/raid1/www/Hosts/bankrupt/TCRAP_Public/210609.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, June 9, 2021, Vol. 24, No. 109
Headlines
A U S T R A L I A
BAYSIDE GATE: Second Creditors' Meeting Set for June 16
ECSPRO PTY: First Creditors' Meeting Set for June 16
I50Four Technology: First Creditors' Meeting Set for June 18
INTRINSIC INVESTMENT: Second Creditors' Meeting Set for June 17
MCLEAN STREET: First Creditors' Meeting Set for June 16
C H I N A
CHINA AOYUAN: Fitch Affirms 'BB' LT IDR, Alters Outlook to Neg.
CHINA EVERGRANDE: Rises After Making US$43 Million Buyback
LIONBRIDGE CAPITAL: Moody's Upgrades CFR to Ba3 on Revenue Growth
TAHOE GROUP: Moody's Withdraws Caa3 Corporate Family Rating
I N D I A
AGARWAL PHARMA: CRISIL Lowers Rating on INR5cr Cash Loan to B
BABANRAOJI SHINDE: CRISIL Keeps D Debt Rating in Not Cooperating
BALAJI AGRITRADE: CRISIL Keeps D Debt Rating in Not Cooperating
BENTLAY FITTINGS: CRISIL Lowers Rating on INR10.2cr Loan to B
BILPOWER LIMITED: CRISIL Keeps D Debt Ratings in Not Cooperating
DAYANAND COTTON: CRISIL Keeps D Debt Ratings in Not Cooperating
DENTCARE DENTAL: CRISIL Lowers Rating on INR15cr Cash Loan to B
DREAMLIGHT MERCHANT: CRISIL Migrates B+ Rating to Not Cooperating
GOMATHI STEELS: CRISIL Keeps D Debt Ratings in Not Cooperating
HOLISTIC REMEDIES: CRISIL Migrates B+ Rating to Not Cooperating
INCOM WIRES: CRISIL Keeps D Debt Ratings in Not Cooperating
INTERGLOBE AVIATION: IndiGo Posts Fifth Straight Quarterly Loss
J. R. AGROTECH: CRISIL Keeps D Debt Ratings in Not Cooperating
JET AIRWAYS: Slots Will be Based on Existing Norms, Regulator Says
KSHATRIYA CONSTRUCTIONS: CRISIL Cuts Rating on INR10cr Loan to D
MODEL RAG: CRISIL Migrates B+ Rating to Not Cooperating Category
NAGOORAR ENTERPRISES: CRISIL Keeps D Rating in Not Cooperating
NARAYAN INDUSTRIES: CRISIL Keeps D Ratings in Not Cooperating
NATURAL FOODS: CRISIL Migrates D Debt Rating to Not Cooperating
RAJESHWARI COTSPIN: CRISIL Moves D Ratings to Not Cooperating
RAMKY INFRA: CRISIL Hikes Rating on INR749.82cr Bank Loan to C
SDS INFRATECH: CRISIL Keeps D Debt Rating in Not Cooperating
SHRESHT INDUSTRIES: CRISIL Moves D Debt Rating to Not Cooperating
SIKKIM FERRO: CRISIL Keeps D Debt Ratings in Not Cooperating
TEMPLE CITY: CRISIL Keeps D Debt Rating in Not Cooperating
TOPLON INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating
TRISONS IMPEX: CRISIL Keeps D Debt Ratings in Not Cooperating
UNNATI WRITING: CRISIL Migrates D Debt Rating to Not Cooperating
VERSATILE MOBILE: CRISIL Keeps D Debt Ratings in Not Cooperating
ZONASHA ESTATES: CRISIL Lowers Rating on INR60cr LT Loan to B
P A K I S T A N
PAKISTAN: To Reduce Some Import Taxes in Bid to Boost Growth
S I N G A P O R E
2BY2 YACHTS: Court to Hear Wind-Up Petition on June 11
KRISENERGY LTD: Files Winding-Up Petition in Cayman Islands Court
TECHNICS OIL: Court Enters Wind-Up Order
S R I L A N K A
BIMPUTH FINANCE: Fitch Lowers National LT Rating to 'B-(lka)'
FINTREX FINANCE: Fitch Affirms 'B+(lka)' National LT Rating
IDEAL FINANCE: Fitch Puts 'BB-(lka)' National Rating on Watch Pos.
SARVODAYA DEVELOPMENT: Fitch Affirms 'B+(lka)' National LT Rating
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A U S T R A L I A
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BAYSIDE GATE: Second Creditors' Meeting Set for June 16
-------------------------------------------------------
A second meeting of creditors in the proceedings of Bayside Gate
Frames Pty. Ltd, trading as Bayside Fencing Products, Direct
Factory Outlet Concrete Sleepers, Landscaping and Building Products
and Concrete Sleeper Retaining Walls Brisbane, has been set for
June 16, 2021, at 10:00 a.m. via virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 15, 2021, at 4:00 p.m.
Stephen Robert Dixon and Hamilton Murphy Advisory of Hamilton
Murphy were appointed as administrators of Bayside Gate on March 9,
2021.
ECSPRO PTY: First Creditors' Meeting Set for June 16
----------------------------------------------------
A first meeting of the creditors in the proceedings of ECSPRO Pty
Ltd will be held on June 16, 2021, at 10:00 a.m. at the offices of
Jirsch Sutherland, Level 7, 28 O Connell Street, in Sydney, NSW.
Daniel Jean Civil of Jirsch Sutherland was appointed as
administrator of ECSPRO Pty on June 8, 2021.
I50Four Technology: First Creditors' Meeting Set for June 18
------------------------------------------------------------
A first meeting of the creditors in the proceedings of I50Four
Technology Pty Limited will be held on June 18, 2021, at 11:00 a.m.
at the offices of SV Partners, Suite 2, Level 1, 1 Market Street,
in Newcastle, NSW.
Daniel Jon Quinn of SV Partners was appointed as administrator of
I50Four Technology on June 7, 2021.
INTRINSIC INVESTMENT: Second Creditors' Meeting Set for June 17
---------------------------------------------------------------
A second meeting of creditors in the proceedings of Intrinsic
Investment Management Pty. Ltd has been set for June 17, 2021, at
11:00 a.m. via virtual means.
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 16, 2021, at 5:00 p.m.
Nicholas Giasoumi and Shane Leslie Deane of Dye & Co. Pty were
appointed as administrators of Intrinsic Investment on May 18,
2021.
MCLEAN STREET: First Creditors' Meeting Set for June 16
-------------------------------------------------------
A first meeting of the creditors in the proceedings of McLean
Street Pty Ltd will be held on June 16, 2021, at 11:00 a.m. via
telephone conference.
Ross John McDermott of Ross McDermott Chartered Accountant was
appointed as administrator of McLean Street on June 3, 2021.
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C H I N A
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CHINA AOYUAN: Fitch Affirms 'BB' LT IDR, Alters Outlook to Neg.
---------------------------------------------------------------
Fitch Ratings has revised the Outlook on China Aoyuan Group
Limited's Long-Term Foreign-Currency Issuer Default Rating (IDR) to
Negative, from Stable, and has affirmed the rating at 'BB'. Fitch
has also affirmed the Chinese homebuilder's senior unsecured rating
and the rating on its outstanding US dollar senior notes at 'BB'.
The Negative Outlook reflects Fitch's view that Aoyuan's
proportional consolidated leverage may stay at above 40%, Fitch's
negative rating trigger, in forecast period to 2024 after it edged
up to 41.8% by end-2020 from 37.9% at end-June 2020. Fitch is
uncertain if the drop in implied cash collected can be reversed by
end-2021 and whether Aoyuan can reduce guarantees to joint ventures
and associates in 2021. The Outlook may return to Stable if Aoyuan
improves in the abovementioned aspects in 2021.
KEY RATING DRIVERS
Leverage Rose on Land Purchases: Aoyuan's proportional consolidated
leverage exceeded the negative rating trigger of 40% by end-2020
after it spent CNY45 billion on buying land during the year, higher
than the budgeted CNY35 billion as it saw good opportunities while
land prices were lower. Land bank life extended to 2.8 years by
end-2020 from 2.3 years at end-1H20. Fitch believes Aoyuan's land
bank and 60 urban renewal projects (URPs) will give it enough land
to sustain its business model. It will not be under pressure to
acquire land at sub-optimal prices to maintain contracted sales.
Lower Implied Cash Collection: Implied cash collected - defined as
change in customer deposits plus revenue booked during the year -
fell to CNY47 billion in 2020 from CNY74 billion in 2019 despite
steady attributable contracted sales of CNY98 billion in 2020. The
implied cash collection was only 48% of the reported attributable
sales during the year. CNY7.5 billion of customer deposits are lost
due to disposal of subsidiaries. Management said CNY32 billion of
cash was collected from JVs and associates.
This suggests that a large portion of Aoyuan's attributable
contracted sales in 2020 were from JVs and associates as a large
proportion of land acquired was via JVs and associates in 2020. The
high proportion of off-balance-sheet projects meant the performance
of many projects is not fully reflected in the company's
financials, in Fitch's view.
Increase in Guarantees: Aoyuan's net debt + guarantees/adjusted
inventory (on consolidated basis) jumped to 59.2% from 45.7% in
2019. This was driven by the rise in guarantees provided to JVs to
CNY24 billion in 2020 from CNY8 billion in 2019, partly due to some
subsidiaries being changed to JVs during the year. Also, the number
of JV projects Aoyuan engaged in rose to 90 in 2020 from 10 in
2019. Management expects guarantees to decline down as the company
will switch to providing guarantees on an attributable proportion
basis instead of full ones.
Minority Shareholders: Aoyuan's exposure to non-controlling
interest (NCI) further rose to 66% of total equity by end-2020.
