/raid1/www/Hosts/bankrupt/TCRAP_Public/210526.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, May 26, 2021, Vol. 24, No. 99
Headlines
A U S T R A L I A
BOART LONGYEAR: S&P Downgrades ICR to 'D' on Restructuring
BONDI BEVERAGES: Second Creditors' Meeting Set for June 1
UA CORP: First Creditors' Meeting Set for June 1
VIRK BROS: Second Creditors' Meeting Set for June 2
C H I N A
CBAK ENERGY: Posts $29.6 Million Net Income in First Quarter
CHINA HUARONG: Bonds Lose Half Their Value in China Funding Market
IONIX TECHNOLOGY: Incurs $115,594 Net Loss in Third Quarter
KAISA GROUP: Fitch Assigns B Rating to Proposed USD Unsec. Notes
REMARK HOLDINGS: Incurs $5.5 Million Net Loss in First Quarter
I N D I A
AL-AYAAN FOODS: ICRA Keeps D Debt Ratings in Not Cooperating
ASHOKA FOAM: ICRA Keeps B+ Debt Ratings in Not Cooperating
BUILDMET PRIVATE: ICRA Keeps D Debt Ratings in Not Cooperating
CHALAPATHI EDUCATION: ICRA Keeps B+ Rating in Not Cooperating
CITRON ECOPOWER: Ind-Ra Hikes Bank Loan Rating to 'B'
COX & KINGS: NCLT Admits Financial Unit for Insolvency Resolution
DEEP MOTORS: ICRA Moves B+ Debt Rating to Not Cooperating
DOLPHIN MARINE: ICRA Keeps D Debt Ratings in Not Cooperating
HANUMAN TRUST: ICRA Keeps D Debt Rating in Not Cooperating
INDIA: Guarantors Liable if Firms Fail to Repay, High Court Rules
JCBL LIMITED: Ind-Ra Cuts LT Issuer Rating to 'D', Outlook Stable
L.M. FOODS: ICRA Keeps D Debt Ratings in Not Cooperating Category
MINING ASSOCIATES: ICRA Lowers Rating on INR10cr Cash Loan to B+
MYTRAH AKSHAYA: Ind-Ra Affirms 'BB+' Loan Rating, Outlook Stable
MYTRAH VAYU: ICRA Lowers Rating on INR1,452cr Term Loan to D
R J BUILDCON: ICRA Keeps D Debt Ratings in Not Cooperating
RADIUS ESTATES: NCLT Initiates Insolvency Process vs. Firm
RAIPUR ENERGEN: ICRA Withdraws D Rating on INR5850cr Loan
RAJESH CONSTRUCTION: Insolvency Resolution Process Case Summary
REGEN INTERNATIONAL: ICRA Keeps D Debt Ratings in Not Cooperating
S.P.R.L FOODS: ICRA Keeps B+ Debt Rating in Not Cooperating
S.S.V. FAB: Ind-Ra Moves 'BB+' LT Issuer Rating to Non-Cooperating
SAI INTERNATIONAL: ICRA Keeps B+ Debt Rating in Not Cooperating
SHARADAMBA DEVELOPERS: Insolvency Resolution Process Case Summary
SUSHRAVYA UPLIFTMENT: ICRA Reaffirms B Rating on INR10cr Loan
V-ACCURATE MANAGEMENT: Insolvency Resolution Process Case Summary
VIVIANA VITRIFIED: ICRA Removes B+ Debt Rating from Not Cooperating
I N D O N E S I A
PAKUWON JATI: Fitch Affirms 'BB' LT IDR, Outlook Stable
M A L A Y S I A
SCOMI GROUP: Proposes to Form JV with Zuha Systems
P A K I S T A N
PAKISTAN WATER: S&P Rates New Sr. Unsec. Notes 'B-'
PAKISTAN: Nears Debt-for-Nature Swap Agreement With Creditors
S I N G A P O R E
CHINA SKY: Does Not Have Funds to Make Exit Offer for Delisting
EAGLE HOSPITALITY: Auction Yields $480 Mil., None for Queen Mary
LIBRA GROUP: Lacks Funds for AGM, Financial Statements
V I E T N A M
VIETCOMBANK: S&P Alters Outlook to Positive, Affirms 'B+/B' ICR
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A U S T R A L I A
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BOART LONGYEAR: S&P Downgrades ICR to 'D' on Restructuring
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
drilling services provider and manufacturer Boart Longyear Ltd. to
'D' from 'CC'.
S&P said, "We also lowered our rating on the company's senior
secured debt to 'D' from 'CC' and our rating on the company's
senior unsecured debt to 'D' from 'C'. At the same time, we removed
the ratings from CreditWatch with negative implications, where we
placed them March 5, 2021.
"Our rating action reflects our view that a default on Boart
Longyear's obligation is a virtual certainty following the
restructuring support agreement reached with lenders and the
forbearance in place as part of the agreement." The company will
undertake a restructuring that will recapitalize substantially all
its debt. Under the agreement, upon completion of upcoming court
proceedings in Australia, the company will file for Chapter 15
bankruptcy in the United States to recognize the proposed
recapitalization of its debt. In addition, the company will change
its domicile to the U.S. from Australia.
As part of the restructuring agreement, the following debt
instruments will be converted to new common equity:
-- $354 million of term loan A and term loan B
-- $348 million of senior secured notes
-- $94 million of senior unsecured notes
The company has secured a $50 million bridge loan facility to
provide liquidity during these proceedings, which S&P expects to be
completed in late August. At close, Boart Longyear will have
approximately $200 million of debt outstanding.
BONDI BEVERAGES: Second Creditors' Meeting Set for June 1
---------------------------------------------------------
A second meeting of creditors in the proceedings of Bondi Beverages
Pty Limited has been set for June 1, 2021, at 9:30 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 31, 2021, at 4:00 p.m.
Christopher Damien Darin of Worrells Solvency & Forensic
Accountants was appointed as administrator of Bondi Beverages on
April 27, 2021.
UA CORP: First Creditors' Meeting Set for June 1
------------------------------------------------
A first meeting of the creditors in the proceedings of UA Corp Pty
Ltd will be held on June 1, 2021, at 9:00 a.m. via virtual meeting
technology.
Shane Leslie Deane and Nicholas Giasoumi of Dye & Co. were
appointed as administrators of UA Corp on May 24, 2021.
VIRK BROS: Second Creditors' Meeting Set for June 2
---------------------------------------------------
A second meeting of creditors in the proceedings of Virk Bros
Trucking Pty. Ltd. has been set for June 2, 2021, at 11:30 a.m. via
electronic facilities.
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 31, 2021, at 4:00 p.m.
Matthew Leslie Joiner and Neil Cussen of Cor Cordis were appointed
as administrators of Virk Bros on May 11, 2021.
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C H I N A
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CBAK ENERGY: Posts $29.6 Million Net Income in First Quarter
------------------------------------------------------------
CBAK Energy Technology, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $29.61 million on $9.42 million of net revenues for the three
months ended March 31, 2021, compared to a net loss of $2.35
million on $6.90 million of net revenues for the three months ended
March 31, 2020.
As of March 31, 2021, the Company had $203.96 million in total
assets, $106.08 million in total liabilities, and $97.88 million in
total equity.
The Company stated, "We had financed our liquidity requirements
from a variety of sources, including short-term bank loans, other
short-term loans and bills payable under bank credit agreements,
advance from our related and unrelated parties, investors and
issuance of capital stock."
"We generated a net profit of $29.6 million for the three months
ended March 31, 2021. As of March 31, 2021, we had cash and cash
equivalents and restricted cash of $81.4 million. Our total
current assets were $119.9 million and our total current
liabilities were $89.3 million, resulting in a net working capital
of $30.6 million."
"We had an accumulated deficit from recurring losses from
operations and short-term debt obligations as of December 31, 2020
and March 31, 2021. As of December 31, 2020, we had a working
capital deficiency of $10.5 million. These factors raise
substantial doubts about our ability to continue as a going
concern. The report from our independent registered public
accounting firm for the year ended December 31, 2020 included an
explanatory paragraph in respect of the substantial doubt of our
ability to continue as a going concern. We are currently expanding
our product lines and manufacturing capacity in our Dalian and
Nanjing plant, which requires more funding to finance the
expansion. We plan to renew our bank borrowings upon maturity and
raise additional funds through bank borrowings and equity financing
to meet our daily cash demands. However, there can be no assurance
that we will be successful in obtaining the financing."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1117171/000121390021026727/f10q0321_cbakenergy.htm
About CBAK Energy
Liaoning Province, People's Republic of China-based CBAK Energy --
www.cbak.com.cn -- is a manufacturer of new energy high power
lithium batteries that are mainly used in light electric vehicles,
electric vehicles, electric tools, energy storage including but not
limited to uninterruptible power supply (UPS) application, and
other high-power applications. Its primary product offering
consists of new energy high power lithium batteries, but it is also
seeking to expand into the production and sale of light electric
vehicles.
CBAK Energy reported a net loss of $7.85 million for the year ended
Dec. 31, 2020, compared to a net loss of $10.85 million for the
year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$142.77 million in total assets, $90.36 million in total
liabilities, and $52.41 million in total equity.
Hong Kong, China-based Centurion ZD CPA & Co., the Company's
auditor since 2016, issued a "going concern" qualification in its
report dated April 13, 2021, citing that the Company has a working
capital deficiency, accumulated deficit from recurring net losses
and significant short-term debt obligations maturing in less than
one year as of Dec. 31, 2020. All these factors raise substantial
doubt about its ability to continue as a going concern.
CHINA HUARONG: Bonds Lose Half Their Value in China Funding Market
------------------------------------------------------------------
Bloomberg News reports that China's repo market shows just how
risky China Huarong Asset Management Co.'s bonds are perceived to
be within the mainland, despite being majority-owned by the finance
ministry.
Borrowers putting up a Huarong Securities 2023 bond for collateral
now get just 40% of the note's face value as cash, down from 91% at
the start of April, Bloomberg discloses citing China Securities
Depository and Clearing Corp. data.
According to Bloomberg, the decline in effective value illustrates
the stunning loss of confidence in a company that's crucial to
China's banking system. Given the size of Huarong's outstanding
yuan bonds -- $18.5 billion worth -- and its former quasi-sovereign
status, the company's notes are likely to have been widely used as
collateral for repurchase agreements.
Beijing's silence over Huarong's fate is unnerving investors amid
concern the company will struggle to repay its debts without
inflicting losses on bondholders, Bloomberg says. Fitch Ratings and
Moody's Investors Service downgraded Huarong in late April,
highlighting a lack of clarity over the scope of the central
government's support. Speculation over Huarong's financial health
has swirled ever since the firm delayed its 2020 earnings results.
"Huarong is currently a blind box," Bloomberg quotes Yang Hao, an
analyst with Nanjing Securities Co., as saying.
Investors have become dependent on a drip-feed of media reports for
insight in the absence of official statements, Bloomberg states.
Huarong is "nowhere near" defaulting on its more than $20 billion
in offshore bonds, the managing editor of Caixin Media wrote in an
opinion piece dated May 22, Bloomberg relays. The New York Times
reported last week that the central government is in the early
stages of a plan to overhaul Huarong -- one that would inflict
"significant losses" on both domestic and foreign bondholders.
According to Bloomberg, Huarong has been repaying its maturing
bonds on time and said as recently as May 13 it had seen no change
in government support. The company has the equivalent of about $2.5
billion in offshore and onshore bonds coming due through August,
data compiled by Bloomberg show.
In China's pledged repo market, the country's smaller banks and
broker-dealers get needed financing by pledging securities they
hold in return. In the event of a seller default, the repo buyer
can seize the securities to compensate for the loss. While most
bonds trading in China are eligible as collateral regardless of
their credit rating, counterparties typically tend to prefer
government or corporate bonds issued by state-backed enterprises
-- like Huarong -- to lessen the risk.
