/raid1/www/Hosts/bankrupt/TCRAP_Public/210524.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, May 24, 2021, Vol. 24, No. 97
Headlines
A U S T R A L I A
EMMADALE HOMES: Second Creditors' Meeting Set for June 1
GROCON: Daniel Grollo Sweetens Payout to ATO in Revised Plan
NODLYAB PTY: Second Creditors' Meeting Set for June 2
C H I N A
CHINA HUARONG: Bond Losses Spread Onshore, Risking Downward Spiral
IDEANOMICS INC: To Acquire US Hybrid for $50M
JINKE PROPERTY: S&P Assigns 'B+' Rating on Senior Unsecured Notes
KUNMING PUBLIC RENTAL: Fitch Assigns 'BB+' LT IDRs, Outlook Stable
ZHONGYU GAS: Moody's Assigns First Time Ba3 Corp. Family Rating
I N D I A
AAISWARYA DYEING: CRISIL Keeps B+ Debt Rating in Not Cooperating
AL-AYAAN FOODS: CRISIL Keeps D Debt Rating in Not Cooperating
ANIL CONSTRUCTION: Ind-Ra Keeps BB Issuer Rating in Non-Cooperating
ANMOL ENTERPRISES: CRISIL Keeps D Debt Rating in Not Cooperating
ARPEE ENERGY: Ind-Ra Moves B+ LT Issuer Rating to Non-Cooperating
ASIA-PACIFIC INSTITUTE: CRISIL Keeps D Rating in Not Cooperating
CELEBRITY CORPORATE: CRISIL Keeps D Ratings in Not Cooperating
CHARMS CHEM: CRISIL Keeps D Debt Ratings in Not Cooperating
DANU WIND: Ind-Ra Keeps 'D' Term Loan Rating in Non-Cooperating
DESERVE CONSTRUCTION: Insolvency Resolution Process Case Summary
EAGLE FIBRES: Ind-Ra Keeps BB LT Issuer Rating in Non-Cooperating
ECO CEMENT: CARE Lowers Rating on INR10cr LT Loan to B+
EXCEL VEHICLES: CARE Keeps D Debt Rating in Not Cooperating
GREEN EXPRESS: CARE Lowers Rating on INR12cr LT Loan to B-
GYANKUND TRUST: Ind-Ra Keeps 'D' Loan Rating in Non-Cooperating
HEMA ENGINEERING: CARE Lowers Rating on INR296.91cr Loan to D
INDIAN INFRADEVELOPERS: CARE Lowers Rating on INR6cr LT Loan to B
J P SORTEX: CARE Lowers Rating on INR37cr LT Loan to B+
JAYPEE INFRATECH: Creditors' Panel Approves Suraksha Group's Offer
KINSHUK ENTERPRISE: CARE Cuts Rating on INR0.46cr Loan to B
KOTECHA INDUSTRIES: CARE Keeps D Debt Ratings in Not Cooperating
LEELA KRISHNA: CARE Lowers Rating on INR29.04cr LT Loan to B+
LOKNAYAK JAYPRAKASH: CARE Lowers Rating on INR50cr Loan to D
MAHALAXMI AUTOMOTIVES: Ind-Ra Affirms 'B' Long-Term Issuer Rating
MAKSON NUTRITION: Ind-Ra Withdraws BB Long-Term Issuer Rating
MANIPAL ENERGY: Ind-Ra Lowers Long-Term Issuer Rating to BB
MANIPAL MEDIA: Ind-Ra Lowers Long-Term Issuer Rating to 'BB+'
NAGARJUNA FERTILIZERS: CARE Keeps D Ratings in Not Cooperating
NAND ESTATE: CARE Lowers Rating on INR38.50cr LT Loan to D
ORAVEL STAYS: Fitch Gives FirstTime 'B(EXP)' LT IDRs, Outlook Neg.
ORAVEL STAYS: Moody's Assigns First Time B3 Corp. Family Rating
PARANJAPE SCHEMES: CARE Lowers Rating on INR175cr Loan to D
RADHA KRISHNA: CARE Keeps D Debt Ratings in Not Cooperating
RADHAMADHAV AUTOMOBILES: CARE Cuts Rating on INR70.87cr Loan to B+
RAJMOTI INDUSTRIES: CRISIL Keeps D Ratings in Not Cooperating
RY MIDAS: CARE Lowers Rating on INR29cr Loans to D
SAI SWADHIN: CRISIL Keeps D Debt Ratings in Not Cooperating
SARASWATI EDUCATIONAL: Ind-Ra Keeps 'D' Rating in Non-Cooperating
SATYAM GREEN: CRISIL Keeps D Debt Rating in Not Cooperating
SGC LOGISTIC: CRISIL Keeps D Debt Rating in Not Cooperating
SHRIMATI POORNA: CRISIL Keeps D Debt Rating in Not Cooperating
SOUTH INDIAN: CRISIL Keeps D Debt Ratings in Not Cooperating
SRIPATHI PAPER: Ind-Ra Affirms 'D' Long-Term Issuer Rating
SUDAMA COTTON: CRISIL Keeps D Debt Rating in Not Cooperating
SWAPNA PRINTING: Ind-Ra Keeps BB Issuer Rating in Non-Cooperating
VEDIK COTTON: Insolvency Resolution Process Case Summary
VENKATESHWARA POWER: Ind-Ra Moves 'BB+' Rating to Non-Cooperating
YASHODAKRISHNA AUTO: CARE Cuts Rating on INR34.54cr Loan to B+
I N D O N E S I A
BAYAN RESOURCES: Moody's Affirms Ba3 CFR & Alters Outlook to Pos.
J A P A N
ANA HOLDINGS: Egan-Jones Keeps B- Senior Unsecured Ratings
KEISEI ELECTRIC: Egan-Jones Cuts Senior Unsecured Ratings to BB
MITSUI OSK: Egan-Jones Keeps B Senior Unsecured Ratings
NOMURA HOLDINGS: Egan-Jones Keeps BB Senior Unsecured Ratings
TOBU RAILWAY: Egan-Jones Keeps BB- Senior Unsecured Ratings
TOKYO ELECTRIC: Egan-Jones Keeps BB Senior Unsecured Ratings
TOKYU CORPORATION: Egan-Jones Cuts Senior Unsecured Ratings to BB-
M A L A Y S I A
CHINA AUTOMOBILE: PN17 Exit Plan Hits Yet Another Snag
EKA NOODLES: Trading of Shares to be Suspended on May 31
N E W Z E A L A N D
QUEST INSURANCE: Best Affirms B(Fair) Financial Strength Rating
SERKO LIMITED: Posts NZD29.4MM Net Loss in Year Ended March 31
S I N G A P O R E
EMAS RISK: Creditors' Proofs of Debt Due June 22
FLEX LIMITED: Egan-Jones Keeps BB- Senior Unsecured Ratings
NU PHOTO: Court Enters Wind-Up Order
SUPERVALU PTE: Creditors' Meeting Set for June 4
WINE IMPRESSION: Court to Hear Wind-Up Petition on June 4
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A U S T R A L I A
=================
EMMADALE HOMES: Second Creditors' Meeting Set for June 1
--------------------------------------------------------
A second meeting of creditors in the proceedings of Emmadale Homes
Pty Limited has been set for June 1, 2021, at 11:00 a.m. via
virtual meeting technology.
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 28, 2021, at 3:00 p.m.
Aaron Torline of Slaven Torline was appointed as administrator of
Emmadale Homes on April 23, 2021.
GROCON: Daniel Grollo Sweetens Payout to ATO in Revised Plan
------------------------------------------------------------
Larry Schlesinger at Australian Financial Review reports that the
Australian Taxation Office will receive a AUD6 million upfront
payment to wipe out almost half of its claims against collapsed
building giant Grocon, according to a revised rescue plan proposed
by property scion Daniel Grollo.
According to AFR, the sweetened offering is part of an amended Deed
of Company Arrangement which Mr. Grollo hopes will be supported by
creditors when they reconvene on Thursday [May 27] to vote on the
future of the 88 collapsed Grocon companies that make up the
majority of the group.
Rather than 20.5 cents in the dollar, the ATO is now expected to
receive a minimum 43.9 cents in the dollar under the revised DOCA,
AFR discloses.
As one of Grocon's largest creditors, the ATO could play a key role
in deciding whether Mr. Grollo's DOCA gets over the line or the
group is liquidated.
A majority of creditors by value and number need to back the DOCA
for it to be executed, AFR says.
At stake for Mr. Grollo is AUD94.4 million of related-party loans
and shares in Grocon Property (Vic), which owns the property atop
the Eureka Tower and which collects rent from a lease to a
communications tower.
These loans and shares will be transferred back to entities
controlled by Mr. Grollo if creditors vote in favour of his DOCA,
but not if they vote in favour of liquidation, AFR notes.
According to AFR, administrators KordaMentha urged creditors to
vote in favor of the amended DOCA arguing it will result in a
"similar or better return than if any company is liquidated".
AFR relates that under the amended DOCA the original AUD10 million
cash contribution has been increased to AUD13.32 million, but
almost all of this increase will go towards making an upfront
payment to the ATO.
Employees' wages and entitlements and small creditors (those owed
less than AUD10,000) will be paid in full under the DOCA. Large
creditors, bond creditors and litigation creditors including
funding manager APN and the Liberman family's Impact Investment
Group may receive as little as 2.5 cents - 2.9 cents in the dollar
under the rescue plan.
AFR says Mr. Grollo is hoping to repay all creditors in full by
winning a significant payout from its dispute with Infrastructure
NSW over the botched Central Barangaroo project where Grocon claims
to have suffered significant losses because of its forced early
exit from the project.
The Grocon scion blames the collapse of the country's most famous
construction empire, which was founded by his grandfather Luigi,
entirely on Infrastructure NSW (previously the Barangaroo
Development Authority) after sight lines to Sydney Harbour were
sold twice, and eventually claimed by Lendlease and Crown for the
new Sydney casino and luxury apartments, AFR relays.
Infrastructure NSW is defending itself against claims by Grocon in
relation to Central Barangaroo because it believes they lack
merit.
According to the report, the amended DOCA includes an extra
AUD200,000 to cover the additional costs in relation to the second
creditors meeting, which has been adjourned twice. KordaMentha
estimates the adjournments added more than AUD300,000 to
administration costs.
The AUD13.32 million cash contribution, which is being funded by an
unrelated third party, is sitting in a trust account of law firm
Hall & Wilcox acting on behalf of the DOCA proponents.
The cash contribution will be made available for distribution
within 30 days of the DOCA being executed, AFR adds.
Litigation creditors, including fund manager APN which is embroiled
in a long-running dispute with Grocon, argue liquidation could
yield more if entities outside those in administration are pursued
including Mr. Grollo's build-to-rent projects, the report relays.
It is understood Mr. Grollo considers those entities outside the
Grocon group and off-limits to creditors of the collapsed
entities.
In its latest report, KordaMentha said although it was pleased the
original DOCA could be amended to the benefit of creditors it was
"disappointed" in that it was advised the first DOCA proposal was
final when it was "clearly not," AFR adds.
About Grocon
Australia-based Grocon engages in development, construction and
funds management.
Craig Peter Shepard and Mark Korda of KordaMentha were appointed as
administrators of Grocon Pty on Nov. 27, 2020.
Craig Peter Shepard and Andrew Knight of KordaMentha were also
appointed as administrators of Belgrave Street et al. on Nov. 27,
2020.
- Belgrave Street Developments Pty Ltd
- Grocon (Fairfield) Developer Pty Ltd
- Grocon (Belgrave St) Developer Pty Ltd
- Grocon (Fairfield) Pty Ltd
- Grocon Builders (Vic) Pty Ltd
- Grocon (Parklands) Holdings Pty Ltd
- Grocon Services Pty Ltd
- QV No 1 Pty Ltd
- Grocon Operations Pty Ltd
- Grocon Developments NSW Pty Ltd
- 61 Lt Collins Street Pty Ltd
- Grocon (Victoria Street) Pty Ltd
- Grocon Developments (Box Hill) Pty Ltd
- Grocon (480 Queen Street) Pty Ltd
- Grocon (Scots Church) Pty Ltd
- QV Pty Ltd
- Grocon (Bouverie Street) Pty Ltd
- Grocon (Pitt Street) Developments Pty Ltd
- Grocon Developments (55 Elizabeth St) Pty Ltd
- Grocon Constructors (SA) Pty Ltd
- Grocon (Baroona Rd) Holdings Pty Ltd
- Grocon (Bouverie St) Holdings Pty Ltd
- Grocon (CB) Development Manager Pty Ltd
- Grocon (Spring Street) Pty Ltd
- Grocon QV Investments Pty Ltd
- QV Property Management Pty Ltd
- Grocon (Pixel) Pty Ltd
- Grocon (Swanston Square) Holdings Pty Ltd
- Grocon (Carlton Brewery) Developments Pty Ltd
- Grocon (SQ Stage 2) Developments Pty Ltd
- Grocon (FCAD) Pty Ltd
- Grocon (Castlereagh St, NSW) Pty Ltd
- Grocon Development Holdings Pty Ltd
- QV No 2 Pty Ltd ATF Grocon Land Owning Trust 2
- QV No 3 Pty Ltd ATF Grocon Land Owning Trust 3
- QV No 4 Pty Ltd ATF Grocon Land Owning Trust 4
- QV No 5 Pty Ltd ATF Grocon Land Owning Trust 5
- Grocon (Victoria Street) Developments Pty Ltd ATF
NODLYAB PTY: Second Creditors' Meeting Set for June 2
-----------------------------------------------------
A second meeting of creditors in the proceedings of Nodlyab Pty
Ltd, trading as Bayldon Ag, has been set for June 2, 2021, at 2:30
p.m. via virtual meeting technology.
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 June 1, 2021, at 4:00 p.m.
Tony Lane of Beacon Advisory was appointed as administrator of
Nodlyab Pty on April 28, 2021.
=========
C H I N A
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CHINA HUARONG: Bond Losses Spread Onshore, Risking Downward Spiral
------------------------------------------------------------------
Bloomberg News reports that concern over China Huarong Asset
Management Co.'s financial health is deepening among domestic
investors, threatening to worsen a selloff offshore.
The firm's thinly traded CNY19 billion note due 2022 fell 12% to
CNY70.2 on May 20, according to Bloomberg-compiled data, while its
3.54% domestic bond maturing in November dropped 24% to CNY75.3,
both on pace for record lows. The company's dollar bonds also
declined, with a 3.75% bond due 2022 falling 5.5 cents on the
dollar to 73.6 cents, its weakest level in more than a month. Its
4.5% perpetual dollar note was on track to close at a record low of
around 53 cents in U.S. hours, Bloomberg-compiled prices show.
According to Bloomberg, Huarong's domestic bonds had held up better
than its dollar notes since the start of April as speculation grew
over a possible debt restructuring at the company. The risk now is
that a loss of confidence among mainland investors may reinforce
nervousness offshore, creating a downward spiral. Several of China
Huarong's dollar notes are trading near their lows reached during
the depths of the initial selloff last month.
"Many factors could be involved in China Huarong's debt resolution
and it will take time for any proposal to be finalized," Bloomberg
quotes Li Gen, chief executive officer of Beijing BG Capital
Management Ltd, as saying. "Although Huarong could get some
liquidity support from banks, it's still unclear whether bonds will
be repaid at a discount in the long term."
There's been little clarity from authorities over the distressed
debt manager's future in recent days, despite conflicting media
reports about whether the central government will allow the company
to default, the report says. Failure to repay its debts would upend
the long-held expectation by investors that Beijing will support
companies owned by the central government. That's helping to fuel
volatility in the bonds.
Right now, the risk of a broader fallout in China's credit market
is low. Spreads on the nation's domestic, lower-rated corporate
bonds over comparable government notes are at about their lowest in
two months, while yield premiums on offshore investment-grade bonds
have improved since hitting a nine-month high at the height of the
panic, Bloomberg-compiled data show.
While this is positive for Beijing's efforts to create better
market discipline without triggering financial turmoil, some
analysts have said the lack of market contagion could embolden
authorities to limit support for the company, Bloomberg relays.
Caixin Media's WeNews reported on May 12 that authorities had urged
Huarong to solve its issues on its own. The New York Times said on
May 18 China's government is "strongly committed" to making sure
both foreign and domestic bondholders don't receive full repayment
of their principal.
Huarong has been repaying its maturing bonds on time and said it
had seen no change in government support. The company has the
equivalent of about $2.83 billion in offshore and onshore bonds
coming due through August, including a dollar note that matures on
May 20, data compiled by Bloomberg show.
A unit of the firm, China Huarong International Holdings Ltd., said
it has wired funds for principal and interest payment on a AUD300
million bond due May 20, according to a company statement
May 20. The firm was profitable in the January-April period, it
added.
Te financial giant owes domestic and international bondholders the
equivalent of about AUD41 billion, following an ill-fated expansion
under former Chairman Lai Xiaomin, who was executed for crimes
including bribery in January, Bloomberg discloses. Huarong is
majority owned by China's Ministry of Finance and is deeply
intertwined with the nation's AUD54 trillion financial industry.
About China Huarong
China Huarong Asset Management Co., Ltd., together with its
subsidiaries, provides various financial asset management
services.
As reported in the Troubled Company Reporter-Asia Pacific on April
16, 2021, Moody's Investors Service has placed the A3 long-term and
P-2 short-term issuer ratings, as well as the b1 baseline credit
assessment, of China Huarong Asset Management Co., Ltd. (Huarong
AMC) under review for downgrade. In addition, Moody's has placed
the debt ratings and medium-term note (MTN) program ratings of
Huarong AMC's offshore financing vehicles under review for
downgrade. These include the Baa1 long-term backed senior unsecured
debt ratings and the (P)Baa1 backed senior unsecured MTN program
ratings of Huarong Finance 2017 Co., Ltd and Huarong Finance II
Co., Ltd, as well as the Baa1 long-term backed senior unsecured
debt rating, the (P)Baa1 long-term and (P)P-2 short-term backed
senior unsecured MTN program ratings of Huarong Finance 2019 Co.,
Ltd.
IDEANOMICS INC: To Acquire US Hybrid for $50M
---------------------------------------------
Ideanomics Inc. has signed a definitive agreement to acquire 100%
of privately held US Hybrid in cash and stock consideration. The
acquisition is subject to customary closing conditions.
Ideanomics will acquire US Hybrid for an aggregate purchase price
of $50,000,000 in a combination of $30,000,000 of cash and
$20,000,000 worth of Ideanomics stock as consideration, subject to
customary purchase price adjustments set forth in the Agreement. US
Hybrid designs, manufactures, and markets integrated power
conversion systems for battery electric, fuel cell, and hybrid
vehicles, as well as systems for renewable energy generation and
storage.
The Agreement contains customary representations, warranties,
covenants, termination rights and indemnities of the parties.
Non-fundamental representations and warranties survive for 18
months following the closing date and fundamental representations
and warranties survive either indefinitely or for the statute of
limitations. The Agreement also contains mutual indemnification
obligations of the parties thereto. The indemnification obligations
of the parties are capped at $25,000,000 for non-fundamental
representations and warranties. The indemnification obligations of
the parties for breaches of non-fundamental representations and
warranties are subject to a $100,000 deductible, except in the case
of fraud. The Agreement contains customary covenants.