This is high among Chinese developers rated by Fitch, and reflects
Aoyuan's reliance on capital contributions from minority
shareholders, which are mostly developers and URP fund unitholders,
to finance its expansion. This lowers Aoyuan's need for debt
funding, but creates the potential for cash leakage. High NCI
exposure also reduces Aoyuan's financial flexibility because
homebuilders with lower NCI can dispose of stakes in projects to
cut leverage.
About 20% of the company's NCI is attributable to private funds set
up by Aoyuan to gather capital for the URPs it started prior to
2018. Fitch does not treat this as debt, as there is a loss-sharing
provision and no fixed return on investment. There may be cash
outflow to buy out minority investors of the URPs as they mature,
but Fitch believes the amount will be lower than the cost of
acquiring the land bank in the open market.
Larger Scale: Aoyuan was one of the fastest-growing among peers
with attributable contracted sales increasing by CAGR of 44% in
2016-2020. Revenue rose by 34% in 2020. Aoyuan had 370 projects in
95 cities across China and overseas at end-2020. It has improved
the geographical diversification of its land bank and reduced its
reliance on lower-tier cities over the past few years. Southern
China, its largest market, accounted for 35% of land bank by gross
floor area (GFA) in 2020, compared with 42% in 2019.
More Volatile End-Markets: Aoyuan is more exposed to industry risks
due to higher exposure to lower-tier cities and commercial property
than 'BB' peers. Commercial properties have a lower sell-through
rate than residential ones and are more susceptible to economic
cycles, which leaves Aoyuan with more operational risk than peers
that sell only residential projects. Commercial property from
integrated-development projects made up 13% of Aoyuan's contracted
sales in 2020. Fitch expects the product mix to be stable in the
short term, with commercial products making up 20% of saleable
resources in 2021.
DERIVATION SUMMARY
Aoyuan's contracted sales are larger than the CNY50 billion-70
billion (on an attributable basis) of 'BB-' peers, including
Central China Real Estate Limited (BB-/Stable), Times China
Holdings Limited (BB-/Stable) and KWG Group Holdings Limited
(BB-/Stable). Aoyuan's land bank is more geographically diversified
and larger than that of the three peers, which are more regionally
based and have operations in fewer than 50 cities. Aoyuan's
attributable contracted sales scale and revenue scale are
comparable with that of 'BB' rated peers, such as CIFI Holdings
(Group) Co. Ltd. (BB/Stable) and Logan Group Company Limited
(BB/Stable).
Aoyuan's 2020 proportionately consolidated leverage of 41.8% is
slightly higher than that of Times' 39%, but Aoyuan's land-bank
life is longer at 2.8 years compared to Times' 2.5 years. Aoyuan's
profitability is higher than that of China SCE Group Holdings
Limited (BB-/Stable) but Aoyuan's leverage is around 1pp higher.
Aoyuan and Risesun Real Estate Development Co.,Ltd. (BB-/Stable)
have similar scales. Risesun's land bank is more concentrated, with
around 60% of land reserves in Beijing and the Bohai area, which is
under stricter scrutiny than other regions. In comparison, 35% of
Aoyuan's land bank is in southern China, which has stronger
economic prospects. They both focus in lower-tier cities, which is
reflected in their similar ASPs of around CNY11,000 per sq m, but
Aoyuan's land bank is more diversified as it covers 95 cities
compared with Risesun's 79. Risesun has a shorter land bank life
(2.3 years) than Aoyuan's 2.8 years at end-2020.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- CNY105 billion-109 billion of attributable sales in 2021-2024;
-- 6% rise on average in ASP a year in 2021-2024;
-- GFA acquired to be 0.8x-1.0x of GFA sold in 2021-2024;
-- 4% rise in average land cost a year in 2021-2024;
-- Unsold land bank life maintained at around 2.5 years (excluding
URPs);
-- Selling, general and administrative expenses at 6%-8% of
revenue.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch will revise the Outlook to Stable if the negative rating
triggers are not met in 12-18 months.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Proportionally consolidated leverage (net debt/adjusted
inventory) above 40% for a sustained period;
-- Large increase in NCI exposure and guarantees to debts of JVs
and associates;
-- Continued weakness in implied cash collected (defined as change
in customer deposits plus revenue booked during the year).
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: Aoyuan had CNY52.5 billion in available cash on
hand at end-2020, just enough to cover its short-term debt of
CNY52.4 billion. If the short-term debt backed by restricted and
pledged deposits are excluded, the ratio will improve. The group's
ratio of total cash to short-term debt was 1.3x. The company has
multiple funding channels, including onshore and offshore bank
loans, and private and public bond issuance.
ISSUER PROFILE
Aoyuan is a middle-sized China property developer. It has a solid
base in Guangdong province, which accounted for 28% of total land
bank by GFA at end-2020, while showing a greater presence in major
economic zones - including the Yangtze River Delta and central and
western China, which together represent 45% of the total land bank
at end-2020.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch's calculation of CNY133 billion of adjusted inventory used in
the proportionately consolidated leverage calculation at end-2020
includes CNY158 billion of properties for sale, CNY4 billion of
deposits paid for acquisitions of subsidiaries & potential
purchases of land use rights and property projects, CNY1 billion of
land use rights, CNY 5 billion of other payables related to
development-property acquisitions, CNY4.4 billion of project
consideration payables, CNY1.9 billion of acquisition consideration
payables, CNY5.5 billion due from NCI, CNY5.5 billion due to NCI,
CNY8.8 billion in investment properties, CNY69 billion in contract
liabilities, CNY4.3 billion of buildings, and CNY27 billion in
adjusted inventory at its JVs. Fitch has adjusted the value of
investment properties based on investment properties at cost.
Fitch has included JV net debt of CNY10 billion to the net debt
calculation on a proportionately consolidated leverage
calculation.
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.
CHINA EVERGRANDE: Rises After Making US$43 Million Buyback
----------------------------------------------------------
Lulu Yilun Chen and Ina Zhou at Bloomberg News report that China
Evergrande Group, the country's most indebted developer, rose in
Hong Kong trading after the company bought back HK$336 million ($43
million) of shares.
The stock climbed 2.2% on June 8. The company paid HK$11.08 to
HK$11.84 apiece for the shares, about 0.2% of issued capital, it
said in a filing to the exchange on June 7, Bloomberg relays.
The move extended gains that began Monday afternoon [June 7] after
the developer issued a statement dismissing "rumors" that
questioned its price discounts and dealings with a banking unit.
According to Bloomberg, Evergrande is under close regulatory
scrutiny as authorities issue a slew of measures to curtail risks
in the property sector. It's falling further behind peers in
meeting stricter Chinese borrowing limits, raising refinancing
concerns.
"The volatility in Evergrande's share price is unlikely to
decrease," Bloomberg quotes Castor Pang, an analyst at Core
Pacific-Yamaichi International Hong Kong Ltd, as saying.
"Evergrande's price has dropped a lot and that's helping with the
rebound, but it's hard to say if it can last."
Evergrande's bonds also rose on June 8, Bloomberg notes. Its 8.75%
dollar bond due 2025 climbed 2 cents on the dollar to 75.9 cents as
of 3:57 p.m. in Hong Kong, set for the largest increase since
December. The firm's onshore bonds were generally higher as well,
with its 6.98% note due 2022 up 2.1% at CNY88, erasing much of June
7's decline.
According to Bloomberg, analysts at JPMorgan Chase & Co. upgraded
the stock to overweight from neutral, saying the likelihood of
further share repurchases should drive near-term gains.
Evergrande's statement saying it's been complying with the law on
transactions with part-owned Shengjing Bank Co. "should remove
concerns among investors," analysts including Ryan Li wrote in a
note.
Uncertainties for the industry still remain amid policy changes,
says Bloomberg. China's Ministry of Land and Resources shifted the
responsibility for collecting land sales revenue to the tax bureau
on June 4, a development that Australia & New Zealand Banking Group
Ltd. analysts deemed negative for the property sector.
The People's Bank of China said in a response to a Bloomberg query
on June 4 that it would include commercial banks' investment in
securities backed by residential mortgages in property-related loan
exposure, a move that could limit growth of debt for builders.
"Evergrande's buyback may fail to ease liquidity concerns," said
Kristy Hung, a Hong Kong-based analyst with Bloomberg Intelligence.
The company "could face higher refinancing risks because the PBOC's
broadening of its definition of banks' property exposure to include
some investments in the sector may force them to trim loan exposure
to developers further."
Evergrande's bond and stock selloff worsened last week after Caixin
Media's WeNews reported that regulators were looking into its
dealings with a banking unit, according to Bloomberg. The China
Banking and Insurance Regulatory Commission is examining more than
CNY100 billion ($15.6 billion) of transactions between the
developer and Shengjing Bank, WeNews said on May 27.
Shengjing Bank holds large amounts of bonds issued by Evergrande,
WeNews reported, citing unspecified sources, Bloomberg relays.
Evergrande is the bank's biggest shareholder.
Evergrande said in its statement that its operations were as normal
and it has never delayed any repayment of loan principal or
interest. The firm will arrange payment of a "very small amount" of
commercial paper issued by some affiliates that hadn't been repaid
on time, it added.
In an effort to restore investor confidence, the company said last
week that it would try to meet at least one of China's so-called
three red lines -- metrics limiting debt levels in the property
sector -- by the end of this month, Bloomberg adds.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
As reported in the Troubled Company Reporter-Asia Pacific on April
15, 2021, S&P Global Ratings on April 12, 2021, revised its
outlooks on China Evergrande Group, its property development arm,
Hengda Real Estate Group Co. Ltd., and its offshore financial
platform, Tianji Holding Ltd., to stable from negative. At the same
time, S&P affirmed its 'B+' long-term issuer credit ratings on the
three companies and its 'B' long-term issue ratings on the U.S.
dollar notes issued by Evergrande and those guaranteed by Tianji.
