/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/210604.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Friday, June 4, 2021, Vol. 24, No. 106 Headlines A U S T R A L I A DNR AIRCONDITIONING: Second Creditors' Meeting Set for June 10 FOCUS FUNDING: First Creditors' Meeting Set for June 15 GROCON PTY: Creditors Approve Revised Rescue Plan KPM INDUSTRIES: Second Creditors' Meeting Set for June 10 MISS CHERI: Second Creditors' Meeting Set for June 11 NORTH AUSTRALIAN CATTLE: Goes Into Voluntary Administration C H I N A BEIJING EASYHOME: S&P Affirms 'BB+' LT ICR, Outlook Negative CHINA HONGQIAO: Moody's Gives B1 Sr. Unsec. Rating to New USD Notes SHINSUN HOLDINGS: Fitch Assigns 'B' LT IDR, Outlook Positive ZHENRO PROPERTIES: Moody's Rates New Sr. Unsecured USD Notes 'B2' I N D I A ACHAL INDUSTRIES: ICRA Withdraws B+ Rating on INR16cr Loan ADANI GREEN: Fitch Affirms BB+ Rating on USD500MM Sec. Notes AKSHAR GINNING: ICRA Keeps B+ Debt Rating in Not Cooperating ALUMINIUM INDIA: ICRA Keeps D Debt Ratings in Not Cooperating BAJRANG GINNING: ICRA Keeps D Debt Rating in Not Cooperating BEVCON WAYORS: ICRA Moves D Debt Ratings to Not Cooperating BVV PAPER INDUSTRIES: Insolvency Resolution Process Case Summary COASTAL ENERGEN: ICRA Keeps D Debt Ratings in Not Cooperating CRIYAGEN AGRI: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable GOLD STAR: ICRA Keeps D Debt Ratings in Not Cooperating Category HAREKRUSHNA COTTEX: ICRA Keeps B+ Debt Ratings in Not Cooperating HIGH TECH GARMENTS: ICRA Keeps D Debt Ratings in Not Cooperating HIGH-TECH KNITWEAR: ICRA Keeps D Debt Ratings in Not Cooperating IDBI BANK: Fitch Affirms Then Withdraws BB+ LT IDR INDIA: Creditors Trigger Most Bankruptcy Cases Below INR1 crore J M J CHARITABLE: Ind-Ra Assigns 'BB' Rating to Bank Loan JAYASWAL NECO: ICRA Reaffirms D Rating on INR3,632.15cr Loan KSM EDUCATIONAL: Ind-Ra Keeps 'D' Loan Rating in Non-Cooperating LAKSHMI POULTRY: ICRA Keeps C+ Debt Ratings in Not Cooperating LIMTEX AGRI: ICRA Keeps D Debt Ratings in Not Cooperating MAGMA AUTOLINKS: ICRA Keeps D Debt Ratings in Not Cooperating OCEAN CONSTRUCTIONS: ICRA Cuts Rating on INR12cr Loan to D ORISSA CONCRETE: ICRA Keeps D Debt Ratings in Not Cooperating PYTEX JEWELLERS: ICRA Keeps B- Debt Rating in Not Cooperating R.L. AGRO: ICRA Lowers Rating on INR65cr Loan to D RAMA EDUCATION: ICRA Keeps D Debt Ratings in Not Cooperating RENEW POWER 4: Fitch Assigns Final BB- Rating to USD585MM Notes ROOP TECHNOLOGY: ICRA Keeps D Debt Ratings in Not Cooperating SAMDARIYA BUILDERS: ICRA Keeps B+ Debt Ratings in Not Cooperating SANTOSH COTTON: ICRA Keeps D Debt Ratings in Not Cooperating SELENO STEELS: ICRA Keeps B Debt Rating in Not Cooperating SHANTI EDUCATIONAL: ICRA Keeps D Debt Rating in Not Cooperating SHIRPUR POWER: Ind-Ra Withdraws 'D' Term Loan Rating SHIVAM PIPE: ICRA Keeps D Debt Ratings in Not Cooperating SHRINIVAS (GUJARAT): ICRA Cuts Rating on INR40cr Loans to B+ SIKSHA 'O' ANUSANDHAN: Ind-Ra Lowers Term Loan Rating to 'BB' SKYLA HOSPITALITY: ICRA Keeps B+ Debt Ratings in Not Cooperating SRINIVASAN CHARITABLE: Ind-Ra Keeps 'D' Rating in Non-Cooperating SRINIVASAN HEALTH: Ind-Ra Keeps 'D' Loan Rating in Non-Cooperating SUBHANG CAPSUS: ICRA Keeps B+ Debt Ratings in Not Cooperating TECHNO INDIA: ICRA Keeps D Debt Ratings in Not Cooperating TULSIANI CONSTRUCTIONS: ICRA Keeps D Rating in Not Cooperating YCD INDUSTRIES: Ind-Ra Affirms 'BB+' Issuer Rating, Outlook Stable I N D O N E S I A ALAM SUTERA: Fitch Raises IDR to 'B-', Outlook Stable J A P A N JAPAN: Pandemic Puts Food Truck Industry in Dire Straits M A L A Y S I A SERBA DINAMIK: Fitch Lowers LT IDR to 'B-', On Watch Negative N E W Z E A L A N D SACRED HILL: Two More Wine Businesses Placed Into Receivership S I N G A P O R E EAGLE HOSPITALITY: Court Rules Foreign Units Can Stay in Ch. 11 S O U T H K O R E A SSANGYONG MOTOR: Eyes New Investor to Complete Sale Process - - - - - ================= A U S T R A L I A ================= DNR AIRCONDITIONING: Second Creditors' Meeting Set for June 10 -------------------------------------------------------------- A second meeting of creditors in the proceedings of DNR Airconditioning & Electrical Pty Ltd has been set for June 10, 2021, at 10:00 a.m. via teleconference only. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 9, 2021, at 5:00 p.m. Sule Arnautovic of Hall Chadwick was appointed as administrator of DNR Airconditioning on May 10, 2021. FOCUS FUNDING: First Creditors' Meeting Set for June 15 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Focus Funding Pty Ltd will be held on June 15, 2021, at 10:30 a.m. via virtual meeting technology. Giovanni Maurizio Carrello of BRI Ferrier Western Australia was appointed as administrator of Focus Funding on June 2, 2021. GROCON PTY: Creditors Approve Revised Rescue Plan ------------------------------------------------- The Australian reports that creditors have determined collapsed construction group Grocon will not be placed in liquidation after voting in favor of a revised rescue deal. According to The Australian, administrators KordaMentha were appointed in November, and in March, their epic 1,500-plus page report revealed the largely dormant 88 subsidiaries in their hands had greater liabilities than assets and had likely been insolvent since February 2019. Including about AUD14 million owed to the Australian Taxation Office in unpaid GST and excluding a complex web of intercompany loans, the group owes creditors about AUD100 million in total, The Australian discloses. The Australian relates that KordaMentha recommended placing the entities into a deed of company arrangement rather than winding them up, saying the rescue plan was in creditors' best interests given administrators were "not certain of the recoverability of the companies' assets in a liquidation scenario". At a meeting on May 27, creditors backed Grocon chief executive Daniel Grollo's sweetened offer to them, which involved him adding, from his own pocket, AUD3.32 million on top of a previously pledged AUD10 million into the pool of funds to be distributed, according to The Australian. The Australian says the ATO gets AUD6 million of that -- almost double what was originally proposed -- and some creditors, including APN Property, are reportedly furious, describing the revision as a backroom deal. Mr. Grollo's revised proposal lifted the ATO's return from 20.5 cents in the dollar to 43.9 cents in the dollar, the report notes. The result for other creditors remains largely the same -- 100 cents in the dollar for employees and small creditors and 2.9 cents in the dollar for large creditors, up from 2.8 cents previously, The Australian adds. APN had pushed for a winding up, suggesting creditors could pursue Mr. Grollo's assets, including luxury apartments, and had even previously threatened legal action to set aside the settlement proposal, if approved, The Australian notes. About Grocon Australia-based Grocon engages in development, construction and funds management. Craig Peter Shepard and Mark Korda of KordaMentha were appointed as administrators of Grocon Pty on Nov. 27, 2020. Craig Peter Shepard and Andrew Knight of KordaMentha were also appointed as administrators of Belgrave Street et al. on Nov. 27, 2020. - Belgrave Street Developments Pty Ltd - Grocon (Fairfield) Developer Pty Ltd - Grocon (Belgrave St) Developer Pty Ltd - Grocon (Fairfield) Pty Ltd - Grocon Builders (Vic) Pty Ltd - Grocon (Parklands) Holdings Pty Ltd - Grocon Services Pty Ltd - QV No 1 Pty Ltd - Grocon Operations Pty Ltd - Grocon Developments NSW Pty Ltd - 61 Lt Collins Street Pty Ltd - Grocon (Victoria Street) Pty Ltd - Grocon Developments (Box Hill) Pty Ltd - Grocon (480 Queen Street) Pty Ltd - Grocon (Scots Church) Pty Ltd - QV Pty Ltd - Grocon (Bouverie Street) Pty Ltd - Grocon (Pitt Street) Developments Pty Ltd - Grocon Developments (55 Elizabeth St) Pty Ltd - Grocon Constructors (SA) Pty Ltd - Grocon (Baroona Rd) Holdings Pty Ltd - Grocon (Bouverie St) Holdings Pty Ltd - Grocon (CB) Development Manager Pty Ltd - Grocon (Spring Street) Pty Ltd - Grocon QV Investments Pty Ltd - QV Property Management Pty Ltd - Grocon (Pixel) Pty Ltd - Grocon (Swanston Square) Holdings Pty Ltd - Grocon (Carlton Brewery) Developments Pty Ltd - Grocon (SQ Stage 2) Developments Pty Ltd - Grocon (FCAD) Pty Ltd - Grocon (Castlereagh St, NSW) Pty Ltd - Grocon Development Holdings Pty Ltd - QV No 2 Pty Ltd ATF Grocon Land Owning Trust 2 - QV No 3 Pty Ltd ATF Grocon Land Owning Trust 3 - QV No 4 Pty Ltd ATF Grocon Land Owning Trust 4 - QV No 5 Pty Ltd ATF Grocon Land Owning Trust 5 - Grocon (Victoria Street) Developments Pty Ltd ATF KPM INDUSTRIES: Second Creditors' Meeting Set for June 10 --------------------------------------------------------- A second meeting of creditors in the proceedings of KPM Industries Pty Ltd has been set for June 10, 2021, at 10:00 a.m. via Zoom. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 9, 2021, at 4:00 p.m. Malcolm Kimbal Howell of Jirsch Sutherland was appointed as administrator of KPM Industries on April 29, 2021. MISS CHERI: Second Creditors' Meeting Set for June 11 ----------------------------------------------------- A second meeting of creditors in the proceedings of Miss Cheri Body Contouring Pty Ltd, trading as Miss Cheri Body Contouring, has been set for June 11, 2021, at 11:00 a.m. at the offices of SM Solvency Accountants, Level 10/144 Edward Street, in Brisbane, Queensland. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 10, 2021, at 4:30 p.m. Brendan Nixon of SM Solvency Accountants was appointed as administrator of Miss Cheri on May 10, 2021. NORTH AUSTRALIAN CATTLE: Goes Into Voluntary Administration ----------------------------------------------------------- ABC Rural reports that one of Australia's biggest and oldest live export companies has gone into voluntary administration in a sign of how much pressure the industry is under. North Australian Cattle Company (NACC) was founded in 1980 and was run by Elders for nearly three decades until its sale to a Chinese-Australian buyer in 2017. On May 31, the company went into voluntary administration with debts of approximately AUD3.6 million, ABC Rural discloses. ABC Rural relates that a statement from administrator Jirsch Sutherland said the company was impacted by the pandemic, delays in shipments, the quarantine required for cattle and a competitive global livestock market. "It's too early to say what the financial position is as yet, but the estimated amount owing to trade creditors is approximately AUD3.6 million," it said. NACC general manager Ashley James told ABC Rural he was unable to comment on the state of the business until administrators had met with the board, notes the report. He said his priority was managing the cattle in the supply chain awaiting processing in Vietnam. ABC Rural says the company was trying to ascertain how many cattle were yet to be processed, he added, and that "his responsibility was to ensure animal welfare was accounted for". "Another focus will be looking after the welfare of the company's six full-time employees, as staff await further instructions from the administrators." NACC confirmed no cattle controlled by the exporter remained in Australian quarantine facilities or at sea. ========= C H I N A ========= BEIJING EASYHOME: S&P Affirms 'BB+' LT ICR, Outlook Negative ------------------------------------------------------------ On June 2, 2021, S&P Global Ratings affirmed its 'BB+' long-term issuer credit rating on the Chinese furniture mall operator Beijing Easyhome Investment Holding Group Co. Ltd. and issue rating on Easyhome's guaranteed senior unsecured notes. The negative outlook reflects S&P's expectation that Easyhome's cash flows from its home improvement and furnishing retail malls may not rebound sufficiently to near pre-COVID-19 levels due to the slowdown in domestic consumption. S&P affirmed its rating on Easyhome because the company's operations should start to boost growth from a trough over the next 12 months. The pandemic's impact has faded out across Easyhome's retail malls, in S&P's view. However, business performance may not return to pre-pandemic levels because of consumer hesitation, which could weaken growth momentum in rental income in the longer term. This is reflected in our negative outlook on the rating. The COVID-19 pandemic disrupted Easyhome's business but the impact will unlikely last over the next 12 months. Rental revenue of the company's shopping malls dropped by about 18% in 2020, reflecting broad rental concessions and discounts for tenants to tackle the pandemic. Effective rent (after discounts and incentives) declined by 15%-20% while occupancy rate remained above 90% at the height of the pandemic. Easyhome's effort in maintaining flattish rental by giving incentives or concessions helped to limit the pandemic's impact. S&P expects average occupancy rate to rebound to about 95% in 2021. Easyhome's operations may not be restored sufficiently to pre-pandemic levels. This takes into account our view that consumer sentiment may not rebound in the medium term; national statistics show that people have been saving more of their income than before COVID-19, thus sapping consumer spending. The home furnishing sector has been one of the worst performers among all consumer categories in 2020, down 7%, compared with 4% growth for total retail sales. Although sales volume in Easyhome's malls in the first quarter of 2021 showed a decent rebound from some pent-up demand, S&P expects full-year sales to be still below 2019's. S&P said, "We believe the company's involvement in other businesses would skew earnings away from its stable and recurring rental income. The booking of a property development project and an increase in supermarket sales in 2020 supported top-line growth, but these were one-off events. We estimate total revenue will fall by 3%-5% in 2021, mainly because of the absence of such nonrecurring items, partly offset by a rise in rental. "In our view of Easyhome's business model, we consider its recurring rental income as a more stable source of income than income streams of traditional retailers. While most retailers have inventory risks, Easyhome puts little upfront capital and instead, relies on fixed rents paid in advance and backed by one-year lease terms. This is reflected in our assessment of a positive comparable rating analysis." Easyhome's controlled capital expenditure will help protect its credit quality. The company scaled down its new mall pipeline in 2020 with an addition of only one self-owned mall during the year. S&P said, "We forecast annual capital expenditure will be RMB1.5 billion–RMB2 billion, including one self-owned mall each year on average in the next two years. We believe Easyhome has the flexibility to adjust its investment plans because most of its malls are under a sublease arrangement and are operationally mature." The sublease model has been test by the pandemic when Easyhome managed to obtain rental concession from the property owner, such that its mall portfolio could maintain a stable gross margin of about 44%. The "asset-light" business model, where Easyhome operates but does not own the mall property, also allows the company to extend its operations to a larger portfolio of malls with lower debt funding needs. Easyhome had reported debt of RMB15.2 billion, including domestic and offshore bonds of RMB4.6 billion. Its cash balance after a share placement increased to RMB8.2 billion as of end-2020, sufficiently covering short-term debt. S&P said, "The negative outlook reflects our view that Easyhome's cash flows from its home improvement and furnishing retail malls may not rebound sufficiently to pre-COVID-19 levels due to the slowdown in domestic consumption. This may hinder the company's effort to boost its leverage to a level commensurate with the current rating. "We could downgrade Easyhome if the company's cash flow significantly weakens, such that the adjusted debt-to-EBIDA ratio fails to recover to about 6x, or EBITDA interest coverage falls short of 2x. This could happen if the occupancy or rental reversions cause rental income to drop materially more than our base-case expectations, or the company enters into unexpected large acquisitions that derail its financial metrics. "We could also downgrade Easyhome if income other than the recurring rental becomes the dominant portion of the company's revenue and EBITDA. We may see it as a signal that the stability of earnings has deteriorated. "We could revise the outlook to stable if Easyhome improves its leverage and cash flow adequacy such that its adjusted debt-to-EBIDA ratio stays consistently at below 6x and EBITDA interest coverage above 2x. This could happen if the company achieves solid rental income growth, or it reduces debt to improve its financial leverage." CHINA HONGQIAO: Moody's Gives B1 Sr. Unsec. Rating to New USD Notes ------------------------------------------------------------------- Moody's Investors Service has assigned a B1 senior unsecured rating to the proposed USD notes to be issued by China Hongqiao Group Limited (Ba3 stable). China Hongqiao will use the proceeds from the proposed issuance for refinancing and general working capital purposes. RATINGS RATIONALE China Hongqiao's Ba3 Corporate Family Rating reflects its leading position in the aluminum industry, long operating history and advanced low-cost production facilities. The rating also reflects Hongqiao's vertically integrated business model, which has resulted in strong profitability and high utilization compared with those of its domestic peers. On the other hand, China Hongqiao's rating is constrained by the cyclicality of the aluminum industry, regulatory risks, concentrated ownership, historically aggressive expansion and frequent change of auditors. "The proposed issuance will not affect China Hongqiao's credit profile because the issuance, partly for refinancing, will not lead to a material increase in leverage. The issuance will improve the company's debt maturity profile," says Roy Zhang, a Moody's Vice President and Senior Analyst. China Hongqiao's liquidity is good. The company had cash and cash-like sources of about RMB45.5 billion as of the end 2020. This, together with its projected strong operating cash flow, is sufficient to cover its short-term debt and other financial obligations over the next 12 to 18 months. The company has also managed its refinancing through an equity placement, convertible bond issuance and redemption of its onshore bond using internal resources. The B1 senior unsecured bond rating is one notch lower than it would otherwise be due to structural subordination risk. This risk reflects the fact that the majority of Hongqiao's claims are at its operating subsidiaries and have priority over its senior unsecured claims at the holding company in a bankruptcy scenario. China Hongqiao's rating also takes into account the following environmental, social and governance (ESG) considerations. The company's bauxite mining, power generation, alumina refinery and aluminum smelting operations are exposed to high environmental and safety risks. However, these risks are mitigated by its good operational track record and continued investment in related processes and facilities to meet higher standards. On the governance front, the company has a record of aggressive expansion and changing auditors historically, while its ownership is concentrated in its key shareholder, Mr. Zhang's family, who held a 68.5% stake in the company as of the end of 2020. These risks are partially tempered by stronger board oversight exercised through the presence of a strategic minority shareholder, CITIC Group Corporation (A3 stable). At the same time, company has also demonstrated prudent financial management with absolute debt reduction, cautious management and cost control. The company has recently introduced CCB Financial Asset Investment Company Limited, a subsidiary of China Construction Bank Corporation (A1 stable), as a strategic investor in its core subsidiary, Shandong Hongqiao New Material Co., Ltd. This helps bring additional governance control and oversight for the company. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The stable outlook reflects Moody's expectation that China Hongqiao will (1) maintain its strong market position; (2) generate sufficient cash flow from operations to meet its payment obligations, and (3) adopt a prudent financial policy in pursuing its growth over the next 12-18 months. Moody's could upgrade the rating if China Hongqiao (1) continues to maintain sound corporate governance standards, (2) demonstrates a longer track record of maintaining its strong financial profile through the industry cycle and the use of free cash flow or equity to fund its growth and debt repayment; and (3) maintains its solid liquidity profile such as cash/short-term debt is above 1.2x. Moody's could downgrade the rating if (1) its operations weaken as a result of an industry downturn or adverse regulatory change; (2) the company fails to adhere to prudent financial management and sound corporate governance standards; (3) its cost competitiveness and market position deteriorate; (4) its credit metrics materially worsen, with its adjusted debt/EBITDA rising above 4.0x; or (5) its liquidity deteriorates. The principal methodology used in this rating was Steel Industry published in September 2017. Founded in 1994 and headquartered in Zouping, Shandong Province, China Hongqiao Group Limited is one of the largest aluminum manufacturers in China and globally by production volume. The company listed on the Hong Kong Stock Exchange in March 2011. At the end of 2020, China Hongqiao Group Limited was 68.5% owned by Mr. Zhang's family, 9.9% by CITIC Group Corporation. The company posted revenue of RMB86.1 billion in 2020. SHINSUN HOLDINGS: Fitch Assigns 'B' LT IDR, Outlook Positive ------------------------------------------------------------ Fitch Ratings has assigned China-based homebuilder Shinsun Holdings (Group) Co., Ltd. a Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'B'. The Outlook is Positive. The ratings are constrained by the company's short record of maintaining a stable financial profile, low profitability and material related-party transactions. Shinsun's large scale, strong market position in Zhejiang province and improving financial profile after being listed in November 2020 support its rating. The Positive Outlook reflects Fitch's view that Shinsun may be able to sustain a business and financial profile in line with those of 'B+' rated peers in the coming 18 months. KEY RATING DRIVERS Short History of Low Leverage: Shinsun's net debt + guarantee/adjusted inventory only dropped to below 50% in 2020, from above 90% before 2019, mainly helped by proceeds from its IPO in November 2020, an increase in non-controlling interests (NCI) and trade payables. Fitch estimates that Shinsun's unadjusted leverage can remain below 50% and leverage with related-party transaction adjustments can stay below 55%, as Shinsun uses more NCI and intends to control leverage. Fitch also thinks that Shinsun has to rely on increasing NCI contribution to control leverage as the company plans to spend 80% of the cash proceeds from property pre-sales on land and construction in 2021. Shinsun's NCI/total equity increased to 47% in 2020 from 23% in 2019. Low Margins: Shinsun's EBITDA margins (excluding capitalised interest) dropped to 18% in 2020 from 22% in 2019, mainly due to recognition of low-margin projects acquired in 2017-2018, according to management. The margins were low and volatile in 2017-2018 as well. Shinsun was unprofitable before 2017 mainly due to large selling, general and administrative costs when entering new markets. Management expects the gross profit margin to climb to 21%-23% in the near term from 18% in 2020. Material Related-Party Transactions: The significant related-party transactions linked to the ultimate shareholder, Mr. Chen Guoxiang, are negative for Shinsun's rating, although the risks are mitigated by the rules governing Hong Kong-listed companies. A related party supplies a substantial part of Shinsun's construction services, which indicates higher counterparty risk than peers, as Shinsun is more likely to expedite payments to the related party if it is in distress. Hence, Fitch deducts the relevant net payables from adjusted inventory when calculating leverage. Mr. Chen is the founder of Shinsun and Xiangsheng Industrial Group Co., Ltd., which accounts for 40%-50% of Shinsun's total purchases each year, mainly construction services provided to Shinsun's property development segment. Xiangsheng Industrial is 99% owned by Mr. Chen. Large Scale, Zhejiang Focus: Shinsun's reported consolidated sales plus attributable sales from JVs increased by 25% to CNY78 billion in 2020. Fitch estimates that Shinsun's total attributable sales were in line with the operating scale of a 'BB-' rated developer. Shinsun is one of the top three players by sales value in Zhejiang province, according to management. Zhejiang accounted for 69% of Shinsun's sales in 2020 and 48% of the company's land bank at end-2020. Fitch expects Shinsun to continue to focus on the Yangtze River Delta and reduce its reliance on Zhejiang in the near term. Fast Churn: Shinsun's churn rate, measured by consolidated sales/ total debt and attributable sales/total debt was 1.5-2x in 2017-2020, much higher than that of most of its peers. Adequate Land Bank: Fitch estimates that Shinsun had 14.5 million sq m of available-for-sale land bank at end-2020, sufficient for two to three years of sales. It had CNY33 billion of attributable land acquisitions (100% consolidated and attributable JVs) in 2020 and management plans to maintain land bank for 2-2.5 years of sales, with 45%-50% of sales proceeds used to buy land in 2021-2022. Shinsun's average land cost in 2020 was CNY3,281/sqm, or 24% of the average selling price. The cost of new land rose to CNY4,800/sqm in 2020 from CNY3,400 in 2017 as Shinsun added land in higher-tier cities. ESG - Group and Governance Structure: Shinsun has an ESG Relevance Score of 4 for Group Structure - which reflects the large related-party transactions, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Shinsun also has an ESG Relevance Score of 4 for Governance Structure as its shareholding is highly concentrated in its single largest shareholder, who owns a 78.1% equity stake. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY Shinsun's business profile is supported by its leading market position in Zhejiang province and large operating scale. Its attributable contracted sales in 2020 is similar to most of 'BB-' rated peers, which had CNY60-70 billion in sales, such as KWG Group Holdings Limited (BB-/Stable), Times China Holdings Limited (BB-/Stable), China SCE Group Holdings Limited (BB-/Stable) and Ronshine China Holdings Limited (BB-/Negative). However, Shinsun is less geographically diversified than most 'BB-' and 'B+' peers - Zhejiang province generated almost 70% of Shinsun's total sales. Shinsun's closest peer is Sinic Holdings (Group) Company Limited (B+/Stable). Shinsun's attributable sales were larger than Sinic's CNY50 billion in 2020, but Shinsun's leverage (including guarantees but not related-party payable adjustments) of 49% at end-2020 is similar to Sinic's 51%. Shinsun also adopts a high-churn model with churn rate of 1.6x contracted sales/total debt that is similar to that of Sinic. However, Shinsun's EBITDA margin excluding capitalised interest of 18% is lower than Sinic's 27%. Shinsun has lower JV and NCI exposure than Sinic, although it is trying to increase NCI contribution in the future. However, Sinic is more diversified geographically, with the largest sales contributor, Jiangxi province, accounting for 31% of total sales in 2020. Sinic does not have significant related-party transactions. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Consolidated and attributable contracted sales of CNY65 billion-70 billion per year during 2021-2022; -- Cash collection rate at 83%-85% during 2021-2022; -- Land premium accounting for 50% of sales receipts in 2021 and 45% in 2022; -- Construction expenditure accounting for 40% of sales receipts per year during 2021-2022. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Net debt including external guarantees/adjusted inventory less shareholder-related net payables below 55% for a sustained period; -- EBITDA margin (excluding capitalised interest) above 15% for a sustained period; -- Available cash/short-term non-bank debt sustained above 1x, with lower reliance on trust loans; -- Longer record of maintaining stable financial metrics and strong corporate governance practices. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- The Outlook will be revised to stable if positive triggers are not met with 18 months 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: Shinsun had CNY17 billion of available cash at end-2020, equivalent to 0.77x of total short-term debt and 0.85x of non-bank short-term borrowings. Shinsun's CNY7 billion restricted cash also includes cash pledged to repay project loans. Its liquidity was bolstered by CNY4 billion of proceeds from its IPO in November 2020, but liquidity management was opportunistic before 2020. Shinsun kept less than CNY10 billion in total cash to run its property development business that generates more than CNY60 billion in attributable sales. The management says it plans to keep available cash at more than 1x short-term debt in the future. Limited Refinancing Risks: Shinsun had three bonds outstanding as of end-2020: two offshore bonds that are due within the next six months and one onshore bond that matures in 2023. Shinsun plans to issue no more than USD300 million of bonds in 1H21 to refinance part of the USD500 million of offshore bonds due in July 2021 and January 2022. High Effective Interest Rate: Shinsun's auditor calculated the company's funding cost at around 9%, but the effective interest rate, measured by gross interest expenses excluding interest from leases as well as contract liabilities/average total debt, was 12% in 2019-2020. Fitch believes that Shinsun may have used some super short-term financing that pushed up weighted average total debt throughout the year above the year-end debt figure. Shinsun's reliance on non-bank loans has also led to higher funding costs than higher-rated peers. Non-bank loans accounted for 59% of Shinsun's total debt as of end-2020, although it dropped from 63% at end-2019 and fell to 49% by end-March 2021, according to management. ISSUER PROFILE Shinsun is a property developer focusing on China's Zhejiang province and Yangtze River Delta region. It ranked among the top 40 property developers by sales value in China in 2020, according to CRIC and CREIS, two top Chinese property data providers. The company is listed on the Hong Kong stock exchange. SUMMARY OF FINANCIAL ADJUSTMENTS -- Fitch's calculation of CNY47 billion of adjusted inventory at end-2020 includes CNY4 billion of property held for sale, CNY106 billion of property under development for sale, CNY1 billion of prepayments for land-use rights, CNY1.6 billion in investment properties, CNY4 billion due from NCI, CNY69 billion in contract liabilities, CNY2 billion due to NCIs, CNY2 billion of investments in JVs and associates, CNY1.7 billion due from JVs and CNY1.7 billion due to JVs. Fitch has adjusted the value of investment properties based on the investment properties at cost. -- Fitch has also adjusted cash interest paid to CNY4.6 billion from gross interest expenses by excluding interest arising from revenue contracts, interest on lease liabilities, and capitalised interest. -- Interest on lease liabilities was excluded in the EBITDA calculation and adjusted in cash interest paid. ESG CONSIDERATIONS Shinsun has an ESG Relevance Score of '4' for Group Structure due to large related-party transactions, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Shinsun also has an ESG Relevance Score of '4' for Governance Structure as its shareholding is highly concentrated in one shareholder, who owns a 78% equity stake. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ZHENRO PROPERTIES: Moody's Rates New Sr. Unsecured USD Notes 'B2' ----------------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to Zhenro Properties Group Limited's (B1 stable) proposed senior unsecured USD notes. Zhenro plans to use the proceeds from the proposed notes mainly to refinance existing debt. RATINGS RATIONALE "Zhenro's B1 corporate family rating (CFR) reflects the company's (1) good-quality and geographically diversified land bank, which helps it manage property market volatility and regulatory risks; (2) ability to generate strong contracted sales growth; and (3) good liquidity and improved access to funding, especially in the debt capital markets," says Cedric Lai, a Moody's Vice President and Senior Analyst. "However, the company's credit profile is constrained by its improving but still-moderate financial metrics as a result of its moderate debt leverage," adds Lai. The proposed issuance will improve Zhenro's liquidity profile and will not materially affect its credit metrics, because the company will use the proceeds mainly to refinance its existing debt. Moody's expects Zhenro's revenue/adjusted debt and adjusted EBIT/interest, excluding adjustments for its joint ventures and associates, will improve to around 53%-56% and 2.0x respectively over the next 12-18 months from 48.5% and 1.9x in 2020, underpinned by increased revenue recognition from strong contracted sales over the past two years. Zhenro's total contracted sales jumped 92.7% to RMB54.7 billion in the first four months of 2021, mainly because of the low base last year earlier. Moody's expects its contracted sales will slightly increase in the next 12-18 months, supported by its strong sales execution abilities, good-quality land bank and sizable salable resources in upper-tier cities. The B2 senior unsecured debt rating is one notch lower than the CFR due to structural subordination risk. This risk reflects the fact that the majority of Zhenro's claims are at its operating subsidiaries and have priority over claims at the holding company in a bankruptcy scenario. In addition, the holding company lacks significant mitigating factors for structural subordination. Consequently, the expected recovery rate for claims at the holding company is lower. Zhenro's liquidity is good. Moody's expects the company's cash holdings of RMB42.4 billion as of December 31, 2020, together with expected operating cash inflow, will be able to cover its short-term debt of around RMB19.8 billion, committed land purchases and dividend payments, as well as its capital spending and payables for previous acquisitions over the next 12-18 months. In terms of environmental, social and governance (ESG) factors, Moody's has considered the company's concentrated ownership by the owner family, which held a 64.56% stake in the company as of 31 December 2020. Moody's has also considered (1) the fact that independent directors as chairs of the audit and remuneration committees; (2) the low level of related-party transactions and dividend payouts; and (3) the presence of other internal governance structures and standards as required by the Hong Kong Stock Exchange. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The stable rating outlook reflects Moody's expectation that Zhenro will be able to execute its sales plan and remain prudent in its financial management, such as by maintaining sufficient liquidity over the next 12-18 months. Moody's could upgrade Zhenro's ratings if the company (1) demonstrates sustained growth in its contracted sales and revenue through the economic cycles without sacrificing its profitability; (2) remains prudent in its land acquisitions and financial management; (3) improves its credit metrics, such that EBIT/interest registers at least 2.7x-3.0x and revenue/adjusted debt rises to at least 70%-75% on a sustained basis; and (4) maintains adequate liquidity. On the other hand, Moody's could downgrade the ratings if Zhenro's: (1) generates weak contracted sales; (2) suffers from a material decline in its profit margins; (3) experiences an impairment of its liquidity position, such that cash/short-term debt falls below 1.0x; and/or (4) materially increases its debt leverage. Credit metrics indicative of a downgrade include EBIT/interest coverage falling below 2.0x and/or adjusted revenue/debt falling below 50%-55% on a sustained basis. The principal methodology used in this rating was Homebuilding And Property Development Industry published in January 2018. Zhenro Properties Group Limited was incorporated in the Cayman Islands in 2014 and listed on the Hong Kong Stock Exchange in January 2018. At December 31, 2020, Zhenro had 216 projects in 32 cities across China. Its key operating cities include Shanghai, Fuzhou, Nanjing, Suzhou, Jinan, Hefei, Tianjin, Wuhan and Xi'an. The company was founded by Mr. Ou Zongrong, who indirectly owns 54.6% of Zhenro Properties as of December 31, 2020. Mr. Ou Guowei and Mr. Ou Guoqiang, the sons of Ou Zongrong, together own 9.96% of the company as of the same date. ========= I N D I A ========= ACHAL INDUSTRIES: ICRA Withdraws B+ Rating on INR16cr Loan ---------------------------------------------------------- ICRA has withdrawn the ratings assigned to the bank facilities of Achal Industries Private Limited (AIPL) at the request of the company and based on the No Objection Certificate received from the 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 have not been captured as the rated instruments are being withdrawn. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- Cash Credit 16.00 [ICRA]B+ (Stable); Withdrawn Unallocated 2.00 [ICRA]B+ (Stable); Withdrawn Interchangeable (15.00) [ICRA]A4; Withdrawn Incorporated in 2016, Achal Industries Private Limited is involved in processing organic as well as conventional RCNs to cashew kernels. In addition, the company sells cashew by products such as cashew shells and peels. The company is promoted by Mr. G. Giridhar Prabhu and his family. It has an established processing capacity of 5 metric tonnes per day and generates turnover from export and domestic Markets. Apart from AIPL, the group comprises Achal Cashews Private limited which is also involved in processing RCNs into finished cashew kernels as well as in trading RCNs; Achal Primenuts Private Limited and Achal Farm Products Private Limited, which manage retail outlets in Bangalore and Mangalore, respectively. Achal Industries has been converted from proprietorship to private limited and all operating activities of the proprietorship firm has been taken over by Achal Industries Private Limited from January 2018. The assets of the proprietorship firm have been leased to Achal Industries Private Limited w.e.f 1st February 2018. ADANI GREEN: Fitch Affirms BB+ Rating on USD500MM Sec. Notes ------------------------------------------------------------ Fitch Ratings has affirmed Adani Green Energy Limited Restricted Group 1's (AGEL RG1) USD500 million senior secured notes due 2024 at 'BB+'. The Outlook is Stable. AGEL RG1 includes three subsidiaries of Adani Green Energy Limited (AGEL). The US dollar notes are issued in part by each of the three SPVs in the restricted group (RG). The notes are stapled together to mimic the structure of the restricted pool. The issuers directly own operating assets and are not merely lenders to the operating entities, unlike other rated issuance from most Indian restricted groups. All covenants or triggers are on an aggregate basis. Each SPV guarantees the note obligations of the other two SPVs, although the notes constitute each issuer's obligations only on a several basis. RATING RATIONALE The affirmation reflects the credit profile of AGEL RG1, which operates solar generation assets across India with a combined capacity of 930MW. The rating is underpinned by long-term fixed-price power purchase agreements (PPAs), commercially proven technology with a pure solar portfolio and experienced operations and maintenance (O&M) contractors. Noteholders benefit from a standard security package and robust covenants restricting distributions. The notes have a bullet repayment due in 2024. However, the refinancing risk is mitigated by the remaining terms of the PPAs, the group's established access to banking and capital markets, and a senior debt restricted amortisation account. Fitch assumes the notes will be refinanced at maturity, with the refinancing debt to be amortised across the remaining PPA terms. Fitch considers revenue from sovereign-backed NTPC Limited (BBB-/Negative) and Solar Energy Corporation of India (SECI), to which AGEL RG1 contracts 57% of its total capacity, as fully contracted revenue and apply the fully contracted project threshold. SECI's credit quality does not constrain the rating, as revenue exposure to SECI presents a systematic sector risk. Fitch does not rate the state-owned distribution companies that purchase power from some projects of the restricted group. The counterparties have weak credit profiles and varying history of payment delays, although exposure to multiple counterparties mitigates the risk. Fitch believes that it is prudent for such projects to meet a higher threshold to achieve the same rating as other projects with strong counterparties, all else being equal. Hence, Fitch bases the credit assessment of the notes on the indicative debt service coverage ratio (DSCR) thresholds applicable to merchant projects for the revenue-weighted exposure to the state-owned distribution companies instead of the ones for fully contracted projects, while the cash flow is evaluated based on the contracted prices. The RG generates an average annual DSCR of 1.36x, with a minimum of 1.15x under Fitch's rating case, which is commensurate with a 'BB+' rating. KEY RATING DRIVERS Experienced Contractors; Proven Technology: Operation Risk − Midrange AGEL RG1 consists of 930MW polycrystalline solar projects, which are a proven technology with a long operating history. Fitch regards the operation of these types of solar projects as straightforward. The solar modules are provided by internationally known suppliers. Operation and maintenance work is carried out by an affiliate company, Adani Infrastructure Management Services Limited, under seven-year fixed-price contracts with 2% annual price escalation. Replacement operators are readily available in the market. However, the operation risk assessment is constrained to 'Midrange', as the operating cost forecast is not validated by an independent technical advisor and the solar projects have a modestly variable operating history. Moderately Variable Operating Record: Revenue Risk (Volume) − Midrange The energy-yield forecast produced by third-party experts indicates an overall P50/one-year P90 spread between 6% and 16%, leading to a 'Midrange' volume risk assessment. The performance of the projects has been moderately volatile and slightly below their P90 forecasts in the past two years. Generation was lower in the 12 months ended March 2021 on account of lower irradiation and grid curtailment at PSEPL (40 MW Kallur) plant and stood at 1,908 million units, which was 3% lower than the P90 generation forecast of 1,960 million units for the same period. Overall, availability of the RG for the financial year ended March 2021 (FY21) was 99.6%. Curtailment risk is limited because of the must-run status of renewable energy plants in India and the curtailment faced at PSEPL, Kallur plant is due to load congestion, which AGEL RG1 expects to improve after the augmentation of evacuation infrastructure. Long-Term Fixed-Price PPAs: Revenue Risk (Price) − Stronger AGEL RG1 contracts 40% of its total capacity with NTPC and 17% with SECI, with the remaining capacity contracted with various state distribution companies under 25-year fixed-price PPAs, which protect the portfolio from merchant price volatility. Fitch assesses price risk as 'Stronger'. Refinancing Risk Mitigated by Protective Structural Features: Debt Structure - Midrange The debt is a senior secured five-year bullet bond. The bullet repayment structure presents significant refinancing risk. However, the notes benefit from a senior debt restricted amortisation account that requires issuers to pre-fund a proportion of debt by maturity. The notes also require issuers to submit a refinancing plan 12 months before maturity. The refinancing risk is also mitigated by the remaining terms of the PPAs and the group's established access to banking and capital markets. Noteholders benefit from protective structural features to restrict distributions. The debt has a six-month debt service reserve. All cash will be trapped if the 12-month backward-looking DSCR drops to below 1.35x or if the project life cover ratio drops to below 1.6x. Distribution will also be restricted if there is a reduction of the EBITDA mix from sovereign-backed off-takers to less than 55% or if aggregate cash flow available for debt service (CFADS) from sovereign-backed off-takers over the remaining PPA lives is insufficient to cover 75% of the outstanding debt. PEER GROUP AGEL RG1 is rated a notch lower than Adani Green Energy Limited Restricted Group 2 (AGEL RG2 , note rating: BBB-/Negative; underlying credit rating: bbb). AGEL RG2 has a much tighter structure with largely amortising and longer-dated debt, higher contribution from capacity contracted with sovereign-owned entities (61%) than AGEL RG1, and a better financial profile with a rating case DSCR of 1.45x. The Negative Outlook on the 'BBB-' rating on the senior notes of AGEL RG2 reflects the Negative Outlook on the 'BBB-' Indian sovereign rating. Fitch also views Azure Power Solar Energy Private Limited (Azure RG2, note rating: BB/Stable) to be comparable with AGEL RG1. AGEL RG1 is rated a notch higher than Azure RG2, even though its rating case DSCR of 1.35x is lower than that of Azure RG2. AGEL RG1's credit profile is supported by a higher share of capacity contracted with sovereign-owned entities (57% versus 15%), which allows lower rating thresholds for AGEL RG1. The debt term for Azure RG2 and AGEL RG1 are both five-year bullet bonds. However, AGEL RG1 benefits from a stronger distribution lock-up test, debt service reserve account and capex reserve account. AGEL RG1 can be also compared with Continuum Energy Levanter Pte. Ltd. (Continuum RG1, note rating: BB+/Stable). Unlike, AGEL RG1 which is a pure solar portfolio, wind resources make up 89% of Continuum RG1's assets, but it has a much higher rating case DSCR of 1.71x, which supports its rating. Continuum RG1 has partial debt amortisation and cash sweep in the bond document, which will result in 53% of the senior notes' principal to be refinanced, unlike the AGEL RG1 bullet structure that requires about 91% of the bond amount to be refinanced at the end of the five-year period. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Positive rating action appears unlikely given the uncertainty of the refinancing terms, structure and future coverage profile upon the maturity of the notes. Factors that could, individually or collectively, lead to negative rating action/downgrade: Average annual DSCR across the PPA terms drops below 1.30x persistently as a result of: -- Energy production underperforming long-term projections due to low solar resource or operational issues; or -- Less favourable refinancing terms and structure than the assumptions made in Fitch's financial analysis. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. TRANSACTION SUMMARY AGEL RG1 is a RG consisting of three SPVs under Adani Green Energy Limited, with total capacity of 930MW across India. The RG issued five-year senior secured notes due 2024 to refinance its debt. CREDIT UPDATE Impact of Covid-19 There has been no major impact on AGEL RG-1 operational portfolio despite the Covid-19 pandemic, as electricity generation has been notified as an essential service. The RG operated with a plant availability of 99.6%. Management has informed that electricity offtake continued as per normal course of business without any major curtailments and are receiving regular collections from off-takers. Operational Performance Plant availability of AGEL RG1 portfolio was 99.6% for FY21. AGEL RG1 performed about 3% lower than P90 levels in terms of generation due to lower radiation and curtailment faced at the Kallur 40 MW plant. The Kallur 40 MW plant is connected at the Kushtagi substation where other wind plants and solar plants are also connected. All connected generators are curtailed during high wind season and high irradiation days, due to load congestion and overloading of power transformer at the Kushtagi substation. AGEL RG1 took a number of steps to improve the grid availability, including upgrading evacuation infrastructure, which resulted in better grid availability at Kallur of about 96% in FY21 against about 93% in FY20. A new 220 kilovolt substation is planned near the existing Kushtagi substation as a long-term solution, which is expected to be commissioned by FY23. FINANCIAL ANALYSIS Fitch assumes the bullet principal repayment will be refinanced upon maturity by fully amortising debt across the remaining PPA terms at a higher refinancing interest rate of 12%. Fitch also assumes that the RG will continue to have historical O&M costs that are higher and include the overhead charges. This is in contrast with management's strategy of accounting for the entire overhead cost at the group level instead of project/SPV level. Fitch's base case assumes a P50 energy production throughout the forecast period until the end of the PPAs and a 5% production haircut to reflect variability in the operating history. Fitch also applies a three-month stress to the receivable day assumption for state distribution company off-takers. Fitch's base case generates an average annual DSCR of 1.50x, with a minimum of 1.29x. Fitch's rating case assumes a one-year P90 energy yield throughout the forecast period, 5% production haircut and 0.6% annual solar degradation. Fitch also applies a 10% stress on operating expenses and a three-month stress to the receivable day assumption for state distribution company off-takers. The assumptions generate an average annual DSCR of 1.36x, with a minimum of 1.15x. Our CFADS calculation is different from that in the legal documentation for the notes. Fitch's CFADS calculation includes funding of capex for repowering and working capital movement but does not include opening cash available in the operating account, if not distributed, at the start of the financial year. 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. SECURITY The US dollar bonds issued by three SPVs in the RG benefit from a standard security package, including a charge over certain immobile and movable assets of the co-issuer, and a share pledge over 100% shares of each of the SPV issuers. AKSHAR GINNING: ICRA Keeps B+ Debt Rating in Not Cooperating ------------------------------------------------------------ ICRA has retained the ratings for the bank facilities of Akshar Ginning and Pressing Industries in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 8.00 [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. Established in 2006, Akshar Ginning & Pressing Industries (AGPI) is a partnership firm that gins and presses raw cotton to produce cotton bales and cottonseeds. The firm also crushes cottonseeds to produce cottonseed oil. The manufacturing facility, located at Una, Gujarat, is equipped with 24 ginning machines and a pressing machine, with a production capacity of 240 finished bales per day. The firm also has three expellers with a processing capacity of 15 tonnes of cottonseeds per day. AGPI is promoted by six partners, namely, Mr. Shambhu B. Zalavadiya, Mr. Himmat B. Zalavadiya, Mr. Chunilal B. Zalavadiya, Mr. Pareshkumar H. Zalavadiya, Mr. Jaydipkumar C. Zalavadiya and Mr. Ashvinkumar V. Barvaliya. All of them are family members, with an extensive experience in the cotton industry. ALUMINIUM INDIA: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Aluminium India in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] D/D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 40.00 [ICRA] D; ISSUER NOT COOPERATING; Fund based/ Rating continues to remain under Cash Credit 'Issuer Not Cooperating' category Long Term/ 2.00 [ICRA]D/D; ISSUER NOT Short Term COOPERATING; Rating continues to Unallocated remain under 'Issuer Not Limits 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. Aluminium India (AI), set up in 1965 as a proprietorship firm by Mr. Chiranji Vyas, to primarily trade aluminium in Hyderabad (Telangana). The firm was reconstituted as a partnership firm in 1975, with Mr. Chiranji Vyas, Mr. Niranjan Vyas, Mr. Suresh Vyas and Mr. Baiju Vyas as its partners. In the year 1995, AI diversified into trading of copper as well. The firm majorly procures the material from Hindalco Industries Limited (HIL). The day to day operations of the firm are looked after by Mr. Suresh Vyas. BAJRANG GINNING: ICRA Keeps D Debt Rating in Not Cooperating ------------------------------------------------------------ ICRA has retained the ratings for the bank facilities of Bajrang Ginning & Pressing Factory in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 8.00 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit 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. Established in the year 2009, it is a partnership concern engaged in the business of ginning and pressing of cotton. The factory is located at Jasdan having land area of 2 acres. It avails power load of 124 HP. It is equipped with 24 ginning machines and 1 pressing machine. It has a capacity to produce 180 bales a day (considering 24 hours of operations). The firm is managed by six partners. Partners have long standing experience in the field of cotton industry. BEVCON WAYORS: ICRA Moves D Debt Ratings to Not Cooperating ----------------------------------------------------------- ICRA has moved the ratings for the bank facilities