Huarong Securities's 2023 yuan bond was rated AAA at China Lianhe
Credit Rating. It traded around CNY85 on May 24, according to
Bloomberg-compiled data.
Bloomberg says the Shanghai stock exchange is emerging as a key
market for repos, where more than CNY23 trillion ($3.6 trillion) of
the instruments changed hands in April. On exchange, the CSDC acts
as the central counterparty to sellers and buyers. Most
transactions still occur in China's interbank market, where there's
little transparency and haircuts tend to be larger than on
exchange.
Credit risk is an important component of China's money market. In
November, a string of defaults at some state-backed companies meant
China's big banks were unwilling to lend to smaller firms, freezing
the repo market before the central bank stepped in to inject
liquidity, recalls Bloomberg.
If concern that Beijing won't backstop large SOEs gets out of hand,
the effects could be widespread given the importance of their bonds
as collateral in the repo market, Bloomberg adds.
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.
IONIX TECHNOLOGY: Incurs $115,594 Net Loss in Third Quarter
-----------------------------------------------------------
Ionix Technology, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $115,594 on $3.16 million of revenues for the three months ended
March 31, 2021, compared to a net loss of $636,222 on $2.75 million
of revenues for the three months ended March 31, 2020.
For the nine months ended March 31, 2021, the Company reported a
net loss of $1 million on $9.10 million of revenues compared to net
income of $210,712 on $17.59 million of revenues for the same
period in 2020.
As of March 31, 2021, the Company had $18.76 million in total
assets, $7.75 million in total liabilities, and $11.01 million in
total stockholders' equity.
During the nine months ended March 31, 2021, net cash used in
operating activities was $1,411,451 compared to the cash provided
by operating activities of $641,370 for the nine months ended March
31, 2020. The change was mainly due to a decrease of $1,214,730 in
net income and an increase of $1,012,057 in cash outflow from
changes in operating assets and liabilities in the nine months
ended March 31, 2021 compared to the same period in 2020.
During the nine months ended March 31, 2021, net cash used in
investing activities was $192,524 compared to net cash used in
investing activities of $71,895 for the same period in 2020. The
change was primarily due to the fact that there were proceeds from
sale of equipment of $121,715 during the nine months ended March
31, 2020 while no sales of fixed assets or intangible assets during
the same period in 2021.
During the nine months ended March 31, 2021, cash provided by
financing activities was $787,342 compared to net cash provided by
financing activities of $787,503 for the same period in 2020. The
change was immaterial during the nine months ended March 31, 2021
compared to same period of 2020.
As of March 31, 2021, the Company has a working capital of
$2,165,185.
The Company's total current liabilities as of March 31, 2021 were
$7,748,280 and mainly consisted of $1,217,415 for short-term bank
loans, $2,650,376 in accounts payable, the amount due to related
parties of $2,879,635, advance from customers of $351,225 and the
self-amortized promissory notes of $571,093. The Company's major
shareholder is committed to providing for its minimum working
capital needs for the next 12 months, and the Company does not
expect the previous related party loan be payable for the next 12
months. However, the Company does not have a formal agreement that
states any of these facts. The remaining balance of the Company's
current liabilities relates to audit and consulting fees and such
payments are due on demand and we expect to settle such amounts on
a timely basis based upon shareholder loans to be granted to the
Company in the next 12 months.
Going Concern
The Company incurred loss from operation and did not generate
sufficient cash flow from its operating activities for the nine
months ended March 31, 2021. These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
The Company plans to rely on the proceeds from loans from both
unrelated and related parties to provide the resources necessary to
fund the development of the business plan and operations. The
Company is also pursuing other revenue streams which could include
strategic acquisitions or possible joint ventures of other business
segments. However, no assurance can be given that the Company will
be successful in raising additional capital.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1528308/000121465921005505/i51421010q.htm
About Ionix
Headquartered in Liaoning Province, China, Ionix Technology, Inc.
-- http://www.iinx-tech.com-- is a holding company that is
principally engaged in the photoelectric display and smart energy
industries. The company has five operating subsidiaries: Changchun
Fangguan Electronics Technology Co., Ltd, a company which has been
focusing on R&D, manufacturing and marketing LCM and LCD; Changchun
Fangguan Photoelectric Display Technology Co., Ltd, a company which
specializes in developing, designing, and selling TN and STN LCD,
STN, CSTN, and TFT LCD modules as well as other related products;
Shenzhen Baileqi Electronic Technology Co., Ltd, a company which
specializes in LCD slicing, filling, researching and designing, and
selling of LCD Modules (LCM) and PCBs; Lisite Science Technology
(Shenzhen) Co., Ltd., a company engaged in the marketing and
selling of intelligent electronic devices; and Dalian Shizhe New
Energy Technology Co., Ltd., a company engaged in the new energy
support service, and operating the photovoltaic power generation,
electric vehicles and charging piles with corresponding operation
and maintenance and three dimensional parking. Currently, IINX has
embarked on the layout of industrialization and marketization of
front end materials and back end modules of liquid crystal displays
and applications of flexible folding display technology by taking
Fangguan Electronics as production bases, to seize the market share
of OLED high technology.
Ionix reported a net loss of $277,668 for the year ended June 30,
2020, compared to net income of $397,047 for the year ended June
30, 2019. As of Dec. 31, 2020, the Company had $18.08 million in
total assets, $7.12 million in total liabilities, and $10.96
million in total stockholders' equity.
The Company had an accumulated deficit of $626,226 as of Dec. 31,
2020. The Company incurred loss from operation and did not
generate sufficient cash flow from its operating activities for the
six months ended Dec. 31, 2020. The Company said these factors,
among others, raise substantial doubt about its ability to continue
as a going concern.
KAISA GROUP: Fitch Assigns B Rating to Proposed USD Unsec. Notes
----------------------------------------------------------------
Fitch Ratings has assigned China-based homebuilder Kaisa Group
Holdings Limited's (B/Stable) proposed US-dollar senior unsecured
notes a rating of 'B' with a Recovery Rating of 'RR4'.
Proceeds will be used to refinance existing medium- to long-term
offshore debt to become due within one year. The proposed notes are
rated at the same level as Kaisa's senior unsecured rating as they
constitute its direct and senior unsecured obligations.
Kaisa's ratings are underpinned by a strong asset base that
supports scale expansion, which is at a level comparable with 'BB'
category homebuilders. The rating is constrained by high leverage
of 52% at end-2020, as measured by net debt, including external
guarantees/adjusted inventory, including urban regeneration
projects (URP) and investment properties at original cost. Fitch
expects leverage to increase to 56%-57% in 2021-2023 on higher land
acquisition and construction costs and the provision of
property-development related guarantees to joint ventures (JV) and
associates.
KEY RATING DRIVERS
High Leverage Constrains Ratings: Fitch expects Kaisa's leverage to
stay above 56%-57% in 2021-2023, compared with 52% in 2020 and 62%
in 2019. The lower leverage in 2020 was due to URP disposals to
minority shareholders, which boosted available cash. Fitch believes
further deleveraging may be challenging due to Kaisa's high
land-replenishment budget and interest burden in the next year or
two.
Fitch expects Kaisa to spend 38%-39% of attributable sales on land
replenishment and conversion of URPs into land bank in 2021-2022
(2019-2020: 31%-44%), including the acquisition of a Beijing
residential project. Kaisa also formed a JV in February 2021 on a
commercial property project in Kai Tak, Hong Kong, with total
consideration of HKD7 billion (CNY6.1 billion). Fitch expects Kaisa
to offer guarantees on JV projects, which will also increase
leverage.
Higher Minority, JV Exposure: Fitch expects Kaisa's JV exposure,
including JV investment, receivables and payables to JVs, to rise
to CNY44.9 billion in 2021 (2020: CNY24.2 billion). The minority
interest/total equity ratio rose to 59% in 2020 (2019: 54%). Fitch
sees higher exposure to JVs and increased minority interest as a
credit weaknesses, as it reduces financial transparency and
flexibility.
Project Transactions May Compress Margin: Kaisa plans to acquire
residential and commercial projects near Beijing's fourth ring for
total consideration of CNY13.0 billion from its chairman in 2Q21.
This is to be funded by a CNY9.0 billion offshore loan, with CNY2.2
billion raised from a rights issue and CNY1.8 billion from internal
cash. This related-party transaction is subject to shareholder
approval.
Fitch expects the company to sell some Beijing residential units in
2H21; this may bring down Kaisa's margin in the next 12-18 months,
as the price cap on Beijing's residential units is at a similar
level to the company's purchase costs. In addition, the high land
costs in China's tier one to three cities will also pressure the
company's margin as it diversifies outside the Greater Bay Area
(GBA). Consequently, Fitch expects Kaisa's EBITDA margin, excluding
capitalised interest, to drop to 25.6% in 2021 and 24.7% in 2022,
from 28%-30% in 2019-2020.
URPs Provide Flexibility: Fitch believes Kaisa's URP business
offers operational flexibility, as the high profitability helps to
sustain price cuts in a market downturn. Kaisa can also sell stakes
in its URPs at a profit because of their low land costs. Kaisa's
long experience in URPs has enabled it to secure a large land bank
with a high gross profit margin of over 40%. This supported its
EBITDA margin, excluding capitalised interest in cost of goods
sold, of 30% in 2020. A strong URP pipeline will provide a
consistent stream of projects entering the sales phase in 2021.
Large, Premium Land Bank: Fitch believes Kaisa's quality land bank
will support contracted sales in the next three years. Kaisa
expects CNY130 billion of attributable contracted sales from 6.8
million square metres of gross floor area sold. Its premium asset
base can also buffer liquidity if URP conversion to land bank takes
longer than it expects, as it can easily find buyers for the
well-located URPs, especially in Shenzhen. Kaisa's land bank
totalled 28.7 million square metres, with company-estimated
sellable resources of CNY670 billion at end-2020, of which 55% was
in the GBA.
DERIVATION SUMMARY
Kaisa's attributable sales scale in 2020 was comparable with that
of 'BB' category peers, such as Logan Group Company Limited
(BB/Stable) and China Aoyuan Group Limited (BB/Stable), and
exceeded the CNY60 billion-70 billion sales of KWG Group Holdings
Limited (BB-/Stable) and Times China Holdings Limited (BB-/Stable).
Over half of Kaisa's land bank by gross floor area is in the GBA, a
similar level to that of Logan, China Aoyuan and Times China.
Kaisa's EBITDA margin of around 30%, excluding capitalised interest
in 2019-2020, is at the higher end of 'BB' category peers due to
its high-margin URPs.
Kaisa's closest peer is Yango Group Co., Ltd. (B+/Stable). Yango's
sales scale is larger than that of Kaisa and its land bank is more
diversified, but its EBITDA margin of around 22%, excluding
capitalised interest, is narrower than Kaisa's more than 30%.
Yango's leverage - measured by net debt/adjusted inventory - of 47%
in 2020 was lower than Kaisa's 52%.
In comparison with Guangzhou R&F Properties Co. Ltd. (B+/Stable),
Kaisa has similar a leverage level and margin, excluding
capitalised interest, but better liquidity. Kaisa's scale is
smaller and it has significantly higher JV and non-controlling
interest exposure, while Guangzhou R&F has a more diversified land
bank. Yango's and Guangzhou R&F's moderately stronger business
profiles justify the one-notch rating differential with Kaisa.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Attributable contracted sales to increase by 10% in 2021 and
8% in 2022 (2020: 21%);
-- Attributable land premium/contracted sales at 37%-38% in 2021
2022 (2020: 44%);
-- Cash collection rate of around 73% in 2021 and 75% in 2022
(2020: 71%);
-- Construction costs/attributable contracted sales at 20%-22% in
2021-2022 (2019-2020: 20%-24%);
-- Dividend payout ratio of 15% of net income (2020: 15%).