The stable outlook on Evergrande reflects S&P's view of its
strengthening liquidity profile over the next 12 months, given it
expects its short-term debt position and liquidity to continue to
improve. It also reflects our expectation that further margin
decline should be offset by Evergrande's ramp-up of revenue
recognition and debt reduction, and that Hengda and Tianji will
remain core subsidiaries of the parent.
LIONBRIDGE CAPITAL: Moody's Upgrades CFR to Ba3 on Revenue Growth
-----------------------------------------------------------------
Moody's Investors Service has upgraded Lionbridge Capital Co.,
Limited's corporate family rating to Ba3 from B1 and issuer rating
to B1 from B2.
At the same time, Moody's has revised the entity-level outlook to
stable from positive.
The upgrade reflects Lionbridge Capital's increased financial
flexibility and more diversified funding channels. The stable
outlook reflects Moody's expectation that the company will continue
to benefit from the improved funding access and maintain its
profitability, asset quality and capital adequacy around current
levels.
RATINGS RATIONALE
Lionbridge Capital's financial flexibility has improved since the
second half of 2020 with more diversified funding channels and
lower reliance on wholesale secured funding. This is largely a
result of CCB Trust Co., Ltd. (CCBT)'s shareholding in Lionbridge
Capital and various forms of ongoing support. In June 2020, CCBT, a
67%-owned subsidiary of China Construction Bank Corporation (CCB A1
stable, Baseline Credit Assessment baa1) became the largest
indirect shareholder of Lionbridge Cayman Limited, which owns 100%
of Lionbridge Capital. Moody's expects CCBT to remain as a key
shareholder at least over the next 12-18 months and Lionbridge
Capital to maintain its key metrics around current levels, as
reflected by the stable outlook.
Lionbridge Capital's 2020 results also demonstrate the company's
resiliency despite the impact of COVID-19. Revenue and net profit
grew from a year ago, while its return on average assets was in
line with the prior-year level. Asset quality metrics were affected
by the COVID-19 in the first half of 2020, but have been recovering
since then and remained at solid levels. The results testify to the
company's leading franchise in the truck leasing market in China
and its effective credit risk management framework.
Moody's regards CCBT's shareholding to be an enhancement to
Lionbridge Capital's governance under its environmental, social and
governance (ESG) framework, given their implications for Lionbridge
Capital's organization and board structures as well as financial
strategy. The action reflects the improvement in Lionbridge
Capital's credit quality from the shareholding change.
Structural considerations
Moody's CFR reflects the likelihood of a default on a corporate
family's contractually promised payments and the expected financial
loss suffered in the event of default. A CFR is assigned to a
corporate family as if it had a single class of debt and a single
consolidated legal entity structure. Moody's issuer rating reflects
the ability of entities to honor senior unsecured financial
counterparty obligations and contracts.
The one-notch difference between Lionbridge Capital's CFR and its
issuer rating reflects the fact that (1) most of the company's
assets reside at its fully owned onshore operating entity,
Lionbridge Leasing; and (2) a large proportion of Lionbridge
Leasing's assets are encumbered for secured borrowings. Lionbridge
Capital's senior unsecured debt is structurally subordinated to
Lionbridge Leasing's secured indebtedness and senior unsecured
indebtedness.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Lionbridge Capital's CFR could be upgraded if Lionbridge (1)
further strengthens its capital adequacy; (2) further improves its
financial flexibility through diversifying funding channels and
increasing debt maturities coverage; and (3) maintains its solid
profitability and asset quality metrics.
The issuer rating could be upgraded if the CFR is upgraded.
Lionbridge Capital's CFR could be downgraded if (1) Lionbridge's
franchise in China's truck leasing sector weakens materially; (2)
Lionbridge's financial flexibility deteriorates with debt
maturities coverage ratio decreasing and secured debt/gross
tangible assets ratio increasing for consecutive periods; or (3)
capital adequacy, as measured by tangible common equity/tangible
managed assets, sustains below 8%.
The issuer rating could be downgraded if (1) the CFR is downgraded;
or (2) structurally senior unsecured debt or secured debt, or both,
increase materially.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
Lionbridge Capital Co., Limited is domiciled in Hong Kong with a
majority of its operations in mainland China. The company reported
assets of RMB21.8 billion as of December 31, 2020. Lionbridge
Capital's core operating entity, Lionbridge Financing Leasing
(China) Co., Ltd (Lionbridge Leasing), is based in mainland China.
As of the end of 2020, Lionbridge Leasing accounted for 97% of
Lionbridge Capital's total assets.
TAHOE GROUP: Moody's Withdraws Caa3 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has withdrawn Tahoe Group Co., Ltd 's
Caa3 Corporate Family Rating.
At the same time, Moody's has withdrawn Tahoe Group Global (Co.,)
Limited 's Ca Backed senior unsecured ratings. The notes are
unconditionally and irrevocably guaranteed by Tahoe.
Prior to the withdrawal, the outlooks on Tahoe and Tahoe Group
Global (Co.,) Limited were negative.
RATINGS RATIONALE
Moody's has decided to withdraw the ratings because it believes it
has insufficient or otherwise inadequate information to support the
maintenance of the ratings.
Tahoe Group Co., Ltd (Tahoe) was listed on the Shenzhen Stock
Exchange in 2010. The company began its first residential property
project in Fuzhou, Fujian province, in 1996, with its operations
mainly focused on residential property development. The company is
also engaged in commercial property development.
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I N D I A
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AGARWAL PHARMA: CRISIL Lowers Rating on INR5cr Cash Loan to B
-------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Agarwal Pharma
(AP) to 'CRISIL B/Stable Issuer Not Cooperating' from 'CRISIL
BB-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING)
CRISIL Ratings has been consistently following up with AP for
obtaining information through letters and emails dated January 30,
2021 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of AP, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AP is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of AP
Revised to 'CRISIL B/Stable Issuer Not Cooperating' from 'CRISIL
BB-/Stable Issuer Not Cooperating'.
The firm was incorporated as a proprietorship firm by M Amit
Agarwal in 1999 and is in distribution of medicines and
pharmaceutical drugs in Lucknow (UP).The firm has an owned 4,000
square foot of warehouse and one rented store in main market of
Lucknow.
BABANRAOJI SHINDE: CRISIL Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL said the rating on bank facilities of Babanraoji Shinde
Sugar & Allied Industries Limited (BSSAIL) continues to be 'CRISIL
D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 35 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with BSSAIL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BSSAIL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
BSSAIL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of BSSAIL continues to be 'CRISIL D Issuer Not
Cooperating'.
Incorporated in 2011, BSSAIL is promoted by Mr. Ranjitsingh B
Shinde and his family. The company has set up a sugar plant
(capacity of 5000 tonnes of cane per day) along with a
co-generation power plant of 25 megawatts in Solapur, Maharashtra.
BALAJI AGRITRADE: CRISIL Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
CRISIL said the rating on bank facilities of Balaji Agritrade
Private Limited (BAPL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Rupee Term Loan 12 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with BAPL for
obtaining information through letters and emails dated January 30,
2021 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BAPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BAPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BAPL continues to be 'CRISIL D Issuer Not Cooperating'.
BAPL's primary business is trading of agro commodities. It deals in
the SriGanga Nagar, Rajasthan. However, in fiscal 2017, BAPL
undertook a project to build a private mandi, Balaji Agritrade. The
purpose of establishing mandi is to support the farmers to sell
their crop.
BENTLAY FITTINGS: CRISIL Lowers Rating on INR10.2cr Loan to B
-------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Bentlay
Fittings Private Limited (BFPL) to 'CRISIL B/Stable Issuer Not
Cooperating' from 'CRISIL BB+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING)
Proposed Long Term 5.8 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING
Term Loan 10.2 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING
CRISIL Ratings has been consistently following up with BFPL for
obtaining information through letters and emails dated January 30,
2021 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BFPL Revised to 'CRISIL B/Stable Issuer Not Cooperating' from
'CRISIL BB+/Stable Issuer Not Cooperating'.
BFPL, incorporated in 2014, is promoted and managed by Mr Piyush
Patel, Mr Jatin Patel, and Mr Vinay Patel. The company manufactures
electrofusion fittings used as connectors of high-density
polyethylene (HDPE) and polypropylene (PP) pipes at its facility at
Ahmedabad, Gujarat.
BILPOWER LIMITED: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Bilpower Limited
continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 90 CRISIL D (Issuer Not
Cooperating)
Letter of credit 80 CRISIL D (Issuer Not
& Bank Guarantee Cooperating)
Proposed Long Term 4 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with Bilpower for
obtaining information through letters and emails dated November 30,
2020 and April 28, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Bilpower, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Bilpower is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Bilpower continues to be 'CRISIL D/CRISIL D Issuer
Not Cooperating'.
Bilpower, incorporated in 1989, manufactures transformer
laminations. It has manufacturing units at Vadodara (Gujarat),
Silvassa (Dadra and Nagar Haveli), Kanchad (Maharashtra), and
Roorkee (Uttarakhand).
DAYANAND COTTON: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL said the ratings on bank facilities of Dayanand Cotton Ind
(DCI) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Term Loan 1 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with DCI for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of DCI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on DCI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
DCI continues to be 'CRISIL D Issuer Not Cooperating'.
DCI is a partnership firm that started commercial production from
February 2012. The firm is engaged in ginning and pressing of raw
cotton (kapas). There are 12 partners in the firm with Mr.
Jerambhai Dubriya (15 per cent stake), Mr. Jitendrakumar Khokhani
(10 per cent), and Mr. Chunilal Ghetiya (10 per cent) actively
handling its operations.