of Bevcon Wayors 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- 11.00 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit Rating Moved to the 'Issuer Not Cooperating' category Fund Based- 2.66 [ICRA] D; ISSUER NOT COOPERATING; Term Loan Rating Moved to the 'Issuer Not Cooperating' category Long Term- 75.00 [ICRA] D; ISSUER NOT COOPERATING; Non Fund Based Rating Moved to the 'Issuer Not Cooperating' category Unallocated 8.34 [ICRA] D; ISSUER NOT COOPERATING; Rating Moved to the '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. Bevcon Wayors Private Limited (BWPL) was incorporated in October 31, 1994 and is engaged in manufacturing of Bulk Material Handling Products as well as providing EPC/turnkey solutions of Balance of Plant (BOP) requirements of customers across diverse sectors such as power, steel, cement, mining, sugar, ports, paper, pharma, FMCG, etc. The company has its manufacturing unit in Hyderabad. The company is currently headed by Mr Y. Srinivas Reddy, who is the Managing Director of the company and has nearly 25 years of experience in material handling products line of business. BVV PAPER INDUSTRIES: Insolvency Resolution Process Case Summary ---------------------------------------------------------------- Debtor: BVV Paper Industries Limited 148 Dpalani Road Venkatesa Mills Post Udumalpet TN 642128 IN Insolvency Commencement Date: May 31, 2021 Court: National Company Law Tribunal, Chennai Bench Estimated date of closure of insolvency resolution process: November 27, 2021 Insolvency professional: Ramakrishnan Sadasivan Interim Resolution Professional: Ramakrishnan Sadasivan New No. 28, Old No. 22 Menod Street, Purasawalkam Chennai 600007 E-mail: sadasivanr@gmail.com bvvirp@gmail.com Last date for submission of claims: June 14, 2021 COASTAL ENERGEN: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Coastal Energen 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- 1150.00 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under 'Issuer Not Cooperating' category Fund Based- 6113.79 [ICRA] D; ISSUER NOT COOPERATING; Term Loan Rating continues to remain under 'Issuer Not Cooperating' category Long Term- 465.20 [ICRA] D; ISSUER NOT COOPERATING; Non Fund Based Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 25.21 [ICRA] D; ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Short Term- Non Fund Based 40.00 [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. CEPL is a special purpose vehicle (SPV) promoted by Mr. Ahmed Buhari (promoter of the Coal & Oil Group) for the development of a 1200-MW imported coal-based thermal power plant at Tuticorin in Tamil Nadu. The Coal & Oil Group is a Dubai-based energy conglomerate that operates as an integrated fuel solution provider with interests in coal trading, technical consultancy for fuel sourcing, handling, shipping, logistics etc. The flagship company of the Group is Coal & Oil Company DMCC (C&O). The total project cost for CEPL of INR7,870 crore was funded through a debt to equity ratio of 80:20. Its unit-1 contributing to 600- MW power commenced operations from December 2014 and unit-2 from January 2016. CRIYAGEN AGRI: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Criyagen Agri & Biotech Private Limited's Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR9.3 mil. (reduced from INR15 mil.) Term loan due on December 2025 affirmed with IND BB+/Stable rating; -- INR120 mil. (increased from INR70 mil.) Fund-based working capital limits affirmed IND BB+/Stable/IND A4+ rating; -- INR150 mil. Proposed term loan* assigned with IND BB+/Stable rating; and -- INR20 mil. Proposed fund-based working capital limits* assigned with IND BB+/Stable/IND A4+ rating. * unallocated KEY RATING DRIVERS Liquidity Indicator - Stretched: The ratings reflect Criyagen's continued stretched liquidity with the average maximum use of the fund-based limits of 86% during the 12 months ended April 2021 with instances of overutilization in June and August 2020. The company has capex plans of INR200 million; however, the funding is yet to be tied up. The company's ability to complete the project within the estimated cost and timeline, along with generating adequate cash flows from the project will remain a key rating sensitivity. The company had cash and cash equivalents of INR2 million at FYE21 (FYE20: INR16 million). The company had availed moratorium on its working capital and long-term facilities over March-August 2020 under the Reserve Bank of India's COVID-19 regulatory package scheme. Its working capital cycle elongated to 84 days in FY21 (FY20: 37 days, FY19: 73 days) on account of a decrease in the payable period to 179 days (FY20: 223 days, FY19: 198 days). FY21 financials are provisional in nature. The affirmation reflects Criyagen's continued small scale of operation despite a significant rise in the revenue to INR802.5 million in FY21 (FY20: INR488 million, FY19: INR337 million), due to an increase in the number of orders received through brand partnership with its key customer Coromandel International Limited ('IND AA+'/Stable), which constituted 43% of its total sales. The company achieved around INR180 million of revenue in April 2021. The ratings continue to factor in Criyagen's modest credit metrics. The interest coverage (operating EBITDA/gross interest expense) improved to 7.59x in FY21 (FY20: 3.5x, FY19: 1.83x) on account of an increase in the EBITDAR to INR53.35 million (INR37.96 million, INR35.78 million) and reduction in the interest expenses to INR7.08 million (INR10.84, INR10.08 million). However, the net leverage (total adjusted net debt/operating EBITDAR) deteriorated to 2.83x in FY21 (FY20: 1.86x, FY19: 4.21x), on account of an increase in the debt towards the end of the year to INR120 million (INR34.95 million, INR51.07 million). However, Ind-Ra expects the credit metrics to deteriorate over the medium term, owing to the planned capex of INR200 million, which is likely to be funded by a term loan of INR150 million and an unsecured loan of INR50 million. The agency will continue to monitor the capex progress and its impact on the credit metrics. However, the ratings are supported by Criyagen's healthy operating profitability with a return on capital employed of 14.9% in FY21 (FY20: 9.8%, FY19: 7.5%). However. the EBITDA declined to 6.70% in FY21 (FY20: 7.65%, FY19: 10.08%) on account of increase in raw material prices and freight expenses. Ind-Ra expects the margins to remain volatile over the medium term due to fluctuations in raw material prices. The ratings continue to benefit from the promoters' a decade-long experience in the manufacturing of biochemical fertilizers. RATING SENSITIVITIES Positive: An improvement in the liquidity position, along with an increase in the scale of operations while maintaining the overall credit metrics, all on a sustained basis, could lead to a positive rating action. Negative: Any deterioration in the scale of operations, liquidity along with the interest coverage reducing below 2.0x could be negative for the ratings. COMPANY PROFILE Incorporated in 2008, Criyagen manufactures bio-fertilizers, phosphate rich organic manure and bio control agents. GOLD STAR: ICRA Keeps D Debt Ratings in Not Cooperating Category ---------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Gold Star Steels (P) Ltd. in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 5.50 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under 'Issuer Not Cooperating' category Non-fund based 1.50 [ICRA]D; ISSUER NOT COOPERATING; Letter of Rating continues to remain under Credit 'Issuer Not Cooperating' category Non-fund based 1.00 [ICRA]D; ISSUER NOT COOPERATING; Bank Guarantee Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 0.50 [ICRA]D; ISSUER NOT COOPERATING; Limit 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. GSSPL was incorporated in 1992 by the Raipur-based Agarwal family. However, the company has been taken over by the Vaswani family in the recent past. GSSPL has facilities for manufacturing high tension steel (HTS) wire, inserts and insulated caps. HAREKRUSHNA COTTEX: ICRA Keeps B+ Debt Ratings in Not Cooperating ----------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Harekrushna Cottex in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based 5.72 [ICRA]B+ (Stable) ISSUER NOT Limits COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated Limits 0.20 [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. Established in April 2015 as a partnership firm, Harekrushna Cottex ('HC') is in the business of ginning and pressing of raw cotton. HC's manufacturing facility is located at Rajkot (Gujarat), and is equipped with 24 ginning machines and one pressing machine with annual processing capacity of 12,442 metric tonnes (MT) of raw cotton. The operations commenced from February 2016. HIGH TECH GARMENTS: ICRA Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of High Tech Garments Private Limited in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 5.70 [ICRA] D ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Cash Credit 4.90 [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 the year 2005, High Tech Garments Private Limited is engaged in the manufacturing of grey fabric made from polyester yarns. The company is promoted by Mr. Ajay Agrawal and other family members who have been in the textile business for over a decade. The manufacturing unit of the company is located a Kim, Surat. HIGH-TECH KNITWEAR: ICRA Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of High-Tech Knitwear Private Limited in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 33.85 [ICRA] D; ISSUER NOT COOPERATING; Term Loan Rating continues to remain under Issuer Not Cooperating' category Cash Credit 13.51 [ICRA] D; ISSUER NOT COOPERATING; Rating continues to remain under Issuer Not Cooperating' category Unallocated 2.97 [ICRA] D; ISSUER NOT COOPERATING; Limits 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. High Tech Knitwear Private Limited (HTKPL) is a part of the Surat-based High-Tech Group which has its presence in manufacturing of greige fabric, sized yarn and warped yarn. HTKPL manufactures polyester greige fabrics. The company has its registered office in Surat and its manufacturing facility in Bharuch District (Gujarat). IDBI BANK: Fitch Affirms Then Withdraws BB+ LT IDR -------------------------------------------------- Fitch Ratings has affirmed IDBI Bank Limited's (IDBI Bank) Long-Term Issuer Default Rating (IDR) at 'BB+' and Viability Rating at 'ccc+'. The Outlook on the IDR is Negative. Concurrently, Fitch is withdrawing all ratings on IDBI Bank. Fitch has chosen to withdraw the ratings on IDBI Bank for commercial reasons. KEY RATING DRIVERS There has been no material change in IDBI Bank's credit profile since the previous rating action on 3 December 2020. RATING SENSITIVITIES Rating sensitivities are not applicable as the ratings have been withdrawn. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond 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. ESG CONSIDERATIONS IDBI Bank has an ESG Relevance Score of '4' for Governance Structure due to Fitch's assessment that key governance aspects, in particular board independence and effectiveness, ownership concentration and protection of creditor or stakeholder rights are a moderate influence on the VR. It has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Fitch views governance to be less developed for state banks, which is evident from weak underwriting that results in high levels of poorly performing loans and credit losses. IDBI Bank's board is dominated by government appointees, and its business models often focus on supporting government strategy with lending directed towards promoting socioeconomic and macroeconomic policies, which may include lending to government-owned companies. These factors also drive Fitch's view on the bank's state linkages that affect support prospects that drive the long-term ratings. IDBI Bank has an ESG Relevance Score of '4' for Financial Transparency due to Fitch's assessment that the quality and frequency of financial reporting and the auditing process are a moderate influence on the VR. It has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. These factors have become more prominent in the past few years because of the sharp financial deterioration at state banks as well as the widely reported divergences in non-performing loan recognition between the banks and the regulator, although these incidents have narrowed in recent years. Still, financial transparency is pivotal for general business and depositor confidence and can lead to significant reputational risk if not managed well. 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. INDIA: Creditors Trigger Most Bankruptcy Cases Below INR1 crore --------------------------------------------------------------- Livemint.com reports that operational creditors such as vendors have filed the bulk of bankruptcy cases so far involving payment defaults of less than INR1 crore, while financial institutions dragged businesses to tribunals for defaults of up to INR10 crore, according to official data. According to Livemint.com, the Insolvency and Bankruptcy Board of India (IBBI) said in its latest quarterly bulletin that about 80% of bankruptcy proceedings involving a default of less than INR1 crore were initiated by operational creditors, while 80% of the cases with defaults of over INR10 crore were initiated on applications by financial creditors. Bankruptcy cases filed by operational creditors accounted for over half of the 4,376 cases initiated under the Insolvency and Bankruptcy Code till March 31, 2021, while around 43% of the cases were triggered by financial creditors, Livemint.com discloses. The remaining cases were filed by the companies that were on the brink of financial collapse. Livemint.com relates that the dominance of bankruptcy cases by operational creditors, especially over smaller defaults, reflect how suppliers are struggling with delayed payments from corporate clients - a trend that has only been aggravated during the second wave of the coronavirus infections. Several small firms said their payment cycle got prolonged during the second wave of the pandemic. Around three-fourths of all bankruptcy proceedings initiated by operational creditors resulted in liquidation of the corporate debtor, and have been concluded, Livemint.com discloses. In case of proceedings triggered financial creditors that have been concluded, nearly half of the businesses have faced liquidation. According to the report, IBBI said in the case of 79% of all ongoing bankruptcy proceedings, the 270-day time frame specified under the law for finding a resolution have been breached. This is owing to litigation involving shareholders and potential investors. Prolonged litigation derails operations of the corporate defaulter, lets assets idle and lose value besides leading to job losses, Livemint.com states. To address this, the central government recently brought out a new resolution scheme called 'pre-pack', which is a hybrid of formal and informal, out-of-court restructuring. However, the scheme is restricted to only cases involving defaults of up to INR10 lakh. If successful, the pre-pack scheme is likely to prompt the government to consider raising the threshold to cover larger defaults, too. J M J CHARITABLE: Ind-Ra Assigns 'BB' Rating to Bank Loan ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned J M J Charitable Education Society's (JMJCES) bank loans a final rating as follows: -- INR200 mil. (increased from INR182.20 mil.) Bank loans* assigned with IND BB/Stable rating. *The assignment of the final rating is based on the receipt of the sanction letter by Ind-Ra. KEY RATING DRIVERS The ratings continue to reflect JMJCES's small scale of operations as indicated by the total income of INR125.17 million in FY21 (FY20: INR200.33 million in FY20, FY19: INR191.30 million). Tuition fee income continued to dominate the revenue profile with a contribution of 93.09% in FY20 (FY19: 91.68%). Despite a fall in the student headcount to 1,619 in FY20 (FY19: 1,675), the society's revenue remained stable on the back of a 10.01% yoy growth in the average fee per student. FY21 financials are provisional in nature. The decline in revenue in FY21 was due to a delay in commencement of academic sessions for 2020-21, owing to the ongoing COVID-19 pandemic. It has collected one semester fees from students for the academic year 2020-21 during FY21 and the second semester fee will be collected after the commencement of second semester. The same will be booked as and when it is collected, as the society follows actual basis accounting system for receipts and accrual basis accounting system for payments. JMJCES plans to start three new undergraduate arts and science courses with an annual approved intake of 180 seats (60 each) from the academic year 2022-23. Ind-Ra expects the society's revenue to grow in the medium term on the back of commencement of new courses. Students' headcount declined to 1,508 in FY21 due to a 14.57% yoy fall in student enrolment due to COVID-19 related disruption. However, students' headcount is likely to grow in the medium term on account of the commencement of new courses. Society's acceptance ratio has remained low at 10.33% in FY21 (FY20: 9.71%), while the enrollment rate declined to 43.51% (63.30%). The ratings also factor in an increase in the society's leverage (debt (including rent)/current balance before interest, depreciation and rents (CBBIDR)) to 1.11x in FY21 (FY20: 1.02x) due to an 8.98% yoy decline in the CBBIDR to INR24.17 million. JMJCES has a sanctioned term loan of INR200 million for the construction of a new campus in Chikkaballapur, Bengaluru, which will entail a total cost of INR301.50 million over FY20-FY22. The construction work, which was scheduled to be completed by FY21, has been delayed due to the COVID-19-led lockdowns and delay in receipt of the term loan. Ind-Ra expects the society's debt burden to increase significantly in FY22, due to