/raid1/www/Hosts/bankrupt/TCRAP_Public/210331.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, March 31, 2021, Vol. 24, No. 59
Headlines
A U S T R A L I A
CASTLE ROCK: Second Creditors' Meeting Set for April 9
EAD CONCEPTS: First Creditors' Meeting Set for April 12
NORTH QUEENSLAND EXPORT: S&P Cuts ICR to BB-, Outlook Negative
ONWARDS UP: First Creditors' Meeting Set for April 12
RAGING THUNDER: First Creditors' Meeting Set for April 12
C H I N A
AGILE GROUP: Moody's Affirms Ba2 CFR & Alters Outlook to Stable
CANSINO BIOLOGICS: Annual Net Loss Widens to CNY397MM in 2020
DAFA PROPERTIES: S&P Withdraws 'B' Issuer Credit Rating
ZHONGLIANG HOLDINGS: Moody's Alters Outlook on B1 CFR to Positive
[*] CHINA: Plans to Keep Local SOEs from Going to Deep Into Debt
I N D I A
9PLANETS PRODUCTS: CRISIL Keeps D Debt Ratings in Not Cooperating
ASUTI TRADING: CRISIL Keeps D Debt Rating in Not Cooperating
BADRI KEDAR: CRISIL Reaffirms D Ratings on INR28cr Loans
GOVAAN STEELS: CRISIL Keeps D Debt Ratings in Not Cooperating
H. R. INTERNATIONAL: CRISIL Keeps D Ratings in Not Cooperating
HOSHIARPUR ROLLER: CRISIL Keeps D Debt Ratings in Not Cooperating
INDIAN FOODTECH: CRISIL Keeps D Debt Ratings in Not Cooperating
JAYAM SAND: CRISIL Keeps B+ Debt Rating in Not Cooperating
JOSEPH LESLIE: CRISIL Lowers Rating on INR15.5cr Bank Debt to D
JOYS STEEL: CRISIL Lowers Rating on INR39cr Cash Debt to D
MAGNUM AVIATION: CRISIL Withdraws B Rating on INR9.5cr Cash Loan
NASSCO TRADING: CRISIL Lowers Rating on INR9.5cr Cash Loan to D
NEEL KANTH: CRISIL Keeps B Debt Ratings in Not Cooperating
NRU SPINNING: CRISIL Keeps D Debt Ratings in Not Cooperating
OM ENERGY: CRISIL Keeps B+ Debt Ratings in Not Cooperating
ORIGIN CORPORATION: CRISIL Keeps D Ratings in Not Cooperating
P. C. INDUSTRIES: CRISIL Keeps B Debt Ratings in Not Cooperating
PADMA LAXMI: CRISIL Lowers Rating on INR12.65cr Loans to B
PARAMESHWAR WEAVES: CRISIL Keeps B Ratings in Not Cooperating
PEARL MINERAL: CRISIL Keeps B+ Debt Ratings in Not Cooperating
PRACHIN FOUNDATION: CRISIL Keeps D Ratings in Not Cooperating
RENEW POWER 4: Fitch Assigns BB-(EXP) Rating on Proposed USD Notes
RENEW POWER PRIVATE: Fitch Affirms 'BB-' LT IDR, Outlook Positive
SHAKAMBARI RICE: CRISIL Keeps B Debt Rating in Not Cooperating
SMT MACHINES: CRISIL Keeps D Debt Ratings in Not Cooperating
STA-CO NUTRA: CRISIL Keeps D Debt Ratings in Not Cooperating
SUISO ENERGY: CRISIL Assigns B+ Rating to INR1cr Proposed Loan
SUJATHA FEEDS: CRISIL Keeps D Debt Ratings in Not Cooperating
TRANS TECH: CRISIL Keeps D Debt Ratings in Not Cooperating
TRANSPORT SOLUTIONS: CRISIL Keeps D Ratings in Not Cooperating
TRIPATHI HOSPITAL: CRISIL Keeps D Debt Rating in Not Cooperating
TULSI ROCKS: CRISIL Keeps D Debt Ratings in Not Cooperating
UDAY STRUCTURALS: CRISIL Keeps D Debt Ratings in Not Cooperating
VIJAYA KRISHNA: CRISIL Lowers Rating on INR5.5cr Loans to D
[*] INDIA: Corporate Guarantor Can Face Insolvency Action
[*] INDIA: Resumes Bankruptcy Filings Halted by Pandemic
J A P A N
BRIDGESTONE CORP: To Shut Japan Bicycle Plant in Turnaround Move
M A L A Y S I A
AIRASIA GROUP: Posts MYR2.4 Billion Net Loss in Q4 Ended Dec. 31
S I N G A P O R E
AVATION PLC: S&P Raises ICR to 'CCC' on Extension of Bond Maturity
EAGLE HOSPITALITY: Court Issues Winding Up Order vs Former EH-Reit
EAGLE HOSPITALITY: Defends Inclusion of Foreign Units in Ch. 11
HIN LEONG: Founder Faces Another 23 Forgery-Related Charges
V I E T N A M
NATIONAL POWER: Fitch Affirms 'BB' LT Foreign Currency IDR
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A U S T R A L I A
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CASTLE ROCK: Second Creditors' Meeting Set for April 9
------------------------------------------------------
A second meeting of creditors in the proceedings of Castle Rock
Global Capital Pty Ltd and Davcas Investments Pty Limited has been
set for April 9, 2021, at 9:30 a.m. via Zoom Webinar.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by April 8, 2021, at 3:00 p.m.
Brian Raymond Silvia and Geoffrey Granger of Ferrier Silvia were
appointed as administrators of Castle Rock Global on Jan. 4, 2021.
EAD CONCEPTS: First Creditors' Meeting Set for April 12
-------------------------------------------------------
A first meeting of the creditors in the proceedings of EAD Concepts
Pty Ltd, formerly trading as Pitard Concepts Pty Ltd, will be held
on April 12, 2021, at 1:30 p.m. via virtual meeting technology.
Con Kokkinos & Matthew Kucianski of Worrells Solvency & Forensic
Accountants were appointed as administrators of EAD Concepts on
March 29, 2021.
NORTH QUEENSLAND EXPORT: S&P Cuts ICR to BB-, Outlook Negative
--------------------------------------------------------------
S&P Global Ratings lowered its issue credit rating on North
Queensland Export Terminal Pty Ltd.'s (NQXT) debt to 'BB-' from
'BB+'.
The negative outlook continues to reflect increasing uncertainty as
to the nature and timing of future refinancing plans as well as
borrowing costs. The company has indicated it will borrow
additional shareholder loans by end-April 2021 to meet the upcoming
maturity due in September 2021.
Abbot Point Coal Terminal, located 25km northwest of Bowen in the
Australian state of Queensland, is Australia's northernmost coal
port. The multiuser port has a design capacity of 50 million tons
per annum (mtpa) that is substantially contracted under
medium-to-long term take-or-pay agreements. The port is held under
a 99-year lease acquired by the Adani Group from the Queensland
government early in 2011.
The port was renamed North Queensland Export Terminal (NQXT) from
Adani Abbot Point Terminal in October 2020. The port has also
incorporated a new entity, NQXT Capital Pty Ltd., which will be the
pass-through special-purpose financing vehicle for the project for
future refinancing.
-- Relatively stable revenue under take-or-pay contracts and
socialization arrangement at the time of resets.
-- Good contracted capacity pipeline from multiple shippers.
Risks
-- Exposure to refinancing risk given increasing reluctance of
capital providers to finance coal-related assets.
-- Some headline environmental, social, and governance (ESG) risk
given linkages to the Carmichael Mine as one of the users.
-- Periodic exposure to contract renewals.
-- Revision of tariffs at next reset in June 2022.
S&P said, "We have lowered the rating on NQXT to reflect the
increasing refinancing risks associated with the project,
difficulty in accessing markets, and potentially higher borrowing
costs for the project.
"Near-term liquidity risks remain as we believe the refinancing of
the upcoming maturity is not going to proceed. Consequently, NQXT
is seeking additional shareholder borrowings by April 30, 2021, to
meet the upcoming September 2021 maturity.
"Beyond the imminent liquidity risks, we believe that the
refinancing risks and borrowing costs associated with the project
have increased. The credit margin for refinancing remain uncertain
as the project has been unable to attract financing for its last
two maturities (A$270 million); instead having to turn to is
ultimate parent to provide shareholder loans. Our current base-case
forecast assumes the project will continue to bear risk associated
with increased borrowing costs, as the current tariff mechanism
doesn't pass this through to users. We believe widening of credit
margins could remain a persistent feature for future refinancing,
owing to ESG-related considerations over coal assets in general as
well as this project itself."
This remains a risk given the substantial upcoming maturity of
US$500 million due in December 2022. Delayed refinancing for
subsequent maturities may put further downward pressure on the
ratings.
S&P has assumed refinance margins of 6% and 7.5% in its base and
downside case assessment, leading to debt service coverage ratios
(DSCRs) of 1.56x and 1.07x, respectively. The combination of this
leads to a two-notch downgrade.
NQXT's long-term capital structure remains under development. Of
the shareholder loans taken so far, the company has converted A$198
million into equity (units of the NQXT Holdings Trust), including
an additional A$98 million borrowed to meet its legal liabilities
arising out of the August 2020 Queensland Supreme Court decision.
Currently our assessment factors in A$1.34 billion as senior debt.
In addition, the company is considering an amortization structure
for its senior debt, which NQXT has stated it intends to put in
place in the next two-three months. Clarity on the long-term debt
profile would also be an important input for the future credit
profile.
Timely completion of the next tariff reset, including arbitrations
if any, as well as conclusions of the ongoing renewal of Glencore
contract would be relevant credit factors in the next term.
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Greenhouse gas emissions,
-- Other environmental factors, and
-- Other governance factors.
The negative outlook continues to reflect NQXT's increasing
refinancing risk and borrowing costs. As NQXT has not yet
refinanced the upcoming maturity, the company has indicated it will
borrow additional shareholder loans by end-April 2021 to meet the
upcoming maturity in September 2021. As such, the outlook also
captures the uncertainty as to the nature and timing of future
refinancing.
S&P said, "We may lower the rating if the funding for the September
2021 debt maturity is not received in NQXT's account by April 30,
2021, and continued uncertainty remains around the 2022
refinancing. We could also lower the ratings if our calculated
minimum DSCR was to drop below 1.4x, which could most likely happen
if there is a further increase in borrowing costs beyond that
factored into our base case. Further, uncertainty around the timing
of resolution of handling charges, contract renewals, or any other
operational challenges can also weigh on the rating.
"We could revise the outlook to stable if the company receives
funds for the September 2021 maturity and there is greater
certainty over the long-term debt profile for the business. A
precursor to a revision in the outlook would also include DSCRs
remaining above 1.4x in our base case and 1x in our downside case
assessment."
ONWARDS UP: First Creditors' Meeting Set for April 12
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Onwards Up
And Gone Pty Ltd will be held on April 12, 2021, at 2:00 p.m. using
virtual meeting technology.
Con Kokkinos of Worrells Solvency & Forensic Accountants were
appointed as administrators of Onwards Up on March 29, 2021.
RAGING THUNDER: First Creditors' Meeting Set for April 12
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Raging
Thunder Retail Pty Limited will be held on April 12, 2021, at 10:00
a.m. using virtual meeting technology.
Andrew McCabe and Rajiv Goyal of Wexted Advisors were appointed as
administrators of Raging Thunder on March 30, 2021.
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C H I N A
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AGILE GROUP: Moody's Affirms Ba2 CFR & Alters Outlook to Stable
---------------------------------------------------------------
Moody's Investors Service has changed Agile Group Holdings
Limited's rating outlook to stable from negative.
At the same time, Moody's has affirmed Agile's Ba2 corporate family
rating and Ba3 senior unsecured rating on its notes.
"The outlook revision to stable from negative reflects our
expectation that Agile's revenue growth and controlled debt
increase will help to further improve its key financial metrics
over the next 12-18 months," says Kaven Tsang, a Moody's Senior
Vice President.
"The rating affirmation also reflects our view that Agile will
maintain financial discipline and good liquidity while pursuing
business growth over the next 1-2 years," adds Tsang.
RATINGS RATIONALE
Agile's Ba2 CFR reflects its (1) strong market position and a solid
track record of property development in its core Guangdong and
Hainan markets; (2) track record of disciplined financial
management; (3) good liquidity, with good access to offshore debt
and banking markets; and (4) improving geographic diversification
that could temper regional economic and regulatory risks.