"The acquisition of US Hybrid is a significant one for our EV
efforts across the Ideanomics Mobility division and is the
stepping-stone we were looking for to ensure we provide vehicles
and technologies that can proudly allow us to state the meaningful
components are Made in America. We are excited to bring Dr.
Goodarzi and team into the Ideanomics family, they have been
exceptional to work with throughout our discussions, and we look
forward to helping them develop their business further. We will be
bringing their technologies and capabilities into our own vehicles,
as well as helping the broader industry leverage the outstanding
technology the US Hybrid team has developed in Hybrid, EV, and
Hydrogen fuel cells," said Alf Poor, Ideanomics CEO. "With decades
of experience and credibility from deployments with reputable
customers, US Hybrid will become an innovation engine for
Ideanomics and provide strategic opportunities for clean technology
applications across the zero emissions transportation value chain,
both now and in the future."
"We are excited to be joining the Ideanomics family, as a
synergistic addition to the Ideanomics ecosystem of EV businesses.
Ideanomics' global platform will provide us with the opportunity to
unlock the commercialization and sales potential of our
American-made zero-emission products within Ideanomics and our
broad customer base. This combination of our businesses provides
for a bright future in zero emission transportation, where we
continue to innovate for the future, while scaling our commercial
products to meet the immediate demands of the industry," said Dr.
Gordon Abas Goodarzi, PhD, PE, CEO of US Hybrid.
About Ideanomics
Ideanomics is a global company focused on the convergence of
financial services and industries experiencing technological
disruption. Its Mobile Energy Global (MEG) division is a service
provider which facilitates the adoption of electric vehicles by
commercial fleet operators through offering vehicle procurement,
finance and leasing, and energy management solutions under its
innovative sales to financing to charging (S2F2C) business model.
Ideanomics Capital is focused on disruptive fintech solutions and
services across the financial services industry. Together, MEG and
Ideanomics Capital provide their global customers and partners with
leading technologies and services designed to improve transparency,
efficiency, and accountability, and its shareholders with the
opportunity to participate in high-potential, growth industries.
The Company is headquartered in New York, NY, with operations in
the U.S., China, Ukraine, and Malaysia.
Ideanomics reported a net loss of $106.04 million for the year
ended Dec. 31, 2020, compared to a net loss of $96.83 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$234.41 million in total assets, $32.64 million in total
liabilities, $1.26 million in series A convertible redeemable
preferred stock, $7.48 million in redeemable non-controlling
interest, and $193.02 million in total equity.
JINKE PROPERTY: S&P Assigns 'B+' Rating on Senior Unsecured Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issue rating to a
proposed issuance of U.S. dollar-denominated senior unsecured notes
by Jinke Property Group Co. Ltd. (BB-/Stable/--). The issue rating
is subject to its review of the final issuance documentation.
S&P said, "We rate the notes one notch lower than the issuer credit
rating on Jinke to reflect subordination risk. The proposed notes
will rank behind a material amount of secured debt in the company's
capital structure. As of Dec. 31, 2020, Jinke's capital structure
consisted of Chinese renminbi (RMB) 72 billion in secured debt,
represented by bank and trust loans. The company also had RMB26
billion of unsecured debt, including RMB18 billion in bonds.
Jinke's secured debt is about 73% of its total debt, above our
notching-down threshold of 50%.
"The new issuance will not significantly affect Jinke's credit
profile because the proceeds will be used to refinance existing
debt. We expect Jinke to be less reliant on debt to fund business
needs as the company has shifted its focus to operating efficiency
from scale expansion. We anticipate Jinke's financial leverage, as
measured by the consolidated debt-to-EBITDA ratio, will moderately
decline to about 5x in the next 12 months, from 5.3x in 2020."
KUNMING PUBLIC RENTAL: Fitch Assigns 'BB+' LT IDRs, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has assigned China-based Kunming Public Rental
Housing Development and Construction Management Co., Ltd. (KPRH)
Long-Term Foreign- and Local-Currency Issuer Default Ratings of
'BB+'. The Outlook is Stable.
KPRH is engaged mainly in investment, development, operation and
management of public rental housing in Kunming municipality.
Kunming is the provincial capital of Yunnan province, in
southwestern China. It has residential population of nearly seven
million, and GDP per capita is above the national average.
Budgetary revenue reached CNY65 billion in 2020 (2019: CNY63
billion).
KEY RATING DRIVERS
'Very Strong' Status, Ownership and Control: KPRH is a limited
liability company wholly owned, controlled and supervised by the
Kunming municipal government, via the Kunming State-Owned Assets
Supervision and Administration Commission (SASAC) and its
controlled entity. The government and its controlled entity
ultimately appoint the majority of KPRH's board of directors. Major
investment and financing activities are also subject to approval by
the government and its controlled entity.
'Strong' Support Record: KPRH has benefited from central,
provincial and municipal government funding for the construction of
public rental housing. The funding is set at CNY400 per square
metre (sq m) from the central government, at least CNY100/sqm from
the provincial government and CNY100/sqm from the municipal
government. KPRH can use the funding as capital injections for
public housing projects.
Dedicated Municipal-Level Support: The municipal government can use
net appreciation of the housing management fund, 5% of total land
sales revenue, 10% of tax revenue of property development in each
year to support public rental housing. Government support varies
depending on requirements. Public sector transfers and grants were
over 35% of KPRH's total operating revenue in 2017-2020. Asset
injections and tax policy support are also provided. KPRH can also
divest up to 40% of a residential area in a housing project to
service debt if approved.
'Strong' Socio-Political Default Implications: KPRH is the only
municipal-level entity in charge of public rental housing
investment and operation in the city. Public rental housing is a
key contributor to Kunming's affordable social housing portfolio.
KPRH had over 40,000 public rental housing units as of June 2020.
The operation of public rental housing is a high political priority
for the municipal government. China's 14th five-year plan has
specified that affordable public rental housing supply should be
increased.
Fitch expects that Kunming will be the principal city within Yunnan
province to be supported by upper-tier governments' budgetary
investment in affordable public rental housing. The company relies
on continuous access to external funding to execute policy mandates
from the government, although the completed social housing is
established service infrastructure. Therefore, a financial default
could lead to delay in development pace and have significant
political or economic repercussions for the municipality.
'Moderate' Financial Default Implications of Default: Fitch expects
that a default by KPRH would have a moderate impact on the
financing costs of other government-related entities (GREs) in
Kunming. KPRH uses capital injections from the government and debt
funding to finance public sector projects, and relies on rental
proceeds from tenants, sales proceeds from restricted-price
commercial residential properties, and subsidies and policy support
from the public sector to service debt.
Funding Access Diversified: KPRH has access to diversified funding
channels, including the domestic bond market and key national
policy banks to finance its investments. The company has access to
user-based revenue and potential exposure to volatility in the
property sector, as one of the public sector GREs in Kunming.
Standalone Credit Profile of 'b+': Revenue defensibility is
assessed as 'Midrange' to reflect strong demand for affordable
social housing in Kunming and very limited pricing autonomy on
public welfare businesses. Operating risk is 'Midrange' on
well-identified cost drivers, adequate resource and labour
supplies, and reasonable yet limited timing flexibility to finish
the government's investment plan on social housing. Its financial
profile is assessed as 'Weaker', as Fitch forecasts net adjusted
debt/EBITDA to stay above 12x in the medium term.
There is nil asymmetric risk or other considerations affecting the
Standalone Credit Profile. Fitch expects profitability to improve
gradually, as the company's sales of restricted-pricing commercial
properties will cross-subsidise the rental sector.
DERIVATION SUMMARY
Fitch assessed KPRH under Fitch's GRE Rating Criteria, reflecting
the municipal government's ultimate ownership and oversight over
KPRH, a record of financial support and the company's functional
role in the city's public housing development, a key government
strategic initiative. These factors indicate a strong incentive by
the sponsor to provide extraordinary support to KPRH, if needed.
KPRH's Standalone Credit Profile is assessed under Fitch's Public
Sector, Revenue-Supported Entities Rating Criteria.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Upward revision of Fitch's credit view on Kunming municipal
government's ability to provide subsidies, grants or other
legitimate resources allowed under China's policies and
regulations;
-- An increase in the municipal government's incentive to support
KPRH, including stronger socio-political and financial
implications of a default or a stronger support record and
expectation.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Downward revision in Fitch's credit view on the Kunming
municipal government's ability to provide subsidies, grants or
other legitimate resources allowed under China's policies and
regulations;
-- Significant weakening in the socio-political and financial
implications of a default by KPRH, a weaker government support
record and expectation or a dilution in the government's
shareholding.
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.
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.
ZHONGYU GAS: Moody's Assigns First Time Ba3 Corp. Family Rating
---------------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba3 corporate
family rating to Zhongyu Gas Holdings Limited.
At the same time, Moody's has assigned a Ba3 senior unsecured
rating to the proposed USD notes to be issued by Zhongyu Gas.
The outlook on Zhongyu Gas is stable.
RATINGS RATIONALE
"Zhongyu Gas' Ba3 corporate family rating (CFR) reflects its (1)
regional market position in China's city-gas distribution sector,
especially in Henan and Hebei provinces, and (2) strong track
record of gas sales growth supported by favorable industry policy,"
says Ralph Ng, a Moody's Vice President and Senior Analyst.
Zhongyu Gas' market position benefits from its regional coverage,
with 72 long-term concessions across nine provinces in China
covering 20 million people. These parameters position the company
as a medium-sized city-gas distributor within Moody's rated
portfolio.
Moody's expects Zhongyu Gas to achieve annual gas sales growth of
around 20% in 2021 and 2022, supported by the resumption of
business activity in its existing projects and inorganic growth
from newly acquired projects.
Favorable industry trends and supportive government policies will
also continue to drive Zhongyu Gas' strong business growth over the
long term, given China's stance on increasing its use of clean
energy to combat air pollution.
However, these credit strengths are counterbalanced by (1) the
risks associated with China's evolving regulatory framework for gas
distributors, (2) the company's reliance on its less recurring gas
connection business, and (3) the pressure on its credit metrics due
to heavy planned capital spending over the next two years.
Zhongyu Gas' reliance on connection fees will introduce volatility
to its operating cash flow, because this segment is less stable
than natural gas sales. Although connection fees have a very high
profit margin and contribute to only 17% of revenue, they accounted
for 73% of Zhongyu Gas' total profit in 2020. Moody's expects the
contribution from connection fees will gradually reduce, but still
remain around 50% of the company's total profit over the next two
years.
The senior unsecured rating of Ba3 is consistent with the Zhongyu
Gas' Ba3 CFR. Zhongyu Gas' majority of the claims is at the holding
company level and therefore structural subordination risk to USD
notes creditors is low. Zhongyu Gas' overall cash flows are
generated cross a large number of operating subsidiaries and the
largest operating subsidiary only accounts for around 10% of total
revenue. Such diversification will reduce the subordination risk.
Moody's estimates that Zhongyu Gas' annual capital spending will be
HKD1.5 billion - HKD2.0 billion over the next three years, while
its funds from operations (FFO)/debt will be 10%-11% and retained
cash flow (RCF)/debt will stay at 8%-9% in 2021-2023.
The rating also takes into account the following environmental,
social and governance (ESG) considerations.
Zhongyu Gas bears low carbon transition risk as the government aims
to increase the consumption of natural gas, a cleaner fuel than
coal, to control air pollution.
Zhongyu Gas faces moderate social risk in terms of worker health
and safety in relation to its construction and operation of city
gas projects.
In terms of governance risk, Zhongyu Gas has pursued a relatively
more aggressive financial policy than other rated peers during the
past five years, resulting in fast-growing revenue and assets. The
company's reported debt has increased by 165% during the last five
years (2015-2020).
Zhongyu Gas' stable outlook reflects Moody's expectation that the
company's credit profile and regulatory environment will remain
broadly stable over the next 12-18 months. Its liquidity profile
remains adequate to address its upcoming debt maturities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would upgrade the rating if there is a material improvement
in Zhongyu Gas' business model and financial profile, and if
favorable regulatory changes significantly improve the company's
ability to pass through costs.
Improvement in capital structure by extending the debt maturity and
in its liquidity position will support a positive momentum.
Financial metrics indicative of an upgrade include RCF/debt above
10% and FFO interest cover above 4.0x on a sustained basis.
Moody's would downgrade the rating if unfavorable regulatory
changes significantly reduce the company's ability to pass through
costs and its credit metrics significantly weaken due to, but not
limited to, aggressive debt-funded capital spending or
acquisitions.
Financial metrics indicative of a downgrade include RCF/debt below
5% and FFO interest cover below 2.0x on a sustained basis.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
Established in 2002, Zhongyu Gas is a city-gas distributor in
China, with most of its projects covering second-tier or lower-tier
cities in Henan and Hebei provinces.
The company is 40% owned by China Gas, 28.8% owned by Mr. Wang
Wenliang, the chairman of Zhongyu Gas, and the rest is owned by its
directors (2.1%) and are public (29%).
=========
I N D I A
=========
AAISWARYA DYEING: CRISIL Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Aaiswarya
Dyeing Mills Private Limited (ADMPL) continue to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 30 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 33.5 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ADMPL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 ADMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ADMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ADMPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in April 1999, ADMPL, promoted by Mr. Ramesh Modi,
processes, and manufactures dyed and printed fabrics used for
making dress materials, sarees and shirts. Its manufacturing units
are at Surat, Gujarat.
AL-AYAAN FOODS: CRISIL Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Al-Ayaan Foods
Private Limited (AAFPL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with AAFPL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 AAFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AAFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AAFPL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2014 by Mr. Naushad Elahi and Ms. Mumtaz Elahi,
AAFPL trades in livestock (buffalo). The company commenced
operations in December 2014. The company was acquired by Mr.
Mohammed Elahi Qureshi and Mr. Dilshad in 2015.
ANIL CONSTRUCTION: Ind-Ra Keeps BB Issuer Rating in Non-Cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Anil
Construction Company's Long-Term Issuer Rating 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 these ratings. The rating will
continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based limits maintained to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating;
-- INR20 mil. Proposed fund-based limits Withdrawn (the company
did not proceed with the instrument as envisaged); and
-- INR70 mil. Non-fund-based limits maintained to non-cooperating
category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 29, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2000, Anil Construction Company is a partnership
firm engaged in road construction and maintenance for Madhya
Pradesh Rural Road Development Authority, with whom it has a Class
A contractor status.
ANMOL ENTERPRISES: CRISIL Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Anmol
Enterprises continues to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with Anmol for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 Anmol, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on Anmol
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
Anmol continues to be 'CRISIL D Issuer Not Cooperating'.
Anmol is a project-specific firm promoted by Ahmedabad-based Mr.
Arvind Patel and his family members. The firm is developing a
residential project in Gota, Ahmedabad. It commenced construction
in January 2012.
ARPEE ENERGY: Ind-Ra Moves B+ LT Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Arpee Energy
Minerals 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 B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR70 mil. Fund-based limits migrated to non-cooperating
category with IND B+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May
12, 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 2006, Arpee Energy Minerals is engaged in the
business of coal trading in Ranchi (Jharkhand). The company
procures trading materials from Central Coalfields Limited, Bihar
Foundry & Castings Ltd and others, and sells them to players in the
steel and power industry. The company's promoter director is
Praveen Agarwal.
ASIA-PACIFIC INSTITUTE: CRISIL Keeps D Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Asia-Pacific
Institute of Management (A Unit of All India Asian Educational
Foundation) (AIAEF) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 18 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with AIAEF for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 AIAEF, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AIAEF
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AIAEF continues to be 'CRISIL D Issuer Not Cooperating'.
AIAEF was set up in 1996 by Mr. A K Shrivastav and his family
members. The society operates APIM, which provides postgraduate
courses in business administration.
CELEBRITY CORPORATE: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Celebrity
Corporate Club (CCC) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 7 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 1 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CCC for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 CCC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CCC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CCC continues to be 'CRISIL D Issuer Not Cooperating'.
Set up in 2010 by Mr. Kangeyan, CCC runs a club in Chennai which
has three branches in Tamil Nadu.
CHARMS CHEM: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Charms Chem
Private Limited (CCPL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL D (Issuer Not
Cooperating)
Inland/Import
Letter of Credit 0.5 CRISIL D (Issuer Not
Cooperating)
Proposed Fund- 1.09 CRISIL D (Issuer Not
Based Bank Limits Cooperating)
Term Loan 0.55 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CCPL for
obtaining information through letters and emails dated October 24,
2020 and April 28, 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 CCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CCPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Incorporated in 2001, CCPL manufactures herbal extracts and
phytochemicals which find application in oncology drugs and
nutraceutical products. The company is promoted by Mr. Milind
Honavar and Mrs. Sangeeta Honavar, and its manufacturing units are
located in Kurkumbh and Jejuri near Pune (Maharashtra).
DANU WIND: Ind-Ra Keeps 'D' Term Loan Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Danu Wind Parks
Private Limited's term loan rating in the non-cooperating category.
The issuer did not participate in the surveillance 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
D (ISSUER NOT COOPERATING)' on the agency's website.
The detailed rating action is:
-- INR2,676.3 bil. Term loan due on March 31, 2034 maintained in
non-cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING; The rating was last reviewed on May
6, 2020. Ind-Ra is unable to provide an update, as the agency does
not have adequate information to review the rating.
COMPANY PROFILE
Danu Wind Parks was formed in 2011 to build and operate wind power
plant in Kurnool, Andhra Pradesh.
DESERVE CONSTRUCTION: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: Deserve Construction Private Limited
Deserve CST Road Junction
Opp. University of Mumbai Premises
Kalina, Santacruz (East)
Mumbai, Maharashtra 400098
India
Insolvency Commencement Date: April 30, 2021
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: November 14, 2021
Insolvency professional: Hemantprakash Shyamsunder Jain
Interim Resolution
Professional: Hemantprakash Shyamsunder Jain
7 Jyotikapark Society
Near Police Commissioner Office
Shahibaug Road
Ahmedabad 380004
E-mail: hpsjca@gmail.com
- and -
501, Aalin Complex
Nr. Rambha Complex
Opp. Gujarat Vidyapith
Ashram Rd
Ahmedabad 380014
E-mail: cirp.deserve@gmail.com
Last date for
submission of claims: June 1, 2021
EAGLE FIBRES: Ind-Ra Keeps BB LT Issuer Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Eagle Fibres
Private Limited's (EFPL) Long-Term Issuer Rating of 'IND BB (ISSUER
NOT COOPERATING)' in the non-cooperating category and has
simultaneously withdrawn it.
The instrument-wise rating action is:
-- INR60 mil. Non-fund-based working capital limit* maintained in
non-cooperating and withdrawn; and
*Maintained at 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn
KEY RATING DRIVERS
The ratings have been maintained in the non-cooperating category
because the company did not participate in the rating exercise
despite continuous requests and follow-ups by Ind-Ra.
The agency is no longer required to maintain the ratings, as the
agency has received a no-objection certificate from the lenders.
This is consistent with the Securities and Exchange Board of
India's circular dated March 31, 2017 for credit rating agencies.
Ind-Ra will no longer provide analytical or rating coverage for
EFPL.
