND BB (ISSUER NOT COOPERATING)' may not reflect
KJS's credit strength as the issuer has been non cooperative with
the agency.
Ind-Ra also takes note of media reports of an investigation by the
Directorate General of GST Intelligence against KJS for GST evasion
and raids conducted by the Income Tax department at the various
premises of Pawan Ahluwalia, the promoter of KJS for tax evasion.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-objection certificate from the lead lender on
behalf of the consortium. This is consistent with the Securities
and Exchange Board of India's circular dated March 31, 2017 for
credit rating agencies.
COMPANY PROFILE
KJS Cement manufactures cement at its 2.25 million tons per annum
facility in Satna (Madhya Pradesh). The company has a captive 27MW
power plant and limestone mines (located near the manufacturing
facility), with prospective reserves of 70 million metric tons.
MAHIMA COLD: CARE Reaffirms B+ Rating on INR6.22cr LT Loan
----------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Mahima Cold Storage Private Limited (MCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 6.22 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MCSPL continues to
remain constrained by its small scale of operations with moderate
profitability margins, regulated nature of business, seasonality of
business with susceptibility to vagaries of nature, risk of
delinquency in loans extended to farmers and competition from other
local players. However, the rating continues to drive strength from
the extensive experience of the promoters with long track record of
operations comfortable capital structure with moderate debt
coverage indicators and proximity to potato growing area.
Key Rating Sensitivities
Positives factors
* Sizeable improvement in scale of operations (turnover beyond
INR10 crore) while sustaining current operating margin
on a sustained basis.
Negatives factors
* Any sizeable capex and its increase reliance on external
borrowing for funding its working capital requirement which lead to
deterioration in overall gearing ratio above 2.5x on a sustained
basis.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operations with moderate profitability margins:
MCSPL is a small player vis-a-vis other player in the domestic cold
storage industry marked by total operating income of INR2.01 crore
(INR2.23 crore in FY19) with a PAT of INR0.09 crore (INR0.07 crore
in FY19) in FY20. Furthermore, the total capital employed remained
moderate at INR3.95 crore as on March 31, 2020. The small size
restricts the financial flexibility of the company and hinders its
economies of scale. Further, the profitability margins of the
company remained moderate marked by operating margin of 18.73% and
PAT margin of 4.60% in FY20. The operating margin has deteriorated
during FY20 due to higher increase in cost of operations. Moreover,
the PAT margin has improved during FY20 due to low capital charges.
There was no restriction on the local movement of goods even though
lockdown was imposed in the country owing to COVID pandemic as the
company is dealing with the essential commodity for general
consumption. Accordingly, the operation of the company was not
impacted owing to COVID 19 and is running smoothly. Moreover, the
company has booked a revenue of INR2.26 crore with a PBT of INR0.13
crore during 11MFY21.
* Regulated nature of business: In West Bengal, the basic rental
rate for cold storage operations is regulated by the state
government through West Bengal State Marketing Board. The rent of
these cold storages is decided by taking into account political
considerations, not economic viability. Due to severe government
intervention, the cold storage service providers cannot enhance
rental charge commensurate with increased power tariff and labor
charge.
* Seasonality of business with susceptibility to vagaries of
nature: MCSPL's operation is seasonal in nature as potato is a
winter season crop with its harvesting period commencing in March.
The loading of potatoes in cold storages begins by the end of
February and lasts till March. Additionally, with potatoes having a
perceivable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period from December to January.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
* Risk of delinquency in loans extended to farmers: Against the
pledge of cold storage receipts, MCSPL provides interest-bearing
advances to the farmers & traders. Before the closure of the season
in November, the farmers & traders are required to clear their
outstanding dues with the interest. In view of this, there exists a
risk of delinquency in loans extended, in case of downward
correction in potato or other stored goods prices, as all such
goods are agro commodities.
* Competition from other local players: In spite of being capital
intensive, the entry barrier for new cold storage is low, backed by
capital subsidy schemes of the government. As a result, the potato
storage business in the region has become competitive, forcing cold
storage owners to lure farmers by providing them interest-bearing
advances against stored potatoes which augments the business risk
profile of the companies involved in the trade.
Key Rating Strengths
* Extensive experience of the promoter in the industry with long
track record of operations: The company is into cold storage
business since 2003 and accordingly it has established relationship
with its customers and suppliers. The promoter; Mr. Rajesh Kumar
Patwari, has more than three decades of experience in cold storage
industry, looks after the overall management of the company. He is
supported by other director Mr. Neeraj Agarwal who also has more
than a decade of experience in this line of business. The promoters
are supported by a team of experienced professionals.
* Comfortable capital structure with moderate debt coverage
indicators: The capital structure of the company deteriorated on
the account of higher utilization of working capital bank borrowing
but the same remained comfortable marked by overall gearing ratio
of 0.70x (0.59x as on March 31, 2019) as on March 31, 2020.
Furthermore, the debt coverage indicators also remained moderate
marked by interest coverage of 2.78x and total debt to GCA of 7.73x
in FY20. The interest coverage ratio improved in FY20 due to
low-interest expenses. Moreover, due to increase in debt levels,
the total debt to GCA has deteriorated to 7.73x in FY20 from 6.08x
in FY19.
* Proximity to potato growing area: MCSPL's storing facility is
situated at Cooch Bihar, West Bengal which is one of the major
potatoes growing regions of the state. The favourable location of
the storage unit, in close proximity to the leading potato growing
areas provides it with a wide catchment and making it suitable for
the farmers in terms of transportation and connectivity.
Liquidity: Adequate
Liquidity is marked by sufficient cushion in accruals vis-a-vis
repayment obligation, modest cash and cash equivalents and modest
utilized bank limits. The average utilization of working capital
limit was around 60% during last 12 month ended on February 28,
2021. The unencumbered cash and cash equivalent stood at INR0.34
crore as on March 31, 2020. The company has reported cash accruals
of INR0.21 crore during FY20. Moreover, the company not availed
moratorium on repayment of vehicle loan and interest on working
capital that could be availed under the terms of recent RBI
circular. Further, the company has not availed COVID relief loan of
from its lender.
Mahima Cold Storage Private Limited (MCSPL) was incorporated in
July 2003 and presently managed by Mr. Rajesh Kumar Patwari and Mr.
Neeraj Agarwal. The cold storage facility of the company is located
at Cooch Bihar, West Bengal with aggregated storage capacity of
149664 quintal. The company provides cold storage services for
potatoes to the farmers and traders. This apart the company
provides interest-bearing advances to the farmers & traders against
the pledge of cold storage receipts.