At the same time, its Ba2 rating incorporates the company's modest
financial metrics, and exposure to financial and execution risks
associated with its expansion in non-property businesses.
Moody's expects Agile's debt leverage, measured by revenue/adjusted
debt, to improve further to 70%-75% over the next 1-2 years after
increasing to 66.9% in 2020 from 50.5% in 2019. Similarly, its
interest coverage, measured by EBIT/interest, will rise to
3.0x-3.5x in the next 1-2 years, following an improvement to 2.8x
in 2020 from 2.3x in 2019.
These improvement trends meet our expectation for Agile's Ba2 CFR,
and reflects Agile's abilities to reduce its leverage through
prudent business growth and controlled debt increases.
Agile's revenue growth over the next 1-2 years will be supported by
a higher delivery of presold property projects, due to solid
presales growth over the past 2-3 years, and continued development
in non-property businesses.
Agile's property presales grew 17% to RMB138.2 billion in 2020
despite the disruption caused by COVID-19 in the first half (1H).
This growth provides visibility for the recognition of property
development revenues over the next 1-2 years.
Moody's expects Agile's solid sales execution, established brand
and sizable land banks in Greater Bay Area and Eastern China to
support moderate growth in its property presales to RMB145
billion-RMB155 billion annually over the next 1-2 years, amid
tightened credit conditions in China.
Moody's also expects Agile to maintain financial discipline and
keep its investments in new land purchases and non-property
development businesses at 25%-30% of its property presales over the
next 1-2 years. This will allow the company to keep its debt growth
at an annual rate of 5%-10% over the next 1 -2 years.
Agile's liquidity position remains good. The company's cash-on-hand
of RMB50.9 billion as of December 31, 2020 can cover its short-term
debt of RMB38.8 billion as of the same date. Moody's also forecasts
its cash holding and operating cash flow to be sufficient to cover
its maturing debt, committed land premiums and dividend payments
over the next 12-18 months.
In terms of environmental, social and governance factors, Moody's
has considered Agile's concentrated ownership by its key
shareholder, the Chen family, which held a 66.3% stake as of end of
December 2020. The family's track record of injecting equity into
the company to support its liquidity and refinancing needs partly
temper concerns over its concentrated ownership.
Agile's CFR has also considered the presence of internal governance
structures and disclosure standards, as required under the
Corporate Governance Code for companies listed on the Hong Kong
Stock Exchange.
Agile's Ba3 senior unsecured bond rating is one notch below its CFR
because of the risk of structural subordination. This subordination
risk reflects the fact that most of Agile's claims are at the
operating subsidiaries and have priority over claims at the holding
company in a bankruptcy scenario. In addition, the holding company
lacks significant mitigating factors for structural subordination.
As a result, the likely recovery rate for claims at the holding
company will be lower.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward rating pressure could develop if Agile (1) executes its
business expansion plan with discipline; (2) maintains a strong
liquidity position; and (3) improves its credit metrics, with
revenue/adjusted debt above 80%-85% and EBIT/interest coverage
trending to 4.5x-5.0x on a sustained basis.
Downward rating pressure could develop if (1) Agile's presales
decline, (2) the company fails to ramp up its environmental
protection business or (3) the expansion strategy in its property
or non-property businesses becomes more aggressive such that its
debt or contingent liabilities increase, weakening its credit
metrics.
Indications of downgrade pressure includes EBIT/interest coverage
below 3.0x-3.5x or revenue/adjusted debt under 65%-70% on a
sustained basis.
Any signs of weakening in liquidity with cash/short-term debt
consistently below 1.0x or deterioration of corporate governance
standards will also pressure the rating.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Agile Group Holdings Limited (Agile) is one of China's major
property developers. As of December 31, 2020, the company had a
land bank with a total attributable planned gross floor area (GFA)
of 53 million sq.m. in 84 cities, spanning across Southern China
region, Eastern China region, Western China region, Central China
region, Hainan and Yunnan region, Northeast China region, Northern
China region, Hong Kong and overseas. Southern China (mainly
Guangdong Province) is Agile's largest market, accounting for 32%
of the company's land bank as of December 31, 2020 and 34% of its
presales by GFA in 2020.
CANSINO BIOLOGICS: Annual Net Loss Widens to CNY397MM in 2020
-------------------------------------------------------------
Caixin Global reports that CanSino Biologics Inc. reported a 2020
net loss of CNY397 million (US$61 million), more than double the
loss of the previous year, reflecting heavy investments in research
and business expansion.
Total revenue for the year grew more than ninefold to CNY24.9
million, the company said in its latest financial report, Caixin
discloses.
Caixin relates that CanSino's gross profit margin was 42.4% in
2020, down 51 percentage points from 2019, reflecting rising costs,
the company said. Investment in research and development rose 182%
year-on-year, while marketing costs jumped more than twofold.
CanSino Biologics Inc. develops and manufactures biological vaccine
products. The Company discovers quadrivalence meningococcal
conjugate, pneumococcal polysaccharide, and adenovirus vector-based
tuberculosis vaccines for human use. CanSino Biologics serves
customers worldwide.
DAFA PROPERTIES: S&P Withdraws 'B' Issuer Credit Rating
-------------------------------------------------------
S&P Global Ratings withdrew its ratings on DaFa Properties Group
Ltd. at the company's request. The issuer credit rating was 'B' and
the outlook was negative at the time of the withdrawal. At the same
time, S&P withdrew its 'B-' long-term issue rating on the senior
unsecured notes that DaFa issued.
S&P said, "The issuer credit rating and outlook prior to the
withdrawal reflected our view that DaFa's aggressive debt-funded
expansion, together with reducing margins due to high reliance on
public auctions for land acquisition, may hinder the company's
deleveraging over the next 12-18 months. In our view, DaFa's strong
contracted sales growth and improving capital structure partly
offset the risk."
ZHONGLIANG HOLDINGS: Moody's Alters Outlook on B1 CFR to Positive
-----------------------------------------------------------------
Moody's Investors Service has revised to positive from stable the
rating outlook of Zhongliang Holdings Group Company Limited.
At the same time, Moody's has affirmed Zhongliang's B1 corporate
family rating and its B2 senior unsecured debt rating.
"The change in outlook to positive from stable reflects our
expectation that Zhongliang's credit metrics will continue to be
strong over the next 12-18 months for its B1 CFR, supported by its
solid revenue growth and controlled debt growth," says Cedric Lai,
a Moody's Vice President and Senior Analyst.
Specifically, Zhongliang's revenue growth will be driven by its
strong sales execution. Total contracted sales grew 11% year over
year to RMB168.8 billion for 2020, despite the negative impact from
the coronavirus outbreak. This comes after the company's contracted
sales grew 50% year over year to RMB152.5 billion for 2019.
"At the same time, the rating affirmation reflects our expectation
that the company will maintain its financial discipline and good
liquidity position over the next 12-18 months," adds Lai.
RATINGS RATIONALE
Zhongliang's B1 CFR reflects the company's (1) recognized brand
name in second-tier and lower-tier cities in the Yangtze River
Delta region; (2) strong sales execution, as reflected by its rapid
annual contracted sales growth in the past three years; and (3)
solid credit metrics and good liquidity.
On the other hand, Zhongliang's rating is constrained by its
relatively high exposure to lower-tier cities and reliance on
non-bank financing. In addition, the company has a material
exposure to joint venture (JV) businesses, which hinders the
transparency of its credit metrics.
Moody's expects Zhongliang's debt leverage -- as measured by
revenue/adjusted debt -- will continue to be strong at 95%-100%
over the next 12-18 months from 99% in 2020. This is driven by
Moody's expectation of Zhongliang's strong revenue recognition, as
well as its disciplined approach to pursuing growth and controlling
debt increase.
Meanwhile, Moody's expects Zhongliang's EBIT/interest coverage will
improve to about 3.0x over the same period from 2.8x in 2020,
supported by revenue growth and declining interest costs. These
metrics alone are strong compared with many of its B1 rated peers.
In addition, Moody's expects its gross profit margin to stay flat
at around 21% over the next 12-18 months, given rising land costs
will temper an increase in its average property selling prices.
Moody's believes Zhongliang's sizable salable resources, strong
sales execution and solid housing demand in the company's core
markets will enable its contracted sales to grow to RMB175
billion-RMB185 billion annually in 2021 and 2022. Such contracted
sales growth will help fund the company's business expansion and
support revenue growth and liquidity over the next 12-18 months.
The company's B2 senior unsecured debt rating is one notch lower
than the CFR, due to structural subordination risk. This risk
reflects the fact that the majority of claims are at the operating
subsidiaries and have priority over Zhongliang's senior unsecured
claims in a bankruptcy scenario. In addition, the holding company
lacks significant mitigating factors for structural subordination.
As a result, the likely recovery rate for claims at the holding
company will be lower.
Zhongliang's liquidity position is good. The company's cash balance
of RMB34.2 billion as of the end of 2020 covered 144% of its
short-term debt. Such cash holdings, together with the company's
operating cash flow, will be sufficient to cover its short-term
debt and estimated committed land payments over the next 12-18
months.
In terms of environmental, social and governance (ESG) factors,
Moody's has considered the risk associated with the ownership
concentration in Zhongliang's controlling shareholders, Mr. Yang
Jian and his spouse, who together held a 82.9% stake as of December
31, 2020. Moody's has also considered (1) the presence of three
independent non-executive directors on a board of seven directors,
and two independent non-executive directors who chair the audit and
remuneration committees, respectively, and (2) the company's
moderate 30%-40% dividend payout ratio over the past two years; (3)
the application of the listing rules of the Hong Kong Stock
Exchange and the Securities and Futures Ordinance in Hong Kong.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the CFR if Zhongliang (1) diversifies its
funding channels and reduces the proportion of its trust financing;
(2) continues to executes its business plans and expands; (3)
maintains adequate liquidity; (4) sustains its credit metrics,
including adjusted EBIT/interest rising above 3.0x and
revenue/adjusted debt in excess of 80% on a continued basis.
A rating downgrade is unlikely, given the positive outlook.
However, Moody's could revise Zhongliang's outlook to stable if the
company's sales weaken or if it expands more aggressively,
weakening its credit metrics. Credit metrics that could trigger a
ratings downgrade include: (1) adjusted EBIT/interest trending
toward 2.0x-2.5x; (2) revenue/adjusted debt trending toward 60%.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Zhongliang Holdings Group Company Limited is a Shanghai-based
residential property developer. The company engages in real estate
development in China. The Yangtze River Delta region contributed
around 65% of the company's contracted sales in 2020.
As of December 31, 2020, Zhongliang was 82.9% owned by its
chairman, Mr. Yang Jian, and his spouse, who was acting in
concert.
[*] CHINA: Plans to Keep Local SOEs from Going to Deep Into Debt
----------------------------------------------------------------
Zhang Yuzhe and Tang Ziyi at Caixin Global reports that China's top
state-asset supervisor has a plan to keep the debts of local
state-owned enterprises (SOEs) from spiraling out of control.
The government's State-owned Assets Supervision and Administration
Commission (SASAC) wants its local counterparts to improve how they
track the debt of SOEs under their purview by evaluating debt
level, debt structure, profitability, cash situation, asset quality
and off-balance-sheet debt, according to guidelines released on
March 26, Caixin relays.
Caixin relates that the guidelines, which were handed out to local
SASACs in late February, came as the value of corporate bond
repayments is peaking in China this month, analysts said, raising
the specter of another wave of defaults like the one that rattled
bond markets last year and set off a chain reaction affecting other
issuers, including local government financing vehicles.
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9PLANETS PRODUCTS: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of 9Planets
Products Private Limited (9PPPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.2 CRISIL D (Issuer Not
Cooperating)
Term Loan 14.9 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with 9PPPL 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 9PPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on 9PPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
9PPPL continues to be 'CRISIL D Issuer Not Cooperating'.
9PPPL, incorporated in 2012, manufactures PVC sheets. The company
has a manufacturing unit in Khed (Pune). It is promoted by Mr.
Shekar Parab and his wife, Ms. Aishwarya Parab. The company started
its commercial operations in December 2013.
ASUTI TRADING: CRISIL Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Asuti Trading
Private Limited (ATPL) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Letter of Credit 40 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ATPL 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 ATPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ATPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ATPL continues to be 'CRISIL D Issuer not cooperating'.