COMPANY PROFILE
Incorporated in 1990, EFPL manufactures polyster and nylon yarn,
and fabrics. The company has three units in Surat specializing in
spinning of yarns, sizing of filaments and weaving of fabrics.
ECO CEMENT: CARE Lowers Rating on INR10cr LT Loan to B+
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Eco
Cement India Limited (ECIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 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 23, 2020 placed the
ratings of ECIL under the 'issuer non-cooperating' category as ECIL
had failed to provide information for monitoring of the rating.
ECIL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated February 06, 2021, February 16, 2021, February
26, 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. Further banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account non-availability
of information and no due-diligence conducted due to
non-cooperation by ECIL with CARE'S efforts to undertake a review
of the rating outstanding. CARE views information availability risk
as a key factor in its assessment of credit risk. Further, the
ratings continue to remain constrained owing to modest scale of
operations, low Profitability margins and intense competition and
dependence on real estate sector. The ratings, however, continue to
take comfort from experienced promoters and long track record of
operations, moderate capital structure coupled with improvement in
the coverage indicators, Moderate operating cycle and presence in
cement deficit zone.
Detailed description of the key rating drivers
At the time of last rating on March 23, 2020 the following were the
rating weaknesses and strengths:
Detailed description of the key rating drivers
Key Rating Weaknesses
* Modest scale of operations: The scale of operations continues to
remain modest as marked by total operating income and gross cash
accrual of INR66.86 crore and INR1.61 crore respectively in FY20 as
against INR75.29 crore and INR 1.64 crore in FY19. (refers to the
period April 1 to March 31). The modest scale limits the company's
financial flexibility in times of stress and deprives it of scale
benefits.
* Low Profitability margins: The profitability margins of the
company continue to remain on the lower side due to ECIL's presence
in highly competitive industry. The PBILDT margin of the company
continues to remain around 5% for the past three financial years
i.e. FY18- FY20. Further high depreciation and interest cost
restricted the net profitability below unity at 0.68% in FY20.
* Intense competition and dependence on real estate sector: The
spectrum of the cement industry in which the company operates is
highly fragmented and competitive marked by the presence of
numerous players in India. Hence the players in the industry do not
have any pricing power and are exposed to competition induced
pressures on profitability. Further, cement industry is primarily
dependent upon the demand of real estate and construction sector
across the globe. The real estate industry is cyclical in nature
and is exposed to various macro-economic factors which may affect
the real estate industry which in turn would impact the demand for
ECIL's product.
Key Rating Strengths
* Experienced promoters and long track record of operations: The
operations of the company are currently being managed by Mr. Bipin
Kumar Agrawal and Mr. Kamal Kumar Agrawal. Mr. Kamal Kumar Agarwal
and Mr. Mr. Bipin Kumar Agrawal both have an experience of around
two decades in cement industry through their association with ECIL.
The company has a considerable track record of around two decades
in manufacturing and trading of cement which has resulted in long
term relationship with suppliers and customers.
* Moderate capital structure coupled with improvement in the
coverage indicators: The capital structure of the company continues
to be moderate owing to moderate net worth base as marked by
overall gearing ratio of 0.93x as on March 31, 2020 as against
0.91x as on March 31, 2019.The slight deterioration in the overall
gearing is on account of higher utilization of the working capital
borrowings as on balance sheet date. The coverage indicators of the
company declined and stood moderate as marked by interest coverage
ratio and total debt to gross cash accrual of 1.96x and 9.59x for
FY20 as against 2.18x and 8.85x for FY19.
* Moderate operating cycle: The operating cycle of the company
continues to remain moderate at 60 days for FY20. The company is
required to maintain adequate inventory of raw material for smooth
processing and also maintain inventory of finished goods for
meeting the demands of the customers resulting into average
inventory holding of 21 days in FY20 as against 16 days in FY19.
The company normally offers credit period of around two months to
its customers / dealers resulting in the average collection period
of around 50 days in FY20 as against 52 days in FY19. It receives
payable period of around half month from its suppliers resulting in
average creditor period of around 12 days for FY20.
* Presence in cement deficit zone: The grinding unit of ECIL is
located in Uttar Pradesh which gives proximity to the markets in
the Eastern India. In view of the current and growing demand for
cement in eastern territory like Bihar which has currently been
cement deficit zone, ECIL expects a stable demand from customers in
the regions of Bihar and Uttar Pradesh.
Eco Cement India Limited (ECIL) was incorporated in 1996 and is
currently being managed by Mr. Bipin Kumar Agarwal and Mr. Kamal
Kumar Agarwal. They collectively look after the overall operations
of the company. ECIL is primarily engaged in the manufacturing of
cement and trading of clinker. The grinding unit for manufacturing
Portland Pozzolana Cement (PPC) has total installed capacity of 600
tons per day (TPD) in Chandauli, Uttar Pradesh. Thus, the company
has access to the market of eastern India, mainly Bihar & Uttar
Pradesh. The company majorly procures raw material i.e. clinker
from domestic manufacturers located in the regions of Madhya
Pradesh, Uttar Pradesh and Maharashtra while packaging material is
procured from its group company Lolark Polytex Private Limited.
Besides ECIL, group concerns include Trinayani Cement Private
Limited (rated CARE BB/Stable) which is engaged in manufacturing
and trading of cement, and Lolark Polytex Private Limited (rated
CARE BB/Stable) which is engaged in manufacturing of polypropylene
(PP) bags.
EXCEL VEHICLES: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Excel
Vehicles Private Limited (EVPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 57.00 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 22, 2020, had reviewed
the rating of EVPL under the 'issuer non-cooperating' category as
EVPL had failed to provide information for monitoring of the
rating. EVPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated April 28, 2021. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The ratings on EVPL 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 on May 22, 2020, the following were the
rating strengths and weaknesses.
Key Rating Weaknesses
* Delays in debt servicing: There are delays in debt servicing and
over-drawings in fund based working capital limits owing to weak
liquidity caused by cash losses and elongated working capital
cycle.
Incorporated in the year 2012, EVPL (CIN: U50400MP2012PTC028568)
belongs to Bhopal-based "My Car" Group. EVPL operates in Bhopal and
nearby region as an authorized dealer of Tata Motors Limited (TML)
for its commercial vehicle segment in Madhya Pradesh. The company
deals in all models of TML in commercial vehicle segment.
GREEN EXPRESS: CARE Lowers Rating on INR12cr LT Loan to B-
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Green Express Carriers Private Limited (GECPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 12, 2020 placed the
ratings of GECPL under the 'issuer non-cooperating' category as
GECPL had failed to provide information for monitoring of the
rating. GECPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated April 21, 2021, April 20, 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.
Further banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account non-availability
of information and no due-diligence conducted due to
non-cooperation by Green Express Carriers Private Limited with
CARE'S efforts to undertake a review of the rating outstanding.
CARE views information availability risk as a key factor in its
assessment of credit risk. Further, the ratings continue to remain
constrained owing by small scale of operations, weak financial risk
profile, Working capital intensive nature of operations, highly
competitive and fragmented nature of the freight logistics and
Sensitivity to changes in the overall general economic conditions.
The ratings, however, continue to take comfort from Experienced
Management in the logistic industry, widespread distribution
network and reputed clientele.
Detailed description of the key rating drivers
At the time of last rating on March 12, 2020 the following were the
rating weaknesses and strengths:
Key Rating Weaknesses
* Small scale of operations: The scale of operations of the company
stood small in FY20 as marked by TOI of INR46.03 crore as against
INR49.15 crores during FY19. Further the net worth of the company
stood small at 7.63 crores as on March 31, 2020. The small scale
limits the company's financial flexibility in times of stress and
deprives it of scale benefits.
* Weak financial risk profile: The profitability margins of the
company stood thin owing to competitive nature of industry as
marked by PBIDLT of around 5.50% for the past two financial years
i.e. FY19 and FY20. The capital structure of the company stood
leveraged owing to higher dependence on the external borrowings to
meet its working capital requirements. The overall gearing ratio
remained around 2x as on the balance sheet date of the last
financial year's i.e.FY19 and FY20. The debt coverage indicators
continue to remain weak as marked by interest coverage ratio and
total debt to gross cash accruals of 1.55x and 20.86x respectively
for FY20 as against 2.03x and 18.54x for FY19 respectively.
* Working capital intensive nature of operations: The operations of
the company are working capital intensive in nature as marked by
gross current asset days of 167 days for FY20. The high gross
current asset days emanates from high collection period of 135 days
in FY20. The company renders transportation services and has to
offer high credit period of three to four months to its customers
as majority of them are large size players which possess high
bargaining power compared to GECPL. GEC enjoys credit period of 4
days from its suppliers, resulted into high operating cycle.
* Highly competitive and fragmented nature of the freight
logistics industry: Around 80-85 per cent of the road freight
transport industry consists of small transport operators that own
less than five trucks, are fragmented and unorganized. The highly
fragmented and unorganized nature of the industry results in
intense price competition and may lead to pressure on the company's
profitability in case of adverse situations.
* Sensitivity to changes in the overall general economic
conditions: GECPL's operations are dependent on the overall
economic condition of the country. Higher economic activity
translates into higher freight movement which drives demand for the
road freight transport industry. Lorry hire charges, being the
major expense for the company is directly linked to the changes in
the diesel prices. As a result, the company's margins are
vulnerable to price hike of diesel. However, the risk is mitigated
to a large extent with presence of fuel linked price escalation
clause in majority of its contracts.
Key rating strengths
* Experienced Management in the logistic industry: GECPL is
promoted and is being managed by Mr. Tejinder Jit Singh Dang having
almost two decades of experience in the logistics business through
his association with Green Carriers & Contractors (Delhi) Private
Limited (GCPL) (established in 1973) and other concerns. He is
supported by Mr. Kamal Deep Singh Dang who is post graduate by
qualification and has overall experience of more than one decade in
the logistics business through his association with GEC.
* Widespread distribution network: GEC's business risk profile
continues to be supported by widespread distribution network along
with warehousing facilities. Company has 45 nodal offices in the
country predominantly covering entire India which facilitate
collection and distribution of goods and parcels, which are fully
equipped with latest electronic equipment's and possess remote
connection facility.
* Reputed clientele: The customer profile of the company includes
reputed companies in the domestic private sector such as Arvind
Lifestyles Brands Limited, Pearl Global Industries Limited, Orient
Craft Limited and Shahi Exports Pvt. Ltd., among others. In light
of the satisfactory work, it has managed to get repeat orders from
its clients as well as reputed client base assures timely payment
and lends comfort to the revenue realization.
New Delhi-based Green Express Carriers Private Limited (GEC) was
incorporated in February 2015 by Mr. Tejinderjit Singh Dang and Mr.
Kamal Deep Singh Dang and started its commercial operations in
December 2015. The company is in the business of providing
logistics services. GEC has a total 45 branch offices across India
which facilitate collection and distribution of goods and parcels.
GYANKUND TRUST: Ind-Ra Keeps 'D' Loan Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Gyankund Trust
to Educate and to Serve's 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 ratings. The ratings will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The detailed rating actions are:
-- INR153.74 mil. Term loan (Long-term) due on August 2024 to
February 2027 maintained in non-cooperating category with
IND D (ISSUER NOT COOPERATING) rating; and
-- INR32.5 mil. Working capital facility (Long-term) maintained
in non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating.
ISSUER NOT COOPERATING: The ratings were last reviewed on May 23,
2019. Ind-Ra is unable to provide an update, as the agency does not
have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2007 in Kurukshetra, Gyankund Trust to Educate and
to Serve's manages and operates Technology Education & Research
Integrated Institutions group of institutes.
HEMA ENGINEERING: CARE Lowers Rating on INR296.91cr Loan to D
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Hema
Engineering Industries Limited (HEIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 296.91 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category and Revised from
CARE BB; Stable
Short Term Bank 93.50 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 revised the rating of HEIL to CARE D; ISSUER NOT
COOPERATING from CARE BB; Stable/CARE A4; ISSUER NOT COOPERATING
based on best available information on account ongoing delays in
repayment of debt as per bank feedback. 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
Key Rating Weaknesses
* Delays in servicing of debt service obligations: The ratings have
been revised on account of the ongoing delays in servicing of debt
obligations by the company as per bank feedback.
HEIL was established by Mr. Krishan Kumar Jajoo (Chairman) in 1984.
The company was rechristened into its present name in 1987. Mr. K.
K. Jajoo, an Engineer from BITS Pilani, has over 35 years of
experience and is supported by Mr. Chandresh Jajoo (Managing
Director), having more than two decades of experience. The company
is engaged in manufacturing of chassis parts, frames, sheet metal
parts, silencers, etc for 2-wheelers and has 13 operational
plants.
INDIAN INFRADEVELOPERS: CARE Lowers Rating on INR6cr LT Loan to B
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Indian Infradevelopers (IID), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 5, 2020 placed the
ratings of IID under the 'issuer noncooperating' category as IID
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. IID 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 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.
The ratings assigned to the bank facilities of IID 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 May 5, 2020 the following were
the rating strengths and weaknesses.
Key rating weaknesses
* Decline in turnover during FY17: During FY17, the TOI of IID
declined to INR8.25 crore as against INR13.82 crore during FY16,
while the orders executed were largely for the government entities
in the state of Gujarat.
* Moderate profitability and debt coverage indicators: During FY17,
the operating profits stood moderate at INR1.59 crore (19.24%) as
against INR1.48 crore (10.70%) during FY16. The debt coverage
indicators as marked by total debt to gross cash accrual (TDGCA)
deteriorated marginally and stood at 6.70 times as on March 31,
2017 as against 5.65 times as on March 31, 2016. The interest
coverage ratio also remained moderate at 2.05 times during FY17
(2.73times during FY16).
* Partnership nature of constitution coupled with presence in
highly competitive and tender driven construction industry:
Construction industry is fragmented in nature with a large number
of medium scale players present at the regional level. This coupled
with the tender driven nature of construction contracts poses huge
competition and puts pressure on the profit margins of the players.
IID being a partnership entity, there is inherent risk of
possibility of withdrawal of capital and dissolution of the firm in
case of retirement/insolvency/personal contingency of any of the
partners.
Key Rating Strengths
* Experienced partners: The key partner, Mr. Dilipsinh J Borana has
more than two decades of experience in the construction industry.
He has developed long standing relationship with key government
customers located in the state of Gujarat.
* Comfortable capital structure: The capital structure of the firm
stood comfortable as marked by overall gearing of 0.79 times as on
March 31, 2017 as against 0.80 times as on March 31, 2016.
Established in January 2013, Surendranagar-based (Gujarat) IID is a
partnership firm run by four partners having equal profit and loss
sharing proportion in the firm. IID is engaged into the business of
construction, repair & maintenance of roads. IID is registered as
'AA' class approved contractor by Government of Gujarat and works
generally on road construction, repair and maintenance contract of
roads for Government of Gujarat.
J P SORTEX: CARE Lowers Rating on INR37cr LT Loan to B+
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of J P
Sortex Private Limited (JPSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 37.00 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 February 7, 2020, placed the
rating of JPSPL under the 'issuer non-cooperating' category as
JPSPL failed to provide information for monitoring of the rating.
JPSPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated May 3, 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.
The rating has been revised on account of non-availability of
requisite information due to non-cooperation by JPSPPL with CARE's
efforts to undertake a review of the outstanding rating. CARE views
information availability risk as a key factor in its assessment of
credit risk. Further, the ratings continue to be constrained by the
raw material price volatility, weak capital structure & total debt
to GCA ratio, elongated operating cycle, monsoon dependent
operations, susceptibility to foreign currency fluctuations and
regulatory risk with highly competitive and fragmented nature of
the industry. The ratings, however, derive strength from the
experienced promoters with established relations with customers and
suppliers, and favorable manufacturing location.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Weak capital structure & Total debt to GCA ratio: The capital
structure of the company remained leveraged marked by overall
gearing ratio of 2.06x, as on March 31, 2020. The total debt to GCA
ratio also continued to remain weak at 13.08x, as on March 31, 2020
(PY: 24.30x).
* Elongated operating cycle: The operating cycle of JPSPL continued
to remain elongated at ~136 days, as on March 31, 2020 (~172 days,
as on March 31, 2019), on account of stretched average inventory
and average collection period.
* Raw material price volatility, monsoon dependent operations:
Agro-based industry is characterized by its seasonality, due to its
dependence on raw materials whose availability is affected directly
by the vagaries of nature. The price of rice moves in tandem with
the prices of paddy. Availability and prices of agro commodities
are highly dependent on the climatic conditions. The monsoon has 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 company is exposed to
the risk of adverse price movement which might result in lower
realization than expected.
* Susceptibility to foreign currency fluctuations: The company
derives a major portion of its income from exports. However the raw
material is being procured domestically. In the absence of any
natural hedge and any hedging mechanism entered into by the
company, the profitability of the company remains susceptible to
any adverse movement in the foreign exchange rates.
* Regulatory risk with highly competitive and fragmented nature of
the industry: The commodity nature of the product makes the
industry highly fragmented with numerous players operating in the
unorganized sector with very less product differentiation. The raw
material (paddy) prices are regulated by government to safeguard
the interest of farmers, which in turn limits the bargaining power
of the rice millers.
Key Rating Strengths
* Experienced promoters with established relations with customers
and suppliers: The operations of the company are currently being
managed by Mr. Raman Garg and Mr. Rahul Garg. The promoters are
having an experience ranging between 7-15 years. The promoters are
also involved in another group concern- Chhabeela Energy Foods
Private Limited (rated CARE BBB-; Stable), which is also engaged in
the same line of business. Presence of company in the rice industry
for close to two decade and favorable location of the plant in
close proximity to paddy growers in Punjab has led to development
of long term relationships with the suppliers and therefore easy
procurement of raw materials. On the customer side, this has
enabled the company to establish strong business relationships with
its clientele (long standing relationship of around 15 years with
some of the clients) in the market, which has led to repeat
orders.
* Favorable manufacturing location: The company's manufacturing
facilities are located in Ferozepur, Punjab. The area is one of the
hubs for paddy/rice, leading to its easy availability. The unit is
also at a close proximity to the grain market resulting in
procurement at competitive rates. The presence of company in
vicinity to the paddy producing regions gives it an advantage over
competitors in terms of easy availability of the raw material as
well as favorable pricing terms. The favorable location also puts
the company in a position to cut on the freight component of the
incoming raw materials.
Analytical approach: Standalone. Combined approach was followed
earlier whereby financial and business risk profiles of JP Sortex
Private Limited (JPSPL) and Chhabeela Energy Foods Private Limited
(CEFPL; rated CARE BBB-; Stable) had been combined. However, the
two companies had no cash flow fungibility in the last few years.
Therefore, a stand-alone approach is being adopted for CEFPL now.
JP Sortex Private Limited (JPSPL) started its operations in 1999 is
managed by Mr. Raman Garg and Mr. Rahul Garg. The company is
engaged in the processing of paddy to rice and also sells its
by-products like bardana, bran, husk, etc. at its sole facility in
Ferozepur, Punjab with an installed capacity of processing 8TPH
(tonnes per hour). The company derived ~72% of its revenue from
exports in FY18 and remaining from the domestic market. In export,
the company is mainly exporting basmati as well as non-basmati rice
with destination that includes Italy, Canada, Egypt, Oman and Saudi
Arabia. Majority of the exports are to Gulf countries.
