/raid1/www/Hosts/bankrupt/TCRAP_Public/210913.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, September 13, 2021, Vol. 24, No. 177
Headlines
A U S T R A L I A
ALLIED CREDIT 2021-1: Moody's Assigns (P)B2 Rating to Cl. F Notes
BIANCO SOURCECORP: First Creditors' Meeting Set for Sept. 21
CROWN RESORTS: Warns May Not Continue As 'Going Concern'
ENVIRONMENTAL SERVICES: First Creditors' Meeting Set for Sept. 20
MAC WINDOWS: Second Creditors' Meeting Set for Sept. 20
TG SHARE: Second Creditors' Meeting Set for Sept. 17
ZIP MASTER 2021-2: S&P Assigns B Rating on Class F Notes
C H I N A
DAFA PROPERTIES: Moody's Affirms 'B2' CFR, Outlook Stable
HAITONG SECURITIES: Probed in Fraudulent Financial Reporting Case
REMARK HOLDINGS: Settles Litigation With CBG Over 2016 Acquisition
ZHONGLIANG HOLDINGS: Fitch Rates Proposed USD Notes 'B+'
I N D I A
AASTHA INFRACITY: ICRA Keeps B Debt Rating in Not Cooperating
AMI RIDDHI: ICRA Keeps B+ Debt Ratings in Not Cooperating
BALAJI SUGARS: ICRA Keeps D Debt Ratings in Not Cooperating
BALESHWAR KHARAGPUR: Ind-Ra Moves D Loan Rating to Non-Cooperating
BARWA ADDA: Ind-Ra Moves 'D' Bank Loan Rating to Non-Cooperating
CHENANI NASHRI: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating
ENERTECH ENGINEERING: ICRA Keeps B+ Ratings in Not Cooperating
G.M. SYNTEX: ICRA Lowers Rating on INR47cr Term Loan to B+
GANDHI ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating
GLOBAL ENVIRO: ICRA Keeps D Debt Ratings in Not Cooperating
HARITHA FERTILIZERS: ICRA Keeps D Debt Ratings in Not Cooperating
HEMANI INDUSTRIES: ICRA Lowers Rating on INR11.63cr Loan to B+
JITF URBAN: ICRA Reaffirms B+ Rating on INR26.83cr Term Loan
KARUNA VENTURES: Ind-Ra Affirms BB- Non-Convertible Debentures
MAGUS METAL: ICRA Keeps D Debt Ratings in Not Cooperating
MAHATHI SOFTWARE: Ind-Ra Lowers Long-Term Issuer Rating to 'D'
MNR COTTONS: ICRA Keeps B+ Debt Ratings in Not Cooperating
OPTICS & ALLIED: ICRA Keeps B+ Debt Ratings in Not Cooperating
PHTHALO COLOURS: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating
RADHEKRISHNA COTTON: ICRA Withdraws B+ Rating on INR7cr LT Loan
RADIANT ORGANICS: ICRA Lowers Rating on INR7.00cr LT Loan to B+
RELIANCE INFRA: Wins $632MM Arbitration Against Delhi Metro
SAROJA AVIATION: ICRA Keeps B- Debt Ratings in Not Cooperating
SATISH SUGARS: ICRA Keeps B- Debt Ratings in Not Cooperating
SEASONS HEALTHCARE: ICRA Keeps B+ Debt Ratings in Not Cooperating
SHIVAM JEWELS: ICRA Lowers Rating o INR18cr LT Loan to B+
SIDDHARTH CARBOCHEM: ICRA Lowers Rating on INR4.94cr Loan to B+
SIKAR BIKANER: Ind-Ra Moves 'D' Loan Rating to Non-Cooperating
TEKZA CERAMIC: ICRA Keeps B+ Debt Ratings in Not Cooperating
UMA JEWELLERS: ICRA Keeps D Debt Ratings in Not Cooperating
UNI MEDICOLABS: ICRA Lowers Rating on INR22.57cr Loan to B+
UNITED HOTELS: ICRA Keeps D Debt Ratings in Not Cooperating
VIJAY SABRE: ICRA Withdraws C Rating on INR10.90cr LT Loan
VIVIANA VITRIFIED: ICRA Moves B+ Debt Ratings to Not Cooperating
I N D O N E S I A
WIJAYA KARYA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Negative
J A P A N
TOSHIBA CORP: To Close 30-Year Chinese Plant in Dalian
S I N G A P O R E
SINGAPORE PRESS: Shareholders Approve Media Spinoff Plan
TEE INT'L: Receives Notice From DBS to Get Mortgaged Property
S O U T H K O R E A
DOOSAN INFRACORE: Shareholders Approve Capital Reduction
V I E T N A M
VIETNAM OIL & GAS: Fitch Affirms 'BB' Foreign Currency IDR
- - - - -
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A U S T R A L I A
=================
ALLIED CREDIT 2021-1: Moody's Assigns (P)B2 Rating to Cl. F Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to the notes to be issued by AMAL Trustees Pty Ltd (the
Trustee) as trustee of Allied Credit ABS Trust 2021-1.
Issuer: Allied Credit ABS Trust 2021-1
AUD152 million Class A Notes, Assigned (P)Aaa (sf)
AUD13.8 million Class B Notes, Assigned (P)Aa2 (sf)
AUD11.4 million Class C Notes, Assigned (P)A2 (sf)
AUD7 million Class D Notes, Assigned (P)Baa2 (sf)
AUD9.8 million Class E Notes, Assigned (P)Ba2 (sf)
AUD2.6 million Class F Notes, Assigned (P)B2 (sf)
AUD3.4 million Class G Notes are not rated by Moody's
Allied Credit ABS Trust 2021-1 is the second term securitisation of
loans backed by motor vehicle, motorcycle, marine and other assets
by Allied Credit Pty Ltd (Allied Credit, unrated).