ATPL, based in Mumbai, is owned by Mr. Sidharth M Bagrecha, Mr.
Binod Kumar Agarwal and Mr. Vimal Agarwal. The company trades in
steel and iron products, such as hot-rolled coils, cold-rolled
coils, sheets, sponge iron fines/lumps, and pig iron.
BADRI KEDAR: CRISIL Reaffirms D Ratings on INR28cr Loans
--------------------------------------------------------
CRISIL Rating has reaffirmed its 'CRISIL D/CRISIL D' ratings on the
bank facilities of Shree Badri Kedar Papers Pvt Ltd (SBKPPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Reaffirmed)
Letter of Credit 3 CRISIL D (Reaffirmed)
Term Loan 10 CRISIL D (Reaffirmed)
The ratings reflect delays by SBKPPL in servicing its debt
obligations, owing to cash flow mismatches and hold-up in the
turbine project.
The ratings also factor in the company's exposure to intense
competitive pressure in the paper industry and its stretched
working capital cycle. These weaknesses are partially offset by the
extensive experience of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Delays in servicing debt obligation: The company has not serviced
its interest and principal obligations due to weak liquidity, which
resulted from a delay in the turbine project.
* Exposure to intense competitive pressure: The industrial paper
industry in India, which accounts for the bulk of paper industry,
is highly fragmented. This is because the cost of setting up an
industrial paper plant is relatively low as the majority of smaller
capacities are waste-paper-based and involve little investment in
technology. Furthermore, susceptibility to government policies
persists: several excise concessions and other benefits are offered
to small paper mills from time to time.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' experience of over 30 years, and their understanding of
market dynamics and healthy relationships with suppliers and
customers should continue to support business risk profile.
Further, promoter has planned to infuse additional capital to
support the capex.
Liquidity: Poor
Liquidity is likely to remain stretched over the medium term on
account of insufficient cash accrual to meet maturing debt.
Rating sensitivity factors
Upward factors:
* Track record of timely payment of term loans for three months
* Improvement in accrual generation by 30%
SBKPPL was set up as a closely held company by Mr Arvind Kumar
Agarwal and his family in 1994. It manufactures kraft paper, and
has a capacity of 27,000 tonne per annum. The company utilised 78%
of the capacity in fiscal 2019. The manufacturing unit is in
Najibabad (Uttar Pradesh).
GOVAAN STEELS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Govaan Steels
Private Limited (GSPL) continue to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 20 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 15 CRISIL D (Issuer Not
Cooperating)
Proposed Cash
Credit Limit 7.14 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GSPL 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 GSPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GSPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
Incorporated in June 2008, GSPL manufactures mild steel billets and
thermo-mechanically treated (TMT) bars. GSPL commenced commercial
operations in September 2010 and is based in Coimbatore, Tamil
Nadu.
H. R. INTERNATIONAL: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of H. R.
International Limited (HRIL) continue to be 'CRISIL D/CRISIL D
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 12.0 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 10 CRISIL D (Issuer Not
Cooperating)
Packing Credit 8 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 6.06 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 0.94 CRISIL D (Issuer Not
Cooperating)
Foreign Documentary 10.00 CRISIL D (Issuer Not
Bills Purchase Cooperating)
CRISIL Ratings has been consistently following up with HRIL 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-cooperation 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 HRIL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HRIL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HRIL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
HRIL, part of the Mall group of Kolkata, trades in jute and
jute-based products. The company commissioned a jute-bag
manufacturing unit in December 2011 with total capacity of 63,000
bags per annum. The Mall family has a track record of over 100
years in the jute business (including trading and manufacturing).
The business was started by Mr. Harkisandas Ramkishendas Mall and
is currently being managed by the family's fourth generation.
HOSHIARPUR ROLLER: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Hoshiarpur
Roller Flour Mills Private Limited (HRFPL) continue to be 'CRISIL
D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8.5 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 3.0 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.3 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with HRFPL 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 HRFPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HRFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HRFPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
Set up in 1981 by Mr Anil Kumar Gupta and his family members, HRFPL
manufactures fine and coarse flour at its facilities in Hoshiarpur
(Punjab).
INDIAN FOODTECH: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Indian
Foodtech Limited (IFL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.5 CRISIL D (Issuer Not
Cooperating)
Term Loan 2.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with IFL for
obtaining information through letters and emails dated August 31,
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 IFL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on IFL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
IFL continues to be 'CRISIL D Issuer Not Cooperating'.
IFL is a closely held public-limited company incorporated in 2010.
It processes and packages ready-to-eat, ready-to-cook,
ready-to-serve food and frozen peas under its own brand, Ruhils,
and for other brands also. The company is managed by Mr. Ashok
Ruhil. It has its processing plant in Bajpur (Uttarakhand) and
started full scale of operations in 2012-13 (refers to financial
year, April 1 to March 31).
JAYAM SAND: CRISIL Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Jayam Sand &
Gravels Private Limited (JSGPL) continues to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 5 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with JSGPL for
obtaining information through letters and emails dated December 30,
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 JSGPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JSGPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JSGPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Jayam Sand & Gravels Private Limited, incorporated in 2008 and
based out of Thrissur (Kerala), is engaged in manufacture of
building stone aggregates and m-sand. The company is promoted by Mr
Jovy C.V. and Mr Paul K. Davis.
JOSEPH LESLIE: CRISIL Lowers Rating on INR15.5cr Bank Debt to D
---------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank loan
facilities of Joseph Leslie Dynamiks Manufacturing Private Limited
(JLDMPL) to 'CRISIL D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 15.5 CRISIL D (Downgraded from
'CRISIL A4 ')
Cash Credit 6.5 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Term Loan 1.36 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Working Capital 11.84 CRISIL D (Downgraded from
Facility 'CRISIL B+/Stable')
The downgrade reflects recent delays in servicing of term loan
repayment. This was due to poor liquidity which was owing to
stretch in working capital cycle.
The ratings reflect JLDMPL's delay in servicing of debt, small
scale, large working capital requirement, susceptibility of
profitability to foreign exchange (forex) risk, as well as
below-average financial risk profile. These weaknesses are
partially offset by JLDMPL's long track record in dealership of
personnel safety equipment.
Key Rating Drivers & Detailed Description
Weakness:
* Delays in Servicing of Debt: There has been recent delay in
servicing of term loan repayment in February 2021 due to delayed
receivables.
* Exposure of operating profitability to forex fluctuations and
limited ability to pass on prices: Subdued scale is reflected in
revenue of INR22 crore in fiscal 2020. Raw material prices form
47–57% of sales in the past three years, leading to sharp
volatility in the operating margin (7.9% to negative 3.4% for the
three years ended March 31, 2020). The profitability is also
susceptible to foreign exchange fluctuations. Going forward, CRISIL
believes that the turnaround in operations and its sustenance will
be a key rating monitorable.
* Working capital-intensive operations: Gross current assets are
estimated at 280-300 days as of March 31, 2021, driven by high
debtors and higher inventory, although a significant portion of the
inventory is usually backed by orders. As of March 31, 2020, the
company's receivables are estimated at 135 days. The operations are
supported by creditors, estimated at 130 days as on March 31, 2020,
as well as highly utilized bank lines. CRISIL believes that the
operations of the company would remain working capital intensive in
the near term because of no changes in the profile of customers.
* Below-average financial risk profile: JLDMPL's financial risk
profile is below average, as indicated by low net worth and modest
gearing, estimated at INR5.87 crore and 1.17 times, respectively,
in fiscal 2020. Debt protection metrics are low, with estimated
interest coverage and net cash accrual to total debt ratios of 1.23
times and 0.06 time, respectively, in fiscal 2020. CRISIL expects
the company's financial risk profile to remain below average
because of its small net worth and large working capital
requirement.
Strengths:
* Extensive experience of the promoters: JLDMPL has a long track
record in the personal protection equipment industry since 1956.
This has helped the company to establish healthy relationships with
its customers. The long presence in the sector has also helped
JLDMPL to associate itself with other vendors post disassociation
with Drager. In addition, the company has also started
manufacturing few products in-house, which has helped it to
establish its brand in the safety equipment sector. Its long track
record of supplying safety equipment and gas detection products has
helped it to participate and win tenders floated by customers in
the oil and gas and mining sectors and other public sector
entities. The company has also established its distribution network
across the country with six branch offices in Mumbai, Baroda,
Chandigarh, Chennai, Delhi and Kolkata. It has a manufacturing unit
in Mumbai that is used to assemble and manufacture products
specific to Indian requirements. CRISIL believes that JLDMPL's long
track record of dealing in safety equipment will help the company
over the medium term.
Liquidity: Poor
The liquidity of company is poor marked by delay in servicing of
term loan repayment in the month of February 2021. The delay in
servicing of loan was owing to stretch in receivable from the
Government entity and timely receivables from the same, will remain
critical. Improvement in the working capital management thus
improving its liquidity will remain a key rating driver.
Rating Sensitivity Factors
Upward Factors
* Track record of timely servicing of debt for atleast 90 days
* Sustained increase in revenue and stable operating margin
* Improvement in the working capital cycle
JLDMPL was incorporated in 1987 as Joseph Leslie Drager
Manufacturing Pvt Ltd by Mumbai-based Leslie family and Dragerwerk,
AG, Germany (Drager). In fiscal 2013, the company's name was
changed to JLDMPL post disassociation with Drager. JLDMPL trades
and manufactures equipment and paraphernalia used in gas detection,
respiratory protection, search and rescue, and disaster management.
Its manufacturing unit is in Vasai, Maharashtra.
JOYS STEEL: CRISIL Lowers Rating on INR39cr Cash Debt to D
----------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Joys Steel Impex (JSI) to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'. The downgrade reflects delays in interest
servicing of working capital facility and repayment of funded
interest term loan.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 39 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Letter of Credit 7 CRISIL D (Downgraded from
'CRISIL A4')
CRISIL Ratings has also taken cognizance of application made by JSI
for restructuring of its bank facilities under Reserve Bank of
India (RBI) guidelines issued on August 6, 2020-'Resolution
Framework for COVID-19-related Stress'. However there had been
continuous delays in debt servicing prior to this application to
the bank. Final approval for restructuring is still pending.
The rating action is in line with the CRISIL's approach to default
recognition for entities applying for restructuring under the RBI
resolution framework published in the criteria alert titled
'CRISIL's approach to Covid-19-related restructuring.
The ratings continue to reflect below-average financial risk
profile and large working capital requirement. These weaknesses are
partially offset by the extensive experience of the proprietor in
the steel industry.
Analytical Approach
Unsecured loans of INR12.59 crore as of March 31, 2019 has been
treated as debt in absence of track record of non-withdrawal.
Key Rating Drivers & Detailed Description
Weaknesses:
* Delays in debt servicing: Poor liquidity has resulted in delays
in servicing of interest on fund-based working capital facilities
for over 30 days as well as delays in repayment of funded interest
term loan.
* Below average financial risk profile: Total Outside Liabilities
to Adjusted net worth (TOLANW) ratio was high at 10.83 times and
networth modest at INR6.85 crore as of March 31, 2019 indicating
below average financial risk profile. The debt protection metrics
remained weak, with interest coverage and of 1.14 times in fiscal
2019.
* Large working capital requirement: Gross Current Assets (GCA)
were high at 192 days, primarily driven by large receivables of 157
days, as of March 31, 2019, expected to continue at similar level
over the medium term.
Strength:
* Extensive industry experience of the proprietor: The proprietor
has over two decades of experience in the steel industry, resulting
in an established relationship with customers and suppliers
Liquidity-Poor
Liquidity is poor as reflected by delays in debt servicing. Bank
limits are fully utilized. CRISIL Ratings had taken into
cognizance, moratorium being granted by the bankers until August
31, 2020 in debt servicing as permitted by the Reserve Bank of
India (RBI). CRISIL Ratings has also taken cognizance of
application made by the company for restructuring of its bank
facilities under Reserve Bank of India (RBI) guidelines issued on
August 06, 2020-'Resolution Framework for COVID-19-related
Stress'.
Rating Sensitivity factors
Upward Factor
* Track record of timely debt servicing for 90 days or more
* Improvement in liquidity due to restructuring of debt or infusion
of equity or improvement in operating performance
Set up in 2006 as a proprietorship firm by Mr Tejal Shah, JSI
trades in carbon steel plates. The firm is based in Mumbai.