MALEGAON MANMAD: CARE Raises Rating on INR65.41cr Loan to B
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Malegaon Manmad Kopergaon Infrastructure and Toll Roads Pvt. Ltd.
(MMKITRPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 65.41 CARE B; Stable Rating removed
Facilities from ISSUER NOT COOPERATING
category and Revised from
CARE D; Stable
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the long-term bank
facilities of MMKITRPL takes into account steady improvement in
operational performance during FY20 and satisfactory debt servicing
track record. Long operational track record for ~13 years with CAGR
of 9.87% for FY17-FY20, fixed tariff increase on a periodic basis
and absence of any significant alternate viable route continue to
be viewed as other credit positives. The
above mentioned rating strengths are however tempered by declining
traffic volumes and toll revenue over last few years, absence of
fixed price contract for major maintenance and substantial
long-term investment in group companies funded through debt
yielding no return since FY10.
Rating Sensitivities
Positive Factors
* Ability to sustain pre Covid-19 traffic volumes and toll revenue
* Receipt of claims from PWD improving the liquidity profile
Negative Factors
* Completion of major maintenance at an escalated cost
* Decline in toll revenue on sustained basis
Detailed description of the key rating drivers
Key Rating Strengths
* Operational track record of the stretch for more than 13 years
and absence of alternate viable route: The project stretch reported
CAGR of 9.87% in toll revenue over a period of FY17-FY20 and the
toll revenue stood at INR40.32 crore for FY20. Furthermore, during
7MFY21, the toll revenue was reported at INR15.55 crore as against
INR 20.33 crore for 7MFY20; due to imposition of lockdown during
Covid-19 pandemic. The Malegaon-Manmad-Kopargaon road traverses
through several industrial centers, religious destinations and
educational centers; and consequently, caters to a bulk of the
intra- and inter-state vehicular and commercial traffic.
* Associated with experienced promoter group in infrastructure and
media segment: MMKIPL is jointly owned by Essel group through Essel
RPW which is a wholly-owned subsidiary of Essel Infraprojects
Limited (EIL, rated CARE D; Issuer Not Cooperating) and Lakhani
group through Vishvaraj Infrastructure Ltd and Saptarang Commodeal
Pvt. Ltd. Promoted by Dr. Subhash Chandra, Essel group has presence
in media & entertainment, distribution and packaging. The group is
also present in infrastructure space through EIL which has interest
in road projects, solar power projects, urban infrastructure, power
transmission projects, MSW projects etc. EIL has completed more
than 2000 lane kms of roads and is constructing in various states
such as Madhya Pradesh, Delhi, Punjab, and Haryana. In 1999, Mr.
Arun Lakhani acquired Vishvaraj Housing Company Pvt Ltd. In the
year 2000, the company's name was changed to Vishvaraj
Infrastructure Ltd.(VIL). VIL is a firm in the infrastructure space
working in the highways, water and wastewater sectoring. It is a
company that is focused on developing Water and Highway projects.
Key Rating Weaknesses
* Inherent revenue risk related to toll road projects: During FY20,
the growth in toll revenue was around 9.5% primarily due to
increase in toll rates whereas traffic volumes declined by 4%
during the same period. Furthermore, during 7MFY21, there seems to
be decline in toll collection primarily due to low traffic volumes
during March to September 2020 as a result of Covid-19 pandemic.
The average daily toll collection improved from INR0.08 crore in
FY17 to 0.11 crore in FY20. However, it has reduced for FY21 on
account of reduced traffic volumes due to pandemic. The traffic
plying through corridor is predominantly commercial vehicular
traffic. There is a fixed rate hike of toll rates on periodic basis
with last revision done on July 2019 and increase in toll rates was
approximately 19%. The next revision is due In July 2022. The
project has a tail period of 4 years which provides adequate
refinancing flexibility.
* Absence of fixed price contract for operational and maintenance
expenses and MME: MMKIPL has not entered fixed price contract for
operational and maintenance expenses (OME) and sub-contractor is
decided by both the promoters. The total pricing is estimated based
on actual work done. Further any substantial increase in these
expenses would impact project cash flows especially when MMKIPL has
huge back-ended debt servicing obligations. Going forward, any
substantial de-growth in traffic volume and non-receipt of claim
amount from PWD would impact project cash flows. The total cost for
ongoing Major Maintenance Overlay which is to be carried out on the
entire stretch of 75.6 KMs is estimated at INR29.49 Crores. As on
Dec 31, 2020, MMR work has been completed on 44 KMs out of
envisaged 75.6 km and cost incurred till Dec 31, 2020 was INR18.27
crores. Balance work on remaining 31 km is under process.
* Substantial long term investments funded through debt: As on
March 31, 2020, MMKIPL has INR67 crore as other long term
investments made during FY10. These investments were made out of
new term loan proceeds (INR150 crore) after repaying the original
term debt of banks (INR64.85 crore) and the subordinate debt
(INR6.08 crore) in FY10. This excess amount has been invested in
the promoter group companies (being investment companies in
nature). In the absence of any financial details of these companies
CARE does not expect any recovery of the same over the tenure of
debt. Since FY10, the above investments have not earned any
revenues, thereby affecting the overall financial position of
MMKIPL.
Liquidity: Stretched
MMKITRPL has stretched liquidity on account of upcoming principal
debt repayments of INR8.1 crore during Q4FY21 against liquid
investments in the form of DSRA balance of INR8.47 crore and cash
and bank balance of INR0.65 crore as on December 31, 2020. However,
they have been servicing interest component in timely manner.
Malegaon Manmad Kopergaon Infrastructure & Toll Roads Pvt Ltd
(MMKITRPL) is a Special Purpose Vehicle (SPV) promoted by Lakhani
group [through Vishwaraj Infrastructure Limited and Saptrang
Commodeal Pvt Ltd.] & Essel group [through Essel RPW Projects
Private Limited (ERPW)], with each group having an equity stake of
50%.
MMKITRPL was incorporated to undertake the improvement and
strengthening of the 75.6km long Malegaon-ManmadKopargaon road on a
Build, Operate & Transfer (BOT) basis for a concession period of 20
years, 10 months and 17 days ending in October 2026 (tail period of
4 years). The project was awarded by the Public Works Department
(PWD), Government of Maharashtra. The project was completed at a
total cost of INR115 crore, funded at a project debt-equity ratio
(DER) of 1.77x and achieved its commercial operation date (COD) on
July 12, 2007.
