/raid1/www/Hosts/bankrupt/TCRAP_Public/210430.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, April 30, 2021, Vol. 24, No. 81
Headlines
A U S T R A L I A
ALLIED RURAL: Second Creditors' Meeting Set for May 10
BLACKWATTLE TRUST 2021-1: S&P Assigns (P)B Rating on Cl. F Notes
BONDI BEVERAGES: First Creditors' Meeting Set for May 7
LA PEROUSE: Second Creditors' Meeting Set for May 10
SPEEDCAST INT'L: S&P Discontinues 'D' Issuer Credit Rating
C H I N A
CHINA FORTUNE: Woes Worsen as Profit Plunges by 74.9% in 2020
CHINA LOGISTICS: Fitch Alters Outlook on 'B-' LT IDR to Stable
HENAN: Sets Up $4.6BB Fund to Address Local Firms' Debt Risks
HUARONG INDUSTRIAL: Fitch Lowers LT Foreign Currency IDR to 'BB'
KAISA GROUP: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
KAISA GROUP: Fitch Assigns B Rating on Proposed USD Unsec. Notes
KAISA GROUP: Moody's Assigns B2 Rating to Proposed USD Notes
KANGMEI PHARMACEUTICAL: Hit With Bankruptcy Restructuring Suit
URUMQI GAOXIN: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Stable
H O N G K O N G
FUFENG GROUP: Fitch Withdraws All Ratings
I N D I A
5 CORE: CARE Keeps D Debt Rating in Not Cooperating Category
AD MART PRIVATE: Insolvency Resolution Process Case Summary
ADHUNIK METALIKS: Ind-Ra Cuts Issuer Rating to BB, Outlook Stable
AIR TRAVEL: Ind-Ra Moves 'BB+' LT Issuer Rating to Non-Cooperating
ANCHOR AGRITECH: CARE Keeps D Debt Rating in Not Cooperating
ARVEE ELECTRICALS: CARE Keeps D Debt Ratings in Not Cooperating
ASSOCIATED APPLIANCES: CRISIL Keeps D Ratings in Not Cooperating
BALAJEE LOHA: CRISIL Keeps B+ Debt Rating in Not Cooperating
CLARO ENERGY: Insolvency Resolution Process Case Summary
CONSOLIDATED CONSTRUCTION: Insolvency Resolution Case Summary
CONVEYOR AND ROPEWAY: CRISIL Keeps D Ratings in Not Cooperating
ESSPAL INTERNATIONAL: Ind-Ra Assigns 'BB+' LT Issuer Rating
FUTURE ENTERPRISES: CARE Lowers Rating on INR800cr NCD to D
G.R. ENGINEERING: Ind-Ra Moves BB+ Issuer Rating to Non-Cooperating
GEHLOT ENTERPRISE: CARE Keeps D Debt Rating in Not Cooperating
GREENKO ENERGY: S&P Alters Outlook to Positive & Affirms 'B+' ICR
GSR VENTURES: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable
J.P. RICE: CRISIL Keeps B Debt Ratings in Not Cooperating
JAINAM ALTERNATE: CRISIL Keeps B- Debt Ratings in Not Cooperating
JAY DEE: CRISIL Keeps D Debt Ratings in Not Cooperating Category
K. K. FIBERS: CRISIL Keeps B+ Debt Ratings in Not Cooperating
M. P. K. METALS: CRISIL Keeps D Debt Ratings in Not Cooperating
M.P.K. STEEL: CRISIL Keeps D Debt Ratings in Not Cooperating
MAA SARBAMANGALA: CARE Keeps D Debt Rating in Not Cooperating
MAHANADI EDUCATION: Ind-Ra Keeps BB Loan Rating in Non-Cooperating
MEERA GOPI: CRISIL Keeps B+ Debt Rating in Not Cooperating
MITHILANCHAL INDUSTRIES: Insolvency Resolution Case Summary
MOSAVI ENTERPRISES: Ind-Ra Hikes Long-Term Issuer Rating to 'B'
MULTIDIMENSION WARANGAL: CRISIL Keeps B+ Rating in Not Cooperating
NARAYAN INDUSTRIES: CARE Keeps D Debt Ratings in Not Cooperating
NEELKANTH FARMS: CARE Keeps D Debt Rating in Not Cooperating
ORMA MARBLE: Insolvency Resolution Process Case Summary
PACIFIC JUTE: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
PREMIER ENTERPRISES: CARE Cuts Rating on INR5cr LT Loan to D
RAVIRAJ GINNING: CARE Keeps D Debt Rating in Not Cooperating
REAL LINK: Insolvency Resolution Process Case Summary
RELIANCE COMMUNICATIONS: Headed for Liquidation Amid NCLAT Decision
RELIGARE FINVEST: Ind-Ra Affirms 'D' Long-Term Issuer Rating
RIGHILL ELECTRICS: CARE Keeps D Debt Ratings in Not Cooperating
RJVJ TRADERS PRIVATE: Insolvency Resolution Process Case Summary
SAHDEV JEWELLERS: CARE Keeps D Debt Rating in Not Cooperating
SARVODAYA EDUCATION: CRISIL Keeps B Rating in Not Cooperating
SEAWAYS SHIPPING: Ind-Ra Hikes Long-Term Issuer Rating to 'B'
SHIRAGUPPI SUGAR: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
SIMOVA INDIA: Insolvency Resolution Process Case Summary
TRILOK SECURITY: CARE Lowers Rating on INR10.71cr LT Loan to D
VAIBHAV RICE: CARE Lowers Rating on INR12.21cr LT Loan to B+
YESHODEEP INFRASTRUCTURE: Insolvency Resolution Case Summary
[*] INDIA: Retailers, Restaurants Say Tough to Bear Losses Again
I N D O N E S I A
SRI REJEKI ISMAN: Fitch Lowers LongTerm IDR to 'C'
M A L A Y S I A
MALAYSIA AIRLINES: Manage to Set Aside MYR10 Million Fines
N E W Z E A L A N D
NF GLOBAL: Placed in Liquidation Owing at Least NZD17MM
S I N G A P O R E
A3 SG GAMMA: Creditors' Proofs of Debt Due May 31
CHANG LONG: Creditors' Meetings Set for May 7
SEALOUD ASIA: Court Enters Wind-Up Order
S O U T H K O R E A
SAMSUNG: Lee Family to Offload Picassos, Monets to Settle Tax Bill
- - - - -
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A U S T R A L I A
=================
ALLIED RURAL: Second Creditors' Meeting Set for May 10
------------------------------------------------------
A second meeting of creditors in the proceedings of Allied Rural
Pty Ltd has been set for May 10, 2021, at 10:00 a.m. at the offices
of SV Partners, 22 Market Street, in Brisbane, Queensland.
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 May 7, 2021, at 4:00 p.m.
David Michael Stimpson of SV Partners was appointed as
administrator of Allied Rural on March 2, 2021.
BLACKWATTLE TRUST 2021-1: S&P Assigns (P)B Rating on Cl. F Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to seven
classes of residential mortgage-backed securities (RMBS) to be
issued by Permanent Custodians Ltd. as trustee for Blackwattle
Series RMBS Trust 2021-1. Blackwattle Series RMBS Trust 2021-1 is a
securitization of prime residential mortgages originated by Sintex
Consolidated Pty Ltd. (Sintex).
The preliminary ratings assigned reflect the following factors.
The credit risk of the underlying collateral portfolio and the
credit support provided to each class of notes are commensurate
with the ratings assigned. Credit support is provided by
subordination, lenders' mortgage insurance (LMI), and excess
spread. S&P's assessment of credit risk takes into account Sintex's
underwriting standards and approval process, the servicing quality
of Sintex, and the support provided by the LMI policies on 12.7% of
the loans in the portfolio.
The rated notes can meet timely payment of interest and ultimate
payment of principal under the rating stresses. Key rating factors
are the level of subordination provided, the LMI cover, the
interest-rate swaps, the loss reserve, the liquidity facility, the
principal draw function, and the provision of an extraordinary
expense reserve. S&P's analysis is on the basis that the notes are
fully redeemed by their legal final maturity date, and it assumes
the notes are not called at or beyond the call-option date.
S&P's ratings also take into account the counterparty exposure to
Westpac Banking Corp. as interest-rate swap provider, bank account
provider, and liquidity facility provider. Interest-rate swaps are
provided to hedge the mismatch between the fixed-rate mortgage
loans and the floating-rate obligations on the notes. The
transaction documents for the swap and facilities include downgrade
language consistent with S&P Global Ratings' counterparty
criteria.
S&P has also factored into its ratings the legal structure of the
trust, which is established as a special-purpose entity and meets
our criteria for insolvency remoteness.
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by
year-end or later. S&P said, "We use these assumptions about
vaccine timing in assessing the economic and credit implications
associated with the pandemic. As the situation evolves, we will
update our assumptions and estimates accordingly."
Preliminary Ratings Assigned
Blackwattle Series RMBS Trust 2021-1
Class A1, A$170.00 million: AAA (sf)
Class A2, A$12.60 million: AAA (sf)
Class B, A$7.10 million: AA (sf)
Class C, A$4.10 million: A (sf)
Class D, A$2.70 million: BBB (sf)
Class E, A$1.60 million: BB (sf)
Class F, A$1.00 million: B (sf)
Class G, A$0.90 million: Not rated
BONDI BEVERAGES: First Creditors' Meeting Set for May 7
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Bondi
Beverages Pty Limited will be held on May 7, 2021, at 10:30 a.m.
via Microsoft Teams.
Christopher Damien Darin of Worrells Solvency & Forensic
Accountants was appointed as administrator of Bondi Beverages on
April 27, 2021.
LA PEROUSE: Second Creditors' Meeting Set for May 10
----------------------------------------------------
A second meeting of creditors in the proceedings of La Perouse
Construction Group Pty Ltd FKA 'Hunters Hill Construction Services
Pty Ltd' and 'Forte NSW Pty Ltd' has been set for May 10, 2021, at
11:00 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 May 7, 2021, at 4:00 p.m.
Shumit Banerjee of Westburn Advisory was appointed as administrator
of La Perouse on March 25, 2021.
SPEEDCAST INT'L: S&P Discontinues 'D' Issuer Credit Rating
----------------------------------------------------------
S&P Global Ratings discontinued its 'D' ratings on Speedcast
International Ltd. and related entities. The company, which has
been in default since April 7, 2020, is in the process of being
liquidated.
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C H I N A
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CHINA FORTUNE: Woes Worsen as Profit Plunges by 74.9% in 2020
-------------------------------------------------------------
Niu Mujiangqu and Timmy Shen at Caixin Global report that
cash-strapped property developer China Fortune Land Development Co.
Ltd. saw its profit plunge last year as its revenue shrank due to
stricter regulations on the real estate industry.
China Fortune's net profit in 2020 fell by 74.9% to CNY3.7 billion
(US$570 million), according to its unaudited report released on
April 27, Caixin relates.
The Shanghai-listed developer booked CNY101.2 billion in total
revenue for the year, down 3.8%, the report showed.
China Fortune Land Development Co., Ltd. offers real estate
development and investment services. The Company develops
industrial parks and industrial town projects. China Fortune Land
Development also provides related industrial solution services.
CHINA LOGISTICS: Fitch Alters Outlook on 'B-' LT IDR to Stable
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on China-based warehouse
developer China Logistics Property Holdings Co., Ltd's (CNLP)
Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable
from Negative, and affirmed the IDR at 'B-'. Fitch has also
affirmed CNLP's senior unsecured rating at 'B-' with a Recovery
Rating of 'RR4'.
The Outlook revision takes into consideration CNLP's reduced
refinancing risk following refinancing activities in 2020,
including issuing convertible bonds and a bond exchange. The rating
affirmation reflects gradual improvement in CNLP's financial
profile, with recurring EBITDA interest coverage rising to 0.78x in
2020 despite Covid-19, and trending towards 1x in 2021 in Fitch's
estimate. CNLP's ratings are supported by a robust business
profile, with a quality investment portfolio valued at CNY20
billion as of end-2020.
KEY RATING DRIVERS
Reduced Refinancing Risk: Fitch believes CNLP's refinancing risk in
the next one to two years is manageable. CNLP dealt with two
capital market maturities in 2H20, mainly through asset disposal
proceeds, internal cash and issuing USD100 million in convertible
bonds to Bain Capital. CNLP also extended the maturity of USD150
million of its USD162 million senior notes due September 2021 by 14
months to November 2022, through an exchange offer in November
2020. The only short-term capital market maturity CNLP faces in
2021 is USD12 million due September 2021.
Weak but Improving Interest Coverage: CNLP's reliance on
debt-funded expansion has resulted in EBITDA interest coverage
sustained below 1x since 2013. CNLP's interest coverage was at
0.78x in 2020, lower than Fitch's expectation of 0.93x due to
larger capex than Fitch estimated and a slower ramp-up than Fitch
expected of its logistics properties, despite a higher
profitability with its EBITDA margin improving to 58% (2019: 56%).
Fitch thinks coverage will trend towards 1x in 2021 and stand at 1x
and above from 2022, considering the steady ramp-up of logistics
parks and lower funding costs, after CNLP repays the costly US
dollar bonds issued in previous years. Moreover, the implementation
of an asset-light strategy will help company improve its financial
profile.
Robust Business Profile: CNLP's business profile remains robust and
is commensurate with an entity rated 'B+' or 'BB-'. It had CNY18
billion of completed investment-property (IP) assets at end-2020,
which have a stable occupancy rate of 90% and a high retention rate
of above 80%. CNLP has quality assets in terms of clients and
geographic diversification in core Tier 1 and 2 cities in China.
About 40% of its logistics parks by gross floor area was in the
Yangtze River Delta, where the economy is more vigorous and demand
for logistic facilities is stronger.
Concentrated Customer Base: Its tenants include well-known
customers with online retailer JD.com being the largest.
Third-party logistics providers and e-commerce companies
contributed around 87% of CNLP's rental revenue in 2020. However,
it has a concentrated customer base, as its top-10 customers
consistently account for more than 50% of revenue (2020: 54.3%;
2019: 52.8%).
Evolving Asset-Light Strategy: CNLP has adopted an asset-light
strategy since end-2018 by selling stakes in its mature projects to
core funds or through developing new projects under funds
co-established with institutional investors. It has set up three
funds and sold equity stakes in nine projects, through which the
company recycled CNY1.8 billion until end-2020. CNLP continues
acting as asset manager for these funds. The area under management
was 1 million sq m at end-2020, with assets under management of
CNY5 billion at end-2020.
Fitch believes that either recycling cash from selling equity
stakes in mature assets or inviting investors into the development
stage of new projects would help the company reduce liquidity
pressure. In addition, the proceeds from asset disposal provide an
ongoing source to fund expansion. The company does have potential
institutional investors interested in its quality assets. However,
the strategy carries high execution risk and CNLP has yet to
establish a solid execution record.
DERIVATION SUMMARY
CNLP's rating is constrained by its financial profile, although the
company's quality high-end warehouses and robust industry demand
support a business profile that is in line with a 'B+' or 'BB-'
rating. The sustained weakness in recurring EBITDA interest
coverage (2020: 0.78x) means CNLP is reliant on debt to finance its
capex and operating cash flow. CNLP at end-2018 started exploring
an asset-light business model similar to that of industry leader
GLP Pte. Ltd. (BBB/Stable), but progress has been slow.
CNLP and Lai Fung Holdings Limited (B+/Negative) have similar asset
scales and both have an IP value of around USD2.5 billion, which
generate EBITDA of about USD50 million, before the impact of the
pandemic. Lai Fung's IP EBITDA interest coverage of 0.8x in FY20
was comparable with CNLP's 0.7x-0.8x. Fitch expects Lai Fung's
coverage to trend towards 1.0x in FY23, once the new office
buildings in Shanghai and Guangzhou are completed. Fitch believes
the asset quality of Lai Fung's IP assets as stronger, as they
consist of offices and shopping malls in high-tier cities. Fitch
also sees better funding access for Lai Fung than for CNLP, as Lai
Fung has some support from the parent company and has an adequate
record in obtaining offshore bank consortium loans. The stronger
business profile and stronger funding access of Lai Fung supports
the two-notch difference in ratings compared with CNLP.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Rental income to increase by 20%-25% in 2021-2022;
-- EBITDA margin to edge up to 60% in 2021-2022;
-- Annual capex of CNY1.2 billion-1.3 billion during 2021-2022;
-- Average borrowing cost at 6.8%-7.0% during 2021-2022.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that CNLP would be liquidated in
bankruptcy.
-- 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 0% applied to cash and 100% to restricted
cash, respectively.
-- The 50% advance rate applied to net property, plant and
equipment, and investment properties, is supported by CNLP's
quality logistic parks which generating rental yield of above
3%.
-- Advance rate of 75% applied to account receivables.
-- The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' recovery for onshore and
offshore senior unsecured debts. However, the Recovery Rating
for senior unsecured debts is capped at 'RR4' because under
Fitch's Country-Specific Treatment of Recovery Ratings
Criteria, China falls into Group D of creditor friendliness,
and instrument ratings of issuers with assets in this group
are subject to a soft cap at the issuer's IDR.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Recurring EBITDA/interest coverage sustained above 1x;
-- Unrestricted cash/short-term debt sustained above 1x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Recurring EBITDA/interest coverage fails to improve
materially;
-- Aggressive expansion leading to deterioration in liquidity.
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
Improved Liquidity: CNLP's liquidity improved by end-2020, with the
cash/short-term debt ratio recovering to 1.2x from 0.5x at
end-2019, after the company's management of its debt structure
through issuing convertible bonds and exchanging US dollar senior
notes in 2020. CNLP had CNY1 billion in unrestricted cash on hand,
and CNY0.8 billion in unused bank facilities at end-2020,
sufficient to cover CNY0.9 billion of short-term debt, including
USD12 million of senior notes due September 2021.
Fitch expects that CNLP's liquidity position will be weak during
2021-2022, considering the company's large capex plan, despite
Fitch's assumption of a certain amount of proceeds from asset
disposal each year. Liquidity coverage - measured as (available
cash + undrawn portion of committed facilities + free cash
flow)/short-term debt - would be at around 0.6x in Fitch's forecast
(end-2020: 0.5x) during 2021-2022.
SUMMARY OF FINANCIAL ADJUSTMENTS
Depreciation of right-of-use assets and interest on lease
liabilities was excluded in the EBITDA calculation; interest on
lease liabilities was excluded from cash interests; total debt was
adjusted for face value of convertible bonds.
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.
HENAN: Sets Up $4.6BB Fund to Address Local Firms' Debt Risks
-------------------------------------------------------------
Caixin Global reports that twenty-four companies backed by the
provincial government of Central China's Henan plan to jointly set
up a CNY30 billion (US$4.6 billion) credit guarantee fund to assist
local enterprises in dealing with debt risks, a Henan government
official told Caixin.
Caixin says the fund, which was registered on April 27 with CNY4
billion of registered capital, will raise CNY5 billion in the first
phase.
Henan government-controlled Zhongyuan Yuzi Investment Holding Group
led the investment with a 25% stake. Henan Energy and Chemical
Industry Group Co. Ltd., parent of debt-ridden Yongcheng Coal and
Electricity Holding Group Co. Ltd., also took part in the fund with
a 1.25% holding, business registration records showed, Caixin
relates.
HUARONG INDUSTRIAL: Fitch Lowers LT Foreign Currency IDR to 'BB'
----------------------------------------------------------------
Fitch Ratings has downgraded Huarong Industrial Investment &
Management Co., Ltd.'s Long-Term Foreign-Currency Issuer Default
Rating (IDR) to 'BB', from 'BBB+'. Fitch has also downgraded the
rating on the outstanding senior unsecured bonds issued by Huarong
Universe Investment Holding Limited and guaranteed by Huarong
Industrial to 'BB', from 'BBB+'. The ratings are on Rating Watch
Negative (RWN).
Huarong Industrial has been downgraded by four notches to reflect
the three-notch downgrade of its parent, China Huarong Asset
Management Co., Ltd., to 'BBB', from 'A', on 26 April and an
additional notch owing to Fitch's reassessment of Huarong
Industrial's linkage with its parent. Fitch thinks parent and
subsidiary linkages have weakened due to uncertainty over Huarong
Industrial's business direction, caused by a delay in the
publication of the group's 2020 results due to an undisclosed
transaction.
