/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/210421.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, April 21, 2021, Vol. 24, No. 74 Headlines A U S T R A L I A ACE UP: First Creditors' Meeting Set for April 28 NEWJHON INVESTMENTS: First Creditors' Meeting Set for April 27 ORBIS COMMODITIES: First Creditors' Meeting Set for April 27 SOUTHERN BOTTLING: Second Creditors' Meeting Set for April 28 TBC SUPPLIES: Second Creditors' Meeting Set for April 28 C H I N A CBAK ENERGY: Incurs $7.8 Million Net Loss in 2020 CENTRAL PLAZA: Fitch Retains BB+ Rating on $500MM Sub. Securities CHINA HUARONG: Panic Eases After Government Breaks Silence CONCORD NEW: Fitch Alters Outlook on 'BB-' IDR to Stable GOLDEN WHEEL: Fitch Lowers LongTerm IDRs to 'CCC+' HYTERA COMMUNICATIONS: Wins August 9 Plan Exclusivity Extension KWG GROUP: S&P Alters Outlook to Stable & Affirms 'B+' ICR LUCKIN COFFEE: Gets $250MM Investment From Centurium, Joy Capital H O N G K O N G AJISEN CHINA: Former CFO Sentenced to 6 Years for Embezzlement I N D I A ANDAL AND COMPANY: CRISIL Keeps B+ Debt Rating in Not Cooperating ANSAL LOTUS: Insolvency Resolution Process Case Summary AVVAS INFOTECH: CRISIL Lowers Rating on INR4.07cr Loan to D CITY MART: Insolvency Resolution Process Case Summary CORACIAS PROJECTS: Insolvency Resolution Process Case Summary FLORA DYEING: Insolvency Resolution Process Case Summary HEALTHWARE PRIVATE: CRISIL Withdraws B+ Rating on INR18cr Loan KHATOR TECHNICAL: CRISIL Lowers Rating on INR3.0cr Cash Loan to D KUMUD RICE: CRISIL Withdraws B+ Rating on INR8cr Cash Loan LATE SMT: CRISIL Withdraws B+ Rating on INR3.09cr Term Loan MJR 92: CRISIL Keeps B Debt Rating in Not Cooperating NEHA INFRASTRUCTURES: CRISIL Cuts Rating on INR3.6cr Loan to D PENGUIN PETROLEUM: CRISIL Hikes Rating on INR7.31cr Loan to B PEREGRINE PHOSPHATE: CRISIL Keeps B Rating in Not Cooperating RADIANT POLYMERS: CRISIL Assigns B+ Rating to INR41.3cr NCD RAIPUR POLYMERS: CRISIL Lowers Rating on INR7.5cr Cash Loan to D RAJARAJESHWARE BUILDDCON: CRISIL Withdraws B Rating on LT Loan RUBBER O: CRISIL Lowers Rating on INR10cr Loans to D S S HYUNDAI: CRISIL Lowers Rating on INR8cr Loans to B SAI VISHWAS: CRISIL Keeps B+ Debt Rating in Not Cooperating SIPANI PROPERTIES: CRISIL Lowers Rating on INR28.4cr Loan to D UNISHIRE URBANSCAPE: CRISIL Keeps D Rating in Not Cooperating VAIDYANATH SAHAKARI: CRISIL Keeps D Rating in Not Cooperating VETRIVEL EXPLOSIVES: CRISIL Withdraws D Rating on INR6.16cr Loan M A L A Y S I A TAN CHONG: To Settle Bills of Demand from Malaysian Customs P A P U A N E W G U I N E A PAPUA NEW GUINEA: Moody's Alters Outlook on B2 Ratings to Negative S I N G A P O R E HOE LEONG: Three Vessel Units Placed in Voluntary Liquidation LIBRA GROUP: Seeks High Court Nod for Extension of Moratoria ORIS INTERNATIONAL: Creditors' Meeting Set for May 7 S O U T H K O R E A KOREA NATIONAL: Falls Into Complete Capital Erosion - - - - - ================= A U S T R A L I A ================= ACE UP: First Creditors' Meeting Set for April 28 ------------------------------------------------- A first meeting of the creditors in the proceedings of Ace Up The Sleeve Pty Ltd, formerly trading as Aces Pizza & Liquor, will be held on April 28, 2021, at 11:00 a.m. at the offices of Clifton Hall, Level 3, 431 King William Street, in Adelaide, South Australia. Daniel Lopresti of Clifton Hall was appointed as administrator of Ace Up on April 15, 2021. NEWJHON INVESTMENTS: First Creditors' Meeting Set for April 27 -------------------------------------------------------------- A first meeting of the creditors in the proceedings of Newjhon Investments Pty Ltd, trading as Excavator World Australia, will be held on April 27, 2021, at 10:30 a.m. at Commercial Club Albury, 618 Dean Street, in Albury, NSW. Chris Chamberlain of Chamberlain's SBR was appointed as administrator of Newjhon Investments on April 16, 2021. ORBIS COMMODITIES: First Creditors' Meeting Set for April 27 ------------------------------------------------------------ A first meeting of the creditors in the proceedings of Orbis Commodities Pty Ltd will be held on April 27, 2021, at 9:30 a.m. virtual meeting technology. Richard Albarran and Kathleen Vouris of Hall Chadwick were appointed as administrators of Orbis Commodities on April 16, 2021. SOUTHERN BOTTLING: Second Creditors' Meeting Set for April 28 ------------------------------------------------------------- A second meeting of creditors in the proceedings of Southern Bottling Company Pty Ltd has been set for April 28, 2021, at 10:00 a.m. via virtual meeting. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by April 27, 2021, at 4:00 p.m. Peter James Lanthois and Christopher Powell of Duncan Powell were appointed as administrators of Southern Bottling on March 12, 2021. TBC SUPPLIES: Second Creditors' Meeting Set for April 28 -------------------------------------------------------- A second meeting of creditors in the proceedings of TBC Supplies QLD Pty Ltd has been set for April 28, 2021, at 11:00 a.m. The meeting will be held virtually via Microsoft Teams teleconference. 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 27, 2021, at 4:00 p.m. Geoffrey Trent Hancock of PKF was appointed as administrator of TBC Supplies on March 17, 2021. ========= C H I N A ========= CBAK ENERGY: Incurs $7.8 Million Net Loss in 2020 ------------------------------------------------- CBAK Energy Technology, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $7.85 million on $37.56 million of net revenues for the year ended Dec. 31, 2020, compared to a net loss of $10.85 million on $22.19 million of net revenues for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $142.77 million in total assets, $90.36 million in total liabilities, and $52.41 million in total equity. Hong Kong, China-based Centurion ZD CPA & Co., the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 13, 2021, citing that the Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of Dec. 31, 2020. All these factors raise substantial doubt about its ability to continue as a going concern. Management's Comments Mr. Yunfei Li, chief executive officer of CBAK Energy, commented, "Despite macro challenges in 2020, we grew our top-line by 69.3% year over year. Such robust growth was mainly due to the increased market recognition of our R&D capabilities as well as our higher brand awareness in the energy storage market . With our competitive advantages in R&D and expanded global presence, we remain confident in our future growth prospects. Moreover, our 46800 battery model, 32140 battery model, and special 26650 battery model designed for application in ultra-low temperature environments should enable us to augment our development in the markets for light electric vehicles, electric vehicles, and energy storage to ensure the long-term and sustainable growth of our enterprise value going forward." Ms. Xiangyu Pei, interim chief financial officer, further commented, "In the full year of 2020, we grew our total net revenues while also significantly reducing our net loss. This healthy performance was mainly due to our effective corporate strategy, resilient business model, and operating leverage improvements. As a result of our increased financial capacity from our recent equity offering, we are confident in our ability to continue capitalizing on those opportunities which will emerge going forward to accelerate our development in the post-pandemic world." Recent Developments On Feb. 19, 2021, the Company announced that it has started the trial production of its special 26650 lithium battery (the "Special 26650 Battery"). Different from the Company's regular 26650 batteries that it is currently manufacturing and selling, the Special 26650 Battery is a self-developed battery model specifically designed for application in ultra-low temperature environments. The Special 26650 Battery has delivered satisfactory test performance results to date, while the trial's production yield rate has also been very close to the Company's required level for mass production. The Company believes that it will be capable of achieving mass delivery for its Special 26650 Battery by the second half of 2021. On Feb. 10, 2021, the Company announced that it closed a registered direct placement of approximately $70 million of its common stock, priced at the market under applicable Nasdaq rules with a price of US$7.83 per share, and the concurrent private placement. On Feb. 3, 2021, the Company provided additional details for its plans to expand its production capacity in Nanjing and Dalian in anticipation of increasing client orders. For its Nanjing manufacturing plants, the Company plans to attain a total capacity of 8 GWh per year to produce lithium batteries for the light electric vehicle, electric vehicle, and energy storage industries. The Company is currently developing a production line with an annual capacity of 0.7 GWh for its new model 32140 batteries. This production line is expected to be operational by the second half of 2021 and capable of producing 50,000 model 32140 batteries per day. A full-text copy of the Form 10-K is available for free at: https://bit.ly/3tByqMc About CBAK Energy Liaoning Province, People's Republic of China-based CBAK Energy -- www.cbak.com.cn -- is a manufacturer of new energy high power lithium batteries that are mainly used in light electric vehicles, electric vehicles, electric tools, energy storage including but not limited to uninterruptible power supply (UPS) application, and other high-power applications. Its primary product offering consists of new energy high power lithium batteries, but it is also seeking to expand into the production and sale of light electric vehicles. CENTRAL PLAZA: Fitch Retains BB+ Rating on $500MM Sub. Securities ----------------------------------------------------------------- Fitch Ratings has maintained the Rating Watch Negative (RWN) on the 'BBB' rating of Central Plaza Development Ltd's USD450 million senior notes due 2025 and the 'BB+' rating on its USD500 million subordinated perpetual securities. Central Plaza is the wholly owned offshore SPV of China-based homebuilder Beijing Capital Land Ltd. (BB/Stable). The notes carry keepwell deeds and equity interest purchase undertakings from BCL's parent, Beijing Capital Group Company Limited (BCG, BBB/Stable). Fitch has also maintained the RWN on the 'BBB' rating of Trade Horizon Global Limited's USD400 million senior notes due August 2021 with a keepwell deed and equity interest purchase undertaking from BCG. Trade Horizon is a wholly owned offshore SPV of Beijing Capital Grand Ltd., BCL's listed subsidiary that operates outlet malls. The bonds were placed on RWN in October 2020, following a decision by the administrator of the onshore restructuring of Peking University Founder Group's debt to not recognise the US dollar keepwell bonds of the Chinese company's offshore subsidiary, which highlighted issues over the enforceability of creditors' rights for holders of keepwell bonds in China. BCG and BCL's management is currently discussing options for potential credit enhancements on Central Plaza's notes as well as a refinancing plan for Trade Horizon's notes whose maturity is close. KEY RATING DRIVERS Potential Credit Enhancement: Fitch understands that management is considering the possibility of adding a guarantee from BCG Chinastar International Investment Ltd. (Chinastar, BBB/Stable) to the keepwell deed from BCG on Central Plaza's existing notes. The new note structure would mirror that of Central Plaza's new issuance in January 2021. The credit enhancement, however, may lead to negative rating action on Chinastar's Issuer Default Rating (IDR). This is because the new structure, with a guarantee from Chinastar but not BCG, could reduce the percentage of Chinastar's continent liabilities that are guaranteed by BCG to below 50%, which is a negative trigger for Chinastar. The group is also weighing the provision of a guarantee from Chinastar for the refinancing of Trade Horizon's notes. The new structure could similarly reduce the percentage of Chinastar's continent liabilities that are guaranteed by BCG. Management said it is highly uncertain that the group will be able to complete registration of Central Plaza's and Trade Horizon's notes at the Beijing State Administration of Foreign Exchange if BCG wants to provide guarantee. Rating Impact Without Structural Change: Without further credit enhancement, Fitch may link the notes' ratings to the senior unsecured rating of the guarantors, or issuers if there are no guarantees provided. In this case, the notes issued by Central Plaza and Trade Horizon may be linked to the senior unsecured rating of International Financial Center Property Ltd. (IFC)- the guarantor of Central Plaza's notes and an offshore intermediate holding company under BCL- and Beijing Capital Grand, respectively. IFC's and Beijing Capital Grand's IDRs are likely to be linked to BCL, based on Fitch's Parent and Subsidiary Linkage Rating Criteria. This means that the keepwell bonds' ratings may migrate towards BCL's 'BB' IDR. DERIVATION SUMMARY Further rating action on Central Plaza's and Trade Horizon's notes with the keepwell deeds and equity interest purchase undertakings from BCG will depend on BCG and BCL's decision on a credit-enhancement plan. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for BCL: -- Single-digit sales growth from 2021; -- Cash collection rate to remain weak at 60%-65% over the next two years, although there may be a slight improvement; -- Land to be replenished at 0.8x the gross floor area sold from 2021, based on BCL's sufficient land bank and management's intention to reduce land bank life; -- Construction cost per sq m to rise by 3% per year from 2021; -- Capex of around CNY1 billion for 2021, which will mainly be used for the development of BCL's outlet assets. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- No positive rating action expected on Central Plaza's and Trade Horizon's notes with the keepwell deeds and equity interest purchase undertakings from BCG. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- RWN will be resolved and ratings on Central Plaza's and Trade Horizon's notes could be downgraded and move towards the IDR of BCL if there is no credit enhancement from BCG – a guarantee from Chinastar. 