DENTCARE DENTAL: CRISIL Lowers Rating on INR15cr Cash Loan to B
---------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Dentcare
Dental Lab Private Limited (DDLPL) to 'CRISIL B/Stable Issuer Not
Cooperating' from 'CRISIL BB+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER
NOT COOPERATING)
CRISIL Ratings has been consistently following up with DDLPL for
obtaining information through letters and emails dated December 30,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of DDLPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on DDLPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
DDLPL Revised to 'CRISIL B/Stable Issuer Not Cooperating' from
'CRISIL BB+/Stable Issuer Not Cooperating'.
DDLPL was set up in 2007 by Mr. John Kuriakose and his family
members. The entity manufacture dental prostheses. Their
manufacturing units are based in Ernakulum (Kerala).
DREAMLIGHT MERCHANT: CRISIL Migrates B+ Rating to Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Dreamlight Merchant Private Limited (DMPL) to 'CRISIL B+/Stable
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 3 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with DMPL for
obtaining information through letters and emails dated April 23,
2021, May 12, 2021 and May 17, 2021 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of DMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on DMPL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of DMPL to 'CRISIL B+/Stable Issuer not
cooperating'.
Incorporated in 2010, DMPL manufactures tailor-made polypropylene
fabrics, woven bags, and sacks. Mr Pawan Kumar Agarwal and Ms
Shikha Agarwal are the promoters. The manufacturing facility is in
Bankura, West Bengal.
GOMATHI STEELS: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Gomathi Steels (GS)
continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL D (Issuer Not
Cooperating)
Bill Discounting 3 CRISIL D (Issuer Not
Cooperating)
Bill Discounting 1.5 CRISIL D (Issuer Not
under Letter Cooperating)
of Credit
Cash Credit 14 CRISIL D (Issuer Not
Cooperating)
Intraday Limit 0.1 CRISIL D (Issuer Not
Cooperating)
Term Loan 2 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GS for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of GS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GS is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of GS
continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
GS is a proprietorship concern of Mr. Govindasamy established in
2003. The firm manufactures various steel products such as nails,
bolts, couplers, and mild steel wires, and also trades in steel
wire rods. Its manufacturing units are near Chennai (Tamil Nadu).
HOLISTIC REMEDIES: CRISIL Migrates B+ Rating to Not Cooperating
---------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Holistic Remedies Pvt Ltd (HRPL) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with HRPL for
obtaining information through letters and emails dated April 23,
2021, May 12, 2021 and May 17, 2021 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HRPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HRPL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of HRPL to 'CRISIL B+/Stable Issuer not
cooperating'.
HRPL was incorporated in 1986. The company manufactures homeopathic
medicines in collaboration with Bioforce AG, a Swiss company, and
sells its products under the Blooume brand. Dr Nalini Batra and Dr
Pranav Batra are the promoters of the Thane (Maharashtra)-based
company.
INCOM WIRES: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL said the ratings on bank facilities of Incom Wires and
Cables Limited (IWCL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 6 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 2.15 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 3.85 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with IWCL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of IWCL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on IWCL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
IWCL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
IWCL, incorporated in 1995, manufactures different types of
electric wires, power cables, control cables, railway signaling
cables, railway quad cables and telephone cables at its unit in
Mayapuri Industrial Estate, Delhi. IWCL is approved by the Research
Design and Standards Organisation as a Part 1 supplier of signaling
and telecommunication cables to Indian Railways. The company is
also an approved vendor for other state government power utilities
such as National Thermal Power Corporation Ltd, state electricity
boards of Punjab, Haryana and Rajasthan and private companies like
L&T Ltd.
INTERGLOBE AVIATION: IndiGo Posts Fifth Straight Quarterly Loss
---------------------------------------------------------------
Reuters reports that Interglobe Aviation Ltd, which runs India's
biggest airline IndiGo, reported its fifth straight quarterly loss
on June 5, as the COVID-19 pandemic kept air travel well below
normal levels.
The company reported a net loss of INR11.47 billion ($157.43
million) in the three months ended March 31, compared with a loss
of INR8.71 billion a year earlier, Reuters discloses.
"This has been a very difficult year with our revenues slumping
hard due to COVID, showing some signs of recovery during the period
December to February and then slumping again with the second wave
of the COVID," Reuters quotes IndiGo CEO Ronojoy Dutta as saying in
a statement.
The coronavirus pandemic is a period of great trial for IndiGo
shareholders and staff, Dutta said, adding that the carrier was
strengthening its core to emerge stronger when the sector recovers
from the current situation, according to Reuters.
India's aviation sector is reeling under losses with air travel
brought to a halt for several weeks last year, Reuters notes.
According to Reuters, the country's airlines are expected to lose a
total of $4 billion this fiscal year, aviation consultancy CAPA
estimated - similar to their losses last fiscal year through to
March 31.
Interglobe Aviation Limited is an India-based company engaged in
the provision of passenger services. The Company is engaged in the
business of providing domestic and international scheduled air
transport services under the name of IndiGo. It also provides cargo
services and related allied services, including in-flight sales.
The Company operates on a low-cost carrier (LCC) business model.
The Company has a fleet of approximately 276 aircrafts. IndiGo has
a total destination count of 87 with 63 domestic destinations and
24 International.
J. R. AGROTECH: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of J. R. Agrotech
Private Limited (JRAPL) continue to be 'CRISIL D/CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 194 CRISIL D (Issuer Not
Cooperating)
Foreign Exchange 3 CRISIL D (Issuer Not
Forward Cooperating)
Proposed Cash 22 CRISIL D (Issuer Not
Credit Limit Cooperating)
Proposed Long Term 19.6 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Proposed Short Term 33 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 14.4 CRISIL D (Issuer Not
Cooperating)
Warehouse Receipts 39 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with JRAPL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of JRAPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JRAPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JRAPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
The JR group mills, processes, and sells rice in India and abroad.
Incorporated in 1998, JRAPL is promoted by Mr Raman Aggarwal and
his brother, Mr Krishan Kumar Aggarwal.J. R. D. International
Limited (EXPAND), founded by Mr Raman Aggarwal and his son, Mr
Raghav Aggarwal, in 2010, trades in rice, and has set up its own
sortex machine and processing unit.
JET AIRWAYS: Slots Will be Based on Existing Norms, Regulator Says
------------------------------------------------------------------
The Times of India reports that defunct Jet Airways, which is
undergoing insolvency resolution for nearly two years, cannot claim
"historicity" for slots at airports, and allocation of slots will
be based on existing guidelines, according to an affidavit.
TOI relates that the civil aviation ministry and aviation regulator
DGCA have also informed the National Company Law Tribunal (NCLT)
that for claiming historicity, the criteria cannot be based on
contention that airline was in operation for 25 years.
Jet Airways, which shuttered operations in April 2019, is
undergoing resolution process under the Insolvency and Bankruptcy
Code (IBC). The Jalan Kalrock Consortium has emerged as the winning
bidder for the carrier and the resolution plan is before NCLT,
Mumbai, the report notes.
TOI says NCLT adjourned the hearing on Jet Airways case on June 4
and the matter has been scheduled for hearing this week.
Last month, NCLT directed the ministry and DGCA to submit an
affidavit clarifying their position on slots for Jet Airways, TOI
recalls. In an additional affidavit submitted to NCLT, the
ministry and DGCA said Jet Airways does not qualify for grant of
slots on the basis of historic precedence and and the allocation
will be based on slot allocation guidelines.
Citing the standard operating procedure with respect to slot
allocations, it said slots were not reserved for Jet Airways. ". .
. it is submitted that there can't be any automatic revival of
approvals granted to Jet Airways and reinstatement of slots, which
were with Jet Airways and the same would be as per the extant
guidelines and regulations/rules," the affidavit, as cited by TOI,
said.
All the slots were not allotted in one go and they were allotted in
phases as per the aircraft and other crew availability plan and in
some cases were even taken back from the airline due to
non-utilisation. Accordingly, no airline was granted historicity
over these slots, as per the affidavit.
"Jet Airways does not qualify for grant of slots on the basis of
historic precedence and the submission of the airline that it is in
operation for the last 25 years is not a criteria for claiming
historicity and it can't substitute the requirements for claiming
historic precedence. Thus the claims are wrong and denied," it
noted.
While making it clear that the government supports the revival of
the grounded airline, the affidavit said that allocation of slots
and other approvals would be as per the existing policy and law,
the report states. As and when Jet Airways applies for slots, then
it would be allocated among all the airlines without any claim of
historicity in favour of any airline over these slots. Such
allocation of slots would be as per the Slot Allocation Guidelines,
2013, it said.
According to the affidavit, slot allotments were kept temporary so
that the same were not wasted by any airline and can be taken back
in case of less or non-utilisation, TOI relays.
In March, the ministry and DGCA told NCLT that slots allocated to
Jet Airways were not the airline's asset.
After Jet Airways closed down operations, its slots were offered to
other airlines so that they can ramp up their capacity at the
earliest and were kept temporary.
"Many airlines like IndiGo, SpiceJet and Go Air etc. responded
positively and invested huge amount of money and procured number of
aircraft immediately and in fact even outnumbered the figure which
was reduced on account of suspension of operation by Jet Airways .
. . now such entities can't be deprived of these slots, without any
valid reasons and also without any force of law," the affidavit
said.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited was one of
India's top airlines founded by Naresh Goyal. It provided
passenger and cargo air transportation services as well aircraft
leasing services. It operated flights to 66 destinations in India
and international countries.
Jet Airways on April 17, 2019, halted all flight operations after
its lenders rejected its plea for emergency funds.
On June 20, 2019, the National Company Law Tribunal (NCLT), Mumbai
Bench, accepted an insolvency petition against Jet Airways filed by
its creditors as they attempt to recover some of their dues.
Ashish Chhawchharia of Grant Thornton India has been named as the
resolution professional in the case. Law firm Cyril Amarchand
Mangaldas will represent the interests of the lenders' consortium,
according to a Reuters report.