The securitised loans are predominantly consumer loans, backed by
motor vehicles (57.5%), motorcycles (25.5%), marine assets (15.1%)
and other assets (1.9%). The loans were originated by entities
either 100% owned by Allied Credit or 50% owned by Allied Credit
together with a joint venture partner. All receivables were
underwritten by Allied Credit. The receivables are serviced by
Allied Retail Finance Pty Ltd (ARF, unrated), a wholly owned
subsidiary of Allied Credit.
Allied Credit, a privately owned company, was established in 2010
with a primary focus on financing of motorcycle and marine consumer
loans. In 2019, Allied expanded into financing of auto loans.
Allied Credit's total loan book was around AUD520 million as of
July 31, 2021.
RATINGS RATIONALE
The provisional ratings take into account, among other factors,
evaluation of the underlying receivables and their expected
performance, evaluation of the capital structure and credit
enhancement provided to the notes, availability of excess spread
over the life of the transaction, the liquidity facility in the
amount of 2.00% of the rated notes balance, the legal structure,
and the experience of Allied Credit as servicer.
According to Moody's, the transaction benefits from the high level
of excess spread available to cover losses arising from the
portfolio. The key challenge in the transaction is the limited
historical performance data available for auto loans. With just
over two years of performance data available, future performance of
auto loans could be subject to greater variability than the current
data indicates.
Key transactional features are as follows:
Once step-down conditions are satisfied, all notes, excluding
Class G notes, will receive their pro-rata share of principal.
Step-down conditions include, among others, 30% subordination to
the Class A notes and no unreimbursed charge-offs.
A swap provided by National Australia Bank Limited
(Aa3/P-1/Aa2(cr)/P-1(cr)) will hedge the interest rate mismatch
between the assets bearing a fixed rate of interest, and floating
rate liabilities. The notional balance of the swap will follow a
schedule based on amortisation of the rated notes assuming certain
prepayments.
AMAL Asset Management Limited is a back-up servicer. If ARF is
terminated as servicer, AMAL will take over the servicing role in
accordance with the standby servicing deed and its back-up
servicing plan.
Key model and portfolio assumptions:
Moody's Portfolio Credit Enhancement ("PCE") — representing the
loss that Moody's expects the portfolio to suffer in the event of a
severe recessionary scenario — is 29%. Moody's mean default for
this transaction is 5.9%. The assumed recovery rate is 27%.
Expected defaults, recoveries and PCE are parameters used by
Moody's to calibrate its lognormal portfolio loss distribution
curve and to associate a probability with each potential future
loss scenario in Moody's cash flow model to rate consumer ABS.
The assumed default rate and PCE are higher than for Allied
Credit's previous securitisation, Allied Credit ABS Trust 2020-1
(default rate of 5.2% and PCE of 27.5%), reflecting the stresses
applied to the auto sub-portfolio due to short period of available
historical data.
Key pool features are as follows:
The pool consists of 88.5% consumer loans and 11.5% of commercial
loans.
Interest rates in the portfolio range from 3.99% to 18.95%, with a
weighted average interest rate of 10.3%.
The weighted average seasoning of the portfolio is 10.8 months,
while the weighted average remaining term of the portfolio is 54.6
months.
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
December 2020.
Factors that would lead to an upgrade or downgrade of the ratings:
Up
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the ratings. Moody's current expectations of loss
could be better than its original expectations because of fewer
defaults by underlying obligors. The Australian job market is a
primary driver of performance.
Down
Levels of credit protection that are insufficient to protect
investors against current expectations of loss could lead to a
downgrade of the ratings. Moody's current expectations of loss
could be worse than its original expectations because of more
defaults by underlying obligors. The Australian job market is a
primary driver of performance. Other reasons for worse performance
than Moody's expects include poor servicing, error on the part of
transaction parties, a deterioration in credit quality of
transaction counterparties, lack of transactional governance and
fraud.
BIANCO SOURCECORP: First Creditors' Meeting Set for Sept. 21
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Bianco
Sourcecorp Pty Ltd, Bianco Windows and Joinery, will be held on
Sept. 21, 2021, at 10:00 a.m. via virtual meeting technology.
Dominic Charles Cantone and Nicholas David Cooper of Oracle
Insolvency Services were appointed as administrators of Bianco
Sourcecorp on Sept. 9, 2021.
CROWN RESORTS: Warns May Not Continue As 'Going Concern'
--------------------------------------------------------
Reuters reports that Crown Resorts' auditor on Sept. 9 warned that
numerous money-laundering probes into the Australian casino
operator and the impact of the COVID-19 pandemic cast "material"
uncertainty over the company's ability to continue as a going
concern.
According to Reuters, Crown has been embroiled in legal battles and
scandal since allegations of money laundering at its Melbourne
casino emerged in 2019. In June, financial crime regulator extended
a probe into its flagship casino in Melbourne, to also include its
operations in Perth.
The company, in which billionaire James Packer has a 37% stake,
also said the Australian Transaction Reports and Analysis Centre
(AUSTRAC) was "very likely" to launch civil proceedings against its
casinos in both cities, Reuters relays.