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 BCL's Sufficient Liquidity: BCL's readily available cash of CNY35.7 billion as of end-2020 can fully cover its short-term debt of CNY32.7 billion. The company also had unused strategic bank credit facilities of CNY174 billion to cover other operating needs. Fitch expects the group to maintain sufficient liquidity to fund development costs, land premium payments and debt obligations due to its diversified funding channels from onshore and offshore capital markets, long-term relationships with onshore and offshore banks and a flexible land-acquisition strategy. BCL's weighted-average financing cost fell to 5.14% in 2020, from 5.39% in 2019. CHINA HUARONG: Panic Eases After Government Breaks Silence ---------------------------------------------------------- Lisa Lee and Ye Xie at Bloomberg News report that after two weeks of relentless losses, China Huarong Asset Management Co. bondholders are finally finding reasons for optimism. According to Bloomberg, Huarong bonds jumped after China's financial regulator said on April 16 that the bad-debt manager was operating normally and had ample liquidity, its first official comments since the company jolted Asian credit markets by missing a deadline to report earnings on March 31. While the regulator's statement was hardly a full-throated pledge of government support, it was enough to cement a rally in Huarong bonds from record lows and ease fears of contagion. The gains continued on April 19. One of the state-owned company's dollar bonds -- a 3.375% note maturing in May 2022 -- climbed to about 89 cents after trading at 65 cents on April 14, according to prices compiled by Bloomberg. Bloomberg says the rebound suggests investors have become less concerned about extreme scenarios like bankruptcy. Yet questions remain about the extent of Beijing's support as Huarong tries to overhaul its business. Bloomberg relates that the company, controlled by China's Ministry of Finance, has been mired in scandal since its former chairman Lai Xiaomin was accused of bribery in 2018 and executed earlier this year. Under Lai, Huarong moved beyond its original mandate of helping banks dispose of bad debt, raising billions of dollars from offshore bondholders and expanding into everything from trust companies to securities trading and illiquid investments. If China decides to impose losses on Huarong bondholders in a debt restructuring, it would be the nation's most consequential credit event since the late 1990s and the clearest sign yet that Beijing is serious about reducing moral hazard in its $54 trillion financial industry, Bloomberg notes. But if Huarong continues to meet its obligations, the company's bonds could end up delivering a windfall to investors who bought after prices plunged this month. "The fact that a regulator finally said something should give the market some confidence," Bloomberg quotes David Loevinger, a former China specialist at the U.S. Treasury and now a managing director at TCW Group Inc. in Los Angeles as saying. "The amazing thing is like many investors, if you asked me a month ago, what is the risk of Huarong restructuring its debt, I would have said close to zero. Even though I still think it's unlikely, the risk is no longer zero." In a statement late on April 16, Huarong said it will accelerate disposal of existing risks and keep focusing on its main business of non-performing loans, Bloomberg relays. Huarong said it's working on its full-year earnings report with its auditor and will disclose it at an appropriate time. Investors will be keeping a close eye on the company's near-term debt payments for any signs of stress, Bloomberg says. According to Bloomberg, Huarong's onshore securities unit said on April 19 it had wired funds to fully repay a local bond due April 18. Reports that Huarong has prepared funds to pay a SGD600 million (US$450 million) bond due April 27 helped trigger the rally in its offshore debt from record lows on April 15. The comments from China's regulator on April 16 suggest the worst of the Huarong crisis is likely over, according to Yong Zhu, who manages about $6 billion at DuPont Capital Management in Wilmington, Delaware, Bloomberg relays. "The statement from the China Banking and Insurance Regulatory Commission is a clear indication that the policy of the Chinese government is to support Huarong and avoid near term default," said Zhu, who doesn't own the bonds. Credit-default swaps on China Huarong International Holdings Ltd., an offshore unit of Huarong, tumbled to 956 basis points on April 16 from a record 1,466 basis points, Bloomberg discloses citing ICE Data Services. About China Huarong China Huarong Asset Management Co., Ltd., together with its subsidiaries, provides various financial asset management services. As reported in the Troubled Company Reporter-Asia Pacific on April 16, 2021, Moody's Investors Service has placed the A3 long-term and P-2 short-term issuer ratings, as well as the b1 baseline credit assessment, of China Huarong Asset Management Co., Ltd. (Huarong AMC) under review for downgrade. In addition, Moody's has placed the debt ratings and medium-term note (MTN) program ratings of Huarong AMC's offshore financing vehicles under review for downgrade. These include the Baa1 long-term backed senior unsecured debt ratings and the (P)Baa1 backed senior unsecured MTN program ratings of Huarong Finance 2017 Co., Ltd and Huarong Finance II Co., Ltd, as well as the Baa1 long-term backed senior unsecured debt rating, the (P)Baa1 long-term and (P)P-2 short-term backed senior unsecured MTN program ratings of Huarong Finance 2019 Co., Ltd. CONCORD NEW: Fitch Alters Outlook on 'BB-' IDR to Stable -------------------------------------------------------- Fitch Ratings has revised the Outlook on China-based Concord New Energy Group Limited's (CNE) Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable, from Negative, and has affirmed the rating at 'BB-'. Fitch has also affirmed the senior unsecured rating and the rating on CNE's USD90 million 10.75% bonds due September 2023 at 'BB-'. The Outlook revision follows the repayment of CNE's US-dollar bonds due January 2021 with a combination of refinancing and project disposal proceeds in 2020, as well as de-leveraging to below Fitch's downgrade sensitivity. CNE is optimising its project portfolio by selling subsidy-reliant projects with slower cash flow conversion as well as aiming to double capacity by end-2023. Nevertheless, Fitch expects CNE's management to maintain prudence in executing its growth and asset recycling strategy, and for CNE's FFO net leverage to stay in the 5.0x-6.0x range in 2021-2023, commensurate with its 'BB-' rating. KEY RATING DRIVERS Successful Project Divestures: CNE's successful disposal of 484MW of wind farm and 160MW of solar farm capacity in 2020 helped reduce its FFO net leverage to 4.5x, from 6.9x in 2019. The divestures were valued at 1.1x price-to-book on average, proving the profitability and liquidity of CNE's project portfolio. Fitch expects annual divestures of 300MW-600MW in coming years as per management guidance, which should partly offset CNE's ambitious capacity installation plan of 1.0GW in the next three years. Lower Reliance on Subsidies: Fitch expects CNE to significantly lower its reliance on renewable subsidies over time, as all its projects in the pipeline are of grid parity. Subsidies are likely to fall to less than a quarter of power revenue in 2022 and to less than 10% in 2024 if CNE sticks to the divesture plan presented to Fitch. Solid Operation: Fitch expects decent returns from the grid-parity wind power projects in the pipeline, supported by higher utilisation hours due to project location and high equipment efficiency. Utilisation of CNE's wholly owned wind farms increased by 10% yoy in 2020, to 2,504 hours; this was 21% above the national average, which was flat over the year. The strong performance was driven by newly installed grid-parity wind farms, especially those in Jilin province, which achieved 3,700 hours in 2020. The consolidated wind farm realised tariff fell by 5.3% to CNY0.549/KWh in 2020, although revenue increased by 4.1% yoy per unit of capacity, combining the utilisation and tariff factors. Utilisation of wholly owned solar farms declined by 4.6% in 2020, to 1,436 hours, while the tariff stayed stable. The operation, maintenance and consultancy business continued to expand, with revenue rising by 29% to CNY220 million. Fitch expects the segment to expand by around 20% a year in the next few years. Stable Financial Profile: CNE has extended its debt maturity profile by refinancing and the repayment of its US-dollar bonds. Fitch expects its liquidity profile and credit metrics to remain stable in the medium term. Fitch forecasts a sharp rise in annual capex to CNY4.5 billion-5.5 billion in 2021-2024, but most of this should be covered by project loans, proceeds from project sales and operating cash flow. DERIVATION SUMMARY CNE's rating reflects its healthy project portfolio and falling reliance on subsidies as a revenue source as it focuses on wind power. Leverage and coverage metrics are broadly commensurate with those of peers rated in the low 'BB' category. CNE's credit profile is comparable with that of Indian peer, ReNew Power Private Limited (BB-/Positive). Fitch's forecast for CNE's FFO net leverage of 5.0x-6.0x in the medium-term is broadly in line with that for ReNew. However, Fitch forecasts stronger FFO interest cover for CNE of around 3.0x in the next three years, compared with Fitch's forecast of 1.3x-1.8x for ReNew, due to CNE's lower funding costs. CNE's smaller scale against ReNew is somewhat balanced by its lower counterparty risk. The majority of ReNew's key customers are non-federal government-owned utilities with weak credit profiles, while CNE collects revenue from strong state-owned power grids and receives government subsidies. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- New capacity installation of 1.0GW associated with annual disposals of 300MW-500MW in the next three years; -- Stable capacity utilisation for existing capacity; higher utilisation for grid-parity wind power projects installed in coming years, reflecting their location in better wind resource areas; -- Stable tariffs at existing wind farms; -- Non-power generation revenue to rise by 15%-20% a year in 2021-2024; -- Annual capex at around CNY4.5 billion-5.5 billion in 2021 2024. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- FFO net leverage lower than 5.2x on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- FFO net leverage higher than 6.2x for a sustained period; -- FFO interest coverage lower than 2.5x for a sustained period. 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 in Short Term: CNE had CNY2.3 billion of readily available cash at end-2020, enough to cover short-term debt of CNY1.5 billion. Fitch estimates that CNE had CFO of CNY642 million in 2020 and expect 70%-80% of capex of CNY4.6 billion in 2021 to be financed by project loans or financial leasing. Fitch believes existing cash and expected proceeds from project divestures should be sufficient to cover the equity capital component of the capex and project-level debt amortisation in 2021. SUMMARY OF FINANCIAL ADJUSTMENTS VAT Deduction: Wind and solar farms enjoy a 50% value added tax (VAT) rebate as an incentive for supplying renewable energy. Revenue from wind farms is net of VAT and only the 50% rebate is reflected in the income statement and included as EBITDA. Wind farms are exempt from VAT in the first five operating years; during this time they do not pay VAT or receive rebates. The amount of VAT that has been exempted, although 100% retained by wind farms, is not reflected in the income statement. Fitch has adjusted CNE's EBITDA by adding 50% of the VAT that has been exempted. External Guarantee: CNE continues to provide a guarantee of CNY436 million as at end-2020 on bank loans for projects it sold to an overseas renewable fund in 2019. Fitch includes half of the guaranteed amount in the calculation of CNE's leverage because repayment of the loans is covered by the projects' operating cash flow. GOLDEN WHEEL: Fitch Lowers LongTerm IDRs to 'CCC+' -------------------------------------------------- Fitch Ratings has downgraded China-based homebuilder Golden Wheel Tiandi Holdings Company Limited's (GWTH) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to 'CCC+' from 'B-'. Fitch has also downgraded GWTH's senior unsecured rating to 'CCC+' from 'B-', with a Recovery Rating of 'RR4'. The downgrade is driven by deterioration in GWTH's business profile, weak liquidity and high refinancing risk. Uncertainty and weakness exist in GWTH's contracted sales outlook, as more than 60% of saleable resources are non-residential products. These are more dependent on business confidence and investor sentiment. In addition, GWTH's residential land bank is unable to support sustained development because it has only enough land for one year of development. The downgrade also reflects the likelihood of the company having difficulties meeting its obligations: USD255 million senior notes due January 2023 become puttable in January 2022, and USD200 million senior notes mature in March 2022. KEY RATING DRIVERS Uncertain Sales Outlook: Fitch believes the risk of sales underperformance remains because of GWTH's significant exposure to commercial property sales (including serviced apartments, retail shops and offices), representing almost half of the land bank by gross floor area (GFA) at end-2020 and above 60% by saleable value. GWTH is targeting at CNY3 billion consolidated sales in 2021-2022, of which CNY1.8 billion would be contributed from commercial properties in 2021 and CNY2.9 billion in 2022. Fitch believes GWTH is willing, and has some room, to cut prices given its moderate-to-high profitability (25% for the majority of commercial properties). Even so, there are risks in terms of investment appetite and slow cash collection for commercial properties, especially under the tightening control over property loans. Project concentration risk will be higher in 2022 given less residential saleable resources, and high reliance on two commercial projects in Nanjing and Hong Kong (together CNY2.4 billion sales in GWTH's plan), adding to the sales uncertainty. Limited