The RWN reflects the limited transparency about when China
Huarong's RWN will be resolved, Huarong Industrial's liquidity
position and the uncertain parent and subsidiary linkages.
Huarong Industrial is one of three 'first-level' subsidiaries of
China Huarong's distressed asset-management business, despite its
low revenue contribution and small asset size. The two entities
have strong linkages due to 'Moderate' legal ties and 'Strong'
operational and strategic ties, but Fitch may reassess the linkage
if parental support weakens significantly.
KEY RATING DRIVERS
Downgrade of China Huarong: The downgrade of Huarong Industrial is
driven by the three-notch downgrade of its parent, China Huarong.
Please refer to the commentary on China Huarong for the rationale
of its downgrade.
Weakening Linkage with Parent: Huarong Industrial is now rated
three notches below the parent, from two notches previously. Fitch
believes parent and subsidiary linkages have weakened due to
increasing uncertainty over Huarong Industrial's business direction
and strategy. Fitch does not have sufficient clarity over Huarong
Industrial's potential business changes while its parent continues
to resolve its issues and believe the support China Huarong
receives from the government for distressed asset management may
not fully flow to Huarong Industrial.
This is because China Huarong does not rely on Huarong Industrial
as an overseas financing platform, given the spin-off of the
parent's main overseas operating hub and debt-issuance platform -
China Huarong International Holdings Limited - and because there
are third-party substitutes available for Huarong Industrial's
property consulting and development services. Huarong Industrial
also accounts for a small percentage of the group's revenue and
assets.
China Huarong Crucial for Liquidity: Huarong Industrial relies on
its parent to service its debt, of which over 60% was in the form
of shareholder loans from the parent at end-2020. Fitch assumes the
remainder is mainly capital-market instruments and property project
loans. Fitch estimates that the company's capital-market
instruments, including private notes, euro bonds and debt-financing
plans, reached more than CNY7 billion at end-2020, with all the
instruments maturing in 2022. This compares with CNY4 billion of
available cash at end-1H20.
However, Fitch does not see imminent liquidity risk, as China
Huarong continues to provide liquidity support. Fitch may take
negative rating action if the support is insufficient to avoid a
liquidity crunch or upon a continued lack of transparency of
Huarong Industrial's liquidity position.
'Strong' Operational Ties: Huarong Industrial develops high-value
distressed property assets acquired from the parent and provides
advice on distressed-property resolution. More than 70% of its land
bank is sourced from the parent and it has advised on the
resolution of distressed property projects valued at above CNY2
billion since 2019. Huarong Industrial also helps China Huarong
assess the value of distressed asset packages before being acquired
by the parent. The bidding process usually involves highly
confidential and sensitive information.
'Strong' Strategic Ties: Huarong Industrial is China Huarong's only
property development platform and is important for the parent as a
large-scale vertically integrated distressed asset manager; more
than half of the parent's distressed assets are property-related.
Huarong Industrial enables its parent to maximise value from
professional property-related advisory and high-quality distressed
property development, providing a competitive advantage over other
asset management companies. China Huarong is China's largest asset
management company by assets.
Weak Standalone Credit Profile: Huarong Industrial's Standalone
Credit Profile is weak at 'ccc+', due to its small scale and high
leverage relative to Chinese homebuilding peers. Huarong Industrial
had CNY1 billion-2 billion in contracted sales each year in
2018-2019, but sales fell by 39% to CNY892 million in 9M20. Total
land bank is 4.6 million square metres, of which half comprises a
project in a Tier 3 city in Hunan province. Huarong Industrial does
not have a commercially run homebuilding business and relies
entirely on China Huarong for its operation and financial health.
DERIVATION SUMMARY
Huarong Industrial's ratings are supported by its strong linkage
with its parent, China Huarong. Both companies are on RWN. Huarong
Industrial is rated three notches below China Huarong due to
increased uncertainty about its business strategy within the
group.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Around CNY1 billion in contracted sales in 2021;
-- A property development gross profit margin of 40% in 2021
(2020: 40%);
-- No land acquisitions in 2021.
RATING SENSITIVITIES
The RWN will be resolved upon the resolution of the RWN on China
Huarong.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Weakening linkage with parent;
-- Negative rating action on parent;
-- Continued lack of transparency on Huarong Industrial's
liquidity situation.
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- The ratings may be affirmed and a Stable Outlook assigned if
the ratings on China Huarong are affirmed with a Stable
Outlook following the resolution of the RWN on its ratings and
if there is no weakening in the linkage between Huarong
Industrial and China Huarong.
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.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Huarong Industrial is rated three notches below the Long-Term IDR
of China Huarong.
ESG CONSIDERATIONS
Fitch does not provide separate ESG scores for Huarong Industrial
as its ratings and ESG scores are derived from its parent.
KAISA GROUP: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed Kaisa Group Holdings Limited's Long-Term
Issuer Default Rating at 'B'. The Outlook is Stable. Fitch has also
affirmed Kaisa's senior unsecured rating at 'B' with a Recovery
Rating of 'RR4'.
The ratings are underpinned by a strong asset base that supports
scale expansion, which is at a level comparable with 'BB' category
homebuilders. Kaisa has a large, well-located land bank with more
than 200 projects across five major economic regions in China.
Geographical diversification mitigates project and region-related
risks and provides flexibility on new projects to support sales
growth.
Kaisa can secure a large land bank at low cost in China's Greater
Bay Area (GBA) through its urban regeneration project (URP)
business, which supports a higher EBITDA margin than Chinese
homebuilding peers. Kaisa also acquires land through bidding and
M&A, although around 30% of its projects are URPs.
High leverage constrains Kaisa's ratings. Leverage - measured by
net debt including external guarantee/adjusted inventory (including
URPs and investment properties at original cost) - was 52% at
end-2020, down from over 61% in 2019. Fitch expects leverage to
increase to 56%-57% by 2021-2023, on higher land acquisition and
construction costs, and provision of guarantees to joint ventures
(JV) and associates related to property development.
KEY RATING DRIVERS
High Leverage Constrains Ratings: Fitch estimates that Kaisa's
leverage will stay above 56%-57% in 2021-2023, compared with 52% in
2020 and 62% in 2019. The lower leverage in 2020 was due to URP
disposals to minority shareholders, which boosted available cash.
Fitch believes further deleveraging may be challenging due to
Kaisa's high land-replenishment budget and interest burden in the
next year or two.
Fitch expects Kaisa to spend 38%-39% of attributable sales on land
replenishment and conversion of URP into land bank in 2021-2022
(2019-2020: 31%-44%), including the acquisition of a Beijing
residential project. Kaisa also formed a JV in February 2021 on a
commercial property project in Kai Tak, Hong Kong, with total
consideration of HKD7 billion (CNY6.1 billion). Fitch expects Kaisa
to offer guarantee on JV projects in the future and therefore
increases leverage.
Higher Minority, JV Exposure: Fitch expects Kaisa's JV exposure,
including JV investment, receivables and payables to JV, will rise
to CNY44.9 billion in 2021 (2020: CNY24.2billion). The minority
interest/total equity ratio rose to 59% in 2020 (2019: 54%). Fitch
sees higher exposure from JVs and the increase of minority interest
as credit weaknesses, as they reduce financial transparency and
financial flexibility.
Beijing Project Acquisition May Compress Margins: Kaisa plans to
acquire from its chairman in 2Q21 residential and commercial
projects near Beijing's fourth ring for a total consideration of
CNY13 billion. Kaisa plans to take a CNY9 billion offshore loan,
while raise CNY2.2 billion from a rights issue and CNY1.8 billion
from internal cash. This related-party transaction is subject to
shareholders' approval.
Fitch expects the company to sell some of the Beijing residential
units from 2H21. Fitch believes the sale of the residential units
may bring down Kaisa's margins in the next 12-18 months, given the
price cap on Beijing residential units is at a similar level to the
company's purchase costs. In addition, the high land costs across
Tier 1-3 cities in China also put pressure on margins as the
company diversifies outside the GBA. Consequently, Fitch expects
Kaisa's EBITDA margin, excluding capitalised interest, to drop to
25.6% in 2021 and 24.7% in 2022, against 28%-30% in 2019-2020.
URPs Provide Flexibility: Fitch believes Kaisa's URP business
offers operational flexibility, as the high profitability helps to
sustain price cuts in a market downturn. Kaisa can also sell stakes
in its URPs at a profit because of their low land cost. Kaisa's
long experience in URPs has enabled it to secure a large land bank
with a high gross profit margin of over 40%. This supported its
EBITDA margin, excluding capitalised interest in cost of goods
sold, of 30% in 2020. A 201-strong URP pipeline will provide a
consistent stream of projects entering the sales phase.
Large, Premium Land Bank: Fitch believes Kaisa's quality land bank
will support contracted sales in the next three years. Kaisa
expects CNY130 billion of attributable contracted sales from 6.8
million sqm of gross floor area sold. Its premium asset base can
also buffer liquidity if URP conversion to land bank takes longer
than it expects, as it can easily find buyers for the well-located
URPs, especially in Shenzhen. Kaisa's land bank totalled 28.7
million sqm, with company-estimated sellable resources of CNY670
billion at end-2020, of which 55% was in the GBA.
DERIVATION SUMMARY
Kaisa's attributable sales scale in 2020 was comparable with that
of 'BB' category peers, such as Logan Group Company Limited
(BB/Stable) and China Aoyuan Group Limited (BB/Stable), and
exceeded the CNY60 billion-70 billion sales of KWG Group Holdings
Limited (BB-/Stable) and Times China Holdings Limited (BB-/Stable).
Over half of Kaisa's land bank by gross floor area is in the GBA, a
similar level to that of Logan, China Aoyuan and Times China.
Kaisa's EBITDA margin of around 30%, excluding capitalised interest
in 2019-2020, is at the higher end of 'BB' category peers due to
its high-margin URPs.
Kaisa's closest peers is Yango Group Co., Ltd. (B+/Stable). Yango's
sales scale is larger than that of Kaisa and its land bank is more
diversified, but its EBITDA margin of around 22%, excluding
capitalised interest, is narrower than Kaisa's more than 30%.
Yango's leverage - measured by net debt/adjusted inventory - of 47%
in 2020 was lower than Kaisa's leverage at 52%. In comparison with
Guangzhou R&F Properties Co. Ltd. (B+/Stable), Kaisa has similar
leverage level and EBITDA margin, excluding capitalised interest,
but better liquidity. Kaisa's scale is smaller but has
significantly higher JV and non-controlling interest exposure,
while Guangzhou R&F has a more diversified land bank than Kaisa.
Yango's and Guangzhou R&F's moderately stronger business profile
justifies the one-notch rating differential.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Attributable contracted sales to increase by 10% in 2021 and
8% in 2022;
-- Attributable land premium/contracted sales at 37%-38% in 2021
2022;
-- Cash collection rate of around 73% in 2021 and 75% in 2022
(2020: 71%);
-- Construction cost/attributable contracted sales at 20%-22% in
2021-2022 (2019-20: 20%-24%);
-- Dividend payout ratio of 15% of net income (2020: 15%).
Fitch's Key Recovery Rating Assumptions
Fitch uses the above multiple assumption tool to derive 4x EBITDA
multiple to be applied on Kaisa to get the going-concern value.
Fitch will apply the liquidation approach where a liquidation of
the assets results in a higher return to creditors.
Liquidation Approach
-- Liquidation approach is adopted as company's properties assets
can be disposed in the recovery process;
-- 10% administrative claim;
-- 70% account receivable advanced rate;
-- 75% net inventory advanced rate as EBITDA margin excluding
capitalised interest of development property is at 20%-25%
range;
-- Property, plant and equipment at 60% advanced rate;
-- Investment property (IP) at 25% advanced rate as company's IP
yield was only 1.5%;
-- Excess cash, after deducting payables from available cash at
60% advanced rate.
The resulting recovery rate corresponds to a Recovery Rating of
'RR2' for Kaisa. However, the Recovery Rating is capped at 'RR4'
because, under Fitch's Country-Specific Treatment of Recovery
Ratings Criteria, China falls into Group D of creditor
friendliness, and instrument ratings of issuers with assets in the
group are subject to a soft cap at the issuer's IDR and a Recovery
Rating of 'RR4'.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Leverage, measured by net debt/adjusted inventory including
guaranteed debt for JVs and associates, below 55% for a
sustained period, without material increase in non-controlling
interests.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage, measured by net debt/adjusted inventory including
guaranteed debt for JVs and associates, above 65% 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: Kaisa had short-term interest bearing debt of
CNY23.1 billion as of December 2020, against unrestricted cash of
CNY36.1 billion, long-term bank deposit of CNY3.6 billion and
restricted cash of CNY6.2 billion. Kaisa also issued a tap of
USD200 million in April 2021 due September 2023, for refinancing
existing medium to long-term offshore indebtedness that will become
due within one year.
Kaisa also had total credit lines of CNY136 billion, of which
CNY107 billion was unused. Kaisa's average funding cost dropped
slightly to 8.7% in 2020 from 8.8% in 2019.
SUMMARY OF FINANCIAL ADJUSTMENTS
Face value adjustment has been applied to Kaisa's outstanding
bonds. Interest bearing borrowings from non-financial institutions,
which the company booked in other payables, was adjusted to debt.
Fitch's calculation of CNY154 billion in adjusted inventory at
end-2020 includes property development inventory, investment
property at cost, hotel properties and joint venture investments.
Customer deposits, amounts due to non-controlling interests and
amounts due to joint ventures and associates are deducted from the
summation of items mentioned previously.
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.
KAISA GROUP: Fitch Assigns B Rating on Proposed USD Unsec. Notes
----------------------------------------------------------------
Fitch Ratings has assigned China-based homebuilder Kaisa Group
Holdings Limited's (B/Stable) proposed US dollar senior unsecured
notes a rating of 'B' with a Recovery Rating of 'RR4'.
The proceeds of the note issue will be used to refinance the notes
due in 2024 and other existing medium- to long-term offshore
indebtedness that will become due within one year. The proposed
notes are rated at the same level as Kaisa's senior unsecured
rating as they constitute the company's direct and senior unsecured
obligations.
The ratings are underpinned by a strong asset base that supports
scale expansion, which is at a level comparable with 'BB' category
homebuilders. Kaisa has a large, well-located land bank with more
than 200 projects across five major economic regions in China.
Geographical diversification mitigates project and region-related
risks and provides flexibility on new projects to support sales
growth.
Kaisa can secure a large land bank at low cost in China's Greater
Bay Area (GBA) through its urban regeneration project (URP)
business, which supports a higher EBITDA margin than Chinese
homebuilding peers. Kaisa also acquires land through bidding and
M&A, although around 30% of its projects are URPs.
High leverage constrains Kaisa's ratings. Leverage - measured by
net debt including external guarantee/adjusted inventory (including
URPs and investment properties at original cost) - was 52% at
end-2020, down from over 61% in 2019. Fitch expects leverage to
increase to 56%-57% by 2021-2023, on higher land acquisition and
construction costs, and provision of guarantees to joint ventures
(JV) and associates related to property development.
KEY RATING DRIVERS
High Leverage Constrains Ratings: Fitch estimates that Kaisa's
leverage will stay above 56%-57% in 2021-2023, compared with 52% in
2020 and 62% in 2019. The lower leverage in 2020 was due to URP
disposals to minority shareholders, which boosted available cash.
Fitch believes further deleveraging may be challenging due to
Kaisa's high land-replenishment budget and interest burden in the
next year or two.
Fitch expects Kaisa to spend 38%-39% of attributable sales on land
replenishment and conversion of URP into land bank in 2021-2022
(2019-2020: 31%-44%), including the acquisition of a Beijing
residential project. Kaisa also formed a JV in February 2021 on a
commercial property project in Kai Tak, Hong Kong, with total
consideration of HKD7 billion (CNY6.1 billion). Fitch expects Kaisa
to offer guarantees on JV projects in the future, which therefore
increases leverage.
Higher Minority, JV Exposure: Fitch expects Kaisa's JV exposure,
including JV investment, receivables and payables to JV, will rise
to CNY44.9 billion in 2021 (2020: CNY24.2billion). The minority
interest/total equity ratio rose to 59% in 2020 (2019: 54%). Fitch
sees higher exposure from JVs and the increase of minority interest
as credit weaknesses, as they reduce financial transparency and
financial flexibility.
Beijing Project Acquisitions May Compress Margins: Kaisa plans to
acquire from its chairman in 2Q21 residential and commercial
projects near Beijing's fourth ring for a total consideration of
CNY13 billion. Kaisa plans to take a CNY9 billion offshore loan,
while raising CNY2.2 billion from a rights issue and CNY1.8 billion
from internal cash. This related-party transaction is subject to
shareholders' approval.
Fitch expects the company to sell some of the Beijing residential
units from 2H21. Fitch believes the sale of the residential units
may bring down Kaisa's margins in the next 12-18 months, given the
price cap on Beijing residential units is at a similar level to the
company's purchase costs. In addition, the high land costs across
Tier 1-3 cities in China also put pressure on margins as the
company diversifies outside the GBA. Consequently, Fitch expects
Kaisa's EBITDA margin, excluding capitalised interest, to drop to
25.6% in 2021 and 24.7% in 2022, against 28%-30% in 2019-2020.
URPs Provide Flexibility: Fitch believes Kaisa's URP business
offers operational flexibility, as the high profitability helps to
sustain price cuts in a market downturn. Kaisa can also sell stakes
in its URPs at a profit because of their low land cost. Kaisa's
long experience in URPs has enabled it to secure a large land bank
with a high gross profit margin of over 40%. This supported its
EBITDA margin, excluding capitalised interest in cost of goods
sold, of 30% in 2020. A 201-strong URP pipeline will provide a
consistent stream of projects entering the sales phase.
Large, Premium Land Bank: Fitch believes Kaisa's quality land bank
will support contracted sales in the next three years. Kaisa
expects CNY130 billion of attributable contracted sales from 6.8
million sqm of gross floor area sold. Its premium asset base can
also buffer liquidity if URP conversion to land bank takes longer
than it expects, as it can easily find buyers for the well-located
URPs, especially in Shenzhen. Kaisa's land bank totalled 28.7
million sqm, with company-estimated sellable resources of CNY670
billion at end-2020, of which 55% was in the GBA.
DERIVATION SUMMARY
Kaisa's attributable sales scale in 2020 was comparable with that
of 'BB' category peers, such as Logan Group Company Limited
(BB/Stable) and China Aoyuan Group Limited (BB/Stable), and
exceeded the CNY60 billion-70 billion sales of KWG Group Holdings
Limited (BB-/Stable) and Times China Holdings Limited (BB-/Stable).
Over half of Kaisa's land bank by gross floor area is in the GBA, a
similar level to that of Logan, China Aoyuan and Times China.
Kaisa's EBITDA margin of around 30%, excluding capitalised interest
in 2019-2020, is at the higher end of 'BB' category peers due to
its high-margin URPs.
Kaisa's closest peers is Yango Group Co., Ltd. (B+/Stable). Yango's
sales scale is larger than that of Kaisa and its land bank is more
diversified, but its EBITDA margin of around 22%, excluding
capitalised interest, is narrower than Kaisa's more than 30%.
Yango's leverage - measured by net debt/adjusted inventory - of 47%
in 2020 was lower than Kaisa's leverage at 52%. In comparison with
Guangzhou R&F Properties Co. Ltd. (B+/Stable), Kaisa has similar
leverage level and EBITDA margin, excluding capitalised interest,
but better liquidity. Kaisa's scale is smaller but has
significantly higher JV and non-controlling interest exposure,
while Guangzhou R&F has a more diversified land bank than Kaisa.
Yango's and Guangzhou R&F's moderately stronger business profile
justifies the one-notch rating differential.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Attributable contracted sales to increase by 10% in 2021 and
8% in 2022;
-- Attributable land premium/contracted sales at 37%-38% in 2021
2022;
-- Cash collection rate of around 73% in 2021 and 75% in 2022
(2020: 71%);
-- Construction cost/attributable contracted sales at 20%-22% in
2021-2022 (2019-20: 20%-24%);
-- Dividend payout ratio of 15% of net income (2020: 15%).