MAGNUM AVIATION: CRISIL Withdraws B Rating on INR9.5cr Cash Loan
----------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Magnum Aviation Private Limited (MAPL) to 'CRISIL D/CRISIL D' from
'CRISIL B-/Stable/CRISIL A4'. Subsequently, the rating has been
withdrawn, at the company's request and on receipt of a
no-objection certificate from the bankers. The withdrawal is in
line with the policy of CRISIL Ratings, on withdrawal of bank loan
ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL A4 (Downgraded from
'CRISIL A4'; Rating Withdrawn)
Cash Credit 9.5 CRISIL B/Stable (Downgraded
from 'CRISIL B/Stable'; Rating
Withdrawn)
Cash Credit/
Overdraft facility 6.5 CRISIL B/Stable (Downgraded
from 'CRISIL B/Stable'; Rating
Withdrawn)
The rating downgrade reflects the overdue in the cash credit
account beyond 30 days between January and February 2021, due to
cash flow mismatches.
MAPL, which was incorporated in 2002, is owned and managed by Mr
Vishal Varshnei and Ms Manvi Varshnei. The company trades in
aircraft spares such as wheels, brakes, avionics, propeller hoses
and lubricants. It also offers maintenance, repair & overhaul (MRO)
services for aircraft components. Its service facility is located
in the Special Economic Zone of Noida, Uttar Pradesh.
NASSCO TRADING: CRISIL Lowers Rating on INR9.5cr Cash Loan to D
---------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Nassco Trading India Private Limited (NTIPL) to
'CRISIL D Issuer Not Cooperating' from 'CRISIL B+/Stable Issuer Not
Cooperating'. The downgrade reflects delays by NTIPL in servicing
of debt obligation.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with NTIPL for
obtaining information through letters and emails dated February 12,
2020 and August 15, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NTIPL, which restricts CRISIL's
ability to take a forward-looking view on the entity's credit
quality. CRISIL Ratings believes that rating action on NTIPL is
consistent with 'Assessing Information Adequacy Risk'.
Incorporated in April 2010, NTIPL trades in tiles, marbles, and
granites. It is based in Attingal (Kerala), and is promoted by Mr
Nazar Mohamed Ellias and his wife Ms Raheena Jalaudeen.
NEEL KANTH: CRISIL Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Neel Kanth
Agrofood Products Private Limited (NAPPL) continue to be 'CRISIL
B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.5 CRISIL B/Stable (Issuer Not
Cooperating)
Long Term Loan 3.5 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with NAPPL 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 NAPPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NAPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NAPPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Set up in 2012 as a private limited company by Mr. Abhay Kumar and
Ms. Poonam Kumari, NAPPL processes wheat products such as maida,
suji, atta, rava, and bran and sells them under its brand,
Navmanthan. The company's flour mill in Patna started operations in
May 2014.
NRU SPINNING: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of NRU Spinning
Mills Limited (NRU) continue to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.85 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 0.85 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 3.69 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.19 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with NRU 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 NRU, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NRU
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NRU continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
Set up in 1995 by Mr. Devadass and family, NRU manufactures cotton
yarn.
OM ENERGY: CRISIL Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of OM Energy
Generation Private Limited (OEGPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 1.65 CRISIL B+/Stable (Issuer
Not Cooperating)
Rupee Term Loan 38.35 CRISIL B+/Stable (Issuer
Not Cooperating)
CRISIL Ratings has been consistently following up with OEGPL for
obtaining information through letters and emails dated January 30,
2021 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 OEGPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on OEGPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
OEGPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
OEGPL, part of the OPG group, was incorporated in 2010 to execute a
7-megawatt hydropower project in Chamba (Himachal Pradesh). The
company is promoted by Mr Ravi Gupta and his family members. Its
daily operations will be managed by director Mr Dalip Dua. OEGPL is
expected to commence commercial operations in April/May 2019.
ORIGIN CORPORATION: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Origin
Corporation (OC) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.15 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.67 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 0.68 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with OC 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 OC, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on OC is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of OC
continues to be 'CRISIL D Issuer Not Cooperating'.
OC was set up in 2006 in Indore (Madhya Pradesh) by Mr. Tapash Roy,
Mrs. Ajanta Roy, and Mr. Animesh Roy. It was initially involved in
trading in polyester yarn. However, in 2008, the firm started
processing polyester yarn in the count range of 20s to 80s.
Gradually, it also started manufacturing sewing threads.
P. C. INDUSTRIES: CRISIL Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of P. C.
Industries (PCI) continue to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B/Stable (Issuer Not
Cooperating)
Term Loan 1.99 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PCI 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 PCI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PCI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PCI continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Established in 1996, Ahmedabad, Gujarat-based PCI, a proprietorship
concern of Mr Mayur Shah, manufactures electrical utilities such as
switch gear, fuse gear, re-wireable kit-kat fuses, fuse links,
bases, fittings and pullers; link disconnectors, bus bar support,
cut-outs, and distribution box assemblies. These are used in power
transmission and distribution infrastructure, industrial, and other
applications. Mr Shah and his sons, Mr Falun Shah, and Mr Honey
Shah manage the operations.
PADMA LAXMI: CRISIL Lowers Rating on INR12.65cr Loans to B
----------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of Padma
Laxmi Sree Rice Mill Private Limited (PLSRMPL) to 'CRISIL B/Stable
Issuer Not Cooperating' from 'CRISIL BB-/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Long Term Loan 6 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 0.65 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with PLSRMPL 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 PLSRMPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
PLSRMPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of PLSRMPL Revised to 'CRISIL B/Stable Issuer Not
Cooperating' from 'CRISIL BB-/Stable Issuer Not Cooperating'.
PLSRMPL was incorporated in fiscal 2016, promoted by Mr. Sanjoy
Ghosh The company manufactures non-basmati rice in Bihar; it
markets its products under brand names Laxmi Bhog, Kasturi Gold,
and Kasturi Royal.
PARAMESHWAR WEAVES: CRISIL Keeps B Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Parameshwar
Weaves (PW) continue to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Loan Against
Property 13 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term
Bank Loan Facility 5 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PW 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 PW, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PW is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of PW
continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
PW, a partnership firm, set up in 2002, by Mr Kirti Patel, Mr.
Arvind Patel and Mr Mohan Patel, manufactures polyester fabric. The
firm has an installed capacity of around 22000 metres per day in
Surat (Gujarat).
PEARL MINERAL: CRISIL Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pearl Mineral
And Mines Private Limited (PMMPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Long Term 1.5 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with PMMPL 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 PMMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PMMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PMMPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 2010 and based out of Prakasam district, Andhra
Pradesh, PMMPL is engaged in mining and export of granites,
particularly black galaxy granites. The company is promoted by Mr.
Ch. Venkata Nagaraja and his family.
PRACHIN FOUNDATION: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Prachin
Foundation continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 7.09 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 2.91 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with Prachin 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 Prachin, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Prachin is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Prachin continues to be 'CRISIL D Issuer Not
Cooperating'.
Prachin, based in Hyderabad (Telangana), was established by Mr. G
Satyanarayana in June 2009. The society has a franchisee agreement
with GIFL, Singapore, to manage the Global Indian International
School. The school offers education from pre-school to high school
level. Its operations are managed by Mr. A Venkateswara Rao.
RENEW POWER 4: Fitch Assigns BB-(EXP) Rating on Proposed USD Notes
------------------------------------------------------------------
Fitch Ratings has assigned India-based ReNew Power Restricted Group
4's (ReNew RG4) proposed US dollar senior secured notes due 2028 an
expected rating of 'BB-(EXP)'. The Outlook is Positive.
ReNew RG4 is a restricted group that includes 10 subsidiaries of
ReNew Power Private Limited (ReNew Power, BB-/Positive). ReNew
Power is one of the largest renewable-energy independent power
producers in India with total operating capacity of 5.4GW and
under-construction capacity of 4.5GW.
The final rating is contingent upon the receipt by Fitch of final
documents conforming to information already received.
RATING RATIONALE
The rating on the proposed notes reflects the credit strengths and
weaknesses of the restricted group of operating entities. The
restricted group will benefit from the parent's access to funding
for refinancing its USD bond supported by a full-tenor guarantee
from ReNew Power.
The restricted group includes 10 renewable projects with a total
capacity of 803.1MW spread across seven states in India. The
portfolio has nine wind assets (753.1MW) and one solar project
(50MW). All of the assets have been operating for more than three
years, other than one 300MW wind project, which started operations
in February 2021. The 300MW project is contracted with
sovereign-owned Solar Energy Corporation of India (SECI) while rest
are contracted with weak state-owned distribution companies.
KEY RATING DRIVERS
Proven Technology, Lack of Maintenance Reserve - Operation Risk:
Midrange
The technologies deployed in ReNew RG4's wind and solar projects
are considered proven. Most of the wind turbines are procured from
some of the world's largest manufacturers while the solar modules
are sourced from an internationally well-known supplier. Operation
and maintenance (O&M) for most of the wind projects is carried out
by the original equipment manufacturers under 10-year contracts.
The O&M for two wind projects - 28MW and 92MW - was taken over by
an affiliate company, ReNew Services Private Limited, in early 2020
at a fixed price, with 4%-5% annual price escalation, for shorter
but extendable tenors. The O&M for the solar project is also
carried out by the affiliate company under a five-year fixed-price
contract, with 5% annual price escalation. The operation risk
assessment is constrained at 'Midrange' as the operating cost
forecast is not validated by an independent technical advisor and
the bond indenture does not have a maintenance reserve account.
Wide Forecast Spread, Adequate Operating Performance - Revenue Risk
(Volume): Weaker
The energy yield forecast produced by third-party experts indicates
an overall P50/one-year P90 spread of 18%, leading to a 'Weaker'
assessment for volume risk. The portfolio has a capacity-weighted
average record of three years as all assets have been operating for
more than three years, except the recently commissioned 300MW wind
project. The actual load factors recorded by the portfolio in
FY19-FY20 (financial year ends March) were moderately volatile.
Hence, Fitch applies a lower haircut of 7% on the volume forecast
in Fitch's base and rating cases. The curtailment risk is limited
in India due to the "must-run" status of renewable projects.
Fixed Long-Term Prices, Minimal Renewal Risk - Revenue Risk
(Price): Midrange
ReNew RG4 contracts 63% of its total capacity with state-owned
distribution companies and the balance with SECI under long-term
fixed-price power-purchase agreements (PPA), which largely protect
the portfolio from merchant price volatility. These PPAs have a
capacity-weighted residual life of about 22 years. The only
contract with a shorter fixed-price tenor of 13 years, with a
remaining life of five years, is a 28MW wind project signed with
Maharashtra's state-owned distribution company. However, Fitch
expects management to recontract the asset on the expiry of its
current PPA given the residual asset life of about 12 years at the
end of the tenor. Fitch constrains the price risk assessment at
'Midrange' in light of the low but certain merchant price exposure
due to this asset.
Ring-Fenced Structure, Manageable Refinance Risk - Debt Structure:
Midrange
Noteholders are protected by ReNew RG4's ring-fenced structure and
covenants. Noteholders benefit from a standard cash distribution
waterfall and a lock-up test at a backward-looking 1.3x
interest-service coverage ratio for cash outflow. The notes pay a
fixed interest rate and Fitch expects ReNew RG4 to substantially
hedge currency risk. The restricted group will not maintain a
debt-service reserve account or a major maintenance reserve
account, but this is in part balanced by the excess cash required
to be retained within the restricted group in the last year of the
life of the notes. Refinancing risk is mitigated by the parent's
guarantee and access to banks and capital markets, with support
from the balance tenor of the PPAs, which extend beyond the
maturity of the notes.
PEER GROUP
ReNew RG4's closest peer is ReNew Power Private Limited Restricted
Group 3 (ReNew RG3, US dollar notes: BB-/Stable). The credit
assessment of both restricted groups is supported by that of their
parent, ReNew Power.
ReNew RG3 has similar wind/solar mix of 67%/33%. However, its
counterparty mix is a tad weaker with 77% of its capacity exposed
to weak state-owned distribution companies and the balance signed
up with commercial and industrial customers, against 37% of ReNew
RG4's capacity that is contracted with SECI. ReNew RG4's financial
profile marginally benefits from the benign interest rate
environment while ReNew RG3's financial profile gets an uplift from
committed interest income from the parent on inter-company loans
extended by the restricted group.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade of the parent guarantor.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- A downgrade of the parent guarantor.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
TRANSACTION SUMMARY
The proposed US dollar bonds will be co-issued by the 10 operating
entities. The due and punctual payment of all amounts payable by
each co-issuer under the US dollar notes will be fully and
unconditionally guaranteed on a senior basis by each of the other
co-issuers, and fully guaranteed on a senior basis by ReNew Power.