Fitch's Key Recovery Rating Assumptions
Fitch uses a multiple assumption tool to derive a 4x EBITDA
multiple that Fitch applies to calculate Kaisa's going-concern
value. Fitch will apply the liquidation approach where a
liquidation of the assets results in a higher return to creditors.
Liquidation Approach
Fitch adopts the liquidation approach, as the company's property
assets can be disposed of in the recovery process. This includes:
-- 10% administrative claim;
-- 70% account receivable advanced rate;
-- 75% net inventory advanced rate, as the EBITDA margin,
excluding capitalised interest of development property, is in
the 20%-25% range;
-- Property, plant and equipment at a 60% advanced rate
-- Investment properties at a 25% advanced rate, as the yield was
only 1.5%;
-- Excess cash, after deducting payables from available cash, at
a 60% advanced rate.
The resulting recovery rate corresponds to a Recovery Rating of
'RR2' for Kaisa. However, the Recovery Rating is capped at 'RR4',
because, under Fitch's Country-Specific Treatment of Recovery
Ratings Criteria, China falls into Group D of creditor
friendliness, and instrument ratings of issuers with assets in the
group are subject to a soft cap at the issuer's Issuer Default
Rating and a Recovery Rating of 'RR4'.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Leverage, measured by net debt/adjusted inventory, including
guaranteed debt for JVs and associates, below 55% for a
sustained period, without a material increase in non
controlling interests.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage, measured by net debt/adjusted inventory, including
guaranteed debt for JVs and associates, above 65% for a
sustained period.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Kaisa had short-term interest-bearing debt of
CNY23.1 billion as of end-2020, against unrestricted cash of
CNY36.1 billion, long-term bank deposit of CNY3.6 billion and
restricted cash of CNY6.2 billion. Kaisa also issued a tap of the
USD200 million bonds in April 2021 due September 2023 to refinance
its medium- to long -term offshore debt becoming due within one
year. Kaisa had total credit lines of CNY136 billion, of which
CNY107 billion was unused, and its average funding cost dropped to
8.7% in 2020, from 8.8% in 2019.
SUMMARY OF FINANCIAL ADJUSTMENTS
A face-value adjustment has been applied to Kaisa's outstanding
bonds. Interest-bearing borrowings from non-financial institutions,
which the company booked in other payables, was adjusted to debt.
Fitch's calculation of CNY154 billion in adjusted inventory at
end-2020 includes property development inventory, investment
property at cost, hotel properties and JV investments. Customer
deposits as well as amounts due to non-controlling interests and
JVs and associates are deducted from the summation of items
mentioned previously.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
REMARK HOLDINGS: Incurs $5.5 Million Net Loss in First Quarter
--------------------------------------------------------------
Remark Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $5.46 million on $4.41 million of revenue for the three months
ended March 31, 2021, compared to a net loss of $2.42 million on
$431,000 of revenue for the three months ended March 31, 2020.
As of March 31, 2021, the Company had $14.38 million in total
assets, $28.05 million in total liabilities, and a total
stockholders' deficit of $13.67 million.
During the three months ended March 31, 2021, and in each fiscal
year since its inception, the Company has incurred net losses which
have resulted in an accumulated deficit of $366.0 million as of
March 31, 2021. Additionally, the Company's operations have
historically used more cash than they have provided. Net cash used
in continuing operating activities was $5.5 million during the
three months ended March 31, 2021. As of March 31, 2021, the
Company's cash and cash equivalents balance was $0.9 million, and
it had a negative working capital balance of $11.1 million.
"Our first quarter was highlighted by substantial increases in
revenue coming from the United States and China, despite each
country's slow emergence from COVID-19 lockdowns that dampened
business in the first quarter of last year. Momentum from last
year's second half continued with first quarter U.S. revenue
increasing by over half a million dollars and revenue from China
increasing by more than 10 times compared to the first quarter of
2020," noted Kai-Shing Tao, chairman and chief executive officer of
Remark Holdings. "Demand for our AI solutions came from schools,
retail outlets, bank branches, and medical facilities and we expect
demand momentum, particularly in the United States, to carry
forward throughout 2021. Additionally, during the quarter we saw
the initial implementation of our AI marketing program that we
believe will be a big catalyst for 2021."
"First quarter revenue growth set a positive tone for 2021. Our
China business was strong and is expected to get stronger as the
year progresses with retail, banking, school, smart community and
environmental sustainability opportunities growing. Our U.S.
business is expanding in health security, predictive analytics and
retail, as seen with our recently-won deal to outfit Shryne Group's
flagship Stiiizy Cannabis retail location. Finally, we anticipate
the closing of the Sharecare merger with Falcon Acquisition will
fund our balance sheet while simultaneously supporting working
capital needs to meet our growth goals," concluded Mr. Tao.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1368365/000136836521000029/mark-20210331.htm
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- delivers an integrated suite of AI
solutions that enable businesses and organizations to solve
problems, reduce risk and deliver positive outcomes. The company's
easy-to-install AI products are being rolled out in a wide range of
applications within the retail, financial, public safety and
workplace arenas. The company also owns and operates digital media
properties that deliver relevant, dynamic content and ecommerce
solutions. The company is headquartered in Las Vegas, Nevada, with
additional operations in Los Angeles, California and in Beijing,
Shanghai, Chengdu and Hangzhou, China.
Remark Holdings reported a net loss of $13.68 million for the year
ended Dec. 31, 2020, compared to a net loss of $25.61 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$11.31 million in total assets, $20.40 million in total
liabilities, and a total stockholders' deficit of $9.09 million.
Los Angeles, California-based Weinberg & Company, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 31, 2021, citing that the Company has suffered
recurring losses from operations and negative cash flows from
operating activities and has a negative working capital and a
stockholders' deficit that raise substantial doubt about its
ability to continue as a going concern.
=========
I N D I A
=========
AL-AYAAN FOODS: ICRA Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Al–Ayaan
Foods Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 10.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Unallocated 20.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in January 2014, the company currently operates as a
supplier for Indian meat exporters, with trading of livestock and
raw meat compromising the major part of the company's operations.
The company has a plant for processing of buffalo meat but is yet
to commence operations; as of now, the company's operations consist
solely of trading.
ASHOKA FOAM: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Ashoka
Foam Private limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 5.00 [ICRA] B+(Stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund Based 10.00 [ICRA] B+(Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
AFPL is a closely-held private limited company started in 2003 and
promoted by the members of the Goel family. It manufactures wood
plastic composite (WPC) foam boards and doors, PVC foam boards,
windows and doors. AFPL commenced its operation in November 2015 at
its manufacturing facility in Bareilly, Uttar Pradesh.
In FY2018, the company reported a net profit of INR0.24 crore on an
operating income (OI) of INR18.45 crore on a provisional basis
compared with a net profit of INR0.05 crore on an OI of INR13.83
crore in the previous year.
BUILDMET PRIVATE: ICRA Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Buildmet
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 4.72 [ICRA]D ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating'
Category
Fund Based 12.00 [ICRA]D ISSUER NOT COOPERATING;
Limits Rating continues to remain under
'Issuer Not Cooperating'
Category
ST-Unallocated 8.78 [ICRA] D ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating'
Category
ST-Non-fund based 24.50 [ICRA] D ISSUER NOT COOPERATING;
Rating continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
BPL was established in 1974 as a private limited company by a group
of civil engineers. The company is a civil constructor and is also
a registered Class-I contractor for PWD, Karnataka. The company was
taken over by Ayoki Fabricon Private Limited, a Pune-based company
in May 2015. The company does civil construction work for
cement-manufacturing units, power production units,
sugarcane-manufacturing units, roads etc.
CHALAPATHI EDUCATION: ICRA Keeps B+ Rating in Not Cooperating
-------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Chalapathi
Education Society in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 10.21 [ICRA] B+(Stable); ISSUER NOT
Based-TL COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term Fund 2.60 [ICRA] B+(Stable); ISSUER NOT
Based-CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term 3.19 [ICRA] B+(Stable); ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Chalapathi Educational Society (CES) was established in 1995 as a
non-profit society by its chief promoter Mr. Y.V. Anjaneyulu. The
society operates five institutions including Engineering
institutes, Pharmacy College, Degree college and Junior college.
The establishments of CES, namely, Chalapathi Institute of
Engineering & Technology (CIET), Chalapathi Institute of Technology
(CIT), Chalapathi Institute of Pharmaceutical Sciences (CIPS),
Chalapathi Degree College (CDC) and Chalapathi Junior College (CJC)
are based in Guntur, Andhra Pradesh. The colleges are located in
Guntur, Andhra Pradesh (AP) and are well connected by bus or train
with Vijayawada (40 min), Hyderabad (5.00 hrs.) and Chennai (7
hrs).
CITRON ECOPOWER: Ind-Ra Hikes Bank Loan Rating to 'B'
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Citron Ecopower
Private bank loan ratings as follows:
-- INR2.75 bil. Term loan due on November 30, 2028 upgraded with
IND B/Stable rating; and
-- INR250 mil. Overdraft upgraded with IND B/Stable rating.
KEY RATING DRIVERS
The upgrade reflects Citron's stable operational performance, in
line with Ind-Ra's base case expectations, continued moderate
utilization of working capital in FY21, and an improvement in Leap
Green Energy Limited's (sponsor) liquidity.
The generation levels improved in April 2021 to 6.80% from 2.96% in
April 2020 (April 2019: 4.65%). In FY21, wind projects saw a huge
dip in performance across India. Wind projects are generally
susceptible to the wind speed that could affect the cash flows.
Citron's average plant load factor was stable at 18.05% in FY21,
though there was no major improvement in generation levels (FY20:
18.10%; FY19:19.31%) which were even lower than the P90 estimates
of 23.23%. In FYE21, average grid availability was 93.49% and
machine availability was at 96.71%.
The ratings continue to reflect the lack of significant improvement
in Citron's debt service coverage ratios (less than 1x). The
project's average receivable days for the group captive consumers
(accounting for around 95% of FY20 revenue) were 82 days at FYE21
(FYE20: 81 days).
The ratings remain constrained by the regulatory risk associated
with a group captive business, as any adverse changes in
Electricity Rules, 2005 notified by the Ministry of Power and/or
the regulations notified by Tamil Nadu Electricity Regulatory
Commission may directly impact the project's cash flows.
Liquidity Indicator – Stretched: The project still has not
created a debt service reserve (DSR), equivalent to two quarter's
debt servicing, depleted earlier in FY19. Management expects to
create the required DSR in FY22 and the lenders have given an
extension for the creation of the second-quarter DSR until June 30,
2021. The working capital had been utilized at an average of 21.89%
in FY21. The company has unutilized working capital limits of
around INR170 million. Citron availed the debt moratorium under the
COVID relief package for the period March-August 2020.
The operation and maintenance(O&M) contract had been signed with
Siemens Gamesa Renewable Energy S.A. and Suzlon Energy Limited. The
contracted O&M expenses for 9MFY21 were at 1.27 million/MW and for
FY20 were INR1.68 million/MW (FY19: INR1.42 million/MW).
In August 2019, debt at Citron's holding company and guarantee
provider Leap Green Energy Private Limited was refinanced through
an external commercial borrowing loan from its parent company AIRRO
(Mauritius) Holdings II where there is deferment of interest till
August 2021. Debt refinancing at the sponsor level, coupled with
improved cash flow in Citron, ensured timely debt servicing since
August 2019. Management has represented that liquidity at group
level has improved compared to FYE20.
The ratings continue to be supported by the presence of a
medium-term power purchase agreement for the 66.45MW capacity with
captive consumers, where power is directly sold to industries or
commercial entities and the tariff tracks the state's industrial
tariff. The presence of diversified off-takers for the captive
business reduces the receivable risk to a certain extent. The
balance 9MW is sold to Tamil Nadu Generation and Distribution
Corporation Limited ('IND BBB'/Negative).
RATING SENSITIVITIES
Negative: A significant increase in operating expenses beyond
Ind-Ra's base case, increase in the receivable days by 30 days in
FY22 from the current level or any adverse revenue impact could
lead to a negative rating action.