MOHAN IRON: CARE Reaffirms B+ Rating on INR1.78cr LT Loan
---------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of Mohan
Iron and Steel (India) Private Limited (MISPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 1.78 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MISPL continues to
remain constrained on account of its moderate scale of operations
with net loss reported in FY20 (Audited, refers to period from
April 1, 2019 to March 31, 2020), weak solvency position owing to
negative net worth and stretched liquidity position. The rating,
further, continues to remain constrained on account of
susceptibility of profitability margins to volatile raw material
prices in the highly fragmented and competitive iron and steel
industry. The rating, however, continues to derive strength from
experienced management with group support.
Rating Sensitivities
Positive Factors
* Sustained improvement in operating margin along with registration
of net profit
* Improvement in solvency position marked by achieving positive
net-worth and overall gearing of less than 3 times
Negative Factors
* Decline in orders from its prime customer resulting in degrowth
in total operating income by more than 30%
* Reporting net loss consistently resulting in erosion of net worth
of the company
* Undertaking any debt-funded capex putting pressure on
profitability and liquidity
Detailed description of the key rating drivers
Key Rating Weaknesses
* Moderate scale of operations with reported net loss during FY20
(A) and weak solvency position: FY19 onwards, MISPL started its
revenue generation from sale of MS ingots and billets and had
reported a total operating income (TOI) of INR91.03 crore which
grew by 20.04% on back of increase in demand from its associate
concern and remained moderate at INR109.27 crore during FY20.
During FY19, the company had reported operating loss of INR2.74
crore with net and cash loss of INR2.56 crore and INR3.39 crore
respectively due to high material cost. However, in FY20, the
company has reported operating profit of INR1.93 crore on back of
increase in manufacturing sales. But as a result of increase in tax
adjustment, MISPL reported net loss of INR0.20 crore. Further,
MISPL is able to generate cash profit of INR1.34 crore for FY20.
Solvency position of the MISPL remained weak on back of negative
networth base as a result of accumulated losses generated during
last three years. However, its debt coverage parameters remained
moderate marked by Total debt to GCA ratio of 7.57 times and
interest coverage ratio of 3.26 times in FY20.
* Susceptibility of profitability margins to volatile raw material
prices in highly fragmented and competitive iron and steel
Industry: The major raw materials required for manufacturing of MS
billets and MS pipes are sponge iron and iron scrap, prices of
which are highly fluctuating in nature and move in tandem with
global demand-supply factors. Adverse changes in prices of the same
would have an impact on the profitability margins of the company.
Iron and Steel is generally manufactured in a continuous process to
keep down the power costs. Uninterrupted supply of raw materials
is, thus, imperative to continuous production processes. The
control over supply could be either in the form of captive
operational mines or long-term supply contracts with miners. Raw
material constitutes around 70-75% of cost of sales of steel.
Further, due to limited global availability of key raw materials
like iron ore and coal/coke, the raw material industry is
supplier-dominated. Ability to control raw material costs is
therefore a key determinant of profitability. To mitigate its risk,
MISPL stocks up raw material as and when it gets a favorable rate.
The company procures raw material based on the requirement of the
order from various places and so is exposed to the risk of price
fluctuations. MISPL operates in a highly fragmented market with the
presence of a large number of organized and unorganized players due
to low entry barriers. Also, the presence of large players with an
established marketing & distribution network leads to intense
competition in the industry.
Key rating strengths
* Experienced promoters with strong group support: Mr. Mayank
Bansal, Director, is BBA by qualification and looks after the
production and sales department of MISPL. He has more than 12 years
of experience. He is supported by other director, Ms Shailbee
Bansal, who is MBA by qualification and has around five years of
experience. He looks after finance and accounts departments of the
company. The directors are assisted by Mr Nitin Kedia, chartered
accountant by qualification, who has 8 years of experience in the
industry. Further, he is supported by a team of qualified employees
having long-standing experience in their respective fields for
executing quality work on time. Further, the company is supported
by its group concern, ASPL which is engaged manufacturing of TMT
bars since 1995. MISPL registers 100% of its turnover from sale to
its group concern; ASPL.
Liquidity: Stretched
Liquidity position of the company remained stretched marked by low
cash accruals of INR1.34 crore for FY20, however remained
sufficient against repayment obligation of INR0.71 crore for
current year. However, the company has already repaid a significant
portion of its long-term debt by way of infusion of unsecured loans
during FY20 due to which MISPL's debt repayment obligation has
reduced by more than half. Further its cash and bank balance
remained low at INR0.06 crore as on March 31, 2020. Average
fund-based working capital limit utilization was moderate around
70% for the past year ended January 2021. Cash flow from operating
activities deteriorated to negative INR0.22 crore due to
significant increase in receivables as on March 31, 2020. The
company had not availed moratorium in line with RBI announcement in
the wake of COVID pandemic.
Indore (Madhya Pradesh) based MISPL was incorporated in 2011 as a
private limited company. Previously, the company was engaged in
sale of scrap. During FY18, MISPL has completed its project and
started commercial production from March 29, 2018 for manufacturing
of MS ingots and billets. The manufacturing unit of the company is
situated at Indore and operating at an installed capacity of 24000
Metric Tonnes Per Annum (MTPA) as on March 31, 2020.
MURLI COLD: CARE Reaffirms B+ Rating on INR9.97cr LT Loan
---------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of Murli
Cold Storage Private Limited (MCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 9.97 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MCSPL continues to
remain constrained by its small scale of operations with moderate
profitability margins, leveraged capital structure with moderate
debt coverage indicators, regulated nature of business, seasonality
of business with susceptibility to vagaries of nature, risk of
delinquency in loans extended to farmers and competition from other
local players. However, the rating continues to drive strength from
the extensive experience of the promoters with long track record of
operations and proximity to potato growing area.
Key Rating Sensitivities
Positives factors
* Sizeable improvement in scale of operations (turnover beyond
INR10 crore) while sustaining current operating margin on a
sustained basis.
* Improvement in capital structure (overall gearing ratio below
1.50x) and its reduced reliance on external borrowing for funding
its working capital requirement on a sustained basis.