Creditors have filed claims worth INR30,907 crore, according to
Financial Express. The RP has so far admitted claims worth over
INR14,000 crore.
Jet Airways would be acquired by an investor consortium under a
multi-million dollar resolution plan approved by the carrier's
creditors on Oct. 17, 2020.
KSHATRIYA CONSTRUCTIONS: CRISIL Cuts Rating on INR10cr Loan to D
----------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Kshatriya Constructions (KC) to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating' because
of delay in repayment of debt obligation.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft Facility 10 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with KC for
obtaining information through letters and emails dated March 17,
2020 and September 16, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the company's management,
CRISIL Ratings did not receive any information on the financial
performance or strategic intent of KC, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. The rating action on KC is consistent with
Assessing Information Adequacy Risk.
Set up in 1980, KC is a Hyderabad-based proprietorship firm which
undertakes development of residential real estate projects in and
around the city. Currently, the firm is executing seven residential
real estate projects, funded largely by proprietor's contribution
and minimal external debt of INR10 crore. The day-to-day operations
are managed by Mr P. Kumar.
MODEL RAG: CRISIL Migrates B+ Rating to Not Cooperating Category
----------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Model
Rag Exports (MRE) to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with MRE for
obtaining information through letters and emails dated April 23,
2021, May 12, 2021 and May 17, 2021 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of MRE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MRE
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of MRE to 'CRISIL B+/Stable Issuer not
cooperating'.
MRE was set up in 2012 as a sole proprietorship concern by Mr
Shabbir Ahmad. The firm trades in and processes unmanufactured
tobacco; the facilities are in Guntur, Andhra Pradesh.
NAGOORAR ENTERPRISES: CRISIL Keeps D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Nagoorar Enterprises
(NE) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 5.44 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with NE for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NE is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of NE
continues to be 'CRISIL D Issuer Not Cooperating'.
Set up in 1985, NE, a proprietorship firm of Mr N Shahul Hameed,
trades in scrap material such as mild steel, fly ash, and firewood,
sprint green and plastic scrap.
NARAYAN INDUSTRIES: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL said the ratings on bank facilities of Narayan Industries -
Chattisgarh (NI) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D (Issuer Not
Cooperating)
Cash Credit 9 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with NI for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NI is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of NI
continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
The firm was established in 2007 as a proprietorship by Mr Mukesh
Motwani. It is engaged in processing of paddy into non-basmati rice
and sorting of various types of dal. It also trades in non-basmati
rice and undertakes rice milling on job work-basis for Food
Corporation of India (FCI). The firm's manufacturing facility is
located in Baloda Bazar, Chhattisgarh. It sells products to local
traders in the state.
NATURAL FOODS: CRISIL Migrates D Debt Rating to Not Cooperating
---------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Natural Foods and Facials (NFF) to 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Long Term Loan 13 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with NFF for
obtaining information through letters and emails dated April 23,
2021, May 12, 2021 and May 17, 2021 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NFF, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NFF
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of NFF to 'CRISIL D Issuer not cooperating'.
Set up in 2009, and still in project stage, Chittoor (Andhra
Pradesh)-based NFF is setting up an agro commodity pulp
manufacturing unit, focusing on mango and tomato pulp. The firm is
a partnership between Mr Kishore Kumar Reddy, Chandrasekhar Reddy,
and their family and friends.
RAJESHWARI COTSPIN: CRISIL Moves D Ratings to Not Cooperating
-------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Rajeshwari Cotspin Limited (RCL) to 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 7.5 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Term Loan 34 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with RCL for
obtaining information through letters and emails dated February 27,
2021 and March 31, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of RCL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RCL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of RCL to 'CRISIL D/CRISIL D Issuer not
cooperating'.
Incorporated in February 2013, and operations starting in November
2018, RCL was established for the purpose of ginning of cotton and
using it captively for spinning to manufacture cotton yarn in
multiple counts, which find use in products such as bedsheets,
terry towels, suiting, shirting and hosiery. Mr Mahesh Patel, Mr
Pravin Khunt, Mr Bhavin Patel and Mr Ramesh Patel are the
promoters.
RAMKY INFRA: CRISIL Hikes Rating on INR749.82cr Bank Loan to C
--------------------------------------------------------------
CRISIL Ratings has upgraded its ratings on the bank facilities of
Ramky Infrastructure Ltd (RIL) to 'CRISIL C' from 'CRISIL D'.
CRISIL Ratings has withdrawn its rating on the term loan facility
of INR440.52 crore on the company's request and confirmation from
the statutory auditor that no long-term debt was outstanding as on
April 30, 2021. Also, CRISIL Ratings has withdrawn its rating on
the working capital facility of INR1641.35 crore basis confirmation
of sanctioned lines by the statutory auditor and on the company's
request. This is in-line with CRISIL Ratings' withdrawal policy.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 65.76 CRISIL D Withdrawn
Bank Guarantee 98.83 CRISIL C (Upgraded from
'CRISIL D')
Bank Guarantee 749.82 CRISIL C (Upgraded from
'CRISIL D')
Cash Credit 110.00 CRISIL C (Upgraded from
'CRISIL D')
Cash Credit 52.31 CRISIL D Withdrawn
Cash Credit 30.47 CRISIL C (Upgraded from
'CRISIL D')
Letter of Credit 25.00 CRISIL C (Upgraded from
'CRISIL D')
Proposed Bank
Guarantee 606.07 CRISIL D Withdrawn
Proposed Cash
Credit Limit 648.43 CRISIL D Withdrawn
Proposed Working
Capital Facility 260.02 CRISIL D Withdrawn
Term Loan 440.52 CRISIL D Withdrawn
Working Capital 45.70 CRISIL C (Upgraded from
Loan 'CRISIL D')
Working Capital 155.00 CRISIL C (Upgraded from
Loan 'CRISIL D')
Working Capital
Loan 8.76 CRISIL C Withdrawn
The upgrade factors in a track record of more than three months in
timely debt servicing. The company does not have long-term loan
outstanding as on April 30, 2021. Debt servicing on working capital
demand loan (WCDL) and cash credit facilities have been timely.
While there are instances of overutilisation of WCDL, it is due to
interest charged on the last day of the month, which is recovered
from the cash credit lines on the next working day. As confirmed by
all the lenders this is an operational issue.
The ratings continue to reflect the company's modest debt
protection metrics and working capital intensive operations. These
weaknesses are partially offset by RIL's established position in
the construction industry, and improvement in capital structure.
Analytical Approach
CRISIL Ratings has combined the business and financial risk
profiles of RIL and its special purpose vehicle (SPV) Sehore Kosmi
Tollways Ltd where the company has extended corporate guarantee of
INR5.12 crore. The company has also extended corporate guarantee to
its SPV, Srinagar Banihal Expressway Ltd. However, given the
validity of the same is being contested in the High Court, the debt
of these SPVs have not been consolidated with RIL. CRISIL Ratings
has moderately combined the business and financial risk profiles of
RIL with its subsidiaries to the extent of support requirement.
CRISIL Ratings has considered interest-bearing unsecured loans from
the promoters/subsidiaries or inter corporate deposits from related
parties as debt (Rs 405 crore as on March 31, 2020).
Key Rating Drivers & Detailed Description
Strengths:
* Established position in the construction industry, and moderate
revenue visibility: The experience of over two decades of the
promoters (in the construction of roads and buildings, power, and
in irrigation and water projects), established execution
capabilities, and healthy relationship with customers, should
continue to support the business. The group manages projects
efficiently, backed by its trained labour force, adequate
equipment, and good sub-contracting management systems.
Operating performance in fiscal 2021 was impacted because of the
lockdown imposed by the central government to curb Covid-19 –
revenue declined by around 32% in 9MFY21 as compared to 9MFY20.
Revenue was impacted in the first and second quarters of fiscal
2021, operations reached pre-Covid levels in the third and
continued at a similar pace in the fourth. Operating performance is
expected to remain under pressure in this fiscal as well given the
second wave of the pandemic. However, orders of ~Rs 2600 crore
outstanding as on December 31, 2020 are to be executed in the next
2-3 years. Order book to revenue (fiscal 2020) ratio is about ~2
times, which gives visibility for the near-to-medium term.
* Improvement in capital structure: Debt has reduced substantially
in the last two fiscals as reflected in the sharp reduction in
total outside liabilities to adjusted networth ratio to 2.8 times
as on March 31, 2020 (estimated at a similar level for fiscal 2021)
from 9.26 times as on March 31, 2017. The company has relied on
unsecured loans from the promoters/subsidiaries and sales proceeds
from monetising assets including sale of NAM Expressways to reduce
debt. Unsecured loans from promoters/subsidiaries have increased
from INR136 crore as on March 31, 2017 to INR405 crore as on March
31, 2020. Additionally, external debt has come down from INR1200
crore to INR350 crore for the same period (Rs 300 crore as on
December 31, 2020). There is no long-term loan outstanding as on
April 30, 2021.
Weakness:
* Modest debt protection metrics: While the debt has come down to
around INR300 crore as on Dec ember 31, 2020, moderate accrual
limits the improvement in debt protection metrics. Interest
coverage stood at 1.5 times during the first nine months of fiscal
2021 (it has remained at 1.0-1.5 times in the past three years).
Also net cash accrual to total debt ratio has remained low at
0.5-0.10 time in the last three fiscals.
* Working capital intensive operations: Operations remain working
capital intensive with gross current assets of around 272 days as
on March 31, 2020 driven by large debtors of ~125 days and
inventory days of around 95.
Liquidity: Poor
There is no buffer in the fund-based working capital limits and
unencumbered cash balances are minimal. Fund-based limit was
utilised 97% on average in the six months ended March 2021.
Further, unencumbered cash balances were low at around INR12 crore
as on March 31, 2021. The company however does not have any
repayment obligations (term loan is nil as on April 30, 2021).