Positive: An improvement in the internal liquidity and plant
generation could result in a positive rating action.
COMPANY PROFILE
Incorporated on March 8, 2016, Citron is a special purpose vehicle
that was formed by Leap Green Energy to operate two wind power
plants (42.45MW and 33.00MW) in Tamil Nadu.
COX & KINGS: NCLT Admits Financial Unit for Insolvency Resolution
-----------------------------------------------------------------
VCCircle.com reports that the National Company Law Tribunal (NCLT)
has admitted the financial unit of debt-laden travel firm Cox &
Kings to insolvency for a default of INR445.5 crore on a plea by
private sector lender Yes Bank.
Pardeep Kumar Sethi, appointed as interim resolution professional,
will take control of Cox & Kings Financial Services Ltd (CKFSL).
According to VCCircle.com, Yes Bank had approached the court after
CKFSL defaulted on a working capital loan and a credit facility
sanctioned in October 2018 and March 2019, respectively.
CKFSL, primarily in the business of foreign exchange, was demerged
from parent Cox & Kings Ltd in 2018, also facing insolvency.
The firm became a non-performing asset (NPA) in October 2019, the
report notes.
Two months later, Yes Bank sent an 'invocation of personal
guarantee' notice to promoters Ajay (Ajit Peter) Kerkar and his
wife Urmila Kerkar.
Promoters including Ajay Kerkar and Kubber Investments (Mauritius)
Pvt Ltd, which government agencies suspect is controlled by him,
own 12.20% of CKFSL. Government-owned Life Insurance Corporation of
India owned 2.04% of the company as on March-end 2021.
In January this year, chief financial officer Milind Ramesh Gandhi
resigned citing personal reasons.
CKFSL got listed in April 2018. The company was also registered as
an NBFC but the licence was voluntarily surrendered in September
2019.
As reported in the Troubled Company Reporter-Asia Pacific on Nov.
1, 2019, BloombergQuint said the Mumbai bench of the National
Company Law Tribunal (NCLT) admitted an insolvency application
against Cox & Kings Ltd. after the tour operator defaulted on its
debt obligations. The travel firm's financial creditor -- Ratan
India Finance Pvt. Ltd. -- had dragged it to the tribunal after a
default on repayment of the loan extended to it under a credit
facility. Noting that Cox & Kings had accepted the liability and
default, the tribunal allowed the insolvency application and
appointed Alok Kumar Agarwal as the interim resolution professional
for the insolvency resolution process of the company,
BloombergQuint added.
DEEP MOTORS: ICRA Moves B+ Debt Rating to Not Cooperating
---------------------------------------------------------
ICRA has moved the ratings for the INR12.25 crore bank facilities
of Deep Motors (DM) to Issuer Not Cooperating Category. The rating
is now denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 12.25 [ICRA]B+ (Stable) ISSUER NOT
Limits- COOPERATING; Ratings
Cash Credit downgraded from [ICRA]BB
(Stable) and moved to 'issuer
not cooperating category
As part of its process and in accordance with its rating agreement
with DM, ICRA has been trying to seek information from the entity
so as to monitor its performance, but despite repeated requests by
ICRA, the entity's management has remained noncooperative. In the
absence of requisite information and in line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's
Rating Committee has taken a rating view based on the best
available information.
Deep Motors is the authorised dealer for the retail sales and
distribution of passenger cars manufactured by MSIL. It was awarded
the MSIL dealership in 2006. At present, it is the only MSIL
dealership in the three districts of Azamgarh, Mau and Balia in
Uttar Pradesh. DM operates one full-fledged 3S showroom (sales,
service, and spares) in Azamgarh. The firm also has sales outlets
at Mau and Balia along with three service workshops.
DOLPHIN MARINE: ICRA Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Dolphin
Marine Foods & Processors (India) Pvt. Ltd. (DMPL) in the 'Issuer
Not Cooperating' category. The rating is denoted as "[ICRA] D;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 2.00 [ICRA] D; ISSUER NOT COOPERATING;
Limits- Rating continues to remain under
Cash Credit 'Issuer Not Cooperating' category
Fund Based- 9.00 [ICRA] D; ISSUER NOT COOPERATING;
Limits- Rating continues to remain under
FDBP/FUDBP 'Issuer Not Cooperating' category
Fund Based- (9.00) [ICRA] D; ISSUER NOT COOPERATING;
Limits- Rating continues to remain under
Packing Credit 'Issuer Not Cooperating' category
Rationale
The rating is based on limited cooperation from the entity since
the time it was last rated in September 2020. As part of its
process and in accordance with its rating agreement with Dolphin
Marine Foods & Processors (India) Private Limited, ICRA has been
sending repeated reminders to the entity for payment of
surveillance fee that became due. However, despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite cooperation and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, the company's rating continues to remain under
"Issuer Not Cooperating" category.
Incorporated in 1996 by Mr. Rosario D'Souza, Dolphin Marine Foods &
Processors (India) Pvt. Ltd. (DMPL) is engaged in processing of sea
food products which are mainly exported to Asia and Africa. It
commenced operations in 1999 from its 5000 square meters plot in
Taloja, MIDC. From 1999 to 2009, DMPL was only involved in
pre-processing activities like cleaning, washing and peeling. It
started exporting in 2009 as a merchant exporter from the rented
facility of Sumraj Sea Foods. It set up its own freezing and cold
storage unit in 2011. After receiving licenses from The Marine
Products & Export Development Authority (MPEDA) and Export
Incentive Agency (EIA), it commenced operation in October 2011.
HANUMAN TRUST: ICRA Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Shree
Hanuman Trust in the 'Issuer Not Cooperating' category. The rating
is denoted as "[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 59.50 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 1982, Shree Hanuman Trust (SHT) is engaged in
leasing of the 3rd floor of Mittal Court developed by the Mittal
Group with an area of 22,111 sq. ft. at 244, Nariman Point, Mumbai
to The Income Tax Department, Government of India. The trust is a
part of the Mittal Group, which is engaged in real estate
development since 1952.
INDIA: Guarantors Liable if Firms Fail to Repay, High Court Rules
-----------------------------------------------------------------
The Hindustan Times reports that promoters, managing directors and
chairmen, who stand as personal guarantors to corporate loans, can
also be proceeded against before the company law tribunal if their
firms are unable to repay debts, ruled the Supreme Court on May 21
as it declared "legal and valid" a November 15, 2019, notification
issued by the Union government under the Insolvency and Bankruptcy
Code (IBC).
"It is held that the impugned notification was issued within the
power granted by Parliament, and in valid exercise of it. The
exercise of power in issuing the impugned notification is
therefore, not ultra vires; the notification is valid," a bench of
justices L Nageswara Rao and S Ravindra Bhat held, Hindustan Times
relays.
Affirming the government's mandate, the bench dismissed a clutch of
75 petitions, including the ones filed by industrialists Anil
Ambani, Venugopal Dhoot, and Kapil Wadhawan who had personally
guaranteed corporate debt, and who challenged the validity of the
2019 notification that sought to make them personally liable for
remaining debts not settled in the resolution plan of the companies
under insolvency, according to Hindustan Times.
Hindustan Times relates that the ruling means that in keeping with
the government notification that activated the IBC provision
against the guarantors of companies going through insolvency
proceedings, if the debt owed by such a company is not repaid under
the resolution plan, the personal guarantor could be forced into
bankruptcy proceedings by the creditors.
Reacting to the verdict, Faisal Sherwani, Partner, L&L Partners law
firm, said: "It is time for promoters who furnish personal
guarantees lightly to wake up and smell the coffee. From a
jurisprudential perspective, it is now clear that mere approval of
a resolution plan relating to a corporate debtor would not mean
that the personal guarantor is also off the hook. After all, the
object sought to be achieved by the amendment was permissible and
aimed at maintaining the financial health of the banking sector."
The SC, however, held the 2019 government notification issued under
the IBC was legal and valid, relays Hindustan Times.
However, advocate Soumya Dharwa, who represented one of the
petitioners in the matter, apprehended that the judgment may result
in further concentration of powers with the lender banks by opening
another avenue for recovery of their loans apart from SARFAESI Act,
debt recovery proceedings, and other civil remedies already
available, the report notes. This, the lawyer said, will also open
the floodgates for multiple litigations between the lenders and
corporate borrowers and their personal guarantors.
While the petitions alleged that the Centre did not have the power
to bring in IBC provisions selectively to personal guarantors of
corporate debtors, the top court underscored that "there is no
compulsion in the Code that it should, at the same time, be made
applicable to all individuals (including personal guarantors), or
not at all," adds Hindustan Times.
JCBL LIMITED: Ind-Ra Cuts LT Issuer Rating to 'D', Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded JCBL Limited's
Long-Term Issuer Rating to 'IND D' from 'IND B'. The Outlook was
Stable.
The instrument-wise rating actions are:
-- INR340 mil. Fund-based working capital limit (long-term/Short-
term) downgraded with IND D rating;
-- INR270 mil. Non-fund-based working capital limit (short-term)
downgraded with IND D rating; and
-- INR100 mil. Term loan (long-term) due on February 2027
downgraded with IND D rating.
KEY RATING DRIVERS
The downgrade reflects JCBL's delays in debt servicing during
February-March 2021 due to a stretched liquidity position,
resulting from the impact of COVID-19-led disruptions.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months will result in a positive rating action.
COMPANY PROFILE
Incorporated in 1989, JCBL is engaged in the body building and
fabrication of buses and containers for original equipment
manufacturers such as Swaraj Mazda Limited, Eicher Motors Limited,
Tata Motor Limited, Ashok Leyland Limited and state transport
undertakings. The company also provides transport solutions to
prime fleet operators, schools and other institutions in the
country.
L.M. FOODS: ICRA Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of L.M. Foods
in the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA] D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 23.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term 2.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Unallocated 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Based in Karnal, L.M. Foods was formed in 1997 as a partnership
firm by Mr. Madan Lal and Mr. Kewal Krishnan. Mrs Krishna Devi and
Mr. Kewal Krishnan are equal partners in the firm. L.M. Foods is
involved in milling and processing of basmati rice. The firm is
also engaged in further processing of byproducts like bran and
husk. From FY13, the firm has focused only on domestic sales and
does not have any export sales.
MINING ASSOCIATES: ICRA Lowers Rating on INR10cr Cash Loan to B+
----------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Mining
Associates Private Limited (MAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit– 10.00 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating downgraded
from [ICRA]BB+ (Stable) and
moved to the 'Issuer Not
Cooperating' category
Non-Fund Based 18.00 [ICRA]B+(Stable) ISSUER NOT
Limit–Bank COOPERATING/[ICRA]A4 ISSUER
Guarantee NOT COOPERATING; Rating
downgraded from [ICRA]BB+
(Stable)/[ICRA]A4+ and moved
to the 'Issuer Not
Cooperating' Category
Rationale
The ratings have been downgraded because of lack of adequate
information about MAPL's performance and the resultant uncertainty
around its credit risk. ICRA assessed whether the information
available about the entity was commensurate with its rating and
reviewed the same as per its "Policy in respect of non-cooperation
by a rated entity" available at www.icra.in. The lenders, investors
and other market participants are thus advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity, despite
the downgrade.
As a part of its process and in accordance with its rating
agreement with MAPL, ICRA has been trying to seek information from
the entity to monitor its performance. Despite repeated requests by
ICRA, the entity's management has remained noncooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, a rating view has been taken on the entity based on
the best available information.
Incorporated in 2003, MAPL provides mining services including
survey, exploration and geotechnical services for coal and other
minerals like copper, uranium, zinc etc. The company is based in
Asansol, West Bengal and operates in different parts of India. The
company has tied up with leading consultants for availing quality
mining consultancy services that helps MAPL in delivering its
services efficiently.