Residential Land Bank: Fitch thinks GWTH is under urgent pressure to replenish the residential land bank in 2021. The land bank is only sufficient to support residential sales for one year by saleable resources. GWTH plans to invest CNY500 million-1 billion in land acquisitions for 2021-2023, mainly through joint ventures (JVs) or associates. GWTH invested in five JVs or associates in 2020 with equity interests ranging from 10% to 37%, to cooperate with other developers in residential projects in the Yangtze River Delta. Eroded Margin: GWTH reported 3.7% gross profit margin (GPM) for its property development business in 2020, down sharply from 24% in 2019 and 30%-50% in 2016-2018. This is attributed to delivery of a zero-margin project in Zhuzhou, Hunan due to high construction costs (nearly 70% of the delivered average selling price). Fitch thinks this reflects GWTH's weak operational ability in project selection and in cost control, especially considering such projects were acquired in 2017-2018 when the company accelerated land acquisition to expand scale. GWTH had CNY3.8 billion unrecognised contracted sales at end-2020 with GPM at 15%, which would be booked over the next two years. Meanwhile, Fitch expects a further drop in GPM in the medium term given the motivation for the company to cut prices to boost sales in 2021-2022. Tight Liquidity: GWTH's available cash to short-term debt remained weak at 0.5x at end-2020 (0.6x at end-2019). It had CNY849 million in unrestricted cash at end-2020 and CNY186 million in undrawn bank facilities, insufficient to cover CNY3 billion in short-term debt. This debt comprised CNY1.8 billion in short-term bank loans and USD137.6 million in outstanding senior notes. GWTH dealt with the USD137.6 million senior notes through tap issuance in January 2021, but its impaired internal cash generation would mean the company would depend mainly on refinancing to tackle its maturity wall in 1H22. High Refinancing Risk: Fitch believes the repayment pressure on GWTH is likely to intensify in 2H20, as the USD255 million senior notes due January 2023 become puttable in January 2022, and the USD200 million senior notes mature in March 2022. GWTH has communicated to Fitch that its refinancing plan will include issuing exchange bonds, and new offshore bond issuance. Fitch views the refinancing plans as having high execution risks, considering GWTH's narrowing access to bond markets, which is evident in rising bond yields and the shortened tenor when it tapped the US dollar bond markets in 2020. Feasible Business Turnaround Plan: GWTH is monetising its commercial properties and self-owned non-core investment properties. GWTH is boosting the commercial sales by reorganising a stronger sales team and providing certain discounts. GWTH achieved CNY943 million in consolidated sales in 1Q21, achieving 30% of its annual sales target. It also plans to dispose of some retail shops or malls in Nanjing, Wuxi and Zhuzhou, targeting CNY500 million each year during 2021-2023. Meanwhile, it is shifting back to residential property development mainly through project cooperation with other developers. Fitch thinks the turnaround plan is feasible, while any failure in execution would put pressure on the company's business sustainability. DERIVATION SUMMARY GWTH's ratings reflect its impaired internal liquidity generation, uncertainty in the execution of plans to refinance its capital-market debt maturing in the short term and sustained weak liquidity. Both GWTH and Guorui Properties Limited (B-/Negative) have high refinancing risk and tight liquidity. However, Guorui has stronger sales visibility, underpinned by its sufficient and quality saleable resources, of which more than 50% are from residential projects in Tier 1-3 cities (36% in Beijing) with satisfactory sell-through rates. Guorui has USD328.6 million bonds that are due or become puttable in 1H22, against sales of CNY10 billion a year. Guorui also has longer land bank life of more than nine years by GFA (GWTH: one year for residential; four years for commercial properties). The stronger internal cash generating ability supports the rating differential between Guorui and GWTH. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Consolidated contracted sales of CNY2.7 billion a year in 2021-2022; -- 25%-40% of sales receipts spent on land acquisitions each year in 2021-2022; -- EBITDA margin, excluding capitalised interest from the cost of goods sold, at 20% in 2021-2022; -- Cash collection ratio of 65%-70% in 2021-2022 (2020: 72%). KEY RECOVERY RATING ASSUMPTIONS -- The recovery analysis assumes that GWTH would be liquidated. -- Fitch has assumed a 10% administrative claim. Liquidation Approach -- The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realised in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors; -- Advance rate of 100% applied to cash and restricted cash. Fitch gives 100% advance rate to unrestricted cash and treats trade payable as the highest priority creditor into creditor repayment waterfall as unrestricted cash (GWTH: CNY849 million at end-2020) is unable to cover the trade payable (CNY1,261 million); -- The 60% inventory advance rate supported by properties located in Tier 2-3 cities in mainland China and Hong Kong that generate an EBITDA margin of below 20%; -- Advance rate of 60% applied to property, plant and equipment; -- Advance rate of 40% applied to investment properties is supported by GWTH's investment properties (IP) in Tier 2-3 cities, that together generate rental yield of less than 3%. The 40% advance rate is derived from estimated IP value (rental income / 6.5% rental yield) against year-end IP book value; -- Trade payables and bank borrowings are superior to offshore senior unsecured debt in the waterfall; -- Fitch used the post-refinancing amount of US dollar obligations (USD455 million) in the analysis. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' recovery for the bank loans and the senior unsecured notes. However, the Recovery Rating for senior unsecured debt is capped at 'RR4' because under Fitch's Country-Specific Treatment of Recovery Ratings Criteria, China falls into Group D of creditor friendliness, and the Recovery Ratings of issuers with assets in this group are subject to a cap of 'RR4'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Successful refinancing of upcoming maturities; -- Improvement in business sustainability, including generating stable contracted sales scale, and profitability that is in line with 'B' rated peers. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Inability to tackle short-term debt, in particular the USD255 million senior notes due January 2023 and puttable in January 2022, and the USD200 million senior notes maturing in March 2022; -- Worsening liquidity position; -- Failure to implement management's turnaround business plan, resulting in unsustainable business. 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 Tight Liquidity: GWTH's available cash (unrestricted cash + pledged cash for bank loans)/short-term debt) remained weak at 0.5x at end-2020 (0.6x at end-2019). It had CNY849 million in unrestricted cash at end-2020 and CNY186 million in undrawn bank facilities, insufficient to cover CNY3 billion short-term debt, comprising CNY1.8 billion in short-term bank loans and USD137.6 million in outstanding senior notes. GWTH dealt with the senior notes through tap issuance. However, its impaired internal cash generation ability means GWTH will depend mainly on refinancing to deal with its maturity wall in 1H22. More USD Bonds Raised Borrowing Costs: GWTH relied mainly on offshore bank loans through onshore guaranteed offshore borrowing, also known as NeiBaoWaiDai (accounting for 26% of total borrowing at end-2020), US dollar senior unsecured notes (54%) and onshore bank loans (19%). Fitch had seen average borrowing costs jump to 9% in 2020, from 7% in 2017-2019, on an increased portion of costly offshore US dollar bonds. SUMMARY OF FINANCIAL ADJUSTMENTS Capitalised interest is added back to calculate EBITDA. Fitch's calculation of CNY9.5 billion adjusted inventory at end-2020 included CNY5.3 billion net inventory (inventory - customer advance), CNY55 million PP&E, CNY91 million hotel and CNY468 million net claims from JV and associates (investment in JV/associates + due from JVs/associates - due to JVs/associates). Fitch has adjusted the value of investment properties based on 4% rental yield. 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. HYTERA COMMUNICATIONS: Wins August 9 Plan Exclusivity Extension --------------------------------------------------------------- Judge Erithe A. Smith of the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, extended the periods within which HCA West Inc., previously known as Hytera Communications America (West), Inc. and its affiliates have the exclusive right to file a plan of reorganization through and including August 9, 2021, and to solicit acceptances from creditors for its plan through and including October 8, 2021. With the extension, the Debtor will now be able to wait longer and work on the issues that might surface in their case, since the Debtors are expecting proposed terms or an outline regarding a consensual plan of liquidation from Motorola. A copy of the Court's Extension Order is available at https://bit.ly/2ODGjBB from PacerMonitor.com. About Hytera Communications America HCA West Inc., previously known as Hytera Communications America (West), Inc. -- https://www.hytera.us -- is a global company in the two-way radio communications industry. It has 10 international R&D Innovation Centers and more than 90 regional organizations around the world. Forty percent of Hytera employees are engaged in engineering, research, and product design. Hytera has three manufacturing centers in China and Spain. On May 26, 2020, Hytera sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 20-11507). At the time of the filing, the Debtor estimated assets of between $10 million and $50 million and liabilities of between $500 million and $1 billion. Judge Erithe A. Smith oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones, LLP as bankruptcy counsel; Steptoe & Johnson, LLP as corporate and special counsel; Imperial Capital, LLC as financial advisor; and David Stapleton of Stapleton Group as a chief restructuring officer. The Office of the U.S. Trustee appointed a committee of unsecured creditors on June 15, 2020. The committee is represented by Levene Neale Bender Yoo & Brill, LLP. KWG GROUP: S&P Alters Outlook to Stable & Affirms 'B+' ICR ---------------------------------------------------------- S&P Global Ratings, on April 16, 2021, revised its rating outlook on China-based developer KWG Group Holdings Ltd. to stable. S&P also affirmed the 'B+' long-term issuer credit rating on KWG and 'B' long-term issue rating on its senior unsecured notes. S&P said, "The stable outlook on KWG reflects our view that the company will continue to grow earnings while remaining disciplined towards land acquisitions over the next 12 months, such that its leverage will gradually improve. We also expect the company to maintain largely stable margins." KWG is likely to maintain financial prudence over the next 12-24 months, with disciplined land acquisitions and better cash management. This is on the back of the company's shift in focus on pursuing higher-quality growth and better capital efficiency rather than on chasing scale. S&P believes the change would result in moderate debt growth and a gradual restoration of its high leverage level over the next two years. Leverage weakened during KWG's aggressive expansion from 2016-2019. In 2020, the company reduced its land acquisitions and its oversized cash balance. Attributable land costs fell to Chinese renminbi (RMB) 19.4 billion, or 30% of attributable contracted sales, against 33% in 2019 and 53% in 2018. This helped the company to reduce its adjusted debt level to RMB77.9 billion, from RMB85.6 billion in 2019. S&P expects the company to remain disciplined in 2021 and spend 35%-40% of cash proceeds on land premium payment, or RMB26 billion-RMB28 billion. In S&P's view, KWG still has room to utilize its large cash balance for debt repayment. By the end of 2020, the company has RMB45 billion in cash balance on hand, still high at about 57% of its reported borrowings and 1.8x of short-term borrowings. KWG's abundant saleable resources in economically well-developed regions will drive further earnings growth and cash flow for land replenishment. The company has RMB205 billion of saleable resources for 2021, with 83% located in the Greater Bay Area and Yangtze River Delta. Majority of these were entered into after 2016 and are located in higher-tier cities where local demand is strong and sell-through is robust. S&P said, "As such, we believe the company's contracted sales will grow to RMB120 billion-RMB125 billion in 2021, implying a sell-through rate of about 60%, from about RMB103 billion in 2020. This should support our estimation of its proportionated revenue growth of 15%-20% annually over the next two years. Highly visible cash generation will also cover its land replenishment needs." Transparency should gradually improve as KWG consolidates more of its projects. The company is consolidating 93% of its newly acquired saleable resources in 2020, a marked increase from 74% in 2019. This level is higher than its 2020 proportionate revenue, with only 65% being generated from subsidiaries. This contribution should increase towards 70% over the next three years, in its view. The current low consolidation ratio presents a risk as information disclosure for joint ventures tend to be more limited. The visibility on future earnings is also low and creates a large gap between the consolidated and look-through leverage. In 2020, its debt-to-EBITDA ratio was 6.6x on a look-through basis, compared with consolidated debt-to-EBITDA of 10.2x. The gap has closed slightly, against 8.5x and 13.8x in 2019, and should continue to gradually converge further. S&P said, "We expect KWG's margin to stay largely stable at 29%-31% over the next two years. In our view, the cost of KWG's existing land bank as at end-2020 is competitive as the costs only account for about 30% of its intended average selling price." This is partly due to its long operating history and emphasis