the ongoing capex. However, the ratings benefit from an improvement in the operating margin (excluding rent) to 19.02% in FY21 (FY20: 13.06%, FY19: 11.25%), mainly due to a 40.99% yoy decline in the operating expense to INR112.05 million, partially offset by a 37.6% yoy decline in the operating income to INR124.72 million. The society reported a higher net surplus of INR7.52 million in FY21 (FY20: INR5.29 million). The ratings are also supported by the society's comfortable debt servicing capabilities. The fixed charge coverage (CBBIDR/interest expenses including rent) improved to 2.03x in FY21 (FY20: 1.61x) due to a 31.47% yoy decline in the lease rent to INR11.05 million. The society started paying interest on the term loan from January 2021 and the same has been capitalized to project account (fixed assets work in progress). The principal repayments are likely to start from FY23. Liquidity Indicator – Adequate: The society has likely debt service commitments of INR27.76 million for FY22. Ind-Ra expects the same to be funded through cash flow from operations, other income, and unrestricted cash balances. The society maintained the available funds at above INR31 million during FY20-FY21. The available funds cover to total long-term debt was high during FY20-FY21 due to the absence of debt (FY20: 114.62%, FY21: 133.94%). The available funds cover to operating expenditure stood at 35.58% in FY21 (FY20: 17.87%). It does not have any working capital facility and reported a nil collection period in FY21. RATING SENSITIVITIES Positive: Events that may, individually or collectively, lead to a positive rating action are: - a 10% growth in student headcount, - the operating margin sustaining above 15%, - the fixed charge coverage ratio sustaining above 2x. Negative: Events that may, individually or collectively, lead to a negative rating action are: - a 10% fall in student headcount for two consecutive years, - the operating margin declining below 10% on sustained basis. COMPANY PROFILE JMJCES came into existence on May 16, 2013, under Registrar of Societies, Rajajinagar, Bengaluru Urban district. The Acharya Institute of Management & Sciences was initially under the management of JMJ Education Society (debt rated at 'IND BBB-'/Stable). All the Acharya institutes managed under JMJES were transferred to a new location Soldevanahalli, Bengaluru, except JMJCES, which remained in the Peenya campus, Bengaluru. JAYASWAL NECO: ICRA Reaffirms D Rating on INR3,632.15cr Loan ------------------------------------------------------------ ICRA has reaffirmed ratings on certain bank facilities of Jayaswal Neco Industries Limited (JNIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 3,632.15 [ICRA] D; reaffirmed Fund Based- Term Loan Long Term 59.97 [ICRA] D; reaffirmed Fund Based- Cash Credit Short-term 224.34 [ICRA]D; reaffirmed Non-fund based- Letter of Credit/ Bank Guarantee This rating is specific to the rated instrument/facility, its terms and its structure and does not represent ICRA's opinion on the general credit quality of the entity concerned. The last row in the table above also captures ICRA's opinion on the rating without factoring in the explicit credit enhancement. Rationale The rating factors in the continued delays in debt servicing by JNIL with the account continuing to be designated as a non-performing asset (NPA) by its lenders. The share of Assets Care & Reconstruction Enterprise Limited (ACRE) in JNIL's total debt after loan sell-off by its existing lenders stood at 99.6% as on April 30, 2021. ICRA notes that the restructuring scheme for JNIL by ACRE is yet to be finalized. The terms of the restructuring agreement would drive JNIL's liquidity profile going forward. In FY2018, the State Bank of India filed an insolvency application against JNIL in the National Company Law Tribunal (NCLT) following the rejection of debt restructuring plan by the Reserve Bank of India (RBI). JNIL, in return, filed a writ petition in the Supreme Court, which directed the NCLT to maintain status quo in the insolvency process initiated against the company vide its order dated April 16, 2018. The matter continues to be at pre-admission stage in the NCLT. The provisional attachment of JNIL's INR307.6-crore sponge iron facility by the Enforcement Directorate (ED) has been put on stay by the Appellate Authority. JNIL's investment in the greenfield sponge iron and captive power projects in Bilaspur, Chhattisgarh also remains stuck, which continues to adversely impact its return on capital employed (ROCE). This investment was declared as non-core asset by the lenders a couple of years back. Since then no fresh investment has been made by the company towards the same. The company has provided for impairment of this project as on March 31, 2020 which was appearing under CWIP. While there has been improvement in JNIL's operating performance in Q2 and Q3 FY2021 (after being adversely impacted in Q1 FY2021 due to the Covid-19 pandemic), led by improved demand in the end-user segments as well as increased steel prices, its liquidity position continues to remain stretched on account of elevated debt levels. The ratings, however, favorably factor in JNIL's integrated nature of operations and the location-specific advantage of the company's plants. The provisional rating of [ICRA]A3(CE) outstanding for the proposed non-fund based-facility of INR300 crore has been withdrawn in accordance with ICRA's policy on the withdrawal and suspension of credit ratings as the proposed facility is not sanctioned. ICRA is withdrawing the rating and it does not have information to suggest that the credit risk has changed since the time the rating was last reviewed. Key rating drivers and their description Credit strengths * Integrated nature of operations ensures cost and quality control: JNIL is a mid-sized integrated steel manufacturer, specializing in alloy steel products and steel castings catering to various engineering, industrial, construction and automotive industries. The company generates power from its 54.5 MW-captive power plant units, which fulfill about 65-75% of its annual power requirement. Presence of 1.0 million tonnes per annum (mtpa) - captive iron ore mine, 0.8-mtpa sinter facility, 1.2- mtpa pelletization unit and 0.2-mtpa coke oven facility ensures adequate backward integration. JNIL's downstream facility includes a 1.0-mtpa rolling mill, which can produce long products, including that of alloy steel category. The steel division contributed ~90% to the net sales in 9M FY2021, with the balance being contributed by the casting division. * Location-specific advantage: JNIL's steel plant and casting division are situated in Raipur (Chhatisgarh) and Nagpur (Maharashtra), respectively, which are steel clusters. The presence of JNIL's plants at these locations provides ready access to suppliers and customers, resulting in significant savings in freight cost. Moreover, the company's operational captive iron ore mine is situated in Chhattisgarh, with approved mining capacity of 1 mtpa, which fulfills 30-40% of its iron ore requirements. Credit challenges * Continued delays in debt servicing: JNIL's bank account remains an NPA with persistent delays in repayment of principal component of term loans and interest component of term loans and fund-based working capital facility. There were also some devolvements in the letter of credit facility due to the pandemic induced lockdown in Q1 FY2021. ICRA notes that eleven out of twelve bankers have assigned the INR3,625-crore (99.6% of total outstanding term loan and fund based working capital facility) term loan and fund-based working capital facility on their books to ACRE, which is yet to implement a restructuring of the loans. The restructuring scheme for JNIL by ACRE is yet to be finalised. The terms of the restructuring agreement would drive JNIL's liquidity profile going forward. * Leveraged capital structure and depressed coverage indicators: The total debt of JNIL increased to INR6,571.7 crore as on as on September 30, 2020 from INR6,024.8 crore as on March 31, 2020 mainly on account of an increase in accrued interest and non-repayment of loans. While there has been improvement in its operating performance in Q2 and Q3 FY2021 (after being adversely impacted in Q1 FY2021 by the Covid-19 pandemic), led by improved demand in the end-user segments as well as increased steel prices, its liquidity position continues to remain stretched owing to elevated debt levels. Continued net losses have resulted in erosion of net worth as on September 30, 2020. The coverage indicators remain depressed due to high interest charges on account of elevated debt levels. * Vulnerability of profits and cash flows to cyclicality inherent in steel industry: Owing to the cyclicality inherent in the steel industry, the company's profits and cash flows are likely to remain volatile. Additionally, cyclicality in the automotive sector accentuates price risks for JNIL. * Susceptibility of foundry division to intense competition: In case of castings business, the company caters to various established players in the engineering and automotive industries. However, a highly fragmented nature of the domestic casting industry limits the scope of margin expansion of players including JNIL. The revenues and profit margins of the casting business have remained very low since FY2014. * Stalled investments in form of sponge iron and captive power project in Bilaspur impacting business return indicators: JNIL's greenfield project of 0.3-mtpa sponge iron facility and 50.0-MW captive power plant remains stuck for various reasons including delays in land acquisition, environmental clearance and funding constraints. In FY2018, the company suspended the project, which involved a total investment of ~Rs. 450.0 crore. This is likely to remain unproductive in the near-to-mediumterm, thereby impacting its ROCE. This investment had been declared as non-core asset by the lenders a couple of years back. Since then, no fresh investment has been made by the company towards the same. The company has provided for impairment of this project as on March 31, 2020 which was appearing under CWIP. Liquidity position: Poor While JNIL's bank balance has improved in Q3 & Q4 FY2021 due to an improvement in operating performance, its liquidity remains poor due to continued losses incurred by the company owing to elevated debt levels, which in turn led to delays in debt servicing. Going forward, its liquidity would primarily depend on the terms of restructuring scheme to be implemented by ACRE. Rating sensitivities Positive factors – ICRA may upgrade JNIL's rating in case of timely debt servicing on a sustained basis. Negative factors – Not applicable. JNIL, incorporated in 1972, began operations with foundry units at Nagpur and subsequently integrated backward by setting up a pig iron (with captive power) manufacturing unit at Raipur (Chhatisgarh) in 1995. Following the mergers, expansions and group restructuring, at present, JNIL operates a 0.75-mtpa pig iron unit, 0.2-mtpa coke oven plant, 0.8-mtpa sinter plant, 0.25- mtpa sponge iron unit, 1.2-mtpa pelletisation unit, 1.0-mtpa billet making unit and rolling mills, 54.5-MW captive thermal/waste heat recovery based power plants and an iron ore mine in Metabodeli, Chhattisgarh. It also has an iron and steel castings capacity of 0.08 mtpa, with its facilities located in Nagpur, Bhilai and Anjora. KSM EDUCATIONAL: Ind-Ra Keeps 'D' Loan Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained KSM Educational & Charitable Trust's bank loans' rating in the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating action is: -- INR65.20 mil. Bank loans (Long-term) maintained in the non- cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on May 17, 2019. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the ratings. COMPANY PROFILE KSM Educational & Charitable Trust was established in 2007 and is registered under the Indian Trust Act 1872. In 2008, it started a college - Holy Trinity College of Education - in Kanyakumari district. The trust also started a CBSE school named Holy Trinity International School in the academic year 2015-2016. LAKSHMI POULTRY: ICRA Keeps C+ Debt Ratings in Not Cooperating -------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Sri Lakshmi Poultry Farm in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] C+ ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 6.50 [ICRA] C+(Stable); ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term 1.87 [ICRA] C+(Stable); ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan 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. Sri Lakshmi Poultry Farm (SLPF) was incorporated as a partnership firm in 2007 and is engaged in the business of commercial layer poultry farming and trading of maize. The firm operates through its facilities located in Brahmanagudem and Chikkala villages with a total capacity of 2,80,000 commercial layers. LIMTEX AGRI: ICRA Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Limtex Agri Udyog Limited in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 25.00 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under 'Issuer Not Cooperating' category Non-Fund based 0.50 [ICRA] D; ISSUER NOT COOPERATING; Bank Guarantee Rating continues to remain under 'Issuer Not Cooperating' category Non-Fund based 8.00 [ICRA] D; ISSUER NOT COOPERATING; Letter of Credit 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. Limtex Agri Udyog Limited (LAUL) is a part of the Kolkata-based Limtex group, which has interests in tea, biscuits and information technology. LAUL concentrates on the production of CTC variety of tea as well as blending and trading of tea. Apart from production of CTC tea, the company also carries out purchasing of premium quality tea to blend with its lower grade of bought leaf production to enhance the quality of the blended tea. MAGMA AUTOLINKS: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Magma Autolinks 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 1.00 [ICRA] D; ISSUER NOT COOPERATING; Fund Based- Rating continues to remain under Cash Credit 'Issuer Not Cooperating' category Long Term 5.00 [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 November 2013, Magma Autolinks Private Limited (MAPL) is an authorised dealer for passenger vehicles of Honda Cars India Limited (HCIL). The company is promoted by the Sharma family, with Mr. Tushar Sharma and Ms. Shveta Sharma serving as the directors. OCEAN CONSTRUCTIONS: ICRA Cuts Rating on INR12cr Loan to D ---------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Ocean Constructions, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 12.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/CC Rating downgraded from [ICRA]B+(Stable) and continues to remain in the 'Issuer Not Cooperating' category Long Term- 6.50 [ICRA]D ISSUER NOT COOPERATING; Fund Based/TL Rating downgraded from [ICRA]B+(Stable) and continues to remain in the 'Issuer Not Cooperating' category Long Term-Non 16.50 [ICRA]D ISSUER NOT COOPERATING; Fund Based/TL Rating downgraded from [ICRA]B+(Stable) and continues to remain in the 'Issuer Not Cooperating' category Rationale The rating downgrade reflects Delay in Debt Repayment as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in July 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. 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. Ocean Constructions, a proprietorship firm set up in 2006 and owned by Mr. Sharfuddin Ali Mulki was taken over by Ocean Constructions India Private Limited (OCIPL, incorporated in 2008) in April 2013. OCIPL, promoted by Mr. Sharfuddin Ali and his brothers Mr. Inayath Ali and Mr. Abid Ali undertakes civil contracts involving irrigation canals, aqueducts, site grading & levelling and road works in Karnataka mainly for government clients including Karnataka Neeravari Nigam Limited (KNNL), Krishna Bhagya Jala Nigam Ltd (KBJNL), Public Works Department (PWD) Karnataka, National Highway Authority of India (NHAI), Visvesvaraya Jala Nigam Ltd (VJNL), National Mineral Development Corporation (NMDC) and Mangalore City Corporation (MCC). Ocean Constructions previously undertook sub-contracting works for private companies including Shapoorji Pallonji and company Ltd and AMR India Ltd. Mr. Inayath Ali was previously the national secretary of National Students' Union of India (NSUI) and general secretary of Karnataka Pradesh Youth Congress Committee (KPYCC) and has good relationship with governmental agencies awarding the contracts. ORISSA CONCRETE: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Orissa Concrete & Allied Industries Ltd. in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 9.00 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under 'Issuer Not Cooperating' category Fund Based- 1.50 [ICRA] D; ISSUER NOT COOPERATING; Standby Line Rating continues to remain under of Credit 'Issuer Not Cooperating' category Non-fund based 1.00 [ICRA]D; ISSUER NOT COOPERATING; Letter of Credit Rating continues to remain under the 'Issuer Not Cooperating' category Non-fund based 7.00 [ICRA]D; ISSUER NOT COOPERATING; Bank Guarantee Rating continues to remain under the '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 1979, OCAIL is a closely held company belonging to the Raipur-based Agarwal family. OCAIL has facilities at Raipur, Chhattisgarh for manufacturing of concrete sleepers for railways, with an annual capacity of 4.25 lakh sleepers per annum. PYTEX JEWELLERS: ICRA Keeps B- Debt Rating in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Pytex Jewellers Pvt. Ltd. in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B- (Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 10.00 [ICRA]B- (Stable) ISSUER NOT Fund Based/CC 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. Pytex Jewellers Pvt. Ltd. was established in 2006 as a private limited company by Mr. Pradeep Tayaland family. The company is engaged in the manufacturing and trading of gold, silver, diamonds and precious stones. Pytex Jewellers is situated at Netaji Subhah Place, New Delhi, with a shop area close to 600 sq yards. Mr. Ankur Tayal assists Mr. Pradeep Tayal in business. R.L. AGRO: ICRA Lowers Rating on INR65cr Loan to D -------------------------------------------------- ICRA has revised the ratings on certain bank facilities of R.L. Agro Foods Pvt. Ltd. (erstwhile R.L.Foods) as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based 65.00 [ICRA]D Rating downgraded from [ICRA]B+(Stable) and continues to remain in the 'Issuer Not Cooperating' category Rationale The rating downgrade reflects Delay in Debt Repayment as mentioned in publicly available sources. The rating is based on limited information on the entity's performance since the time it was last rated in February 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. 