MYTRAH AKSHAYA: Ind-Ra Affirms 'BB+' Loan Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Mytrah Akshaya
Energy Private Limited's (MAEPL) term loan rating at 'IND BB+' with
a Stable Outlook, as follows:
-- INR628.6 mil. Term loan due on September 30, 2035 affirmed
with IND BB+/Stable rating.
Analytical Approach: The rating is now based on the analysis of
debt facilities borrowed by MAEPL and Mytrah Advaith Power Private
Limited (MAPPL; 'IND BBB-/Negative), as against the earlier
standalone view. Ind-Ra has considered the residual cash flow
approach for the ratings, in view of the need for approval from the
sole and common lender of MAPPL and MAEPL to share the surplus
cashflows of one company with the other in case either of the
entities has insufficient funds for debt servicing. Both the
companies have separate trust and retention accounts with a common
bank. There is no cross default or cross guarantee between the two
companies.
The affirmation reflects MAEPL's continued moderate operational
performance in FY21, with the generation being in line with the P90
level. However, the rating continues to be restrained by the
stretched payment cycle of the counterparty, Gulbarga Electricity
Supply Company Limited (GESCOM).
KEY RATING DRIVERS
Moderate Operational Performance: MAEPL's performance was in line
with the P90 levels during FY21, with the plant load factor rising
to 22.16% (FY20: 21.3%). The grid availability was lower than 97%
during October 2020 and February 2021 due to the undertaking of
maintenance work by Karnataka Power Transmission Corporation. In
FY20, MAEPL recorded revenue of INR121.1 million (FY19: INR143.14
million) and EBITDA of INR78.52 million (INR102.25 million). The
company did not report any contingent liabilities for FY20. The
related party transactions during FY20 included other payables of
INR14 million to MAPPL.
Liquidity Indicator - Stretched: The rating is constrained by the
stressed liquidity position caused by continued high receivable
days (FYE21: 240 days; FYE20: 174 days), and the continued
non-creation of the entire mandated debt service reserve (DSR). The
DSR needs to be sufficient to meet two quarters of debt servicing
obligations (INR51.2 million). MAEPL has placed INR42 million from
the project cash flows in the DSR account, equivalent to only about
five months of debt servicing. As of March 31, 2021, MAEPL had
INR7.5 million in the trust and retention account. MAEPL had
availed the Reserve Bank of India-prescribed debt moratorium for
June-August 2020.
The creation of the pending DSR from the project cash flows and
maintaining of the same remains a key rating sensitivity. The
lender has undisbursed DSR equivalent to one quarter (INR24
million). According to management, the prefunded DSR forming part
of project cost will be disbursed only after the creation of
security on land. The management expects the security creation to
be completed by August 2021. Procedural delays in the same cannot
be ruled out in view of the impact of the second wave of COVID-19.
An additional interest was applied due to the non-creation of
security over land, which has also led to a subdued debt service
coverage ratio. The additional interest will fall off on security
creation. The management expects the interest rate to reduce
further post the security creation, as per the lender's policies.
In the past, Mytrah Energy (India) Private Limited ('IND
BBB-'/RWN), the sponsor and operator of the project, has helped
MAEPL meet its debt servicing obligations (about INR11.6 million
provided until August 2019). The management has represented that
MEIPL has tied-up additional liquidity lines in 1QFY22. However,
the higher leverage and weakened liquidity at the sponsor level
have led to heightened concerns related to timely support for the
project going forward.
Debt Structure: As of March 31, 2021, the outstanding debt was
INR529.2 million. The rated debt will amortize in structured
quarterly installments, with the last principal repayment ending in
September 2035. The project has standard project finance features
such as a cash flow waterfall mechanism, a DSR (principal and
interest dues for the ensuing two quarters) and a major maintenance
reserve equivalent to 5% of the module cost (to be created within
eight years from the commercial operations date). An additional
interest was applied due to the delays in the creation of security
over land. The company expects the security creation to be
completed over the next three months. The covenants under the loan
agreement stipulate the maintaining of the debt service coverage
ratio (DSCR) and debt-equity ratio in line with the banking base
case. In case of more than 20% deviation from the base case, the
additional penal interest shall be payable.
Moderate Counterparty Risk: MAEPL's receivable days stretched to
240 days in FY21 (FY20:174 days). In FY20, GESCOM reported EBITDA
of INR192 million ((FY19: INR823 million). GESCOM's payable days at
FYE20 were 350 days (FYE19: 335 days; FY18: 369 days), according to
the Report on Performance of State Power Utilities 2018-19 and the
annual report of GESCOM. The disbursement of the second tranche
from the liquidity scheme under the Atmanirbhar Bharat for
distribution utilities might improve the payments from GESCOM
temporarily.
Moderate Technology Risk: MAEPL uses polycrystalline solar panels
with a single axis tracker. These panels have exhibited high
reliability and stable performance through the years. The modules
have been procured from reputed suppliers, which provide comfort in
terms of higher accountability.
Firm Offtake Agreement: The rating continues to take comfort from
MAEPL's 25-year fixed-price power purchase agreement with GESCOM
for the entire 15MW.
RATING SENSITIVITIES
Negative: The plant load factor falling below P90 levels, an
increase in the receivable days from GESCOM by 90 days from current
240 days, a reduction in debt service/cash reserve below two months
of debt service obligations, deterioration in the counterparty
profile, significant deterioration in the credit profile of the
operator-cum-sponsor affecting project operations and the minimum
DSCR being lower than 1.05x could lead to a downgrade.
Positive: Forward-looking minimum DSCR being higher than 1.1x and
the creation of six months' DSR for both MAPPL and MAEPL could lead
to an upgrade.
COMPANY PROFILE
MAEPL operates a 15MW solar project, located in Raibagh, Karnataka.
MAEPL is a subsidiary of MEIPL, which is a subsidiary of Mytrah
Energy Limited.
MYTRAH VAYU: ICRA Lowers Rating on INR1,452cr Term Loan to D
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Mytrah
Vayu (Sabarmati) Private Limited (MVSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 1,452.00 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Rating downgraded from [ICRA]BB+
(Negative) and moved to the
'Issuer Not Cooperating'
Category
Rationale
The rating downgrade factors in the delays in debt servicing in
March 2021 by MVSPL as confirmed by one of its lenders. ICRA
further takes note of the non-waiver of penal interest by this
lender arising from delays in security creation by the company.
Further, ICRA has been consistently following up with MVSPL for
obtaining the monthly 'No Default Statement' and had also placed
the ratings under review due to non-submission of NDS in the month
of April 2021. However, the entity's management has remained
non-cooperative.
The rating is based on limited information on the entity's
performance since the time it was last rated in October 2020. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity, despite the downgrade.
Key rating drivers and their description
Credit strengths
* Limited demand risks for the wind power project: The presence of
long term PPAs with PTC India Limited for the entire capacity at
the quoted bid tariff, with back to back PSAs with discoms in
Assam, Bihar, Jharkhand and Uttar Pradesh mitigates demand risks
for the project. Moreover, comfort can be drawn from the cost
competitive tariff rate offered by MVSPL in relation to the average
power purchase cost of these utilities.
Credit challenges
* Delays in debt servicing: The company has delayed in servicing of
its debt obligations for March 2021.
* Single asset nature of operations; sensitivity of debt metrics to
energy generation: MVSPL is entirely dependent on power generation
by the wind power project for its revenues and cash accruals, given
the single-part nature of the tariff. As a result, any adverse
variation in wind conditions may impact PLF and consequently its
cash flows. The single location nature of the company's operations
amplifies this risk.
* Counterparty credit risk from exposure to single buyer, with
ultimate procuring discoms having weak finances: The cash flows for
MVSPL remain susceptible to timely realisation of payments from
PTC, which in turn sells power to discoms in Assam, Bihar,
Jharkhand and Uttar Pradesh, which have a weak to moderate
financial profile.
Liquidity position: Poor
The liquidity position of MVSPL is poor given the delays in debt
servicing by the company.
Rating sensitivities
Positive factors – The rating could be upgraded if the company is
able to service its debt obligations in a timely manner, on a
sustained basis for an appropriate cooling period as per ICRA's
default recognition policy.
Negative factors – Not applicable.
MVSPL, incorporated in March 2017, is a special purpose vehicle
(SPV) promoted by Mytrah Energy (India) Private Limited (MEIPL).
MVSPL is operating a 252 MW wind power capacity at Maniyachi in
Tamil Nadu. The company won this project through tariff-based
competitive bidding conducted by Solar Energy Corporation of India
(SECI) in February 2017, under the 1000 MW inter-state transmission
system (ISTS) connected wind scheme of Ministry of New and
Renewable Energy (MNRE). The project is developed by MEIPL, with
WTGs supplied and installed by GEIPL, while the remaining plant
work (including land acquisition) was done by other promoter group
entities. The company has signed a PPA with PTC India Limited at
the bid tariff rate of INR3.46 per unit for the entire capacity.
The appraised project cost for MVSPL is INR1936 crore. MEIPL,
incorporated in November 2009, is a leading wind power IPP in India
with operational wind and solar power capacity of 1.7 GW spread
across eight states under various SPVs.
R J BUILDCON: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of R J
Buildcon Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term- 4.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based Rating continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Short Term- 6.00 [ICRA]D ISSUER NOT COOPERATING;
NonFund Based Rating continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 2008, R J Buildcon Private Limited (RJBPL) is
involved in executing contracts for roads, irrigation systems and
buildings for state government and civil bodies. The company is a
class I(A) contractor with Public Works Department (PWD) of
Government of Maharashtra and an approved contractor for various
government and civil bodies.
RADIUS ESTATES: NCLT Initiates Insolvency Process vs. Firm
----------------------------------------------------------
The Free Press Journal reports that the National Company Law
Tribunal (NCLT) last month agreed to initiate insolvency and
bankruptcy proceedings against Radius Estates and Developers, which
is indulged in developing work at city's suburban BKC (Bandra-Kurla
Complex) area.
The Free Press Journal relates that the NCLT Coram led by Suchitra
Kanuparthi, judicial member, was seized with a plea filed by Beacon
Trusteeship Limited that sought insolvency and bankruptcy
proceedings against Radius developers.
According to the report, the Beacon Trusteeship said the developer
was in need of funds for repayment of its existing debts and for
expenses related to residential project being developed under the
name "Ten BKC" in the city. For this purpose the developer issued
6,500 secured, unlisted, unrated redeemable, non-convertible
debentures for a nominal amount of INR1,00,000/- each, aggregating
up to INR65 crores for a maximum period of 24 months.
These debentures were subscribed by 167 Debenture Holders in
November 2018 after which a Debenture Trust Deed (DTD) was
executed, which also mentioned of the quarterly coupon rate at 16
per cent per annum, the report says.
However, the developer defaulted in paying four installments
following which a defaulter notice was issued to the group and
despite that the payments weren't done, the report relays.
According to the debenture holders, the default aggregated to
INR21.49 crores, The Free Press Journal discloses.
On the other hand, the developer by a notice informed the debenture
holders that it was in talks with certain investors and that it was
about to complete the construction work of its project and the sale
would soon commence, the report states. It claimed that the
payments would be done in 180 days.
However, the Coram considered the debenture holders' plea which was
supported with "sufficient", documents to substantiate their
claims.
"From the material on record, we find that the Beacon Trusteeship
has not received the outstanding debt from the Radius group and
that the formalities as prescribed under the rules have been
completed by the debenture holders. Thus, we are of the
conscientious view that this plea deserves 'Admission'," the Coram,
as cited by The Free Press Journal, said while agreeing to initiate
insolvency and bankruptcy proceedings against the developer.