Negatives factors
* Any sizeable capex and its increase reliance on external
borrowing for funding its working capital requirement which lead to
further deterioration in capital structure from current level on a
sustained basis.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operations with moderate profitability margins:
MCSPL is a small player vis-a-vis other player in the domestic cold
storage industry marked by total operating income of INR2.88 crore
(INR3.34 crore in FY19) with a PAT of INR0.09 crore (INR0.08 crore
in FY19) in FY20. Furthermore, the total capital employed remained
moderate at INR5.02 crore as on March 31, 2020. The small size
restricts the financial flexibility of the company and hinders its
economies of scale. Further, the profitability margins of the
company remained moderate marked by operating margin of 17.58% and
PAT margin of 3.13% in FY20. The operating margin has deteriorated
during FY20 due to increase in cost of operations. Moreover, the
PAT margin has improved during FY20 due to decrease in capital
charges. There was no restriction on the local movement of goods
even though lockdown was imposed in the country as the company is
dealing with the essential commodity for general consumption.
Accordingly, the operation of the company was not impacted owing to
COVID 19 and is running smoothly. Moreover, the company has booked
a revenue of INR3.29 crore with PBT of INR0.16 crore during
11MFY21.
* Leveraged capital structure with moderate debt coverage
indicators: The capital structure of the company deteriorated on
the account of higher utilization of working capital bank borrowing
during FY20 and the same remained leveraged marked by overall
gearing ratio of 2.19x (1.29x as on March 31, 2019) as on March 31,
2020. Furthermore, the debt coverage indicators also remained
moderate marked by interest coverage of 2.11x and total debt to GCA
of 15.97x in FY20. The interest coverage ratio improved in FY20 due
to decrease in interest expenses. Furthermore, due to increase in
debt level, the total debt to GCA has deteriorated to 15.97x in
FY20 from 9.02x in FY19.
* Regulated nature of business: In West Bengal, the basic rental
rate for cold storage operations is regulated by the state
government through West Bengal State Marketing Board. The rent of
these cold storages is decided by taking into account political
considerations, not economic viability. Due to severe government
intervention, the cold storage facility providers cannot enhance
rental charge commensurate with increased power tariff and labor
charge.
* Seasonality of business with susceptibility to vagaries of
nature: MCSPL's operation is seasonal in nature as potato is a
winter season crop with its harvesting period commencing in March.
The loading of potatoes in cold storages begins by the end of
February and lasts till March. Additionally, with potatoes having a
perceivable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period from December to January.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
* Risk of delinquency in loans extended to farmers: Against the
pledge of cold storage receipts, MCSPL provides interest bearing
advances to the farmers & traders. Before the closure of the season
in November, the farmers & traders are required to clear their
outstanding dues with the interest. In view of this, there exists a
risk of delinquency in loans extended, in case of downward
correction in potato or other stored goods prices, as all such
goods are agro commodities.
* Competition from other local players: In spite of being capital
intensive, the entry barrier for new cold storage is low, backed by
capital subsidy schemes of the government. As a result, the potato
storage business in the region has become competitive, forcing cold
storage owners to lure farmers by providing them interest-bearing
advances against stored potatoes which augments the business risk
profile of the companies involved in the trade.
Key Rating Strengths
* Extensive experience of the promoter in the industry with long
track record of operations: MCSPL is into cold storage business
since 1976 and accordingly has a long track record of operations of
more than four decades. Mr. Rajesh Kumar Patwari, has more than
three decades of experience in cold storage industry, looks after
the overall management of the company. He is supported by other
director Mr. Neeraj Agarwal who has more than decade of experience
in this line of business. The promoters are supported by a team of
experienced professionals.
* Proximity to potato growing area: MCSPL's storing facility is
situated at Cooch Bihar, West Bengal which is one of the major
potatoes growing regions of the state. The favorable location of
the storage unit, in close proximity to the leading potato growing
areas provides it with a wide catchment and making it suitable for
the farmers in terms of transportation and connectivity.
Liquidity: Adequate
Liquidity is marked by sufficient cushion in accruals vis-a-vis
repayment obligation, modest cash and cash equivalents and modest
utilized bank limits. The average utilization of working capital
limit was around 60% during last 12 month ended on February 28,
2021. The unencumbered cash and cash equivalent stood at INR0.17
crore as on March 31, 2020. The company has reported cash accruals
of INR0.21 crore during FY20. Moreover, the company not availed
moratorium on interest on working capital that could be availed
under the terms of recent RBI circular. Further, the company has
not availed COVID relief loan of from its lender.
Murli Cold Storage Private Limited (MCSPL) was incorporated in
September 1976 and presently managed by Mr. Rajesh Kumar Patwari
and Mr. Neeraj Agarwal. The cold storage facility of MCSPL is
located at Boinchi, Hooghly with aggregated storage capacity of
241836 quintal. The company provides cold storage services for
potatoes to the farmers and traders. This apart the company
provides interest-bearing advances to the farmers & traders against
the pledge of cold storage receipts.
NAGARJUNA OIL: NCLT Approves Haldia's Resolution Plan
-----------------------------------------------------
The Hindu reports that the National Company Law Tribunal (NCLT) -
Chennai has approved the resolution plan submitted by Haldia
Petrochemicals for Nagarjuna Oil Corporation Ltd. (NOCL).
V. Mahesh, liquidator for NOCL, confirmed the development, but the
final order copy is awaited, The Hindu relates.
The Hindu notes that NOCL's refinery project in Cuddalore was
supposed to go on stream in 2012, but faced numerous delays,
including in the form of a cyclone in 2011. Time and cost overruns
resulted in the project cost escalating to INR15,000 crore from
INR3,500 crore.
The Hindu relates that a consortium of 17 banks, that funded the
project, was to have brought in an additional INR7,000 crore debt
as part of a restructuring plan. However, it did not materialise
and insolvency proceedings were initiated against NOCL. The project
was one of the biggest for Tamil Nadu and the State government had
offered tax incentives during the global investors meet held in
2015.
NCLT had ordered liquidation of NOCL in 2018, after resolution
plans failed to materialize, The Hindu recalls.
Later, Haldia submitted a resolution plan under section 230 of
Companies Act. Section 230 is a mechanism to ensure institutional
settlement of disputes between creditors and the company. It
ensures that the company has a chance to save itself from
insolvency or liquidation by entering into a deal with at least a
majority of creditors, The Hindu says.
About NORL
Hyderabad-based Nagarjuna Oil Refinery (NORL) holds 46.78% of the
equity share capital in NOCL, which is involved in setting up of a
refinery at Cuddalore in Tamil Nadu.
The National Company Law Tribunal's (NCLT) Chennai bench on July
25, 2017, appointed an Insolvency Resolution Professional (IRP) for
Nagarjuna Oil Corporation (NOCL) based on an application filed by
one of its creditors.