Domestically, the company sells its products in the states of
Haryana, Himachal Pradesh, Delhi, Maharashtra, Jammu and Kashmir,
Rajasthan, Madhya Pradesh, Andhra Pradesh and Punjab through a
network of sales team and commission agents. Domestically, the
products are majorly sold under company's own brand name "Rice 'o'
India" and "Rice 'o' Punjab" and in export markets, majority of the
products are sold under company's own brand name "Shabeelah".
JAYPEE INFRATECH: Creditors' Panel Approves Suraksha Group's Offer
------------------------------------------------------------------
ETRealty.com reports that creditors' panel of Jaypee Infratech on
May 20 decided to start the voting process on Suraksha group's
offer from next week and rejected the plan proposed by state-owned
NBCC, according to sources. The sources said NBCC's bid was found
to be non-compliant with certain provisions of the insolvency law.
On May 19, construction firm NBCC and Suraksha group submitted
their final resolution plans to acquire Jaypee Infratech Ltd (JIL)
in the fourth round of corporate insolvency resolution process.
ETRealty.com relates that the sources said that a virtual meeting
of the Committee of Creditors (CoC) was held on May 20 to discuss
the bids.
During the meeting, it was decided to put on vote the Suraksha
group's resolution plan next week, they added.
Voting is likely to start from Monday [May 24] and end on Thursday
[May 27], the report notes.
The committee decided not to put NBCC's bid on voting as it found
the offer of the public sector entity non-compliant with provisions
of the insolvency law related to the treatment of assenting and
dissenting financial creditors, as per the sources.
Interestingly, NBCC's plan was approved by the CoC and the NCLT in
the third round of bidding process held in late 2019 and early last
year.
JIL's Interim Resolution Professional (IRP) Anuj Jain had submitted
a report in the CoC meet, stating that NBCC plan was non-compliant,
the sources said, ETRealty.com relays.
Some banks were in favor of putting NBCC's plan for voting but the
CoC did not agree to it, they added.
In this fourth round of the bidding, Surakasha group proposed to
give 2,651 acres of land parcels to lenders. It has earmarked 1,486
acre to dissenting lenders out of the total land parcels offered in
the proposal.
ETRealty.com says Suraksha group will keep Yamuna Expressway with
itself. It has also offered to complete the pending around 20,000
housing units in 42 months. Further, the group has proposed a line
of credit of INR3,000 crore as working capital for construction of
projects.
Further, it has given an undertaking that any shortfall to the
dissenting creditors will be met by the company through pumping of
more funds or assets.
It is estimated that around INR6,000 crore will be required to
complete all stalled projects. The receivables from customers
against sales are estimated at around INR3,500 crore, sources had
said.
This is the fourth round of the bidding process in the matter of
JIL case, ETRealty.com notes.
About Jaypee Infratech
Jaypee Infratech Limited (JIL) is engaged in the real estate
development. The Company's business segments include Yamuna
Expressway Project and Healthcare. The Company's Yamuna Expressway
Project is an integrated project, which inter alia includes
construction of 165 kilometers long six lane access controlled
expressway from Noida to Agra with provision for expansion to eight
lane with service roads and associated structures on build, own,
operate and transfer basis. The Company provides operation and
maintenance of Yamuna Expressway for over 36 years, collection of
toll and the rights for development of approximately 25 million
square meters of land for residential, commercial, institutional,
amusement and industrial purposes at over five land parcels along
the expressway. The Healthcare business segment includes
hospitals. The Company has commenced development of its Land
Parcel-1 at Noida, Land Parcel-3 at Mirzapur and Land Parcel-5 at
Agra.
JIL features in the Reserve Bank of India's first list of
non-performing assets accounts and had debt exposure of over
INR9,783 crore as of September 2017. The parent company,
Jaiprakash Associates Ltd. (JAL), owes more than INR29,000 crore to
various banks.
On Aug. 8, 2017, the National Company Law Tribunal (NCLT),
Allahabad bench accepted lender IDBI Bank's plea and classified JIL
as an insolvent company. With this, the board of directors of the
company remains suspended.
Anuj Jain was appointed as Interim Resolution Professional (IRP) to
manage the company's business. The IRP had invited bids from
investors interested in acquiring JIL and completing the stuck real
estate projects in Noida and Greater Noida.
In the first round of insolvency proceedings conducted in 2018, the
INR7,350-crore bid of Lakshdeep, part of Suraksha Group, was
rejected by lenders. The Committee of Creditors (CoC) rejected the
bids of Suraksha Realty and NBCC Ltd in the second round held in
May-June 2018, according to The Economic Times.
On Nov. 6, 2019, the Supreme Court directed completion of Jaypee
Infratech's insolvency process within 90 days and said the revised
resolution plan will be invited only from NBCC and Suraksha Realty,
ET related.
KINSHUK ENTERPRISE: CARE Cuts Rating on INR0.46cr Loan to B
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kinshuk Enterprise (KE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 0.46 CARE B; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B+
Long Term/Short 6.50 CARE B/CARE A4; ISSUER NOT
Term Bank COOPERATING Rating continues to
Facilities Remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+/CARE A4
Short Term Bank 0.30 CARE A4; 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 5, 2020 placed the
ratings of KE under the 'issuer noncooperating' category as KE had
failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. IID 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 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.
The ratings assigned to the bank facilities of KE 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 May 5, 2020 the following were
the rating strengths and weaknesses.
Key rating weaknesses
* Low profitability: The profit margins remained low on account of
processing and trading nature of business. The PBILDT margins
remained in the range of 1.09% to 2.25% during last three years
ended FY16.
* Leveraged capital structure and weak debt coverage indicators:
Due to increase in working capital bank borrowing to support
increasing scale of operations, the overall gearing deteriorated
from 1.07 times to 2.00 times as on March 31, 2016. Its debt
coverage indicators also remained weak on account of low
profitability and high gearing.
Key Rating Strengths
* Consistent increase in scale of operations: The TOI of the firm
has increased from INR30.84 crore to INR35.88 crore in FY16
depicting growth of 15.85% on y-o-y basis. KES also commenced
processing of agro products such as Millet, Cumin seeds and Sesame
seeds since October, 2015.
KE was formed in 2010 as a partnership firm by Mr. Suraj Vadhava,
Mr. Nandkishor Wadhawa and Mrs. Kasturaben Wadhawa. In April 2013,
a new partner Mr. Naval Wadhawaal joined the firm. KE is engaged in
the business of trading, processing and export of agro commodities
such as Cumin seeds, Sesame seeds, Watermelon seeds, Groundnut
seeds, Fenugreek, Cattle feed, Psyllium husk powder, Guar gum
powder etc. KE operates from its facilities located at Sidhpur,
Gujarat. KE sells its products in the domestic market as well as
exports it to Turkey, Iran and Morocco.
KOTECHA INDUSTRIES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Kotecha
Industries Limited (KIL) 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 3.00 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 5, 2020 placed the
ratings of KIL under the 'issuer non-cooperating' category as KIL
had failed to provide information for monitoring of the ratings as
agreed to in its Rating Agreement. KIL 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 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 May 5, 2020 the following were
the rating strengths and weaknesses.
Key rating weaknesses
* Ongoing delays in debt servicing: KIL has been irregular in
servicing its debt obligation and there are on-going delays in debt
servicing due to weak liquidity position of the company.
KIL is a closely held limited company, incorporated on May 9, 2008
and promoted by Mr. Hardik Kotecha and Mr. Manharlal Kotecha. The
company is engaged into 2the trading Poly Vinyl Chloride (PVC)
resin in domestic markets based on the orders given by customers.
KIL has set up its unit in Rajkot and has a branch office and a
warehouse in Mumbai. The PVC resin is procured from suppliers
spread across India as well as is imported from South Korea.
LEELA KRISHNA: CARE Lowers Rating on INR29.04cr LT Loan to B+
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Leela Krishna Automobiles Private Limited (LKAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 29.04 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 18, 2020, placed the
rating of LKAPL under the 'issuer non-cooperating' category as
LKAPL had failed to provide information for monitoring of the
rating. LKAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and an email dated between February 1, 2021 and February 21, 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.
The rating was revised on account of decline in the total operating
income and profitability levels, deterioration in coverage
indicators and elongation in working capital cycle. Furthermore,
the analytical approach has been changed from combined to
standalone as there is no sufficient information to establish
cashflow fungibility.
Detailed description of the key rating drivers
At the time of last rating on March 18, 2020 the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
* Decline in financial performance of the group during FY20
vis-à-vis FY19: The total operating income of the group declined
from INR1502.33 crore during FY19 to INR1283.06 crore during FY20.
The PBILDT interest coverage and coverage ratios and working
capital cycle of the group deteriorated during FY20 as compared to
FY19.
* Linked to the fortunes of Toyota Kirloskar Motors Pvt Limited
(TKML) with nonexistence of bargaining power: Radha group Toyota
being an authorized dealer of TKML, the financial risk profile of
the group has a high degree of correlation with the performance of
TKML's vehicles in the market and their ability to launch new
products as per the market dynamics. Further, the group operates on
a fixed margin basis wherein prices and margins are fixed by the
principal, resulting in limited bargaining power.
* Volume driven business with intense competition and cyclical
nature of the auto industry: Automobile industry is highly
competitive as there are several players operating in the market in
the passenger vehicle segment like Maruti Suzuki, Hyundai,
Mahindra, Honda, etc. This exposes the group to competition in the
region. Accordingly, the group has to resort to offering better
buying terms like allowing discounts on purchases or attaching
freebies to capture the market share as this is volume driven
business. Such discounts create margin pressure and negatively
impact the earning capacity of the company. However, the group's
long association with its clients, its established network help it
to sustain the competition and maintain its strong market position
in the region. Further, the auto industry is inherently vulnerable
to the economic cycles and is highly sensitive to the interest
rates and fuel prices. The group thus faces significant risks
associated with such cyclical nature of the auto industry.
Key Rating Strengths
* Experienced and resourceful promoters with long established track
record: The Radha Group Toyota was established in 1964 as a trading
organization is being promoted by Mr. Subrahmanyam (Chairman), who
has more than five decades of experience in trading business and
over two decades of experience in managing automobile business. He
is ably supported by his son Mr. M. V. Srinivas (Managing
Director), who has a long and established track record of
operations in the automobile business for over three decades. The
operations of the group draw strength from the extensive dealership
network spread across Andhra Pradesh and Telangana.
* Long and established relationship with TKML: Radha group Toyota
is an authorized dealer for Passenger Vehicles of TKML (both new
and pre used vehicles) in Andhra Pradesh and Telangana since 2004.
As per SIAM data, Toyota sold 1,51,480 units in CY18 out of which
11,433 units (7.5% of the total sales of Toyota) is being
contributed by the group. Over the years Radha group Toyota has
been able to develop comfortable and long-standing relations with
its principal which is reflected in the group's success in getting
its contract renewed in the past.
* Wide distribution network across Andhra Pradesh and Telangana:
The group has dealership rights in Passenger Vehicle segment, which
is spread across the states of Andhra Pradesh and Telangana with 15
show rooms and 9 service centres. Equipped with such wide
distribution network and ability to handle large volumes of cars
enables the group to achieve economies of scale, cost absorption
and ability to offer competitive pricing.
Leela Krishna Automobiles Private Limited (LKAPL) belongs to Radha
Group Toyota of Vijayawada, Andhra Pradesh established in 1964 as a
trading organization. Radha Group Toyota is engaged in the business
of sales and service of passenger vehicles of Toyota Kirloskar
Motors Pvt Limited (TKML) and it is an authorized dealer of TKML.
The group was promoted by Mr. M Subrahmanyam (Chairman), who has
more than five decades of experience in trading and more than two
decades of experience in automobile industry. Mr. M Srinivas
(Managing Director) has more than two decades of experience in
automobile industry. The group comprises of four automobile
companies namely Radha Krishna Automobiles Private Limited,
Radhamadhav Automobiles Private Limited, Leela Krishna Automobiles
Private Limited and Yashodakrishna Automobiles Private Limited
located in Andhra Pradesh and Telangana. These four companies are
in to similar line of business catering to different regions in
both states. RMAPL and LKAPL are operating in the state of Andhra
Pradesh, whereas RKAPL and YKAPL are operating in the state of
Telangana with a total of 15 showrooms in both the states.
LOKNAYAK JAYPRAKASH: CARE Lowers Rating on INR50cr Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Loknayak Jayprakash Narayan Shetkari Sahakari Soot Girni Limited
(LNJL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 50.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category and Revised from
CARE B-; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 22, 2019, placed the
rating(s) of LNJL under the 'issuer non-cooperating' category as
LNJL had failed to provide information for monitoring of the rating
as agreed to in its Rating Agreement. LNJL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and email dated April 17,
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 of the ratings assigned to the bank facilities of LNJL
factors in delays in servicing of interest on the bank facilities
due to stressed liquidity position.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delays in servicing of interest obligations: As per the banker
feedback there were delays in interest servicing on the revolving
demand loan facility, sanctioned by the bank, due to stressed
liquidity position. However, the outstanding amount were fully
repaid and the account was closed on a later date.
Nandurbar (Maharashtra) based Loknayak Jayprakash Narayan Shetkari
Sahakari Soot Girni Limited (LJNSGL) was established as a
cooperative society in the year 1979, promoted by Late Shri P.K.
Anna Patil. The society has a total of 22 members. The society is
engaged in the business of manufacturing of cotton yarn at its
manufacturing facilities (two units) located at Nandurbar,
Maharashtra, having an aggregate installed capacity of 56,880
spindles per annum. Apart from this, the society is also engaged in
ginning and pressing unit for captive consumption to manufacture
cotton yarn; for which the society usually procures the raw
material (raw cotton and cotton bales) from the domestic market and
also from the farmers based out in Nandurbar. The company markets
its products under the brand name of "Jay Soot" and further
sellsits products to power looms and cloth manufacturers.
MAHALAXMI AUTOMOTIVES: Ind-Ra Affirms 'B' Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Mahalaxmi
Automotives Wheels Pvt Ltd's (MAWPL) Long-Term Issuer Rating at
'IND B'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR23 mil. (reduced from INR25 mil.) Fund-based limits
affirmed with IND B/Stable/IND A4 rating.
KEY RATING DRIVERS
The ratings reflect MAWPL's continued small scale of operations
even as its revenue grew 3.8% yoy to INR107.90 million in FY20, due
to an increase in demand for two-wheeler vehicles. During FY21, the
company expects to have booked revenue of INR115 million, despite
the COVID-19-led lockdown, due to an improvement in demand for
automobiles during the last two quarters.
The ratings also factor in MAWPL's modest EBITDA margin of 3.3% in
FY20 (FY19: 3.9%), with the return on capital employed of 6.6%
(5.4%). The margins are likely to have improved at 5%-7% in FY21,
due to a decline in the one-time cost incurred during the initial
years of business (FY19).
Liquidity Indicator - Stretched: The average maximum utilization of
the company's fund-based working capital limits was 98% during the
12 months ended March 2021. At FY20, the company had cash and cash
equivalents of INR0.40 million (FY19: INR0.50 million) against the
total debt of INR16.50 million (INR18.30 million). The company
reported cash flow from operations of INR2 million in FY20 (FY19:
INR1.10 million). MAWPL does not have any debt-led capex plan over
the near term. The company had availed the Reserve Bank of
India-prescribed moratorium over April-June 2020.
The rating is constrained by MAWPL's modest credit metrics with the
gross interest coverage (operating EBITDA/gross interest expense)
of 3.8x in 10MFY21 (FY20: 1.8x; FY19: 1.5x) and the net leverage
(adjusted net debt/operating EBITDAR) of 1x (4.5x; 4.5x). The
agency expects the credit metrics to have improved in FY21 due to
the rise in profitability. The net working capital cycle declined
to negative 1 day in FY20 (FY19: negative 11 days) due to increase
in debtors days to 7 (1). The company has a policy to maintain an
inventory for one-to-two months, based on the season. The company
has a dealership of Honda Motorcycle and Scooter India Private
Limited (HMSI); MAWPL has to make all payments as it does not
receive any credit period; however, the company receives payment
from its customer only after the delivery of the vehicles in
two-to-three days.
The ratings however, are supported by the promoter's experience of
over a decade in the dealership business in its group companies,
and its position of being among the top five dealers of automobiles
in Pune.
RATING SENSITIVITIES
Positive: An increase in the scale of operations and the operating
EBITDA, resulting in an improvement in the liquidity profile with
the net leverage sustaining below 3x could be positive for the
ratings.
Negative: Any decrease in the revenue and/or operating EBITDA,
resulting in further deterioration in the liquidity profile with
net leverage exceeding 3.5x on a sustained basis, could be negative
for the ratings.
COMPANY PROFILE
MAWPL commenced operations in 2019 in Pune, Maharashtra and has a
dealership of HMSI.
MAKSON NUTRITION: Ind-Ra Withdraws BB Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Makson Nutrition
Food (India) Private Limited's (MFINPL) Long-Term Issuer Rating of
'IND BB (ISSUER NOT COOPERATING)'.
The instrument-wise rating actions are:
-- INR237.42 mil. Term loans due on January 2019 to December 2021
is withdrawn; and
-- INR7.5 mil. Fund-based working capital limits is withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings, as MFINPL has
merged with Makson Nuvo Private Limited, effective March 14, 2019,
and has subsequently ceased to exist as a legal entity. Ind-Ra will
no longer provide analytical and rating coverage for MFINP.
COMPANY PROFILE
Set up in 2000, MNFIPL manufactures choclairs for Mondelez India
Foods.
MANIPAL ENERGY: Ind-Ra Lowers Long-Term Issuer Rating to BB
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Manipal Energy
and Infratech Limited's (MEIL) Long-Term Issuer Rating to 'IND BB'
from 'IND BB+'. The Outlook is Negative.
The instrument-wise rating actions are:
-- INR150 mil. Fund-based working facilities Long-term rating
downgraded; Short-term rating affirmed with IND B/Negative
/IND A4+ rating;
-- INR250 mil. (reduced from INR320 mil.) Non-fund-based working
facilities Long-term rating downgraded; Short-term rating
affirmed with IND BB/Negative/IND A4+ rating; and
-- INR43 mil. Term loan due on FY24 assigned with IND BB/Negative
rating.
Analytical Approach: Ind-Ra continues to take a consolidated view
of Manipal Media Network Limited ('IND BB+'/Negative) and its
wholly-owned subsidiaries — MEIL; Manipal Digital Network
Limited; Manipal Ace Event Management Company Private Limited; and
Vijna Labs Private Limited. The ratings factor in the cash flow
fungibility and common management among these entities. FY21
financials are provisional in nature.
The downgrade reflects deterioration in the consolidated credit
profile of MMNL over FY20 and FY21, characterized by the declining
operational and financial performance amid elevated debt levels. In
FY20, MMNL continued to extend inter-corporate loans to MVP Group
International Inc. (MVP, US-based Manipal Group company) contrary
to Ind-Ra's expectations, resulting in the deterioration of its
credit profile.