RAIPUR ENERGEN: ICRA Withdraws D Rating on INR5850cr Loan
---------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Raipur Energen Limited (erstwhile GMR Chhattisgarh Energy Limited)
at the request of the company and based on the No Objection
Certificate received from its banker. However, ICRA does not have
information to suggest that the credit risk has changed since the
time the rating was last reviewed. The Key Rating Drivers,
Liquidity Position, Rating Sensitivities, Key financial indicators
have not been captured as the rated instruments are being
withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 5850.00 [ICRA] D; ISSUER NOT
COOPERATING; Withdrawn
Unallocated
limit 1867.00 [ICRA] D; ISSUER NOT
COOPERATING; Withdrawn
Raipur Energy Limited (erstwhile GMR Chhattisgarh Energy Limited)
is an SPV which operates 1370 MW (2 X 685 MW) domestic coal based
super-critical thermal power plant. The plant is located at Raipur
District, in the state of Chhattisgarh. The plant has declared the
commercial operations in March 2016 (Unit 1 in November 2015 and
Unit 2 in March 2016) as against original COD of March 2014. The
SPV was previously promoted by the GMR Group, that was taken over
by Adani Power Ltd in August 2019 through a competitive bidding
process initiated by the lead bank i.e. Axis Bank after the company
got into financial stress. and was unable to service its debt
obligations. Under the resolution process, Adani Power Ltd has
taken over the project and renamed it 'Raipur Energen Limited'.
RAJESH CONSTRUCTION: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Rajesh Construction Company Private Limited
139, Seksaria Chambers
2nd Floor
Nagindas Master Road
Fort, Mumbai 400023
India
Insolvency Commencement Date: May 13, 2021
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: November 9, 2021
Insolvency professional: Abhijit Gokhale
Interim Resolution
Professional: Abhijit Gokhale
A/1903, 19th Floor
N L Aryavarta
N L Complex
Opp. Anand Nagar
Dahisar East, Mumbai
Maharashtra 400068
E-mail: abhijitgokhale07@gmail.com
- and -
C/o Areion Resolution and Turnaround
Private Limted
A/301, Kanakia Zillion
Junction of L.B.S. Road & CST Road
B.K.C. Annex, Near Equinox
Kurla (West), Mumbai 400070
E-mail: cirp.rajeshconstruction@gmail.com
Classes of creditors: Homebuyers
Insolvency
Professionals
Representative of
Creditors in a class: Rajat Mukherjee
Arun Gaikwad
Nitin Kothari
Last date for
submission of claims: June 2, 2021
REGEN INTERNATIONAL: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Regen
International and Services Private Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA] D/[ICRA]D;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 20.00 [ICRA] D; ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain under
(Long Term) 'Issuer Not Cooperating' category
Non Fund Based 20.00 [ICRA] D/[ICRA]D; ISSUER NOT
(Long Term/ COOPERATING; Rating continues to
Short Term) remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
RISPL, incorporated in January 2008, is a wholly owned subsidiary
of Regen Powertech Private Limited (RPPL). This company primarily
handles the infrastructure requirements in commissioning a wind
turbine generator (WTG), including facilitation of land
acquisition, and the civil works w.r.t. erection and commissioning
of WTGs supplied by RPPL. The company also provides O&M services to
WTGs installed by RPPL.
S.P.R.L FOODS: ICRA Keeps B+ Debt Rating in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of S.P.R.L
Foods Limited in the 'Issuer Not Cooperating' category. The rating
is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based 32.00 [ICRA]B+(Stable) ISSUER NOT
Limits COOPERATING; Continues to
remain Issuer Not Cooperating
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
SPRL, a public limited company, was set up in September 2011 by Mr.
Shiv Poojan and his family members. It is involved in processing
and selling of Basmati/non-Basmati rice, processing of wheat into
various by products such as flour and semolina for different
traders and millers in Andhra Pradesh, UP, Maharastra, Delhi, MP
and Telangana. It has a plant at Sahson (Allahabad), which has a
milling capacity of 54,000 tonne per annum for wheat processing and
46,080 tonne per annum capacity for paddy processing.
S.S.V. FAB: Ind-Ra Moves 'BB+' LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated S.S.V. Fab
Industries Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based limit migrated to non-cooperating
category with IND BB+ (ISSUER NOT COOPERATING)/IND A4+
(ISSUER NOT COOPERATING) rating;
-- INR150 mil. Non-fund-based limit migrated to non-cooperating
category with IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR50 mil. Proposed fund-based limit withdrawn (the company
did not proceed with the instrument as envisaged).
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May
19, 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 2007, SSV Fab Industries manufactures high-density
polyethylene/polypropylene sacks, woven fabrics and liner packaging
bags for fertilizers, chemical sugar, rice, spices, foodgrains,
cement and salt at its 9,000 metric tons per annum site in
Hyderabad, Telangana.
SAI INTERNATIONAL: ICRA Keeps B+ Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Sai
International in the 'Issuer Not Cooperating' category. The rating
is denoted as "[ICRA] B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 13.00 [ICRA] B+(Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Sai International is a partnership firm and was incorporated in
2005 by two brothers Mr. Nishant Jaggaand Mr. Vishal Jagga. The
firm manufactures footwear at its plant at Bahadurgarh in Haryana.
The product profile of the firm includes sports shoes, sandals and
slippers. The sports shoes of the firm are sold under the brand
name 'Tavera' whereas the sandals and slippers are sold under the
brand name 'PU-Lite'. The firm's major raw material is
Polyurethane, which is mostly imported and Rexine which is procured
from suppliers in Haryana, Delhi and Uttar Pradesh.
SHARADAMBA DEVELOPERS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------------
Debtor: M/s Sharadamba Developers Pvt Ltd
No. 38/A, 3rd Cross
Kanakapura Main Road
Shakambari Nagar
Bangalore
Insolvency Commencement Date: April 16, 2021
Court: National Company Law Tribunal, Bangalore Bench
Estimated date of closure of
insolvency resolution process: October 13, 2021
(180 days from commencement)
Insolvency professional: Ms Medha Kulkarni
Interim Resolution
Professional: Ms Medha Kulkarni
D 301, Admiralty Square
13 Cross, 6 Main
Indiranagar
Bangalore 560068
E-mail: medha1273@gmail.com
Last date for
submission of claims: April 30, 2021
SUSHRAVYA UPLIFTMENT: ICRA Reaffirms B Rating on INR10cr Loan
-------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Sushravya
Upliftment Foundation, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Bank facilities 10.00 [ICRA]B(Stable); reaffirmed
Rationale
The rating reaffirmation factors in Sushravya Upliftment
Foundation's geographically concentrated and modest scale of
operations, its stretched capital structure and limited financial
flexibility. The entity's geographical concentration of operations
exposes it to considerable regional risks and the portfolio is also
susceptible to ago-climatic risks as most of the borrowers are
dependent on agriculture. Sushravya's gearing was stretched at 23.7
times as on March 31, 2020 with a low net worth of INR0.5 crore.
Its internal generation is modest, and it reported a profit of
INR0.2 crore in FY2020 (INR0.1 crore in FY2019).
The rating factors in the financial and operational support from
Organisation for Development of People (ODP) and the track record
of ODP's operations in the microfinance business albeit on a modest
scale. ICRA notes that Sushravya is vulnerable to the risks
associated with unsecured lending, a marginal borrower profile and
other socio-political and operational risks inherent in
microfinance operations. Going forward, it is critical for
Sushravya to improve its loan appraisal, information technology
(IT) and audit systems to adequately manage the risks associated
with the microfinance business.
Key rating drivers and their description
Credit strengths
* ODP's regionally established franchise: ODP has a track record of
over two decades in microfinance activities with a member base of
about 2,300 groups (34,500 individual members) as of December 31,
2020. It used to offer microfinance loans directly to its self-help
group (SHG) members. However, it discontinued incremental lending
from June 2016. ODP currently focusses on extending credit plus
facilities for the empowerment of rural women and also provides
financial literacy and training for various programmes for the
livelihood of women in rural areas. Sushravya was started by ODP's
governing body members to provide microfinance loans to its SHG
members.
Credit challenges
* Modest scale and geographically concentrated operations
accentuate agro-climatic risks: Sushravya provides microfinance
loans and its portfolio outstanding as on December 31, 2020 stood
at INR8.1 crore (INR10.5 crore as on March 31, 2020). The portfolio
moderated because of lower disbursements during the period. The
entity's operations are spread across four districts in Karnataka,
and it has two branches. The concentration of its assets under
management (AUM) in four districts exposes Sushravya to regional
risks including agro-climatic risks as it primarily lends to
borrowers who are involved in agri-related activities. Collection
were affected due to the Covid-19 pandemic-related lockdown in
April 2020 and May 2020; however, all dues were recovered as of
February 28, 2021. Sushravya's borrowers are largely farmers and
hence the impact of the pandemic was relatively lower in the last
fiscal.
* Critical to improve appraisal, risk management and IT systems:
The entity's branches are not connected on a real-time basis and
the accounts and reconciliation are done at the head office.
Sushravya does not undertake credit bureau checks during its loan
appraisal process and it does not have a formal internal audit
procedure. The absence of credit bureau checks exposes the entity
to overleveraging of borrowers. It is critical for Sushravya to
strengthen its loan appraisal, IT and audit systems to ensure good
asset quality as the business expands.
* Weak overall financial risk profile: Sushravya's capital
structure is stretched with a low net worth of INR0.5 crore and a
gearing of 23.7 times as of March 31, 2020. The entity's internal
generation of funds is modest, and it reported a profit of INR0.2
crore in FY2020. Currently, the entity's borrowings include loans
from Federation of Maholidaya Self-Help Groups (FMSHG) and Grama
Vikasa Swa-Sahaya Sanghagala Maha Okkuta (GVSSMO), which do not
have a fixed repayment schedule. As it is a Section 8 company,
Sushravya has limited financial flexibility. It is, therefore,
critical to diversify its funding sources to scale up its
operations while maintaining adequate liquidity.
Liquidity position: Adequate
Sushravya primarily meets its debt obligations through loan
repayments from its borrowers. Further, it had free cash and liquid
investments of INR2.0 crore as of February 28, 2021. ICRA takes
note of the scheduled inflows of INR4.4 crore during March 2021 to
August 2021 against scheduled outflows of INR1.2 crore till August
2021. However, it would be critical for Sushravya to maintain its
collection efficiency while ensuring the regular flow of funds to
sustain its operations and meet its internal growth projections.
Rating sensitivities
Positive factors – ICRA could upgrade the rating if Sushravya is
able to improve its financial risk profile on a sustained basis as
it scales up going forward while maintaining good asset quality.
Negative factors – Pressure on Sushravya's rating could arise if
there is a deterioration in the asset quality or otherwise,
impacting earnings, or a further weakening in the capital or
liquidity profile.
Sushravya Upliftment Foundation is registered under Section 8 of
the Companies Act, 2013 as a not-for-profit entity. It commenced
operations in June 2016. Headquartered in Mysore (Karnataka),
Sushravya is entirely held by the governing members of Organisation
for Development of People (ODP). ODP is a society, registered in
1990, to undertake welfare activities in four districts in
Karnataka – Chamrajanagar, Kodagu, Mandya and Mysore. ODP formed
the Federation of Maholidaya SelfHelp Groups (FMSHG) in 1991 to
provide microfinance to women SHGs and it formed Grama Vikasa
Swa-Sahaya Sanghagala Maha Okkuta (GVSSMO) in 2000 for men SHGs. In
June 2016, ODP stopped microfinance disbursements and Sushravya
started lending operations.
V-ACCURATE MANAGEMENT: Insolvency Resolution Process Case Summary
-----------------------------------------------------------------
Debtor: V-Accurate Management Services Private Limited
Vidyadhar Heights, 6th Floor
Garud Ganpati Square
Narayan Peth, Laxmi Road
Pune MH 411030
IN
Insolvency Commencement Date: March 9, 2021
Court: National Company Law Tribunal, Pune Bench
Estimated date of closure of
insolvency resolution process: September 5, 2021
Insolvency professional: Ritesh Raghunath Mahajan
Interim Resolution
Professional: Ritesh Raghunath Mahajan
B-203 Devgiri, Ganeshmala
Sinhagad Road
Pune 411030
Maharashtra
E-mail: riteshmahajancs@gmail.com
vaccuratecirp@gmail.com
Last date for
submission of claims: March 23, 2021
VIVIANA VITRIFIED: ICRA Removes B+ Debt Rating from Not Cooperating
-------------------------------------------------------------------
ICRA has removed its earlier ratings of [ICRA]B+ (Stable)/[ICRA]A4
from the 'ISSUER NOT COOPERATING' category as the Viviana Vitrified
Private Limited has now submitted its 'No Default Statement'
("NDS") which validates that the company is regular in meeting its
debt servicing obligations. The company's ratings were moved to the
'ISSUER NOT COOPERATING' category in April 2021.