Fitch's Key Recovery Rating Assumptions
Fitch uses the above multiple assumption tool to derive a 4x EBITDA
multiple to be applied on Kaisa to get the going-concern value.
Fitch will apply the liquidation approach where a liquidation of
the assets results in a higher return to creditors.
Liquidation Approach
-- Liquidation approach is adopted as the company's properties
assets can be disposed in the recovery process;
-- 10% administrative claim;
-- 70% account receivable advanced rate;
-- 75% net inventory advanced rate as EBITDA margin excluding
capitalised interest of development property is at 20%-25%
range;
-- Property, plant and equipment at 60% advanced rate;
-- Investment property (IP) at 25% advanced rate as company's IP
yield was only 1.5%;
-- Excess cash, after deducting payables from available cash at
60% advanced rate.
The resulting recovery rate corresponds to a Recovery Rating of
'RR2' for Kaisa. However, the Recovery Rating is capped at 'RR4'
because, under Fitch's Country-Specific Treatment of Recovery
Ratings Criteria, China falls into Group D of creditor
friendliness, and instrument ratings of issuers with assets in the
group are subject to a soft cap at the issuer's IDR and a Recovery
Rating of 'RR4'.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Leverage, measured by net debt/adjusted inventory including
guaranteed debt for JVs and associates, below 55% for a
sustained period, without material increase in non-controlling
interests.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage, measured by net debt/adjusted inventory including
guaranteed debt for JVs and associates, above 65% 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: Kaisa had short-term interest-bearing debt of
CNY23.1 billion as of December 2020, against unrestricted cash of
CNY36.1 billion, long-term bank deposit of CNY3.6 billion and
restricted cash of CNY6.2 billion. Kaisa also issued a tap of the
USD200 million bonds in April 2021 due September 2023, for
refinancing existing medium to long-term offshore indebtedness that
will become due within one year.
Kaisa also had total credit lines of CNY136 billion, of which
CNY107 billion was unused. Kaisa's average funding cost dropped
slightly to 8.7% in 2020 from 8.8% in 2019.
SUMMARY OF FINANCIAL ADJUSTMENTS
Face value adjustment has been applied to Kaisa's outstanding
bonds. Interest-bearing borrowings from non-financial institutions,
which the company booked in other payables, was adjusted to debt.
Fitch's calculation of CNY154 billion in adjusted inventory at
end-2020 includes property development inventory, investment
property at cost, hotel properties and joint venture investments.
Customer deposits, amounts due to non-controlling interests and
amounts due to joint ventures and associates are deducted from the
summation of items mentioned previously.
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.
KAISA GROUP: Moody's Assigns B2 Rating to Proposed USD Notes
------------------------------------------------------------
Moody's Investors Service has assigned a B2 senior unsecured rating
to the proposed USD notes to be issued by Kaisa Group Holdings Ltd
(B1 stable).
Kaisa plans to use the proceeds from the proposed notes to
refinance its existing offshore debt.
RATINGS RATIONALE
"Kaisa's B1 corporate family rating (CFR) reflects the company's
(1) well-established market position and quality land bank in
higher-tier cities in the Great Bay Area (GBA), (2) robust gross
profit margin, supported by material revenue contribution from its
urban redevelopment projects, and (3) good liquidity," says Danny
Chan, a Moody's Assistant Vice President and Analyst.
"On the other hand, the company's B1 CFR is constrained by its
moderate credit metrics, highly concentrated geographic coverage,
high funding costs given its history of debt restructuring and
increasing exposure to joint ventures," adds Chan.
The proposed bond issuance will lengthen Kaisa's debt maturity
profile and improve its liquidity without having a material impact
on its credit metrics, because the company will use the proceeds to
refinance maturing debt.
Moody's expects Kaisa's debt leverage, as measured by
revenue/adjusted debt, will improve towards 55%-60% over the next
1-2 years from 48% in 2020, reflecting the company's strong revenue
growth due to solid sales registered in the past two years and
controlled adjusted debt growth over the same period.
Moody's also expects Kaisa's EBIT/interest coverage will improve to
1.9x-2.0x over the next 12-18 months from 1.7x in 2020, because its
revenue growth and declining borrowing costs will offset a mild
contraction in its gross profit margin. Moody's forecasts the
company's gross profit margin will edge down to about 28% from 29%
over the same period amid rising land and construction costs.
Kaisa's attributable contracted sales grew by about 21% in 2020
compared with the previous year, followed by a 168% growth in the
first quarter of 2021. The substantial growth in Q1 2021, however,
was mainly due to the low base last year caused by the coronavirus
pandemic.
Moody's expects Kaisa's annual contracted sales growth will slow
down but remain healthy at 10%-15% each year over the next 1-2
years, supported by its sufficient saleable resources, which are
mainly located in higher-tier cities, strong housing demand, and
its strong sales execution ability. Moderating contracted sales
growth will also contain Kaisa's debt funding needs.
The B2 senior unsecured debt rating is one notch lower than Kaisa's
B1 CFR due to structural subordination risk. The subordination risk
refers to the fact that the majority of Kaisa's claims are at its
operating subsidiaries and, in the event of a bankruptcy, have
priority over claims at the holding company. In addition, the
holding company lacks significant mitigating factors for structural
subordination. Consequently, the expected recovery rate for claims
at the holding company will be lower.
Kaisa's liquidity is good. Its ample cash balance provides
sufficient buffer against its material exposure to offshore senior
debt. Moody's expects the company's cash holdings, together with
its expected operating cash inflow, will be able to cover its
unpaid land premiums, dividend payments and maturing debt over the
next 12-18 months. As of the end of 2020, the company had a cash
balance of RMB42.3 billion (including restricted cash of RMB6.2
billion) which could cover about 1.8x of its total short-term debt
of RMB23.1 billion as of the same date.
In terms of environmental, social and governance (ESG)
considerations, Kaisa's CFR considers the company's increasing
exposure to joint ventures, which in turn lowers its transparency,
aggressive capital structure with a high debt leverage and history
of debt restructuring and share suspension, which results in higher
financing costs.
Moody's has also considered Kaisa's moderately concentrated
ownership in its founder and chairperson, Kwok Ying Shing, and his
family, who together held a 39.04% direct and indirect stake in the
company as of the end of 2020. This concern is partly mitigated by
(1) the presence of three independent nonexecutive directors on the
company's nine-member board of directors; (2) Kaisa's moderate 20%
dividend payout ratio over the past three years; and (3) the
presence of other internal governance structures and standards as
required under the Corporate Governance Code for companies listed
on the Hong Kong Stock Exchange.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The stable outlook reflects Moody's expectation that Kaisa will
continue to achieve healthy contracted sales growth without
embarking on aggressive debt-funded acquisitions, improve its
credit metrics and maintain good liquidity over the next 12-18
months.
Kaisa's rating could be upgraded if the company (1) maintains its
adequate liquidity; (2) diversifies its funding channels; and (3)
improves its adjusted EBIT/interest coverage to above 3.0x-3.5x and
revenue/adjusted debt to above 75%-80% on a sustained basis.
On the other hand, Moody's could downgrade the rating if the
company fails to achieve its expected sales growth or aggressively
acquires land beyond Moody's expectation, such that its financial
metrics and liquidity deteriorate.
Credit metrics indicative of a downgrade include the company's (1)
cash to short-term debt falling below 1.0x-1.5x; (2)
revenue/adjusted debt falling below 50%; and (3) adjusted
EBIT/interest coverage falling below 2.0x; on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Kaisa Group Holdings Ltd is in real estate development in China,
including urban redevelopment projects in the GBA. At December 31,
2020, the company's land bank comprised an aggregate gross floor
area of 28.7 million square meters of saleable resources across 51
cities in China.
KANGMEI PHARMACEUTICAL: Hit With Bankruptcy Restructuring Suit
--------------------------------------------------------------
Wang Juanjuan and Han Wei at Caixin Global report that a creditor
of Kangmei Pharmaceutical Co. filed suit seeking bankruptcy
restructuring of the scandal-plagued drugmaker as the company
posted a massive annual loss of CNY27.7 billion (US$4.3 billion).
Guangdong Jiedong Rural Commercial Bank sued Kangmei in a local
court on April 22, Guangdong-based Kangmei said in a filing on
April 27 as it reported 2020 financial results, Caixin relates.
Jiedong Rural Commercial Bank accused Kangmei of failure to repay
CNY49 million of debts.
Kangmei's 2020 annual losses reached CNY27.7 billion, surging
nearly five-fold from CNY4.7 billion a year ago, the company
reported the same day. Kangmei attributed the widened losses asset
write-offs mainly due to inventory impairment, Caixin adds.
Kangmei Pharmaceutical became the first listed company to default
on a bond issue when the market reopened on Feb. 3 after the
extended Lunar New Year holiday, according to Caixin Global. The
supplier of traditional Chinese medicines said in a statement Feb.
2 that it couldn't make principal and interest payments and on
CNY2.4 billion (US$340 million) of bonds because of tight
liquidity. The bonds were issued in 2015 and due in 2022, but the
issuer had an option to raise the coupon rate and investors had an
option to sell back the bonds at the end of the fifth year.
URUMQI GAOXIN: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed China-based Urumqi Gaoxin Investment and
Development Group Co., Ltd.'s (UGID) Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDRs) at 'BB+'. The Outlook
is Stable.
Fitch has also affirmed UGID's USD300 million 4.75% senior
unsecured notes due 2023 at 'BB+'.
UGID's ratings are based on the company's 'Very Strong' status,
ownership and control, 'Strong' support record, 'Moderate'
socio-political implications of default and 'Very Strong' financial
implications of default.
UGID is a district-level urban-infrastructure developer located in
the Urumqi High-tech Industrial Development Zone (New City) in the
Xinjiang Uyghur Autonomous Region in north-west China. UGID is an
important state-owned enterprise under the New City government.
KEY RATING DRIVERS
Status, Ownership and Control: 'Very Strong'
Fitch's assessment is based on the high level of control and full
ownership by the state despite UGID's legal status under ordinary
commercial law. UGID remains 100% directly owned and supervised by
the Urumqi High-tech Industrial Development Zone State-owned Assets
Supervision and Administration Commission (New City SASAC). Company
directors and senior management are mainly appointed or nominated
by the district government and UGID's major decisions, financial
plans and debt need the government's approval.
Support Track Record: 'Strong'
UGID receives capital injections and operating subsidies regularly
from the New City government. Capital injections during 2015-2019
reached CNY7.3 billion, equivalent to about half of the group's net
assets at end-2019. Subsidies received in the same period totalled
CNY1 billion, equivalent to about 20% of the operating revenue
during the period. The company received a CNY436 million cash
injection from the government in 2020, according to its preliminary
annual results.
In addition, the issuer enjoys a high level of revenue from the
local government. Around 35% of UGID's revenue was from the
government, which is the main customer of the company's
infrastructure development and maintenance, and property rental
businesses.
Socio-Political Implications of Default: 'Moderate'
UGID in 2020 continued in its role of leading infrastructure
development in New City to attract businesses and corporations to
the high-tech zone. The company expects to continue to serve as
administrator of this zone as well as support local industrial
investment during next five years. A default by UGID would affect
the long-term economic development of New City, but would not
disrupt the provision of services due to possible substitution by
other government-related entities.
Financial Implications of Default: 'Very Strong'
UGID is the New City government's most important financing platform
for providing public services to the district and the enterprises
that operate in the high-tech zone. This includes financing
infrastructure projects via public-private partnerships with the
government since 2017 and engagement in government
build-and-transfer projects in the past. Should UGID default, Fitch
believes infrastructure growth in the high-tech zone would slow in
the medium term, and funding costs would increase sharply for the
private and public sectors in the region.
STANDALONE CREDIT PROFILE
Fitch assesses UGID's Standalone Credit Profile in the 'b'
category. The assessment is based on the UGID's moderate level of
revenue sustainability during economic downturns, and an assessment
of 'Weaker' for cost controls, 'Midrange' for resource management,
together with a 'Weaker' financial profile.
Revenue Defensibility: 'Midrange'
UGID's infrastructure investment business and rental business are
contracted with the government, which supports UGID's revenue
growth. These two segments accounted for about 35% of 2020
operating revenue. However, the recently added trading business
exposes UGID to revenue volatility and a thinner profit margin.
Although UGID's overall business is highly concentrated in the
infrastructure sector, this is partly offset by expected growth in
operating revenue as the high-tech zone develops. UGID's pricing
ability remains at a moderate level, indicated by its positive
gross margin.
Operating Risk: 'Weaker'
Infrastructure investment contracted with New City and the property
leasing business enjoy full pass-through of operating costs. The
government also compensates UGID for part of its finance expenses
for these two businesses. These two segments have well-defined cost
drivers. Operating risk is weighed down by UGID's market-based
segments, such as trading and construction, where the cost of
business tends to be more volatile. Issuer's large capex plan
driven by infrastructure development has less flexibility,
resulting in an overall 'Weaker' assessment of this factor.
Financial Profile: 'Weaker'
The assessment is driven by the high leverage, measured by total
debt/ Fitch-calculated EBITDA, which stood at 23x at end-2019.
UGID's preliminary financial results show leverage dropped to 14x
by end-2020 on rising revenue and gross profit. Fitch expects
UGID's net debt to continue to rise in the forecast period to 2024,
driven by capex spending, which will push leverage to around 20x by
end-2024.
DERIVATION SUMMARY
UGID's ratings are assessed under Fitch's Government-Related
Entities Rating Criteria, reflecting New City's strong control over
UGID as well as the solid support it provides to the company. Fitch
also factors in the socio-political and financial implications for
the government if UGID were to default.
UGID's Standalone Credit Profile of 'b' is assessed under Fitch's
Public Sector, Revenue-Supported Entities Rating Criteria, while
its IDR is driven by the four rating factors under the
Government-Related Entities Rating Criteria.
DEBT RATINGS
UGID's USD300 million senior unsecured notes are rated at the same
level as UGID's Long-Term Foreign-Currency Issuer Default Rating as
they constitute its unsecured and unsubordinated obligations,
ranking pari passu with all its other present and future
obligations.
RATING SENSITIVITIES
FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:
-- A downward-revision in Fitch's assessment of the
creditworthiness of New City or its commitment to support
UGID, or in Fitch's perception of the district's ability to
provide subsidies, grants or other legitimate resources
allowed under China's policies and regulations may trigger
negative rating action on UGID.
-- A downgrade may result from Fitch's weaker assessment of any
of UGID's key rating drivers.
FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:
-- An improvement in Fitch's assessment of the creditworthiness
of New City or its commitment to support UGID, or in Fitch's
perception of the district's ability to provide subsidies,
grants or other legitimate resources allowed under China's
policies and regulations may trigger positive rating action on
UGID.
-- An upgrade may result from a stronger support track record or
stronger socio-political implications of a default.
-- An upgrade may also result from a significant strengthening of
UGID's standalone credit profile.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
=================
H O N G K O N G
=================
FUFENG GROUP: Fitch Withdraws All Ratings
-----------------------------------------
Fitch Ratings has affirmed China-based Fufeng Group Limited's
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+'.
The Outlook is Stable. Fufeng's senior unsecured rating has also
been affirmed at 'BB+'. Fitch has also simultaneously withdrawn all
the ratings of Fufeng.
Fitch has chosen to withdraw all the ratings of Fufeng for
commercial reasons.
KEY RATING DRIVERS
The affirmation reflects Fitch's assessment that there are no
material changes to Fufeng's credit profile since the last rating
action on 9 July 2020.
RATING SENSITIVITIES
No longer relevant as the ratings have been withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fufeng secured a three-year syndicated loan
facility of USD400 million (around CNY2.6 billion) in March 2021,
which along with the total cash balance of CNY1.2 billion as of
end-2020 should be more than sufficient to cover the short-term
debt balance of CNY3 billion. The company's short-term debt
obligations include a USD350 million 5.875% bond due in August 2021
(remaining balance of USD253 million at end-2020 is equivalent to
around CNY1.6 billion).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Following the withdrawal of ratings for Fufeng, Fitch will no
longer be providing the associated ESG Relevance Scores.
=========
I N D I A
=========
5 CORE: CARE Keeps D Debt Rating in Not Cooperating Category
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of 5 Core
Acoustics Private Limited (FCAPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Bank 15.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 22, 2020 continued
to place the ratings of FCAPL under the 'Issuer Not Cooperating'
category as the company had failed to provide the requisite
information required for monitoring of the ratings as agreed to in
its rating agreement. 5 Core Acoustics Private Limited continues to
be non-cooperative despite repeated requests for submission of
information through phone calls and a letter/email dated February
4, 2021. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available Information which
however, in CARE'S opinion is not sufficient to arrive at a fair
rating. The ratings on bank facilities of 5 Core Acoustics Private
Limited are denoted as 'CARE D; Issuer not cooperating'.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
CARE could not contact the banker and no other information is
available. However, at the time of last review, the rating took
into account the irregularities in the bank facilities.
5 Core Acoustics Private Limited (FCAPL) was incorporated in
September, 1995 under the name of Rajindra Mattresses Private
Limited (RMPL) with the main purpose of manufacturing car seats,
bedding, etc. However, in 2014, RMPL was acquired by the promoters
of the '5 Core' group, Mr. Amarjit Singh Kalra and his wife, Ms.
Surinder Kaur Kalra and the name of the company was changed to 5
Core Acoustics Private Limited in December, 2014. Presently, the
company is involved in the manufacturing and assembling of public
address (PA) systems and components, including loud speakers,
amplifiers, microphones, and woofers, and related electronic and
electrical equipment. The company commenced operations in December,
2014 and its manufacturing facility is located in Bhiwadi,
Rajasthan. FCAPL belongs to the 5 core group, based in New Delhi.
The 5 core group was established in 1983 and apart from FCAPL, the
group has six other companies namely, Indian Acoustics Private
Limited, Happy Acoustics Private Limited, Visual & Acoustics
Corporation LLP, EMS & Exports, Five Core Electronics Limited and
Digi Export Venture Private Limited which are all involved in the
same line of business.
AD MART PRIVATE: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: AD Mart Private Limited
41, Thiruvengadam Street
Mandaveli, Chennai 600028
Tamil Nadu
Insolvency Commencement Date: January 18, 2021
Court: National Company Law Tribunal, Coimbatore Bench
Estimated date of closure of
insolvency resolution process: October 16, 2021
(180 days from commencement)
Insolvency professional: M. Jayasree
1A, Saffron Krishna Kutiya
No. 49, Bharathi Park 7th Cross
Coimbatore 641011
Tamilnadu
E-mail: jayashree_muralidharan@
yahoo.co.uk
Last date for
submission of claims: May 4, 2021
ADHUNIK METALIKS: Ind-Ra Cuts Issuer Rating to BB, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Adhunik Metaliks
Limited's (AML) Long-Term Issuer Rating to 'IND BB' from 'IND BBB-'
and simultaneously placed it on Rating Watch Negative (RWN). The
Outlook was Stable.
The instrument-wise rating actions are:
-- INR600 mil. Proposed fund-based limits downgraded; placed on
RWN with IND BB/RWN/IND A4+/RWN rating; and
-- INR2.40 bil. Proposed non-fund-based limits downgraded; placed
on RWN with IND BB/RWN/IND A4+/RWN rating.
The downgrade reflects delays in ramp-up of AML's operations due to
pending capital repairs, lack of working capital tie-up leading to
sub-optimal operations, and delayed execution of contracts with
end-customers, leading to lower-than-expected operational
performance in FY21 and likely weak performance in FY22.
The RWN reflects uncertainty regarding the ramping up of AML's
operations, which is subject to additional funding tie-up of both
short-term funds for working capital and long-term funds for
capital repairs due to higher-than-estimated spending of around
INR320 million required for capital repairs. AML's ability to
timely mobilize the required funds and ramp-up operations shall
remain critical for future courses of action and shall be closely
monitored.