Rating Sensitivity factors
Upward factors
* Improvement in operating performance while sustaining operating
margin of above 5% on annual basis.
* Maintaining an adequate financial risk profile
* Improvement in liquidity and working capital cycle
Downward factors
* Significant deterioration in operating performance
* Stretch in the working capital cycle
RIL, the flagship company of the Ramky group, was incorporated as
Ramky Engineers Pvt Ltd in 1994 to provide civil and environmental
engineering consultancy services. In 1998, it started executing
civil and environmental engineering, procurement, and construction
projects, primarily in the water and waste-water sector.
Subsequently, it expanded into road, building, irrigation, and
industrial construction. In 2003, the company got its present name
and was thereafter reconstituted as a public limited company. RIL
principally operates in two business segments: construction (under
RIL) and development (under SPVs). In the development business, the
group constructs roads under built-operate-transfer (BOT modes,
industrial parks, special economic zones, and bus terminals.
RIL's debt was restructured in June 2015 by the Joint Lenders Forum
comprising seven lenders.
For nine months ended December 31, 2020, the company reported
topline of INR658 crore against net profit of INR6 crore as
compared to topline and net loss of INR972 crore and INR9 crore,
respectively, for the corresponding period last year.
SDS INFRATECH: CRISIL Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL said the rating on bank facilities of SDS Infratech Private
Limited (SIPL) continues to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 11 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SIPL for
obtaining information through letters and emails dated December 18,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SIPL continues to be 'CRISIL D Issuer Not Cooperating'.
SIPL, formed in 2008 and based in Delhi, undertakes real estate
development. The company is promoted by Mr. Deepak Bansal. It is
developing two residential projects, both under NRI residency, at
Noida and Greater Noida.
SHRESHT INDUSTRIES: CRISIL Moves D Debt Rating to Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Shresht Industries Private Limited (SIPL) to 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12.5 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with SIPL for
obtaining information through letters and emails dated April 23,
2021, May 12, 2021 and May 17, 2021 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SIPL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of SIPL to 'CRISIL D Issuer not cooperating'.
SIPL, based in Hyderabad and incorporated in 2013, manufactures
water purifiers for domestic and industrial use, under the Shresht
RO brand. The company is promoted by Mr Pattela Gaurav and his
family.
SIKKIM FERRO: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL said the ratings on bank facilities of Sikkim Ferro Alloys
Limited (SFAL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 300 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 140 CRISIL D (Issuer Not
Cooperating)
Standby Letter 10 CRISIL D (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with SFAL for
obtaining information through letters and emails dated March 31,
2021 and April 28, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SFAL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SFAL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SFAL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
SFAL was founded in 1998 by Mr Kamlesh Kanungo, a first-generation
entrepreneur. The company trades in ferroalloys, steel scrap, and
related products. It has also undertaken factory dismantling and
ship breaking to generate and sell scrap.
Mr Kanungo also established Trisons Impex (rated 'CRISIL D Issuer
not cooperating') as a sole proprietorship firm in 2001; the firm
operates in the same line of business.
Mr Kanungo oversees the operations of the two entities. The Kanungo
family has various business interests, such as real estate
development and movie production.
TEMPLE CITY: CRISIL Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CRISIL said the rating on bank facilities of Temple City Developers
Private Limited (TCDPL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TCDPL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of TCDPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TCDPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TCDPL continues to be 'CRISIL D Issuer Not Cooperating'.
TCDPL, based in Odisha, was established in 1995 and was taken over
by Mr. Pradeep Kumar Mangaraja in 2003-04 (refers to financial
year, April 1 to March 31) from its earlier promoters. The company
commenced operations in April 2013. TCDPL trades in iron ore fines
and construction materials; its operations are managed by Mr.
Pradeep Kumar Mangaraja and Mr. Bijaya Kumar Pradhan.
TOPLON INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Toplon Industries
Private Limited (TIPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.5 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 6.5 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 2.5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with TIPL for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of TIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TIPL continues to be 'CRISIL D Issuer Not Cooperating'.
TIPL is setting up a manufacturing unit in Kathua (Jammu and
Kashmir) for grinding PET from PET bottles and scrap. The proposed
capacity of the facility is 3,000 kilogram per hour. The company is
promoted by Mr Daljit Singh Rana and Mr Kush Aggarwal.
TRISONS IMPEX: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL said the ratings on bank facilities of Trisons Impex (TI)
continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 35 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 15 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with TI for
obtaining information through letters and emails dated March 31,
2021 and April 28, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of TI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TI is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of TI
continues to be 'CRISIL D Issuer Not Cooperating'.
Established as a sole proprietorship firm in 2001 by Mr. Kamlesh
Kanungo, TI trades in stainless steel scrap, and finished steel
products such as sheets, plates, pipes, billets, and coils. It also
trades in ferro alloys having a high proportion of non-ferrous
elements such as copper, aluminium, and nickel.
Sikkim Ferro Alloys Ltd (rated 'CRISIL D Issuer Not Cooperating')
set up by Mr. Kanungo in 1998, is also in the same business.
UNNATI WRITING: CRISIL Migrates D Debt Rating to Not Cooperating
----------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Unnati
Writing Products Private Limited to 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 11 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Term Loan 3 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with Unnati for
obtaining information through letters and emails dated April 23,
2021, May 12, 2021 and May 17, 2021 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Unnati, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Unnati is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of Unnati to 'CRISIL D Issuer not cooperating'.
Unnati was set up as a partnership firm by Mr Sudarshan Gupta, his
brother Mr Suranjan Gupta, and Mr Raj Kumar Goel in 2001. It was
reconstituted as a private limited company in 2009. The company
manufactures ball pens, fountain pens, roller pens, and gel pens.
VERSATILE MOBILE: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Versatile Mobile
Distributors Private Limited (VSTMDL) continue to be 'CRISIL
D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5.15 CRISIL D (Issuer Not
Cooperating)
Cash Credit 8.85 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with VSTMDL for
obtaining information through letters and emails dated October 31,
2020 and April 28, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of VSTMDL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
VSTMDL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of VSTMDL continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
VSTMDL, incorporated in 2008, is a distributor of mobile phones of
brands such as Apple and HTC. It operates mainly in Hyderabad and
is promoted by Mr. V Ramesh and Mr. T Manohara Rao.
ZONASHA ESTATES: CRISIL Lowers Rating on INR60cr LT Loan to B
-------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Zonasha
Estates and Projects (ZEP, part of Zonasha group) to 'CRISIL
B/Stable Issuer Not Cooperating' from 'CRISIL BB-/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 60 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
CRISIL Ratings has been consistently following up with ZEP for
obtaining information through letters and emails dated October 24,
2020 and April 20, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ZEP, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ZEP
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ZEP Revised to 'CRISIL B/Stable Issuer Not Cooperating' from
'CRISIL BB-/Stable Issuer Not Cooperating'.
About Promoter
Mr. Nagaraj is the president of CREDAI, Bangalore and has
experience of 25 years in real estate development. Mr. Nagaraj also
holds few commercial properties in his own personal capacity.
About the Group
Zonasha Estates and Projects Pvt Ltd was incorporated in 2010 by
Mr. R Nagaraj to undertake real estate development in Bangalore.
ZEP is a Partnership firm incorporated by Mr. Nagaraj R to
undertake real estate development in Bangalore. Currently the firm
is executing two projects in residential segment in Bangalore.
===============
P A K I S T A N
===============
PAKISTAN: To Reduce Some Import Taxes in Bid to Boost Growth
------------------------------------------------------------
Kamran Haider at Bloomberg News reports that Pakistan will cut
taxes on imports of raw materials to spur manufacturing and overall
economic growth, according to Prime Minister Imran Khan's trade
adviser.
Customs duties on input items needed by pharmaceutical, chemical,
engineering and food processing industries will be reduced by 3% to
10%, Abdul Razzak Dawood, Khan's adviser on commerce, said in an
interview by telephone, Bloomberg relays. That will help lower the
import of finished goods, encourage local production and put the
nation in a position to boost exports, he said.
"Pakistan had ridiculously high duties," Bloomberg quotes Dawood as
saying. The objective is to put Pakistan on par with other
countries on trade taxes, he said.
According to Bloomberg, the proposal will find mention in the
federal government's annual budget for the year starting July 1, by
when it targets to achieve a growth rate of 4.8%. The nation
forecast growth to be 3.9% this year after a rare contraction last
year. The new budget is scheduled to be presented in the lower
house of the parliament on June 11.
Paring import taxes will be a huge policy shift for Pakistan, given
more than 40% of its total tax revenue is generated from levies on
inbound shipments. Bloomberg says Khan's government is seeking to
end the nation's reliance in recent years on foreign loans and
bailouts, and instead boost industrial productivity and the share
of exports in the economy.
To that end, the administration will extend concessional long-term
financing for exports as well as working capital financing to
businesses in the next fiscal year, Dawood, as cited by Bloomberg,
said. The nation's exports haven't grown significantly in the past
decade, averaging $23 billion annually. For the next financial
year, the government hopes it would be higher than $25 billion.
According to Bloomberg, Pakistan's economy survived through the
global Covid-19 pandemic with support of international lenders and
debt repayments reliefs by G-20 nations.
Bloomberg relates that the slow pace of tariff liberalization thus
far has hurt Pakistan's competitiveness, compared with regional
nations like Bangladesh, Malaysia and Vietnam, whose total exports
consist of 40% imported components, said Manzoor Ahmad, Pakistan's
former ambassador to the World Trade Organization.
"We take imports as an evil. This misperception must go away," he
said. Without "imports, there will be no increase in exports," he
said.