=================
I N D O N E S I A
=================
PAKUWON JATI: Fitch Affirms 'BB' LT IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed Indonesia-based property developer PT
Pakuwon Jati Tbk's (PWON) Long-Term Issuer Default Rating (IDR) at
'BB'. The Outlook is Stable.
The affirmation reflects PWON's comfortable rating headroom and
strong liquidity, supported by its mature and well-located
investment properties, which have helped it absorb the impact from
the coronavirus pandemic. PWON's credit metrics remain consistent
with its ratings, despite weaker cash flow caused by the pandemic.
Fitch expects its credit metrics to improve, which underpins the
Stable Outlook.
Fitch estimates that net debt could rise to around IDR3 trillion
over the next two to three years, from an average of IDR1 trillion
in the past three years, as PWON may opportunistically acquire new
assets using proceeds from its new US-dollar notes. However, Fitch
believes it has sufficient financial capacity and a record of
adhering to prudent expansion strategy, such that it will remain
within its rating perimeters while executing its expansion plans.
KEY RATING DRIVERS
Easing Rebates, High Occupancy: Fitch expects rent rebates to ease
and gradually improve from 2H21 in line with Fitch's expectation of
an economic recovery. Fitch forecasts non-development EBITDA to
improve to 80% of 2019 levels in 2021 and to fully recover by
end-2022, from 60% in 2020. Average monthly rent fell by 30%-50% in
2020, led by temporary rebates to tenants to account for lower mall
traffic. The rebates, however, helped PWON maintain an average
occupancy of above 90%. This supported revenue from service charges
to pay for operating costs.
Risks to Recovery: Fitch expects the government's coronavirus
vaccination programme and stimulus to bolster the economy,
including income-tax relief and cash transfers, to boost
consumption and consumer sentiment. However, any delay to the
vaccination rollout or a spike in infection rates may see a return
to stricter social-distancing measures. This is a key risk to
Fitch's recovery expectations.
Robust Portfolio, Concentrated Assets: PWON's rating is driven by
its portfolio of mature and well-located investment properties in
Indonesia's most affluent cities - Jakarta and Surabaya - which
provide strong average interest coverage of above 10x over the
medium term. However, it is constrained by high asset
concentration, with 80%-90% of non-development revenue stemming
from only four mixed-use projects in the two cities. Fitch does not
think PWON's portfolio granularity will improve due to the scale of
its top-three assets and conservative expansion strategy.
Sector Gains from Government Initiatives: Presales were up by
nearly 17% in 1Q21 versus 1Q20, with half of the presales booked in
March alone, following the implementation of government initiatives
to boost the property sector. This was a reversal of the more than
30% drop in 2020. Fitch expects the strong sales momentum to
continue, supported by the low interest-rate environment, slowing
property price increases and limited new-project launches.
Prudent Project Execution: PWON's financial profile is supported by
its prudent development of mixed-use projects. It has only one
greenfield project in Bekasi, a satellite city east of Jakarta,
with a staged construction of residential and commercial
components. PWON has also secured enough pre-sales to construct the
first tower for the project. Fitch thinks execution risk for PWON's
other projects is manageable, as they are part of existing projects
and most have secured enough pre-sales to fund construction.
DERIVATION SUMMARY
PWON is rated one notch higher than Lippo Malls Indonesia Retail
Trust (LMIRT, BB-/Negative) due to its stronger investment-property
portfolio, which has larger and better-quality retail malls with
higher occupancy and rent per square foot. Its projects also
comprise mixed developments, with office and hospitality
properties. This, together with PWON's stronger financial profile,
which stems from its conservative approach to property development
and expansion, more than offsets its development-property risks
compared with LMIRT.
PWON is rated one notch higher than PT Bumi Serpong Damai Tbk (BSD,
BB-/Stable) due to its larger non-development EBITDA scale of
around IDR1.1 trillion in 2020, which Fitch expects to rise to
IDR1.6 trillion in 2021, supported by its well-located and mature
mixed-use properties. This compares with BSD's below IDR1.0
trillion non-development EBITDA in 2020-2021 and portfolio of
standalone offices, less-prime hotels and smaller malls. This,
together with PWON's stronger balance sheet, supports a one-notch
higher rating and offsets its more risky property-development
business, which is smaller in scale and focuses on narrower
products and price points than that of BSD.
BR Malls Participacoes S.A. (Long-Term Local-Currency IDR,
BBB-/Negative) and InRetail Real Estate Corp. (BB+/Stable) are the
leading shopping malls operators in Brazil and Peru, respectively.
The companies' underlying business profiles appear to be stronger
than that of PWON, driven by a more granular asset portfolio, which
more than offsets their weaker financial profiles. PWON derives
80%-90% of its non-development revenue from only four key assets,
while the peers generate roughly 60%-70% from 10-15 different
assets.
KEY ASSUMPTIONS
-- Non-development EBITDA of IDR1.6 trillion in 2021 and IDR2.0
trillion in 2022 (2020: IDR1.1 trillion);
-- Pre-sales of IDR1.4 trillion in 2021 and IDR1.5 trillion in
2022 (2020: IDR1.0 trillion). Fitch has revised up Fitch's pre
sales expectation by around 30% due to strong actual pre-sales
reported in 1Q21;
-- Capex and discretionary land acquisitions totalling IDR1.9
trillion and IDR2.4 trillion in 2021 and 2022, respectively
(2020: IDR700 billion, excluding the acquisition of two
shopping malls in Yogyakarta and Solo and a Marriott hotel in
Yogyakarta).
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action is not probable in the medium term.
PWON would need to have a more granular and mature asset
portfolio before positive rating action would be considered.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Weakening investment-property portfolio performance, which
would be indicated by falling occupancy rates and negative
rental reversions for a sustained period;
-- Evidence of increased risk appetite and greenfield projects,
leading to negative net operating cash flow over an extended
period;
-- Non-development EBITDA/net interest expense falling to below
3.0x for a sustained period.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Low Leverage Supports Strong Liquidity: PWON's liquidity was
supported by IDR2.9 trillion in cash at end-2020 and proceeds from
new US-dollar notes totalling USD400 million (IDR5.6 trillion),
against IDR398 billion of short-term debt due in 2021 and estimated
negative free cash flow of IDR640 billion. PWON will fully redeem
its USD250 million notes due in 2024 using the proceeds from the
new notes. Post the refinancing, PWON will not have any significant
maturity until 2028, when its USD400 million notes are due. Fitch
expects PWON to maintain a prudent balance sheet in line with its
record, with leverage, defined as net debt/adjusted inventory,
remaining below 20%, underscored by a conservative approach to
property development.
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.
===============
M A L A Y S I A
===============
SCOMI GROUP: Proposes to Form JV with Zuha Systems
--------------------------------------------------
Malay Mail reports that Scomi Group Bhd has proposed to form a
20:80 joint venture (JV) company with Zuha Systems Sdn Bhd to
jointly explore opportunities in the rail industry.
In a filing with Bursa Malaysia on May 19, Scomi said both parties
had signed a JV agreement on May 19.
In a separate statement, the Practice Note 17 (PN17)-status oil and
gas (O&G) support service provider said the agreement is in line
with the company's strategy of seeking strategic alliances that
offers synergistic growth benefits that would contribute towards
generating recurring revenue and sustainable profits, Malay Mail
relays.
"This strategy is part of our efforts towards restructuring and
rebuilding the company," it said.
According to the report, Scomi said Zuha is primarily involved in
the public transportation and energy sectors, and its business
focus areas include urban transport, rail, O&G and renewable
energy.
"Zuha also works in collaboration with technology partners, subject
matter experts and original equipment manufacturers (OEMs) for the
projects that it is involved in," it said.
With that, Scomi believes that the agreement with Zuha would offer
vast potential for the company, as both organisations bring
complementary experience and expertise to the JV.
"The JV will target opportunities in new conventional rail and
urban rail projects which are anticipated in the country.
"By utilising the maintenance expertise within the company, the JV
is optimistic of its potential to secure projects in maintenance,
repair and overhaul for the rail industry," it said.
About Scomi Group
Headquartered in Kuala Lumpur, Malaysia, Scomi Group Bhd --
http://www.scomigroup.com.my/publish/home.shtml-- provides
drilling fluids and mud engineering services and the supply of
industrial and production chemicals to the upstream and downstream
oil and gas industry.
In December 2019, Scomi Group Bhd slipped into Practice Note 17 (PN
17) status after it triggered Paragraphs 2.1(a) and 2.1(e) of PN17
of the Listing Requirements, whereby its shareholder equity fell
below the 25% threshold with modified opinion from its auditors.
===============
P A K I S T A N
===============
PAKISTAN WATER: S&P Rates New Sr. Unsec. Notes 'B-'
---------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issue rating to
Pakistan Water and Power Development Authority's (WAPDA;
B-/Stable/--) proposed senior unsecured notes. The issue rating is
subject to our review of the final issuance documentation.
The Pakistan-based hydroelectric power generation company proposes
to issue notes of up to US$500 million (about Pakistani rupee [PKR]
82 billion). WAPDA intends to use the proceeds from the issuance to
partly refinance debt at the company and to fund capital spending
for its large-scale hydroelectric power plants under construction.
The size of the proposed issuance is within our base case for the
current rating level.
S&P said, "We equalize the rating on WAPDA's proposed senior
unsecured notes with the issuer credit rating on the company. This
is because we do not view WAPDA's capital structure as having
material structural or contractual subordination risks."
As of June 30, 2020, WAPDA's capital structure consisted of
PKR358.4 billion of debt. The company has about PKR83.9 billion of
secured debt, reflecting a priority debt ratio of 23%. With the
proposed bond issuance, S&P expects the priority debt ratio to
decrease and remain below the 50% priority debt ratio threshold for
notching down the issue rating.
S&P said, "The rating on WAPDA reflects our view that the company
would benefit from an extremely high likelihood of timely and
sufficient extraordinary support from the Pakistani government. We
expect WAPDA to maintain its very important role for the government
as a major generator of hydroelectric power, which accounts for
about 25% of the country's installed capacity. In our view, WAPDA
has an integral link with the government, reflecting its 100%
government ownership through the Ministry of Water Resources.
"We expect about 80% of WAPDA's debt will remain linked to the
government post the proposed bond issuance--this relates to
government loans, loans that are guaranteed by the state, and loans
that are directly borrowed by the government and then on-lent to
WAPDA." The government closely oversees WAPDA's operations and
defines the company's strategies, including its investments and
borrowings, and WAPDA understands that a default would put the
sovereign's reputation at risk. The government also appoints
WAPDA's chairman and key management team.
Grants provided by the government to compensate WAPDA for a lower
return on equity of 10%, which was reduced from 17% in August 2020,
also indicate continuing government support. In addition, S&P
expects the company to receive capital expenditure (capex) grants
for its projects under construction without delay.
S&P said, "In our view, WAPDA will remain highly leveraged in the
next three years due to its heavy capital spending plan. The
company has an ambitious capex plan, which includes the
construction of three new mega hydroelectric power plants worth
US$13.5 billion in total. This will add 4.8 gigawatts (GW) of
capacity by fiscal 2026 (year ending June 30), and 4.5GW more by
fiscal 2029. Due to the size of these projects, capex (net of
government grants) will be elevated at PKR200 billion-PKR320
billion over fiscals 2022 and 2023. We forecast WAPDA's leverage
will stay high, with the debt-to-EBITDA ratio in the range of
7.0x-8.0x, and ratio of funds from operations to debt at 6.8%-8.0%
over fiscals 2022 and 2023."