KEY RATING DRIVERS
Delays in Capacity Ramp Up: Post the successful takeover of AML by
Liberty Steel Group under the Insolvency and Bankruptcy Code on
March 3, 2020, the unit resumed part operations on 18 October 2020
for sponge iron and billets. The facilities for manufacturing pig
iron rolled products and ferroalloys were to begin operations by
end-December 2020. However, capital repairs for the balance
facilities were delayed and are pending as of April 2021, due to
inadequate funds owing to a higher-than-envisaged CAPEX of INR870
million than earlier estimates of INR550 million. The completion of
capital repairs and ramp-up of capacities is subject to the
arrangement of INR400 million of additional funds, which are yet to
be tied up. As per management, the turnaround time to get the
facilities operational shall be two-to-three months, post the
receipt of funds. While the consent-to-operate is in place for
partial operations (sponge iron and induction furnace), the same is
yet to be received for other facilities compared to the
end-November 2020 envisaged earlier. The plant's ability to ramp up
operations shall remain a key monitorable.
Considering sub-optimal actual performance in FY21, the financials
are likely to be significantly short of Ind-Ra's and management's
earlier estimates. The management had estimated EBITDA of INR700
million in FY21 and INR1,700 million-1,900 million over the next
two to three years as capacity utilization improves. However, the
agency had a conservatively estimated EBITDA of INR350 million in
FY21 and INR1,300 million in the next two to three years, with
capacity utilization of 30% and 75% in FY21 and FY22, respectively,
in its last assessment in October 2020. The estimates factored in
the exposure of the company to market purchases of iron ore, coke,
and coal, and the restart of operations after a long gap, due to
which the EBITDA margins could witness sharp fluctuations.
Delay in Funds Tie-Up led to Sub-optimal Operations: AML's plant
operations (sponge iron and billets via induction furnace) were at
sub-optimal levels, due to a shortage of working capital funds. The
equity infusion towards working capital requirements would be
insufficient to ramp up operations to the desired levels. AML plans
to raise INR3,000 million towards working capital limits (20%
fund-based, 80% non-fund-based), with INR1,500 million per year in
FY21 and FY22. While AML has received a sanction of INR1,000
million in February 2021, the terms are under discussion and the
limits are yet to be disbursed as of April 2021, against the
end-December 2020 envisaged earlier.
Liquidity Indicator – Stretched: AML's scale of operations, which
resumed on 18 October 2020, is low with limited capacity
utilization. The liquidity remains dependent on the parent's fund
infusion. Considering the absence of any long-term debt as of date,
AML does not have any fixed debt obligations. Given the equity
infusion, free cash balances amounted to around INR113 million at
the end-December 2020. AML does not have sanctioned
fund-based/non-fund-based working capital facilities from banks.
Financial Stress in Promoter Group: The group is facing financial
issues post the filing of bankruptcy by Greensill Capital (UK)
Limited (one of the main lenders to the Sanjeev Gupta-led Gupta
Family Group (GFG) Alliance, which owns Liberty Steel Group) on 8
March 2021. However, the management has confirmed to Ind-Ra that
the Indian assets are completely ring-fenced from any
borrowing/security structure at the parent group and the recent
international developments will have no cascading impact on AML.
The agency has relied considerably on this confirmation to arrive
at AML's ratings. However, any additional funding from the
promoters is highly unlikely in the interim.
Delayed Conversion Contract with Tata Steel: AML is in discussions
with Tata Steel Ltd. (TSL, 'IND AA'/Stable) to renew a job-work
contract to convert chrome ores provided by TSL into high carbon
ferrochrome for onward use by TSL. However, due to the pending
capital repairs in the ferroalloy division, the machineries are yet
to start. The contract had expired on March 31, 2020, and is yet to
be renewed as of April 2021, against October-November 2020
envisaged earlier.
Limited Debt Servicing to Aid Credit Metrics: AML was acquired by
GFG Alliance on March 3, 2020, for INR4,200 million, which was
infused as a short-term loan. The management intends to convert
AML's INR4,200 million short-term loan to INR3,869.40 million
zero-coupon fully convertible preference shares, convertible after
15 years, and the balance amount to equity over FY22. Given the
nature of the debt, AML would not have any significant long-term
loans on the balance sheet, which would support the credit metrics.
As of April 1, 2021, the promoters infused INR5,570 million
(including for capital repairs and working capital requirement). As
per the resolution plan, no additional infusion is pending.
AML might raise INR400 million term loan for capital repairs in
FY22 towards capital repairs, as against no long-term debt planned
earlier. Thereafter, it does not have any large CAPEX plans, and
routine CAPEX shall be funded by internal cash accruals.
Partly Integrated Operations to Support Business Profile: The
rating factor in the partly-integrated nature of the special/alloy
steel plant (0.45 million tons per annum (mtpa)) for manufacturing
blooms and alloy bars through the in-house production of pig iron
and sponge iron. Moreover, the presence of a captive power plant
(34MW), ferroalloy plant (0.045mtpa), and sinter plant (0.36mtpa)
are likely to bolster the margin profile. AML expects to meet
nearly 50% of the power requirements through captive power. The
plant is located close to the rich iron ore and coal belt of Odisha
for easy sourcing of raw materials. AML also has its own railway
sidings (three tracks) inside the plant. However, it does not have
access to iron ore or coal mines.
RATING SENSITIVITIES
The RWN indicates that the ratings may be affirmed or downgraded
upon resolution. Ind-Ra will resolve the RWN within three months
after obtaining clarity on the mobilization of additional funds
required for capital repairs and working capital, which is critical
for the operationalization of capacities.
COMPANY PROFILE
AML, incorporated in November 2001, has an integrated steel plant
(integrated capacity of 0.45mtpa) along with a 34MW captive power
plant (coal and waste heat) located in Chadrihariharpur near
Rourkela in Odisha. The unit produces specialized steel and alloy
steel products. AML has its registered office at Sundargarh,
Odisha. Its key product offerings include sponge iron, pig iron,
cast billets, rolled products, and ferroalloys.
AIR TRAVEL: Ind-Ra Moves 'BB+' LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Air Travel Bureau
Private Limited's Long-Term Issuer Rating to the non-cooperating
category while maintaining it on Rating Watch Evolving (RWE). The
issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB+
(ISSUER NOT COOPERATING)/RWE' on the agency's website.
The instrument-wise rating actions are:
-- INR1.0 bil. Fund-based working capital limit migrated to non-
cooperating category and maintained on RWE with IND BB+
(ISSUER NOT COOPERATING)/RWE/IND A4+ (ISSUER NOT
COOPERATING)/RWE rating; and
-- INR100 mil. Non-fund-based working capital limit migrated to
non-cooperating category and maintained on RWE with IND A4+
(ISSUER NOT COOPERATING) / RWE rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 3, 2020. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Air Travel Bureau provides business travel services to direct
corporate customers, offering an integrated service portfolio
covering total travel solutions, value-added services and optimal
management of corporate travel budgets.
ANCHOR AGRITECH: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Anchor
Agritech (ARG) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.45 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 4, 2020, placed the
rating(s) of ARG under the 'issuer noncooperating' category as ARG
had failed to provide information for monitoring of the rating. ARG
continues to be noncooperative despite repeated requests for
submission of information through phone calls and emails dated
March 20, 2021, March 30, 2021 and April 9, 2021. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on May 4, 2020, the following was the
rating weaknesses:
Key Rating Weaknesses
* On-going delays in debt servicing: As per banker interaction,
there are on-going delays in debt servicing.
M/s. Anchor Agritech (ARG) was initially setup by Mrs. Kalpana
Desai as a sole proprietorship firm in 2013 under the name of M/s.
Anchor Chemicals. It was reconstituted into a partnership firm in
September 2015, under its current name by adding Mrs Kalpana Desai,
Mr. Jayesh Desai as a partner in the firm. The firm is engaged in
storage and handling of fruit and vegetables and their ripening,
packaging and distribution.
ARVEE ELECTRICALS: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Arvee
Electricals And Engineers Private Limited (AEEPL) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 10.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 24, 2020 placed the
rating of AEEPL under the 'issuer non-cooperating' category as
AEEPL had failed to provide information for monitoring of the
rating as agreed to in its Rating Agreement. AEEPL continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and e-mails dated January 25, 2021,
March 8, 2021, March 17, 2021 and April 15, 2021. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on January 24, 2020, the following were
the rating weaknesses:
Key Rating Weaknesses
* Delays in servicing of debt obligations: There have been
continuous overdrawals in the cash credit account and the account
is classified under NPA category.
Established in the year, 1987, AEEPL is a Pune-based company
promoted by Mr. Arun Doshi and Mrs Asha Doshi. The company is a
turnkey electrical contractor and handles contracts for sugar,
cement, fertilizer, metallurgical plants, cement plants and the oil
industry. The company also provides services related to
engineering, detailing, designing, production and commissioning of
substations and transmission lines set up for private organizations
and is also engaged in the trading of electrical components like LT
panels and electrical control boards.
ASSOCIATED APPLIANCES: CRISIL Keeps D Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Associated
Appliances Limited (AAL) continue to be 'CRISIL D/CRISIL D Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D (Issuer Not
Cooperating)
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
Inland/Import 11 CRISIL D (Issuer Not
Letter of Credit Cooperating)
Term Loan 3 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with AAL for
obtaining information through letters and emails dated September
30, 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 AAL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AAL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AAL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
AAL was founded in New Delhi in 1994, by Mr Dev Dutta Sharma and
his family members. The company manufactures and trades in home and
kitchen appliances, including liquefied petroleum gas stoves and
kitchen ventilation hoods.
BALAJEE LOHA: CRISIL Keeps B+ Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Balajee Loha
Limited (BLL; part of the Balajee group) 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 BLL 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 BLL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BLL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BLL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
For arriving at the rating, CRISIL Ratings has combined the
business and financial risk profiles of BLL, Shree Hanuman Loha Ltd
(SHLL), and Balajee Structurals (India) Ltd (BSIL). This is because
these companies, collectively referred to as the Balajee group,
have a common management and fungible cash flow, and are in the
same business.
Promoted by Raipur-based Agrawal family, the Balajee group
manufactures ingots and billets, steel long products, and
structural products. The group utilizes ingots/billets manufactured
in-house for its rolling mills.
Incorporated in 1989, BLL has two units to manufacture
ingots/billets, thermo-mechanically treated bars, and steel
structural products such as channels, beams and angles.
Incorporated in 1989, SHLL has two units to manufacture
ingots/billets and steel structural products.
BSIL, set up in 2000, has two units to manufacture ingots/billets,
and steel structural products. All the manufacturing units are in
Raipur.
CLARO ENERGY: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Claro Energy Private Limited
D-196, Second Floor Saket
New Delhi 110017
Insolvency Commencement Date: April 13, 2021
Court: National Company Law Tribunal, Delhi Bench
Estimated date of closure of
insolvency resolution process: October 10, 2021
(180 days from commencement)
Insolvency professional: Rajesh Lohia
Interim Resolution
Professional: Rajesh Lohia
414, Manas Bhawan Ext.
11 RNT Marg, Indore
MP 452001
E-mail: rlohiaandcompany@gmail.com
Last date for
submission of claims: April 5, 2021
CONSOLIDATED CONSTRUCTION: Insolvency Resolution Case Summary
-------------------------------------------------------------
Debtor: Consolidated Costruction Consortium Limited
8/33, Padmavathiyar Road
Jeypore Colony
Gopalapuram, Chennai
Tamilnadu 600086
Insolvency Commencement Date: April 20, 2021
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: October 18, 2021
Insolvency professional: Krishnasamy Vasudevan
Interim Resolution
Professional: Krishnasamy Vasudevan
17B/7B, Maruthi Nagar
Hasthinapuram, Chromepet
Chennai 600064
E-mail: cavasu1967@gmail.com
cirp.cccl@gmail.com
support@gbsv.in
Last date for
submission of claims: May 5, 2021
CONVEYOR AND ROPEWAY: CRISIL Keeps D Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Conveyor and
Ropeway Services Private Limited (CRSPL) continue to be 'CRISIL
D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D (Issuer Not
Cooperating)
Cash Credit 1 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 0.4 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 4 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.94 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 0.15 CRISIL D (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with CRSPL 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 CRSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CRSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CRSPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
CRSPL, established in 1975, is engaged in the designing,
manufacturing, erection and commissioning of aerial ropeway
systems, material handling plants and coal washing plants apart
from providing techno feasibility studies for ropeway systems.
ESSPAL INTERNATIONAL: Ind-Ra Assigns 'BB+' LT Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Esspal
International Private Limited (EIPL) a Long-Term Issuer Rating of
'IND BB+'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR165.00 mil. Fund-based limit assigned with IND BB+/Stable/
IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect EIPL's modest scale of operations. The
company's revenue fell 10.65% yoy to INR1,406.01 million in FY20
(FY19: INR1,573.61 million), due to a COVID-19-led decline in the
demand of products in the international and the domestic market.
The company recorded a revenue of INR1,505.73 million during
11MFY21. Basis this, Ind-Ra expects the revenue to have increased
yoy in FY21 due to an increase in the demand of products.
The ratings are constrained by the company's modest EBITDA margin
that deteriorated slightly to 6.91% in FY20 (FY19: 7.47%), due to a
marginal increase in the raw material prices, coupled with an
increase in the employee cost for FY20. The company's return on
capital employed was 7.6% in FY20 (FY19: 10.2%). Ind-Ra expects the
margin to have improved slightly in FY21, due to the increased
selling price of its end products during the last three months, due
to increasing demand.
The rating factor in EIPL's modest credit metrics with interest
coverage (operating EBITDA/gross interest expense) of 1.62x in FY20
(FY19: 1.83x) and a net financial leverage (adjusted net
debt/operating EBITDAR) of 5.03x (4.49x). The yoy deterioration in
the company's credit metrics in FY20 was primarily on account of a
lower proportionate rise in the absolute EBITDA than the debt and
interest expense. However, Ind-Ra believes the company's metrics
would have improved marginally in FY21, owing to the repayment of a
term debt.
Liquidity Indicator - Stretched: The company's average use of its
fund-based limits was 98% during the 12 months ended February 2021.
EIPL's net working capital cycle was elongated at 173 days in FY20
(FY19: 122 days), due to a yoy shorter-but-elongated receivables
period of 186 days (223 days). The cash flow from operations turned
negative at INR52.35 million in FY20 (FY19: INR11.84 million). Its
cash and cash equivalents stood at INR7.58 million at FYE20 (FYE19:
INR16.04 million). The company availed the Reserve Bank of
India-prescribed moratorium for six months on the interest on cash
credit facility and term loan interest and principal repayment. It
cleared the funded interest term loan amounting to INR17.60 million
in March 2021. EIPL also availed a guaranteed emergency credit line
facility of INR78 million in October 2020 to meet the working
capital requirements.
The ratings are, however, supported by the promoter's decade-long
experience in the textile industry.
RATING SENSITIVITIES
Positive: A substantial growth in the scale of operations, leading
to an improvement in the credit metrics with the net leverage below
3.5x, all on a sustained basis, could lead to a positive rating
action.
Negative: Any decline in the scale of operations, leading to
deterioration in the credit metrics and/or deterioration in the
liquidity will be negative for the ratings.
COMPANY PROFILE
Incorporated in March 2009, EIPL is engaged in the manufacturing
and trading of grey fabrics. It has its unit in Bhilwara, Rajasthan
with 340 weaving machines. EIPL is promoted by Manish Lath and
Rashmi Lath.
FUTURE ENTERPRISES: CARE Lowers Rating on INR800cr NCD to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Future Enterprises Limited (FEL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible 800.00 CARE D Revised from CARE C
Debenture Issue rating removed from credit
watch with developing
implications
Long-term Bank 550.00 CARE C (CWD) (Under Credit
Facilities– watch with Developing
Term Loan Implications)
Long-term fund 625.00 CARE C (CWD) (Under Credit
based bank watch with Developing
facilities–CC Implications)
Short-term Bank 602.00 CARE A4 (CWD) (Under Credit
Facilities– Watch with Developing
LC/BG Implications)
Non-Convertible 100.00 CARE C (CWD) (Under Credit
Debenture Issue watch with Developing
Implications)
Non-Convertible 1,824.00 CARE D
Debenture Issue
Fixed Deposit 700.00 CARE C (FD) (CWD) (Under Credit
Programme watch with Developing
Implications)
Detailed Rationale & Key Rating Drivers
The revision of ratings assigned to the instruments of FEL is on
account of default in servicing of interest due on April 17, 2021
on its Non-convertible Debentures bearing ISIN INE623B07685 and
INE623B07693. Furthermore, as per the company due to ongoing poor
liquidity position it will not be in a position to service interest
on NCD bearing ISIN INE623B07701 due on April 24, 2021 and hence
CARE has also revised the rating of the said NCD to 'CARE D' as it
is likely to be in default soon. The other issues raised by CARE in
its press release dated March 31, 2021, viz., continued poor
liquidity position leading to reduced cash accruals on account of
impact of COVID19, slower than anticipated recovery of business of
key customers Future Retail Limited and Future Lifestyle Fashions
Limited (FLFL) and ongoing defaults (FLFL) continue to constrain
the ratings.
FEL had availed both phases of moratorium from lenders as part of
the COVID19 - Regulatory Package announced by the RBI on March 27,
2020. Non-recognition of default in this case is as per the
guidance provided by the SEBI circular
SEBI/HO/MIRSD/CRADT/CIR/P/2020/53 dated March 30, 2020.
FEL applied for the One Time Restructuring (OTR) facility vide its
letter dated September 27, 2020 to all its lenders, under RBI
guidelines issued on August 6, 2020. Further FEL did not made debt
repayments that were due on September 30, 2020 to its lenders as
the OTR process has been initiated. Since the application for OTR
has been made before the due date, CARE has not treated the same as
default in line with the criteria issued on 'Analytical treatment
for one-time restructuring due to COVID-19 related stress', issued
on September 29, 2020. The successful implementation of
restructuring remains a key rating monitorable.
The ratings also factor in high promoter pledge and falling market
capitalization significantly impacting financial flexibility,
dependence on group companies for revenue and high working capital
cycle. The rating continues to derive strength from experienced
promoter group.
The ratings continue to be on credit watch with negative
implications on account of the company's announced scheme of
arrangement with FEL and OTR application. CARE will continue to
monitor the progress on said scheme of arrangement and OTR
application and will resolve the watch once clarity emerges on the
same.
Key Rating Sensitivities
Positive Factors
* Improvement in company's liquidity profile resulting from equity
infusion/divestment of investments/improved credit profile of its
key customer, FRL
* Regularisation of ongoing defaults and default free track record
of three months
Negative Factors
* Rejection of OTR application or delays in implementation
Detailed description of the key rating drivers (As per PR dated
March 31, 2021)
Key Rating Weakness
* Weakened financial flexibility; considerable promoters' stake
pledged: As on December 31, 2020, the promoters of FEL have pledged
99.26% of their 34.83% stake in the company. Falling market
capitalisation coupled with rising debt has led to significant
deterioration of debt to market-capitalisation. Considerable
reduction in market capitalisation and in absence of any additional
cover provided by the promoters, significant amount of pledged
shares have been invoked.
* Continued subdued operational performance for 9MFY21 due to
lingering effect of COVID19 pandemic: The quarterly performance
continues to remain weak in Q3FY21 on account of lingering effect
of the COVID19 pandemic on the economy. FEL has witnessed
significant shrinkage in volumes from FRL and FLFL despite the
government easing restrictions. Although, the financials have
improved on a sequential basis, fixed costs and interest has been
eroding the profitability and networth of the company. FEL has
reported cash losses for 9MFY21. Pickup in business from FRL and
FLFL leading to company posting profits remains a key rating
factor.
* Continued weakening of credit profile and liquidity of both
customers: FEL provides infrastructure support to group companies
and logistical support through its subsidiary Future Supply Chain
Solutions Limited. The company also designs, manufactures garments
for in-house brands and engages in trading for various group
companies. Sale of goods and services to its group companies has
shown an increasing trend. FEL is completely reliant on FRL and
FLFL for its sales. Due to the COVID19 pandemic, the retail sector
has been one of the most adversely affected sectors. The downward
revision in credit profile of FRL and FLFL primarily factors in
continued liquidity stretch on account of reduced cash accruals and
unavailability of additional working capital limits from lenders
along with decline in market capitalization, leading to default
(FLFL). Liquidity and operating cash flow of FEL has consequently
been impacted in view of the foregoing. CARE takes cognizance of
the fact that FRL and FLFL both are currently undergoing
restructuring and a resolution plan.