=================
S I N G A P O R E
=================
2BY2 YACHTS: Court to Hear Wind-Up Petition on June 11
------------------------------------------------------
A petition to wind up the operations of 2BY2 Yachts (FR) Pte Ltd
will be heard before the High Court of Singapore on June 11, 2021,
at 10:00 a.m.
SPBI (France Registration No. 491 372 702) filed the petition
against the company on May 18, 2021.
The Petitioner's solicitors are:
Virtus Law LLP
One Raffles Place
#18-61 Tower 2
Singapore 048616
KRISENERGY LTD: Files Winding-Up Petition in Cayman Islands Court
-----------------------------------------------------------------
The Business Times reports that KrisEnergy announced in a
regulatory update late on June 4 that it has submitted a winding-up
petition to the Grand Court of the Cayman Islands.
BT relates that the firm said that based on actual and contingent
liabilities, it is unable to pay its debts and will proceed with
liquidation.
According to BT, the decision comes as the company's liabilities
have exceeded the value of assets. There is also a lack of
acceptable alternative restructuring options and little possibility
of near-term infusion of fresh funds, the report relays.
KrisEnergy devised a restructuring plan after its revenue took a
hit from lower oil prices and lower sales in 2019. As at June 30,
2019, total debt on the group's balance sheet was US$476.8 million,
while gearing stood at 110.8 per cent, BT discloses.
But the restructuring plan was shelved given the "significantly
lower ultimate recovery and cashflow" from its Apsara oil field in
Cambodian oil concession Block A.
KrisEnergy shares last traded at SGD0.03 before suspension in
August 2019, BT notes.
About KrisEnergy
KrisEnergy Limited -- https://krisenergy.com/ -- is a
Singapore-based investment holding company. The Company is an
independent upstream oil and gas company with a portfolio of
exploration, appraisal, development and production assets focused
on the geological basins in Asia. The Company operates through
exploration and production of oil and gas in Asia segment. The
Company holds interests in approximately 20 licenses in Bangladesh,
Cambodia, Indonesia, Thailand and Vietnam covering a gross acreage
of approximately 60,750 square kilometers.
In August 2019, the firm sought court protection from creditors'
legal action while it restructured its debts, according to The
Business Times. Keppel Corporation, a creditor and shareholder of
KrisEnergy, then publicly came out to support the application and
KrisEnergy's management in formulating a restructuring plan.
Trading in its shares has been suspended pending the restructuring,
BT noted.
As at Dec. 31, 2019, the group had about US$503 million in
borrowings and debt securities repayable within the next one year
or on demand.
TECHNICS OIL: Court Enters Wind-Up Order
----------------------------------------
The High Court of Singapore entered an order on April 9, 2021, to
wind up the operations of Technics Oil & Gas Limited.
The company's liquidators are:
Andrew Grimmett
Tan Wei Cheong
c/o Deloitte & Touche LLP
6 Shenton Way OUE Downtown 2 #33-00
Singapore 068809
=================
S R I L A N K A
=================
BIMPUTH FINANCE: Fitch Lowers National LT Rating to 'B-(lka)'
-------------------------------------------------------------
Fitch Ratings Lanka has downgraded Bimputh Finance PLC's National
Long-Term Rating to 'B-(lka)' from 'B+(lka)'. The rating has also
been placed on Rating Watch Negative (RWN).
The downgrade reflects deterioration in Bimputh's credit profile as
its weak loss-absorbing buffers continued to narrow following
operating losses. It also reflects further delays in increasing
capital to meet the minimum regulatory capital requirements
relative to Fitch's previous expectations. The delays in securing
additional capital increases the risk that Bimputh is not able to
continue as a going concern, which the independent auditors flagged
in the company's audited financial statements for the year ended 31
March 2020 (FY20), published on 1 April 2021.
The rating is on RWN because it will be downgraded if Bimputh is
unable to address the capital shortfall, which will raise the
company's solvency risk. Fitch believes that protracted delays in
improvement of Bimputh's capital position are likely to push the
company into the Central Bank of Sri Lanka's Prompt Corrective
Actions framework.
KEY RATING DRIVERS
Bimputh's rating reflects its higher-than-peer leverage due to weak
capitalisation and profitability, and increased pressure on its
funding and liquidity profile. The rating also captures its weak
asset quality, which Fitch believes could intensify in the current
challenging operating environment.
Bimputh's declining profit buffer renders it less likely to be able
to replenish its capital. Fitch now estimates that the shortfall
for Bimputh to meet the Sri Lankan regulator's enhanced capital
requirement of LKR2.5 billion by the extended deadline 31 December
2021 has increased to around LKR2.0 billion, which is higher than
Fitch's previous estimate of LKR1.6 billion at FYE20.
The finance and leasing company has options to address the capital
shortfall. It can do so via significant capital infusion, as
indicated in Bimputh's announcement on 7 April 2021 to the Colombo
Stock Exchange or successful completion of a merger under the
Central Bank of Sri Lanka's (CBSL) Master Plan for consolidation of
non-banks financial institutions. However, Fitch believes that the
current weakened operating environment and Bimputh's weak financial
performance will weaken its ability to raise capital in the near
term.
Bimputh's debt/tangible equity of 7.6x at end-December 2020
(3QFY21) remained the weakest among the Fitch-rated finance and
leasing companies in Sri Lanka. Fitch believes this level of
capitalisation and leverage is not commensurate with its high-risk
appetite, stemming from its substantial exposure to microfinancing
and SME lending, which tends to be more vulnerable to economic
conditions, in Fitch's view. In addition to continuing to fall
short of the interim minimum absolute capital requirement,
Bimputh's total capital adequacy ratio of 7.6% at end-3QFY21 was
below the regulatory minimum of 10.5%, underscoring its
deteriorating capital position relative to higher-rated peers.
Fitch believes that funding and liquidity risk has increased,
especially from 2HFY22, due to widened asset liability mismatches
and potential challenges in accessing funding though banks and
deposits. Asset-liability mismatches widened due to a sharp
decrease in Bimputh's loans and assets, as well as a high share of
delinquent loans on the balance sheet. Bimputh may also face
increased refinancing risk as access to bank funding, which
accounted for around 75% of total funding during FY18-3QFY21, could
be difficult given its weak performance.
The share of unsecured debt in Bimputh's funding mix continued to
decline alongside a contracting deposit base, further reducing its
financial flexibility. The CBSL has imposed on Bimputh a deposit
cap of LKR1.5 billion for failing to comply with the interim
minimum capital requirement.
Bimputh's non-performing loan (NPL) ratio, measured as those past
due by six months as a proportion of total loans, continued to
remain the weakest among Fitch-rated peers in Sri Lanka. Fitch
estimates further deterioration of Bimputh's NPL ratio by FYE21,
mainly due to the contraction of the loan book, from 23.2% at
FYE20, which was substantially higher than the sector's 13.9% and
the peer median of 10%.
Fitch expects Bimputh's profitability to remain under stress in the
short to medium term due to weak pre-impairment operating profits
(PPOP) and high credit costs. Continued loan book contraction and
elevated loan impairment charges likely resulted in losses for
FYE21 for the third consecutive financial year. Meaningful recovery
of Bimputh's profitability mainly hinges on sustainable recovery of
its loan growth, while managing credit costs, which in turn depend
on its ability to improve the regulatory capital base.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The RWN will be removed if the company secures adequate
capital that enables Bimputh to meet the minimum regulatory
capital adequacy ratio.
-- Positive rating action appears unlikely in the near term in
light of the weak operating environment and Fitch's
expectation of further deterioration in the company's credit
profile. In the longer term, an upgrade is contingent on a
sustained improvement in Bimputh's credit metrics, especially
its capital buffers, to be more commensurate with its risk
appetite, stronger pre-impairment profit and better asset
quality through an economic cycle.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The RWN will be resolved and the rating will likely be
downgraded to 'CCC(lka)' if the company is unable to restore
its regulatory capital adequacy ratios by 30 September 2021.
-- Further capital impairment due to sustained deterioration of
profitability and asset quality may trigger negative rating
action. The inability to raise new capital to meet regulatory
enhanced capital requirement of LKR2.5 billion could also lead
to operational and funding-access constraints that would be
negative for the rating.
Issuer Disclosure on Regulatory Action
A deposit cap of LKR1.5 billion has been placed by the CBSL until
Bimputh meets the required core capital as per the CBSL Direction
No. 02 of 2017 - Minimum Core Capital.
The "Issuer Disclosure on Regulatory Action" sub-heading was
provided by the issuer and is included pursuant to applicable
regulatory requirements. Fitch Ratings Lanka is not responsible for
the contents of such information.
FINTREX FINANCE: Fitch Affirms 'B+(lka)' National LT Rating
-----------------------------------------------------------
Fitch Ratings has affirmed Fintrex Finance Limited's National
Long-Term Rating at 'B+(lka)'. The Outlook is Stable.
KEY RATING DRIVERS
Fintrex's rating reflects a high-risk appetite that stems from
aggressive growth aspirations, evolving underwriting standards and
risk controls. The rating also captures Fintrex's heavy reliance on
secured funding and a small domestic franchise, representing 0.6%
of sector assets.
Fitch believes that Fintrex's aggressive loan growth may expose the
loan book to high asset-quality risk in the medium term, with the
seasoning of new loans amid a challenging operating environment.
That said, Fitch expects the Fintrex's non-performing loans ratio
to come down from a high of 21.3% as of the financial year ended
March 2020 (FYE20) (1HFYE21: 19.1%), underpinned by management's
aggressive recovery efforts, write offs and loan growth.
Fintrex has strengthened risk management and recoveries in FY21.
This should mitigate asset-quality risk to some extent in the
medium term. Fintrex's main asset-backed lending has led to modest
loan loss coverage, which was around 67% in FY17-FY20.