PAKISTAN: Nears Debt-for-Nature Swap Agreement With Creditors
-------------------------------------------------------------
Greg Ritchie and Faseeh Mangi at Bloomberg News report that
Pakistan is closing in on a deal with bilateral creditors that
would tie debt relief to the achievement of biodiversity goals,
government officials said.
Bloomberg relates that the South Asian nation is working with
lender countries on a debt-for-nature swap program, which would see
debt relief in return for binding commitments to achieve
conservation targets. An official letter of intent could be
announced as soon as World Environment Day on June 5, which
Pakistan is hosting this year.
"Four to five creditors will commit to an intent to engage for a
debt-for-nature swap," Bloomberg quotes Malik Amin Aslam, climate
change adviser to Prime Minister Imran Khan, as saying in an
interview.
Bloomberg says the country is working with the U.K., Germany, Italy
and Canada, though that's yet to be finalized, according to Noor
Ahmed, secretary at the government's economic affairs division.
Apart from Germany, those aren't among Pakistan's largest
outstanding bilateral creditors, with that list topped by China,
Japan and the United Arab Emirates, according to an International
Monetary Fund report released last month.
Debt swaps have been around for decades, with the United Nations
putting the value of debt-for-climate and nature agreements at over
$2.6 billion from 1985 to 2015 -- though most of that was during
the 1990s, Bloomberg notes. There's been a push to repopularize the
structure as part of a broader campaign to realign finance with the
protection of the natural world at the same time as reducing
nations' debt strain after the coronavirus pandemic.
Earlier this year, Pakistan said it was developing a so-called
nature-performance bond, a new instrument that would tie the cost
of repayments to quantified biodiversity targets, recalls
Bloomberg. That's part of a plethora of recently-created debt types
aimed at tapping surging investor interest in environmental, social
and governance assets.
Bloomberg says the concept of nature or conservation bonds was
given a push this year by a U.K. government review led by Partha
Dasgupta that called for an urgent overhaul of economic metrics so
that they take account of the price of damaging natural
ecosystems.
Pakistan has a fragile economy that goes through regular boom and
bust cycles. It received debt relief during the pandemic, and
restored a $6 billion bailout program that it secured from the IMF
in 2019 to avoid bankruptcy.
=================
S I N G A P O R E
=================
CHINA SKY: Does Not Have Funds to Make Exit Offer for Delisting
---------------------------------------------------------------
The Business Times reports that China Sky Chemical Fibre is unable
to provide an exit offer as it does not have sufficient financial
resources, and none of its controlling shareholders have expressed
any intention to do so.
BT relates that the company, which is now under judicial
management, said in a regulatory filing on May 24 that its
creditors are not interested in making an exit offer.
The exit offer is to be made pursuant to the delisting notification
from the Singapore Exchange in April after China Sky missed a final
deadline to submit its proposal for trading resumption, BT says.
BT relays the judicial manager will not be applying to extend the
judicial management order expiring on Sept. 13 but will instead
apply for a discharge.
But China Sky will be under provisional liquidation in its place of
incorporation, Cayman Islands, where the provisional liquidators
there are to make an application to place the company into official
liquidation or dissolve it.
Shares of China Sky have been suspended since Aug. 12, 2016, BT
notes.
China Sky Chemical Fibre Co., Ltd., engages in the manufacture and
sale of chemical fibers.
EAGLE HOSPITALITY: Auction Yields $480 Mil., None for Queen Mary
----------------------------------------------------------------
Becky Yerak of The Wall Street Journal reports that Eagle
Hospitality Real Estate Investment Trust has gotten bids of more
than $480 million for 14 of its properties, but the bankrupt hotel
chain doesn't yet have a buyer for its lease for 1930s ocean liner
the Queen Mary.
Heading into a Thursday, May 20, 2021, auction, Monarch Alternative
Capital LP was the lead bidder for Eagle Hospitality's properties,
with a $470 million offer for all 15 properties that set the floor
price. The distressed-debt investor ended up having the best offer
for 10 of 14 Eagle Hospitality properties.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust ("Eagle H-REIT") and Eagle Hospitality Business Trust. Based
in Singapore, Eagle H-REIT is established with the principal
investment strategy of investing on a long-term basis, in a
diversified portfolio of income-producing real estate which is used
primarily for hospitality and/or hospitality-related purposes, as
well as real estate-related assets in connection with the
foregoing, with an initial focus on the United States.
EHT US1, Inc., and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1, Inc., estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP as bankruptcy counsel; FTI
Consulting, Inc., as restructuring advisor; and Moelis & Company
LLC, as investment banker. Cole Schotz P.C. is the Delaware
counsel. Rajah & Tann Singapore LLP is Singapore Law counsel, and
Walkers is Cayman Law counsel. Donlin, Recano & Company Inc. is the
claims agent.
LIBRA GROUP: Lacks Funds for AGM, Financial Statements
------------------------------------------------------
The Business Times reports that Libra Group lacks the financial
resources to prepare its financial statements, annual and
sustainability reports as well as hold an annual general meeting,
resulting in a breach of Catalist rules that require it to do so.
According to the report, the company issued a response on May 24 to
the Singapore Exchange when it was asked on May 18 about the
breaches.
But it expects to be in a position to rectify the breaches when
there is an injection of funds by potential investors when its
proposed debt restructuring exercise is completed, the company
said.
If it is unable to obtain funds before the expiry of the moratoria,
Libra Group plans to apply for either judicial management or wind
up, the report relays.
Meanwhile, it has minimal business operations as a result of the
ongoing debt restructuring proceedings and the impact of the
pandemic on the construction industry in which it operates, BT
notes.
BT adds that the counter has been suspended after a request was
made two years ago when Libra Group said it had not been able to
demonstrate that it was able to continue as a going concern.
About Libra Group
Libra Group Limited provides integrated M&E services as a
sub-contractor. The Company's services include the contracting and
installation of ACMV systems, fire alarms and fire protection
systems, electrical systems as well as sanitary and plumbing
services. Libra also manufactures and sells ACMV related products.
In October 2019, the Singapore High Court has granted Libra Group a
six-month reprieve against its creditors, according to The Business
Times. Libra's creditors include UOB, which issued a letter of
demand on Oct. 8, 2019, for US$18.8 million, and Maybank Singapore,
which on Sept. 3, 2019, issued a letter of demand to possess
Libra's property at 34 Sungei Kadut Loop.
=============
V I E T N A M
=============
VIETCOMBANK: S&P Alters Outlook to Positive, Affirms 'B+/B' ICR
---------------------------------------------------------------
S&P Global Ratings revised its rating outlook on Vietcombank to
positive from stable and affirmed the 'BB-' long-term and 'B'
short-term issuer credit ratings on the bank. We also affirmed our
'B+' long-term and 'B' short-term issuer credit ratings on
Eximbank, with the outlook on the long-term rating remaining
stable.
On May 21, 2021, S&P Global Ratings revised the rating outlook on
Vietnam to positive from stable and affirmed the 'BB/B' sovereign
credit ratings.
S&P said, "Our rating action on Vietcombank follows the outlook
revision on the sovereign credit ratings on Vietnam. In our
opinion, Vietcombank will likely benefit from enhanced external
support if we raise our sovereign ratings on Vietnam in the next
12-24 months.
"On May 21, 2021, we revised our outlook on Vietnam to positive
from stable to reflect the country's improving track record of
effective administrative processes and our expectation that the
economy will continue to expand rapidly, exemplifying continued
improvements in its policymaking settings and underpinning credit
metrics. We also affirmed our 'BB' long-term and 'B' short-term
sovereign credit ratings on Vietnam.
"As one of the largest state-owned banks in Vietnam, we see a high
likelihood that Vietcombank will receive timely and sufficient
extraordinary support from the government of Vietnam in the event
of financial distress. Vietcombank has high systemic importance,
given its size in Vietnam and our assessment of the government as
highly supportive. We believe Vietnam's strengthening credit
profile would enhance the government's capacity to support banks.
"We affirmed the ratings on Eximbank to reflect the bank's modest
deterioration in asset quality and steady capitalization and
funding profile, despite the COVID-19-related slowdown. Eximbank's
nonperforming loan ratio increased to 2.5% in 2020, from 1.7% in
2019. The bank's restructured loans remain below industry average,
while it also settled its legacy problem assets in the first
quarter of 2021. That said, we now consider Eximbank as having low
systemic importance. The bank has lost market share in the past few
years as it prioritized its restructuring plan to resolve legacy
stressed assets."
Vietnam's economy, like most others in the world, was hit by the
COVID-19 pandemic in 2020. The country could see a strong economic
rebound in 2021, given robust global demand for electronics and its
mild COVID outbreak. S&P forecasts annual credit growth of 12%-14%
in the next 12-18 months. Even during the outbreak last year,
Vietnam achieved double-digit credit growth, higher than its peers
in the region.
S&P said, "We expect banks' return on assets to remain broadly
stable over the next 12-18 months. The pressure on net interest
margins for state-owned banks is likely to ease as the impact from
the credit support package wanes and credit demand increases.
Private sector banks should continue to enjoy low costs of funding
and stable net interest margins. Noninterest income is likely to
expand briskly on the back of healthy export-led trade finance and
foreign exchange income, cross-selling of retail products (e.g.,
insurance), e-transaction channels, loan processing, and card fees.
We expect a range-bound increase in credit costs for Vietnam's
banks due to forbearance."
The reported asset quality of banks in Vietnam deteriorated
modestly in 2020. This was driven by the combined effects of a
swift economic rebound, liquidity support to borrowers at lower
interest rates, and a loan restructuring scheme introduced by the
regulator. Such restructured loans accounted for about 4% of total
outstanding loans as of end-2020.
Rising indebtedness in the economy, along with thin capital buffers
of some banks, continue to pose risks. The banking system profile
could improve if leverage in the private sector stabilizes, banks
improve their capital management, and restructured loans decrease.
Bank for Foreign Trade of Vietnam
S&P said, "The positive outlook reflects our view that Vietcombank
will likely benefit from the government's enhanced capability to
support banks in the next 12-24 months. We believe Vietcombank will
remain resilient amid economic headwinds from the COVID-19
pandemic. Although the bank's asset quality and profitability could
deteriorate, we believe the impact on its financial profile will be
manageable."
Upside scenario
S&P will upgrade Vietcombank if it raises its sovereign ratings on
Vietnam over the next 12-24 months.
Downside scenario
S&P will revise the rating outlook on Vietcombank to stable if it
takes the same action on Vietnam.
Vietnam Export Import Commercial Joint Stock Bank
The stable outlook on Eximbank reflects our expectation that the
bank will continue its business restructuring efforts and maintain
its capitalization over the next 12-18 months.
Downside scenario
S&P said, "We may lower the rating if Eximbank's franchise weakens,
possibly due to any strategic misstep or sustained loss in business
market share (below 1%) owing to weak internal capital accruals
through earnings, deposit mobilization, and operational
performance. We may also downgrade Eximbank if its risk-adjusted
capital ratio declines below 3% on a sustained basis, or its asset
quality deteriorates substantially, possibly due to an uneven
economic recovery in Vietnam."
Upside scenario
An upgrade is unlikely, in S&P's view, given that the bank
primarily operates in Vietnam, which can have a volatile operating
environment and high economic risk.
Ratings List
RATINGS AFFIRMED; OUTLOOK ACTION
TO FROM
Bank for Foreign Trade of Vietnam
Issuer Credit Rating BB-/Positive/B BB-/Stable/B
RATINGS AFFIRMED
Vietnam Export Import Commercial Joint Stock Bank
Issuer Credit Rating B+/Stable/B
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