* Disproportionately High Working Capital Cycle: FEL had elongated
gross working capital cycle of 258 in FY20 which deteriorated from
176 days in FY19. The company sources and manufactures on behalf of
group companies and goods are kept at various retail outlets across
the country thereby leading to high inventory period. The company
receives payment after 6-7 weeks from sale of goods. Due to the
lockdown imposed to contain COVID19 pandemic towards the end of
March 2020, the company could not liquidate its inventory and
realise its existing debtors thereby leading to disproportionately
elongated operating cycle. Furthermore, with the extension of
lockdown till May 2020 led to significant deterioration in FEL's
key customers' liquidity profile leading to a disproportionately
high working capital cycle.
* Ongoing default: Due to ongoing stress on the company's liquidity
position the company defaulted on its debt obligations towards
Several Non-Convertible debentures (NCD) and Commercial Papers (CP)
issued and the same has not been regularized.
* Deterioration in credit profile of Future Group: The share price
of various Future Group entities has witnessed a steep decline. The
weakening of market capitalization has impacted the financial
flexibility of the group.
Key Rating Strengths
* Experienced Promoters & Management: FEL is a part of Future Group
(FG), with the flagship company of group as Future Retail Limited
(FRL). The group is headed by Mr. Kishore Biyani and has business
interest across various sectors such as retail, FMCG, logistics,
financial services etc. The promoters are supported by a strong
management team having significant experience in retail industry.
* Divestment of investments to improve cash flows: FEL is looking
to divest its investments across various businesses. The divestment
includes stake sale in insurance and logistics business. The
divestment is expected to improve the company's cash
flows and the proceeds will be used towards debt reduction.
* Importance to Future group in terms of sourcing and manufacturing
fashion products: FEL sources and manufactures goods for Future
group which is sold to the customer through FRL and FLFL's retail
outlets. FEL continues to an integral part of Future group's
fashion business as both FRL and FLFL, in FY20, sourced 23% and 12%
of its products respectively from FEL.
* Industry Outlook: The lockdown that started from March onwards
continued for almost 2 months with rules and regulations for retail
stores differing as per the respective state governments and
municipalities. This constrained the activities of retail stores at
various locations. Besides, the retail industry will face
difficulty in making payments to operational creditors and getting
an extension from them amid the Covid-19 situation. However,
companies with deep pocket promoters would be expected to tide over
the liquidity crisis better. Also purchases at retail stores are
expected to be impacted on account of restriction in movement,
social distancing and reduction in purchasing power of consumers.
Thus, non-essential items like apparels, consumer durables,
personal products etc. are expected to be impacted more than
essential items. This subdued consumption, in turn, will affect
sales of the retail industry during the year FY21. In addition to
this, the retail industry will face challenges in terms of
inventories that have become out dated, liquidity issues which will
impact working capital needs, cash flows etc.
Liquidity Position: Poor
The company's liquidity profile has been severely impacted on
account of lockdown measures and weakened credit profile of its key
customer, FRL. FRL and FLFL both are facing severe liquidity
stress. The inability of FEL to realise its debtors during COVID19
pandemic and shut down of operations during Q1FY21 led to cash
crunch, increase in debtor days and subsequently default on its
debt service obligations. There have been substantial delays in
receipt from group entities and subsequent receipts have not been
significant.
Erstwhile Future Retail Ltd. has now been renamed as Future
Enterprises Ltd. (FEL) and houses the physical assets (store
formats of erstwhile FRL and Bharti Retail Limited including all
the infrastructure assets situated in the stores) apart from
strategic investments in various companies. The company is also in
the business of manufacturing and trading of men's wear, women's
wear and kid's wear in denim segment. Consequent to de-merger, the
long term debt (comprising bank term loans and NCDs of erstwhile
FRL) now resides in the books of FEL. FEL is also the holding
company for future group's various other businesses.
G.R. ENGINEERING: Ind-Ra Moves BB+ Issuer Rating to Non-Cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated G. R. Engineering
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR376.2 mil. Fund-based working capital facilities migrated
to non-cooperating category with IND BB+ (ISSUER NOT
COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating;
-- INR2.85 bil. Non-fund-based working capital facilities
migrated to non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating;
-- INR223.8 mil. Proposed fund-based working capital facilities*
is withdrawn; and
-- INR550 mil. Proposed non-fund-based working capital
facilities* is withdrawn.
* The rating has been withdrawn since it was outstanding for more
than 180 days.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 5, 2020. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1966 by D.P. Hariani, Mumbai-based G. R.
Engineering supplies fabricated equipment for gas or liquid storage
facilities on an engineering, procurement and construction basis.
Its production unit is based in Tarapur.
GEHLOT ENTERPRISE: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Gehlot
Enterprise (GHE) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 4, 2020, placed the
rating(s) of GHE under the 'issuer non-cooperating' category as GHE
had failed to provide information for monitoring of the rating. GHE
continues to be non-cooperative despite repeated requests for
submission of information through phone calls and emails dated
March 20, 2021, March 30, 2021 and April 9, 2021. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on May 4, 2020, the following was the
rating weaknesses:
Key Rating Weaknesses
* On-going delays in debt servicing: As per banker interaction,
there are on-going delays in debt servicing.
Surat (Gujarat) based, GHE was established as a proprietorship firm
on August, 2015. GHE is currently executing a residential project
named 'Shree Umang Laxmi Residency (The firm has applied for RERA
Registration) with 287 units (72 flats and 215 row houses) at
Ankleshwar consisting total area under development of 24,382 square
meters. The implementation of Shree Umang Laxmi Residency commenced
since August 2015 and till December 1, 2017, GHE has incurred the
total cost of INR12.29 crore (65% of total project cost) out of the
total cost of INR18.73 crore and rest will be incurred by end of
June 2018. Till December 20, 2017, out of total units 15 Row houses
have been booked and 1 row house has been sold and 14 flats have
been booked and 8 flats have been sold.
GREENKO ENERGY: S&P Alters Outlook to Positive & Affirms 'B+' ICR
-----------------------------------------------------------------
S&P Global Ratings, on April 27, 2021, revised its rating outlook
on India-based renewable energy company Energy Holdings to positive
from stable. S&P affirmed its 'B+' long-term issuer credit rating
on Greenko and the 'B+' long-term issue rating on the senior
secured notes the company guarantees.
The positive outlook reflects S&P's view that Greenko will improve
its scale, size, and diversity, as well as stabilize its operating
assets over the next 12-18 months.
Greenko's larger and more diversified portfolio should support its
cash flows over the next 12-24 months. With the inclusion of 873
megawatt (MW) of wind assets from Orix Corp. at the end of fiscal
2021 (year ended March 31, 2021), Greenko's portfolio will be close
to 5 gigawatt (GW). This will provide stability in performance at
least in line with P90 (meeting expected power generation levels at
least 90% of the time) generation estimates over fiscals 2022 and
2023. The Orix assets were operating at between P50 and P75
estimates in fiscals 2019 and 2020, and S&P expects the inclusion
of these wind assets to improve Greenko's overall operating wind
performance. As part of the transaction, Orix picked up 21.5%
shares of Greenko, and transferred 873 MW of wind power assets. The
Orix wind portfolio consists of 32 wind assets located across seven
states in southwest India.
Greenko's proposed acquisition of the 1.2 GW Teesta Urja Ltd.
(Teesta) hydro power facility in Sikkim should further enhance its
portfolio. The company acquired 30% of shareholding at the end of
fiscal 2021 and S&P expects the deal to be completed by the start
of fiscal 2023. Greenko's generation sources will then be spread
across wind, solar, and hydro at 46%, 25%, and 29%, respectively.
This diversity is better than that of closest peer, ReNew Power
Pte. Ltd., which has only solar and wind projects.
The construction of one of Greenko's two integrated renewable
energy storage projects (IRESP) in Andhra Pradesh has started, and
operations are scheduled to begin in September 2023. This should
enhance the company's business position further. Each IRESP
comprises a solar farm, wind farm, and a pumped storage
hydroelectricity facility. S&P estimates the remaining capital
expenditure (capex) for the IRESP in Andhra Pradesh at US$906
million over fiscals 2022-2024. The second IRESP project in
Saundatti is subject to board approvals.
Weak operating performance in Greenko's early years has weighed on
its business profile, although there has been some improvement over
the past two years. The company's wind portfolio did not perform in
line with P90 estimates in fiscal 2021 due to lower-than-average
wind speeds in the first half of the year. However, this was a
regional industrywide trend.
Greenko is unlikely to materially deleverage while it continues its
growth projects and acquisitions. S&P believes Greenko will
continue to receive sufficient funding and capital support from its
sponsor GIC Pte. Ltd. to pursue its growth plans. GIC contributed
US$200 million in fiscal 2021 and has further committed its share
of equity over the next four years. Given that GIC has historically
contributed equity support for growth, this may not lead to any
significant reduction in leverage.
The sponsors paid US$112 million for the 30% Teesta acquisition via
equity contributions. Greenko intends to acquire the remaining 70%
of Teesta (valued at US$1.66 billion) by March 2022, although the
transaction is still subject to approval from the Competition
Commission of India. Greenko also received equity contributions of
US$340 million from Orix following the 21.5% purchase of Greenko's
shares.
Greenko's ratio of funds from operations (FFO) to debt could
improve to 6.5% in fiscal 2023, compared with 2.03% in fiscal 2021,
if its portfolio performs in line with P90 estimates and the
company completes the acquisition of Teesta. EBITDA contribution
from Teesta could also offset high capex and working capital needs,
such that the FFO cash interest coverage strengthens to about 1.80x
in fiscal 2023, compared with 1.22x in fiscal 2021.
Greenko remains exposed to the weak credit quality of Indian state
counterparties.India's Ministry of Power confirmed in 2020 that
payment moratoriums related to COVID-19 will not apply to state
offtakers, and the priority dispatch status for renewable companies
will remain intact. However, payment delays are ongoing as the
economic slowdown caused by the pandemic continues. Further
movement restrictions due to another round of lockdowns in some
states may further hit the timeliness of receivables. S&P said, "As
such, we anticipate Greenko's annual working capital outflow for
fiscals 2021 and 2022 will be US$100 million to account for these
collection delays. We expect timely payments from NTPC Ltd. and
Solar Energy Corp. of India Ltd. (SECI), which account for 20% of
Greenko's revenues, to support its receivables."
S&P said, "We believe Greenko's concentration to these better-rated
counterparties will increase as the new IRESPs come online. For
example, the power purchase agreement of the first IRESP asset has
been signed with SECI, which historically has been clearing its
dues on time. We anticipate Greenko's business profile will further
improve as its offtaker exposure diversifies.
"The positive rating outlook over the next 12-18 months reflects
our view that Greenko is likely to increase its size and diversity,
including from the proposed 100% acquisition of Teesta; stabilize
its operating performance in line with the industry at around P90
levels; and benefit from strong sponsor support from GIC for
funding acquisitions and working capital needs. We expect the
company's FFO cash interest coverage to improve to 1.50x-1.80x over
fiscals 2022 and 2023, compared with 1.22x in fiscal 2021.
"We may raise the rating if Greenko's portfolio, including the Orix
assets, stabilizes; the company completes the Teesta acquisition in
2022; and execution and operational risks of the IRESPs are
manageable."
A stable operating performance backed by Greenko's bigger scale and
diversity could help the company to strengthen its competitive
position while maintaining FFO cash interest coverage of above 1.5x
on a sustainable basis. This also assumes that GIC will continue to
meet any equity needs for growth, acquisitions, and working capital
requirements.
S&P may revise the outlook to stable if Greenko fails to stabilize
its operating performance, the Teesta acquisition does not get
completed on time, or if construction and execution risks for the
IRESPs are not adequately mitigated.
S&P may lower the rating if Greenko's FFO cash interest coverage
falls sustainably below 1.5x. This can happen if:
-- The company's operating performance is weaker than the industry
at around P90 levels;
-- The company's receivables considerably worsen; or
-- It undertakes higher debt-funded capex or acquisitions than S&P
expects without appropriate equity support.
Greenko operates renewable energy projects across wind, solar, and
hydro throughout India. As of March 31, 2021, the company's total
installed capacity was about 5 GW. Unlike other renewable peers,
Greenko's growth has been through acquisitions of operational
assets, allowing the company to achieve scale and diversity quickly
without development risks.
Greenko is majority owned by sovereign wealth funds. GIC has
majority ownership with a 55.4% stake, Orix and Abu Dhabi
Investment Authority owns 21.5% and 13.9%, respectively, while the
promoters of the company own the rest.
GSR VENTURES: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed GSR Ventures
Private Limited's (GSR) Long-Term Issuer Rating at 'IND BB'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR40 mil. Fund-based working capital limits affirmed with
IND BB/Stable/IND A4+ rating;
-- INR400 mil. (reduced from INR450 mil.) Non-fund-based working
capital limits affirmed with IND A4+ rating; and
-- INR100 mil. Proposed non-fund-based working capital limits*
assigned with Provisional IND A4+ rating.
*The final rating will be assigned following the issuance and the
receipt of the final executed transaction documentation, conforming
to the information already received by Ind-Ra.
KEY RATING DRIVERS
The affirmation reflects GSR's continued small scale of operations,
despite a surge in the revenue to INR1,524.8 million in FY20 (FY19:
INR334.1 million, FY18: INR463.8 million) on account of timely
execution of existing orders. The company reported lower revenue
during FY18-FY19 because of slower pace of execution of orders and
bidding, and the resultant stretched receivables from state
government authorities. As of April 2020, GSR had an order book of
INR4,651.7 million (3.05x of FY20 revenue), to be executed by 2023.
The company reported revenue of INR1,906 million (gross sales
including the Goods and Services Tax) during 5MFY21. The order
execution was affected during April-May 2020 because of the
COVID-19-led lockdown, but it picked up from 2QFY21 on account of
unlocking of economic activities. GSR's revenue is likely to
improve over the medium-to-long term on the back of its strong
order book.
Liquidity Indicator - Stretched: GSR's average maximum use of the
fund-based and the non-fund-based facilities was 84% and 47%,
respectively, for the 12 months ended March 2021.The company had
cash and cash equivalents of INR40.6 million at FYE20 (FYE19:
INR31.4 million). Its net cash cycle improved to 60 days in FY20
(FY19: 83 days) due to a decline in the creditors period to 231
days (91 days). The cash flow from operations turned negative to
INR19.1 million in FY20 (FY19: INR38.6 million), due to unfavorable
changes in working capital. However, Ind-Ra expects the cash flow
from operations to have turned positive in FY21 on the back of a
likely improvement in EBITDA margins. Furthermore, the agency
expects GSR's cash flows to be sufficient to service the term debt
obligations of INR1.2 million in FY22. GSR had availed the Reserve
Bank of India-prescribed moratorium on its working capital
facilities over March-August 2020 under the COVID-19 relief
package, to conserve liquidity.
The ratings also remain constrained by customer concentration risk,
as GSR derives 80%-90% of its revenue from four-to-five projects.
However, Ind-Ra expects the order book concentration to marginally
improve in the medium-to-long term on the back of adverse
developments in the projects or state.
The ratings, however, benefit from GSR's healthy margins with a
return on capital employed of 27% in FY20 (FY19: 6%). The margins
declined to 4.8% in FY20 (FY19: 5.6%), due to an increase in raw
material costs and administrative expenses. The company had
allotted a large project of NCC Limited ('IND A'/Positive) and
Gayatri Projects Limited, accounting 93% of the FY20 revenue to a
sub-contractor, resulting in lower margins. Ind-Ra expects the
margins to have improved in FY21, due to the timely order
execution.
The ratings also remain supported by GSR's comfortable credit
metrics as indicated by the interest coverage (operating
EBITDA/gross interest expense) of 12.9x in FY20 (FY19: 2.5x) and
the net leverage (adjusted net debt/operating EBITDAR) of 0.7x
(1.5x). Despite an increase in the total debt to INR93 million at
FYE20 (FYE19: INR60 million), the credit metrics improved primarily
on account of an increase in the operating EBITDA to INR72.5
million (INR18.6 million). The agency expects the absolute EBITDA
to have improved further in FY21 on the back of the likely increase
in the revenue, leading to an improvement in the credit metrics in
the near term.
The ratings also continue to benefit from the founders' experience
of about a decade and a half in the execution of civil construction
projects.
RATING SENSITIVITIES
Negative: A decline in the revenue and/or the operating margins,
resulting in deterioration in the credit metrics and the liquidity,
all on a sustained basis, will lead to a negative rating action.
Positive: A substantial rise in the revenue and the operating
margins, leading to an improvement in the credit metrics and the
liquidity, all on a sustained basis, will lead to a positive rating
action.
COMPANY PROFILE
Hyderabad-based GSR was set up as a partnership firm in 1971 by G
Sivakumar Reddy and his family, and was reconstituted as a private
limited company in 2008. It undertakes civil construction, mainly
canal earthwork excavation and construction of bridges.
J.P. RICE: CRISIL Keeps B Debt Ratings in Not Cooperating
---------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of J.P. Rice and
Foods Private Limited (JPR) continue to be 'CRISIL B/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Inventory Funding 5 CRISIL B/Stable (Issuer Not
Facility Cooperating)
Working Capital 10 CRISIL B/Stable (Issuer Not
Facility Cooperating)
CRISIL Ratings has been consistently following up with JPR for
obtaining information through letters and emails dated September
30, 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 JPR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JPR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JPR continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Set up in 2009, J.P.Rice Exports Private Limited, (JPR) is engaged
in milling and processing of paddy into rice. It has an installed
paddy milling capacity of 36000 MT. Its rice mill is located in
Alipur in Delhi. The company is promoted by Mr. Bharat Bhushan
Arora.
JAINAM ALTERNATE: CRISIL Keeps B- Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Jainam
Alternate Energy Private Limited (PPPL; previously known as
Pithampur Petro Pharma Private Limited) continue to be 'CRISIL
B-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B-/Stable (Issuer Not
Cooperating)
Long Term Loan 2 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'.
The company, incorporated in 2000 and based in Dhar, Madhya Pradesh
(MP), manufactures and sells bitumen in the domestic market. Mr.
Pravin Jain and Mr. Shailesh Jain manage the operations.
JAY DEE: CRISIL Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Jay Dee
Enterprises (JDE) continue to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 8.2 CRISIL D (Issuer Not
Cooperating)
Export Packing 3.0 CRISIL D (Issuer Not
Credit Cooperating)
CRISIL Ratings has been consistently following up with JDE 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 JDE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JDE
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JDE continues to be 'CRISIL D Issuer not cooperating'.
Promoted by Mr. Pawandeep Sachdeva, JDE is engaged in manufacturing
and exports of the ready-made garments.
K. K. FIBERS: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of K. K. Fibers
(KKF; part of the KK group) continue to be 'CRISIL B+/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10.00 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Long Term 1.31 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with KKF 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 KKF, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KKF
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
KKF continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
For arriving at the rating, CRISIL Ratings has combined the
business and financial risk profiles of KKF and KK Finecot Private
Limited (KKPL). This is because both the entities, together
referred to as the KK group, are engaged in a similar business,
managed by common promoters, and have operational linkages in the
form of common procurement.
The KK group, based in Khargone, Madhya Pradesh, is promoted by the
Agrawal family. KKF, a partnership firm established in 2006, gins
and presses raw cotton and sells cotton seeds. It has an in-house
oil mill for extracting oil from cotton seeds. KKFL, incorporated
in fiscal 2012, also gins and presses raw cotton.
M. P. K. METALS: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of M. P. K.
Metals Private Limited (MPKM) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.8 CRISIL D (Issuer Not
Cooperating)
Standby Line 0.22 CRISIL D (Issuer Not
of Credit Cooperating)
Term Loan 0.98 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with MPKM 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 MPKM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MPKM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MPKM continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of MPKI, MPK Metals Pvt Ltd
(MPKM), and MPK Steels India Pvt Ltd (MPKM). This is because the
three companies, together referred to as the MPK group, have common
ownership and management, and MPKM and MPKM have the same product
profile and sell under a common brand. MPKI has been set up in
order to backward integrate into billet manufacturing for
supporting the operations of the other two companies and has also
received corporate guarantees from them for its bank funding.