on margins. Some of its projects, including some acquired long ago, would command high margins of above 50%, which could somewhat balance the margin compression faced by industry peers. The company's increasing pipeline in urban redevelopment projects provides support in saleable resources and to some extent margins. The company accelerated its resources allocation to this segment only in 2018, and it is becoming an important land-bank channel. As of end-2020, KWG has signed 34 such projects, mainly surrounding Guangzhou, Foshan, and Dongguan. These cover a potential conversion of 22 million square meters (sqm) of saleable resources. This pipeline is sizable against the company's annual sales gross floor area (GFA) of 6.1 million sqm in 2020. These projects have made good progress, including two with the bidding process completed and three that have started demolition. S&P estimates the projects will contribute about RMB10 billion of saleable resources for 2021 and more than RMB20 billion for 2022. S&P said, "We forecast KWG's rental income will cover about 20% of interest expenses over the next two years, underpinned by steady growth of 20%-30% annually. In our view, KWG's offices and malls are generally of high quality and most of them located in higher-tier cities such as Guangzhou, Shanghai, Beijing, and Chengdu." The company also has a hotel portfolio generating relatively steady income. On top of organic growth from 37 existing malls, office, and hotels, KWG has 26 shopping malls and 10 office buildings tentatively slated to open over the next three to four years. KWG's strong funding access with well-managed maturities continue to support the rating. As of end-2020, the company has a well-balanced debt mix, with about 40% from banks borrowings and 60% from onshore and offshore capital markets. The company's weighted average maturity profile of about three years is also high among its similarly rated peers, which generally have high profiles of 2-2.5 years. S&P said, "The stable outlook on KWG reflects our view that the company will continue to grow its proportionated revenue and maintain largely stabilized margins, such that its leverage will mildly improve over the next 12 months. We also expect the company to maintain disciplined land acquisitions and capital expenditure in investment properties such that its debt growth will slow. "We could lower the rating on KWG if the company's proportionated revenue growth and margins are weaker than our expectation or if the company fails to control its debt growth due to more aggressive expansion. Pointing to this weakness would be look-through debt-to-EBITDA ratio increasing to above 7x without signs of improvement, or its consolidated debt-to-EBITDA ratio deteriorating from the current level. "Rating upside is limited for the next 12 months. However, we could raise the rating if KWG can significantly enhance its profitability and increase its revenue while maintaining prudent financial discipline, such that its look-through debt-to-EBITDA ratios sustainably improve to below 5x, while its consolidated debt to EBITDA improves to about 7x or less." LUCKIN COFFEE: Gets $250MM Investment From Centurium, Joy Capital ----------------------------------------------------------------- Luckin Coffee Inc. (in Provisional Liquidation) (OTC: LKNCY) on April 15, 2021, announced that it has entered into an investment agreement (the "Investment Agreement") with an affiliate of Centurium Capital, as the lead investor, and Joy Capital. Both Centurium Capital and Joy Capital are leading private equity investment firms in China and current shareholders of the Company. Pursuant to the Investment Agreement, (i) Centurium Capital has agreed to an investment, through a private placement, totaling approximately US$240 million in senior convertible preferred shares of the Company ("Senior Preferred Share(s)"), and (ii) Joy Capital has agreed to an investment, through a private placement, totaling approximately US$10 million in Senior Preferred Shares (collectively, the "Transactions"). Under certain circumstances, Centurium Capital and Joy Capital may be able to upsize on a pro rata basis for an additional US$150 million. The closing of the Transactions will be subject to a series of closing conditions, including the implementation of a restructuring of Luckin Coffee's $460 million 0.75% Convertible Senior Notes due 2025 through a scheme of arrangement under section 86 of the Cayman Islands Companies Act (2021 Revision) in accordance with the terms of the recently announced restructuring support agreement. Luckin Coffee plans to use the proceeds of the investment to facilitate the Company's proposed offshore restructuring and fulfill its obligations under its recently announced settlement with the U.S. Securities and Exchange Commission. The Transactions allow the Company to focus its balance sheet on the continued execution of its business plan, focused on growing the core coffee business and achieving its long-term growth targets. According to a U.S. regulatory filing, the salient terms of the transactions include: * Purchase and Sale: The Company will initially issue and sell to Centurium Capital a total of 295,384,615 Senior Preferred Shares and Joy Capital a total of 12,307,692 Senior Preferred Shares, at the issue price of US$0.8125 per Senior Preferred Share (being equivalent to US$6.50 per ADS on an as-converted basis). * Conversion: At the holder's option, each Senior Preferred Share can be convertible into Class A Ordinary Shares of the Company (or an equivalent number of ADSs) at the then applicable conversion price. * Price Adjustment: The applicable initial conversion price shall be equal to US$0.8125 per Senior Preferred Share (being equivalent to US$6.50 per ADS on an as-converted basis) and be subject to certain customary adjustments * Upsize Right: If the Company has not received an approval from the State Administration of Foreign Exchange to repatriate any funds outside of China by a benchmark date, which is the later of November 15th, 2021 and the 60th day after the date on which the petition to convene a scheme meeting is filed in Cayman court, Centurium Capital and its permitted designated investors will have the right to purchase a pro rata entitlement to an additional 184,615,385 Senior Preferred Shares, at the issue price of US$0.8125 per Senior Preferred Share (being equivalent to US$6.50 per ADS on an as-converted basis), by notifying the Company and Joy Capital of its decision to exercise such right within 40 days after such benchmark date. If Centurium Capital exercises such right, Joy Capital will have the right to purchase a pro rata entitlement to the additional 184,615,385 Senior Preferred Shares, at the issue price of US$0.8125 per Senior Preferred Share (being equivalent to US$6.50 per ADS on an as-converted basis), by notifying the Company and Centurium Capital within 5 business days thereafter. * Voting Rights: Each Senior Preferred Share will be entitled to vote on all matters submitted to a vote of the holders of Class A Ordinary Shares on an as-converted basis, together with the holders of Class A Ordinary Shares, as one single class. A copy of the SEC filing is available at https://bit.ly/3e9iHNL Negotiations between Luckin Coffee, Centurium Capital and Joy Capital were supported throughout by the Company's financial advisor, Houlihan Lokey (China) Limited, legal advisors, Davis Polk & Wardwell LLP and Harney Westwood & Riegels, and the Joint Provisional Liquidators, Mr. Alexander Lawson of Alvarez & Marsal Cayman Islands Limited and Ms. Wing Sze Tiffany Wong of Alvarez & Marsal Asia Limited. About Luckin Coffee Luckin Coffee (OTC: LKNCY) -- http://www.luckincoffee.com/-- has pioneered a technology-driven retail network to provide coffee and other products of high quality, high affordability, and high convenience to customers. Empowered by big data analytics, AI, and proprietary technologies, Luckin Coffee pursues its mission to be part of everyone's everyday life, starting with coffee. Luckin Coffee was founded in 2017 and is based in China. In July 2020, Luckin Coffee called in liquidators in the Cayman Islands to oversee a corporate restructuring and negotiate with creditors to salvage its business, less than four months after shocking the market with a US$300 million accounting fraud. The Company hired Houlihan Lokey as financial advisers to implement a workout with creditors. The start-up company also named Alexander Lawson of Alvarez & Marsal Cayman Islands and Tiffany Wong Wing Sze of Alvarez & Marsal Asia to act as "light-touch" joint provisional liquidators (JPLs) under a Cayman Islands court order. The Joint Provisional Liquidators of Luckin Coffee, Alexander Lawson of Alvarez & Marsal Cayman Islands Limited and Wing Sze Tiffany Wong of Alvarez & Marsal Asia Limited, on Feb. 5, 2021, filed a verified petition under chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-10228). The Chapter 15 Petition seeks, among other things, recognition in the United States of the Company's provisional liquidation pending before the Grand Court of the Cayman Islands. DLA Piper LLP (US), led by Thomas R. Califano and Robert Craig Martin, is the U.S. counsel. ================= H O N G K O N G ================= AJISEN CHINA: Former CFO Sentenced to 6 Years for Embezzlement -------------------------------------------------------------- Caixin Global reports that Robert Lau Ka Ho, a former executive of Ajisen (China) Holdings Ltd., was sentenced on April 16 by a Hong Kong court to six years and eight months in prison for embezzlement, local media said. Mr. Lau, who served as chief financial officer (CFO) of Hong Kong-listed Ajisen China from 2008 to 2018, stole HK$25.9 million ($3.3 million) in total from the company by altering about 180 corporate checks with an erasable pen over the course of almost seven years, Caixin relates citing Hong Kong media reports. Mr. Lau's lawyer said the ex-CFO suffered from depression and had paid about HK$29 million to compensate the company for its losses, the reports said. Ajisen (China) Holdings Limited operates a chain of casual restaurants that offers Japanese ramen and Japanese-style dishes in Hong Kong and People's Republic of China. ========= I N D I A ========= ANDAL AND COMPANY: CRISIL Keeps B+ Debt Rating in Not Cooperating ----------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Sree Andal and Company (SAC) continue to be 'CRISIL B+/Stable Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 22 CRISIL B+/Stable (Issuer Not Cooperating) Proposed Cash 1 CRISIL B+/Stable (Issuer Not Credit Limit Cooperating) CRISIL Ratings has been consistently following up with SAC for obtaining information through letters and emails dated September 28, 2020 and March 17, 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 SAC, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SAC is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SAC continues to be 'CRISIL B+/Stable Issuer Not Cooperating'. SAC, set up in 1992 and based in Chennai, is a partnership concern promoted by Mr. M Subbiah and his family. The firm trades in thermo-mechanically treated bars, channels, angles, joints, and beams. ANSAL LOTUS: Insolvency Resolution Process Case Summary ------------------------------------------------------- Debtor: M/s Ansal Lotus Melange Projects Private Limited 4648/21, Room No. 302 Third Floor Shadumal Building, Daryaganj New Delhi Central Delhi 11002 Insolvency Commencement Date: April 7, 2021 Court: National Company Law Tribunal, New Delhi Bench-III Estimated date of closure of insolvency resolution process: October 4, 2021 (180 days from commencement) Insolvency professional: Mr. Devendra Umrao Interim Resolution Professional: Mr. Devendra Umrao B-43A, First Floor Kalkaji, New Delhi 110019 E-mail: dev.umrao@gmail.com - and - 107, First Floor New Delhi House 27, Barakhamba Road New Delhi 110001 E-mail: cirpansal@gmail.com Classes of creditors: Home-Buyers under the Real Estate Project – Financial Creditors in class Insolvency Professionals Representative of Creditors in a class: Mr. Debashish Nanda CS-14, C-Floor, Ansal Plaza Vaishali, Ghaziabad Uttar Pradesh 201010 E-mail: dnanda.cma@gmail.com Mr. Ashish Singh 811, 8th Floor Aggarwal Millenium Tower 1 Netaji Subhase Place, Pitampura New Delhi 110034 E-mail: lsaadvocates@gmail.com Mr. Navneet Kakkar SCO 145, 2nd Floor Above ICICI Bank Sector 28-D Chandigarh 160002 E-mail: kakkarchd@rediffmail.com Last date for submission of claims: April 23, 2021 AVVAS INFOTECH: CRISIL Lowers Rating on INR4.07cr Loan to D ----------------------------------------------------------- CRISIL has downgraded the ratings of Avvas Infotech Private Limited (AIPL) to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1.02 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL A4 ISSUER NOT COOPERATING') Cash Credit 4.07 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B/Stable ISSUER NOT COOPERATING') Funded Interest 3.11 CRISIL D (ISSUER NOT Term Loan COOPERATING; Downgraded from 'CRISIL B/Stable ISSUER NOT COOPERATING') Proposed Long 3.50 CRISIL D (ISSUER NOT Term Bank COOPERATING; Downgraded Loan Facility from 'CRISIL B/Stable ISSUER NOT COOPERATING') Working Capital 21.80 CRISIL D (ISSUER NOT Term Loan COOPERATING; Downgraded from 'CRISIL B/Stable ISSUER NOT COOPERATING') CRISIL Ratings been consistently following up with AIPL for obtaining information through letters and emails dated July 25, 2020 and January 19, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of PPR. This restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on PPR is consistent with 'Assessing Information Adequacy Risk'. Therefore, on account of inadequate information and lack of management cooperation coupled with adverse information in the public domain, CRISIL has downgraded the ratings to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'. The downgrade reflects delays by AIPL in servicing of debt obligation. Incorporated in 2007 and based at Bengaluru, AIPL provides IT, ITES and HR services. The company is managed by its managing director, Mr. AVS Sarma. CITY MART: Insolvency Resolution Process Case Summary ----------------------------------------------------- Debtor: City Mart Maintenance Services Private Limited Kh.No. 300, Gopi Ram Building Sultanpur Village, South