The co-issuers will use the proceeds to repay their existing debt,
make payments to capital creditors, and fund prepayment transaction
expenses and prepayment penalties. The residual amounts (if any)
would be on lent to the parent guarantor.
CREDIT UPDATE
Not applicable
FINANCIAL ANALYSIS
About 19% of the restricted group's capacity is contracted with
weak state-owned distribution companies in Andhra Pradesh and
Telangana. The higher receivable days put pressure on the
restricted group's cash flows. Fitch assumes associated receivable
days will increase further by FYE21 before falling in FYE23. Fitch
does not expect attempts by the Andhra Pradesh government to
renegotiate tariffs in its PPAs to be successful. Any tariff
revision will be treated as event risk in Fitch's credit assessment
of the restricted group's bonds.
Fitch's forecast assumes that the outstanding US dollar bond at
maturity will be refinanced by another debt that will amortise
across the remaining PPA terms or the projects' useful life,
whichever is longer.
Fitch's base case assumes P50 generation, a 7% production haircut
and an 11% refinancing interest rate, which result in an average
annual debt-service coverage ratio (DSCR) of 2.00x, 1.46x and 1.30x
over the bond life, portfolio life and refinancing period,
respectively. Fitch's rating case assumes one-year P90 generation
and a 7% production haircut. Fitch also applies a 15% stress on
management's operating expense forecast and an 11% refinancing
interest rate. Fitch's rating case results in an average annual
DSCR of 1.63x, 1.17x and 1.0x over the bond life, portfolio life
and refinancing period, respectively. The restricted group will
benefit from the parent's access to funding for refinancing its US
dollar bond supported by a full-tenor guarantee from ReNew Power.
SECURITY
The US dollar bonds issued by each co-issuer benefit from a
standard security package, including a charge over certain immobile
and movable assets of the co-issuer, and a share pledge over a 51%
stake in the operating entity.
CRITERIA VARIATION
Fitch has based the rating on the proposed notes on the indicative
DSCR thresholds applicable to merchant projects, for assets
contracted with state-owned distribution companies, instead of the
ones for fully contracted projects, while the cash flows are
evaluated based on the contracted prices, which constitutes a
criteria variation from Fitch's Renewable Energy Project Rating
Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The rating of ReNew RG4's bonds is directly linked to the credit
quality of its parent, ReNew Power. A change in Fitch's assessment
of the credit quality of the parent would automatically result in a
change in the rating on the bond.
RENEW POWER PRIVATE: Fitch Affirms 'BB-' LT IDR, Outlook Positive
-----------------------------------------------------------------
Fitch Ratings has revised the Outlook on India-based ReNew Power
Private Limited's Long-Term Issuer Default Rating to Positive from
Stable and affirmed the rating at 'BB-'. At the same time, the
agency has affirmed the ratings on ReNew's outstanding senior
secured US dollar notes at 'BB-'.
The Outlook revision reflects ReNew's deleveraging potential
following its announcement it has raised USD610 million from a
primary equity sale as part of its public listing plans. Fitch
forecasts its net leverage, measured as net debt/EBITDA, to reach
around 4.8x over the next 18-24 months. The proposed Nasdaq listing
should help widen ReNew's equity access and strengthen corporate
governance standards over the medium term.
The affirmation reflects ReNew's large scale and diversified
portfolio as one of India's leading renewable-energy independent
power producers with total operating capacity of 5.4GW and 4.5GW of
capacity under development. Fitch expects ReNew's operating
portfolio to reach around 8GW in the next 24 months. Fitch believes
the increasing scale will help improve ReNew's business profile
with increasing exposure to central counterparties and a larger
proportion of relatively stable solar assets. Fitch has raised its
upgrade sensitivity on net debt to EBITDA to 4.8x, from 4.5x
previously, reflecting Fitch's expectation of its improving
business profile.
KEY RATING DRIVERS
Listing to Drive Profile Improvement: ReNew expects to use fresh
equity funds for its capex, which would lower company's incremental
borrowing requirements. Fitch expects this would reduce ReNew's net
leverage to around 4.8x in the year ending March 2022 (FY22) from
6.9x expected in FY21 (FY20: 7.1x) and improve its EBITDA net
interest expense coverage ratio to 2.0x in FY22 from 1.4x expected
in FY21 (FY20:1.3x). Increasing EBITDA from under-construction
capacity becoming operational will also support deleveraging.
The company expects total proceeds of USD1.2 billion from this
listing via a business combination with RMG Acquisition Corporation
II (RMG II). This is subject to attaining the requisite approvals,
including RMG II shareholders' approval, which according to the
company do not involve any market risks. RMG shareholders have the
option to redeem their investment at par but any redemptions would
not impact the net primary equity amount of USD610 million to be
received by ReNew.
Restricted Groups' Contribution: Fitch has deconsolidated ReNew RG
II's (US dollar notes rated: BB) EBITDA and debt to calculate
ReNew's credit metrics, but its EBITDA includes Fitch's
expectations of net cash received from ReNew RG II. Fitch does not
exclude the EBITDA and debt of other restricted groups, India Green
Power Holdings (BB-(EXP)/Stable) and ReNew Power Private Limited
Restricted Group 3 (BB-/Stable), considering their full tenor
guarantees provided by ReNew and their standalone assessment being
weaker or on par with that of ReNew.
Capex to Rely on PPAs: Fitch believes ReNew's capex will rise to
INR67 billion in FY22 (FY21: INR32 billion) short of its INR100
billion target, and fall to around INR54 billion in FY23, below a
INR84 billion target. The remaining capex for its construction
pipeline may be pushed back to FY24. Fitch expects lower capex as
power-purchase agreements (PPAs) for around 50% of ReNew's projects
under development have yet to be signed, which Fitch believes will
delay the commissioning for these projects by 6-12 months from the
company's target completion dates.
Weak Counterparty Profile: ReNew's key counterparties - state-owned
power-distribution utilities - which account for about 47% of total
capacity, including projects under development, have weak credit
profiles. The rest is tied up with sovereign-backed entities (48%)
and direct corporate customers (5%), which have more timely payment
records. ReNew's exposure to sovereign-backed entities should rise
to 48%, from around 18% currently, over the next two-three years as
they account for over 90% of its under-development projects.
Fitch expects the group's receivable days to rise to around 242 in
FY21 (FY20: 198 days) due to payment delays by utilities during the
Covid-19 pandemic. However, Fitch expects receivable days to
decrease to around 181 in FY22 amid the disbursements from the
government's INR1.2 trillion liquidity support package.
Leading Producer: ReNew's large size and diversified
renewable-asset portfolio provide economies of scale and operating
leverage, mitigating concentration risk. The power projects,
including its under-construction pipeline, diversity by type - wind
(51%) and solar (49%) - and geography mitigate risks from adverse
climatic conditions. ReNew's solar assets performed in line with
Fitch's estimates in 1HFY21, but wind-based generation suffered due
to a weaker wind season.
Price Certainty, Volume Risk: Fitch believes the long-term PPAs for
the group's operating assets offer price certainty and long-term
cash-flow visibility. The majority of assets - more than 90% of
group capacity - have PPAs with tenors of around 20-25 years and
the weighted-average operating life of the group's assets is around
four years. The long-term PPAs provide protection from price risk,
but production volume varies, as it is based on resource
availability, which is affected by seasonal and climatic patterns.
Debt-Service Coverage Improves: Fitch monitors the CFO-based
debt-service coverage ratio (CFO+ interest expense/scheduled
project debt amortisations + interest expense) at the holding
company and unrestricted projects to analyse liquidity and the
unrestricted portfolio. Fitch expects the ratio to rise to around
1.6x in FY22 (FY21: 1.2x) with an increase in cash from larger
operational capacity and improving receivables. Debt amortisation
should also drop after refinancing of part of project-level
borrowings with non-amortising US dollar notes.
No Notching for Subordination: Fitch does not notch down the US
dollar note rating, as Fitch expects at least average recovery for
noteholders due to the large scale and project diversity across
geographies, resource types and counterparties. The rating factors
in the subordination of notes to other secured debt at ReNew's
holding company. Higher prior-ranking debt may raise subordination,
leading to a reassessment by Fitch.
Hedging; Refinancing Risk: ReNew's earnings are in Indian rupees,
but its notes are in US dollars, resulting in exposure to
foreign-exchange risk. ReNew has mitigated this risk by
substantially hedging the notes' coupon and principal. The US
dollar notes face refinancing risk, as Fitch estimates the cash
balance at ReNew will be insufficient to repay the notes at
maturity. However, this is mitigated by ReNew's proven access to
debt and equity funding.
DERIVATION SUMMARY
Fitch regards Greenko Energy Holdings (BB/Stable) and Concord New
Energy Group Limited (CNE, BB-/Negative) as ReNew's close peers.
Greenko, like ReNew, is one of India's leading power producers,
with a focus on renewable energy. Both have total operating
capacity in excess of 5GW, although Greenko's is slightly lower
than that of ReNew.
ReNew's resource risk is lower, with higher exposure of 49% to
solar-based projects (Greenko: 27% solar and 11% hydro). Its
counterparty risk is also lower, with 48% capacity contracted with
sovereign-owned entities and the balance with state-owned
distribution companies. Greenko's better credit assessment than
ReNew's is supported by its stronger financial access, which
enables the company to rely on fresh equity for investments and
acquisitions, while utilising cash generated from operations to
deleverage. The Positive Outlook on ReNew reflects Fitch's
expectations of improvement in its financial profile with net
leverage falling to around 4.8x over the next 18-24 months. ReNew's
lower leverage than that of Greenko reduces the difference in the
two companies' overall credit assessment.
CNE has an attributable wind capacity of 2,277MW across multiple
projects in China. CNE's feed-in tariffs are stable and its
counterparty risk is significantly lower than that of ReNew, as its
revenue stream is mostly reliant on State Grid Corporation of China
(A+/Stable) and China's Renewable Energy Subsidy Fund. In
comparison, ReNew has a larger size - allowing for diversity and
granularity across multiple projects. ReNew has higher counterparty
risk, with exposure to weak Indian state-owned distribution
companies, but CNE also suffers from delayed subsidy collections.
Divergence in the Outlook of the two ratings is driven by CNE's
reliance on funding through asset sales and lower liquidity, while
ReNew's proposed Nasdaq listing would improve its financial access
and reduce its projected net leverage to around 1x lower than that
of CNE.
ReNew RG II is a restricted group with total capacity of 636MW
across 11 renewable projects in India and no construction risk.
ReNew RG II's fuel mix is comparable with that of Renew, with 56%
of capacity from solar and the rest from wind. ReNew RG II has a
tighter transaction structure and slightly better average credit
metrics over the life of its bond. Fitch's expectation of ReNew's
lower leverage and improving financial access reduces the variance
in the overall credit assessment between the two.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Plant-load factors to revert to average historical performance
or resource assessment studies after the dip in FY21 due to
the weak performance of wind assets;
-- Plant-wise tariff in accordance with respective PPAs;
-- Average receivable days to increase to 242 in FY21 (FY20: 198
days), before falling to 181 in FY22;
-- EBITDA margins of 80%-93% for all assets, in line with
historical performance or management guidance;
-- Capex to average around INR60 billion per annum from FY22 to
FY24 (FY21: INR32 billion);
-- Inflow of USD610 million through primary equity sale in FY22
to be used for capex or debt reduction;
-- No dividend payout in the medium term.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Net debt/EBITDA below 4.8x on a sustained basis, provided
there is no significant increase in ReNew's overall business
risk profile.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The Outlook will be revised to Stable if net debt/EBITDA
remains above 4.8x;
-- CFO-based debt-service coverage ratio at the holding company
and unrestricted projects below 1x for a sustained period;
-- Significant and prolonged deterioration of the receivable
position;
-- Failure to adequately mitigate foreign-exchange risk.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: ReNew had cash and cash equivalents of INR34.8
billion as of 1HFYE21, against current debt maturities of INR25.3
billion, which include short-term borrowings of INR10.4 billion.