About the Group
MPKS was set up as a private limited concern in 2005. It
manufactures structural products, including thermo-mechanically
treated (TMT) bars, channels, angles, and joints, at its
manufacturing facility in Jaipur. The company markets the products
under its own brand, MPK. The operations of the company are managed
by Mr. Santosh Kumar Upadhyay and his son, Mr. Manoj Upadhyay.
MPKM was set up as a private limited concern in 2009 and
manufactures structural products including TMT bars, channels,
angles, and joints at its manufacturing facility in Jaipur and
markets the same under its MPK brand. The operations of the company
are managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj Upadhyay.
MPKI was set up as a private limited concern in 2010 and started
operations in 2012-13 (refers to financial year, April 1 to March
31) with 2013-14 being its first full year of operations. The
company has been set up as a backward integration unit of the group
to manufacture steel billets and ingots for captive consumption in
MPKS and MPKM. The company has its plant in Bagru (Jaipur) and is
managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj Upadhyay.
M.P.K. STEEL: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of M.P.K. Steel
India Private Limited (MPKS; a part of the MPK group) continue to
be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.36 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 0.50 CRISIL D (Issuer Not
of Credit Cooperating)
Term Loan 2.44 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with MPKS 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 MPKS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MPKS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MPKS continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of MPKS, MPK Metals Pvt Ltd
(MPKM), and MPKI Ispat India Pvt Ltd (MPKI). This is because the
three companies, together referred to as the MPK group, have common
ownership and management, and MPKM and MPKS have the same product
profile and sell under a common brand. MPKI has been set up in
order to backward integrate into billet manufacturing for
supporting the operations of the other two companies and has also
received corporate guarantees from them for its bank funding.
About the Group
MPKS was set up as a private limited concern in 2005. It
manufactures structural products, including thermo-mechanically
treated (TMT) bars, channels, angles, and joints, at its
manufacturing facility in Jaipur. The company markets the products
under its own brand, MPK. The operations of the company are managed
by Mr. Santosh Kumar Upadhyay and his son, Mr. Manoj Upadhyay.
MPKM was set up as a private limited concern in 2009 and
manufactures structural products including TMT bars, channels,
angles, and joints at its manufacturing facility in Jaipur and
markets the same under its MPK brand. The operations of the company
are managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj Upadhyay.
MPKI was set up as a private limited concern in 2010 and started
operations in 2012-13 (refers to financial year, April 1 to March
31) with 2013-14 being its first full year of operations. The
company has been set up as a backward integration unit of the group
to manufacture steel billets and ingots for captive consumption in
MPKS and MPKM. The company has its plant in Bagru (Jaipur) and is
managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj Upadhyay.
MAA SARBAMANGALA: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Maa
Sarbamangala Udyog (MSU) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.13 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from MSU to monitor the rating
vide e-mail communications/letters dated April 2, 2021, April 6,
2021 and April 9, 2021 and numerous phone calls. However, despite
our repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. Further, Maa
Sarbamangala Udyog has not paid the surveillance fees for the
rating exercise as agreed to in its Rating Agreement. The rating on
MSU's bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating in February 28, 2020 the following were
the rating weaknesses:
Key Rating Weaknesses
* Ongoing delay in debt servicing: There are on-going delays in
servicing of debt obligations of the entity due to non-generation
of revenue owing to shut down of its plant owing to devastating
fire occurred on August 26, 2018.
Maa Sarbamangala Udyog (MSU) was established in May 2012 by Mr.
Brajagopal Ghoshal based out of Medinipur, West Bengal. The firm
has been engaged in processing of cashew nuts at its plant located
at Medinipur, West Bengal which has a processing capacity of 20
metric tonnes raw cashew nuts per day. The plant was satisfactory
operational till August 25, 2018; however, the plant of the firm
completely destroyed due to devastating fire occurred on August 26,
2018. The entire plant & machinery and almost entire stock have
been destroyed. The forensic inspection has been conducted by the
National Insurance Company Limited and the same is reported to be
satisfactory. The final and preliminary surveyor report has been
done by the empanelled surveyor of the insurance company and the
same has been deposited to the insurance company.
MAHANADI EDUCATION: Ind-Ra Keeps BB Loan Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Mahanadi
Education Society's (MES) bank facilities' ratings in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will
continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR74.5 mil. Term loan due on September 2019 maintained in
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
rating; and
-- INR100 mil. Working capital facility maintained in non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May
2, 2017. Ind-Ra is unable to provide an update, as the agency does
not have adequate information to review the ratings.
COMPANY PROFILE
Founded in 1994, Mahanadi Education Society is registered with the
Registrar of Firms and Societies, Government of Madhya Pradesh. The
society manages and operates Raipur Institute of Technology (1995),
Kaanger Valley Academy (2005), RIT College of Nursing (2008), RIT
College of Management (2009), RIT College of Hotel Management
(2016) and RIT College of Education (2013).
MEERA GOPI: CRISIL Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Meera Gopi
Jewels Private Limited (MGJPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8.5 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with MGJPL 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 MGJPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MGJPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MGJPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
MGJPL was incorporated in 2012 by Rohtak-based Gupta family. The
company is an authorized dealer of P P Jewellers Pvt Ltd for gold
and diamond studded gold jewelry and operates its showroom in
Rohtak. MGJPL has also started selling gold and diamond studded
gold jewelry purchased from the local market. Mr. Bharat Bhushan
Gupta, and his son, Mr. Abhishek Gupta are the key promoters of the
company.
MITHILANCHAL INDUSTRIES: Insolvency Resolution Case Summary
-----------------------------------------------------------
Debtor: Mithilanchal Industries Private Limited
Office Block, Plot No. 5916
Road No. 59, G.I.D.C.
Sachin, Surat 394230
Insolvency Commencement Date: April 15, 2021
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: October 12, 2021
Insolvency professional: Jigar Tarunkumar Bhatt
Interim Resolution
Professional: Jigar Tarunkumar Bhatt
B-101, Arvind Citadel
B/h. BSNL Office
Navrangpura
Ahmedabad 380009
E-mail: jigarb.jigarb@gmail.com
- and -
407, Satyamev Eminence
Near Shukan Mall
Opp. Asthmangal Mahadev Temple
Science City, Ahmedabad 380060
E-mail: cirp.mipl@gmail.com
Last date for
submission of claims: May 6, 2021
MOSAVI ENTERPRISES: Ind-Ra Hikes Long-Term Issuer Rating to 'B'
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Mosavi Enterprises
Private Limited's (Mosavi) Long-Term Issuer Rating to 'IND B' from
'IND D' and simultaneously placed it on Rating Watch Evolving
(RWE).
The instrument-wise rating action is:
-- INR960 mil. Non-Convertible Debentures (NCDs)ISIN INE280Y07017
issued on August 10, 2017 coupon rate 1% due on August 9,
2022 upgraded; placed on RWE with IND B/RWE rating.
Analytical Approach: Ind-Ra continues to take a consolidated view
of Mosavi, Seaways Shipping and Logistics Limited (Seaways; 'IND
B'/RWE), and the subsidiaries of Seaways to arrive at the ratings,
on account of the operational, management, legal and financial
linkages among the entities. Mosavi is wholly-owned by the
promoters of Seaways.
KEY RATING DRIVERS
The rating action reflects a similar action on Seaways, with which
Mosavi has strong legal linkages. A cross-default clause is
applicable on the debt raised by way of NCDs by Mosavi. The NCDs
have been secured by an 87.8% share pledge of Seaways. The agency
expects Seaways to provide the required assistance to Mosavi in
case of its inability to timely service the debt.
Mosavi, reported revenue of INR82.8 million in FY20 (FY19: INR116.3
million) and EBITDA of INR4.7 million (INR8.9 million). Mosavi does
not have any other external debt except NCDs.
RATING SENSITIVITIES
The RWE indicates that ratings may be upgraded, downgraded or
affirmed. Ind-Ra will continue to closely monitor the developments
at Seaways on the refinancing/stake sale and will take an
appropriate rating action by July 2021 on adequate clarity on the
refinancing/stake sale and the liquidity profile of the company.
COMPANY PROFILE
Incorporated in May 2017, Mosavi is engaged in material handling
operations, transportation and storage across ports. The company
commenced commercial operations in September 2017.
In addition, it leases equipment used for lifting cargo onto ships
and unloading of cargo from ships, transport vehicles that move
goods/cargo between ships and warehouses, and others.
MULTIDIMENSION WARANGAL: CRISIL Keeps B+ Rating in Not Cooperating
------------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Multidimension
Warangal Multiplex Private Limited (MWMPL) continues to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 15 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with MWMPL 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 MWMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MWMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MWMPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in October 2011, MWMPL is currently setting up a
multiplex in Warangal (Telangana). The company is promoted by
Mr.Puskur Ram Mohan Rao and his associates.
NARAYAN INDUSTRIES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Narayan
Industries (Chattisgarh) (NI) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/ 1.00 CARE D; ISSUER NOT COOPERATING
Short Term Rating continues to remain
Bank Facilities under ISSUER NOT COOPERATING
category
Short Term Bank 3.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from NI to monitor the ratings
vide e-mail communications/letters dated March 18, 2021, March 22,
2021, March 24, 2021 and numerous phone calls. However, despite our
repeated requests, the entity has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which, however, in CARE's opinion is
not sufficient to arrive at a fair rating. The rating on NI's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Further, the banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
During the last rating done on Feb. 26, 2020, following rating
weakness was considered.
Key Rating Weaknesses
* Delay in debt servicing: There is continuous overdrawal in cash
credit account more than 30 days. Bank Guarantees has also been
invoked.
Chhattisgarh based Narayan Industries (NRI) was established in 2007
as a proprietorship firm. The firm has installed a rice and pulse
milling unit at Bhatapara in Chhattisgarh with an install capacity
of 4,000 MTPA. NRI sells finished rice, broken rice, rice bran and
various types of pulses like Masoor Dal, Moong Dal, Urad Dal etc.
The day-to-day affairs of the firm are looked after by Mr. Mukesh
Motwani (Proprietor) along with a team of experienced personnel.
NEELKANTH FARMS: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Neelkanth
Farms (NKF) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.20 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 12, 2020, placed
the rating of NKF under the 'issuer non-cooperating' category as
Neelkanth Farms had failed to provide information for monitoring of
the rating. NF continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated March 15, 2021, March 12, 2021, March 11,
2021 and March 10, 2021. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in February, 2020 the following were the
rating weaknesses:
Key Rating Weaknesses
* Instances of delays in debt servicing: There were instances of
delays in the repayment of term debt obligation.
Neelkanth Farms (NKF) was established in July, 2017 as a
partnership firm and is currently being managed by Mr. Anil Mor,
Mr. Ram Kumar and Mr. Madan Mohan. NKF is established with an aim
to set up a poultry farming business at its poultry farm located in
Karnal, Haryana with the proposed breeding capacity of about 20,000
layer birds per batch. The firm plans to sell eggs and one day old
chicks directly to various wholesalers located in Punjab,
Rajasthan, Jammu & Kashmir, Haryana, Uttar Pradesh etc. Besides
NHF, the partners are also engaged in another group concern namely
Neelkanth Breeding Farm (NBF), which is a partnership firm based in
Haryana and engaged in similar business operations since 2010.
ORMA MARBLE: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: M/s Orma Marble Palace Private Limited
III 13 Kothakulangara
Thrissur Road
Angamaly, Ernakulam
KL 683572 IN
Insolvency Commencement Date: April 9, 2021
Court: National Company Law Tribunal, Aluva Bench
Estimated date of closure of
insolvency resolution process: October 17, 2021
Insolvency professional: CA Jasin Jose
Interim Resolution
Professional: CA Jasin Jose
Ponmattam Madaserry
Mookannoor PO 683577
Angamaly, Kerala
India
E-mail: jasinjoseponmattam@gmail.com
- and -
CA Jasin Jose
5D, Skyline Riverscape
Thottumugham, Aluva
Kerala 683101
E-mail: cajasinjose@gmail.com
Last date for
submission of claims: May 4, 2021
PACIFIC JUTE: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Pacific Jute
Limited (PJL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR170 mil. Fund-based limit affirmed with IND BB+/Stable
rating.
KEY RATING DRIVERS
The rating reflects PJL's small scale of operation, as reflected by
revenue of INR733.47 million in FY20 (FY19: INR664.89 million); the
revenue growth was driven by increased sales. According to the
provisional FY21 financials, the company's revenue reduced to
INR612 million due to a lacklustre 1QFY21, which was adversely
impacted by the COVID-19 pandemic. At end-March 2021, PJL had an
order book of INR180 million to be executed in the short term.
The rating is further constrained by PJL's moderate credit metrics.
The company's gross interest coverage (operating EBITDA/gross
interest expense) improved to 3.65x in FY20 (FY19: 2.77x) due to a
slight increase in the absolute EBITDA to INR50.30 million in FY20
(FY19: INR45.74 million). The net leverage (total adjusted net
debt/operating EBITDA), however, deteriorated to 3.41x in FY20
(FY19: 3.30x) due to an increase in debt to INR164.65 million
(INR145.46 million) to fund high year-end utilization. Ind-Ra
estimates the company's credit metrics to have remained stable in
FY21.
The rating factors in PJL's average margin. The EBITDA margin was
stable at 6.86% in FY20 (FY19: 6.88%) with an unchanged return on
capital employed of 13.2%. The agency estimates the company's
margin to have remained unchanged in FY21.
Liquidity Indicator - Stretched: PJL's average maximum utilization
of the fund-based limit was 71.5% during the 12-months ended
February 2021. The company's cash flow from operations reduced
significantly to INR9.54 million in FY20 (FY19: INR29.13 million)
and the free cash flow turned negative due to a significant
increase in capital expenditure to INR36.55 million (INR11.18
million). The company's working capital cycle improved to 129 days
in FY20 (FY19: 167 days) primarily due to the realization of
debtors with debtor days at 72 (91) and an improvement in inventory
days at 61 (88). Its debt obligations for FY21 were INR2.84
million. The company also availed of the Reserve Bank of
India-prescribed moratorium on its fund-based limits from
April-August 2020 and has repaid the same. Additionally, in FY21,
the company availed of a working capital term loan of INR17 million
and guaranteed emergency credit line loan of INR25.80 million from
Indian Bank ('IND AA+'/Stable) as a cushion for COVID-19-led
disruptions.
The rating, however, benefits from the promoter's over three
decades of experience in the jute industry, which helps PJL
maintain strong relations with its suppliers and customers and
develop high-quality products for international markets.
RATING SENSITIVITIES
Positive: A significant increase in the revenue and EBITDA margin
in FY22, leading to an improvement in the credit metrics as well as
in the liquidity position and stabilization in the capital
expenditure, all on a sustained basis, will lead to positive rating
action.
Negative: A decline in the revenue and/or EBITDA margin, leading to
the interest coverage falling below 1.6x and/or a further stressed
liquidity position, will lead to a rating downgrade.
COMPANY PROFILE
Incorporated in 2005 by Kolkata-based Pawan Kumar Agarwal, PJL
manufactures and exports jute products. It has an export-oriented
unit in Falta (West Bengal). The company is a part of the Mohan
Group Limited led by Pawan Kumar Agarwal with four decades of
experience in the jute industry. However, the company has been
rated on a standalone basis, due to low linkages with other group
companies.
PREMIER ENTERPRISES: CARE Cuts Rating on INR5cr LT Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Premier Enterprises (PE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE BB-; Stable
Short Term Bank 11.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PE to monitor the rating
vide e-mail communications/letters dated April 2, 2021, April 6,
2021 and April 9, 2021 and numerous phone calls. However, despite
our repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. Further, Premier
Enterprises has not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. The rating on PE's
bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the ratings takes into account the on-going delays
in debt servicing of the entity.
Detailed description of the key rating drivers
Key Rating Weakness
* On-going delays in debt servicing: There are on-going delays in
the term debt servicing of the entity.
Premier Enterprises was initially established in 2004 as a
partnership firm by Mr. Hironya Kumar Saikia and Mr. Jibeswar
Saikia (Relative of Mr. Hironya Kumar Saikia). But, later on April
1, 2013, the firm was converted into a proprietorship entity upon
retirement of Mr. Jibeswar Saikia. Since inception; the entity has
been engaged in supply, erection, commissioning of transmission
lines for Assam Power Distribution Company Ltd. (APDCL). The entity
procures its orders through participating in tender in the state of
Assam. Apart from execution of contracts it is also involved in
manufacturing of PSC Poles. The manufacturing facility of the unit
is located at Kothiatoli, Dist: Nagaon, Assam, having an installed
capacity of 272 pieces per day.
RAVIRAJ GINNING: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Raviraj
Ginning Pressing & Oil Industries (RGPOI) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 4, 2020, placed the
rating(s) of RGPOI under the 'issuer non-cooperating' category as
RGPOI had failed to provide information for monitoring of the
rating. RGPOI continues to be non-cooperative despite repeated
requests for submission of information through phone calls and
emails dated March 20, 2021, March 30, 2021 and April 9, 2021. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on May 4, 2020, the following was the
rating weaknesses:
Key Rating Weaknesses
* On-going delays in debt servicing: As per banker interaction,
there are ongoing delays in debt servicing.
Morbi (Gujarat) based RGPOI, a partnership firm, was constituted in
October 2005. The key partners of the firm are Mr. Mahendra
Jhalariya and Mr. Kalyanji Jhalariya. The firm is engaged in the
cotton ginning, pressing and oil extraction business with an
installed capacity of 32 metric tonnes per day (MTPD) of cotton
bales as on March 31, 2017.
REAL LINK: Insolvency Resolution Process Case Summary
-----------------------------------------------------
Debtor: M/s. Real Link Engineering India Private Limited
No. 4, Park Street
Kattor, Coimbatore
Tamil Nadu 641009
Insolvency Commencement Date: April 21, 2021
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: October 18, 2021
Insolvency professional: Shri Lakshmanan Krishnan
Interim Resolution
Professional: Shri Lakshmanan Krishnan
T-1, Gokul Flats
#12, Teylor Estate
2nd Street, Kodambakkam
Chennai 600024
E-mail: kichaa_feb05@yahoo.co.in
Last date for
submission of claims: May 5, 2021
RELIANCE COMMUNICATIONS: Headed for Liquidation Amid NCLAT Decision
-------------------------------------------------------------------
Business Standard reports that Anil Ambani-promoted Reliance
Communications (RCom), which is now bankrupt, will now undergo
liquidation, unless the Supreme Court overturns the National
Company Law Appellate Tribunal (NCLAT) order.
According to Business Standard, the order stated that spectrum
owned by the firm can be sold under the insolvency process after
government dues are cleared.
Business Standard relates that a banking source said the committee
of creditors (CoC) for RCom will file an appeal against the order.
The NCLAT had passed the order in the 'Aircel versus the Department
of Telecommunications (DoT)' legal fracas.
Following the NCLAT's judgment, experts said the resolution plan of
UV Asset Reconstruction Company (UVARCL) for Aircel, which was
approved in June 2020, would be unworkable and the company would be
heading for liquidation, thus resulting in zero recovery out of the
INR18,000 crore owed to lenders, Business Standard relates.
"A similar fate awaits RCom, which was sent to the NCLT for debt
resolution after it defaulted on INR46,000 crore of debt," said a
banker.
UVARCL is also the successful bidder for assets of RCom and
Reliance Telecom (RTL), which primarily include spectrum and real
estate, the report says.
Business Standard relates that the NCLAT, in its judgment earlier
in April, had held that spectrum could not be treated as 'security
interest' by lenders. However, the tribunal held that the
government was an operational creditor. In the matter of
'Ghanashyam Mishra and Sons Private Ltd vs Edelweiss Asset
Reconstruction Company Ltd', the Supreme Court had held that
operational creditors could not claim any amount over and above the
resolution plan as approved by the CoC.
It is clear that the DoT, as an operational creditor, cannot
recover any adjusted gross revenue (AGR) dues ahead of financial
creditors. Aircel and RCom owe INR12,389 crore and INR26,000 crore,
respectively, to the DoT in AGR dues.