Delhi New Delhi 110030 India Insolvency Commencement Date: March 18, 2021 Court: National Company Law Tribunal, Gurugram Bench Estimated date of closure of insolvency resolution process: September 14, 2021 (180 days from commencement) Insolvency professional: Santosh Sharma Interim Resolution Professional: Santosh Sharma c/o Rajrani Sharma 6/129 Near Prakash Dairy Lodhi Mohalla, Shahdara New Delhi National Capital Territory of Delhi 110032 E-mail: sci.santoshsharma@gmail.com - and - Unit No. 110, First Floor JMD Pacific Square Sector 15, Part II Gurugram, Haryana 122001 E-mail: cirp.citymart@gmail.com Last date for submission of claims: April 23, 2021 CORACIAS PROJECTS: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Coracias Projects Private Limited House No. 2067 B, G/F E-II, Molar Band Extn Gali No. 57 Badarpur, New Delhi 110044 IN Insolvency Commencement Date: April 9, 2021 Court: National Company Law Tribunal, New Delhi Bench-IV Estimated date of closure of insolvency resolution process: October 6, 2021 (180 days from commencement) Insolvency professional: Atul Kumar Kansal Interim Resolution Professional: Atul Kumar Kansal SCO-61, 3rd Floor Old Judicial Complex Sector-15, Civil Lines Gurgaon 122001 E-mail: cakansal@yahoo.com - and - Immaculate Resolution Professionals Private Limited Unit No. 112, First Floor Tower-A, Spazedge Commercial Complex Sector-47, Sohna Road Gurgaon 122018 E-mail: cirp.coracias@gmail.com Last date for submission of claims: April 26, 2021 FLORA DYEING: Insolvency Resolution Process Case Summary -------------------------------------------------------- Debtor: Flora Dyeing House Private Limited Registered office: 3rd Floor, C-6 DSIDC Industrial Complex Rohtak Road Nangloi Delhi 110041 Also at: Plot No. 392 HSIDC Barhi Disst Sonipat Haryana 131028 Insolvency Commencement Date: April 7, 2021 Court: National Company Law Tribunal, New Delhi Bench-III Estimated date of closure of insolvency resolution process: October 4, 2021 (180 days from commencement) Insolvency professional: Hemant Gupta Interim Resolution Professional: Hemant Gupta 24-A, Pocket A DDA LIG Flats Hari Nagar New Delhi 110064 E-mail: hka.consultants@gmail.com fdh.cirp@gmail.com Last date for submission of claims: April 26, 2021 HEALTHWARE PRIVATE: CRISIL Withdraws B+ Rating on INR18cr Loan -------------------------------------------------------------- Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of Healthware Private Limited (HPL) to 'CRISIL B+/Stable Issuer Not Cooperating'. CRISIL Ratings has withdrawn its rating on bank facility of HPL following a request from the company and on receipt of a 'no dues certificate' from the banker. Consequently, CRISIL Ratings is migrating the ratings on bank facilities of HPL from 'CRISIL B+/Stable Issuer Not Cooperating' to 'CRISIL B+/Stable'. The rating action is in line with CRISIL Ratings' policy on withdrawal of bank loan ratings. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Working Capital Facility 18 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING'; Rating Withdrawn) HPL, established in 1998, trades in medical equipment. The company's day-to-day operations are managed by its promoters, Mr. K Ram Narayanan and Mr. P Shankar Rao. KHATOR TECHNICAL: CRISIL Lowers Rating on INR3.0cr Cash Loan to D ----------------------------------------------------------------- CRISIL Ratings has downgraded its ratings on the bank facility of Khator Technical Textiles Ltd (KTTL) to 'CRISIL D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'. The downgrade reflects poor liquidity profile marked by delay in servicing of term debt obligation. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.7 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 3.0 CRISIL D (Downgraded from 'CRISIL B+/Stable') Letter of Credit 1.0 CRISIL D (Downgraded from 'CRISIL A4') Packing Credit 2.0 CRISIL D (Downgraded from 'CRISIL A4') Proposed Long Term 4.3 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B+/Stable') Term Loan 9.0 CRISIL D (Downgraded from 'CRISIL B+/Stable') The ratings continue to reflect KTTL's small scale of operations and large working capital requirement. These weaknesses are partially offset by the extensive experience of the promoter. Key Rating Drivers & Detailed Description Weaknesses * Delays in Servicing of Debt: There have been delays in term loan servicing on account of poor liquidity position. * Small scale of operations: Scale of operations is modest, as reflected in estimated revenue of INR20 crore in fiscal 2020. The small scale of operations restrict the bargaining power with customers and suppliers. * Large working capital requirement: Operations are working capital intensive, with gross current assets (GCA) of 217 days estimated as of March 31, 2020 driven by high debtors of around 90-95 days. Working capital cycle is expected to remain at a similar level over the medium term. Strengths * Extensive experience of the promoter: The promoter's decade-long experience in the technical textile industry and his strong technical expertise should continue to support the business. Liquidity: Poor Liquidity is poor as reflected in delays in debt servicing. Rating Sensitivity factors Upward factors * Track record of timely debt servicing for 90 days or more * Significant improvement in liquidity due to restructuring of debt or infusion of equity Incorporated in 2013, Mumbai-based KTTL manufactures geo-technical textiles, which find application in infrastructure work, such as construction of roads, dams, and inland fillings. The company plans to undertake expansion to increase its capacity. Mr. Amit Khator is the promoter. KUMUD RICE: CRISIL Withdraws B+ Rating on INR8cr Cash Loan ---------------------------------------------------------- CRISIL Ratings has withdrawn its rating on the bank facilities of Kumud Rice And Dal Mill (KRDM) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 8 CRISIL B+ /Stable (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL Ratings has been consistently following up with KRDM for obtaining information through letters and emails dated August 31, 2019 and February 6, 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 KRDM. This restricts CRISIL Ratings' ability to take a forward-looking view on the credit quality of the entity. CRISIL Ratings believes that rating action on KRDM is consistent with 'Assessing Information Adequacy Risk'. CRISIL Ratings has Continues the ratings on the bank facilities of KRDM to 'CRISIL B+/Stable Issuer not cooperating'. CRISIL Ratings has withdrawn its rating on the bank facilities of KRDM on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. KRDM is a partnership firm established in 1994, and is currently managed by three partners: Mr Sanjeev Kumar Gupta, Mr Tushar Gupta, and Mr Triloknath Gupta. The firm operates three plants in Hardoi, Uttar Pradesh. LATE SMT: CRISIL Withdraws B+ Rating on INR3.09cr Term Loan ----------------------------------------------------------- Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of Late Smt. Vidyawanti Labhu Ram Foundation For Science Research and Social Welfare (LSV) to 'CRISIL B+/Stable/CRISIL A4/Issuer Not Cooperating'. CRISIL Ratings has withdrawn its rating on bank facility of LSV following a request from the company and on receipt of a 'no dues certificate' from the banker. Consequently, CRISIL Ratings is migrating the ratings on bank facilities of LSV from 'CRISIL B+/Stable/CRISIL A4/Issuer Not Cooperating' to 'CRISIL B+/Stable/CRISIL A4'. The rating action is in line with CRISIL Rating's policy on withdrawal of bank loan ratings. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1.2 CRISIL A4 (Migrated from 'CRISIL A4 ISSUER NOT COOPERATING'; Rating Withdrawn) Proposed Term Loan 3.09 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING'; Rating Withdrawn) Term Loan 6.31 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING'; Rating Withdrawn) LSV was incorporated as a trust in 1999, in memory of the Late Smt Vidyawanti Labhu Ram, by her son and founder president, Mr Surender Kumar Aggarwal. Currently, the Aggarwal family is running four institutes and one general hospital. MJR 92: CRISIL Keeps B Debt Rating in Not Cooperating ----------------------------------------------------- CRISIL Ratings said the rating on bank facilities of Sri MJR 92 continues to be 'CRISIL B/Stable Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 10 CRISIL B/Stable (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with MJR for obtaining information through letters and emails dated September 28, 2020 and March 17, 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 MJR, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on MJR is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of MJR continues to be 'CRISIL B/Stable Issuer Not Cooperating'. MJR was set up in 2016 at Bengaluru as a partnership firm by Mr Gautam K and Mrs. Kavitha Praveen Borana. The firm trades in gold and silver ornaments. NEHA INFRASTRUCTURES: CRISIL Cuts Rating on INR3.6cr Loan to D -------------------------------------------------------------- CRISIL Ratings has downgraded its ratings on the bank facilities of Neha Infrastructures (NI) to 'CRISIL D/CRISIL D' from 'CRISIL B/Stable/CRISIL A4'. The downgrade reflects continuous overdrawals in the cash credit facility during last two months through March 2021. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 3.6 CRISIL D (Downgraded from 'CRISIL B/Stable') Proposed Fund- 0.83 CRISIL D (Downgraded from Based Bank Limits 'CRISIL B/Stable') The ratings also factor in the firm's modest scale of operations, large working capital requirement and presence in the highly fragmented civil constructing industry. These weaknesses are partially offset by the extensive experience of the promoters. Key Rating Drivers & Detailed Description Weakness: * Modest scale of operations: The civil construction industry is highly fragmented and the consequent intense competition may continue to constrain scalability, pricing power and profitability. Revenue was modest at INR7.87 crore in fiscal 2020. Although expected to improve in fiscal 2021 with higher orders under execution it is expected to remain modest at over INR10 crore for fiscal 2021. * Large working capital requirement: Gross current assets were high at 600-800 days in the past three fiscals. Gross current assets were high at 635 days as of March 31, 2020, due to large inventory of 329 days and receivables of 210 days, along with security deposit, retention and margin money with government authorities. Strengths: * Extensive experience of the proprietor: The two-decade-long experience of the proprietor, his strong understanding of the market dynamics and healthy relationships with suppliers and customers will continue to support the business. Liquidity: Poor Liquidity is likely to remain stretched over the medium term. The bank limits are fully utilized and also there has been instances of continuous overdrawals for over 30 days. Following the overdrawals, the account has been restructured during March 2021, converting the overdrawn portion into a term loan. Improvement in working capital management and timely repayment of term loan remains a key rating driver. Rating Sensitivity Factors Upward factors * Track record of timely debt servicing for 90 days or more * Sustained revenue growth and improvement in financial risk profile NI is a Bengaluru-based proprietorship firm. It was set up in 2004 by Mr. Sundar Raju. The firm undertakes civil construction work mainly for overhead tanks in and around Bangalore, Karnataka. PENGUIN PETROLEUM: CRISIL Hikes Rating on INR7.31cr Loan to B ------------------------------------------------------------- CRISIL Ratings has upgraded its rating on the long-term bank facilities of Penguin Petroleum Services Pvt Ltd (PPSPL) to 'CRISIL B/Stable' from 'CRISIL B-/Stable' and has reaffirmed its 'CRISIL A4'.rating on the short term bank facility. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Overdraft Facility 1.25 CRISIL A4 (Reaffirmed) Packing Credit 8.25 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 0.19 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Term Loan 7.31 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') The upgrade reflects CRISIL Ratings' belief that PPSPL's business risk profile will improve, driven by healthy revenue growth and operating margin of around 25%. The growth should be supported by the healthy pipeline of orders worth INR20 crore to be executed in the first quarter of fiscal 2022. This will lead to improvement in liquidity marked by comfortable net cash accruals to debt repayment ratio of over 2.5 times. While nationwide lockdown and other measures taken by the central and various state governments towards containment of the Covid-19 pandemic, impacted the performance of PPSPL, with revenue of around INR12 crore and profitability of around 20% estimated for fiscal 2021; however the liquidity was supported by Guaranteed Emergency Credit Line (GECL) of INR3 crore. The ratings continue to reflect the modest scale of operations amidst intense competition and the large working capital requirement. These weaknesses are partially offset by the extensive experience of the promoters in the manufacturing accessories used in the oil and gas exploration segment, and the company's moderate financial risk profile. Key Rating Drivers & Detailed Description Weakness: * Modest scale of operations amid intense competition: Revenue have moderated to INR12 crore in fiscal 2021 from INR23.13 crore in fiscal 2020 due to lockdown-related restrictions. While revenues are expected to grow over medium term, intense competition may continue to constrain scalability, pricing power, and profitability. * Large working capital requirement: Gross current assets (GCAs) stood at 539 days estimated as on March 31, 2021, because of stretched receivables of 120 days and inventory of 350 days. GCAs have been consistently high in the past five years. Working capital requirement is expected to remain large over medium term. Strengths: * Extensive experience of the promoters: Benefits from the four-decade-long experience of the promoters in manufacturing accessories for the oil and gas exploration segment, and their longstanding relationships with the customers will continue to support the business. * Moderate financial