Fitch expects the company to generate negative free cash flow in
the near-to-medium term due to ongoing capacity additions. However,
ReNew has a policy and record of raising equity in advance for its
projects and it has adequate access to the domestic bank-loan
market.
The USD610 million primary equity proceeds also highlight ReNew's
record of raising funds at regular intervals for its growth plans.
ReNew has staggered debt maturities, benefits from a sound mix of
debt in the form of amortising project-level loans, with tenors
between 13 and 23 years, and five tranches of US dollar notes
(ReNew: USD300 million due 2022 and USD450 million due 2027, ReNew
RG II: USD525 million due 2024, India Green Power Holdings: USD460
million due 2027 and ReNew Power Private Limited Restricted Group
3: USD325 million due 2024).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
SHAKAMBARI RICE: CRISIL Keeps B Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Shree
Shakambari Rice Mill Private Limited (SSRMPL) continues to be
'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 20 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SSRMPL 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 SSRMPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
SSRMPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of SSRMPL continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
ARMPL was incorporated in 2009 by Mr. Ram Prakash Agarwal, Mr.
Rajnish Kumar and Mr. Satyadeo Roy. In 2013, the promoters acquired
SSRMPL, which was incorporated in 2006. The group is engaged in
manufacturing of parboiled rice. The group has its manufacturing
facilities in Jharkhand.
SMT MACHINES: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of SMT Machines
India Limited continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.2 CRISIL D (Issuer Not
Cooperating)
Proposed Term Loan 7.7 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SMT 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 SMT, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SMT
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SMT continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 1992 and promoted by Mr Surinder Kumar Mittal and
family, SMT (formerly, Aman Multilateral Pvt Ltd; name changed in
the late 1990s) designs and manufactures equipment for steel
rolling mill plants.
STA-CO NUTRA: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sta-co Nutra
Products Private Limited (SNPPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.1 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 5.4 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SNPPL 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 SNPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SNPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SNPPL continues to be 'CRISIL D Issuer Not Cooperating'.
Established in 2013 by Mr Shivaji Sankpal and Ms Rohini Satkar,
SNPPL is setting up a unit in Ranjangaon, Pune, to manufacture
allopathic and ayurvedic lozenges and oncology active
pharmaceutical ingredients.
SUISO ENERGY: CRISIL Assigns B+ Rating to INR1cr Proposed Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facilities of Suiso Energy Private Limited (SEPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Term Loan 1 CRISIL B+/Stable (Assigned)
The rating reflects the company's exposure to risk related to
ongoing hydro power project and the expected leveraged capital
structure. These weaknesses are partially offset by the extensive
industry experience of the promoters in the industry.
Key Rating Drivers & Detailed Description
Weakness:
* Exposure to risk related to ongoing project: SEPL is currently
executing a 300 kW hydro power project in Kerala in the first
phase. The commercial operations is scheduled to commence its
project from October 2021. Currently, the company has received the
initial approval from the local authorities while the final
Government order is likely to be received shortly. Timely
completion and successful stabilisation of its operations and
entering into long term Power Purchase Agreement (PPA) of the new
unit will remain a key rating sensitivity factor.
* Expected leveraged capital structure: SEPL is expected to have a
leveraged capital structure and moderate debt protection metrics.
The cost of the project is expected at INR1.06 crore which is
funded with INR0.98 crore of term loan and the balance through
promoter funds. The company has approached banks for the same and
timely sanction of the loan will be a key monitorable
Strengths:
* Extensive industry experience of the promoters: The promoters
have experience of over a decade in the power industry. This has
given them an understanding of the dynamics of the market, and will
enable them to establish strong relationships with key
stakeholders.
Liquidity-Stretched
Liquidity is marked by generation of accruals of about INR7-8 lakhs
in fiscal 2022 being the initial year of operations (commercial
operation to commence from October 2021). Against this the company
does not have any repayment obligations. From fiscal 2023 onwards
the accruals is expected in the range of INR20-25 lakhs against
repayment obligation of INR10.9 lakhs. The company currently does
not have any working capital funds.
Outlook: Stable
CRISIL Ratings believes that SEPL will benefit over the medium term
from its promoters' extensive industry experience.
Rating Sensitivity factors
Upward factor
* Stabilises operations at its proposed plant on time
* Timely execution of PPA and reports steady revenue and
profitability
Downward factor
* Any further delay in the commencement of its operations,
DSCR falls below 1 time
SEPL was incorporated in 2020. SEPL is setting up a 300 kW hydro
power plant at Kandoor Puzha, a tributary of Valapattanam River
(Ezhamkadav, Kannur). SEPL is owned & managed by Mr. Rohit Govinda
and Mr. Jith George.
SUJATHA FEEDS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sujatha Feeds
Private Limited (SFPL; Part Of The Gouthami Group) continue to be
'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10.5 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 17.4 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 1.4 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with SFPL 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 SFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SFPL continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at its rating, CRISIL Ratings has combined the
business and financial risk profiles of SFPL and Gouthami
Hatcheries Pvt Ltd (GHPL). This is because both the companies,
together referred to as the Gouthami group, are under the same
management team, and have considerable operational and business
linkages.
SFPL, set up in 2009, manufactures poultry feed. GHPL, set up in
1999, produces hatching eggs and broiler birds. The companies are
promoted by Mr. D Srinath Reddy and his wife, Ms. D Lokeshwari.
TRANS TECH: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Trans Tech
Turnkey Private Limited (TTTPL) continue to be 'CRISIL D/CRISIL D
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 35 CRISIL D (Issuer Not
Cooperating)
Letter of credit 195 CRISIL D (Issuer Not
& Bank Guarantee Cooperating)
Proposed Long Term 5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Proposed Short Term 10 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TTTPL 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 TTTPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TTTPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TTTPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
Set up by Mr. Suranjan Chatterjee, Mr. Sugato Majumdar, Mr. A N
Ghosh, and Mr. Ulhas V Pradhan, TTTPL offers engineering,
procurement and construction services, ranging from design and
civil construction to mechanical, electrical, and plumbing work.
Its large-scale turnkey division caters to industrial units and
commercial buildings, while its heating, ventilation, and air
conditioning division provides design and engineering, supply, and
installation services, mainly to pharmaceutical.
TRANSPORT SOLUTIONS: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Transport
Solutions India Private Limited (TSIPL) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 20 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with TSIPL 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 TSIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TSIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TSIPL continues to be 'CRISIL D Issuer Not Cooperating'.
The TSI group was established in 2006 and manufactures carriers
used in logistic services. It manufactures tippers and trailers
under TSIPL, car and truck carriers under LIAPL, and refrigerated
carriers under HIPL. Its promoters have industry experience of over
four decades.
TRIPATHI HOSPITAL: CRISIL Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Tripathi
Hospital Private Limited (THPL) continues to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 20 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with THPL 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 THPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on THPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
THPL continues to be 'CRISIL D Issuer Not Cooperating'.
Tripathi Hospital Private Limited, incorporated in November 2001,
provides medical services in the fields of orthopaedics and
gynaecology/obstetrics. It was originally established as a
partnership firm in 2000 and was reconstituted as a private limited
company in 2001. The company is managed by Mr B K Tripathi and his
wife Ms. Nidhi Tripathi. It has a 100-bed hospital at Noida in
Uttar Pradesh.
TULSI ROCKS: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Tulsi Rocks
Private Limited (TRPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 15 CRISIL D (Issuer Not
Cooperating)
Export Packing 3 CRISIL D (Issuer Not
Credit Cooperating)
CRISIL Ratings has been consistently following up with TRPL 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 TRPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TRPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TRPL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2013 and promoted by Mr. Prabhat Bhandari and his
family, TRPL is engaged in granite processing in Hyderabad
(Telangana).
UDAY STRUCTURALS: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Uday
Structurals and Engineers Private Limited (USEPL) continue to be
'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL D (Issuer Not
Cooperating)
Cash Credit 4 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 1 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with USEPL 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 USEPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on USEPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
USEPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
USEPL, based in Mumbai (Maharashtra), was set up in 2010 by Mr.
Uday Patil and his wife. The company manufactures scaffoldings and
also undertakes real estate construction on contractual basis.
VIJAYA KRISHNA: CRISIL Lowers Rating on INR5.5cr Loans to D
-----------------------------------------------------------
CRISIL Ratings has downgraded the rating on the long term bank
facilities of Vijaya Krishna Agro Food Processing Private Limited
(VKAFPL) to 'CRISIL D' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.75 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Proposed Long Term 1.75 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
Downgrade in the rating reflects delay in serving of term loan
principal due to stretched liquidity position.
The rating continues to reflect the modest scale of operations,
exposure to intense competition and average financial risk profile.
These weaknesses are partially offset by extensive experience of
the promoters and tie-up with customers resulting in revenue
visibility over the medium term.
Key Rating Drivers & Detailed Description
Strengths:
* Extensive experience of the promoters: Benefits from the
promoters' experience of about two decades in the industry should
continue to support the business.
* Customer tie-up and order visibility: VKAPL entered into a
long-term agreement with a major fast-moving consumer goods player,
in fiscal 2018, resulting in annual orders and revenue visibility
over the medium term.
Weakness:
* Modest scale and exposure to intense competition: Intense
competition from organized as well as unorganized players in the
fruit pulp industry should keep scale of operations modest.
Further, the company commenced operations only in May 2016 and
hence, has a limited track record.
* Average financial risk profile: The capital structure is
moderately leveraged, while debt protection metrics remain subdued
with expected net cash accruals to total debt of 0.25 times and
interest coverage of 2.4 times for FY20.
Liquidity: Poor
ECS has stretched liquidity with high BLU of around 99 % with 12
months ended June 2020. The company is expected to generate
sufficient cash accruals to meet repayment obligations over the
medium term.
Rating Sensitivity factors
Upward factors:
* Track record of timely debt servicing for at least over 90 days
* Sustained improvement in financial risk profile
Incorporated in 2014, VKAFPL, promoted by Mr G Vijaya Kumar and
family, is engaged in processing and sale of guava and mango pulp.
Its pulp processing unit near Vijayawada, Andhra Pradesh.
[*] INDIA: Corporate Guarantor Can Face Insolvency Action
---------------------------------------------------------
The Times of India reports that the Supreme Court on March 26 ruled
that a bank can initiate proceedings under the Insolvency and
Bankruptcy Code (IBC) against a corporate guarantor if the
principal borrower defaults on repayment of loans and the debt is
declared nonperforming asset (NPA).
A bench of Justices A M Khanwilkar, B R Gavai and Krishna Murari
rejected the argument that as the principal borrower was not a
corporate person, the financial creditor could not have invoked
remedy of insolvency resolution proceedings under Section 7 of the
IBC against the corporate person, who had merely offered guarantee
for such loan account, TOI says.
"That action can still proceed against the guarantor being a
corporate debtor, consequent to the default committed by the
principal borrower. There is no reason to limit the width of
Section 7 of the IBC, despite law permitting initiation of
corporate insolvency resolution process (CIRP) against the
corporate debtor, if and when default is committed by the principal
borrower. For, the liability and obligation of the guarantor to pay
the outstanding dues would get triggered co-extensively," the
bench, as cited by TOI, said.
Writing the judgment for the bench, Justice Khanwilkar said Section
7 of the IBC enabled the financial creditor to initiate CIRP
against the principal borrower if it was a corporate person,
including against the corporate person being a guarantor in respect
of loans obtained by an entity not being a corporate person, TOI
relays.
Explaining the mandate of the provision, the bench said, "Section 7
is an enabling provision which permits the financial creditor to
initiate CIRP against a corporate debtor, TOI relates. The
corporate debtor can be the principal borrower. It can also be a
corporate person assuming the status of corporate debtor having
offered guarantee, if and when the principal borrower/debtor (be it
a corporate person or otherwise) commits default in payment of its
debt."
According to TOI, the SC said undoubtedly, a right or cause of
action would be available to the lender (financial creditor) to
proceed against the principal borrower, as well as the guarantor,
in equal measure in case they commit default in repayment of the
amount of debt acting jointly and severally.
[*] INDIA: Resumes Bankruptcy Filings Halted by Pandemic
--------------------------------------------------------
Bloomberg News reports that India allowed the resumption of
bankruptcy filings, ending a year-old suspension created to protect
firms from the impact of the virus pandemic, people with knowledge
of the matter said.
Bloomberg relates that the law is in operation after an executive
order halting bankruptcy proceedings expired on March 25, said the
people, asking not to be identified as the matter is not public.