"If it does so, it is likely that Crown Melbourne and Crown Perth
will be required to pay significant civil penalties," it said in
its 153-page annual report released on Sept. 9.
Reuters relates that KPMG, Crown's auditor, also said the
cancellation or suspension of any of its casino licences could
trigger default on some of its debts.
If that occurred, the report said Crown had negotiated some waivers
with its financiers which would provide "a period of time to
negotiate with lenders or otherwise refinance the facilities".
Its bonds are also at risk of having to be repaid if its credit
rating falls below investment grade, KPMG added.
"The conditions disclosed . . . indicate a material uncertainty
exists that may cast significant doubt on the Group's ability to
continue as a going concern," the auditor said in the report.
To address a potential liquidity shortfall, the company had also
obtained a waiver of financial covenants from its banks until the
end of the year, and extended the maturity of its banking
facilities until October 2023.
It also secured an additional AUD250 million debt facility
commitment with its banks, which could be used to repay its bonds
should it need to do so.
Reuters notes that the troubled firm has received takeover
approaches from several suitors this year, including from
investment giant Blackstone Inc and smaller rival Star
Entertainment Group. However, both proposals have been withdrawn as
Crown struggles to rebuild its image amid multiple Royal Commission
enquiries.
Headquartered in Melbourne, Australia, Crown Resorts Limited
(ASX:CWN) -- https://www.crownresorts.com.au/ -- wholly owns and
operates two of Australia's leading gambling and entertainment
complexes, Crown Melbourne and Crown Perth.
ENVIRONMENTAL SERVICES: First Creditors' Meeting Set for Sept. 20
-----------------------------------------------------------------
A first meeting of the creditors in the proceedings of
Environmental Services (WA) Pty Ltd, will be held on Sept. 20,
2021, at 10:30 a.m. via virtual meeting technology.
Mervyn Jonathan Kitay of Worrells Solvency & Forensic Accountants
was appointed as administrator of Environmental Services on Sept.
8, 2021.
MAC WINDOWS: Second Creditors' Meeting Set for Sept. 20
-------------------------------------------------------
A second meeting of creditors in the proceedings of Mac Windows Pty
Ltd has been set for Sept. 20, 2021, at 11:00 a.m. via Microsoft
Teams.
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 Sept. 16, 2021, at 5:00 p.m.
Rajiv Goyal and Andrew McCabe of Wexted Advisors were appointed as
administrators of Mac Windows on Aug. 23, 2021.
TG SHARE: Second Creditors' Meeting Set for Sept. 17
----------------------------------------------------
A second meeting of creditors in the proceedings of:
- TG Share Investments Pty Ltd ATF Hopetoun Family Trust
- Myrtle Blossom Pty Ltd ATF Myrtle Road Trust
- Grangekew Pty Ltd ATF UTG Share Trust
- UDT Enterprises Pty Ltd ATF Cosmic Commercial Trading Trust
- Prabhat Pty Ltd ATF Goenka Family Trust
- GAD Investment Holdings Pty Ltd
has been set for Sept. 17, 2021, at 10:30 a.m. via
teleconference/online video conference.
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 Sept. 15, 2021, at 5:00 p.m.
Shane Justin Cremin of Rodgers Reidy was appointed as administrator
of TG Share on Aug. 13, 2021.
ZIP MASTER 2021-2: S&P Assigns B Rating on Class F Notes
--------------------------------------------------------
S&P Global Ratings assigned its ratings to six classes of notes
issued by Perpetual Corporate Trust Ltd. as trustee of Zip Master
Trust - Series 2021-2. Zip Master Trust – Series 2021-2 is a
securitization of a buy now, pay later line of credit receivables
to consumers originated by zipMoney Payments Pty Ltd. (Zip).
The ratings reflect the following factors:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that the portfolio has a three-year
revolving period, which means further receivables may be assigned
to the trustee after the closing date.
-- S&P's view that the credit support provided to each class of
rated notes is commensurate with the ratings assigned. Credit
support is provided by subordination and excess spread, if any.
-- S&P's expectation that the various mechanisms to support
liquidity within the series, including a series-specific liquidity
facility, mitigates disruption risks to senior fees and ensures
timely payment of interest on rated notes.
-- The transaction documents include downgrade language consistent
with S&P's counterparty criteria that requires the replacement of
the bank account provider and liquidity facility provider should
our rating on the providers fall below the applicable rating.
-- The legal structure of the trust is established as a
special-purpose entity and meets S&P's criteria for insolvency
remoteness.
Ratings Assigned
Zip Master Trust – Series 2021-2
Class A, A$422,500,000: AAA (sf)
Class B, A$110,500,000: AA (sf)
Class C, A$19,500,000: A (sf)
Class D, A$26,000,000: BBB (sf)
Class E, A$19,500,000: BB (sf)
Class F, A$19,500,000: B (sf)
Class G, A$32,500,000: Not rated
=========
C H I N A
=========
DAFA PROPERTIES: Moody's Affirms 'B2' CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has affirmed DaFa Properties Group
Limited's B2 Corporate Family Rating and B3 senior unsecured
ratings.
The rating outlook remains stable.
"The rating affirmation reflects our expectation that DaFa
Properties will be able to generate good operating cash flow to
maintain its adequate liquidity over the next 12 months despite a
challenging industry environment," says Celine Yang, a Moody's Vice
President and Senior Analyst.
Moody's expects the company's gross contracted sales to increase by
over 20% to around RMB36 billion-RMB38 billion in 2021, given its
strong execution track record and its land bank that is
predominately located in the Yangtze River Delta area.