The Negative Outlook reflects lack of visibility on (a) the
recovery in the profitability and credit metrics of MMNL and (b)
the repayment (timelines and amount) of unsecured loans extended by
MMNL to MVP, the absence of which could lead to a further stress on
its credit metrics.
KEY RATING DRIVERS
MMNL's Elevated Debt Owing to High Exposure to Group Companies:
MMNL's consolidated net leverage remained above 8.0x in FY21,
although no addition support was extended by MMNL to the group
companies and the debt levels also reduced to INR1,425 million.
MMNL's consolidated adjusted debt (including 50% equity credit for
preference shares) increased to INR1,510 million at end-FY20 (FY19:
INR1,087 million). This, along with a decline in FY20 EBITDA,
resulted in deterioration in the consolidated credit metrics with
net leverage (net debt/EBITDA) at 11.2x (end-FY19: 6.9x) and gross
interest coverage (EBITDA/ gross interest) at 1.0x (1.4x).
The high debt levels of MMNL in FY20 resulted primarily from the
inter-corporate loans provided to the group companies (INR430
million), especially MVP (INR420 million), contrary to Ind-Ra's
expectations. The total loans to the group companies stood at
INR1,035 million at end-FY20 (end-FY19: INR606 million), which
represents nearly 50% of MMNL's net worth. Additionally, 97% of
these loans are extended to MVP, where there is lack of clarity
regarding the extent and timelines for the repayment of loans.
MEIL's Small Scale of Operations: Management expects the
performance of MEIL to continue to improve over the medium term,
based on its healthy order book of INR2,040 million at end-FY21,
However, Ind-Ra believes that the volatility in EBITDA margins and
continued elongated working capital cycle could limit the expected
improvement over the medium term. The financial performance of MEIL
improved in FY21, with revenue of INR379 million and EBITDA margins
of 12.4%, based on big tickets size contracts executed. MEIL's
revenue declined to INR317 million in FY20 (FY19: INR555 million)
due to slow order inflows owing to the slowdown in the overall
economy. However, EBITDA margins expanded to 13.7% in FY20 (FY19:
8.6%) due to better realizations in orders.
Weak Counterparties Despite Healthy Order Book: Despite having a
healthy order book of about INR2.0 billion in March 2021, providing
revenue visibility of more than 5x of FY21 revenue, the
counterparty profile of majority of the customers remains weak.
Majority of MEIL's customers are regional electricity boards that
have weak financial profiles. The working capital cycle, therefore,
remains elongated (FY21: 376 days; FY20: 385 days; FY19: 220 days),
owing to high receivable days (428 days; 399 days; 234 days).
Liquidity Indicator - Stretched: MEIL's free cash flows have been
negative since FY17, except FY19 when it turned slightly positive.
The company needed continuous financial support from the parent,
either in the form of equity or inter-corporate loans from
FY17-FY20. Although the financial support was not needed in FY21,
the operations remained susceptible to high working capital
requirements. Ind-Ra, thus, believes that any cash shortfall to
meet the working capital requirements will also be met by support
from the parent. Cash and equivalents stood at INR0.6 million at
end-FY20 (end-FY19: INR0.2 million; end-FY21: INR2.8 million). The
company's average utilization of fund-based limits remained
moderate at about 80% over the 12 months ended April 2021.
Liquidity of MEIL's parent MMNL is also stretched, though is backed
by continuous support from other Manipal Group entities.
Strong Parent Support: Ind-Ra believes the overall linkages between
MEIL and MMNL are strong and MEIL will continue to receive such
support (if required) from MMNL and other group entities. The
strategic linkages between the entities are moderate-to-strong,
given the history of continuous tangible support flowing from MMNL
to MEIL. At end-FY20, MMNL provided an unsecured borrowing of
INR168.9 million (end-FY19: INR153.7 million) to MEIL, and other
group entities infused INR41 million in MEIL (INR19.5 million). The
unsecured loans from the group entities continued to stand at
INR210 million at end-FY21, as no additional support was extended
during FY21. Moreover, MEIL has the repayment flexibility for the
extended loans. The legal linkages are strong as MMNL has provided
a post-default irrevocable and unconditional corporate guarantee
for MEIL's entire external debt, which was about 50% of the total
debt outstanding at end-FY21 (FY20: 42%). Despite being in
unrelated businesses, the operational linkages between these two
entities are moderate owing to the strong supervision of operations
by the parent and common treasury functions between these two
entities. MEIL executes civil construction and rural
electrification works for various state electricity boards, while
MMNL has a newspaper publishing business.
Weak Standalone Credit Metrics: MEIL's net leverage (net adjusted
debt/EBITDA) remained high at 8.9x at end-FY21. Majority of the
debt (around 46%) continues to be from the parent entity. The net
leverage declined to 8.3x at end-FY20 (FY19: 6.2x) while its
interest coverage (EBITDA/gross interest cost) fell to 1.2x (1.4x),
due to the moderate EBITDA and high debt levels. Excluding the
inter-corporate loans MMNL, the net leverage came out to be 3.5x at
end-FY20 (FY19: 2.6x).
RATING SENSITIVITIES
Positive: Developments that could, individually or collectively,
lead to a positive rating action include:
- a positive rating action on MMNL
- a rise in the standalone revenue and EBITDA margin expansion,
along with an improvement in the working capital cycle, leading to
a sustained improvement in MEIL's standalone credit profile
Negative: Developments that could, individually or collectively,
lead to a negative rating action include:
- any negative rating action on MMNL
- any weakening of linkages between MMNL and MEIL
- a sharper-than-expected decline in the MEIL's standalone revenue
and profitability, leading to further deterioration in the credit
metrics
COMPANY PROFILE
MEIL, a 100% subsidiary of MMNL, is an engineering, procurement and
construction contractor executing civil construction and rural
electrification work for various state electricity boards.
MANIPAL MEDIA: Ind-Ra Lowers Long-Term Issuer Rating to 'BB+'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Manipal Media
Network Limited's (MMNL) Long-Term Issuer Rating to 'IND BB+' from
'IND BBB-'. The Outlook is Negative.
The instrument-wise rating actions are:
-- INR172 mil. (reduced from INR242 mil.) Term loans due on FY29
downgraded with IND BB+/Negative rating;
-- INR250 mil. (reduced from INR390 mil.) Fund-based working
facilities downgraded with IND BB+/Negative/IND A4+ rating;
and
-- INR110 mil. Non-fund-based working facilities withdrawn
(repaid in full).
Analytical Approach: Ind-Ra continues to take a consolidated view
of MMNL and its wholly-owned subsidiaries — Manipal Energy &
Infratech Limited (MEIL; 'IND BB'/Negative); Manipal Digital
Network Limited; Manipal Ace Event Management Company Private
Limited; and Vijna Labs Private Limited. The ratings factor in the
cash flow fungibility and common management among these entities.
FY21 financials are provisional in nature.
The downgrade reflects deterioration in the consolidated credit
profile of MMNL over FY20 and FY21, characterized by the declining
operational and financial performance amid elevated debt levels. In
FY20, MMNL continued to extend inter-corporate loans to MVP Group
International Inc. (MVP, US-based Manipal Group company) contrary
to Ind-Ra's expectations, resulting in the deterioration of its
credit profile.
The Negative Outlook reflects lack of visibility on (a) the
recovery in the profitability and credit metrics of MMNL and (b)
the repayment (timelines and amount) of unsecured loans extended by
MMNL to MVP, the absence of which could lead to a further stress on
its credit metrics.
KEY RATING DRIVERS
Elevated Debt Owing to High Exposure to Group Companies: MMNL's
consolidated net leverage remained above 8.0x in FY21, although no
addition support was extended by MMNL to the group companies and
the debt levels also reduced to INR1,425 million.
MMNL's consolidated adjusted debt (including 50% equity credit for
preference shares) increased to INR1,510 million at end-FY20 (FY19:
INR1,087 million). This, along with a decline in FY20 EBITDA,
resulted in deterioration in the consolidated credit metrics with
net leverage (net debt/EBITDA) at 11.2x (end-FY19: 6.9x) and gross
interest coverage (EBITDA/ gross interest) at 1.0x (1.4x).
The high debt levels of MMNL in FY20 resulted primarily from the
inter-corporate loans provided to the group companies (INR430
million), especially MVP (INR420 million), contrary to Ind-Ra's
expectations. The total loans to the group companies stood at
INR1,035 million at end-FY20 (end-FY19: INR606 million), which
represents nearly 50% of MMNL's net worth. Additionally, 97% of
these loans are extended to MVP, where there is lack of clarity
regarding the extent and timelines for the repayment of loans.
Weak Operating Performance: Ind-Ra believes that any recovery in
the operational and financial profile of MMNL at a consolidated
levels needs to be seen over the next 12 months, since the debt
levels remain high. MMNL's revenue dipped by 21% yoy in FY21,
primarily due to the moderate performance in its standalone
operations (revenue down 32% yoy to INR777 million), which more
than offset the 20% yoy growth in MEIL's revenue to INR379 million.
MMNL's consolidated revenue also declined 18.7% yoy to INR1,477
million in FY20, mainly due to a 10% yoy reduction in advertisement
revenue (about 48% of consolidated revenue) and a 43% yoy decline
in revenue in MEIL (about 21%). Advertisement revenue was impacted
by low business volumes, while the decline in MEIL revenue was
attributable to the lower number of rural electrifications
contracts executed due to a slowdown in the overall economy. The
consolidated EBITDA margins improved marginally to 8.8% in FY20
(FY19: 8.4%) and further to 14.5% in FY21 owing to the various cost
cutting initiatives.
Liquidity Indicator - Stretched: Ind-Ra believes MMNL's cash flow
from operations will remained stretched over the medium term to
meet capex and debt-servicing requirements. That being said, Ind-Ra
expects MMNL will continue to get support from the Manipal Group
over the next two-to-three years, whenever required. The company
had limited cash and equivalent of INR47 million on 31 March 2020.
MMNL's standalone cash and equivalents increased to INR19 million
at end-FY21 (FY20: INR12 million). Moreover, the company's working
capital cycle remained elongated at 108 days in FY20 (FY19: 100
days), on account of high receivables levels. Ind-Ra has not
factored in the repayment of loan by MVP due to lack of visibility
on the timelines for the same; however, the loan, once repaid, will
aid MMNL's liquidity. Also, the company had COVID emergency loans
of INR83 million obtained from banks during FY21 (MMNL standalone:
INR40 million; MEIL: INR43 million).
Support from Manipal Group: The ratings continue to be supported by
MMNL's association with the Manipal Group (promoted by Satish Pai);
this includes MMNL, Manipal Technologies Limited ('IND
BBB+'/Negative) and Primacy Industries Limited ('IND B(ISSUER NOT
COPERATING)'). With MMNL operating as a holding company for Manipal
Group, the likelihood of MMNL receiving support from the promoters
and other group companies is high. The promoters and the other
group companies infused INR523 million in FY20 (FY19: INR280
million) in the form of unsecured loans to support the cash flow
needs of the company. Although the need for group support remained
moderate in FY21 (INR16million increase in FY21 at MMNL standalone
level vs INR 501million in FY20), Ind-Ra expects the support to
continue to flow to MMNL from the group, if required.
Coastal Karnataka Market Leadership: MMNL is among the top players
in the coastal Karnataka region. As per the management, the company
holds around 70% of the circulation market share in the coastal
region, with a circulation of about 270,000 daily copies across the
state. MMNL is also known for its weekly and monthly publications
in Kannada language. The company's regional focus has resulted in a
moderate scale of operations, which is unlikely to grow
substantially.
Deterioration in Standalone Credit Profile: The company's FY21
performance remained muted with revenue declining to INR777 million
(FY20: INR1,148 million, FY20 down 8.4% yoy), while EBITDA margins
increased to 15.4% (8.0%). MMNL's gross debt reduced to INR1,214
million at FYE21 (FY20: INR1,306 million). The continuous decline
in revenue primarily due to a decline in advertisement revenue,
while the rise in margins is attributed to the various cost cutting
initiative taken by the company. High newsprint prices too took a
toll on standalone profitability in FY20, thereby reducing EBITDA
to INR92 million (FY19: INR111 million). Although MMNL's standalone
debt increased to INR1,306 million at end-FY20 from INR930 million
at end-FY19, a significant portion of this was loans from other
group companies and directors.
RATING SENSITIVITIES
Positive (Outlook revision to Stable): A reduction in the
consolidated debt levels, along with an increase in the operating
profits leading to the consolidated net adjusted leverage reducing
below 5.0x on a sustained basis could lead to a positive rating
action.
Negative: Developments that could, individually or collectively,
lead to a negative rating action include:
- higher-than-expected financial support to other group entities,
primarily MVP
- deterioration in the credit profile with consolidated net
adjusted leverage remaining above 5.0x on a sustained basis
- weakening of importance to the overall Manipal Group, thereby
limiting the possibility of receiving further support from the
group
COMPANY PROFILE
Incorporated in 1948 in Manipal, Udipi, by the Manipal Group, MMNL
is a newspaper publishing house. Its flagship Kannada daily
newspaper - Udayavani - commands 70%-80% regional language market
share and reasonable market share in its English edition. Udayavani
publishes editions in Manipal, Bengaluru, Hubli, Gulbarga,
Davanagere and Mumbai.
NAGARJUNA FERTILIZERS: CARE Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Nagarjuna
Fertilizers and Chemicals Limited (NFCL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1276.14 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long-term/Short 1179.67 CARE D; ISSUER NOT COOPERATING
Term Bank Rating continues to remain
Facilities under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 16, 2020, placed the
rating of NFCL under the 'Issuer Non-Cooperating' category as NFCL
had failed to provide information for monitoring of the rating.
NFCL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated January 30, 2021, February 9, 2021 and April 30,
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.
The rating factors in delays in servicing of debt obligations on
account of stretched liquidity position of the company.
Detailed description of the key rating drivers
At the time of the last rating on March 16, 2020; the following
were the rating strengths and weaknesses (updated for the
information available from stock exchange):
Key Rating Weaknesses
* Stretched liquidity position: The company continued to report
subdued operational and financial performance during FY19 led by
slower receipt of fertilizer subsidy, absence of adequate working
capital to run the plants and high debt servicing obligation.
Consequently, the company reported net loss for the year FY19 with
resultant stretch on cash flow position and delays in debt
servicing. The total operating income more than halved to
INR1950.59 crore in FY19 as compared to INR3933.49 crore in FY18.
Similarly, NFCL continued to report decline in revenue by about 12%
to INR1714.17 crore in FY20 due to operation of only one Urea plant
and reported net loss and cash loss during the year. There has been
revenue degrowth (by 9%) and losses reported during 9MFY21 also on
a y-o-y basis.
* Regulated nature of industry: The Indian Fertilizer industry is
highly energy and capital intensive, besides being a highly
regulated industry. Urea, the most consumed fertilizer in the
country, remains under the Government control with the selling
price fixed by the Government and the excess of the cost of
production over the selling price, allowing for a suitable return,
given as subsidy to the units.
Key rating Strengths:
* Long-track record of the company: NFCL belongs to the Nagarjuna
group of Hyderabad, promoted by the late Mr. K.V.K. Raju. The group
is an established south India based industrial house with major
focus on agricultural fertilizers & chemicals business since the
last three decades.
* Raw material and fuel sourcing arrangement: Natural gas is key
feedstock & fuel and NFCL has long-term contract for procuring the
same from GAIL (India) Limited and Reliance Industries Limited
which are received through pipelines at NFCL's receiving station at
its plant.
Nagarjuna Fertilisers & Chemicals Ltd. (NFCL), promoted by late
Shri. K.V.K. Raju, is the flagship company of the Hyderabad based
Nagarjuna group. Along with Mr. Raju, Andhra Pradesh State
Government and FIIs are the major shareholders of NFCL. NFCL,
currently, operates only one Urea plant out of two Urea plants
(capacity – 2,300 MT per day each) at its facilities located at
Kakinada, Andhra Pradesh. While Plant-I operates entirely on
natural gas as the feedstock, Plant –II can use both natural gas
(NG) and naphtha. Besides manufacturing, NFCL is also involved in
trading of Urea (Government Pool Urea), Specialty Fertilizers and
Agriinputs [viz. Muriate of Potash (MOP), Di-ammonium Phosphate
(DAP), NPK etc.) A small proportion of NFCL's revenue also comes
from micro irrigation business and manufacturing of PVC Pipes.
NAND ESTATE: CARE Lowers Rating on INR38.50cr LT Loan to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Nand
Estate Developers Private Limited (NDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 38.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category and Revised from
CARE B-; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 6, 2020 placed the
rating(s) of NDPL under the 'issuer non-cooperating' category as
NDPL had failed to provide information for monitoring of the
rating. NDPL continues to be non-cooperative despite repeated
requests for submission of information through phone calls and
emails dated May 1, 2021 and May 5, 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. Further banker could not be
contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in rating is on account of non-availability of
requisite information and no due-diligence conducted due to
non-cooperation by NDPL with CARE'S efforts to undertake a review
of the rating outstanding. CARE views information availability risk
as a key factor in its assessment of credit risk. Hence, based on
the information from public sources regarding the delay in timely
repayment of its debt obligations, CARE has downgraded its ratings
on the bank facilities of NDPL to 'CARE D; Issuer Not Cooperating'
from 'CARE B-; Stable; Issuer Not Cooperating'.
Incorporated in 1991, NDPL is an Agra based company engaged into
construction of shopping complex, residential colonies and hotels.
NEDPL is promoted by Mr. Nand Kishore Manghrani, Mr. Sunil
Manghrani and Ms Deepa Manghrani. NDPL has entered into an
agreement with Wyndham Hotels Group to use brand name "Ramada" for
10 years. The "Ramada Plaza" hotel is situated at Agra and
commenced commercial operations from April 2015. It is a 5 star
hotel consisting of total 145 Spacious rooms, delightful range of
in-house dining venues, Swimming Pool, Spa, Club Lounge, Fitness
Center, a captive Retail Shopping area with modern conveniences
offered for leisure & business travelers.
ORAVEL STAYS: Fitch Gives FirstTime 'B(EXP)' LT IDRs, Outlook Neg.
------------------------------------------------------------------
Fitch Ratings has assigned India-based Oravel Stays Private Limited
(OYO) a first-time expected Long-Term Foreign- and Local-Currency
Issuer Default Rating (IDR) of 'B(EXP)'. The Outlook is Negative.
Fitch has also assigned an expected rating of 'B(EXP)' with
Recovery Rating of 'RR4(EXP)' to the proposed senior secured loan
facility to be issued by OYO's fully owned subsidiary, Oravel Stays
Singapore Pte Limited. The issuance will be unconditionally and
irrevocably guaranteed by OYO and certain other subsidiaries within
the group.
The final rating is contingent on successful completion of the
senior secured term loan issuance and the proceeds being used to
refinance all of the group's existing debt. Liquidity and cash
access within the group will improve following the issuance, given
existing cash restrictions.
OYO's ratings reflect its technology-led platforms, which connect
partnered hotels and homes to travellers in its core markets of
India, Europe and south-east Asia. OYO has a short operating
history of only about seven years and a weak financial profile
characterised by EBITDA losses. Its business model benefits from
high stickiness with property owners due to revenue-sharing with
them, moderate competitive barriers and minimal capex
requirements.