The move follows a court ruling earlier last week that mandated
banks to resume classifying bad debt, unwinding another
pandemic-era measure.
According to the report, the two steps together will give investors
a clearer sense of the impact of the pandemic on the asset quality
of local banks. The resumption of bankruptcies also reopens
avenues for lenders to collect soured debt from delinquent
borrowers, allowing them more tools to manage one of the world's
worst bad loan piles.
The Reserve Bank of India expects that 13.5% of outstanding loans
at local lenders could turn sour by September from 7.5% a year
earlier: that would be the highest level since 1999, Bloomberg
notes.
Bloomberg says the lifting of the halt comes even as a resurgence
in virus cases threatens the nascent economic recovery. It could
spark a wave of new insolvencies, pent up from last year when
businesses were hurt by India's first economic contraction in
decades.
Prime Minister Narendra Modi's government last year halted the
process of initiating most fresh insolvency proceedings to insulate
cash-strapped borrowers hit by the pandemic for six months starting
March 25, and that was extended twice during the year, adds
Bloomberg.
=========
J A P A N
=========
BRIDGESTONE CORP: To Shut Japan Bicycle Plant in Turnaround Move
----------------------------------------------------------------
Nikkei Asia reports that Bridgestone Corporation will close a
domestic bicycle factory under plans announced March 29 as part of
its larger efforts to climb back into the black.
According to Nikkei Asia, the Kisai plant in Saitama Prefecture,
operated by group company Bridgestone Cycle, will shut its doors
for good in June. Its roughly 170 personnel will be reassigned
elsewhere.
Production will be taken over by another Saitama plant and a
Chinese facility. The Kisai plant churned out roughly 220,000 units
last year.
Nikkei Asia says Bridgestone has about 160 plants around the world
producing tires and other items. But the company logged its first
net loss in 69 years in 2020, hit by price competition in
general-purpose tires. With its sprawling network of factories a
drag on earnings, Bridgestone will shrink the number of its plants
by approximately 40% by 2023 compared with 2019.
The Kisai factory opened in 1971. The group is still considering
what to do with the physical facility and land after the closure.
Bridgestone Corporation is a Japan-based company principally
engaged in the tire business. The Company operates its business
through two business segments. Tire segment is involved in the
provision of tire tubes for passenger cars, trucks, buses,
construction and mining vehicles, industrial vehicles, agricultural
machinery, aircraft and motorcycles. The Segment also provides tire
related products, retread materials and related technologies,
automobile maintenance and repair services, as well as tire raw
materials. Diversification segment provides chemical products, such
as automobile related parts, urethane foam and related goods,
electronic precision parts, industrial materials related goods and
building materials related products, roofing materials, as well as
sports goods, such as golf balls and golf clubs. The Segment also
provides bicycle.
===============
M A L A Y S I A
===============
AIRASIA GROUP: Posts MYR2.4 Billion Net Loss in Q4 Ended Dec. 31
----------------------------------------------------------------
Bloomberg News reports that AirAsia Group Bhd. posted a record loss
in the fourth quarter and said revenue plunged 92% from a year
earlier as coronavirus restrictions affected travel demand
internationally and in Malaysia.
The airline, a low-cost pioneer in Asia, posted a net loss of
MYR2.4 billion (US$590 million) for the three months through
December, taking its loss for the year to MYR5.1 billion, Bloomberg
discloses.
Bloomberg relates that the October-December period was AirAsia's
sixth-straight quarterly loss, and also marred by MYR391 million in
fuel-hedging losses. Bookings and load factors have gradually
improved more recently, with the lifting of some restrictions on
interstate travel and domestic tourism, the airline said.
"While international borders remained closed, the group focused on
resuming limited domestic operations in the areas we operate," the
company said in a statement March 29, Bloomberg relays. "Lockdowns
announced in Malaysia for the month of October and November further
dampened sales."
AirAsia was under pressure even before Covid-19 plunged aviation
into crisis, the report notes. According to Bloomberg, auditor
Ernst & Young had questioned the ability of the airline and
long-haul unit AirAsia X Bhd. to continue as going concerns, based
on their 2019 financial reports. At the time, the carrier -- a
major buyer of Airbus SE's A320 aircraft -- was struggling with
excess capacity in Southeast Asia as airlines rapidly added planes
and competition intensified. More recently, AirAsia's Japanese unit
collapsed and it sold its stake in AirAsia India Ltd.
The company has sought to raise up to MYR2.5 billion through debt
and equity. In February, Hong Kong financier Stanley Choi increased
his stake to almost 9% for about $27 million. Mr. Choi told
Bloomberg News he was confident that AirAsia could recover from the
challenges facing the industry.
According to Bloomberg, the airline said March 29 it is close to
finalizing commitments from banks for loans and is in talks with "a
number of parties" for investments, including joint ventures.
AirAsia has branched out into other businesses, with a strong
emphasis on digital operations, Bloomberg says. Chief Exective
Officer Tony Fernandes said this month the company's so-called
super app would have turnover of $250 million this year. The app
can be used for things such as shopping, booking flights and
ordering food.
Logistics arm Teleport will soon start delivering vaccines in
Malaysia and the region, AirAsia said. It plans to convert two A320
aircraft into cargo planes, Bloomberg relays.
About AirAsia
AirAsia Berhad provides low-cost air carrier service. The company
provides services on short-haul, point-to-point domestic and
international routes. AirAsia, headquartered in Malaysia, operates
from hubs in Malaysia, Thailand, Indonesia, Philippines and India.
As reported in the Troubled Company Reporter-Asia Pacific on July
9, 2020, auditor Ernst & Young said the carrier's ability to
continue as a going concern may be in "significant doubt." In a
statement to the Kuala Lumpur stock exchange, Ernst & Young said
AirAsia's current liabilities already exceeded its current assets
by MYR1.84 billion at the end of 2019, a year when it posted a
MYR283 million net loss, Bloomberg News disclosed. That was before
the coronavirus crisis, which has further hit the carrier's
financial performance and cash flow.
=================
S I N G A P O R E
=================
AVATION PLC: S&P Raises ICR to 'CCC' on Extension of Bond Maturity
------------------------------------------------------------------
S&P Global Ratings, on March 29, 2021, raised its long-term issuer
credit rating on Avation PLC to 'CCC' from 'SD'. S&P also raised
its long-term issue rating on the Singapore-headquartered aircraft
lessor's guaranteed senior unsecured notes to 'CCC-' from 'D'.
S&P said, "The upgrade to 'CCC' reflects our view that immediate
risks have abated following the extension of Avation's US$342.6
million unsecured bonds. Still, the company's capital structure
remains unsustainable over the next 12 months in the absence of an
unforeseen positive development, in our view. While the maturity
extension on its unsecured notes has alleviated immediate
refinancing risks, we still see lingering risks for the company's
liquidity given a large maturity of close to US$225 million over
the next 12 months, of which over US$130 million relate to a
warehouse facility falling due in February 2022. While the company
has commenced refinancing discussions on these upcoming maturities,
over the 12 months, we forecast Avation could still face a cash
short fall of approximately US$40 million, absent any further
refinancing.
"We believe the long-term sustainability of Avation's capital
structure remains dependent on continued lender support. Avation
currently has a network of 11 active banking relationships, some of
whom have agreed to defer the amortizations on the company's senior
debt, as well as waive the breach of its maintenance covenants. As
such, we believe the company remains vulnerable and reliant upon
favorable business, financial, and economic conditions to meet its
financial commitments.
"In our opinion, further lease deferrals could exacerbate the
company's working capital, should the recovery in air travel be
prolonged." For the first half of fiscal 2021, the company reported
approximately US$8.4 million in negative working capital, largely
attributable to slower collections. Since the start of the
pandemic, at least three of Avation's airline customers have
entered into some form of restructuring.
Still, Avation's US$144 million in cash on hand as of February 2021
provides some near-term relief, in S&P's view. Avation continues to
find means to preserve cash through the suspension of dividends and
employee cash bonuses, and deferment of its orderbook. In addition,
the company recently successfully raised about GBP7.5 million
proceeds from its equity issuance and expects to collect settlement
claims from Virgin Australia Holdings Ltd. (VAH) of less than US$5
million. At the current rating level, Avation's ability to maintain
a sufficient cash buffer remains a key consideration for its credit
profile.
S&P said, "While aircraft sales remain an option, we believe
Avation may be less inclined to do so given the impact on its
future operating cash flow and business prospects. Avation
repossessed 13 aircraft from VAH in 2020, and has so far sold two
Fokker 100s that have reached the end of their leases. Four
turboprops have been transitioned to new lessees while seven remain
unleased. In addition, the company has four unencumbered aircraft
on its books. While the company has been marketing the remaining
aircraft for sale and re-lease, we believe there may be incentive
to pursue re-leasing options. This is because we believe Avation
would be unlikely to transact at the full realizable value of its
aircraft at this point in the cycle, and would prefer to sustain
its fleet such that it would be in a position to capture demand
once air travel recovers.
"The developing outlook indicates that we may raise or lower our
ratings over the next 12 months depending on Avation's ability to
successfully refinance its upcoming maturities in a timely manner.
"We could lower our rating if we believe Avation is unable to
obtain covenant relief or refinance its upcoming maturities in a
timely manner. This could occur due to continued volatility in the
credit markets or weakening business prospects.
"We could raise our ratings on Avation if the company successfully
refinances its upcoming maturities, easing liquidity pressure over
the next 12 months."
Avation and its subsidiaries lease commercial passenger aircraft to
airlines worldwide. As of December 2020, the company managed a
fleet of 46 aircraft. Avation was founded as a narrow-body aircraft
lessor in 2006 and is headquartered in Singapore.
EAGLE HOSPITALITY: Court Issues Winding Up Order vs Former EH-Reit
------------------------------------------------------------------
The Business Times reports that the Singapore High Court on March
19 issued a winding up order against Eagle Hospitality Reit
Management (EHRM) - the previous manager of Eagle Hospitality Real
Estate Investment Trust (EH-Reit) - on the grounds of insolvency,
and ordered the appointment of liquidators for EHRM.
This order follows an application filed by EHRM to the High Court
to wind up on an undisclosed date, BT says.
BT relates that EHT, which is a stapled trust comprising Eagle
Hospitality Reit (EH-Reit) and the currently dormant Eagle
Hospitality Business Trust (EH-BT), is now being managed by DBS
Trustee - as EH-Reit's trustee - after a proposed change of manager
fell through. The Monetary Authority of Singapore (MAS) had ordered
the removal of EHRM as the manager of the Reit after numerous
breaches.
On Jan. 18, as many as 27 entities in the EHT stable had also filed
for Chapter 11 bankruptcy in the United States Bankruptcy Court for
the District of Delaware.
On March 29, DBS Trustee also gave updates on the stalking-horse
agreement that has essentially put 15 out of the 18 properties in
EHT's portfolio up for sale.
To recap, the stalking-horse bidder in EHT's case is Madison
Phoenix LLC, an affiliate of Monarch Alternative Capital LP, which
had earlier extended a debtor-in-possession (DIP) credit facility
of up to US$100 million to the Chapter 11 entities, BT relays.
According to BT, the United States Bankruptcy Court had on March 24
designated Madison Phoenix LLC to act as the stalking horse bidder
for the sale of the 15 properties. The court had also approved of
certain bid protection for the bidder, as well as bidding
procedures and a timetable for interested parties to "submit higher
or otherwise better offers".
The deadline to submit bids under the second bid round is May 14.
Should the Chapter 11 entities receive more than one qualified bid
under the second bid round, an auction will take place on May 20,
BT discloses.
Following that, the hearing before the court to approve the sale of
the properties to the winning bidder will be held on May 28.
Six of the Chapter 11 entities have also entered into a stipulation
agreement with EHT's sponsor Urban Commons, its co-founders Howard
Wu and Taylor Woods, as well as their previous corresponding master
lessees, BT notes.
A stipulation agreement is a formal legal acknowledgement and
agreement made between opposing parties, and usually relate to
certain facts and issues in relation to the proceedings at hand.
In EHT's case, these matters include a declaration that the
relevant master lease agreements (MLAs) are terminated prior to the
date of the Chapter 11 filing, the recovery of damages from
previous master lessees under the terms of the relevant MLAs and
their breaches, as well as an order requiring the turnover of the
relevant Chapter 11 Properties or their leasehold interest to the
respective Chapter 11 entities, according to BT.