RATINGS RATIONALE
DaFa's B2 CFR reflects the company's long operating track record of
developing properties in the Yangtze River Delta region, especially
in Shanghai and Nanjing, and its good sales execution.
However, the rating is constrained by the company's small scale,
limited funding channels, sizable exposure to lower-tier cities and
joint ventures and associates (JV).
DaFa's contracted sales grew strongly by 95.6% year on year to
RMB31.3 billion in the first eight months in 2021, which exceeded
its total contracted sales of RMB30.3 billion in 2020. The solid
contracted sales will support its liquidity, even after considering
its material exposure to JVs.
Moody's expects DaFa's leverage, measured by revenue/adjusted debt,
to remain at 72%-73% over the next 12-18 months from 73% for the 12
months ended June 2020, supported by mild revenue growth and stable
debt levels. Meanwhile, its EBIT/interest will likely trend towards
1.7x-1.8x over the next 12-18 months from 1.9x for the 12 months
ended June 2021, driven in part by a likely moderate decline in
profit margins.
DaFa's liquidity is adequate. As of the end of June 2021, the
company's unrestricted cash balance of RMB4 billion only covered
85% of its short-term debt. But Moody's expects the company's
operating cash flow to supplement its unrestricted cash holdings
such that the liquidity level is sufficient to cover its short-term
debt and estimated committed land and other payments for the next
12 months.
DaFa's B3 senior unsecured debt rating is one notch lower than its
CFR because of structural subordination risk. This risk reflects
the fact that most of DaFa's claims are at its operating
subsidiaries and have priority over its senior unsecured claims at
the holding company in a bankruptcy scenario. In addition, the
holding company lacks significant mitigating factors for structural
subordination. As a result, the likely recovery rate for claims at
the holding company will be lower.
With respect to environmental, social and governance (ESG) factors,
Moody's has taken into account the concentrated ownership by DaFa's
key shareholder, Ge Hekai, and his family, who together held a
total 72.5% stake in the company as of the end of December 2020.
Moody's has also considered (1) the presence of three independent
nonexecutive directors on the board, who also chair the audit and
remuneration committees; (2) the company's moderate 20%-25%
dividend payout ratio over the past three years; and (3) the
presence of other internal governance structures and standards as
required under the Corporate Governance Code for companies listed
on the Hong Kong Exchange.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable rating outlook reflects Moody's expectation that DaFa
will maintain stable credit metrics and adequate liquidity in the
next 12 months.
Moody's could upgrade DaFa's ratings if the company (1)
successfully executes its business plan; (2) significantly expands
its scale while maintaining its credit metrics; and (3) sustains
adequate liquidity, with unrestricted cash consistently above 1.5x
of short-term debt, and (4) diversifies its funding channels.
A significant reduction in contingent liabilities associated with
JVs would be credit positive. This could be a result of reduced
usage of JVs or significant improvement in the financial strength
of its JV projects.
On the other hand, Moody's could downgrade the ratings if (1)
DaFa's liquidity or funding access weakens; (2) its contracted
sales or cash collection deteriorates; or (3) the company
accelerates its land acquisitions beyond Moody's expectations,
thereby weakening its financial metrics and liquidity.
Financial metrics indicative of a downgrade include (1)
unrestricted cash/short-term debt failing to trend towards 1.0x;
(2) EBIT/interest coverage below 1.5x; or (3) revenue/adjusted debt
below 50%-55% on a sustained basis.
Downward rating pressure could also increase if the company's
exposure to contingent liabilities associated with JVs increases
significantly as a result of a marked deterioration in the
financial strengths and liquidity of its JV projects, or a
substantial increase in investments in JV projects.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
DaFa Properties Group Limited is a Shanghai-based residential
property developer. As of June 30, 2021, the company had developed
69 property development projects, with a gross floor area of 6.7
million square meters. Its key operating cities include Wenzhou,
Huzhou, Hefei, and Ningbo.
As of the end of 2020, DaFa Properties was 72.5% owned by its
founder, Mr. Ge Hekai, and his family.
HAITONG SECURITIES: Probed in Fraudulent Financial Reporting Case
-----------------------------------------------------------------
Caixin Global reports that China's top securities regulators are
probing Haitong Securities over allegations of misconduct in the
brokerage house's investment banking business, dealing another blow
to the scandal-plagued company amid tightening scrutiny of
financial intermediaries.
Haitong received a notice from the China Securities Regulatory
Commission (CSRC) disclosing the probe, which targets the broker's
role in the financial reporting fraud case of Aurora
Optoelectronics, the company said in a filing on Sept. 8.
Caixin relates that the commission said Haitong is under
investigation on suspicion of negligence and violations of law and
regulations when it served as financial adviser of Aurora
Optoelectronics, formerly Southwest Pharmaceutical. A person close
to the CSRC said the regulator would already have evidence of
violations when it announced the probe.
According to Caixin, Shanghai-based Haitong has been under scrutiny
by regulators since late last year, mostly over its scandal-plagued
investment banking business. The broker has received numerous
warnings from the CSRC since November.
In March, Haitong was slapped with a one-year business ban on
conducting bond investment advisory business because it allegedly
helped defaulter Yongcheng Coal and Electricity Holding to sell
bonds illegally, Caixin recalls. In January, China's interbank bond
market regulator criticized Haitong for helping Yongcheng Coal in
the illegal issuance of bonds and market manipulation.