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. RLF is involved in the business of milling basmati rice. The company has a processing unit with a capacity of 16 tonne per hour at Nissing (Karnal, Haryana). The company caters to both domestic and export markets. Out of the total sales in FY2017, ~20% was contributed by export sales and the rest by domestic market sales. RAMA EDUCATION: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ ICRA has retained the ratings for the bank facilities of Sri Rama Education Trust in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 7.20 [ICRA] D; ISSUER NOT COOPERATING; Fund Based- Rating continues to remain under Term Loan 'Issuer Not Cooperating' category Long Term 5.00 [ICRA] D; ISSUER NOT COOPERATING; Fund Based- Rating continues to remain under Cash Credit 'Issuer Not Cooperating' category Long Term- 14.80 [ICRA] D; ISSUER NOT COOPERATING; Unallocated 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. Sri Rama Educational Trust was established in 2000 by Mr. Alluri Murthy Raju. The trust runs Maharajah Institute of Medical Sciences in Vizianagaram District of Andhra Pradesh and is affiliated to Dr. NTR University of Health Sciences, Vijayawada, Andhra Pradesh. It started operations in 2003 by offering graduate medical course (MBBS). Gradually over the years courses in nursing, paramedical sciences and post graduate medical courses were introduced. As part of the medical institute, the trust also runs a 760-bed hospital which includes both inpatient and outpatient facilities. The hospital has the departments of surgery, orthopaedics, ENT, ophthalmology, medicine, paediatrics, obstetrics and gynaecology department. It houses a diagnostic laboratory and pharmacy. It also has a casualty emergency service with ambulance facility intensive care unit, five fully functioning operation theatres and a labour room complex. RENEW POWER 4: Fitch Assigns Final BB- Rating to USD585MM Notes --------------------------------------------------------------- Fitch Ratings has assigned India-based ReNew Power Restricted Group 4's (ReNew RG4) USD585 million senior secured notes due 2028 a final rating of 'BB-'. The Outlook is Positive. The rating follows a review of ReNew RG4's final bond documents and hedging transactions. RATING RATIONALE The rating on the notes reflects the credit strengths and weaknesses of a restricted group of operating entities. The restricted group will benefit from parent ReNew Power Private Limited's (ReNew Power, BB-/Positive) access to funding for refinancing its US dollar bonds, supported by a full-tenor unconditional guarantee from the parent. ReNew Power is one of the largest renewable-energy independent power producers in India with total operating capacity of 5.4GW and under-construction capacity of 4.5GW. The restricted group includes 10 renewable projects of ReNew Power with a total capacity of 803.1MW spread across seven states in India. The portfolio has nine wind assets (753.1MW) and one solar project (50MW). All of the assets have been operating for more than three years, other than one 300MW wind project, which started operations in February 2021. The 300MW project is contracted with sovereign-owned Solar Energy Corporation of India (SECI) while the rest are contracted with weak state-owned distribution companies. KEY RATING DRIVERS Proven Technology, Lack of Maintenance Reserve - Operation Risk: Midrange The technologies deployed in ReNew RG4's wind and solar projects are considered proven. Most of the wind turbines are procured from some of the world's largest manufacturers while the solar modules are sourced from an internationally well-known supplier. Operation and maintenance (O&M) for most of the wind projects is carried out by the original equipment manufacturers under 10-year contracts. The O&M for two wind projects - 28MW and 92MW - was taken over by an affiliate company, ReNew Services Private Limited, in early 2020 at a fixed price, with 4%-5% annual price escalation, for shorter but extendable tenors. The O&M for the solar project is also carried out by the affiliate company under a five-year fixed-price contract, with 5% annual price escalation. The operation risk assessment is constrained at 'Midrange' as the operating cost forecast is not validated by an independent technical advisor and the bond indenture does not have a maintenance reserve account. Wide Forecast Spread, Adequate Operating Performance - Revenue Risk (Volume): Weaker The energy yield forecast produced by third-party experts indicates an overall P50/one-year P90 spread of 18%, leading to a 'Weaker' assessment for volume risk. The portfolio has a capacity-weighted average record of three years as all assets have been operating for more than three years, except the recently commissioned 300MW wind project. The actual load factors recorded by the portfolio in the financial years ended March 2019 and 2020 (FY19-FY20) were moderately volatile. Hence, Fitch applies a lower haircut of 7% on the volume forecast in Fitch's base and rating cases. The curtailment risk is limited in India due to the "must-run" status of renewable projects. Fixed Long-Term Prices, Minimal Renewal Risk - Revenue Risk (Price): Midrange ReNew RG4 contracts 63% of its total capacity with state-owned distribution companies and the balance with SECI under long-term fixed-price power-purchase agreements (PPA), which largely protect the portfolio from merchant price volatility. These PPAs have a capacity-weighted residual life of about 22 years. The only contract with a shorter fixed-price tenor of 13 years, with a remaining life of five years, is a 28MW wind project signed with Maharashtra's state-owned distribution company. However, Fitch expects management to recontract the asset on the expiry of its current PPA given the residual asset life of about 12 years at the end of the tenor. Fitch constrains the price risk assessment at 'Midrange' in light of the low but certain merchant price exposure due to this asset. Foreign-Currency Exposure, Manageable Refinancing Risk - Debt Structure: Weaker Management has hedged the principal payment using options, lowering the all-in cost to about 6.5% but leaving exposure to rupee depreciation until the contracted strike price, resulting in the revision of Fitch's debt structure assessment to 'Weaker' from 'Midrange'. Fitch has assumed in Fitch's rating case 2% annual rupee depreciation to account for principal repayment. Rupee depreciation that is worse than Fitch's estimates will result in further weakening of the underlying credit profile, though the bond's credit rating will continue to benefit from the parent's guarantee. The hedging is done till mid-2024 with mid-term rollover planned for bonds that may still be outstanding. Noteholders are protected by ReNew RG4's ring-fenced structure and covenants. Noteholders benefit from a standard cash distribution waterfall and a lock-up test at a backward-looking 1.3x interest-service coverage ratio for cash outflow. The notes pay a fixed interest rate. The restricted group will not maintain a debt-service reserve account or a major maintenance reserve account, but this is in part balanced by the excess cash required to be retained within the restricted group in the last year of the life of the notes. Refinancing risk is mitigated by the parent's guarantee and access to banks and capital markets, with support from the balance tenor of the PPAs, which extend beyond the maturity of the notes. PEER GROUP ReNew RG4's closest peer is India Green Energy Holdings (IGEH, US dollar notes: BB-/Positive). The credit assessment of both restricted groups is supported by that of their parent, ReNew Power. IGEH has similar wind/solar mix of 67%/33%. However, its counterparty mix is slightly weaker with 77% of its capacity exposed to weak state-owned distribution companies and the balance signed with commercial and industrial customers, against 37% of ReNew RG4's capacity that is contracted with SECI. ReNew RG4's financial profile marginally benefits from the benign interest rate environment while IGEH's financial profile gets an uplift from committed interest income from the parent on inter-company loans extended by the restricted group. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- An upgrade of the parent guarantor to above 'BB-'. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- The Outlook is Positive and Fitch therefore does not expect negative rating action. The Outlook will be revised to Stable if ReNew Power's Outlook is revised to Stable. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. TRANSACTION SUMMARY The US dollar bonds are co-issued by the 10 operating entities. The due and punctual payment of all amounts payable by each co-issuer under the US dollar notes is fully and unconditionally guaranteed on a senior basis by each of the other co-issuers, and fully guaranteed on a senior basis by ReNew Power. The co-issuers will use the proceeds for repaying their existing debt, making payments to capital creditors, and other purposes as allowed by regulations. FINANCIAL ANALYSIS About 19% of the restricted group's capacity is contracted with weak state-owned distribution companies in Andhra Pradesh and Telangana. The higher receivable days put pressure on the restricted group's cash flows. Fitch assumes associated receivable days will increase further by FYE22 before falling in FYE23. Fitch does not expect attempts by the Andhra Pradesh government to renegotiate tariffs in its PPAs to be successful. Any tariff revision will be treated as event risk in Fitch's credit assessment of the restricted group's bonds. Fitch's forecast assumes that the outstanding US dollar bond at maturity will be refinanced by another debt that will amortise across the remaining PPA terms or the projects' useful life, whichever is longer. Fitch's base case assumes P50 generation, a 7% production haircut and an 11% refinancing interest rate, which result in an average annual debt-service coverage ratio (DSCR) of 2.97x, 1.70x and 1.20x over the bond life, portfolio life and refinancing period, respectively. Fitch's rating case assumes one-year P90 generation and a 7% production haircut. Fitch also applies a 15% stress on management's operating expense forecast and an 11% refinancing interest rate. Fitch's rating case results in an average annual DSCR of 2.35x, 1.29x and 0.85x over the bond life, portfolio life and refinancing period, respectively. The restricted group will benefit from the parent's access to funding for refinancing its US dollar bond supported by a full-tenor unconditional guarantee from ReNew Power. SECURITY The US dollar bonds issued by each co-issuer benefit from a standard security package, including a charge over certain immobile and movable assets of the co-issuer, and a share pledge over a 51% stake in the operating entity. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The rating of ReNew RG4's bonds is directly linked to the credit quality of its parent, ReNew Power. A change in Fitch's assessment of the credit quality of the parent would automatically result in a change in the rating on the bond. 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. ROOP TECHNOLOGY: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Roop Technology 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 14.37 [ICRA] D; ISSUER NOT COOPERATING; Fund based/ Rating continues to remain under Non Fund Based 'Issuer Not Cooperating' category Long Term (14.37) [ICRA] D; ISSUER NOT COOPERATING; Interchangeable Rating continues to remain under 'Issuer Not Cooperating' category Short Term (7.57) [ICRA] D; ISSUER NOT COOPERATING; Interchangeable Rating continues to remain under 'Issuer Not Cooperating' category Long Term/ 0.63 [ICRA] D/[ICRA] D; ISSUER NOT Short Term- COOPERATING; Rating continues to Unallocated 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 1998, RTPL is a distributor of several IT and security-related products, LCDs and projectors. It is an authorized distributor of View Sonic for its LCD monitors, ZICOM and Dahua for security products, TP-Link for networking products, Godrej and Boyce for security safes and Optoma for projectors. RTPL has 10 branches across southern and western India. SAMDARIYA BUILDERS: ICRA Keeps B+ Debt Ratings in Not Cooperating ----------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Samdariya Builders Pvt. Ltd. in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] B+(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 0.24 [ICRA] B+(Stable); ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Fund Based- 20.19 [ICRA] B+(Stable); ISSUER NOT Term loan COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 29.57 [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. Samdariya Builders Private Limited (SBPL) is a group company of Samdariya Group, Jabalpur, and the group was incorporated in 1947 to carry on the business as builders, contractors, developers, colonizers and real estate agents. The company also operates a mall "Samdariya Mall" at civic centre Jabalpur, in the central hub of Jabalpur city, which was the first Mall of Jabalpur. Samdariya Mall is a shopping and entertainment destination for Jabalpur. It's a mix of Multiplex Cinema, Hyper Market, Retail Area, Entertainment Area and Restaurant and Food Court. Apart from this, the company also has interest in developing real estate projects. This apart, the company is also engaged in the business of Cement trading, construction, Jewelery wholesaling and mall operations. SANTOSH COTTON: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ ICRA has retained the ratings for the bank facilities of Shree Santosh Cotton Spin Pvt. Ltd. in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 10.00 [ICRA] D; ISSUER NOT COOPERATING; Rating continues to remain under Issuer Not Cooperating' category Term Loan 3.00 [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 February 2013, Shree Santosh Cotton Spin Private Limited (SSCSPL) is engaged in cotton ginning and pressing business. The company started commercial operations from April 2014 at its plant located at Gondal, Rajkot in Gujarat. The plant is equipped with 44 ginning machines and 1 pressing machine with a total installed capacity of producing ~450 bales per day (considering 24 hours of operations). The promoters have extensive experience in cotton industry and are also involved in the operations of a few other cotton ginning companies namely Shree Raghuvanshi Fibers Private Limited, Gopal Enterprise, Gopal Trading Co. and Gopal Cotton Corporation. SELENO STEELS: ICRA Keeps B Debt Rating in Not Cooperating ---------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Seleno Steels 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- 6.00 [ICRA] B(Stable); ISSUER NOT Cash Credit 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 2001, SSL is promoted and managed by Mr. Rajesh Agarwal and his family members. The company is engaged in the manufacturing of sponge iron with an annual production capacity of 45,000 tons per annum (TPA). The manufacturing facility is located at Raigarh in Chattisgarh with three DRI kilns of capacity 50 TPD (tons per day) each. SHANTI EDUCATIONAL: ICRA Keeps D Debt Rating in Not Cooperating --------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Shanti Educational Trust in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 7.10 [ICRA] D; ISSUER NOT COOPERATING; Term Loan 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. Shanti Educational Trust (SET) was established in 2010 as a trust in Patna, Bihar. The trust has started a school as a franchisee of G. D. Goenka Public School and AY2013-14 was the first year of operation for the school. Currently, the school conducts classes from Nursery to standard IX. SHIRPUR POWER: Ind-Ra Withdraws 'D' Term Loan Rating ---------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Shirpur Power Private Limited's loan rating as follows: -- The 'IND D (ISSUER NOT COOPERATING)' rating on the INR15.140 bil. Rupee term loan due on September 2030 is withdrawn. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the ratings, as the company is under liquidation as per the National Company Law Tribunal's order dated March 10, 2021. COMPANY PROFILE Shirpur Power, a wholly-owned subsidiary of Sixvents Power and Engineering Limited, operates a 100% imported coal-based 300MW (2 X 150MW) subcritical thermal power plant near Dhule, Maharashtra. SHIVAM PIPE: ICRA Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Shivam Pipe Industries in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 3.50 [ICRA] D; ISSUER NOT COOPERATING; Term Loan Rating continues to remain under 'Issuer Not Cooperating' category Fund Based- 5.50 [ICRA] D; ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under 'Issuer Not Cooperating' category Non-fund 2.00 [ICRA] D; ISSUER NOT COOPERATING; Based Bank Rating continues to remain under Guarantee '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. SPI is a partnership firm, promoted by Guwahati-based Mr. Ratan Lal Bhati and commenced operations in 2012. Its plant is located at Kamalpur in Guwahati, wherein initially it had a manufacturing capacity of 12,000 mtpa of mild steel pipes and steel tubular poles. In April 2017, the firm commissioned additional MS pipe and Galvanisation capacity of 12,000 mtpa each. However, the operations of the expended capacity was discontinued subsequently. SHRINIVAS (GUJARAT): ICRA Cuts Rating on INR40cr Loans to B+ ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Shrinivas (Gujarat) Laboratories Private Limited (SGLPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 35.00 [ICRA] B+(Stable); ISSUER NOT Limits- COOPERATING; Rating downgraded Term loan from [ICRA]BB+ (Stable) and continues to remain in the 'Issuer Not Cooperating' Category Fund Based- 15.00 [ICRA] B+(Stable); ISSUER NOT Limits- COOPERATING; Rating downgraded Cash Credit from [ICRA]BB+ (Stable) and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade is because of lack of adequate information regarding SGLPL performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews 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 part of its process and in accordance with its rating agreement with Shrinivas (Gujarat) Laboratories Private Limited, 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. 