KEY RATING DRIVERS
Negative Outlook: OYO's ratings have low headroom as it is
uncertain if EBITDA can turn positive in the financial year ending
March 2023 (FY23) and it is likely to have a larger FCF deficit in
FY22, amid a second wave of Covid-19 infections in India. Liquidity
at FYE21 is adequate, but a further extension of travel-related
restrictions, especially in India, can lead to larger-than-expected
negative FCF and increase liquidity risk. Management is committed
to break even on EBITDA by FY23 and is unlikely to enter non-core
areas and markets or make asset-heavy, debt-funded M&As.
Rising Coronavirus Infections: India's infections have doubled
since early April 2021. New cases peaked at a daily average of
about 400,000 on 7 May 2021, but have steadily declined to around
265,000 on 17 May 2021. Fitch believes that the economic shock from
this wave of infections may be less severe than in 2020 as Fitch
expects new cases to peak in May-June 2021 and travel-related
demand to recover from September 2021. Most Indian states have
imposed full or partial lockdowns for short periods, with
restrictions generally more targeted than in 2020.
In 2020, the pandemic had a significant negative impact on OYO as
demand in all its markets plummeted amid the travel restrictions
and lockdowns. Fitch estimates FY21 revenue will decline by 68%,
but the Fitch-adjusted EBITDA loss will improve due to cost
savings, excluding JVs.
Strong Business Profile: OYO's business profile reflects its
technology-led platforms, which connected over 100,000 hotels and
homes at end-March 2021 with global travellers. OYO has a strong
and established relationship with property owners, with which it
has fixed revenue-sharing contracts that provide exclusive rights
to OYO to market and price rooms on its platform in its core
markets. The company derived about 70% of its total room revenue on
its platform from repeat customers in India and south-east Asia.
Moderate Entry Barriers; Low Capex: Entry and competition barriers
are moderate as OYO has solid relationships with low- to mid-tier
property owners that offer them comprehensive services to market
their rooms on various distribution channels, including online
travel agents (OTAs), offline channels and on OYO's own web and
mobile platforms. OYO's platforms enable property owners to enhance
visibility, build brands, maximise revenue and reduce costs, while
offering ease of operation. Switching costs are high for property
owners as OYO's services are well integrated with its platforms.
Weak Financial Profile: Fitch expects OYO's EBITDA and free cash
flow (FCF) to break even only in FY23 and FY24, respectively,
driven by a gradual demand rebound and significant cost savings. In
2017-2019, OYO expanded to several countries, but it retreated from
non-core markets with the onset of the pandemic to focus on
profitable growth in its core markets and cut about 80% of its
costs. Management expects group EBITDA to break even in FY23 due to
cost savings and recovering demand. Its 4QFY21 unaudited results
showed a faster revenue recovery and lower EBITDA deficit than
management's expectations.
Diversified Markets; Strong Growth Prospects: OYO has single-digit
market share in its core markets in terms of marketable rooms.
Revenue diversity will help the company to weather cash flow
volatility from risks inherent in the travel industry. It has
strong growth prospects and faces lower competition as it operates
in the low- to mid-tier market where travellers and property owners
are price sensitive.
Fitch forecasts FY22 revenue to grow by 35%-40% as the room count
and occupancy rates recover. The hospitality industry is highly
fragmented in India and other key markets, with the unorganised
sector accounting for 75%-80% of the market, which gives OYO a
large addressable market.
Rating on Standalone Basis: Fitch rates OYO on a standalone basis.
There is no parent-subsidiary linkage between OYO and Softbank
group, which owns 45.88% of the company, through its subsidiary,
SVF India Holdings (Cayman) Ltd. Softbank does not exercise control
over the company. Although, SoftBank has supported OYO with equity
injections and by extending a term loan in March 2021, Fitch does
not factor in future exceptional liquidity support from SoftBank in
Fitch's ratings, given OYO's small size compared to SoftBank's
overall investment portfolio.
DERIVATION SUMMARY
US-based Expedia Group, Inc. (BBB-/Negative) has a significantly
better business profile than OYO, with a larger scale and a much
better market position. Expedia is the second-largest OTA and it
makes over half of its revenue from the merchant model, thus
exposing it to higher working capital requirements during
downturns. OYO's business model focusses on a price-sensitive
market and there is limited competition overlap with OTAs. OYO also
gets exclusive rights over the marketing and pricing of partner
hotels' room inventory and uses its brand to market rooms, unlike
OTAs.
Expedia's financial profile is significantly better than OYO's,
given its solid EBITDA margin of 16%-17%, despite an EBITDA loss in
2020 due to the impact from the Covid-19 pandemic. The Negative
Outlook on Expedia's rating reflects the uncertain impact of
pandemic on its credit profile and liquidity. Fitch expects
Expedia's EBITDA to recover in 2021-2022 and its FFO gross leverage
to be 2.5x-3.0x in 2022-2023.
China's Meituan (BBB/Negative) has a stronger business and
financial profile than OYO given its leading position as an
e-commerce platform for consumer services, wide customer outreach
and merchant base. Compared with OYO, Meituan has more diversified
service offerings, including food delivery, in-store, hotel and
travel and electronic bikes. Meituan has sizeable operating cash
flow from the mature food delivery and in-store business, but the
Negative Outlook reflects uncertainty in the pace of investment in
new initiatives. Meituan's financial profile is stronger than that
of OYO, given its net cash position, strong financial flexibility
and access to the equity market to fund investments.
OYO's credit profile is comparable to Germany-based online
classified information provider Speedster Bidco GmbH (AutoScout24,
B/Negative). AutoScout24 benefits from its focus on the online car
dealer segment, its established platforms in an environment of low
competition, a high level of immunity to new or smaller
challengers, and the trend of dealers moving from offline to online
platforms. Its scale is smaller than OYO's but it enjoys high
EBITDA margin of 43%-44%. The Negative Outlook on AutoScout24's
rating reflects its aggressive capital structure with 2022 forecast
FFO gross leverage of 7.9x.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Net room additions of 84,000 in FY22, 225,000 in FY23 and 259,
000 in FY24;
-- Occupancy (ex-Europe homes) of 24% in FY22, 40% in FY23 and
46% in FY24;
-- Average room rent (ex-Europe homes) of USD18-19 over FY22
FY24;
-- Revenue growth of 38% in FY22 and 100% in FY23;
-- Gross margin above 30% during FY22-FY23;
-- EBITDA margin of -9% in FY22, 1% in FY23 and 6% in FY24;
-- Minimal working capital, capex and dividend outflows over
FY22-FY24;
-- Annual M&A spend of USD20 million-27 million.
Key Recovery Rating Assumptions
-- The recovery analysis assumes that OYO would be reorganised as
a going concern (GC) in bankruptcy rather than liquidated.
-- Fitch estimates that the post-restructuring EBITDA at about
USD100 million, a 46% discount to Fitch's FY24 EBITDA
estimate.
-- An enterprise value (EV) multiple of 5.0x is applied to the GC
EBITDA to calculate a post-reorganisation EV. The multiple of
5.0x reflects its business and financial profile, industry
dynamics, and comparable peer data, using the multiple
assumption tool under Fitch's Corporates Recovery Ratings and
Instrument Ratings Criteria.
-- 10% of administrative claims taken off the EV to account for
bankruptcy and associated costs.
-- The total amount of permitted prior-ranking debt of USD25
million under the term loan document is assumed to be fully
drawn.
-- Fitch estimates the proposed senior secured term loan to have
superior recovery. However, the Recovery Rating on the term
loan is capped at 'RR4' because under Fitch's Country-Specific
Treatment of Recovery Ratings Criteria, India falls into Group
D of creditor friendliness, and the Recovery Ratings of
issuers with assets in this group are subject to a cap of
'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The expected ratings outlined above would be assigned assuming
the proposed senior secured term loan issuance is successful.
Should the transaction be completed, the following factors would
support a positive rating action/Stable Outlook:
-- Stronger-than-expected EBITDA growth leading to EBITDA break
even earlier than Fitch's expectations.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Expansion in other geographies and/or non-core areas delaying
the EBITDA break-even beyond FY23.
-- Rebound in Covid-19 cases leading to further travel
restrictions and delays in demand recovery.
-- Higher-than-expected negative FCF compared to Fitch's
estimates.
-- Liquidity ratio falls below 1.0x.
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
Manageable Liquidity: At end-March 2021, Fitch estimates that OYO's
unrestricted cash was sufficient to fund the short-term debt and
Fitch-forecast negative FCF (including acquisitions) of USD130
million in the next 12 months. Should there be a funding gap, Fitch
expects OYO to fund it through an undrawn committed facility, which
is subject to achievement of certain milestones that Fitch expects
the company to achieve during FY22.
Fitch assesses the group's access to local and international banks
as moderate with only average access to capital markets.
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.
ORAVEL STAYS: Moody's Assigns First Time B3 Corp. Family Rating
---------------------------------------------------------------
Moody's Investors Service has assigned a first-time B3 corporate
family rating to Oravel Stays Private Limited (OYO).
At the same time, Moody's has assigned a B3 rating to the senior
secured term loan to be issued by Oravel Stays Singapore Pte. Ltd,
OYO's wholly owned subsidiary.
The proposed loan will be guaranteed by OYO and many of its
subsidiaries.
The outlook is stable.
The company will use the loan proceeds to refinance its debt and
for general corporate purposes.
RATINGS RATIONALE
"OYO's B3 corporate family rating reflects its position as one of
the largest providers of budget accommodation in its key operating
markets, good long-term growth prospects for the domestic budget
travel sector, adequate liquidity to cover its likely cash burn and
continued financial support from its key shareholders," says Sweta
Patodia, a Moody's Analyst.
OYO is well-positioned to benefit from increased demand for
domestic travel given international tourism is likely to remain
subdued over at least the next 2-3 years. OYO also stands to
benefit from increasing access to internet in India over the past
few years and faster adoption of digital services since the start
of the pandemic. Moreover, OYO has a strong market position,
presence across hotels and holiday homes, high proportion of direct
demand, reputable brand, exclusive access to all rooms of its hotel
partners and an established technology platform.
OYO's rating is constrained by its short operating track record and
history of operating losses. Losses, however, have reduced
significantly relative to that in the fiscal year ended March 31,
2020, as a result of a change in its business strategy and cost
reduction measures.
However, the resurgence of coronavirus cases in India, with a
significant spike in daily infections, will weaken the company's
operating performance over the next few months and stall the
recovery recorded since July 2020 following the easing of lockdowns
in India.
Moody's expects OYO's operating performance to start recovering in
the second half of 2021 once infections subside. However, if the
number of daily infections fail to decline to more manageable
levels, the risk of nationwide lockdowns cannot be ruled out, which
will delay the company's recovery .
The rating incorporates Moody's expectation that OYO will continue
to incur losses over the next 2-3 years and that its path to
profitability remains uncertain in light of travel restrictions due
to the pandemic.
"The proposed loan will provide OYO with a liquidity buffer to
sustain its cash burn over the next 2-3 years," adds Patodia.
The ratings also benefit from OYO's track record of support from
its founder and other shareholders such as Softbank Vision Fund,
Lightspeed Venture Partners, Sequoia Capital, Airbnb Inc, A1
Holdings Inc (Grab), Star Virtue Investments Limited (Didi). Equity
injections of around $2.4 billion since the company's inception
have helped it to fund its operating losses. OYO's rating
incorporates Moody's expectation that the company will continue to
receive such shareholder support, should the need arise.
In terms of environmental, social and governance (ESG) factors, OYO
is exposed to material social and governance risks. Similar to
other consumer-centric technology companies, there is potential for
reputational harm and business disruption from adverse publicity,
elevated safety concerns for consumers/services providers and data
security breaches.
OYO's privately owned status results in limited corporate
transparency and the potential that the company would adopt
financial strategies that largely favor shareholders over
creditors. The rating also incorporates OYO's aggressive financial
policy, as demonstrated by the use of debt to fund its evolving
business. While OYO also has a history of pursuing aggressive
expansion and business policies that have led to significant
losses, its shareholders have provided substantial equity capital
to cover its cash burn.
Pro forma for the proposed loan proceeds, OYO has good liquidity.
As of March 31, 2021, the cash balance of the restricted group
entities, along with proceeds remaining from the proposed loan
issuance after debt repayment, will be sufficient to support the
company's operations over the next 2-3 years.
The stable outlook considers Moody's expectation that OYO's
operations can be funded, pro forma for the loan proceeds, for at
least the next 3 years and the cash burn will significantly reduce
over the next 12-18 months as operating performance starts to
recover following the roll-out of large-scale vaccination
programs.
The proposed loan will constitute the majority of OYO's debt, and
is therefore, rated in line with the CFR at B3.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the current loss-making operations, an upgrade over the next
12-18 months is unlikely. OYO's ratings could be upgraded if it
turns profitable and starts generating positive cash flow over a
multi-year period, while maintaining robust liquidity.
The ratings could be downgraded if (1) the company's cash burn does
not reduce significantly over the next 12-18 months; or (2) OYO has
insufficient liquidity to fund its operations and investments over
at least the next 2-3 years; or (3) competition from new entrants
or changes in regulations, taxation or government policy weaken the
company's market position, cash flow or earnings relative to
current expectations.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Oravel Stays Private Limited (OYO) is an India-based hospitality
aggregator operating in the budget segment. The company was founded
by Ritesh Agarwal in 2013, who currently holds a 33.1% stake in the
company. SVF India Holdings (Cayman) Limited, a subsidiary of
Softbank Group Corp (Ba3 stable), is the largest shareholder with a
45.9% stake.
PARANJAPE SCHEMES: CARE Lowers Rating on INR175cr Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Paranjape Schemes (Construction) Limited (PSCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non Convertible 175.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category and Revised from
CARE C
Fixed Deposit 55.00 CARE D (FD); ISSUER NOT
COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE C (FD)
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PSCL to monitor the ratings
vide email communications dated April 16, 2021, May 1, 2021, May 3,
2021, May 4, 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
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on PSCL's
instruments will now be denoted as CARE D; ISSUER NOT COOPERATING
and CARE D (FD); ISSUER NOT COOPERATING for non-convertible
debentures and fixed deposits, respectively.
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
The rating action follows receipt of e-mail confirmation from the
Debenture Trustee (DT) informing that the company has not made the
payment on the due date and has requested for extension of due date
from April 30, 2021 which is still to be approved from debenture
holders.
Key Rating Weakness
* Non-Payment of dues on Non-Convertible Debentures (NCD): PSCL has
not paid the coupon interest and principal redemption that was due
on the NCD, on April 30, 2021. As per the terms of the debenture
trust deed and the subsequent extension approved by the debenture
trustee, the said interest payment and principal redemption were
due on or before April 30, 2021. Further extension in due date has
been sought by PSCL; however, the extension is not yet approved by
the debenture holders.
Incorporated in 1987, Paranjape Schemes Construction Limited (PSCL)
is in the business of real estate development, both residential and
commercial. The company has undertaken real estate projects in
Pune, Mumbai, Chiplun, Kolhapur and Bangalore. The group has
completed over 191 projects with total saleable area of 20.9
million square feet (msf) (~85% residential and 15% commercial)
till May 2020. The company has shown reasonable execution
capability; moreover, the major funding being advance from
customers indicate company's ability to market the projects during
construction period and maintain high collection efficiency.
RADHA KRISHNA: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Radha
Krishna Automobiles Private Limited (RKAPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 56.00 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term Bank 40.00 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 March 12, 2020, placed the
rating(s) of RKAPL under the 'issuer non-cooperating' category as
RKAPL had failed to provide information for monitoring of the
rating. RKAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails and a email
dated between January 26, 2021 and February 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(s).
The analytical approach has been changed from combined to
standalone as there is no sufficient information to establish
cashflow fungibility.
Detailed description of the key rating drivers
At the time of last rating on March 12, 2020 the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
* Delays in debt servicing: The lender has confirmed that there are
delays with respect to repayment of instalment amounts of term loan
and working capital demand loan.
* Decline in financial performance of the group during FY20
vis-a-vis FY19: The total operating income of the group declined
from INR1502.33 crore during FY19 to INR1283.06 crore during FY20.
The PBILDT interest coverage and coverage ratios and working
capital cycle of the group deteriorated during FY20 as compared to
FY19.
Key Rating Strengths
* Experienced and resourceful promoters with long established track
record: The Radha Group Toyota was established in 1964 as a trading
organization is being promoted by Mr. Subrahmanyam (Chairman), who
has more than five decades of experience in trading business and
over two decades of experience in managing automobile business. He
is ably supported by his son Mr. M. V. Srinivas (Managing
Director), who has a long and established track record of
operations in the automobile business for over three decades. The
operations of the group draw strength from the extensive dealership
network spread across Andhra Pradesh and Telangana.
* Long and established relationship with TKML: Radha group Toyota
is an authorized dealer for Passenger Vehicles of TKML (both new
and pre used vehicles) in Andhra Pradesh and Telangana since 2004.
As per SIAM data, Toyota sold 1,51,480 units in CY18 out of which
11,433 units (7.5% of the total sales of Toyota) is being
contributed by the group. Over the years Radha group Toyota has
been able to develop comfortable and long-standing relations with
its principal which is reflected in the group's success in getting
its contract renewed in the past.
* Wide distribution network across Andhra Pradesh and Telangana:
The company has dealership rights in Passenger Vehicle segment,
which spread across the states of Andhra Pradesh and Telangana with
15 show rooms and 9 service centres. Equipped with such wide
distribution network and ability to handle large volumes of cars
enables the group to achieve economies of scale, cost absorption
and ability to offer competitive pricing.
Radha Krishna Automobiles Private Limited (RKAPL) belongs to Radha
Group Toyota of Vijayawada, Andhra Pradesh established in 1964 as a
trading organization. Radha Group Toyota is engaged in the business
of sales and service of passenger vehicles of Toyota Kirloskar
Motors Pvt Limited (TKML) and it is an authorized dealer of TKML.
The group was promoted by Mr. M Subrahmanyam (Chairman), who has
more than five decades of experience in trading and more than two
decades of experience in automobile industry. Mr. M Srinivas
(Managing Director) has more than two decades of experience in
automobile industry. The group comprises of four automobile
companies namely Radha Krishna Automobiles Private Limited, Radha
Madhav Automobiles Private Limited, Leela Krishna Automobiles
Private Limited and Yashoda Krishna Automobiles Private Limited
located in Andhra Pradesh and Telangana. These four companies are
in to similar line of business catering to different regions in
both states. RMAPL and LKAPL are operating in the state of Andhra
Pradesh, Whereas RKAPL and YKAPL are operating in the state of
Telangana with a total of 15 showrooms in both the states.
RADHAMADHAV AUTOMOBILES: CARE Cuts Rating on INR70.87cr Loan to B+
------------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Radhamadhav Automobiles Private Limited (RMAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 70.87 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 18, 2020, placed the
rating(s) of RMAPL under the 'issuer non-cooperating' category as
RMAPL had failed to provide information for monitoring of the
rating. RMAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails and a email
dated between February 1, 2021 and February 22, 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 rating was revised on account of decline in the total operating
income and profitability levels, deterioration in coverage
indicators and elongation in working capital cycle. Furthermore,
the analytical approach has been changed from combined to
standalone as there is no sufficient information to establish
cashflow fungibility.