Fintrex's heavy reliance on secured wholesale funding is likely to
hamper financial flexibility in distressed market conditions than a
better rated finance leasing company with a more stable deposit
base, in Fitch's view. Fintrex's deposit share remained at less
than 10% of total funding - the lowest among Fitch-rated entities -
although it did improve moderately in FY21 with increased deposit
flows. Fitch does not expect any material liquidity stress in the
medium term given adequate unused funding lines.
Fitch expects Fintrex's leverage - measured by debt/tangible equity
ratio - to increase in the medium term alongside aggressive loan
book expansion. Fitch estimates this ratio was around 2.9x at
FYE21, which was slightly higher than 2.7x in FYE20. Furthermore,
Fitch estimates there will be around a LKR300 million capital
shortfall to meet the minimum capital requirement of LKR2.5 billion
by end-2021. Fitch believes that major shareholders are likely to
provide the required capital as demonstrated in the past.
Fitch estimates that Fintrex's pretax income/average ratio to be
around 3.5%-3.9% at FYE21 (FYE20: 1.1%), in line with peer median
of 3.7%. Profitability improvement is mainly attributable to a
decline in impairment charges alongside reduced non-performing
loans.
However, Fitch expects pressure on the company's pre-impairment
profit buffers, stemming from interest margin compression amid the
prolonged low interest rate environment. Furthermore, a potential
increase in impairment charges, in line with Fitch's expectation of
pressure on asset quality, could also affect Fintrex's ability to
sustain the improved profitability in the medium term.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Positive rating action appears unlikely in the near term in light
of the ongoing macroeconomic pressures. Sustainable improvement in
asset quality measures, mainly through better underwriting
standards and risk controls, while maintaining acceptable
capitalisation commensurate with Fintrex's risk profile would be
positive for its rating. A substantial strengthening of the scale
and franchise of the business over the longer-term would support
positive rating actions.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A significant reduction in loss absorption buffers owing to
asset-quality slippage or further weakening in the funding and
liquidity profile driven by the poor operating environment would
pressure the rating.
IDEAL FINANCE: Fitch Puts 'BB-(lka)' National Rating on Watch Pos.
------------------------------------------------------------------
Fitch Ratings has maintained Sri Lanka-based Ideal Finance
Limited's 'BB-(lka)' National Long-Term Rating on Rating Watch
Positive (RWP).
KEY RATING DRIVERS
Ideal's rating reflects the company's improved capitalisation,
which has strengthened its financial profile and bolstered its
loss-absorption buffers against Sri Lanka's (CCC) challenging
operating environment. The rating also takes into account Ideal's
high-risk appetite, stemming from its strong loan expansion and
exposure to more vulnerable customer segments, and still-developing
franchise, as reflected in its small market share and limited
operating history.
India's Mahindra & Mahindra Financial Services Limited (MMFSL) was
to invest LKR2.0 billion to acquire a 58.2% stake in Ideal in three
tranches by March 2021. Ideal received new capital following a
LKR1.1 billion investment in February 2020, but the third tranche
remains pending, with the time extension attributed to the
pandemic, and is now planned to be completed by September 2021, at
which point Fitch expects MMFSL to have acquired effective control
of Ideal. The RWP reflects Fitch's belief that Ideal's rating could
benefit from the change in shareholding, with a higher probability
of support once MMFSL's effective control is established in light
of MMFSL's stronger credit profile.
Ideal is mostly likely to have met the LKR2.5 billion minimum
absolute regulatory requirement by 31 March 2021 for finance
companies ahead of the 31 December 2021 deadline. Its Tier I and
total regulatory capital ratios of 43.5% and 44.8%, respectively,
at end-March 2021 are well above the respective end-point minimum
capital adequacy ratio requirements of 8.5% and 12.5% applicable on
1 July 2022. Ideal's leverage in terms of debt/equity, was low
relative to peers at 1.1x in the financial year ending 31 March
2021 (FY21) following the capital infusion, but Fitch expects it to
rise in the medium term alongside the company's planned expansion
in operations.
Asset quality risk is likely to remain in the near term while
aggressive loan growth could also put pressure on asset quality in
the medium term. Ideal's regulatory gross non-performing loan (NPL)
ratio (greater than 180 days overdue) remained below the sector
average at 3.3% at FYE21, down from 5.2% at FYE20 due to a
reduction in absolute NPLs.
A wider net interest margin and strong loan growth supported an
increase in Ideal's pre-tax income/average assets to 6.8% in FY21,
from 5.0% in FY20, despite higher impairment charges. Fitch expects
the company's focus on high-margin products, such as gold loans,
alongside its loan expansion to support its medium-term
profitability buffers against pressure from potentially higher
credit and operating costs.
Fitch believes funding and liquidity risks remain elevated against
the challenging operating conditions. The company's financial
flexibility in terms of unsecured debt/total debt remains low due
to its small deposit base. Its planned expansion in operations
could help to reduce it high deposit concentration, but Fitch
expects its funding profile to remain dependent on wholesale
funding in the medium term.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch expects to resolve the RWP on completion of the increase
in shareholding by MMFSL, when Fitch has greater clarity on
the linkages between Ideal and MMFSL and Fitch factors its
assessment of MMFSL's ability to provide support to Ideal.
Fitch will maintain the RWP beyond the typical six-month
horizon, with parental support likely to be factored in to the
rating once MMFSL has acquired effective control of Ideal.
Fitch's view of support will include an assessment the level
of strategic importance of the Sri Lankan market and Ideal to
MMFSL as well as the extent of integration and branding.
-- Fitch will remove the RWP if the investment is not completed.
The rating would then remain driven by Ideal's intrinsic
credit profile.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Ideal's rating is driven by its intrinsic credit profile.
Negative rating action could occur if a severe deterioration
in the operating environment, beyond Fitch's base-case
expectations, were to diminish the company's capital buffers
and pressure its funding and liquidity.
SARVODAYA DEVELOPMENT: Fitch Affirms 'B+(lka)' National LT Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed Sarvodaya Development Finance Limited's
(SDF) National Long-Term Rating of 'B+(lka)'. The Outlook is
Stable.
KEY RATING DRIVERS
SDF's rating reflects a small franchise and less established and
evolving business model among finance and leasing companies. SDF
has a high-risk appetite along with a weak financial profile,
particularly pressure on asset quality.
Fitch regards SDF's risk appetite as high due to evolving
underwriting standards and risk controls, which are not
commensurate with the expanding operating scale. Lending exposure
is towards mainly riskier low-earning borrowers in rural areas.
This makes asset quality vulnerable to challenging economic
conditions.
Fitch sees risks to asset quality remaining high in the near- to
medium-term due to the unseasoned nature of SDF's portfolio and the
economic fallout from the pandemic. SDF's six-month reported
regulatory non-performing loan (NPL) ratio rose to 12.9% by
end-September 2020 from 11.9% at end-March 2020. Nonetheless, Fitch
estimates that recoveries from delinquent borrowers increased in
the second half of the financial year ending March (FY21) as
authorities eased restrictions.
SDF benefits from high yields albeit declining due to rising
competitive pressure. It relies on high-cost wholesale borrowings
for incremental funding due to the limitation on raising deposits.
The pressure on net interest margin may be eased somewhat with
better cost efficiencies due to higher-than-industry growth in
business volumes. Fitch believes credit costs are likely to remain
high, dampening SDF's profitability in the near to medium term
(pretax return on assets ratio was 3% in FY20).
Fitch believes a high level of leverage is not commensurate with
SDF's risk appetite or business model, as its customers tend to be
more vulnerable to economic conditions and it has an aggressive
growth trajectory, with loan growth exceeding that for the sector.
SDF's capitalisation could improve with possible capital infusions
as it seeks to comply with the interim absolute regulatory minimum
capital requirement. SDF may need to further infuse capital in the
near term to reach the phased capital requirement of LKR2.5 billion
by 31 December 2021.
Challenging operating conditions exacerbated by the pandemic have
increased SDF's funding and liquidity risks. The Central Bank of
Sri Lanka has imposed regulatory sanctions on SDF by way of a
deposit cap of LKR5.5 billion, due to non-compliance in maintaining
a minimum prescribed capital level. Fitch believes continued
sanctions could hamper SDF's financial flexibility, even though the
recent meeting of prescribed capital level could enable SDF to
raise deposits subject to regulatory approval. SDF also has a short
funding duration and inadequate liquid lines to support negative
maturity gaps.
Still, SDF has developed a successful rural-based funding platform
relative to peers. It sources deposits from rural members who are
connected to the social activities of its parent group, the
Sarvodaya Shramadana Movement, which provides a rural customer
platform for SDF.
SDF has a small market share of 0.6% of assets in the finance and
leasing sector and is focused on providing financing to rural
borrowers. The company derives benefits from its linkages to its
parent group. SDF, which started as a microfinance lender, has seen
its business model evolve. Non-microfinance loan segments have
expanded quickly, with large-ticket lending forming 70% of its
portfolio at end-March 2021, from 13% in March 2016.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action appears unlikely in the near-term in
light of the ongoing macroeconomic pressure. An improvement in
SDF's franchise strength, business-model stability and risk
controls would be positive for its rating in the longer term.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Increased asset-quality risks contributing to a weakening in
its capital position and heightening of funding and liquidity
risks would trigger a downgrade. An inability to raise new
capital to meet regulatory requirements could constrain
operational and funding-access and would be negative for the
rating.
Issuer Disclosure on Regulatory Action
The Central Bank of Sri Lanka has imposed a cap of LKR 5.5. Billion
for Total Deposits on 23rd January 2019 as SDF did not comply with
capital requirement of LKR 1.5 Billion as at 01st of January 2019
as per direction no 02 of 2017 - Minimum Core Capital.
The "Issuer Disclosure on Regulatory Action" sub-heading was
provided by the issuer and is included pursuant to applicable
regulatory requirements. Fitch Ratings Lanka is not responsible for
the contents of such information.
*********
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.
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