risk profile: Financial risk profile is marked by a moderate networth of INR10.5 crore and moderately high total outside liabilities to adjusted networth ratio of 2.39 times estimated as of March 31, 2021. Debt protection metrics are adequate, with interest coverage of 1.7 times estimated for fiscal 2021. Liquidity: Stretched Bank limit utilization is moderate at around 76 percent for the past twelve months ended January 2021. Cash accrual are expected to be over INR4.8-5.4 crores which are sufficient against term debt obligation of INR1.9-2.1 crores over the medium term. In addition, it will act as cushion to the liquidity of the company. Current ratio stood at 1.45 times estimated on March 31, 2021. Unsecured loan from promoter stood at INR5.7 crore as of 31st March 2021. The promoters are likely to extend timely support via unsecured loans to cover the working capital requirement and debt obligation. Outlook Stable CRISIL Ratings believes PPSPL will continue to benefit from the extensive experience of its promoters and their established relationships with customers. Rating Sensitivity factors Upward factors * Sustained improvement in net cash accruals to over INR5.5 crore * Sustained and sharp improvement in working capital cycle. Downward factors * Net cash accruals to debt repayment ratio of below 1 time * Increase in working capital requirement, larger-than-expected, debt-funded capex, or more-than-expected dividend pay-out, weakening the financial risk profile, particularly liquidity PPSPL was incorporated in 2005, by the promoter, Mr Cherian A Paul. The company, based in Raigad, Maharashtra, manufactures accessories used in oil and gas exploration. PEREGRINE PHOSPHATE: CRISIL Keeps B Rating in Not Cooperating ------------------------------------------------------------- CRISIL Ratings said the rating on bank facilities of Peregrine Phosphate Private Limited (PPPL) continues to be 'CRISIL B/Stable Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 1 CRISIL B /Stable (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with PPPL for obtaining information through letters and emails dated September 28, 2020 and March 17, 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 PPPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on PPPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of PPPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'. Incorporated in 2013, PPPL is a Bengaluru-based company engaged in trading of chemicals and fertilizers, pesticides and plant nutritional and bio-organic products. The operations are managed by Mr. Rahul Nilkanth. RADIANT POLYMERS: CRISIL Assigns B+ Rating to INR41.3cr NCD ----------------------------------------------------------- CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating on the NCD program of Radiant Polymers Private Limited (RPPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Non-Convertible Debentures 41.3 CRISIL B+/Stable (Assigned) The rating reflects a 3-month track record of servicing interest obligations by RPPL post the restructuring of its NCDs in December 2020, and the expected improvement in performance from fiscal 2022 in line with the recovery in the automobile sector, which will enable it to generate adequate accruals to meet its repayment obligations in fiscal 2023. In September 2020, the company had defaulted on its repayment obligations on account of significant financial stress and liquidity shortfall due to delay in collections of receivables as well as high inventory, further exacerbated by the pandemic. In October 2020, the company requested its lender to restructure the NCDs under the Prudential Framework for Resolution Framework for Covid-19 related stress issued by RBI. The request for restructuring was approved on December 14, 2020, post which the restructured plan was operational. As per the restructuring, moratorium period for principal repayment was extended by 2 years (fiscal 2023) while coupon payment date was changed from 15th of every month to 30th/31st of each month. Further, post the restructuring, all collections (~INR15-17 crore per month) are routed through an escrow account which is closely monitored by the lender. The company also has 9 months to build a DSRA of INR2.25 crore. The company has already deposited INR75 lakhs in the DSRA account. Additionally, promoters have demonstrated a track record of supporting the company in the past by infusing equity in fiscal 2015 and fiscal 2017 and support will be forthcoming in case of any exigencies. The company's performance has already shown improvement from August 2020 with recovery in offtake from the automobile sector. Additionally, the company has initiated various cost-saving measures including closure of loss-making Bhiwadi unit, rationalization various fixed costs and re-alignment of the organization structure. Additionally, in fiscal 2021 company completed and stabilized operations of its Gujarat unit which should lead to better absorption of fixed costs going forward. CRISIL Ratings believes that the company will be able to make adequate cash flows to service its interest obligations as well as principal obligation that is coming up in fiscal 2023. The ratings continue to reflect the extensive experience of RPPL's promoters in the auto components industry and its diversified revenue base. These strengths are partially offset by the company's modest financial risk profile and weak liquidity. Key Rating Drivers & Detailed Description Strengths: * Extensive experience of the promoters: The company benefits from the promoters' experience of almost three decades in the auto component industry, their strong understanding of market dynamics, and healthy relationships with principal customers including Honda Motorcycle & Scooter India Pvt. Ltd., Maruti Suzuki India Ltd (rated 'CRISIL AAA/Stable/CRISIL A1+'), Hanon, Valeo and Bosch India. * Diversified revenue profile: Revenue base remains fairly diversified with presence in automotive (80-85% of the revenue) and lighting (15-20%) segments. The company also has diversified product offering including engine cooling products, automotive engineering products and gear shifting assemblies, pedals and engine transmission. Additionally, the company is in the process of various product developments with existing OEMs and new product developments for new OEMs which should further benefit business risk profile over the medium term. Weakness: * Modest financial risk profile: Losses in the past has led to erosion of networth. While exceptional costs like inventory write-off (INR8 crore in fiscal 2018) and shifting of Gujarat (Vani) unit from rented premises to own premises (in fiscal 2019) leading to duplication of costs resulted in PAT losses in the past, the overall slowdown in the auto sector since the second quarter of fiscal 2020, further exacerbated by the pandemic has led to losses in fiscal 2020 and 2021 as well. While performance, both in terms of revenue as well as profitability is expected to improve from hereon, given the high interest payments (Rs 13 crore per year till fiscal 2023), the company is expected to report PAT losses over the medium term. Consequently, financial risk profile is expected to remain modest over the medium term and improve only gradually. Liquidity: Stretched With the restructuring of the NCDs, principal repayment has been extended by 2 years (fiscal 2023). Interest payments however remain high at (INR13 crore per year till fiscal 2023 which should keep liquidity profile weak over the medium term. Promoters have however, demonstrated a track record of supporting the company in the past by infusing equity in fiscal 2015 and fiscal 2017. Support from promoters in case of exigencies is expected to be forthcoming. Outlook: Stable CRISIL Ratings believes RPPL will benefit from the extensive experience of its promoters, and it's fairly diversified revenue base and healthy relationships with customers over the medium term. Rating Sensitivity factors Upward factors: * Sustained revenue growth of 10-12% as operating margin improves to ~12-13% leading to better than expected cash generation * Equity infusion leading to significant improvement in financial risk profile and liquidity Prudent working capital management Downward factors: * Sustained decline in revenue and operating profitability, adversely impacting cash generation * Any large debt-funded capital expenditure, weakening the capital structure further RPPL was incorporated on August 05, 1988 by Mr. Nalin Bahl and Mr. Kumud Jayee. Both the promoters have over three decades of experience in the business of engineered molded plastic components. RPPL has been engaged in manufacturing of engineered plastic molded components and draws majority of revenue from automotive industry. RPPL is also engaged in the production of lighting components which majorly involves components for LED lamps. The major product profiles include: Engine cooling products, automotive engineering products and gear shifting assemblies, pedals and engine transmission which is supplied directly to the OEMs. In addition, some sales are also made to Tier I auto ancillaries that further supply to other OEMs. RPPL has five manufacturing facilities: 2 in Ghaziabad (Uttar Pradesh) and one each in Uttarakhand, Rajasthan and Gujarat. RAIPUR POLYMERS: CRISIL Lowers Rating on INR7.5cr Cash Loan to D ---------------------------------------------------------------- CRISIL has downgraded the rating on the bank facility of Raipur Polymers Private Limited (RPPL) to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating', as there are delays in repayment of term loan and overdrawals in Cash Credit facility for more than 30 days. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.5 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL A4 ISSUER NOT COOPERATING') Cash Credit 7.5 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Term Loan 2.25 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B+/Stable ISSUER NOT COOPERATING') CRISIL has been consistently following up with RPPL for obtaining information through letters and emails dated September 29, 2020 and October 26, 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 RPPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on RPPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, CRISIL has downgraded the rating on the bank facility of Raipur Polymers Private Limited (RPPL) to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating', as there are delays in repayment of term loan and overdrawals in Cash Credit facility for more than 30 days. Incorporated in 2012 and promoted by Raipur-based Mr. Praveen Bhowray, Mr. Mohan Budhwani, and Mr. Ravishankar Choudhary, RPPL manufactures polypropylene and high-density polyethylene woven bags that are used for packaging in industries such as cement, fertilizer, and food packaging. RAJARAJESHWARE BUILDDCON: CRISIL Withdraws B Rating on LT Loan -------------------------------------------------------------- Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of Rajarajeshware Builddcon Private Limited (RBPL) to 'CRISIL B/Stable /Issuer not cooperating'. CRISIL Ratings has withdrawn its rating on bank facility of RBPL following a request from the company and on receipt of a 'no dues certificate' from the banker. Consequently, CRISIL Ratings is migrating the ratings on bank facilities of RBPL from 'CRISIL B/Stable /Issuer Not Cooperating' to 'CRISIL B/Stable'. The rating action is in line with CRISIL Ratings' policy on withdrawal of bank loan ratings. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Loan 5.9 CRISIL B/Stable (Migrated from 'CRISIL B/Stable ISSUER NOT COOPERATING; Rating Withdrawn) RBPL, incorporated in 2007 and promoted by Mr. Ramanlal M Sharma, develops residential real estate projects in Bengaluru. RUBBER O: CRISIL Lowers Rating on INR10cr Loans to D ---------------------------------------------------- Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of Rubber O Malabar Products Private Limited (ROM) to 'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of the rating. Consequently, CRISIL Ratings is downgraded the rating on bank facilities of ROM from 'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating' to 'CRISIL D'. The downgrade reflects delays in servicing of debt obligations. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.73 CRISIL D (Downgraded from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Long Term Loan 5.27 CRISIL D (Downgraded from 'CRISIL B+/Stable ISSUER NOT COOPERATING') The rating continues to reflect the working capital intensive operations and susceptibility of margins to volatility in raw material prices. These rating weakness are partially offset by the extensive experience of the promoters and established market presence. Key Rating Drivers & Detailed Description Weakness: * Working capital intensive operations: Operations are working capital intensive, marked by gross current assets of 170 days as of March 31, 2020, driven by large inventory of around 86 days * Susceptibility of margins to volatility in raw material prices: The prices of raw material such as rubber and carbon black are highly volatile and has decreased over the past few years. Thus, the firm's margins are exposed to risk of volatility in raw material prices. Strengths: * Promoter's extensive experience: The promoter has been in the industry for over 2 decades. The extensive experience of promoter will help a company in bringing significant business linkage over the medium term. Liquidity: Poor There have been delays in debt servicing. Rating Sensitivity factors Upward factor * Track record of timely debt servicing for at least 90 days * Improvement in business performance, leading to better liquidity ROM was incorporated in 2011, the firm is engaged in Manufacturing of Rubber Conveyor Belts and managed by Mohammed Rashid and M. Usman. S S HYUNDAI: CRISIL Lowers Rating on INR8cr Loans to B ------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of S S Hyundai (SSH) Revised to 'CRISIL B/Stable Issuer Not Cooperating' from 'CRISIL BB/Stable Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2 CRISIL B/Stable (ISSUER NOT COOPERATING; Revised from 'CRISIL BB/Stable ISSUER NOT COOPERATING') Term Loan 8 CRISIL B/Stable (ISSUER NOT COOPERATING; Revised from 'CRISIL BB/Stable ISSUER NOT COOPERATING') CRISIL Ratings has been consistently following up with SSH for obtaining information through letters and emails dated September 28, 2020 and March 17, 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 SSH, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SSH is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SSH Revised to 'CRISIL B/Stable Issuer Not Cooperating' from 'CRISIL BB/Stable Issuer Not Cooperating'. Established in 2009, S S Hyundai (SSH) is a dealer of Hyundai vehicles in Pathanamthitta, Kerala. The operations are managed by Mr. Siby Sleeba. SAI VISHWAS: CRISIL Keeps B+ Debt Rating in Not Cooperating ----------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Sri Sai Vishwas Industries Private Limited (SSVIPL) continue to be 'CRISIL B+/Stable Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4 CRISIL B+/Stable (Issuer Not Cooperating) Proposed Term Loan 5 CRISIL B+/Stable (Issuer Not Cooperating) Term Loan 3.5 CRISIL B+/Stable (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with SSVIPL for obtaining information through letters and emails dated September 28, 2020 and March 31, 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 SSVIPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SSVIPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SSVIPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'. Incorporated in 2005 as a partnership firm, Sri Sai Vishwas Industries was later reconstituted into a private limited company in 2014 under its current name. The company manufactures plastic furniture mainly plastic chairs and is promoted by Mr Upendra who is the Managing Director. SIPANI PROPERTIES: CRISIL Lowers Rating on INR28.4cr Loan to D -------------------------------------------------------------- CRISIL has downgraded the rating on the bank facilities of Sipani Properties Private Limited to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating' as there are delays in the repayment of term loans. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Lease Rental 28.4 CRISIL D (ISSUER NOT Discounting Loan COOPERATING; Downgraded from 'CRISIL B/Stable ISSUER NOT COOPERATING') Overdraft Facility 5.0 CRISIL D (ISSUER NOT COOPERATING*; Downgraded from 'CRISIL A4 ISSUER NOT COOPERATING') Proposed Long 5.1 CRISIL D (ISSUER NOT Term Bank COOPERATING; Downgraded Loan Facility from 'CRISIL B/Stable ISSUER NOT COOPERATING') Term Loan 36.5 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B/Stable ISSUER NOT COOPERATING') CRISIL has been consistently following up with Sipani for obtaining information through letters and emails dated January 14, 2020 and July 17, 2020 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other.' market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component'. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of Sipani. This restricts CRISIL Ratings' ability to take a forward-looking view on the credit quality of the entity. CRISIL Ratings believes that rating action on Sipani is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, CRISIL has downgraded the rating on the bank facilities of Sipani to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating' as there are delays in the repayment of term loans. Sipani, set up in 1997 and managed by Mr R K Sipani and his son Mr Dinesh Sipani, develops residential real estate in Bengaluru. The company was into manufacturing automobile components till 2007, since when it has been in the real estate business. UNISHIRE URBANSCAPE: CRISIL Keeps D Rating in Not Cooperating ------------------------------------------------------------- CRISIL Ratings said the rating on the non-convertible debentures (NCDs) of Unishire Urbanscape Pvt Ltd (UUPL; part of the Unishire Urbanscape group) continues to be 'CRISIL D (Issuer not cooperating)'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Non Convertible Debentures 126.0 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been following up with UUPL for getting information through letter and email, dated October 31, 2020 and March 31, 2021 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 UUPL. This restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on UUPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the rating on the non-convertible debentures (NCDs) of UUPL continues to be 'CRISIL D (Issuer not cooperating)'. Unishire has initiated legal proceedings in Hon'ble City Civil Courts and with RERA against the investor. As per the structure of the debenture trust deed, the bank escrow accounts are being controlled by the investor. Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of the following companies with UUSL: Unishire Skyscapes LLP, Unishire Properties LLP, Unishire Homes LLP, Unishire Regency Park LLP, and Unishire Developers Pvt Ltd. These companies have been consolidated because they are co-obligors to the NCDs. The projects under these companies are security against the NCDs by way of exclusive first charge. Incorporated in February 2011, UUPL develops real estate in Bengaluru and is a part of the Unishire group. VAIDYANATH SAHAKARI: CRISIL Keeps D Rating in Not Cooperating ------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Vaidyanath Sahakari Sakhar Karkhana Limited (VSSKL) continue to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1.73 CRISIL D (Issuer Not Cooperating) Cash Credit 81.96 CRISIL D (Issuer Not Cooperating) Short Term Loan 28.37 CRISIL D (Issuer Not Cooperating) Term Loan 33.60 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with VSSKL for obtaining information through letters and emails dated September 28, 2020 and March 17, 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 VSSKL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on VSSKL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of VSSKL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. VSSKL, set up as a co-operative society in 1996, manufactures sugar. Its unit is in Parali, Maharashtra, and has sugar cane crushing capacity of 4500 tonne per day. It also has a 60-kilolitre-per-day distillery and a 21-megawatt co-generation power unit. VETRIVEL EXPLOSIVES: CRISIL Withdraws D Rating on INR6.16cr Loan ---------------------------------------------------------------- Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of Vetrivel Explosives Private Limited (VEPL) to 'CRISIL D/Issuer Not Cooperating'. CRISIL Ratings has withdrawn its rating on bank facility of VEPL following a request from the company and on receipt of a 'no dues certificate' from the banker. Consequently, CRISIL Ratings is migrating the ratings on bank facilities of VEPL from 'CRISIL D/Issuer Not Cooperating' to 'CRISIL D'. The rating action is in line with CRISIL Rating's policy on withdrawal of bank loan ratings. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 6.16 CRISIL D (Issuer Not Cooperating) Withdrawn VEPL was set up as a partnership firm in Salem, Tamil Nadu, in 1999, and was reconstituted as a closely held private limited company in 2000. Till fiscal 2013, it only manufactured civil explosives. Since fiscal 2014, post-merger with Sivasakthi Hotels, it has been operating a 4-star hotel in Salem. =============== M A L A Y S I A =============== TAN CHONG: To Settle Bills of Demand from Malaysian Customs ----------------------------------------------------------- The Star reports that Tan Chong Motor Holdings Bhd is expected to settle the bills of demand from the Royal Malaysian Customs Department totalling MYR108.06 million over 36 months following a consent judgment from the Shah Alam High Court. The Star relates that the out-of-court settlement would involve the company paying MYR10.8 million on or before April 20 this year, while the remaining balance of MYR97.26 million would be made in 36 equal monthly instalments of MYR2.7 million, from May 2021 to April 2024. Based in Malaysia, Tan Chong Motor Holdings Berhad assembles and distributes motor vehicles, and manufactures and sells auto parts and accessories. The Company also distributes cosmetics, cellular phones, and industrial, agricultural and construction equipment. Tan Chong Motors provides auto insurance, car rental, travel, leasing, and financing services as well as develops properties. =============================== P A P U A N E W G U I N E A =============================== PAPUA NEW GUINEA: Moody's Alters Outlook on B2 Ratings to Negative ------------------------------------------------------------------ Moody's Investors Service has changed the outlook on the Government of Papua New Guinea's (PNG) ratings to negative from stable. Concurrently, the B2 long-term issuer and senior unsecured ratings have been affirmed. The decision to change the outlook to negative from stable reflects the risks that a marked weakening in PNG's fiscal strength and debt position and elevated borrowing requirements raise liquidity risks, notwithstanding the government's strategy to increase reliance on concessional external financing. Moreover, the extent of the fiscal pressures, combined with an uncertain near-term macroeconomic outlook as the economy emerges from a large contraction, will continue to challenge the government's economic and fiscal reform plans and further raise implementation risk. The affirmation of the B2 rating incorporates Moody's assessment that while PNG's domestic government liquidity and external liquidity risks remain credit constraints, these are somewhat balanced against credit strengths stemming from prospects for higher GDP growth potential over the medium term as investment in PNG's natural resource wealth is realized, although a degree of execution risk in progressing large resource projects to fruition remains. The rating is also underpinned by credit challenges related to weaknesses in government effectiveness and moderate political risks. PNG's local- and foreign-currency country ceilings remain unchanged at Ba2 and B1, respectively. The wider-than-average three-notch gap between the local currency ceiling and the sovereign rating reflects low predictability and reliability of government institutions, as well as domestic political risks. While the government does not possess a major footprint in the economy -- it's ownership in large resource ventures is in most cases a minority share -- its revenue base is heavily reliant on the resources sector. The two-notch gap between the foreign currency ceiling and the local currency ceiling takes into account relatively high external indebtedness, weak macro policy effectiveness, and capital account restrictions, as there continues to be a backlog of FX orders due to the country's FX regulations, which have periodically delayed offshore payments. These ceilings typically act as a cap on the ratings that can be assigned to the obligations of other entities domiciled in the country. RATINGS RATIONALE RATIONALE FOR CHANGING THE OUTLOOK TO NEGATIVE FROM STABLE ELEVATED BORROWING REQUIREMENTS ENTAILS GREATER FINANCING AND REFORM RISKS AMID FISCAL DETERIORATION Even before the impact of the global coronavirus crisis, PNG faced a deteriorating fiscal position and a rising government debt burden, as revenue shortfalls, expenditure overruns and the clearance of government arrears led to a widening of the deficit over 2018-19. The global coronavirus pandemic has had a further dampening effect on the government's revenue intake, as slower mining and petroleum activity and restrictions on other domestic economic activity curbed tax revenue. Moreover, trade-related taxes declined as demand for PNG's exports fell amid significantly impaired global economic activity in 2020. Combined, these are estimated to have reduced government revenue by approximately PGK2.7 billion, or 3.4% of 2020 forecast GDP[1]. Total government revenue and grants declined by an estimated 17% compared to 2019. While a supplementary budget in 2020 delivered approximately PGK740 million (0.9% of GDP) in spending cuts, this was offset by the government's fiscal stimulus package that increased spending on health, security and social protection measures. Moody's estimates PNG's fiscal deficit to have increased to around 8.5% of GDP in 2020, driven primarily by these revenue shortfalls. While the government has introduced a medium-term fiscal framework with revised fiscal rules and ongoing focus on a range of fiscal reforms, the implementation risks to reforms that would durably improve fiscal discipline, such as a medium-term revenue strategy, tax administration, SOE policies and expenditure restraint and rationalization, are material. As such, Moody's expects PNG's fiscal deficit to only gradually narrow to around 7% of GDP in 2021 and around 5% of GDP over 2022-23. Further downside risk to the government's fiscal consolidation efforts also stems from the recent rise in COVID-19 infections in the country, which in the event it led to prolonged periods of domestic activity restrictions and/or closures of large mining and gas operations, would negatively impact revenue. Moody's expects PNG's debt burden to increase to around 55% of GDP over 2021-22, from around an estimated 40% of GDP at the end of 2019, while debt affordability -- as measured by interest payments as a share of revenue -- will worsen to a high level of over 20% over the same period. PNG's fiscal position will remain susceptible to exchange rate risk, with around half of its debt stock denominated in foreign currency. As a result of the near-term outlook for wider fiscal deficits, Moody's expects PNG's gross borrowing requirements to remain high for a sovereign with limited financing sources. Moody's estimates PNG's gross borrowing requirements to have exceeded 26% of GDP in 2020 and remain elevated at around 18% of GDP over 2021-22, driven by these wider deficits and a large stock of short-term domestic debt that keeps the government vulnerable to potential shifts in domestic financing conditions. PNG's weaker fiscal outlook, combined with slower implementation of economic and fiscal reforms, are likely to increase uncertainty over the availability of external financing, to cover substantial borrowing requirements. While entrance into an IMF staff-monitored program (SMP) has supported crowding-in of broader external, concessional financing over the last twelve months, Moody's foresees risks in maintaining this amount of external financing over the next few years. Should the government increasingly