Detailed description of the key rating drivers
At the time of last rating on March 18, 2020 the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
* Decline in financial performance of the group during FY20
vis-à-vis FY19: The total operating income of the group declined
from INR1502.33 crore during FY19 to INR1283.06 crore during FY20.
The PBILDT interest coverage and coverage ratios and working
capital cycle of the group deteriorated during FY20 as compared to
FY19.
* Linked to the fortunes of Toyota Kirloskar Motors Pvt Limited
(TKML) with nonexistence of bargaining power: Radha group Toyota
being an authorized dealer of TKML, the financial risk profile of
the group has a high degree of correlation with the performance of
TKML's vehicles in the market and their ability to launch new
products as per the market dynamics. Further, the group operates on
a fixed margin basis wherein prices and margins are fixed by the
principal, resulting in limited bargaining power.
* Volume driven business with intense competition and cyclical
nature of the auto industry: Automobile industry is highly
competitive as there are several players operating in the market in
the passenger vehicle segment like Maruti Suzuki, Hyundai,
Mahindra, Honda, etc. This exposes the group to competition in the
region. Accordingly, the group has to resort to offering better
buying terms like allowing discounts on purchases or attaching
freebies to capture the market share as this is volume driven
business. Such discounts create margin pressure and negatively
impact the earning capacity of the company. However, the group's
long association with its clients, its established network help it
to sustain the competition and maintain its strong market position
in the region. Further, the auto industry is inherently vulnerable
to the economic cycles and is highly sensitive to the interest
rates and fuel prices. The group thus faces significant risks
associated with such cyclical nature of the auto industry.
Key Rating Strengths
* Experienced and resourceful promoters with long established track
record: The Radha Group Toyota was established in 1964 as a trading
organization is being promoted by Mr. Subrahmanyam (Chairman), who
has more than five decades of experience in trading business and
over two decades of experience in managing automobile business. He
is ably supported by his son Mr. M. V. Srinivas (Managing
Director), who has a long and established track record of
operations in the automobile business for over three decades. The
operations of the group draw strength from the extensive dealership
network spread across Andhra Pradesh and Telangana.
* Long and established relationship with TKML: Radha group Toyota
is an authorized dealer for Passenger Vehicles of TKML (both new
and pre used vehicles) in Andhra Pradesh and Telangana since 2004.
As per SIAM data, Toyota sold 1,51,480 units in CY18 out of which
11,433 units (7.5% of the total sales of Toyota) is being
contributed by the group. Over the years Radha group Toyota has
been able to develop comfortable and long-standing relations with
its principal which is reflected in the group's success in getting
its contract renewed in the past.
* Wide distribution network across Andhra Pradesh and Telangana:
The group has dealership rights in Passenger Vehicle segment, which
is spread across the states of Andhra Pradesh and Telangana with 15
show rooms and 9 service centres. Equipped with such wide
distribution network and ability to handle large volumes of cars
enables the group to achieve economies of scale, cost absorption
and ability to offer competitive pricing.
Radhamadhav Automobiles Private Limited (RMAPL) belongs to Radha
Group Toyota of Vijayawada, Andhra Pradesh established in 1964 as a
trading organization. Radha Group Toyota is engaged in the business
of sales and service of passenger vehicles of Toyota Kirloskar
Motors Pvt Limited (TKML) and it is an authorized dealer of TKML.
The group was promoted by Mr. M Subrahmanyam (Chairman), who has
more than five decades of experience in trading and more than two
decades of experience in automobile industry. Mr. M Srinivas
(Managing Director) has more than two decades of experience in
automobile industry. The group comprises of four automobile
companies namely Radha Krishna Automobiles Private Limited, Radha
Madhav Automobiles Private Limited, Leela Krishna Automobiles
Private Limited and Yashoda Krishna Automobiles Private Limited
located in Andhra Pradesh and Telangana. These four companies are
in to similar line of business catering to different regions in
both states. RMAPL and LKAPL are operating in the state of Andhra
Pradesh, whereas RKAPL and YKAPL are operating in the state of
Telangana with a total of 15 showrooms in both the states.
RAJMOTI INDUSTRIES: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shree Rajmoti
Industries (SRI) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 60 CRISIL D (Issuer Not
Cooperating)
Pledge Loan 25 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SRI for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 SRI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SRI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SRI continues to be 'CRISIL D Issuer Not Cooperating'.
SRI, set up as a partnership firm in 1962, manufactures and trades
in double-filtered and refined groundnut oil and other edible oils.
The firm is promoted by Mr. Sameer Shah, Mr. Shyam Shah, and Mr.
Bhavdeep Vajubhai Vala.
RY MIDAS: CARE Lowers Rating on INR29cr Loans to D
--------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of RY
Midas Alluminiums Private Limited (RMAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/Short 29.00 CARE D; ISSUER NOT COOPERATING
Term Bank Rating continues to remain
Facilities under ISSUER NOT COOPERATING
category and Revised from
CARE B+; Stable/CARE A4;
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 22, 2020, reviewed the
rating assigned to the bank facilities of RMAPL under the 'Issuer
Not-Cooperating' category as RMAPL had failed to provide
information for monitoring of the ratings. RMAPL continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and an email dated April 7, 2021,
April 17, 2021, April 27, 2021, May 2, 2021 and May 3, 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.
The revision in the ratings assigned to the bank facilities of
RMAPL take into account delay in servicing of debt obligations.
Detailed description of the key rating drivers
At the time of last rating on May 22, 2020, the following were the
rating strengths and weaknesses [updated for best available
information i.e. FY20 (refers to the period from April 1 to March
31) audit report from MCA filings]:
Key Rating Weakness
* Delay in servicing of debt obligations and losses in FY20: As per
the audit report of FY20 (refers to the period from April 1 to
March 31), auditor had observed that the company has suffered major
losses even after March 31, 2020 and has defaulted on repayment of
all dues to Canara Banks Cash Credit limits and all other loans
appearing in Balance sheet. During FY20, scale of operation
declined by 31% marked by TOI of INR115.13 crore (FY19: INR168.63
crore). Further, company had reported loss of INR9.07 crore at
PBILDT level and net-loss of INR13.40 crore. This has resulted in
diminution in net worth base from INR10.83 crore on March 31, 2019
to INR -2.57 crore on March 31, 2020.
Incorporated in October 2006, RY Midas Alluminiums Pvt. Ltd.
(RMAPL) is promoted by Mr. Jagdishchandra Shah. RMAPL is primarily
engaged in the trading of metal scrap and manufacturing of aluminum
ingots. At its manufacturing plant, various scrap of aluminum,
copper, iron etc. is segregated and aluminum ingot is manufactured
which finds application as de-oxidation agent during alloy steel
manufacturing. RMAPL's manufacturing facility is located at
Ahmedabad with an aggregate capacity of melting 4,500 MTPA of metal
scrap as on March 31, 2017.
SAI SWADHIN: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sai Swadhin
Commercials Private Limited (SSCPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Term Loan 3.75 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SSCPL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 SSCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSCPL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2008, SSCPL is engaged in extraction of rice bran
oil. The company has its processing unit located at Berhampur
(Odisha) and has total extraction capacity of 180 tonnes per day.
SSCPL is promoted by Mrs. Jami Nirmala, Mr. Jami Siva Sai, Mr. Jami
Ramesh and Mrs. Jami Kavita who also looks after the operations.
SARASWATI EDUCATIONAL: Ind-Ra Keeps 'D' Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Saraswati
Educational Charitable Trust's 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 ratings. The ratings will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The detailed rating actions are:
-- INR299 mil. Term loan (long-term) due on March-June 2022
maintained in non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating; and
-- INR50 mil. Working capital facility (long-term) maintained in
non-cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 11, 2019. Ind-Ra is unable to provide an update as the agency
does not have adequate information to review the rating.
COMPANY PROFILE
Saraswati Educational Charitable Trust has colleges near Lucknow.
It also runs an aviation academy, a medical college and a 410-bed
hospital.
SATYAM GREEN: CRISIL Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Satyam Green
Energy (SGE) continues to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 6 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SGE for
obtaining information through letters and emails dated October 24,
2020 and April 28, 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 SGE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SGE
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SGE continues to be 'CRISIL D Issuer Not Cooperating'.
SGE, a proprietorship firm, was promoted by Mr. Sanjay Joshi for
setting up a solar power project of 1.1-megawatt in Solapur,
Maharashtra.
SGC LOGISTIC: CRISIL Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of SGC Logistic
Solutions Limited (SGCLSL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SGCLSL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 SGCLSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
SGCLSL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of SGCLSL continues to be 'CRISIL D Issuer Not
Cooperating'.
Incorporated in 2006, SGCLSL is a company engaged in the
transportation of beer and liquor. The company's headquarters are
located in Delhi and has presence spread over to North East states,
Bihar, West Bengal,Maharashtra, Gujarat, Rajasthan, Punjab, Haryana
and agents all over India.
SHRIMATI POORNA: CRISIL Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Shrimati
Poorna Devi Memorial Trust (SPDMT) continues to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 9 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SPDMT for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 SPDMT, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SPDMT
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SPDMT continues to be 'CRISIL D Issuer Not Cooperating'.
SPDMT was set up in May 2015 by Mrs Deepti Rawat, Mr. Toshit Rawat,
and Mrs Lakshmi Rana to establish a nursing and paramedical college
at Shankarpur village, District Dehradun.
SOUTH INDIAN: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of South Indian
Constructions (SIC) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6 CRISIL D (Issuer Not
Cooperating)
Cash Credit 12.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SIC for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 SIC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SIC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SIC continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Set up in 1992, SIC undertakes civil construction contracts for
various statutory bodies of the Kerala and Tamil Nadu governments.
The operations of the firm are managed by the proprietor Mr. Vinod
Kumar.
SRIPATHI PAPER: Ind-Ra Affirms 'D' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Sripathi Paper &
Boards Private Limited's (SPBPL) Long-Term Issuer Rating at 'IND
D'.
The instrument-wise rating actions are:
-- INR1.80 bil. Fund-based working capital limit (Long-term/
Short-term) affirmed with IND D rating;
-- INR775 mil. (reduced from INR1,387.9 mil.) Term loan (Long-
term) due on March 2025 affirmed with IND D rating; and
-- INR685 mil. Non-fund-based working capital limit (Short-term)
affirmed with IND D rating.
KEY RATING DRIVERS
The affirmation reflects SPBPL's continued delays in the debt
servicing of its term loans during September 2020-February 2021 on
account of its tight liquidity position.
RATING SENSITIVITIES
Positive: Timely debt servicing for three consecutive months could
result in a positive rating action.
COMPANY PROFILE
SPBPL manufactures kraft paper, duplex board, writing and printing
paper, and newsprint at its manufacturing units in Sivakasi and
Sathyamangalam, Tamil Nadu. The company is wholly-owned by the
founders and their families.
SUDAMA COTTON: CRISIL Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Sudama Cotton
Ginning and Processing Factory (SCG) continues to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SCG for
obtaining information through letters and emails dated October 24,
2020 and April 20, 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 SCG, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SCG
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SCG continues to be 'CRISIL D Issuer Not Cooperating'.
SCG was established by Mr. Suresh Kumar and Mr. Ashwini Kumar in
1987, and is based in Punjab. It manufactures cotton bales, cotton
seed oil, and cotton oil cakes. It sells cotton bales to spinning
mills and local traders in Punjab. It has already started
operations of mustard oil processing in April 2016.
SWAPNA PRINTING: Ind-Ra Keeps BB Issuer Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Swapna Printing
Works Private Limited's Long-Term Issuer Rating 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 these ratings. The rating will
continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR20 mil. Fund-based limits maintained to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR40 mil. Proposed fund-based limits withdrawn (the company
did not proceed with the instrument as envisaged); and
-- INR70 mil. Non-fund-based limits maintained to non-cooperating
category with IND A4+ (ISSUER NOT COOPERATING) rating.
COMPANY PROFILE
Incorporated in 1984, Swapna Printing Works is promoted by Buddha
Dev Bhattacharjee and Arunava Bhattacharjee. The company prints
books, mainly for various education boards.
VEDIK COTTON: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Vedik Cotton Limited
5-C/207, Akshay Mittal
Industrial Estate
Andheri-Kurla Road
Andheri (E)
Mumbai 400059
Insolvency Commencement Date: March 9, 2021
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: November 13, 2021
Insolvency professional: Dakshesh Pravinchandra Choksi
Interim Resolution
Professional: Dakshesh Pravinchandra Choksi
Agarwal & Choksi, 303-305
Vrajbhumi Complex
Nr. Prarthana Flats
B/H Shilp Bldg
Off C G Road
Navrangpura, Ahmedabad
Gujarat PIN 380009
E-mail: ca.dakshesh@gmail.com
- and -
Sun Resolution Professionals Pvt Ltd
9B, Vardan Tower
Nr. Vimal House
Lakhudi Circle
Navrangpura
Ahmedabad 380014
E-mail: cirp.vedikcotton@gmail.com
Last date for
submission of claims: May 31, 2021
VENKATESHWARA POWER: Ind-Ra Moves 'BB+' Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Venkateshwara
Power Project 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:
-- INR402 mil. Term loan due on September 2026 migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)
rating; and
-- INR1.70 bil. Fund-based facilities migrated to non-cooperating
category with IND BB+ (ISSUER NOT COOPERATING)/IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May
22, 2020. Ind-Ra is unable to provide an update, as the agency does
not have adequate information to review the ratings.
COMPANY PROFILE
Venkateshwara Power Project has an integrated sugar plant in
Bedkihal Village, Chikkodi Taluk, Belgaum District, Karnataka. The
plant has a cane crushing capacity of 8,500 tons of cane per day, a
23MW co-generation unit and a distillery and ethanol unit of 90
kilolitres per day. In Nagpur, the company has one sugar unit with
a cane crushing capacity of 2,000 tons of cane per day.
YASHODAKRISHNA AUTO: CARE Cuts Rating on INR34.54cr Loan to B+
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Yashodakrishna Automobiles Private Limited (YKAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 34.54 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 18, 2020, placed the
rating(s) of YKAPL under the 'issuer non-cooperating' category as
YKAPL had failed to provide information for monitoring of the
rating. YKAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails and a email
dated between February 1, 2021 and February 21, 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 rating was revised on account of decline in the total operating
income and profitability levels, deterioration in coverage
indicators and elongation in working capital cycle. Furthermore,
the analytical approach has been changed from combined to
standalone as there is no sufficient information to establish
cashflow fungibility.
Detailed description of the key rating drivers
At the time of last rating on March 18, 2020 the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
* Decline in financial performance of the group during FY20
vis-à-vis FY19: The total operating income of the group declined
from INR1502.33 crore during FY19 to INR1283.06 crore during FY20.
The PBILDT interest coverage and coverage ratios and working
capital cycle of the group deteriorated during FY20 as compared to
FY19.
* Linked to the fortunes of Toyota Kirloskar Motors Pvt Limited
(TKML) with nonexistence of bargaining power: Radha group Toyota
being an authorized dealer of TKML, the financial risk profile of
the group has a high degree of correlation with the performance of
TKML's vehicles in the market and their ability to launch new
products as per the market dynamics. Further, the group operates on
a fixed margin basis wherein prices and margins are fixed by the
principal, resulting in limited bargaining power.
* Volume driven business with intense competition and cyclical
nature of the auto industry: Automobile industry is highly
competitive as there are several players operating in the market in
the passenger vehicle segment like Maruti Suzuki, Hyundai,
Mahindra, Honda, etc. This exposes the group to competition in the
region. Accordingly, the group has to resort to offering better
buying terms like allowing discounts on purchases or attaching
freebies to capture the market share as this is volume driven
business. Such discounts create margin pressure and negatively
impact the earning capacity of the company. However, the group's
long association with its clients, its established network help it
to sustain the competition and maintain its strong market position
in the region. Further, the auto industry is inherently vulnerable
to the economic cycles and is highly sensitive to the interest
rates and fuel prices. The group thus faces significant risks
associated with such cyclical nature of the auto industry.
Key Rating Strengths
* Experienced and resourceful promoters with long established track
record: The Radha Group Toyota was established in 1964 as a trading
organization is being promoted by Mr. Subrahmanyam (Chairman), who
has more than five decades of experience in trading business and
over two decades of experience in managing automobile business. He
is ably supported by his son Mr. M. V. Srinivas (Managing
Director), who has a long and established track record of
operations in the automobile business for over three decades. The
operations of the group draw strength from the extensive dealership
network spread across Andhra Pradesh and Telangana.
* Long and established relationship with TKML: Radha group Toyota
is an authorized dealer for Passenger Vehicles of TKML (both new
and pre used vehicles) in Andhra Pradesh and Telangana since 2004.
As per SIAM data, Toyota sold 1,51,480 units in CY18 out of which
11,433 units (7.5% of the total sales of Toyota) is being
contributed by the group. Over the years Radha group Toyota has
been able to develop comfortable and long-standing relations with
its principal which is reflected in the group's success in getting
its contract renewed in the past.
* Wide distribution network across Andhra Pradesh and Telangana:
The group has dealership rights in Passenger Vehicle segment, which
is spread across the states of Andhra Pradesh and Telangana with 15
show rooms and 9 service centres. Equipped with such wide
distribution network and ability to handle large volumes of cars
enables the group to achieve economies of scale, cost absorption
and ability to offer competitive pricing.
Analytical approach: Standalone (changed from combined analytical
approach adopted earlier)
Yashoda Krishna Automobiles Private Limited (YKAPL) belongs to
Radha Group Toyota of Vijayawada, Andhra Pradesh established in
1964 as a trading organization. Radha Group Toyota is engaged in
the business of sales and service of passenger vehicles of Toyota
Kirloskar Motors Pvt Limited (TKML) and it is an authorized dealer
of TKML. The group was promoted by Mr. M Subrahmanyam (Chairman),
who has more than five decades of experience in trading and more
than two decades of experience in automobile industry. Mr. M
Srinivas (Managing Director) has more than two decades of
experience in automobile industry. The group comprises of four
automobile companies namely Radha Krishna Automobiles Private
Limited, Radha Madhav Automobiles Private Limited, Leela Krishna
Automobiles Private Limited and Yashoda Krishna Automobiles Private
Limited located in Andhra Pradesh and Telangana. These four
companies are in to similar line of business catering to different
regions in both states. RMAPL and LKAPL are operating in the state
of Andhra Pradesh, whereas RKAPL and YKAPL are operating in the
state of Telangana with a total of 15 showrooms in both the states.
=================
I N D O N E S I A
=================
BAYAN RESOURCES: Moody's Affirms Ba3 CFR & Alters Outlook to Pos.
-----------------------------------------------------------------
Moody's Investors Service has affirmed Bayan Resources Tbk (P.T.)'s
Ba3 corporate family rating and the Ba3 rating on its senior
unsecured notes. At the same time, Moody's has revised the outlook
to positive from stable.
"The revision in outlook to positive reflects Bayan's very low
leverage following its large notes buy back with cash and our
expectation that the company will maintain strong credit metrics
with minimal reliance on incremental debt and very good liquidity
over the next 12-18 months," says Maisam Hasnain, a Moody's
Assistant Vice President and Analyst.