SEFL DA SEP 2019 II: Ind-Ra Cuts Guarantee-Backed Rating to 'B+'
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded SEFL DA
September 2019 II's (government of India partial credit
guarantee-backed direct assignment transaction) to 'IND B+
(SO)(ISSUER NOT COOPERATING)' from 'IND BB+ (SO)(ISSUER NOT
COOPERATING)' while maintaining the ratings on Rating Watch
Negative (RWN). The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Thus, the rating is based on the best available information.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND B+ (SO)(ISSUER NOT COOPERATING)/RWN' on the agency's
website.
The instrument-wise rating actions are:
-- INR3,412.55 bil. Assignee payouts issued on September 30, 2019
coupon rate 10.01% due on September 30, 2023 downgraded;
maintained on RWN with IND B+ (SO)(ISSUER NOT COOPERATING)
/RWN; and
-- INR379.17 mil. Assignor retention due on September 30, 2023
downgraded; maintained on RWN with IND B+ (SO)(ISSUER NOT
COOPERATING) /RWN.
* The maturity dates are subject to change due to transaction
amendments, as a consequence of COVID-19 regulatory relief in the
form of moratorium granted to borrowers in the pool.
^Balance after October 31, 2020 payout date
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information
The construction equipment pool assigned to the trust is originated
by SREI Equipment Finance Limited (SEFL; the assignor, and
collection and processing agent (CPA)).
KEY RATING DRIVERS
The downgrade is primarily driven by the weakened credit profile of
the CPA; low available credit enhancement as a percent of pool
principal outstanding as of October 2020, and continued uncertainty
around the servicing of rated instruments in absence of information
from assignor and assignee representative.
The ratings have been maintained on RWN in view of the continued
uncertainty around the pending outcome of the meeting with the
creditors and its impact on the collection efficiency of the
transaction.
SEFL has proposed a scheme of arrangement to its creditors and the
same is under consideration. Meanwhile, SEFL's creditors have
decided that the collections of the underlying loan receivables
would be deposited in the trust and retention account (TRA)
maintained by the lead bank of the consortium of creditors, which
would then be identified and transferred to the assignee bank.
However, with the collections being deposited in the TRA, the
reconciliation of the cash flow to be remitted from the TRA to the
assignee bank account is posing a challenge to SEFL, as understood
from the assignor. Hence, SEFL is unable to share the complete
information essential to assess the ratings of the assignee payout
and assignor retention tranches. Hence, Ind-Ra has migrated the
rating to the non-cooperating category.
COMPANY PROFILE
SEFL is engaged in the financing of construction, IT, medical and
agriculture-based farm equipment operating through 78 branches, 92
satellite locations and 153 SEFL entrepreneur partners spread
across 21 states in India. SEFL's revenue increased to INR50.79
billion during FY20 (FY19: INR43.78 billion). The company's profit
after tax decreased to INR0.56 billion in FY20 (FY19: INR3.06
billion), while its gross stage III asset increased to INR33.2
billion (INR16.7 bil.).
In 1HFY21, the company reported a profit after tax of INR0.22
billion. As of September 30, 2020, SEFL had assets under management
of INR356.32 billion, of which 10.16% is in stage III asset
category.
SEFL DA SEP 2019 III: Ind-Ra Cuts Guarantee-Backed Rating to B+
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded SEFL DA
September 2019 III's (government of India partial credit
guarantee-backed direct assignment transaction) to 'IND B+
(SO)(ISSUER NOT COOPERATING)' from 'IND BB+ (SO)(ISSUER NOT
COOPERATING)' while maintaining the ratings on Rating Watch
Negative (RWN). The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Thus, the rating is based on the best available information.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND B+ (SO)(ISSUER NOT COOPERATING)'/RWN on the agency's
website.
The instrument-wise rating actions are:
-- INR2,221.88 bil. Assignee payouts issued on September 30, 2019
coupon rate 10.26% due on September 30, 2023 downgraded;
maintained on RWN with IND B+ (SO)(ISSUER NOT COOPERATING)
/RWN; and
-- INR246.88 mil. Assign or retention due on September 30, 2023
downgraded; maintained on RWN with IND B+ (SO)(ISSUER NOT
COOPERATING) /RWN.
*The maturity dates are subject to change due to transaction
amendments, as a consequence of the COVID-19 regulatory relief in
the form of moratorium granted to borrowers in the pool.
^Balance after October 31, 2020 payout date
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information.
The construction equipment pool assigned to the trust is originated
by SREI Equipment Finance Limited (SEFL; the assignor, and
collection and processing agent).
KEY RATING DRIVERS
The downgrade is primarily driven by weakened credit profile of the
CPA; low available credit enhancement as a percent of pool
principal outstanding as of October 2020, and continued uncertainty
around the servicing of rated instruments in absence of information
from assignor or assignee representative.
The ratings have been maintained on RWN in view of the continued
uncertainty around the pending outcome of the meeting with the
creditors and its impact on the collection efficiency of the
transaction.
SEFL has proposed a scheme of arrangement to its creditors and the
same is under consideration. Meanwhile, SEFL's creditors have
decided that the collections of the underlying loan receivables
would be deposited in the trust and retention account (TRA)
maintained by the lead bank of the consortium of creditors, which
would then be identified and transferred to the assignee bank.
However, with the collections being deposited in the TRA, the
reconciliation of the cash flow to be remitted from the TRA to the
assignee bank account is posing a challenge to SEFL, as understood
from the assignor. Hence, SEFL is unable to share the complete
information essential to assess the ratings of the assignee payout
and assignor retention tranches. Hence, Ind-Ra has migrated the
rating to the non-cooperating category.
COMPANY PROFILE
SEFL is engaged in the financing of construction, IT, medical and
agriculture-based farm equipment operating through 78 branches, 92
satellite locations and 153 SREI entrepreneur partners spread
across 21 states in India. SEFL's revenue increased to INR50.79
billion during FY20 (FY19: INR43.78 billion). The company's profit
after tax decreased to INR0.56 billion in FY20 (FY19: INR3.06
billion), while its gross stage III asset increased to INR33.2
billion (INR16.7 billion).
In 1HFY21, the company reported profit after tax of INR0.22
billion. As of September 30, 2020, SEFL had an asset under
management of INR356.32 billion, of which 10.16% is in the stage
III asset category.