State-owned Yongcheng Coal's default on CNY1 billion ($155 million)
of bonds in November triggered a chain reaction that rattled the
bond market and shook investor confidence in state-owned
enterprises. The company and its executives were fined CNY5.3
million in August for financial fraud after the high-profile
default.
Aurora Optoelectronics was a longtime client of Haitong, Caixin
notes. In 2015, Aurora made a backdoor listing through an asset
swap with Southwest Pharmaceutical. Heilongjiang businessman Zuo
Hongbo and his wife Chu Shuxia became controlling shareholders of
Aurora Optoelectronics. Haitong was the financial adviser on the
deal.
Shortly after the listing, Aurora Optoelectronics struggled and in
2017 it started losing money, breaching a promise to shareholders
of at least three years of profitability. The company posted a net
loss of CNY1.7 billion for 2018.
In May 2018, the securities regulator launched a probe of Aurora
Optoelectronics for alleged financial reporting fraud. In July
2020, the CSRC confirmed multiple violations by Aurora
Optoelectronics, including profit inflation of CNY668 million
between 2016 and 2018 and failure to properly disclose major
operating issues and transactions between connected parties, Caixin
says. The company was slapped with the highest penalty, CNY600,000.
Fifteen of its senior executives were also punished with fines or
business bans.
In November, Aurora Optoelectronics auditor Dahua Certified Public
Accountants was punished by the CSRC for negligence as a financial
intermediary serving Aurora Optoelectronic, Caixin relates.
Under industry rules, sponsorship institutions in mergers and
restructuring deals could face a six-month business ban if they
fail to properly deliver on their responsibilities and commit
serious violations, Caixin states.
China-based Haitong Securities provides services in stocks and
futures brokerage, as well as investment banking, corporate
finance, M&A, asset management, mutual fund, and private equity.
REMARK HOLDINGS: Settles Litigation With CBG Over 2016 Acquisition
------------------------------------------------------------------
Remark Holdings, Inc., together with its wholly owned subsidiary
KanKan Limited, entered into a settlement agreement with China
Branding Group Limited (CBG) and its joint official liquidators to
settle the parties' claims against each other in the legal
proceeding the Company filed arising from its acquisition of assets
of CBG in September 2016.
Pursuant to the terms of the Settlement Agreement, in consideration
for a settlement of the parties' claims and a mutual release, the
Company has agreed to (i) release to CBG, within five business days
following the Effective Date, the $375,000 held in escrow in
connection with the Company's acquisition of assets of CBG and (ii)
issue to CBG warrants to purchase up to 5,710,000 shares of the
Company's common stock at a per share exercise price of $6.00,
which warrants are exercisable for a period of five years from the
Effective Date. Additionally, if the closing price of the
Company's common stock is $8.00 or greater for any five days (which
may be non-consecutive) in any consecutive 30-day trading period,
the Company has the right to cause the holder of the Warrants to
exercise, at its election, all or any portion of the Warrants on a
cashless basis at a deemed exercise price of $8.00 per share. The
Company has also agreed to file a registration statement
registering the resale of the shares of common stock underlying the
Warrants within 10 business days of the Effective Date.
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- delivers an integrated suite of AI
solutions that enable businesses and organizations to solve
problems, reduce risk and deliver positive outcomes. The company's
easy-to-install AI products are being rolled out in a wide range of
applications within the retail, financial, public safety and
workplace arenas. The company also owns and operates digital media
properties that deliver relevant, dynamic content and ecommerce
solutions. The company is headquartered in Las Vegas, Nevada, with
additional operations in Los Angeles, California and in Beijing,
Shanghai, Chengdu and Hangzhou, China.
Remark Holdings reported a net loss of $13.68 million for the year
ended Dec. 31, 2020, compared to a net loss of $25.61 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$13.73 million in total assets, $28.94 million in total
liabilities, and a total stockholders' deficit of $15.21 million.
Los Angeles, California-based Weinberg & Company, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 31, 2021, citing that the Company has suffered
recurring losses from operations and negative cash flows from
operating activities and has a negative working capital and a
stockholders' deficit that raise substantial doubt about its
ability to continue as a going concern.
ZHONGLIANG HOLDINGS: Fitch Rates Proposed USD Notes 'B+'
--------------------------------------------------------
Fitch Ratings has assigned China-based Zhongliang Holdings Group
Company Limited's (B+/Positive) proposed US dollar senior notes a
'B+' rating, with a Recovery Rating of 'RR4'.
The proposed notes are rated at the same level as Zhongliang's
senior unsecured rating because they will constitute its direct and
senior unsecured obligations. Zhongliang intends to use the net
proceeds to refinance debt, in accordance with its sustainable
finance framework.
Zhongliang's Positive Outlook reflects the improving contracted
sales scale, which is now comparable with that of 'BB' category
homebuilders. The group's projects are spread across five core
economic regions in China, mitigating regional economic and policy
risk. Zhongliang adopts a fast-churn model and aims to begin sales
soon after acquiring land, leading to efficient use of capital.
Proportional consolidated leverage has been well controlled in the
past three years, supported by higher trade payables and
non-controlling interests.
KEY RATING DRIVERS
Geographically Diversified Homebuilder: Zhongliang's improved
diversification mitigates regional economic and policy shocks. The
company's property projects were located in 155 cities across five
core economic regions in China as of 1H21. The majority were in
third- and fourth-tier cities, which have weaker demand
fundamentals than higher-tier cities. Zhongliang has responded to
changing market conditions by increasing its presence in
second-tier cities in the past two years; 47% of the land it
acquired in 2020 was in Tier 2 cities.