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 1990, SGLPL is involved in the manufacturing and marketing of branded formulations in the domestic market. The company has two manufacturing units, located at Baddi, Himachal Pradesh and Dibrugarh, Assam. The manufacturing facilities of the company are Good Manufacturing Practices (GMP) approved. The company has capacities to manufacture tablets, dry syrup, liquid orals, capsules, ointments and dry injectables. The produced formulations mainly belong to the therapeutic segments namely anti-filarial, anti-tuberculosis, haematinic, analgesic & anti-pyretic, eye care products, cardiovascular, anti-bacterials, anti-infective and multivitamins/enzymes among others. The major portion of formulations of SGLPL is produced in-house, while the remaining products are outsourced to the contract manufacturers. SGLPL also markets a few ayurvedic/herbal medicines manufactured by its sister concern (LGS Formulation). The company has 14 branch offices located in various states. The company markets its products under the brand name of 'SHRINIVAS'. SIKSHA 'O' ANUSANDHAN: Ind-Ra Lowers Term Loan Rating to 'BB' ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Siksha 'O' Anusandhan's (SOA) bank facilities ratings as follows: -- INR2,797.80 bil. Term loans due on October 2030 downgraded with IND BB (ISSUER NOT COOPERATING) rating; and -- INR415.50 mil. Non-fund-based limit downgraded with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: based on the best available information. KEY RATING DRIVERS The downgrade is pursuant to the SEBI Circular SEBI/HO/MIRSD/CRADT /CIR/P/2020/2 dated January 3, 2020. As per the circular, any issuer with an investment-grade rating remaining non-cooperative with the rating agency for more than six months should be downgraded to a sub-investment grade rating. The current outstanding rating of IND BB (ISSUER NOT COOPERATING) might not reflect SOA's credit strength as the company has been non-cooperative with the agency since November 24, 2020. Therefore, investors and other users are advised to take appropriate caution while using these ratings. COMPANY PROFILE SOA operates nine educational institutes across four campuses, offering undergraduate, postgraduate, and doctorate programmes in engineering, medical, dental, pharmacy, management, nursing, biotechnology, agriculture, hospitality, and law. SKYLA HOSPITALITY: ICRA Keeps B+ Debt Ratings in Not Cooperating ---------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Skyla Hospitality Pvt Ltd in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 7.39 [ICRA] B+(Stable); ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long term 0.50 [ICRA] B+(Stable); ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term/ 2.11 [ICRA] B+(Stable)/[ICRA]A4; Short Term- ISSUER NOT COOPERATING; Unallocated 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. Skyla Hospitality Private Limited (SHPL) was established in the year 2008 as a partnership firm M/s. Skyla Homes. It is subsequently converted on 10th May 2010 to private limited company in the name of M/s. Skyla Hospitality Private Limited. SHPL is a provider of serviced apartments in the city of Hyderabad with 100+ corporate clients such as Tata Capital Financial Services Ltd, Bharti AXA Life Insurance Limited, KPMG, ADP India Private Limited, ACT Limited, ITC Limited, PWC, NSE Limited, Honda Cars India Limited, Thought Works Technologies India Private Limited etc. SRINIVASAN CHARITABLE: Ind-Ra Keeps 'D' Rating in Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Srinivasan Charitable & Educational Trust's bank loan rating in the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating action is: -- INR2.370 bil. Bank loans (long-term) maintained in non- cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on May 31, 2017. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the ratings. COMPANY PROFILE Srinivasan Charitable & Educational Trust was established in 2006 by Shri. A. Srinivasan. The trust runs five educational institutions in Tamil Nadu. It offers engineering, polytechnic, nursing and medical courses and operates a hospital in Perambalur district. SRINIVASAN HEALTH: Ind-Ra Keeps 'D' Loan Rating in Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has maintained Srinivasan Health & Educational Trust's bank loan rating in the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating action is: -- INR1.80 bil. Bank loans (Long-term) maintained in non- cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on May 31, 2017. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the ratings. COMPANY PROFILE Srinivasan Health & Educational Trust was founded by A. Srinivasan in 2009 with an objective to promote, set up and run charitable institutions, educational institutions, and hospitals. SUBHANG CAPSUS: ICRA Keeps B+ Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Subhang Capsus Pvt. Ltd. in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] B+(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash credit 4.50 [ICRA] B+(Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Term Loan 1.46 [ICRA] B+(Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 0.54 [ICRA] B+(Stable); ISSUER NOT Limits 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 December 2011, SCPL is in the business of manufacturing moulded products for packaging solutions. It manufactures blow moulded containers with capacity ranging from 1 litre to 120 litres. The firm caters to customers across various business segments such as chemicals, pesticides, food and processing and lube oil. TECHNO INDIA: ICRA Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Techno India in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 9.00 [ICRA] D; ISSUER NOT COOPERATING; Term Loan Rating continues to remain under 'Issuer Not Cooperating' category Fund Based- 16.00 [ICRA]D; ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under the '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. Techno India (TI) was established in 2001 as a trust in Kolkata, West Bengal and manages three colleges offering under and post graduate courses across engineering, management and computer application. TI also manages eight primary and secondary level schools. Techno India College is the flagship college of the trust contributing significant proportion of the total fee income of the trust. TULSIANI CONSTRUCTIONS: ICRA Keeps D Rating in Not Cooperating -------------------------------------------------------------- ICRA has retained the ratings for the bank facilities of Tulsiani Constructions & Developers Limited. in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 30.00 [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. Tulsiani Constructions & Developers Limited (TCDL) is a flagship company of the Tulsiani Group which has several companies undertaking real estate project in Lucknow, Allahabad and other regions of Uttar Pradesh. TCDL is promoted by Allahabad based Tulsiani family and is engaged in the business of construction of residential and commercial building in Allahabad for last 14 years. TCDL is currently undertaking three residential projects in Lucknow and Aallahabad region. YCD INDUSTRIES: Ind-Ra Affirms 'BB+' Issuer Rating, Outlook Stable ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed YCD Industries Limited's Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR290 mil. (increased from INR200 mil.) Fund-based limits affirmed with IND BB+/Stable/IND A4+ rating; -- INR99.3 mil. (increased from INR42 mil.) Term loan due on March 2025 affirmed with IND BB+/Stable rating; and -- INR40 mil. Non-fund-based limits affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects YCD's continued medium scale of operations with the revenue declining to INR1,304.20 million in FY21 (FY20: INR1,558.11 million) due to closure of the factory for almost two months, owing to the COVID-19-led nationwide lockdown. Ind-Ra expects the revenue to improve marginally in FY22, owing to an increase in domestic sale and the addition of new clients. FY21 financials are provisional in nature. The ratings also factor in YCD's continued modest EBITDA margin which improved to 5.05% in FY21 (FY20: 4.61%), due to a decrease in raw material prices. Its return on capital employed was 7.5% in FY21 (FY20: 6.6%). Ind-Ra expects the margins to improve in FY22 in line with the top line. The ratings continue to factor in the company's modest credit profile. The gross interest coverage (operating EBITDA/gross interest expense) marginally deteriorated to 2.55x in FY21 (FY20: 2.65x) and the net financial leverage (adjusted net debt/operating EBITDA) to 6.02x (5.06x) due to a decline in the absolute EBITDA to INR65.80 million (INR71.79 million) and an increase in the borrowings to INR400 million (INR368.71 million). Ind-Ra expects the credit metrics to improve gradually with the repayment of debt. Liquidity Indicator – Stretched: The maximum average utilization of the fund-based facilities was around 94% during the 12 months ended April 2021. The cash flow from operations turned negative to INR37.53 million in FY20 (FY19: INR154.33 million) on account of unfavorable changes in working capital. Consequently, the free cash flow turned negative to INR68.87 million in FY20 (FY19: INR98.45 million). The cash and cash equivalent stood at INR5.36 million at FYE20 (FYE19: INR4.34 million). Furthermore, the net cash conversion cycle deteriorated to 230 days in FY21 (FY20: 107 days) due to an increase in the inventory holding period to 87 days (78 days) and the receivable period to 54days (43 days). The company did not avail the Reserve Bank of India-prescribed moratorium under the COVID-19 relief package scheme. However, it did avail a guaranteed emergency credit line of INR46 million. The ratings, however, continue to be supported by the management's experience of more than a decade in the textile industry. RATING SENSITIVITIES Negative: A further elongation of the working capital cycle, along with a significant decline in the EBITDA margins and/or a further deterioration in the liquidity position, leading to weakening of the credit metrics with the gross interest coverage reducing below 1.7x, all on a sustained basis, will be negative for the ratings. Positive: An improvement in the working capital cycle, an increase in the revenue, along with an improvement in the liquidity position while maintaining the credit metrics will be positive for the ratings. COMPANY PROFILE YCD manufactures cotton and polyester yarn in Rupnagar, Punjab, and is part of the Satia Group. The company is promoted by Dhruv Satia. ================= I N D O N E S I A ================= ALAM SUTERA: Fitch Raises IDR to 'B-', Outlook Stable ----------------------------------------------------- Fitch Ratings has upgraded Indonesia-based homebuilder PT Alam Sutera Realty Tbk's (ASRI) Issuer Default Rating (IDR) to 'B-' from 'CCC+'. The Outlook is Stable. Fitch also upgraded ASRI's outstanding USD46 million unsecured notes issued by wholly owned subsidiary, Alam Synergy Pte Ltd, due on 24 April 2022 to 'B-' with a Recovery Rating of 'RR4' from 'CCC+'/'RR4'. The upgrade follows ASRI's announcement that it secured IDR500 billion (around USD35 million) of bank loans, partly used to repay the USD15.9 million unsecured notes due 22 April 2021. The balance from the loan, together with cash on hand of IDR770 billion at end-March 2021 (around USD55 million) and Fitch's expectations of broadly neutral free cash flow (FCF) in 2021-2022, is sufficient to meet ASRI's debt repayments for the rest of 2021, and the USD46 million unsecured notes due on 24 April 2022. The Stable Outlook on the IDR also reflects the company's demonstrated ability to regain access to domestic banks to boost liquidity following the debt restructuring in 2020, supported by healthy presales despite the pandemic, and a significantly better operating environment than last year. KEY RATING DRIVERS Improved Liquidity, Bank Access: Fitch expects ASRI to have sufficient cash to cover its balance IDR223 billion debt due for the rest of 2021, and IDR929 billion of debt due in 2022, after repaying the USD15.9 million outstanding unsecured notes in April 2021. ASRI has a further IDR223 billion in term loans due in 2021, USD46 million unsecured notes due in April 2022 (around IDR658 billion) and IDR271 billion borrowings due in 2022. Fitch estimates about a IDR610 billion cash balance at end-2021, supported by a neutral FCF amid healthy presales this year. Fitch also expects the company to be able to liquidate approximately USD26 million of hedges on its April 2022 unsecured notes, which would boost ASRI's liquidity beyond April 2022 and support the repayment of its IDR271 billion borrowings next year. The company confirms that the value of the hedge will not decrease meaningfully unless the local currency strengthens well below IDR13,500 per US dollar, against Fitch's base case of IDR14,025 in 2021 and IDR14,250 in 2022. Presales Higher than Expected: Fitch has raised Fitch's 2021-2022 presales forecasts for ASRI to IDR2.7 trillion-3.0 trillion, an uptick from the IDR2.6 trillion presales, excluding the IDR200 billion of bulk land sales, in 2020. The company reported strong presales of IDR589 billion in 1Q21, driven by demand for landed houses. This coupled with a strong pipeline of project launches in 2Q21-3Q21, in both the Alam Sutera and Suvarna Sutera townships, support Fitch's expectations. Fitch expects property developers' operating environment to improve as the pandemic is increasingly contained in 2021. ASRI's 2020 presales beat Fitch's expectations on demand from first-time buyers for affordable landed homes around or below IDR1.5 billion. ASRI's Suvarna Sutera township caters to this segment and had robust presales growth of 29% in 2020. Shophouses and high-rise apartment projects in the Alam Sutera township also had strong presales due to the maturity of ASRI's main township, despite the pandemic-induced economic downturn. CFLD Deposit Risk Mitigated: Fitch has not included any land sales to China Fortune Land Development Co., Ltd. (CFLD) in Fitch's 2021-2024 forecasts for ASRI because of CFLD's financial difficulties. ASRI has around a IDR650 billion refundable deposit from CFLD. The deposit was to be gradually offset against delivery of land parcels by ASRI over a five-year period to end-2021. ASRI has confirmed that the agreement does not require an immediate return of the refundable deposit upon expiry. Neutral FCF: Fitch expects cash collections to improve in 2021 from a FCF gap of IDR527 billion in 2020, due to higher presales and looser mortgage loan regulations that allow banks to disburse up to 90% of customers' loans upfront to ASRI. Fitch expects around 60% of ASRI's presales to be funded by mortgage loans in the medium term, a similar level to 2020. Fitch has also factored in 25%-30% of collections due in 2020 to be deferred mostly as a result of construction delays. These should fall due in 2021-2023. DERIVATION SUMMARY ASRI's 'B-' IDR compares well with the company's two closest peers, PT Kawasan Industri Jababeka Tbk (KIJA, B-/Stable) and PT Lippo Karawaci TBK (B-/Stable). KIJA has smaller presales scale than ASRI but this is counterbalanced by steady cash flow from non-development sources, mainly long-term power purchase agreements with the state-owned PT Perusahaan Listrik Negara (Persero) (BBB/Stable), a dry port and estate management services. These in aggregate cover KIJA's interest expenses by around 1.0x. ASRI and KJIA have similar liquidity. KJIA's earliest unaddressed bond maturity is in 2023, and Fitch expects only negligible bank debt prior to that will be met via internally generated funds. As such, ASRI is rated at the same level as KIJA. ASRI and Lippo are also rated at the same level. ASRI's business risk profile is better than Lippo because, despite similar presales scale of around IDR2 trillion-3 trillion, ASRI's cash flow is stronger with broadly neutral FCF, whereas Fitch expects Lippo to have negative FCF of around IDR1.2 trillion in 2021-2022. Lippo's higher business risk is mitigated by its longer debt-maturity profile with the earliest bond due in 2025. Lippo also has a larger, more diversified land bank that provides it with more options to manage its liquidity, resulting in both companies being rated the same. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Attributable property presales of IDR2.6 trillion-3.0 trillion in 2021 and 2022; -- No bulk sales of land in 2021-2024; -- EBITDA margin of around 22%-26% for 2021-2022; -- ASRI to spend around IDR200 billion on discretionary land banking annually in 2021-2022; -- FCF to be marginally negative in 2021 and marginally positive in 2022. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes ASRI will be liquidated in a bankruptcy rather than continue as a going-concern because it is an asset-trading company. -- A 75% advance rate against the value of accounts receivable and a 50% advance rate against inventory, investment properties and other property plant and equipment, in estimating the liquidation value; -- The reported land bank value, which is based on historical land costs, is at a significant discount to current market value, and thus is already conservative. Based on the 1Q21 financials, the average book value of the land was around IDR560,000/sqm, significantly lower than the residential land lot price at Serpong of around IDR14.2 million/sqm and around IDR6.3 million/sqm at Pasar Kemis in 1Q21; -- ASRI's around IDR6.9 trillion of secured debt outstanding as of March 2021 will rank prior to its USD868 million senior unsecured notes in a liquidation; -- Deducted 10% of the resulting liquidation value for administrative claims. The resulting recovery rate corresponds to a Recovery Rating of 'RR1' for ASRI. However, the Recovery Rating is capped at 'RR4' because, under Fitch's Country-Specific Treatment of Recovery Ratings Criteria, Indonesia falls into Group D of creditor friendliness. Instrument ratings of issuers with assets in this group are subject to a soft cap at the issuer's IDR and a Recovery Rating of 'RR4'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained increase in presales above IDR3 trillion; -- Net debt/adjusted inventory below 50%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Attributable presales sustained below IDR2 trillion; -- A significant weakening in liquidity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: ASRI had IDR770 billion of cash as of end-March 2021. This, together with the IDR500 billion new loans secured in April 2021 and the ability to liquidate the hedge on its USD46 million outstanding unsecured notes due in April 2022 (valued at IDR388 billion at end-March 2021), will be sufficient to cover debt maturities in 2021-2022. Fitch expects ASRI will need to tap external financing to repay its 2023 and 2024 secured cross-border notes, based on Fitch's projections that the company will not have sufficient internal liquidity sources. ISSUER PROFILE ASRI is a small Indonesian homebuilder that develops and manages two townships, Alam Sutera and Suvarna Sutera. Presales are fairly even between the townships. Residential presales contribute around 75% of the total, with commercial (shophouses, office tower units) making up the balance. 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. ========= J A P A N ========= JAPAN: Pandemic Puts Food Truck Industry in Dire Straits -------------------------------------------------------- The Japan Times reports that the coronavirus pandemic has ravaged the nation's food truck industry, as more people are working from home and many events have been canceled. The Japan Times says local governments have also placed restrictions on where food trucks can operate due to the state of emergency in Tokyo, Osaka and other prefectures. "We've seen a drop in the number of places where we're allowed to operate," the report quotes Atsushi Oshima, the operator of Potage-Ya, a food truck specializing in vegetable soup, as saying. According to The Japan Times, Potage-Ya has not been able to operate in Tokyo's bustling Marunouchi business district since late April, when the capital was placed under a third COVID-19 state of emergency, as the local government has asked administrators of office buildings and other facilities to ban food trucks. As a result, Potage-Ya's sales have dropped by more than 20%. Oshima, 40, questions the local government's decision, The Japan Times says. Banning food trucks "only means that customers will flock to restaurants indoors, creating crowded places," he said. Miku Akimoto, who owns Smappy Cafe, a food truck that sells crepes, has also seen her business get hit hard, The Japan Times reports. COVID-19 began spreading in Japan shortly after Akimoto, 38, purchased a new truck in January 2020, as her husband decided to help her with her business. Smappy Cafe previously operated around 65 days a year at festivals and fireworks displays, but most of these events were canceled due to the coronavirus, says The Japan Times. After paying for operating expenses such as ingredients and gasoline, Akimoto is left with only a small amount of cash, and the burden of the cost of the new truck and repayment of outstanding loans weigh heavily, according to The Japan Times. While eating and drinking establishments that comply with the local governments' request to shorten operating hours receive financial assistance, food trucks are, in principle, not eligible for such aid, the report states. Many food truck operators want the local governments to make up for lost sales, even if it's only a small amount. Meanwhile, some are pursuing new business opportunities to overcome the crisis, the report says. =============== M A L A Y S I A =============== SERBA DINAMIK: Fitch Lowers LT IDR to 'B-', On Watch Negative ------------------------------------------------------------- Fitch Ratings has downgraded Malaysia-based energy-service provider Serba Dinamik Holdings Berhad's (SDHB) Long-Term Issuer Default Rating to 'B-' from 'BB-'. At the same time, Fitch has downgraded SDHB's senior unsecured sukuk due 2022 and 2025 to 'B-' from 'BB-' with a Recovery Rating of 'RR4'. The ratings have been placed on Rating Watch Negative (RWN). The downgrade reflects the pressure on SDHB's liquidity and the elevated refinancing risk from its short-term debt maturities in 2021 and its USD222 million sukuk due May 2022. Fitch believes the company's access to debt funding has been compromised after its auditor, KPMG, requested an independent review when a 2020 statutory audit raised multiple questions over the company's operations. The RWN takes into account the plans for the independent review and the uncertainty over the completion of the review, and the limited time to maturity of its bonds. Fitch expects to resolve the RWN following the completion of the review and the company demonstrating it has access to funding to enable it to refinance its upcoming debt maturities. KEY RATING DRIVERS Independent Review: KPMG, in the process of the 2020 statutory audit, requested for an independent firm to review SDHB to assess the veracity and accuracy of parts of its business. This includes a review of some of its suppliers as well as 11 customers accounting for total sales transactions of MYR2.32 billion, trade receivables balance of MYR652 million and materials-on-site balance of MYR569 million. An independent firm will be appointed within the next few days to start the review. Undetermined Scope, Completion: The scope of the work to ascertain the accuracy of the details is not finalised, making the review's duration uncertain. SDHB has indicated it plans to complete the review within one month. Fitch believes the process is generally complex, necessitating ground checks to ascertain accuracy, which may take longer than anticipated. Refinancing Risk: Fitch believes the issues raised by KPMG and the review will constrain SDHB's ability to access capital markets to manage its liabilities. It had MYR836 million in cash at end-2020 versus short-term debt due of MYR807.5 million. It raised MYR508.6 million in a private placement in February 2021 and drew down MYR100 million from Islamic commercial paper (ICP). It also has USD225 million of sukuk due in 2022 for which it may have to consider other refinancing options. Fitch thinks the company had strong access to multiple forms of capital before the KPMG findings, which, combined with its proactive refinancing strategy, would have enabled it to refinance its short-term debt and undertake liability management. However, the independent review has hurt its ability to address its short-term maturities, resulting in the multiple-notch downgrade. Cash Preservation a Priority: Fitch believes SDHB's top priority under these circumstances will be to ensure the continuity of its operations. In Fitch's opinion, cash will be deployed to ensure that its oil and gas service contracts are carried out smoothly, rather than servicing or redeeming debt. SDHB has indicated that its banks have not frozen or withdrawn any facilities to date. However, SDHB may face limited access to funds if the independent review reveals any anomalies. High Working Capital, Capex: SDHB's working-capital needs surged to MYR1 billion in 2020, from Fitch's earlier projection of about MYR420 million, due to a disproportionate increase in inventory. Fitch estimates that, even if SDHB reins in its dividend distribution, its working capital and capex needs will use up cash of about MYR90 million-100 million per month. Hence, SDHB is reliant on increasing working-capital facilities to smoothen operations and bridge the time lag between the rendering of its services and the receipt of cash. DERIVATION SUMMARY SDHB's 'B-' rating and RWN reflects its heightened liquidity risk following the questions raised over the quality of its earnings by its auditor, which gives rise to the possibility lenders may cut their exposure to the company, and investor or lender interest in the company may be constrained, if the audit review is unresolved or prolonged. Its rating can be compared with Indonesia-based engineering and construction company PT Wijaya Karya (Persero) Tbk's (WIKA; BB-/Negative) Standalone Credit Profile (SCP) of 'b-', as well as the rating of US-based Infrastructure and Energy Alternatives, Inc. (IEA; B/Stable). WIKA's 'b-' SCP and Negative Outlook reflect its tight liquidity, underpinned by a sharp increase in leverage, following a decline in new orders and slowdown in construction activity amid the Covid-19 pandemic. Fitch expects the company to have sufficient access to state-owned banks in light of its state ownership and status as one of the largest construction companies in Indonesia. However, evidence of liquidity tightening further or failure to address upcoming maturities could lead to negative rating action. IEA's 'B' rating reflects the company's significant execution risk, demonstrated by cost overruns in 2018, followed by strained liquidity in 2019. Pro forma margins are in line with or stronger than those of other 'B' category engineering and construction peers. However, IEA's margins may be more volatile given its small scale and low order backlog relative to its size. The one-notch difference and RWN on SDHB reflect its elevated liquidity risk compared with IEA. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Bid book to increase by 5%-10% annually from 2020; -- New order book win rate of 25% in 2020-2022; -- Order book renewal rate of 30% in 2020-2022; -- EBITDA margin of around 18% over 2020-2022 (2019: 18%). KEY RECOVERY RATING ASSUMPTIONS -- The recovery analysis assumes that SDHB would be reorganized as a going-concern in bankruptcy rather than liquidated. -- Fitch has assumed a 10% administrative claim. -- The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganisation EBITDA level upon which we base the enterprise valuation. -- Fitch estimates EBITDA at MYR700 million, which considers EBITDA in 2018 to 2019, and factors in queries raised by KPMG over the earnings quality from certain customers. -- An enterprise value multiple of 4x EBITDA is applied to the going-concern EBITDA to calculate a post-reorganisation enterprise value. In determining the multiple, Fitch has taken into consideration SDHB's customer quality as well as revenue and cash flow history and outlook, although its high working capital and capex requirements will constrain free cash flow generation. -- The going-concern enterprise value corresponds to a 'RR4' Recovery Rating for the senior unsecured notes after adjusting for administrative claims. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch will remove the RWN and affirm the ratings after a successful completion of the independent review and timely refinancing of all its upcoming debt maturities. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch may take negative rating action if the independent review is protracted, thereby negatively affecting its ability to service or refinance its outstanding debt. 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 Liquidity Pressure: SDHB had readily available cash of around MYR836 million as of end-December 2020, against short-term debt maturities of MYR807.5 million. It also raised MYR508.6 million in the February private placement. SDHB said it drew down the MYR100 million of ICPs in May 2021 to repay part of the term loans due and expects the balance of MYR519.6 million, which consists of mostly revolving credit facilities as part of daily operations, to be repaid when it receives contract payments, or rolled over. The company had around MYR750million in unused credit facilities as of 31 March 2021, which have not been withdrawn by the banks to date. Nevertheless, SDHB's USD222 million sukuk due in May 2022, which it was originally planning to refinance with another bond, may face delays if the independent review cannot be completed swiftly. The company appears to have sufficient cash and ample credit lines, but the impending independent review may put pressure on its liquidity, should some of its banks withdraw or freeze the available facilities. ISSUER PROFILE SDHB is one of Malaysia's leading oil-and-gas service and equipment companies, ranked fourth by sales in 2019. It has operational facilities in Malaysia, Indonesia, United Arab Emirates, Bahrain, the UK and India. 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. ===================== N E W Z E A L A N D ===================== SACRED HILL: Two More Wine Businesses Placed Into Receivership -------------------------------------------------------------- John Anthony at Stuff.co.nz reports that two more Sacred Hill wine businesses have been placed into receivership. A notice in the New Zealand Gazette said Westpac appointed Rees Logan and Andrew McKay of BDO joint receivers of Sacred Hill Family Vineyards and Sacred Hill Global on May 27, Stuff discloses. According to Stuff, the receiverships come less than a month after Westpac appointed Messrs. Logan and McKay receivers of Sacred Hill Vineyards and Sacred Hill Marlborough Vineyards. In April Sacred Hill's drinks distribution business Quench Collective went into liquidation owing unsecured creditors NZD3.16 million, recalls Stuff. Quench Collective was placed into liquidation by its shareholder Sacred Hill Family Vineyards, now in receivership. If a company is unable to pay its debts to a secured creditor, it can be forced into receivership by a secured creditor. Sacred Hill Family Vineyards is 65 per cent owned by Sacred Hill Winery and 30 per cent owned by Hong Kong company Jebsen Beverage Company. Antony Bish owns 3 per cent and Richard Foddy owns 2 per cent. The company was named Whitecliff Vineyards until October. Sacred Hill Global is owned by Sacred Hill Family Vineyards. David Mason is the sole director of Sacred Hill Family Vineyards and Sacred Hill Global. He owns 90 per cent of Sacred Hill Winery. ================= S I N G A P O R E ================= EAGLE HOSPITALITY: Court Rules Foreign Units Can Stay in Ch. 11 --------------------------------------------------------------- Law360 reports that a Delaware bankruptcy judge on June 1 denied Bank of America's bid to dismiss the Chapter 11 cases of Eagle Hospitality's Singapore real estate investment trust, finding it was eligible to file for bankruptcy under Singapore law. In his opinion, U.S. Bankruptcy Judge Christopher Sontchi said EHT's expert witness had persuaded him that the Singapore trust was an entity capable of filing for bankruptcy and that the Singapore courts had granted the REIT trustee the authority to do so. 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. ===================== S O U T H K O R E A ===================== SSANGYONG MOTOR: Eyes New Investor to Complete Sale Process ----------------------------------------------------------- The Economic Times reports that SsangYong Motor Company is looking to complete a sale process by finding a new majority investor by October, even as it struggles under court receivership, said two people familiar with the matter. The development comes after its owner, Mahindra & Mahindra, decided to pull out of the cash-strapped car maker, leaving it under financial duress, ET says. According to ET, SsangYong Motor is expected to invite tenders by next month and is likely to submit a restructuring programme by the first week of July, with the consent of the employees' union. The court-appointed auditor, Ernst & Young Hanyoung, will oversee the sale process, said the people. About Ssangyong Motor Headquartered in Kyeonggi-Do, South Korea, Ssangyong Motor Co. Ltd. engages in the manufacture and sale of automobiles. The Company mainly manufactures and sells recreational vehicles (RVs), sports utility vehicles (SUVs), multi-purpose vehicles (CDVs) and passenger cars under the brand name of rexton sports, korando, korando sports, korando turismo, tivoli, tivoli air and others. The Company also provides automobile parts. The Company distributes its products within domestic market and to overseas markets. Mahindra acquired a 70% stake in SsangYong for KRW523 billion in 2011 and now holds a 74.65% stake in the carmaker. SsangYong Motor Co. on Dec. 21, 2020, filed for court receivership as it struggles with snowballing debts amid the COVID-19 pandemic, according to Yonhap News Agency. The decision comes after SsangYong Motor failed to pay KRW60 billion (US$54.8 million) worth of debts to its three creditor banks. On April 15, 2021, SsangYong Motor Co. was placed under court receivership as its Indian parent Mahindra & Mahindra Ltd. failed to attract an investor amid the prolonged COVID-19 pandemic and its financial status is further worsening. Under court receivership, SsangYong's survival depends on whether there will be a new investor to acquire a streamlined SsangYong after debt settlement and other restructuring efforts, Yonhap said. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***