Business Standard says the resolution plan of RCom and RTL was duly
cleared by 100 per cent of lenders, and is awaiting approval of the
NCLT, Mumbai, since March 2020.
Liquidation of RCom and RTL will result in a loss of INR40,000
crore to 38 lenders, Business Standard notes. Chinese banks led by
China Development Bank will lose INR9,000 crore, while SBI stands
to lose INR3,000 crore and Life Insurance Corporation of India
stands to lose INR3,700 crore. The banks, which have not received a
single penny from RCom since June 2017, are now looking at clarity
from the apex court, Business Standard says.
About Reliance Communications
Based in Mumbai, India, Reliance Communications Ltd is a
telecommunications service provider. The Company operates through
two segments: India Operations and Global Operations. India
operations segment comprises wireless telecommunications services
to retail customers through global system for mobile communication
(GSM) technology-based networks across India; voice, long distance
services and broadband access to enterprise customers; managed
Internet data center services, and direct-to-home (DTH) business.
Global operations comprise Carrier, Enterprise and Consumer
Business units. It provides carrier's carrier voice, carrier's
carrier bandwidth, enterprise data and consumer voice services. The
Company owns and operates Internet protocol (IP) enabled
connectivity infrastructure, comprising over 280,000 kilometers of
fiber optic cable systems in India, the United States, Europe,
Middle East and the Asia Pacific region.
The National Company Law Tribunal on May 9, 2019, allowed Reliance
Communications (RCom) to exclude the 357 days spent in litigation
and admitted it for insolvency. With this, RCom, which owes over
INR50,000 crore to banks, has become the first Anil Ambani group
company to be officially declared bankrupt after the NCLT on May 9
superseded its board and appointed a new resolution professional to
run it and also allowed the SBI-led consortium of 31 banks to form
a committee of creditors.
RELIGARE FINVEST: Ind-Ra Affirms 'D' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Religare Finvest
Limited's (RFL) Long-Term Issuer Rating at 'IND D'.
The instrument-wise rating actions are:
-- INR4 mil. Lower tier 2 sub-debt# downgraded with IND D rating;
and
-- INR150 mil. Long-term bank loans affirmed with IND D rating.
#Details in Annexure
KEY RATING DRIVERS
The ratings reflect RFL's continued delays in debt servicing due to
its stretched liquidity situation, along with a strained funding
profile. The company has informed the agency, as well as the NCD
holder (Axis Bank) that it is not in a position to service the
interest and principal amount of the non-convertible debentures on
the approaching maturity date of April 30, 2021.
The company is still under the corrective action plan as advised by
the Reserve Bank of India (RBI) since January 2018. A simultaneous
exercise for identifying potential investors was undertaken in
consultation with a consortium of banks, under which debt
resolution was proposed with TCG Advisory Services Pvt. Ltd. as
the investor. However, the RBI did not approve of this request for
a change in RFL's control in favor of TCG Advisory Services.
The management has informed the agency that its promoter- Religare
Enterprises Limited is in the process of submitting a revised debt
resolution plan, which may not need prior approval from the RBI, as
the latter is a non-bank finance company-core investment companies
registered entity with the RBI. Further, RFL is also actively
pursuing recovery cases, including Lakshmi Vilas Bank, and expects
to recover its fixed deposits along with interest from the bank.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in the re-assessment of the credit profile.
COMPANY PROFILE
RFL is a non-bank finance company that primarily provides loans to
small and medium enterprises through its product offering of loan
against property and working capital loans. RFL had total assets
worth INR54.04 billion at end-March 2020. During FY20, RFL incurred
a net loss of INR8.96 billion (FY19: INR15.48 billion).
RIGHILL ELECTRICS: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Righill
Electrics Private Limited (REPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 1.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 18, 2020 placed the
ratings of REPL under the 'issuer non-cooperating' category as REPL
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. REPL continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and emails dated January 8, 2021,
February 4, 2021, February 11, 2021, February 16, 2021 and February
21, 2021. In line with the extant SEBI guidelines, CARE has
reviewed the ratings on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating done on March 18, 2020 the following
were the rating strengths and weaknesses.
Key rating weaknesses
* Overdrawing owing to poor liquidity position: There was
overdrawing of more than 30 days owing to poor liquidity position.
REPL was incorporated in 1993 as a private limited company by Mr.
Ashutosh Shukla and Mr. Vinod Sapre. The company designs and
manufactures control systems and assemblies for various
applications including oil field equipment. It also manufactures
parts and assemblies like Electronic Control Modules; printed
circuit boards (PCBs), plugs and sockets connectors etc. It
specializes in designing and manufacturing of controls and electric
parts for oil rigs. The major revenue is derived from the sale of
rig equipment, and thus the revenues largely depend on the rigging
activity and in turn the crude oil prices. It also provides
services pertaining to repairs and maintenance and provides annual
maintenance contracts (AMC) for its customers. REPL has installed
rigs in India as well as outside India for various large players
such as ONGC, OIL India, BHEL, National drilling Company, ESSAR,
John energy Limited etc. The company has an employee base of 54
engineers who provide on-site services to its customers. The
manufacturing facility of the company is located in Bhopal, Madhya
Pradesh.
RJVJ TRADERS PRIVATE: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: RJVJ Traders Private Limited
9/B, Sanchar Nagar
G-1, Shilok Enclave
Indore
Insolvency Commencement Date: April 22, 2021
Court: National Company Law Tribunal, Indore Bench
Estimated date of closure of
insolvency resolution process: October 19, 2021
Insolvency professional: Neha Firoda
Interim Resolution
Professional: Neha Firoda
G/H 164, Scheme no. 54
Vijaynagar, Indore
Madhya Pradesh 452010
E-mail: caneha.dahiya@gmail.com
- and -
101 A, Press House
A B Road, 22 Press Complex
Indore, Madhya Pradesh 452008
E-mail: cirp.rjvj@gmail.com
Last date for
submission of claims: May 6, 2021
SAHDEV JEWELLERS: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sahdev
Jewellers (SJW) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Bank 51.40 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 29, 2020, placed the
ratings of SJW under the 'issuer noncooperating' category as SJW
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. SJW continues to be
non-cooperative despite repeated requests for submission of
information through e-mails dated April 4, 2021, March 30, 2021,
March 25, 2021 etc and a letter dated April 13, 2021. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been reaffirmed on account of non-receipt of
information due to which CARE is unable to conduct appropriate
credit risk assessment.
Detailed description of the key rating drivers
At the time of last rating on April 29, 2020 the following were the
rating weaknesses:
Key Rating Weaknesses
* Delays in the servicing of debt obligations: The weak financial
profile is marked by the delays in the servicing of debt
obligations in the PCFC account. The company had defaulted on the
debt servicing in the PCFC account and had LC devolvements due to
poor liquidity position.
Mr. Ravi Sahdev (son of Mr. Vasdev Sahdev) as partners. During
FY17, the constitution of the firm has been changed to a
proprietorship firm following demise of Mr. Vasdev Sahdev. The firm
is an export oriented unit and is engaged in manufacturing, trading
and export of plain gold jewelry. The firm has a manufacturing unit
at SEZ (Special Economic Zone) in Noida, Uttar Pradesh and has a
wholesale outlet in Karol Bagh, Delhi.
SARVODAYA EDUCATION: CRISIL Keeps B Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Sarvodaya
Education Society (SES) continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 25 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SES 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 SES, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SES
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SES continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
SES was established by the late Mrs. Jayalakshmi Siddaiah in 1959.
The society runs three schools in Bengaluru. Dr. B.Ramdas is the
current president of the society. The day-to-day operations are
handled by Dr. Vivekananda Siddiah, General Secretary.
SEAWAYS SHIPPING: Ind-Ra Hikes Long-Term Issuer Rating to 'B'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Seaways Shipping
and Logistics Limited's Long-Term Issuer Rating to 'IND B' from
'IND D' and simultaneously placed it on Rating Watch Evolving
(RWE).
The instrument-wise rating actions are:
-- INR640 mil. Non-convertible debentures (NCDs)ISIN INE286U07012
issued on August 11, 2017 coupon rate 13.5% due on August 10,
2022 upgraded; placed on RWE with IND B/RWE rating;
-- INR250 mil. NCDs INE286U07020 issued on September 8, 2017
coupon rate 6% due on August 10, 2021 upgraded; placed on RWE
with IND B/RWE rating;
-- INR250 mil. Fund-based limits upgraded; placed on RWE with
IND B/RWE/IND A4/RWE rating; and
-- INR50 mil. Non-fund-based limits upgraded; placed on RWE with
IND A4/RWE rating.
Analytical Approach: Ind-Ra continues to take a consolidated view
of Seaways, its subsidiaries and Mosavi Enterprises Private Limited
(Mosavi; 'IND B'/RWE), which is wholly-owned by the promoters of
Seaways, to arrive at the ratings, on account of operational,
management and financial linkages among the entities.
The upgrade reflects restructuring of NCDs of Seaways and Mosavi
under the Reserve Bank of India's Resolution Framework dated August
6, 2020. Seaways and Mosavi had invoked a one-time restructuring
under the Kamath Committee Framework on 30 December 2020.
Subsequently, Ind-Ra received confirmation from the NCD holders and
the trustee that the NCD holders have considered the proposal by
Seaways and Mosavi in a composite manner with certain terms.
Seaways, as per the terms agreed with the NCD holders, had made
requisite payment towards NCDs of INR890 million, which were
scheduled to be paid in January 2021. Also, Mosavi, as per the
revised terms agreed with NCD holders, received forbearance from
the investors for dues towards the NCDs of INR960 million. As a
result of which, the dues of January 2021 will now be paid along
with the installment of August 2021. Ind-Ra has received
confirmation from the NCD holders that the aforementioned
restructuring for Seaways and Mosavi will not be treated as payment
default under transaction documents.
In January 2021, Seaways and Mosavi skipped payment towards the
NCDs on the due date since asset monetization plans to pay of such
debt were adversely affected on account of the COVID-19-led
disruptions. Seaways had envisaged a stake sale in its key
subsidiary – Maxicon Container Line Pte Ltd (Maxicon) – the
proceeds of which were to be utilized for debt repayment. However,
in view of the divestment plans getting adversely affected due to
COVID-19 disruptions, Seaways could not raise adequate funds to pay
off the scheduled dues of January 2021. While Seaways and Mosavi
have applied for a one-time restructuring under the Kamath
Committee Framework, the absence of adequate clarity on the
acceptance and implementation of the restructuring proposal by the
NCD investors, resulted in the downgrade of ratings to 'IND D' by
the agency in January 2021.
Ind-Ra has placed the ratings on RWE on account of the impending
lumpy repayment of about INR1.5 billion due in August 2021 towards
the NCDs. Seaways is looking at refinancing/stake sale in its key
subsidiary – Maxicon to pay off the scheduled debt and the same
is likely to be completed before the due date (August 9, 2021). Any
delay in the refinancing/stake sale beyond the envisaged timeline
will be negative for the ratings.
KEY RATING DRIVERS
Liquidity Indicator – Poor: Seaways had cash and bank balances of
about INR135 million at FYE21 (FYE20: INR70.8 million). It also has
access to the fund-based limits of INR250 million, which were about
97% utilized during the six months ended March 2021; although the
utilization reduced in March 2021. Seaways also utilizes the
factoring facilities of INR100 million for meeting its working
capital requirement. Seaways and Mosavi had cumulatively availed
NCDs of INR1,850 million (INR640 million and INR250 million in
Seaways, and INR960 million in Mosavi), which along with the
accrued interest is scheduled for repayment in August 2021 and
August 2022.
The company's liquidity profile remains poor as the cash flows are
likely to remain inadequate considering the debt servicing
obligations of around INR1.53 billion in FY22. While the overall
profitability and cash flow of the company have improved, the
liquidity profile remains constrained by the lumpy debt repayment
in FY22 and FY23. However, Ind-Ra notes that Seaways is looking to
refinance the existing debt and sell stake in Maxicon. Therefore,
timely refinancing of the debt and stake sale process remains a key
rating sensitivity.
Improvement in Operating Performance: Revenue from operations is
likely to have increased to 30%-35% yoy during FY21 (FY20:
INR5,441.9 million, FY19: INR6,052.0 million supported by growth
across bulk logistics segment, freight forwarding as well as the
non-vessel operating common carrier (NVOCC) segment. The company
witnessed healthy growth in volumes handled across all the business
segments. Revenue from the NVOCC segment, the major business driver
of the group, is likely to have witnessed a 17% yoy growth in FY21,
while the bulk logistics segment revenue is likely to have surged
about 165% yoy. The management estimates the EBITDA margin to have
improved significantly to over 9% in FY21 (FY20: 0.7%, FY19: 0.2%)
on the back of the increase in the revenue, increased margin
contribution from the business segments and a healthy cost
management.
Improvement in Credit Metrics: The credit metrics are likely to
have improved substantially in FY21, primarily on account of a
sharp increase in profitability and a likely decline in the overall
debt levels. The improvement in profitability, and thereby cash
accruals have supported the reduction in the overall debt. Overall
debt (including debt of Mosavi) is likely to decline to about
INR2.52 billion at FYE21 (FYE20: around INR2.64 billion,) primarily
on account of the repayment of NCDs. Considering management
estimates the interest coverage (EBITDA/interest expenses) is
likely to have improved to about 1.9x in FY21 (FY20: 0.1x, FY19:
0.03x) and the net leverage (net debt/EBITDA) to around 3.6x
(71.5x, 260.2x).
Established Market Presence: Seaways provides ocean logistics
services and has an operational track record of three decades. The
company has an established domestic and international presence, and
enjoys a strong network of own offices and exclusive agents. The
company has presence across 26 locations in India and international
presence with operations in Singapore, Malaysia, Dubai, and Zambia
through various subsidiaries. The company, through its
Singapore-based subsidiary Maxicon, carries out its NVOCC business,
which is present in 23 countries, namely Singapore, India,
Malaysia, China, Indonesia, Vietnam, Thailand, Bangladesh, Oman,
Myanmar, UAE, among others.
Diversified Revenue Profile: The business profile of the company
draws strength from the diversified revenue profile of the group.
The group operates across four major business verticals: freight
forwarding, NVOCC, bulk logistics and warehousing. It also provides
project cargo logistics, air cargo logistics and offshore services.
Revenue from NVOCC, freight forwarding, bulk logistics and
warehousing segments is likely to have accounted 56%, 20%, 21% and
3% of the total revenue, respectively, during FY21 (FY20: 65%, 18%,
11% and 6%, respectively).
Cross-Default Clause A cross-default clause is applicable for the
debt raised by way of NCDs by Mosavi. Mosavi's debt (NCDs) has been
secured by an 87.8% share pledge of Seaways. Any default by Mosavi
would result in Seaways playing the part.
Susceptible to EXIM Volumes, Volatility in Freight Rates: Seaways'
operating performance remains susceptible to the export-import
(EXIM) volumes, which is linked to global-macro economic
conditions. A slowdown in the global growth, and consequently the
EXIM volumes could impact the company's operating performance.
Furthermore, the company's operating performance remains exposed to
adverse movement in freight rates.
Standalone Performance: Seaways' revenue from operations is likely
to have increased in FY21, supported by revenue growth in the
freight forwarding and bulk logistics segments. During FY20,
revenue declined to INR1,742 million (FY19: INR2,584.4 million),
while the company continued to report EBITDA losses during FY20.
However, with the improvement in the performance of the business
segments in FY21, coupled with better contribution margin, the
EBITDA margin is likely to have witnessed a substantial improvement
during FY21. Seaways' debt increased to INR1,574.1 million at FYE20
(FYE19: INR1,361.1 million) on account of an increase in both
long-term and short-term borrowings.
RATING SENSITIVITIES
The RWE indicates that rating may be upgraded, downgraded or
affirmed. Ind-Ra will continue to closely monitor the developments
on the refinancing/stake sale and will take an appropriate rating
action by July 2021 on adequate clarity on the refinancing/stake
sale and the liquidity profile of the company.
COMPANY PROFILE
Seaways, a Hyderabad-based logistics group, offers integrated
logistics solutions with multi-modal capabilities across 100
countries through its own offices and/or strategic partners. The
company has an experience of over 30 years in providing integrated
ocean logistics services in India. Its wholly-owned subsidiary in
Singapore, Maxicon is intra-Asia non-vessel operating common
carrier.
Maxicon operates over 16,000 containers, around 60% of which are
owned by its Singapore subsidiary and the group.
SHIRAGUPPI SUGAR: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shiraguppi Sugar
Works Limited (SSWL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable.
The instrument-wise rating action is:
-- INR300 mil. Fund-based working capital limits assigned with
IND BB/Stable/IND A4+ rating.
KEY RATING DRIVERS
Liquidity Indicator - Poor: The ratings reflect the company's high
average peak utilization of its fund-based limits at 94% for the 12
months ended February 2021. It has scheduled debt repayments of
INR270 million and INR256 million during FY22 and FY23,
respectively. SSWL has large working capital requirements, owing to
its high inventory levels due to the stock holding measures fixed
by the government. The net conversion cycle, excluding payables to
harvesting & transport contractors, remained long at 412 days in
FY20 (FY19: 185 days) and the cash flow from operations remained
negative at INR369 million for FY20 (FY19: negative INR1,231
million), resulting from a long inventory holding period. SSWL
availed the Reserve Bank of India-prescribed debt moratorium over
March-August 2020.
The ratings factor in the company's weak credit metrics in FY20,
due to its improved-but-low EBITDA and high debt levels. The gross
interest coverage (operating EBITDA/gross interest expense)
deteriorated marginally to 1.35x in FY20 (FY19: 1.52x), on account
of higher interest expenses with an increase in debt to INR2,901
million (INR2,463.99 million). The improvement in the net leverage
(adjusted net debt/operating EBITDA) to 6.9x (FY19: 7.98x) was
driven by an increase in the operating EBITDA to INR418 million (:
INR306 million).
The ratings are constrained by the company's modest and volatile
EBITDA margins due to its susceptibility to the cyclical nature of
the sugar industry and the central government's policies related to
sugar trade and pricing. The margins were in the range of 17%-31%
over FY18-FY20 with 30.8% in FY20 (FY19: 20.46%); the return on
capital employed was 7.8% (6.7%). The margins improved yoy in FY20
on account of higher realizations, resulting from the government's
initiatives in fixing the minimum support price at INR31/kg.
According to the provisional numbers for FY21, the margins
contracted to 20% due to an increase in sugarcane's fair
remunerative price to INR28.5/MT (FY20: INR27.5/MT) in August 2020,
backed by the increased procurement of materials during SS21.
SSWL's scale of operations is medium with an operational track
record of eight crushing seasons. In FY21, the company witnessed a
significant spur in revenue to INR2,813 million (FY20: INR1,354
million; FY19: INR1,497 million), backed by the increased sales
volume of sugar, owing to high crushing days. The company operated
for 148 days during the sugar season 2021 (SS21) compared to 113
days in SS20, with a recovery rate of 12.02% during 11MFY21 (FY20:
12%). As the government continues to prescribe minimum sugar stock
level for sugar mills, the company recorded a closing finished
goods stock of INR1,404 million at end-March 2021. Furthermore, the
company has a 20MW co-generation plant; its capacity utilization
was 75% during FY21. The company has entered into a power purchase
agreement with the government of Karnataka and 50% of the power
generated during the crushing season is sold at a tariff of INR5.5
per unit; the remaining is used for the captive consumption. Ind-Ra
believes SSWL's FY22 revenue growth is dependent on the sugar
release quota prescribed by the government and is also contingent
on the agro-climatic risks.
The ratings benefit from promoters' experience of two decades in
the sugar industry. Also, the company enjoys locational advantage
as it is based in the Belagavi district, a sugarcane belt of
Karnataka, ensuring proximity to raw material.
RATING SENSITIVITIES
Positive: An increase in the scale of operations, leading to the
interest coverage above 1.5x, along with improvement in its
liquidity profile will be positive for the ratings.
Negative: Lower-than-expected scale of operations, leading to
further deterioration in the liquidity profile as well as the
credit metrics will be negative for the ratings.
COMPANY PROFILE
Incorporated in 1997, having its registered office at Belagavi,
Karnataka, SSWL manufactures sugar. The company also sells
by-products such as bagasse, molasses and pressmud. SSWL has an
installed capacity of 5,000 tons crushed per day and a 20MW
co-generation plant.