Large Scale: Fitch expects mild growth in attributable contracted
sales, after it increased to CNY102 billion in 2020 from CNY16
billion in 2016. Zhongliang's standardised operational procedures,
which cover its entire property-development value chain - including
land acquisition, marketing, design and product lines - have aided
its rapid expansion. Its improving land bank quality is evident
from its average selling price of CNY12,600/sqm in 1H21, up from
CNY10,300/sqm in 2019.
Low Margin, Fast Churn: Fitch expects the EBITDA margin to stay
below 20% in the coming four years. The margin was flat yoy, at
17%-18% in 2020 and 1H21, which is at the lower-end of peers'.
However, the company has sound capital utilisation, aided by the
good execution of its ultra-fast-churn model. Zhongliang enters the
pre-sale phase quickly after land is acquired.
Low Net Inventory: Zhongliang's projects are small and aimed at the
mass market, enabling it to de-stock and achieve positive cash flow
generation within a short period. Internally generated cash flow
supports capital needs for land acquisition and development,
reducing the need for large debt funding. Above-peer contracted
liabilities as a proportion of inventory results in a low net
inventory base. This, together with low net debt and slowing
contracted sales, could produce swings in leverage. Still,
Zhongliang's gross inventory is in line with that of higher-rated
peers.
Low Leverage: Zhongliang's leverage - measured by net debt/adjusted
inventory with proportional consolidation of joint ventures (JV)
and associates - was low at 25%-26% at end-2020 and end-1H21, and
is managed by balancing fast-churn contracted sales and land
acquisitions. Lower cash collection amid mortgage tightening
measures were offset by the increase in trade payables and
non-controlling interests to control leverage. Fitch estimates that
unsold attributable land bank at end-2020 was sufficient for around
three years of development.
JV Guarantees: Zhongliang's guarantees to JVs and associates, at
CNY12.2 billion in 2020, were large relative to consolidated net
debt of CNY19.7 billion. Fitch assesses the company based on
proportional consolidation. If Fitch was to measure leverage based
on consolidated net debt and guarantees/consolidated adjusted
inventory, it would have been 59% during 2020-1H21, higher than the
average of 'B+' rated peers.
This difference in the two leverage measures is due to substantial
cash and thus low net leverage at the JV level at 8%. Fitch expects
the gap to narrow, as the company plans to slow the growth of
guarantees. Consolidated leverage would be 33%-36% at 2020-1H21
excluding guarantees.
Minority Shareholders: Zhongliang's total non-controlling interests
in its balance sheet accounted for 64%-66% of total equity during
2020-2021, which was higher than that of 'B+' peers. This reflects
its reliance on cash from contracted sales and capital
contributions from non-controlling shareholders, which are mainly
developers, as a source of financing to expand scale. This lowers
its need for debt funding, but creates potential cash leakage,
resulting in lower financial flexibility than homebuilders with
lower non-controlling interests.
DERIVATION SUMMARY
Zhongliang's attributable contracted sales, revenue and amount of
implied cash collected are comparable with that of 'BB' category
peers. Its land bank is also spread more widely across China's core
economic regions than that of peers, such as Hong Kong JunFa
Property Company Limited (B+/Stable). However, around 70% of
Zhongliang's gross floor area is in Tier 3 and 4 cities (55% in
terms of saleable value), which Fitch believes has less resilient
demand than first- and second-tier cities.
Fitch estimates that Zhongliang's unsold attributable land bank at
end-2020 was equivalent to around three years of gross floor area
sold - longer than that of fast-churn peers like CIFI Holdings
(Group) Co. Ltd. (BB/Stable). Zhongliang's attributable contracted
sales are 20% below that of CIFI, but net inventory is only around
55% of that of CIFI. This narrows headroom to weather the business
cycle and explains Zhongliang's lower rating.
Zhongliang's land bank penetration is comparable with that of
Guangzhou R&F Properties Co. Ltd. (B+/Stable), which has a much
longer operating history. Zhongliang has higher consolidated
leverage, including guarantees to JVs and associates, but a
stronger cash/short-term debt ratio. Zhongliang's churn rate is
much higher, but its EBITDA margin is lower. Zhongliang has higher
non-controlling interests as a percentage of total equity,
reflecting its greater reliance on minority shareholders for
funding.
Zhongliang's fast-churn model resulted in a contracted sales/total
debt ratio of 1.9x in 2020, one of the highest among Fitch-rated
Chinese homebuilders. Its EBITDA margin is at the lower end of 'B+'
rated peers and it has minimal investment-property interest
coverage. The company's 2019 IPO on the Hong Kong stock exchange
enhanced its financial transparency, leading to better regulatory
oversight compared with unlisted 'B+' peers, such as Helenbergh
China Holdings Limited (B+/Stable) and JunFa.
Zhongliang's proportionally consolidated leverage is lower than
that of peers, but guarantees to JVs and associates are large
relative to consolidated net debt and constrain its ratings.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Land bank life of more than 2.5 years till 2024;
-- Gross floor area acquired is 0.7x-1.0x of gross floor area
sold in 2021-2024;
-- Average selling price rising by 2% a year on average in 2021
2024;
-- Attributable contracted sales rising by 3% a year on average
in 2021-2024;
-- Construction costs kept at 36%-40% of sale proceeds in 2021-
2024 (2020: 45%);
-- Selling, general and administrative expenses at 5% of
contracted sales in 2021-2024 (2020: 4.4%).