SREENAGAR COLD: CARE Lowers Rating on INR7.41cr Loan to B-
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sreenagar Cold Storage Private Limited (SCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.41 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING Revised from
CARE B; Stable and moved to
ISSUER NOT COOPERATING Category
Short Term Bank 0.50 CARE A4; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING Category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SCSPL to monitor the rating
vide email communications/letters dated September 30, 2020, October
19, 2020, November 5, 2020, November 26, 2020, December 18, 2020,
February 26, 2021 and numerous phone calls. However, despite CARE's
repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. Further, SCSPL has not
paid the surveillance fees for the rating exercise as agreed to in
its Rating Agreement. The rating on SCSPL's bank facilities will
now be denoted as CARE B-; Stable; ISSUER NOT COOPERATING and CARE
A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in March 6, 2020, 2020 the following
were the rating weaknesses and strengths (Updated the information
available from Ministry of Corporate Affairs).
Key Rating Weaknesses
* Small scale of operations with moderate profit margins: The scale
of operations of the company remained small with a total operating
income of INR2.92 crore, PAT of INR0.06 crore and cash accruals of
INR0.29 crore in FY20.
* Regulated nature of business: In West Bengal, the basic rental
rate for cold storage operations is regulated by the state
government through West Bengal State Marketing Board. The rent of
these cold storages is decided by taking into account political
considerations, not economic viability. Due to severe government
intervention, the cold storage facility providers cannot enhance
rental charge commensurate with increased power tariff and labor
charge.
* Seasonality of business with susceptibility to vagaries of
nature: SCSPL's operation is seasonal in nature as potato is a
winter season crop with its harvesting period commencing in March.
The loading of potatoes in cold storages begins by the end of
February and lasts till March. Additionally, with potatoes having a
perceivable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period from December to January.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
* Risk of delinquency in loans extended to farmers: Against the
pledge of cold storage receipts, SCSPL provides interest-bearing
advances to the farmers & traders. Before the closure of the season
in November, the farmers & traders are required to clear their
outstanding dues with the interest. In view of this, there exists a
risk of delinquency in loans extended, in case of downward
correction in potato or other stored goods prices, as all such
goods are agro commodities. Competition from other local players:
In spite of being capital intensive, the entry barrier for new cold
storage is low, backed by capital subsidy schemes of the
government. As a result, the potato storage business in the region
has become competitive, forcing cold storage owners to lure farmers
by providing them interest bearing advances against stored potatoes
which augments the business risk profile of the companies involved
in the trade.
* Leveraged capital structure with moderate debt coverage
indicators: The capital structure of the company remained leveraged
marked by overall gearing ratio of 3.81x as on March 31, 2020 as
against 2.48x as on March 31, 2019. The debt coverage indicators of
the company remained moderate marked by interest coverage of 1.67x
and total debt to GCA of 24.50x in FY20.
Key Rating Strengths
* Experienced promoter and long track record of operations: The
company is into cold storage business since 1975 and thus has long
track record of operations of around 45 years. Furthermore, the key
promoters; Mr. Mohan Lal Poddar, has more than four decades of
experience in cold storage industry, looks after the overall
management of the company. He is supported by other promoters Mr.
Jay Prakash Poddar who has around four decades of experience in
this line of business and. The promoters are supported by a team of
experienced professionals.
* Proximity to potato growing area: SCSPL's storing facility is
situated at Medinipore, West Bengal which is one of the major
potato growing regions of the state. The favorable location of the
storage unit, in close proximity to the leading potato growing
areas provides it with a wide catchment and making it suitable for
the farmers in terms of transportation and connectivity.
Sreenagar Cold Storage Private Limited (SCSPL) was established as a
partnership firm in March 1975. However, it was converted into
private limited company in September 1982 and presently the company
is being managed by Mr. Mohan Lal Poddar along with other
promoters. The company provides cold storage services for potatoes
to local farmers and traders. The cold storage unit of the company
is located at Medinipore, West Bengal with aggregated storage
capacity of 22000 metric tons.
TELAWNE POWER: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Telawne Power
Equipments Pvt. Ltd. a Long-Term Issuer Rating of 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR90 mil. Fund-based limits assigned with IND BB+/Stable/IND
A4+ rating; and
-- INR190 mil. Non-fund-based limits assigned with IND A4+
rating.
KEY RATING DRIVERS
The ratings reflect Telawne's medium scale of operations as
indicated by revenue of INR963 million in FY20 (FY19: INR1,100
million). The decline in revenue was owing to a decrease in
capacity utilization to 31% in FY20 (FY19: 49%) due to receipt of
lower number of orders, coupled with the disruptions caused by the
COVID19-led lockdown in the last week of March 2020. The firm
receives customized orders from contractors and requires a lead
time of four-to-six weeks to process the orders. At end-February
2021, Telawne had orders amounting to INR860 million (0.89x of the
FY20 revenue), to be executed in the next six months. The firm
booked revenue of INR568.2 million in 11MFY21 and expects to
achieve revenue of INR700 million in FY21.
The ratings are also constrained by the firm's weak credit metrics
as indicated by the gross interest coverage (operating EBITDA/gross
interest expense) of 1.2x (FY19: 1.3x) and the net leverage (total
adjusted net debt/operating EBITDA) of 2.9x (FY19: 2.5x). The
deterioration in the credit metrics was due to a fall in the EBITDA
to INR38 million in FY20 (FY19: INR57 million). The gross coverage
improved to 2.0x and the net leverage to 2.7x in 9MFY21. Ind-Ra
expects the credit metrics to improve in FY21 owing to improved
EBITDA margins.
Liquidity Indicator - Stretched: The average peak utilization of
the fund-based limits was 70.8% and the non-fund-based limits was
72.3% for the six months ended January 2021. The net working
capital days were 56 days (FY19: 62 days) owing to stretch in
payable days. The cash flow from operations turned positive to
INR27 million in FY20 (FY19: negative INR13 million) owing to
favorable changes in working capital. The free cash flow also
turned positive to INR24 million in FY20 (FY19: negative INR21
million) due to the absence of any major capex during the year. The
cash and cash equivalents stood at INR2.61 million at FYE20 (FYE19:
INR0.41 million). The firm has scheduled debt repayments of INR13.5
million in FY21. Telawne had availed the Reserve Bank of
India-prescribed moratorium for March to August 2020 under the
COVID-19 relief package.