need to finance wider deficits domestically, Moody's expects this would further erode PNG's already weak debt affordability and fragile debt structure, in addition to likely facing constraints in the domestic financial system's ability to absorb greater government borrowing. Government securities as a share of commercial bank assets have increased to 31.5% as of September 2020 from around 25% at end 2019[2]. While domestic financing costs have not risen over the last twelve months, supported by Bank of PNG's monetary policy accommodation, weaker realization of external financing inflows and weaker external liquidity buffers may further constraint monetary policy. Foreign exchange reserves remain thin at around $2.1 billion as of November 2020[3], which amounts to around 7 months of import cover. RATIONALE FOR THE AFFIRMATION OF THE B2 RATING PNG's rating considers significant susceptibility to external shocks, including prolonged periods of lower commodity prices or sudden climate events, given its small size and reliance on commodities production and exports. PNG's credit profile also incorporates prospects for higher growth potential should investment in natural resources wealth be realized, although ultimate implementation risks to project completion and ultimately realizing economic benefits will remain a challenge over the coming years. Large investments in the country's natural resources wealth bolster growth potential, both in terms of the foreign direct investment associated with long construction phases and increased export volumes from higher production over the longer term. Additionally, these projects have spillover benefits to the non-mining economy, as increased availability of foreign exchange supports domestic business confidence. Despite the challenging global macroeconomic environment precipitated by the coronavirus pandemic, especially for PNG's natural resources sector, the government has ratified the fiscal stability agreement for the $15 billion Papua LNG project that was originally negotiated and agreed upon in April 2019. The government also granted an environmental permit for the $5.4 billion Wafi-Golpu copper and gold project in January 2021. However, given the delays in progressing these projects along, final investment decisions and production dates are likely further out than Moody's previously anticipated. With production dates pushed out, the growth, revenue and external stability benefits for PNG are also likely to materialize later than previously assumed. ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS PNG's very highly negative (CIS-5) ESG Credit Impact Score reflects very high exposure to environmental and social risks, further weakened by institutional challenges related to government policy effectiveness, control of corruption and overall legal structures, notwithstanding ongoing support from development partners. The Environmental issuer profile score is very highly negative (E-5). PNG is both exposed to ongoing climate change, particularly extreme rainfall and heat stress, as well as longer-term carbon transition risks, given the economy's and government's reliance on hydrocarbons as a source of revenue. Economic growth is inextricably tied to the potential impact from both gradual and sudden climate events. Moreover, PNG's resources sector, which includes oil, gas, gold and copper, among others, contributes more than one-fourth of the economy's total value-added and around 90% of export revenue, while the government's revenue performance fluctuates with prevailing commodity prices and the tax take on resource agreements. In scenarios of global carbon transition proceeding at a steady pace, PNG would be hit severely. Separately, given large areas of land that are underdeveloped, access to water remains a constraint on economic development, although it provides for high levels of natural capital, in both strong forestation and large untapped deposits of natural resources. Moody's assess PNG's Social issuer profile score as very highly negative (S-5). Access to basic services continues to constrain economic development, while other societal issues, including gender-based violence, political unrest, and widespread poverty, particularly in the country's most rural areas, remain present, although these issues are not significantly more severe than for similarly-rated developing economies. The government continues to direct resources towards its long-term development plan, which prioritizes raising living standards and increasing formal job opportunities. PNG's weak institutions and governance profile constrain its rating, as captured by a highly negative Governance issuer profile score (G-4). Weaknesses prevail in government effectiveness, control of corruption and rule of law, exist, and the credibility of legal structures is also limited. While ongoing support from development partners provides technical capacity in some areas, overall structural reforms remain limited. GDP per capita (PPP basis, US$): 4,018 (2019 Actual) (also known as Per Capita Income) Real GDP growth (% change): 5.5% (2019 Estimate) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 2.9% (2019 Actual) Gen. Gov. Financial Balance/GDP: -4.9% (2019 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: 21.9% (2019 Actual) (also known as External Balance) External debt/GDP: 75.1% (2019 Actual) Economic resiliency: b2 Default history: No default events (on bonds or loans) have been recorded since 1983. On April 14, 2021, a rating committee was called to discuss the rating of the Papua New Guinea, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutions and governance strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has materially decreased. The issuer's susceptibility to event risks has not materially changed. FACTORS THAT COULD LEAD TO AN UPGADE OR DOWNGRADE OF THE RATINGS WHAT COULD CHANGE THE RATING DOWN A materially weaker outlook for fiscal consolidation and stabilization of the government's debt burden and affordability would result in negative pressure on the rating. Moreover, Moody's would also likely downgrade the rating should weaker implementation of the government's reform agenda contribute to higher liquidity pressures than currently assumed. Negative pressure on the rating would also materialize should there be a significantly bleaker outlook for execution on large investments in PNG's natural resource wealth, which would threaten PNG's growth potential and external position. This could come in the context of diminished commercial viability of projects, potentially owed to domestic or external factors, that leads to significant delays or outright abandonment. Furthermore, Moody's would also consider downgrading the rating upon a likely sustained decline in the stock of foreign exchange reserves, and/or worsening foreign exchange shortages. Such diminished external liquidity buffers would heighten risks to PNG's external debt servicing capacity and significantly restrict monetary and fiscal institutions' policy flexibility to effectively respond to potential shocks or implement credit-profile enhancing reforms. WHAT COULD CHANGE THE RATING UP Upward pressure on the rating would likely emanate from a durable and material reduction in refinancing risks, consistent with a significantly greater fiscal adjustment, reduction in gross borrowing requirements and strengthened access to external sources of finance than Moody's currently expects. Moody's would also consider upgrading the rating should a sustained increase in non-debt-creating external inflows lead to a sustained accumulation in foreign exchange reserves. Such an improved position in external liquidity buffers would enhance PNG's external debt servicing capacity, aid economic activity in the non-resource sector, and provide monetary and fiscal authorities with improved policy flexibility. Over the longer term, should implementation of key resource sector investments generate positive economic spillovers in the non-resource economy, the positive impact on growth potential would contribute to upward rating pressure. The principal methodology used in these ratings was Sovereign Ratings Methodology published in November 2019. ================= S I N G A P O R E ================= HOE LEONG: Three Vessel Units Placed in Voluntary Liquidation ------------------------------------------------------------- The Business Times reports that Hoe Leong Corporation's three wholly-owned subsidiaries Arkstar Offshore, Arkstar Voyager and Arkstar Unicorn have been placed under creditors' voluntary liquidation, the company said in a bourse filing on April 19. BT relates that Hoe Leong said it is pursuing these moves following resolutions passed at extraordinary general meetings of the subsidiaries held on April 19. The subsidiaries have ceased their vessel-chartering business following the disposal of all vessels under the vessel chartering segment of the group, it noted. According to the report, the company expects to gain SGD1 million from the deconsolidation, to be recognised for the financial year ending Dec. 31, 2021. Abuthahir Abdul Gafoor and Yessica Budiman of AAG Corporate Advisory have been appointed liquidators, BT discloses. Trading of Hoe Leong's shares has been suspended since September 2019, the report notes. Hoe Leong Corporation provides vessel-chartering services for the oil and gas industry. Hoe Leong Corporation Ltd. -- https://www.hoeleong.com/ -- provides vessel-chartering services for the oil and gas industry. The Company also manufactures, trades and distributes spare parts for heavy equipment and industrial machinery. LIBRA GROUP: Seeks High Court Nod for Extension of Moratoria ------------------------------------------------------------ The Business Times reports that Catalist-listed Libra Group and its sole operating subsidiary Kin Xin Engineering have applied to the High Court for an extension of the existing moratoria which are due to expire on April 30, as the company intends to further discussions with a potential investor and its creditors. The application was made on April 16 and will be heard before the court on April 26, building solutions-provider Libra said in an April 19 bourse filing, BT relays. BT relates that Libra also announced that it has received a term sheet from a new investor that wishes to invest into the company, and will also seek to engage this new investor during the moratoria, if extended. Trading in Libra's shares has been suspended as the company has been deemed unable to continue as a going concern, the report notes. The share price last closed on Aug 22, 2020, at 3.5 Singapore cents. About Libra Group Libra Group Limited provides integrated M&E services as a sub-contractor. The Company's services include the contracting and installation of ACMV systems, fire alarms and fire protection systems, electrical systems as well as sanitary and plumbing services. Libra also manufactures and sells ACMV related products. In October 2019, the Singapore High Court has granted Libra Group a six-month reprieve against its creditors, according to The Business Times. Libra's creditors include UOB, which issued a letter of demand on Oct. 8, 2019, for US$18.8 million, and Maybank Singapore, which on Sept. 3, 2019, issued a letter of demand to possess Libra's property at 34 Sungei Kadut Loop. ORIS INTERNATIONAL: Creditors' Meeting Set for May 7 ---------------------------------------------------- A first meeting of the creditors in the proceedings of Oris International Pte Ltd will be held on May 7, 2021. Farooq Ahmad Mann of Mann & Associates PAC on April 12, 2021, was appointed as provisional liquidator of the company. The company's provisional liquidator may reached at: Farooq Ahmad Mann M/s Mann & Associates PAC 3 Shenton Way #03-06C Shenton House Singapore 068805 ===================== S O U T H K O R E A ===================== KOREA NATIONAL: Falls Into Complete Capital Erosion --------------------------------------------------- Yonhap News Agency reports that the state-run Korea National Oil (KNOC) lapsed into a complete capital erosion in 2020 as its liabilities exceeded assets due to continued losses, data showed on April 20. KNOC's liabilities stood at KRW18.64 trillion (US$16.7 billion) as of the end of last year, up nearly KRW514 billion from a year earlier, Yonhap discloses citing data posted on the state portal All Public Information in One (ALIO). In contrast, its assets amounted to KRW17.5 trillion, down KRW1.12 trillion from the previous year. It marks the first time since the state oil company's inception in 1979 that it has suffered from full-scale capital erosion, the report says. According to Yonhap, KNOC's debt came to KRW3.5 trillion in 2006 before exceeding KRW20 trillion in 2011. Its liabilities remained in the 17 trillion-won range in 2017-18 and rose to KRW18.1 trillion in 2019 before overtaking its assets last year. Yonhap says the ratio of KNOC's interest-bearing debt to total assets came to 83 percent as of end-December. The firm's interest bearing debt reached KRW14.7 trillion last year, with its annual interest burden surpassing KRW400 billion. Yonhap relates that KNOC's huge debt stems mainly from losses incurred from overseas projects it started during the Lee Myung-bak administration of 2008 to 2013. Making matters worse, the oil company has been hit hard by falling oil prices resulting from the coronavirus pandemic, the report notes. Prices of Dubai crude, South Korea's benchmark, came to an average of $42.29 per barrel last year, down 33 percent from the prior year, which made its overseas oil fields less valuable. To pull out of the huge debt burden, the KNOC has been ramping up self-rescue efforts, including the sale of unprofitable subsidiaries and subprime overseas assets, as well as layoffs, Yonhap notes. Yet industry watchers said it will be difficult for the KNOC to solve its debt problem over the short term as its liabilities are expected to reach KRW20 trillion in 2024, the report adds. Korea National Oil Corporation provides crude oil and natural gas exploration and development services. The Company offers oil stockpiling, petroleum distribution, and other services. Korea National Oil offers services throughout South Korea. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. 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