RECOVERY RATING ASSUMPTIONS:
-- Fitch applies the liquidation value approach, as a liquidation
of the assets results in a higher return to creditors;
-- 4x EBITDA multiple to derive Zhongliang's going-concern value;
-- 10% administration claims;
-- Zero advance rate to cash as there is no excess cash after
taking away three months of sales as minimum cash;
-- 70% advance rate to accounts receivable;
-- 9% advance rate to Zhongliang's investment properties;
-- 60% standard haircut to building and leasehold improvements;
-- 60% advance rate to adjusted net inventory of Zhongliang and
its JVs and a 20% discount to customer deposits when
calculating adjusted net inventory to reflect the around 20%
gross profit margin. For JV-adjusted net inventory, Fitch
calculates investment in JVs + amount due from JVs – amount
due to JVs;
-- 100% advance rate to restricted cash and pledged deposits.
The resulting recovery corresponds to a Recovery Rating of 'RR2'.
However, under Fitch's Country-Specific Treatment of Recovery
Ratings Criteria, China falls into the Group D of countries of
creditor friendliness, and instrument ratings of issuers with
assets in the group are subject to a soft cap at the issuer's IDR
and a Recovery Rating of 'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Proportionally consolidated leverage sustained below 40%
without a large increase in guarantees on the debt of JVs and
associates;
-- Available cash/short-term debt sustained above 1.0x (2020:
1.1x);
-- No substantial drop in cash collection (defined by the change
in customer deposits plus revenue booked during the year).
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- The Outlook will be revised to Stable if the positive rating
triggers are not met within 12-18 months.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Liquidity, as measured by available
cash/short-term debt, was 1.2x in 1H21, improved from 1.1x, in 2020
and 0.7x in 2019. Zhongliang's short-term debt amounted to CNY23.2
billion, or 43% of total debt in 1H21, which was at the high-end of
'B+' peers. Total cash of CNY35.5 billion, including restricted
cash, was enough to cover short-term debt by 1.5x while implied
funding costs were flat yoy at 11%. This was at the high-end of
'B+' peers and should edge down once the company pays down its
trust loan, which comprised 28% of total debt in 2020.
ISSUER PROFILE
Zhongliang is a fast-growing real estate developer in China based
in the Yangtze River Delta Economic Region. It has about 20 years
of experience and expanded its footprint nation-wide since 2015.
The company had 480 projects located in 153 cities in 23 provinces
as of December 2020. It ranks among the top 20 Chinese property
developers by sales.
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.
=========
I N D I A
=========
AASTHA INFRACITY: ICRA Keeps B Debt Rating in Not Cooperating
-------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Aastha
Infracity Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] B(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 48.00 [ICRA] B(Stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 2010, AIL has started developing a residential
project - Aastha Greens - in Greater Noida West, Uttar Pradesh in
June 2015. The project has G+19 floors with a total of 636 units
spread over ~12.2 lakh sq ft of saleable area. The project cost is
estimated at INR182.7 crore and is envisaged to be funded by debt
of INR48 crores, customer advances of INR90.7 crore and promoter
funds of INR44.0 crore. The company is promoted by Mr. Sanjay Kumar
and Mr. Arun Kumar.
AMI RIDDHI: ICRA Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA has retained the long-term and short-term ratings of Ami
Riddhi Chem Pvt. Ltd. in the 'Issuer Not Cooperating' category. The
ratings are denoted as [ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 11.00 [ICRA]B+(Stable)ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Non-fund Based– 1.50 [ICRA]A4 ISSUER NOT
Letter of Credit COOPERATING; Rating continues
to remain under the 'Issuer
Not Cooperating' category
Non-fund Based– 0.08 [ICRA]A4 ISSUER NOT
Forward Contract COOPERATING; Rating continues
to remain under the 'Issuer
Not Cooperating' category
Fund Based– (1.50) [ICRA]A4 ISSUER NOT
Buyer's Credit COOPERATING; Rating continues
to remain under the 'Issuer
Not Cooperating' category
Non-fund Based– (0.50) [ICRA]A4 ISSUER NOT
Bank Guarantee COOPERATING; Rating continues
to remain under the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 2009, the company is based in Mumbai and trades in
chemicals that find application primarily in bulk manufacturing of
drugs in pharmaceuticals industry. The promoter has an experience
of around three decades in the field of chemical trading. The
company has a diversified product portfolio comprising of around
hundred chemicals and is dominated by methanol, toluene, acetone,
acetic acid, iso propyl alcohol, piperazine anhyd. and dimethyl
formamide. The products find application in pharmaceutical
industry.
BALAJI SUGARS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Shri
Balaji Sugars and Chemicals Pvt Ltd in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA] D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 65.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based- Rating continues to remain
Term loan under 'Issuer Not Cooperating'
category
Long Term 15.00 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating continues to remain
under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Shri Balaji Sugars and Chemicals Private Limited (SBSCPL) was
incorporated in the year 2011. The company has setup a 3500 TCD
sugar plant and 18 MW cogeneration unit in Bijapur district in
North Karnataka. The first phase of the project initially was to
start commissioning from March 2014. The date of commissioning was
later postponed to November 2014. However, the plant's commercial
operations commenced on March 23, 2015 for the first phase which
essentially involves the sugar plant and the co-gen unit. In the
second phase, the company is planning to integrate the existing
phase 1 unit with a 60 KLPD1 distillery.