However, the ratings are supported by Telawne's healthy EBITDA
margins of 4% in FY20 (FY19: 5.1%), due to increase in other
indirect, administrative and selling expenses. The return on
capital employed was 15.3% in FY20 (FY19: 24%). The margins
increased to 5.7% in 9MFY21, owing to lower consumption of raw
materials as the operations were closed during April to June 2020.
Ind-Ra expects the FY21 margins to be in line with FY20 as the firm
resumed operations from July 2020.
The ratings also benefit from the promoter's experience of three
decades in the manufacturing of transformers.
RATING SENSITIVITIES
Negative: Deterioration in the operating performance leading to the
gross interest coverage reducing below 1.5x, along with
deterioration in the liquidity position would lead to a negative
rating action.
Positive: A substantial improvement in the operating performance,
leading to an improvement in the credit metrics, along with an
improvement in the liquidity position would lead to a positive
rating action.
COMPANY PROFILE
Incorporated in 2004, Telawne manufactures power distribution
transformers at its manufacturing units located in Rabale and
Taloja in Navi Mumbai, Maharashtra.
VIRTUE MARKETING: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Virtue
Marketing Private Limited (VMPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 20.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 28, 2020, placed the
rating of VMPL under the 'issuer non-cooperating' category as VMPL
had failed to provide information for monitoring of the rating.
VMPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and an email
dated January 18, 2021, January 22, 2021 and January 28, 2021. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which, however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on January 28, 2020 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Stretched liquidity position leading to delays in meeting the debt
obligations. There have been continuous overdrawals in cash credit
account along with interest overdue and devolvement in letter of
credit due to stretched liquidity position consequently leading to
delays in meeting the debt obligations.
Incorporated in 2013, Virtue Marketing Private Limited (VMPL) is
promoted by Mr. Ramesh Jain and Mr. Hitesh Jain. VMPL is currently
engaged in the trading of Aluminium Plates, Aluminium Coils,
Aluminium Foils, Aluminium Wires, Aluminium Ingots, Aluminium
Conductors, Aluminium Extrusions, steel products and scraps. The
product range finds application in transport, machinery, defense,
healthcare, automobile, engineering etc. The other company of the
promoters, R.E Cables & Conductors Private Limited (rated CARE D;
Issuer Not Cooperating) is into designing, manufacturing and
marketing all types of aluminum products and scraps. These cables
and conductors find its use in power generating and distributing
companies. The company markets the cables and conductors under
'RECC' brand.
WHITE LOTUS: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of White Lotus
Cotyledon Private Limited (WLCPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.05 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 10.45 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 2.50 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with WLCPL for
obtaining information through letters and emails dated August 22,
2020 and February 16, 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 WLCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on WLCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
WLCPL continues to be 'CRISIL D Issuer Not Cooperating'.
WLCPL, established by Shah family in Aurangabad (Maharashtra), is
engaged in ginning and pressing of raw cotton. The company's unit,
located at Vaijapur in Aurangabad, has a manufacturing capacity of
1500 quintals per day.
=================
S I N G A P O R E
=================
CHINA FISHERY: Kirkland & Ellis Updates on Noteholders
------------------------------------------------------
In the Chapter 11 cases of China Fishery Group Limited (Cayman), et
al., the law firm of Kirkland & Ellis LLP submitted an amended
verified statement under Rule 2019 of the Federal Rules of
Bankruptcy Procedure, to disclose an updated list of Ad Hoc Group
that it is representing.
K&E's representation of certain entities that hold, or that act as
investment manager of or advisor to certain funds, controlled
accounts, and/or other entities that hold or are beneficial owners
of the 9.75% Senior Notes Due 2019, the Club Loan Facility
obligations that matured as of 2018, and claims arising under that
certain $35 million facility letter dated August 26, 2014 among
Bank of America, N.A., China Fisheries International Limited, and
South Pacific Shipping Agency Limited. K&E previously represented
certain entities in their capacities as holders of the Senior
Notes.
K&E represents only the Ad Hoc Group and does not represent or
purport to represent any entity other than the Ad Hoc Group, in
connection with the Debtors' chapter 11 cases. In addition, the Ad
Hoc Group does not represent or purport to represent any other
entity in connection with the Debtors' chapter 11 cases at this
time.
As of March 16, 2021, the Committee Members and their disclosable
economic interests are:
Burlington Loan Management DAC
Pinnacle 2
Eastpoint Business Park Dublin 3
Ireland
* $65,571,000 principal amount of Senior Notes
* $53,250,000 principal amount of Club Loans
Cowell & Lee Asia Credit Opportunities Fund
c/o Cowell & Lee Capital Management Limited
Room 1501 Ruttonjee House,
11 Duddell Street
Central Hong Kong
People's Republic of China
* $47,282,000 principal amount of Senior Notes
Monarch Alternative Capital LP
50-52 Welbeck Street
1st Floor
London, United Kingdom
W1G 9HL
* $32,101,000 principal amount of Senior Notes
* $115,629,369 principal amount of Club Loans
* $30,998,083.56 of CF Facility Claims
VCFG, LLC
3600 West 80th Street Suite 225
Minneapolis, MN 55431
* $80,000,000 principal amount of Club Loans
SC Lowy Primary Investments, Ltd.
8 Queens Road Central 17th Floor
Hong Kong
People's Republic of China
* $9,874,000 principal amount of Senior Notes
* $18,500,000 principal amount of Club Loans
Arkkan Capital Management Limited
8 Queens Road Central 23rd Floor
Hong Kong
People's Republic of China
* $11,122,000 principal amount of Senior Notes
* $12,000,000 principal amount of Club Loans
Deutsche Bank, London Branch
c/o: Deutsche Bank AG
Hong Kong Branch
61/F, International Commerce Centre
1 Austin Road West
Kowloon, Hong Kong
* $7,185,000 principal amount of Senior Notes
* $18,173,076.60 principal amount of Club Loans
Counsel to the Ad Hoc Group can be reached at:
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
Patrick J. Nash, Jr., P.C., Esq.
Gregory F. Pesce, Esq.
Heidi M. Hockberger, Esq.
300 North LaSalle
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
A copy of the Rule 2019 filing is available at
https://bit.ly/3vIGbl0 at no extra charge.
About China Fishery Group
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group was
estimated to have assets at $500 million to $1 billion and debt at
$10 million to $50 million.
The cases are assigned to Judge James L. Garrity Jr.