BT relates that DBS Trustee said the stipulation agreement acts as
"a mere deferment of proceedings against the sponsor parties for a
limited period of time" in order to facilitate the sale of the
properties.
This will reportedly also allow the Chapter 11 entities to focus
their resources on the sale process by deferring the damages
litigation until after that process concludes, as well as to save
significant time and expense that would be otherwise required, BT
adds.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021. EHT US1
estimated $500 million to $1 billion in assets and liabilities as
of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc., is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases
on Feb. 4, 2021. The committee is represented by Morris James,
LLP, and Kramer Levin Naftalis & Frankel, LLP.
EAGLE HOSPITALITY: Defends Inclusion of Foreign Units in Ch. 11
---------------------------------------------------------------
Law360 reports that Eagle Hospitality asked a Delaware bankruptcy
judge to reject a motion by lender agent Bank of America to dismiss
the Chapter 11 cases of Eagle's Singapore affiliates, saying the
move would limit its reorganization options.
In a motion filed Thursday, March 25, 2021, lead debtor EHT US1
Inc. asked U.S. Bankruptcy Judge Christopher S. Sontchi to reject
Bank of America's claims that the Singapore-based real estate
investment trust and holding corporations aren't eligible for a
U.S. bankruptcy, arguing both that they are and that keeping them
in the case will give the debtors needed flexibility.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021. EHT US1
estimated $500 million to $1 billion in assets and liabilities as
of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc., is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases
on Feb. 4, 2021. The committee is represented by Morris James,
LLP, and Kramer Levin Naftalis & Frankel, LLP.
HIN LEONG: Founder Faces Another 23 Forgery-Related Charges
-----------------------------------------------------------
Reuters reports that Lim Oon Kuin, the founder of collapsed oil
trading firm Hin Leong Trading Pte Ltd, is expected to face another
23 charges of forgery-related offences soon, Singapore's
prosecution said.
The 23 charges are expected to be tendered on April 8, Deputy
Public Prosecutor Navin Naidu told a Singapore court on March 29,
Reuters relays.
The Singapore Attorney-General's Chambers confirmed the
prosecutor's comments, Reuters says.
Last year, Singapore police charged the 78-year-old former oil
tycoon, better known as O.K. Lim, with two counts of abetment of
forgery for the purpose of cheating, Reuters recalls.
About Hin Leong Trading
Hin Leong Trading (Pte.) Ltd. provides petroleum products and
transportation services. The Company offers oil, lubricants,
grease, and diesel products, as well grants storage, terminalling,
trucking, and marine logistics services. Hin Leong Trading serves
customers globally.
Hin Leong Trading and shipping unit Ocean Tankers (Pte.) Ltd. filed
for court protection from creditors on April 17, 2020, as the
former struggles to repay debts of almost US$4 billion.
Hin Leong posted a positive equity of US$4.56 billion and net
profit of US$78 million in the period ended October 31, 2019,
according to the people, who asked not to be identified as the
matter is sensitive, Bloomberg News reported.
But Hin Leong told its creditors that total liabilities reached
US$4.05 billion as of early April, while assets were just US$714
million, leaving a hole of at least US$3.34 billion, according to
screenshots of the presentation to a group of bankers seen by
Bloomberg News.
The balance sheet of the company showed no equity at all as of
April 9, 2020, and warned that "figures obtained from the company
are subject to verification," Bloomberg News added.
On April 27, 2020, the Company was granted interim judicial
management by the Singapore High Court. Goh Thien Phong and Chan
Kheng Tek of PricewaterhouseCoopers Advisory Services (PwC) have
been appointed as interim judicial managers. Ernst & Young (EY),
has been appointed interim judicial manager for Ocean Tankers.
=============
V I E T N A M
=============
NATIONAL POWER: Fitch Affirms 'BB' LT Foreign Currency IDR
----------------------------------------------------------
Fitch Ratings has affirmed Vietnam-based National Power
Transmission Corporation's (EVNNPT) Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB'. The Outlook is Stable. Fitch
has also affirmed EVNNPT's senior unsecured rating at 'BB'.
EVNNPT's ratings under Fitch's Parent and Subsidiary Rating Linkage
(PSL) Criteria are based on the consolidated profile of Vietnam
Electricity (EVN, BB/Stable, Standalone Credit Profile (SCP): bb),
which owns 100% of EVNNPT. Strong linkages between EVNNPT and its
parent drive the consolidated rating approach.
Fitch assesses EVNNPT's SCP at 'bb+', stronger than EVN's IDR.
EVNNPT's SCP is supported by its monopoly of Vietnam's electricity
transmission sector, pooled counterparty risk and strong
receivables. EVNNPT's financial profile is stronger than that
commensurate for its credit assessment. However, an upgrade of
EVNNPT's SCP is contingent on the consistent application of
electricity regulatory reforms, including timely changes to tariffs
that reflect cost changes, and an improvement in EVN's credit
profile.
EVN's ratings reflect its SCP, which is at the same level as that
of Vietnam's sovereign (BB/Stable). EVN's SCP benefits from its
ownership and operation of Vietnam's electricity transmission
network through EVNNPT and distribution network, and its near-54%
share of the country's power generation capacity. Under Fitch's
Government-Related Entities Rating Criteria, EVN's ratings will be
equalised with that of the sovereign should its SCP weaken,
provided the likelihood of support remains intact.
KEY RATING DRIVERS
Strong Parent, Subsidiary Linkages: EVN owns 100% of EVNNPT,
controlling key management and approving business and investment
plans. EVN also approves EVNNPT's financing plans, including
borrowings above certain thresholds, organisational structure, and
key executives and their compensation. EVN also supervises EVNNPT's
regulatory compliance. There is no centralised treasury, but about
21% of EVNNPT's total borrowings go through EVN and subsidiaries.
The flow of dividends to EVN from EVNNPT is not restricted.
EVNNPT's Standalone Credit Profile: EVNNPT has a monopoly of
Vietnam's electricity transmission sector, and it faces limited
price and volume risk under the regulatory framework, which
enhances its revenue and profit visibility. EVNNPT receivable
benefits from no direct single counterparty risk as transmission
charges from the five distribution companies are collected by a
pooling mechanism by Electricity Power Trading Company, which is a
separate department within EVN group.
EVNNPT's credit profile is constrained by the short history of the
regulatory framework that remains susceptible to political risks
and by tariffs set for only one year in the framework.
Cost-Plus Transmission Tariff: The regulator fixes the electricity
transmission tariff annually, ensuring EVNNPT recovers appropriate
expenses and earns permissible profits that allow it to maintain
operations and meet investment plans. However, the final tariff is
subject to approval by EVN and the regulator. The regulator and EVN
target a pretax return on equity (ROE) of 3% for EVNNPT. However,
ROE has been volatile and has deviated significantly - both higher
(2019: 10%) and lower than 3% (2017: 2.2%).
Low Price Risk: Transmission tariffs account for only about 6% of
the retail tariff, which means an increase in the transmission
tariff will have limited impact on the final retail electricity
tariff. Hence, EVNNPT's price risk is lower than EVN's, in Fitch's
view. EVN can increase the electricity retail tariff every six
months, in line with rising production costs, but it has to seek
approval from the ministry for increases above 5% - and automatic
tariff adjustments under 5% have a limited record.
Low Impact of Coronavirus: EVNNPT's transmission volume increased
by 2.3% to 204 billion units in 2020, benefiting from Vietnam's
resilient economy and success in containing the pandemic. Even so,
power demand has slowed due to the coronavirus with volume growth
slower than the 9% yearly average increase in the past four years.
EVNNPT's Rising Capex: Fitch estimates EVNNPT to incur average
annual capex of about VND14 trillion from 2021 (2019: around VND11
trillion). Fitch estimates EVNNPT's funds from operations (FFO) net
leverage will stay around 3.5x over the medium term, resulting in a
stronger financial profile than that commensurate for its SCP.
Fitch expects EVN to incur significant capex to address continuing
increases in power demand, tackle a shortage of power plants in the
country's southern region and improve supply services, including
EVNNPT's initiatives to improve grid quality and reliability, and
strengthen regional connections.
EVN's Strong Support Incentive: Fitch sees EVN's status, sovereign
ownership and control as 'Very Strong', as the state fully owns
EVN, appoints its board and senior management, directs investments
and approves tariff hikes in excess of 5%. EVN's record of state
support is 'Strong'. Fitch sees the socio-political implications of
a default by EVN as 'Strong', as it would lead to service
disruptions across the electricity value chain. Fitch sees the
financial implications of a default by EVN as 'Very Strong', as it
is one of Vietnam's main borrowers.
EVN's Standalone Credit Profile: EVN is a monopoly in Vietnam's
electricity transmission and distribution sector, and owns and
operates 54% of the country's installed generation capacity,
including strategic hydropower assets. EVN's SCP is constrained by
the absence of consistent revisions in tariffs to reflect cost
changes. EVN's financial profile can be significantly affected if
tariffs are not adjusted regularly as it faces major hydrology,
currency and demand risks.
DERIVATION SUMMARY
EVNNPT's SCP is assessed a notch higher than EVN's IDR, even though
EVNNPT's IDR is based on the consolidated profile of its parent due
to strong linkages between the two under Fitch's PSL Criteria. The
strong linkages are because EVN fully owns EVNNPT and has extensive
influence over EVNNPT's business plans, profitability and financial
profile. EVN is the state-owned utility that has a monopoly over
electricity transmission and distribution in Vietnam. It also owns
and operates the majority of the country's installed
power-generation capacity. EVN's transmission business is highly
strategic and is operated through EVNNPT.
EVNNPT has a lower operating risk than Vietnam Electricity Northern
Power Corporation (EVNNPC, BB/Stable) - a power distribution
company within the EVN group - because it is a pure transmission
player and has better geographical diversification. Still, EVNNPC
has a tad better financial profile and better counterparty
diversification, with lower receivable days compared with EVNNPT.
EVNNPC and EVNNPT's profiles are comparable, although EVN exercises
a lot more control over EVNNPC as reflected in management of its
profit through determination of annual ROE. EVNNPT's ROE is
determined by the regulator, albeit in consultation with EVN. As
such, Fitch assesses EVNNPT's SCP a notch higher than EVNNPC, as
the latter cannot be better than EVN, in Fitch's view.
Like EVNNPT, EVNNPC's IDR is also driven by the consolidated credit
profile of its parent, EVN, under Fitch's PSL Criteria. EVN has
strong linkages and extensive influence over the business and
financial profiles of EVNNPC via its 100% ownership of the
company.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Average annual volume growth of above 5.5% over the next three
years (2020: 2.3%);
-- Transmission tariff to decline by about 6% in 2021 to VND81.4
per kWh;
-- Average annual capex of about VND14 trillion in 2021-2023;
-- Blended interest rate to increase to 5.0% by 2023 (2020: 3.6%)
with increase in commercial loans in the debt mix;
-- ROE to remain below 4% in 2021-2023 (2020: 3.6%, 2019:10%);
-- No dividend payout, as Fitch expects EVN to leave cash for
EVNNPT's own growth.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action on EVN;
-- Fitch does not expect positive action on EVNNPT's standalone
profile in the absence of consistent implementation of the
current tariff framework and improvement in EVN's credit
profile.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Negative rating action on EVN;
-- Fitch would lower the company's SCP upon adverse regulatory
changes that result in deterioration of EVNNPT's business
profile.
For EVN's ratings, the following sensitivities were outlined by
Fitch in a rating action commentary on 15 September 2020:
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action on the sovereign, provided the
likelihood of state support does not deteriorate
significantly.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Negative rating action on the sovereign;
-- Deterioration in EVN's SCP, along with significant weakening
in linkages with the state. Fitch sees this as a remote
prospect in the medium term.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch estimates EVNNPT had cash and cash
equivalents of around VND6 trillion at end-2020, against the
current debt maturity of VND4.6 trillion. Fitch expects the company
to generate VND11 trillion-13 trillion of operational cash flow
over the next three to four years. This will be sufficient to
manage annual debt maturities but will require external funds to
manage annual capex targets. EVNNPT liquidity benefits from its
strong access to domestic markets and overseas development
assistance due to its linkages with EVN and hence the state.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
EVNNPT's ratings are directly linked to the credit quality of its
parent, EVN. A change in Fitch's assessment of the credit quality
of the parent would automatically result in a change in the rating
on EVNNPT.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***