"Bayan's improving credit profile is supported by its increasing
thermal coal volumes following the increase in production at its
Tabang mines in recent years; the long reserve life of its mines;
and the company's solid profitability," adds Hasnain, who is also
Moody's lead analyst for Bayan.
RATINGS RATIONALE
The company has also established a track record of debt reduction,
using free cash flow to proactively repay debt ahead of schedule in
recent years. In May 2021, it upsized its tender offer to redeem
$251 million (up from the initial $220 million) of its $400 million
US dollar notes with cash on hand, a credit positive.
Pro forma for this transaction, Moody's estimates Bayan's leverage
-- as measured by adjusted debt/EBITDA -- will decline further to
0.3x from 0.8x as of March 2021. Moody's expects the company to
maintain a very low leverage of below 0.5x over the next 12-18
months, based on a medium-term price assumption for Newcastle
thermal coal of $65-$75 per ton.
Moody's also expects Bayan will have minimal reliance on
incremental debt funding over the next few years, as the company's
planned capital spending to increase production capacity and
infrastructure will primarily be funded from internal cash flow.
Moody's also expects Bayan's construction of a 100-kilometer haul
road connecting its Tabang mines to the Mahakam River along with a
new barge loading facility, scheduled for completion in 2022, will
help increase its production capacity to around 50 million tons in
the next 3-4 years from around 33 million tons currently, and
reduce the risk of weather-related operational disruptions. Mahakam
is a larger river that is less exposed to water level fluctuations
than Bayan's current principal waterways to transport coal.
Concurrent with its tender offer for its US dollar notes, Bayan
obtained approval from noteholders to increase its dividend payment
capacity under its bond indenture by $125 million. Still, despite
the increased flexibility to pay higher dividends amid stronger
cash flow generation, Moody's expects the company to maintain its
shareholder returns over the next few years in line with its
publicly stated dividend payout policy of up to 60% of the previous
year's net income.
In addition, Moody's expects Bayan's liquidity to remain very good
over the next 12-18 months, with cash on hand and projected
operating cash flow sufficient to fund its proposed capital
spending, notes buyback and dividends. The company also has around
$274 million undrawn under multi-year committed working capital
facilities with four banks that help supplement its liquidity.
The ability to draw down on these working capital facilities
provides Bayan flexibility in the event of an adverse court ruling
around its ongoing litigation with a former joint venture partner,
which had claimed $153 million plus interest and costs. That said,
Bayan has yet to record any provisions against this case. According
to the company, a final ruling on this case is likely in 2021.
Thus, while Bayan's credit profile is constrained by its
single-commodity exposure to thermal coal in Indonesia, its
low-cost mining operations provide a considerable buffer against
coal price downturns. That in part reflect the company's Tabang
mines, which contribute around 85% of its coal production, and are
among the lowest-cost energy-adjusted global coal producers with a
very low stripping ratio of around 2.7x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook reflects Moody's expectation that Bayan will
generate strong earnings and cash flow, with a minimal reliance on
incremental debt while maintaining very good liquidity over the
next 12-18 months.
Moody's could upgrade the ratings over the next 12-18 months if
Bayan continues to demonstrate conservative financial policies with
strong credit metrics and maintaining enough cash to redeem the
remainder of its US dollar bond due in January 2023.
Moody's could downgrade the rating if (1) Bayan experiences a
material disruption in its operations; (2) industry fundamentals
deteriorate, leading to a decline in earnings; or (3) the company's
underlying financial or operational strategy changes materially,
including higher-than-expected capital spending, material
debt-funded acquisitions or a more aggressive dividend payment
policy.
Specific financial indicators for a downgrade include adjusted
debt/EBITDA approaching 3.5x or adjusted EBIT/interest expense
trending down to 2.0x.
The methodology used in these ratings was Mining published in
September 2018.
Bayan, which was listed on the Indonesian Stock Exchange in 2008,
is engaged in surface open cut mining of coal mines primarily in
East and South Kalimantan.
Bayan's founder, Dato' Low Tuck Kwong, is the largest shareholder
with a 54.7% stake. Korea Electric Power Corporation owns 20%
through its subsidiaries, PT Sumber Suradaya Prima owns 10%,
Bayan's management and founders hold an 11.8% stake, and the
balance is publicly owned.
=========
J A P A N
=========
ANA HOLDINGS: Egan-Jones Keeps B- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 12, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Ana Holdings Inc. EJR also maintained its 'B' rating
on commercial paper issued by the Company.
Headquartered in Minato City, Tokyo, Japan, Ana Holdings Inc.
provides a variety of air transportation-related services.
KEISEI ELECTRIC: Egan-Jones Cuts Senior Unsecured Ratings to BB
---------------------------------------------------------------
Egan-Jones Ratings Company, on May 14, 2021, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Keisei Electric Railway Co., Ltd. to BB from BB+.
Headquartered in Ichikawa, Chiba, Japan, Keisei Electric Railway
Co., Ltd. provides passenger rail and bus transportation services
in the Metropolitan Tokyo and Chiba prefecture areas.
MITSUI OSK: Egan-Jones Keeps B Senior Unsecured Ratings
-------------------------------------------------------
Egan-Jones Ratings Company, on May 14, 2021, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Mitsui O.S.K. Lines, Ltd. EJR also maintained its
'C' rating on commercial paper issued by the Company.
Headquartered in Minato City, Tokyo, Mitsui O.S.K. Lines, Ltd.
provides marine transportation, warehousing, and cargo handling
services.
NOMURA HOLDINGS: Egan-Jones Keeps BB Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on May 10, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Nomura Holdings, Inc.
Headquartered in Tokyo, Japan, Nomura Holdings, Inc. is a holding
company which manages financial operations for its subsidiaries.
TOBU RAILWAY: Egan-Jones Keeps BB- Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on May 14, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Tobu Railway Co., Ltd.
Headquartered in Tokyo, Japan, Tobu Railway Co., Ltd. mainly
provides passenger rail and bus transportation services in the
Kanto area.
TOKYO ELECTRIC: Egan-Jones Keeps BB Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on May 14, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Tokyo Electric Power Company Holdings,
Incorporated.
Headquartered in Chiyoda City, Tokyo, Japan, Tokyo Electric Power
Company Holdings, Incorporated generates, transmits, and
distributes electricity.
TOKYU CORPORATION: Egan-Jones Cuts Senior Unsecured Ratings to BB-
------------------------------------------------------------------
Egan-Jones Ratings Company, on May 21, 2021, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Tokyu Corporation to BB- from BB. EJR also downgraded the rating
on commercial paper issued by the Company to B from A3.
Headquartered in Shibuya City, Tokyo, Japan, Tokyu Corporation
provides railway services.
===============
M A L A Y S I A
===============
CHINA AUTOMOBILE: PN17 Exit Plan Hits Yet Another Snag
------------------------------------------------------
Sulhi Khalid at theedgemarkets.com reports that China Automobile
Parts Holdings Bhd has scrapped plans to inject property
development business into the China-based automobile parts
manufacturing company, as part of a plan to regularise its Practice
Note 17 (PN17) condition and maintain its listing status on the
Main Market of Bursa Malaysia.
theedgemarkets.com relates that China Automobile had on Feb. 22
entered into a memorandum of understanding (MoU) with Gan Kah
Siong, the controlling shareholder of Idaman Sejiwa Development Sdn
Bhd (ISD), for the proposed acquisition of the entire equity
interest of ISD. The latter's development projects are primarily
residential properties located in the Klang Valley.
In a bourse filing on May 17, China Automobile said it has received
a termination letter from Gan following no progress after the
execution of the MoU. As such, the MoU will be "terminated and
lapsed automatically".
According to the report, China Automobile noted that the
termination of the MoU is not expected to have any financial impact
on the company and it is currently deliberating on its next course
of action and will make the necessary announcements in due course.
The proposed acquisition was supposed to be part of China
Automobile's regularisation plan, which would have involved the
set-up of a new company (Newco), proposed acquisition of ISD and
other related companies by Newco via issuance of shares, proposed
shares exchange of China Automobile shares with Newco shares,
proposed shares placement by Newco and proposed transfer of listing
status from China Automobile to Newco, theedgemarkets.com relays.
This is the second time China Automobile's attempt to regularise
its financial condition has fallen through, the report notes. In
December 2019, China Automobile's plan to acquire Local Assembly
Sdn Bhd - a subcontractor assembler of electrical appliances and
equipment, and manufacturer of plastic injection moulded components
- hit a snag after the MoU between both companies was terminated.
China Automobile shares have been suspended from trading since June
8, 2017 after it failed to release its financial reports within the
stipulated time frame, the report notes. To date, the company still
has not issued its outstanding 2017 and 2018 annual reports, after
it last reported a net loss of MYR77.12 million in its financial
year ended Dec. 31, 2016.
About China Automobile
China Automobile Parts Holdings Limited is a Malaysia-based
investment holding company. The Company, through its subsidiaries,
is principally engaged in the manufacturing of chassis components
used in automobiles for transporting goods. Its product portfolio
consists of five categories: wheel-hub bolts, wheel axles, steel
pins, u-bolts and torque-rod bushings. The Company's products are
supplied for aftermarket repair, maintenance and modification
segment, with an emphasis towards catering for replacement
components in heavy commercial vehicles. The Company's subsidiaries
include CAP-HK, an investment holding company, and FenSun, a
manufacturer, marketer and trader of automobile chassis
components.
China Automobile Parts Holdings Ltd slipped into Practice Note 17
(PN17) after its external auditor Messrs PFK expressed an audit
disclaimer of opinion in the company's latest audited financial
statements for financial year ended Dec. 31, 2015 (FY15) on
undisclosed material liabilities.
EKA NOODLES: Trading of Shares to be Suspended on May 31
--------------------------------------------------------
Syafiqah Salim at theedgemarkets.com reports that trading of shares
in Eka Noodles Bhd will be suspended from May 31, after Bursa
Malaysia Securities rejected its application for a further
extension of time to submit its revised proposed regularisation
plan.
theedgemarkets.com relates that Bursa Securities felt the company
had not demonstrated to its satisfaction any material development
towards the finalisation and submission of the regularisation plan
to the regulatory authorities, Eka Noodles said in a filing on May
20.
Following the suspension, Eka Noodles will be delisted on June 2,
unless an appeal against the delisting is submitted before May 28.
"In the event the company submits an appeal to Bursa Securities
within the appeal time frame, the delisting of the securities of
the company from the official list of Bursa Securities on June 2
will be deferred pending the decision on the company's appeal," the
filing, as cited by theedgemarkets.com, read.
In the event of delisting, Eka Noodles will continue to exist but
as an unlisted entity.
About EKA Noodles
EKA Noodles Berhad is engaged in the manufacturing and marketing of
various types of rice, sago sticks (vermicelli), sago starch and
related products in Malaysia. The Company's product categories
include Bihun, Bihun Siam, Instant Bihun, Laksa, Instant Noodles
and Others. The Company's brands include Bihun EKA, Laksa EKA and
Instant Noodle EKA. The Company, through its subsidiaries, is
engaged in manufacturing and trading of beehoon and beehoon laksa,
and manufacturing and trading of noodles and its related products.
The Company sells its products primarily to small wholesalers and
retailers. The Company's subsidiaries include Kilang Bihun Bersatu
Sdn. Bhd., Rasayang Food Industries Sdn. Bhd., Bersatu Noodles
Industries Sdn. Bhd., EKA Foodstuff Sdn. Bhd. and Kilang Bihun
Bersatu (East Malaysia) Sdn. Bhd.
EKA Noodles Berhad has been considered a PN17 Company pursuant to
Paragraph 8.04 and Paragraph 2.1 (a) of Practice Note 17 (PN17).
The PN17 criteria was triggered as EKA's shareholders' equity on a
consolidated basis is 25% or less of the issued and paid-up capital
of EKA and such shareholders' equity is less than MYR40.0 million
in EKA's unaudited interim financial results for the 2nd quarter
ended June 30, 2016.
=====================
N E W Z E A L A N D
=====================
QUEST INSURANCE: Best Affirms B(Fair) Financial Strength Rating
---------------------------------------------------------------
AM Best has affirmed the Financial Strength Rating of B (Fair) and
the Long-Term Issuer Credit Rating of "bb+" (Fair) of Quest
Insurance Group Limited (Quest) (New Zealand). The outlook of these
Credit Ratings (ratings) is stable.
The ratings reflect Quest's balance sheet strength, which AM Best
assesses as adequate, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management (ERM). The ratings also factor in a neutral impact
from the company's ultimate majority ownership by Federal Pacific
Group Limited.
Quest's balance sheet strength is underpinned by its risk-adjusted
capitalization, which was at the strongest level in fiscal year
2020, as measured by Best's Capital Adequacy Ratio (BCAR). AM Best
expects Quest's risk-adjusted capitalization to trend down over the
near term due to increased underwriting risk emanating from planned
portfolio growth. Notwithstanding this, risk-adjusted
capitalization is expected to remain at least at the strong level
over the medium term. AM Best considers Quest's asset quality to
have improved following the sale of an illiquid private equity
investment during fiscal year 2021, with prospective asset
allocation expected to include cash, term deposits and affiliated
loans over the medium term. A partially offsetting balance sheet
factor is the company's small absolute capital base, which exposes
risk-adjusted capitalization to volatility in the event of stressed
scenarios.
The company has a track record of adequate operating performance,
as evidenced by a five-year weighted average return-on-equity ratio
of 11.7% (fiscal years 2016 to 2020). Despite elevated underwriting
growth over the past two fiscal years, Quest has consistently
returned underwriting profits, with the combined ratio tracking in
the low 90% range. AM Best expects prospective operating
performance to remain supportive of the adequate assessment over
the medium term, driven by positive underwriting results.
AM Best assesses Quest's business profile as limited, reflecting
its small market presence and relatively concentrated niche product
offering, largely as a provider of mechanical breakdown insurance
(MBI) and comprehensive vehicle insurance (CVI) in New Zealand. The
company's scale of operation has increased significantly in recent
years, driven by both the growth in Quest's direct channels and a
strategic partnership with Janssen Insurance Limited (Janssen), a
third-party distributor of motor-related insurance. This has
significantly diversified Quest's distribution channels outside of
affiliated business written in conjunction with its intermediate
parent group, Geneva Finance Limited. Quest's near-term projected
underwriting growth is expected to be driven by increased volumes
written through the partnership with Janssen, as well as from
entering into new direct distribution deals for MBI and CVI
business.
AM Best assesses Quest's ERM as appropriate given the current size
and complexity of the company's operations. Following recent
business expansion, the company is exposed to an elevated level of
underwriting execution risk. However, this risk has been mitigated
partially to date through adequate monitoring of underwriting
performance, and a conservative approach to pricing and reserving
supported by a third-party actuary.
SERKO LIMITED: Posts NZD29.4MM Net Loss in Year Ended March 31
--------------------------------------------------------------
Radio New Zealand reports that Serko Limited has posted a sharply
higher loss as the pandemic grounded much of its business.
Its net loss for the year ended March increased to NZD29.4 million
from NZD9.3 million the year before, as bookings using its systems
slumped because of lockdowns and closed borders, RNZ discloses.
"The Covid-19 pandemic has caused enormous disruption to
international travel markets and Serko's business, with revenue
from all regions falling sharply during the 2021 financial year,"
RNZ quotes chair Claudia Batten as saying.
Revenue halved to NZD12.4 million, while operating expenses rose 21
percent to NZD44.8 million as it took on staff to continue
development and roll out of products.
According to RNZ, Ms. Batten said Serko was seeing a return to
growth, particularly in the New Zealand and Australian home
markets.
"We occupy a strong market position in Australasia, with most of
our transactions being domestic travel. As the pandemic has been
contained, these markets have recovered from the near standstill
experienced at the beginning of the financial year."
She said by April bookings had recovered to about 80 percent of
those in 2019, but New Zealand had recovered faster than Australia,
RNZ relays.
RNZ relates that the company raised NZD67.5 million in a capital
raising last year to see it through the downturn and continue
development of products and allowing it to continue with rolling
out a new platform coming from its partnership with Booking.com.
Serko's cash balance was close to NZD80 million at the end of
March, and it has kept its cash burn within its previously advised
NZD2 million-NZD4 million a month.
RNZ adds that Chief executive Darrin Grafton said its systems have
been developed to integrate information about Covid and vaccine
passports as well as cope with cancellations, credits, and
rebookings.
He expected North America would likely provide the next significant
expansion of travel but that it would be at least another year
before broader global travel started to return to something
approaching pre-Covid levels, RNZ relates.
Serko Limited (SKO:NZE) -- http://www.serko.com/-- provides
computer software solutions for online travel bookings and expense
management in New Zealand, Australia, North America, and
internationally. The company offers Zeno Travel, an online booking
tool that corporate travelers use to book flights, trains, hotels,
rental cars, and airport transfers in line with their corporate
travel policies; and Zeno Expense, which automates the process of
corporate card and out-of-pocket expense submission,
reconciliation, and reimbursement. It also provides Serko mobile, a
mobile app for iPhones and android devices that gives users access
to information and travel booking functionality on their mobile
devices. The company sells and delivers its products through a
network of travel management companies.
=================
S I N G A P O R E
=================
EMAS RISK: Creditors' Proofs of Debt Due June 22
------------------------------------------------
Creditors of Emas Risk Services Pte Ltd, which is in voluntary
liquidation, are required to file their proofs of debt by June 22,
2021, to be included in the company's dividend distribution.
The company's liquidator is:
Lai Seng Kwoon
100 Cecil Street
#08-01/02 The Globe,
Singapore 069532
FLEX LIMITED: Egan-Jones Keeps BB- Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on May 13, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Flex Limited.
Headquartered in Singapore, Flex Limited operates as an electronics
manufacturing services company.
NU PHOTO: Court Enters Wind-Up Order
------------------------------------
The High Court of Singapore entered an order on Jan. 29, 2021, to
wind up the operations of NU Photo Private Limited.
United Overseas Bank Limited filed the petition against the
company.
The company's liquidators are:
Gary Loh Weng Fatt
Leow Quek Shiong
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
SUPERVALU PTE: Creditors' Meeting Set for June 4
------------------------------------------------
Supervalu Pte Ltd, which is in compulsory liquidation, will hold a
meeting for its creditors on June 4, 2021, at 2:30 p.m. via Zoom.
Agenda of the meeting includes:
a) to update the creditors on the status of the liquidation
of the Company;
b) to appoint a Committee of Inspection, if thought fit;
c) to approve the Liquidators' fees and disbursements; and
d) Any other business.
The company's liquidators are:
Gary Loh Weng Fatt
Leow Quek Shiong
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
WINE IMPRESSION: Court to Hear Wind-Up Petition on June 4
---------------------------------------------------------
A petition to wind up the operations of Wine Impression Singapore
Pte Ltd will be heard before the High Court of Singapore on June 4,
2021, at 10:00 a.m.
FY Group Pte Ltd filed the petition against the company on May 10,
2021.
The Petitioner's solicitors are:
Asialegal LLC
10 Collyer Quay
#18-01 Ocean Financial Centre
Singapore 049315
*********
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.
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