Weil, Gotshal & Manges LLP has been tapped to serve as lead
bankruptcy counsel for China Fishery and its affiliates other than
CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal
replaces Meyer, Suozzi, English & Klein, P.C., the law firm
initially hired by the Debtors. The Debtors have also tapped
Klestadt Winters Jureller Southard & Stevens, LLP, as conflict
counsel; Goldin Associates, LLC, as financial advisor; RSR
Consulting LLC as restructuring consultant; and Epiq Bankruptcy
Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as
special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11
trustee for CFG Peru Investments Pte. Limited (Singapore), one of
the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as
the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as
special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves
as special litigation counsel.
SEN YUE: To Oppose DBS' Judicial Management Applications
--------------------------------------------------------
The Business Times reports that Sen Yue will contest the judicial
management applications by creditor DBS at hearings in April and
May.
BT relates that the waste-management firm said in a regulatory
statement on March 19 that it will oppose the interim judicial
management applications to be heard on April 1, and the judicial
management applications fixed for hearing on May 10.
Sen Yue and SMC Industrial, its wholly owned subsidiary, are facing
the applications from DBS, the report notes. SMC owes the bank
around SGD5.9 million and has about US$9 million outstanding, plus
all accrued interest and legal costs on an indemnity basis.
According to BT, the Catalist-listed firm said that Hong Kong and
Shanghai Banking Corp is participating as a creditor in the
applications, but it did not say whether this bank is supporting or
objecting to the applications.
Its shares last traded at 2.2 Singapore cents in April last year,
before it requested for a trading halt, the report notes.
About Sen Yue
Sen Yue Holdings Limited is an investment holding company. The
Company is principally engaged in three business verticals: e-waste
management solutions, commodities trading, and surface coating and
related services. The Company provides holistic e-waste management
solutions to local and overseas customers. It offers e-waste
management solutions in Singapore to recycle lithium-ion batteries.
The Company's commodities trading and processing business
activities is an extension of its e-waste management business by
creating new value in metal scraps. Its surface coating and related
services offer protection from corrosion and extend the service
life of its customers' products and components, while staying
environmentally friendly.
As reported in the Troubled Company Reporter-Asia Pacific on March
5, 2021, The Business Times said Sen Yue Holdings on March 3, 2021,
said that DBS, its bank creditor, has applied to the High Court for
the waste-management group and its subsidiary to be placed under
judicial management. The subsidiary, SMC Industrial (SMCI), owes
DBS around SGD5.9 million and has about US$9 million outstanding,
plus all accrued interest and legal costs on an indemnity basis. In
January, it received a letter of demand from DBS, which had
recalled banking facilities on the grounds of default. The lender
had demanded that the sums be paid in three weeks, failing which
SMCI would be liable to be compulsorily wound up.
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T H A I L A N D
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THAI AIRWAYS: Disputes US$7.4 Billion of Aircraft Lessor Claims
---------------------------------------------------------------
Anuchit Nguyen at Bloomberg News reports that Thai Airways
International Pcl is challenging some US$7.4 billion in claims from
dozens of aircraft lessors and engine service provider Rolls-Royce
Holdings Plc, saying it isn't liable for the monies because they
concern future expenses and were incurred after the airline
received bankruptcy protection from a Bangkok court.
Thailand's flag carrier, which is undergoing a court-supervised
restructuring to trim debt and return to profit by raising fresh
capital, is disputing around THB192 billion ($6.3 billion) claimed
by 48 lessors including BOC Aviation Ltd. and SMBC Aviation Capital
Ltd., and another THBT33 billion that Rolls-Royce says it's owed
for maintenance services, according to a copy of the debt
rehabilitation plan seen by Bloomberg.
The disputed amount is more than half of Thai Airways' total
liabilities of THB410 billion, the report notes. Yet an amicable
settlement with creditors is key for the airline to stave off
bankruptcy. The carrier will require THB30 billion by the middle of
this year to resume its scheduled commercial services and pay for
one-time employee separation costs, Acting President Chansin
Treenuchagron said earlier this month, Bloomberg relates.
Some THB50 billion of fresh capital in total will be sought over
the next two years, either through new shares or borrowings.
According to Bloomberg, Thailand's finance ministry, Thai Airways'
largest shareholder, has already backed the proposed restructuring,
which also seeks to impose a three-year freeze on debt repayments,
a waiver of unpaid interest on loans and the deferment of bond
repayments for six years.
Thai Airways posted a record loss of $4.7 billion last year after
most of its services were halted by border closures due to
Covid-19, Bloomberg discloses. Accumulated losses and mounting debt
turned the airline's equity negative prompting the Thai bourse to
suspend its shares from trading last month. The stock fell 54% in
2020.
Bloomberg says the carrier submitted the debt recast plan to the
bankruptcy court on March 2 and expects creditors to vote on it on
May 12.
Bondholders, although their repayments will be deferred, haven't
been asked to take any haircut on their principal. They're owed
about THB70 billion in total.
"Bondholders are very happy even though the repayment period will
be extended for some time," Bloomberg quotes Somboon Sangrungjang,
a senior lawyer at Kudun & Partners Ltd., which represents the
bondholders, as saying. But he added there will be "some disputes
between Thai Air and other creditors."
About Thai Airways
Thai Airways International PCL (BAK:THAI) --
http://www.thaiairways.co.th/-- is the national carrier of
Thailand. The company provides air transportation, freight and
mail services on domestic and international routes including Asia,
Europe, North America, Africa and South West Pacific. The Company
is a state enterprise which is controlled by the government and
partly owned by the public.
As reported in Troubled Company Reporter-Asia Pacific on May 21,
2020, Thailand's cabinet approved a plan to restructure troubled
Thai Airways International Pcl's finances through a bankruptcy
court, the Southeast Asian country's prime minister said on May 19,
2020.
The plan for a court-led restructuring of the national carrier
replaces a previous proposal of a government-backed rescue package
that was heavily criticised in the country.
Thai Airways on May 27, 2020 said it appointed board members as
rehabilitation planners in a bankruptcy court submission.
On Sept. 14, 2020, Thailand's Central Bankruptcy Court approved
Thai Airways debt restructuring.
Thai Airways posted losses every year after 2012, except in 2016.
In 2019, it reported losses of THB12.04 billion.
The company's shareholders' equity turned negative at minus THB18.1
billion ($580 million) as of June. While its total liabilities
ballooned to THB332.1 billion, a 36.7% increase from the end of
2019, its cash and cash equivalents fell by 35.5% to THB13.9
billion, according to the Nikkei Asia.
*********
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-
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Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
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Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9482.
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*** End of Transmission ***