SIMOVA INDIA: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Simova India Lifesciences Private Limited
F-97, IInd Floor
East of Kailash
New Delhi 110065
Insolvency Commencement Date: April 13, 2021
Court: National Company Law Tribunal, Ghaziabad Bench
Estimated date of closure of
insolvency resolution process: October 10, 2021
Insolvency professional: Anurag Gupta
Interim Resolution
Professional: Anurag Gupta
498, Niti Khand-1
Indirapuram
Ghaziabad 201014
E-mail: anurag.gupta.fcs@gmail.com
Last date for
submission of claims: May 3, 2021
TRILOK SECURITY: CARE Lowers Rating on INR10.71cr LT Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Trilok Security Systems India Private Limited (TSSIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.71 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE BB-; Stable
Short Term Bank 1.25 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 25, 2020, placed the
rating(s) of TSSIPL under the 'issuer non-cooperating' category as
TTSIPL had failed to provide information for monitoring of the
rating. TSSIPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and an email dated April 2020 to April 1, 2021. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The revision in the rating is on account of ongoing delays in
servicing of debt obligation of the company.
Detailed description of the key rating drivers (Updated for the
information available in ROC)
Key Rating Weakness
* Account has been classified as NPA: The company has shut down of
the business operations in the month of April 2020. Consequently,
there has been substantial stress on the cash flow resulting in
delays in debt servicing and the account has been classified as
NPA.
Trilok Security Systems India Private Limited (TSS) was
incorporated in December 2005. TSS is primarily engaged in
providing advertising services by providing biometric access cards
used in Queue Management system at various pilgrim centers. The
company generates its revenues through selling the space of access
cards for advertisements. TSS is having its registered office at
Tirupathi, Andhra Pradesh. TSS is providing its queue management
services on Built-Own-Operate (BOO) basis at pilgrim destinations
like Tirumala Tirupati Devastanam, TTD (Tirupati, Andhra Pradesh),
Shri Sirdi Sai Sansthan, SSS (Shirdi, Maharashtra), Shri Mata
Vaishno Devi Shrine, SMV (Katra, Jammu & Kashmir), Chardham,
Hemakund Saheb, Ajmer Sharif Dargah (Ajmer, Rajasthan) and Baba
Bydhyanath (Deoghar, Jharkhand).
VAIBHAV RICE: CARE Lowers Rating on INR12.21cr LT Loan to B+
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Vaibhav Rice Mill (VRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.21 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE BB-; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 26, 2020 placed the
ratings of VRM under the 'issuer noncooperating' category as VRM
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. VRM continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and emails dated April 2, 2021,
April 5, 2021 and April 7, 2021. In line with the extant SEBI
guidelines, CARE has reviewed the ratings on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings assigned to the bank facilities of VRM have been
revised on account of non-availability of requisite information.
Detailed description of the key rating drivers
At the time of last rating done on March 26, 2020 the following
were the rating strengths and weaknesses.
Key rating weaknesses
* Moderate scale of operations and profitability: During FY18,
VRM's total operating income (TOI) continued to remain moderate,
albeit increased by a moderate 34.96% y-oy and remained at INR53.92
crore as against INR39.95 crore during FY17 owing to an increase in
sales volume led by completion of capex pertaining to starting up
unit for milling and processing of flattened rice and puffed rice.
The project cost of which stood at INR4.76 crore with a debt-equity
mix of 1.96 times, while the same was completed in July, 2017.
PBILDT also increased, however, remain moderate at INR2.72 crore
(5.04%) in FY18 as against INR1.53 crore (3.84%) in FY17, owing to
decrease in cost of raw materials. However, PAT margin continued to
remain thin at 0.25% in FY18 as against 0.31% in FY17 due to
increase in depreciation and interest cost led by completion of
capex as well as increase in interest cost during FY18 owing to an
increase in debt level.
* Moderate capital structure and weak debt coverage indicators:
Capital structure of VRM continued to remain moderate marked by an
overall gearing ratio of 2.37 times as on March 31, 2018 as against
2.64 times as on March 31, 2017. The debt coverage indicators of
VRM, though improved, continued to remain weak as marked by total
debt to GCA at 11.40 times as on March 31, 2018 as against 23.12
times as on March 31, 2017, owing to an increase in the GCA level.
The interest coverage ratio also continued to remain moderate at
1.91 times during FY18 from 1.64 times in FY17, owing to increase
in PBILDT during FY18.
* Constitution as a partnership firm: VRM being a partnership firm
is exposed to inherent risk of the partners' capital being
withdrawn at the time of contingency and also limits the ability to
raise the capital. The partners may withdraw capital from the
business as when it is required, which may put pressure on the
capital structure of the firm and restrict the financial
flexibility to a certain extent.
* Susceptibility of margins to raw material price volatility along
with presence in seasonal and fragmented nature of industry which
is subject to government regulations: Monsoons have a huge bearing
on crop availability which determines the prevailing paddy prices.
Since, there is a long time lag between raw material procurement
and liquidation of inventory, the firm is exposed to the risk of
adverse price movement, resulting in lower realization than
expected. Also, the commodity nature of the rice makes the industry
highly fragmented with numerous players operating in the
unorganized sector with very less product differentiation.
Moreover, the raw material (paddy) prices are regulated by the
government mainly through Minimum Support Price (MSP), which in
turn limits the bargaining power of the paddy processors.
Key Rating Strengths
* Experienced partners: Mr. Hitesh Patel, Mr. Narendrabhai Patel
and Mr. Nilesh Patel have nearly two decades of experience into the
rice industry and handles manufacturing, banking and finance and
purchase/sales related activities respectively.
Vaibhav Rice Mill (VRM) was formed during March, 1998 by Mr.
Narendra Patel, Mr. Hitesh Patel, Ms. Bhavna Patel and Mr. Nilesh
Patel as a partnership firm. VRM is into the business of milling
and processing of paddy into rice, broken rice, puffed rice and
flattened rice. Paddy is the main raw material which in majority of
cases is being procured from APMC market, Bavla and Ahmedabad.
YESHODEEP INFRASTRUCTURE: Insolvency Resolution Case Summary
------------------------------------------------------------
Debtor: Yeshodeep Infrastructure Private Limited
Registered office:
Plot No. 55
Near Hanuman Mandir
Mondha Market
Parli Vaijnath 431515
Branch office:
417, DSK Chintamani
A Wing, 1st Floor
Nr Appa Balwant Chowk
Shaniwar Peth
Pune 411030
Insolvency Commencement Date: April 16, 2021
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: October 13, 2021
Insolvency professional: Mr. Vinit Gangwal
Interim Resolution
Professional: Mr. Vinit Gangwal
Office No. 503, 5th Floor
Varun Capital
CTS No. 364-365/13
Off J M Road
Bharat Petrolium Lane
Next to Citiotel
Shivajinagar
Pune 411005
E-mail: ip.vinitgangwal@sudharman.in
- and -
Sankalp Resolution Professionals LLP
504, 5th Floor, The Central Building
Shell Colony Road, Chembur(East)
Mumbai 400071
E-mail: yeshodeep@sankalp-ipe.com
Last date for
submission of claims: April 30, 2021
[*] INDIA: Retailers, Restaurants Say Tough to Bear Losses Again
----------------------------------------------------------------
The Times of India reports that restaurants, pubs, malls and
retailers in India are once again staring into a dark abyss as more
metros go into lockdowns. Many restaurants shut down last year
after the painful two-and-a-half months of lockdown.
TOI relates that more are expected to now follow suit, unable to
bear losses for a second year on the trot. Restaurants across the
country had seen sales pick up since opening before the festive
season, and by December, footfalls were robust with weekends
reporting near full capacity.
According to the report, the first three months of this year
recorded more sales than the same period last year and takeaways
and deliveries had slightly dipped as people became confident and
went outdoors. Malls, just like restaurants, are also facing an
uncertain future with retailers set to discuss with them about
rental waivers or entering into a revenue sharing model.
The Shopping Centres Association of India (SCAI) said in a
statement that the local restrictions, closure of malls in a few
states, weekend curfews have impacted business, recovery, and
employment associated with organized retail, TOI relays.
Malls across India had recovered close to 90% of their business and
75% of their footfalls after the collapse last year, the report
adds.
=================
I N D O N E S I A
=================
SRI REJEKI ISMAN: Fitch Lowers LongTerm IDR to 'C'
--------------------------------------------------
Fitch Ratings has downgraded Indonesia-based textile manufacturer
PT Sri Rejeki Isman Tbk's (Sritex) Long-Term Issuer Default Rating
(IDR) to 'C' from 'CCC-'. Fitch has also downgraded Sritex's
outstanding US dollar notes to 'C' from 'CCC-' with a Recovery
Rating of 'RR4'. At the same time, Fitch Ratings Indonesia has
downgraded Sritex's National Long-Term Rating to 'C(idn)' from
'CCC-(idn)'.
The downgrade follows confirmation that the company did not meet an
interest payment due 23 April 2021 on its syndicated loan.
'C' National Ratings denote a default or default-like process has
begun, or the issuer is in standstill; or for a closed funding
vehicle, that payment capacity is irrevocably impaired.
KEY RATING DRIVERS
Missed Interest Payment: The downgrade follows the non-payment of
around USD850,000 of interest due on 23 April 2021. Failure to pay
within five business days of the due date will constitute an Events
of Default under the loan documentation. Fitch may downgrade the
ratings further to 'Restricted Default' if no payment is made at
the expiration of the five days.
Debt Moratorium, Standstill Negotiation: Sritex and its
subsidiaries are the subjects of various legal actions. One of its
suppliers has filed a petition to place Sritex and certain
subsidiaries under court-supervised debt moratorium (PKPU) in the
Indonesian courts, while Golden Legacy Pte Ltd, the issuer of 2024
bonds, has applied for a moratorium order under Section 64(1) of
the Act in Singapore related to the USD150 million bonds due in
2024. A Section 64 application provides a thirty-day automatic
interim moratorium, pending the court's decision to grant the
order.
Sritex also continues to negotiate with its syndicated lenders, and
has proposed a standstill agreement related to the USD350 million
facility. The facility comprises USD200 million of term loans and a
USD150 million revolver. Inability to roll over the revolver would
exacerbate Sritex's liquidity pressure, as the company funds its
daily operations with cash. Fitch understands that the company has
chosen not to make the interest payment as it has not secured an
agreement on the standstill agreement.
Weakening Cash Flow Generation: Sritex is reliant on its own
cash-flow generation to fund its operations as external funding
access has weakened. Decreasing access to working capital will also
limit Sritex's ability to increase revenue. Fitch expects Sritex's
cash flow from operations (CFO) to remain negative in 2021 due to
challenging working-capital management, which has also resulted in
a drain on the company's cash balance. Negative CFO will make it
difficult for Sritex to address its 2021 debt maturity and
maintenance capex without any additional external funding.
ESG - Governance: Sritex has an ESG Relevance Score of '4' for both
Management Strategy and Governance Structure due to delays in
securing the extension of its facilities, which is putting pressure
on its credit profile given the increasing refinancing risks. This
has a negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
DERIVATION SUMMARY
Sritex's downgrade to 'C' reflects its non-payment of syndicated
loan interest which fell due on 23 April 2021.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Revenue to decline in 2021 by around 6%. Revenue growth of
around 1.5% in 2022 and 2023;
-- Longer working capital days in 2021 and 2022;
-- EBITDA margin of 17%-18% in 2021-2023;
-- Capex of around USD60 million per year in 2021-2022, mostly
for maintenance purpose.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that Sritex would be reorganized
as a going-concern in bankruptcy rather than liquidated.
-- Fitch has assumed a 10% administrative claim.
-- The going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganisation EBITDA level upon which Fitch
bases the enterprise valuation.
-- Fitch estimates EBITDA at USD210 million, which is around 10%
lower than the EBITDA of USD231 million in the 12 months to
December 2020, to reflect the industry's mid-cycle conditions
and competitive dynamics.
-- An enterprise value multiple of 5x EBITDA is applied to the
going-concern EBITDA to calculate a post-reorganisation
enterprise value. The multiple reflects a discount from the
median global multiple of 9x for completed M&A transactions in
the textile industry over the past decade, based on Bloomberg
data. The 5x multiple also reflects Sritex's smaller size than
global manufacturers.
-- The going-concern enterprise value corresponds to a 'RR2'
Recovery Rating for the senior unsecured notes after adjusting
for administrative claims. Nevertheless, Fitch has rated the
senior unsecured bonds 'C'/'RR4' because under Fitch's Country
Specific Treatment of Recovery Ratings Criteria Indonesia is
classified under the Group D of countries in terms of creditor
friendliness, and the instrument ratings of issuers with
assets located in this group are subject to a soft cap at the
issuer's IDR and Recovery Rating of 'RR4'.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Payment of the missed interest within the cure period and
avoidance of default-like process.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- The IDR will be downgraded to 'RD' if the payment default is
uncured.
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
Insufficient Liquidity: Sritex's cash balance of USD187 million at
end-December 2020 is not sufficient to cover its short-term debt
maturities of more than USD300 million, comprising USD277 million
of short-term bank loans, USD25 million of medium-term notes, and
USD6 million of the current portion of long-term debt. Sritex will
also face the maturity of its USD350 million syndicated facility in
January 2022.
ESG CONSIDERATIONS
Sritex has ESG Relevance Scores of '4' for Management Strategy and
Governance Structure due to significant delays in executing its
refinancing plan, which has a negative impact on the credit
profile, and is relevant to the ratings in conjunction with other
factors.
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.
===============
M A L A Y S I A
===============
MALAYSIA AIRLINES: Manage to Set Aside MYR10 Million Fines
----------------------------------------------------------
theedgemarkets.com reports that the Court of Appeal on April 27 set
aside the RM10 million fines each imposed on AirAsia Bhd and
Malaysian Airline System Bhd (MAS) by the Malaysia Competition
Commission (MyCC) over a short-lived collaboration between the two
in 2012.
This followed Justice Datuk Hanipah Farikullah, who led the
three-member bench, to set aside the High Court decision on Dec.
20, 2018 that ordered both airlines to pay the fines and overturned
an earlier decision by the Competition Appeal Tribunal (CAT)
decision in February 2016 to allow their appeal.
According to the report, Justice Hanipah ruled that MyCC should
have abided by the decision imposed by the CAT and not filed the
judicial review to challenge the CAT's decision.
"They (MyCC) cannot challenge its appellate authority," the report
quotes Justice Hanipah as saying.
theedgemarkets.com relates that the court further ruled that MyCC
was not an aggrieved party under Order 53, Rule 2 to initiate the
legal challenge against the CAT.
The judge further said MyCC had not shown that the CAT decision to
overturn the fine was irrational.
The threshold for MyCC to initiate the judicial review had not been
breached, the judge added, theedgemarkets.com relays.
Sitting with her in the unanimous decision were Justice Datuk Lee
Swee Seng and Justice Datuk Mohd Soffian Abdul Razak, the report
notes.
theedgemarkets.com says Justice Hanipah ordered MyCC to pay
RM30,000 costs each to both appellants in this court and the court
below.
MyCC imposed the fines on both airlines in 2014 after it found that
both AirAsia and MAS breached the market sharing prohibition under
Section 4(2) of the Competition Act 2010 by entering into an
agreement on sharing markets in the air transport services sector
within Malaysia.
The complaint was lodged by the Federation of Malaysian Consumer
Association (FOMCA).
On appeal by both airlines over the fines, the CAT on Feb. 18, 2016
overturned MyCC's decision to impose the fines.
Following that, MyCC then filed the judicial review, resulting in
the High Court reimposing the fines.
AirAsia was represented by the counsel led by Datuk Ambiga
Sreenevasan, while Logan Sabapathy appeared for MAS, discloses
theedgemarkets.com.
About Malaysia Airlines
Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines
-- http://www.malaysiaairlines.com/-- engages in the business of
air transportation and the provision of related services.
As reported in the Troubled Company Reporter-Asia Pacific on March
19, 2020, The Malaysian Reserve said that Malaysia Airlines Bhd
(MAB) is at risk of bankruptcy and staff are encouraged to take the
voluntary unpaid leave programme, said the group CFO Boo Hui Yee in
an internal memo addressed to the airline's 13,000 staff.
Khazanah is the sole shareholder of MAB after taking the airline
private in 2014. The sovereign wealth fund injected MYR6 billion
into the airline to keep it afloat.
From its delisting from Bursa Malaysia from 2015 to 2017, MAB had
registered a loss of MYR2.3 billion due to the ringgit's weakness
and higher jet fuel costs.
According to Reuters, the Malaysian government has been seeking a
strategic partner for its national airline, which has struggled to
recover from two tragedies - the mysterious disappearance of flight
MH370 and the shooting down of flight MH17 over eastern Ukraine.
=====================
N E W Z E A L A N D
=====================
NF GLOBAL: Placed in Liquidation Owing at Least NZD17MM
-------------------------------------------------------
National Business Review reports that the High Court at Auckland
has placed online payments platform NF Global in the hands of
liquidators after the company and its overseas shareholder failed
to pay existing creditors almost NZD17 million.
And that debt is increasing, with at least five more international
creditors coming out of the woodwork claiming they too are owed
money, NBR relates.
According to NBR, Associate judge Roger Bell in March ordered NF
Global to clear its liabilities by April 23 or be placed in the
hands of PwC's John Fisk and Marcus McMillan, after the online
payments platform claimed it had the financial backing of its
London-headquartered owner, Starboard.
=================
S I N G A P O R E
=================
A3 SG GAMMA: Creditors' Proofs of Debt Due May 31
-------------------------------------------------
Creditors of A3 SG Gamma Pte Ltd, which is in voluntary
liquidation, are required to file their proofs of debt by May 31,
2021, to be included in the company's dividend distribution.
The company's liquidator is:
Ho Lon Gee
80 Robinson Road #02-00
Singapore 068898
CHANG LONG: Creditors' Meetings Set for May 7
---------------------------------------------
Chang Long Construction Pte Ltd, which is in liquidation, will hold
a meeting for its creditors on May 7, 2021, at 10:00 a.m. The
meeting will be held by way of video conference via Zoom.
Agenda of the meeting includes:
a. updating the creditors on the status of the liquidation
of the Company;
b. approving the petitioning creditor's costs;
c. approving the liquidator's fees and disbursements; and
d. any other business.
The company's liquidator is:
Gary Loh Weng Fatt
600 North Bridge Road
23-01 Parkview Square
Singapore 188778
SEALOUD ASIA: Court Enters Wind-Up Order
----------------------------------------
The High Court of Singapore entered an order on April 23, 2021, to
wind up the operations of Sealoud Asia Pte. Ltd.
Marketlend Pty Ltd filed the petition against the company.
The company's liquidators are:
Don Ho Mun-Tuke
DHA+ PAC
63 Market Street
#05-01A, Bank of Singapore Centre
Singapore 048942
=====================
S O U T H K O R E A
=====================
SAMSUNG: Lee Family to Offload Picassos, Monets to Settle Tax Bill
------------------------------------------------------------------
The Wall Street Journal reports that Samsung Group's ruling Lee
family unveiled plans to pay one of the world's largest-ever
inheritance tax bills, unloading rare Picasso and Monet paintings
while trumpeting its extra donations to South Korean society.
The Journal relates that South Korea's wealthiest family faces more
than $10 billion in estate taxes, following the October death of
Samsung Chairman Lee Kun-hee. The inheritance tax rate is 50% in
South Korea and that can inch higher for the transfer of company
shares. Lee Kun-hee's wife and three children had until Friday to
detail how they would pay the bill.
Under local law, the Lees have up to five years to make full
payment, which they plan to do in six installments with the first
coming this month, Samsung said in a statement on April 28, the
Journal relays. The 12 trillion South Korean won inheritance-tax
bill, the equivalent to about $10.8 billion, is the country's
largest ever.
“It is our civic duty and responsibility to pay all taxes,” the
Lee family said in a statement, the Journal relays.
Alongside the tax-payment blueprint, Samsung said the Lee family
would commit more than $900 million to build new South Korean
medical facilities and pay expenses for children afflicted by
cancer or other rare diseases, adds the Journal.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***