BALESHWAR KHARAGPUR: Ind-Ra Moves D Loan Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Baleshwar
Kharagpur Expressway Limited's bank loans rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR3,936.2 bil. (INR3,916.4 bil. outstanding as of March 31,
2020) Senior project bank loans migrated to non-cooperating
category with IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING; the ratings were last reviewed on
September 4, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Baleshwar Kharagpur Expressway operates a 24-year concession
project to construct bridges/structures and repair the existing
four-lane highway from Baleshwar to Kharagpur of National Highway
60 in Odisha and West Bengal. The project was awarded on a design,
build, finance, operate and transfer basis by the National Highways
Authority of India ('IND AAA'/Stable).
BARWA ADDA: Ind-Ra Moves 'D' Bank Loan Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Barwa Adda
Expressway Limited's bank loan rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR14.40 bil. (outstanding INR12,591.2 as of August 31, 2020)
Term loan (long term) due on June 2030 migrated to non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING; the ratings were last reviewed on
September 7, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Barwa Adda Expressway has been granted a 20-year concession by the
National Highways Authority of India (NHAI; 'IND AAA'/Stable') to
widen the Barwa-Adda-Panagarh section of NH-2 to 521.120km from
398.240km to six lanes including Panagarh Bypass in the states of
Jharkhand and West Bengal on a design, build, fund, operate, and
transfer basis. BAEL shall pay an annual premium amount of INR420
million from the appointed date and an escalation of 5%
thereafter.
CHENANI NASHRI: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Chenani Nashri
Tunnelway Limited's bank loans rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR29.760 bil. (INR27,721.1 bil. outstanding on August 30,
2020) Senior long-term bank loans* migrated to non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR3.72 bil. (INR3,342.5 bil. outstanding on August 30, 2020)
Subordinated long-term bank loans migrated to non-cooperating
category with IND D (ISSUER NOT COOPERATING) rating.
*including USD43 million external commercial borrowings
Note: ISSUER NOT COOPERATING; the ratings were last reviewed on
September 7, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Chenani Nashri Tunnelway Limited which is wholly-owned by IL&FS
Transportation Networks Limited ('IND D') is a special purpose
vehicle created to implement the four-laning of the
Chenani-to-Nashri section of the National Highway 1A (including a
two-lane, 9km tunnel in the Udhampur district near Jammu) on a
design, build, finance, operate and transfer basis under a 20-year
concession (expiring in May 2031) from the National Highways
Authority of India (NHAI; 'IND AAA'/Stable).
ENERTECH ENGINEERING: ICRA Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Enertech
Engineering Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA] B+(Stable)/[ICRA] A4;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 5.00 [ICRA]B+(Stable)ISSUER NOT
CC Limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based 0.08 [ICRA]B+(Stable)ISSUER NOT
TL Limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term– 0.05 [ICRA] B+(Stable); ISSUER
NOT
Unallocated COOPERATING; Rating continues
Limits to remain under 'Issuer Not
Cooperating' category
Short Term– 40.93 [ICRA] A4; ISSUER NOT
Non Fund Based COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Enertech Engineering Private Limited (EEPL) was set up by Mr. Vijay
Chadha in 1989. The company has been operating in the area of
developing and selling customized integrated turnkey prefabricated
modules since 1991. The modules developed by the company are used
for residential purpose by defense forces and as mobile satellite
guidance and launching pads. The company has developed technology
to make the modules nuclear, bio-weapon and chemical weapon proof,
at the same time, maintaining the easy transportability. The
founder and managing director Mr. Vijay Chadha passed B.E.
(Mechanical Engineering) from REC Kurukshetra in 1976 and has done
MBA from Osmania University in 1983 and he is the First Generation
Entrepreneur who started Small Scale Industry in 1993 with only 5
workers. Presently, his two sons are also partners and hold
positions in the company supporting the MD. All the directors are
engineers and technically well-qualified.
G.M. SYNTEX: ICRA Lowers Rating on INR47cr Term Loan to B+
----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of G.M.
Syntex Pvt. Ltd., as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 47.00 [ICRA]B+ (Stable) ISSUER NOT
Limits- COOPERATING; Rating downgraded
Term loan from [ICRA]BB+ (Stable)and
continues to remain in the
'Issuer Not Cooperating'
Category
Non-Fund Based (13.00) [ICRA]A4 ISSUER NOT
Sublimits–Bank COOPERATING; Rating
downgraded
Guarantee/Letter from [ICRA]A4+ and continues
of credit to remain under Issuer Not
Cooperating category
Fund-based 25.00 [ICRA]B+ (Stable)/[ICRA]A4
Limits-Cash ISSUER NOT COOPERATING;
Credit/Post Rating downgraded from
& Pre shipment [ICRA]BB+ (Stable)/[ICRA]A4+
Credit and Rating continues to
remain under the 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is attributable to the lack of adequate
information regarding G.M. Syntex Pvt. Ltd.'s performance and in
turn, the uncertainty around its credit risk. ICRA assesses whether
the information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by a rated entity" available at www.icra.in. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the same
may not adequately reflect the credit risk profile of the entity,
despite the downgrade.
As part of its process and in accordance with its rating agreement
with G.M. Syntex Pvt. Ltd., ICRA has been trying to seek
information from the entity to monitor its performance. Despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of the requisite information and in
line with the aforesaid policy of ICRA, a rating view has been
taken on the entity based on the best available information.
Promoted by Mr. Gurbakshish Singh, G.M Syntex Private Limited
(GMSPL) was incorporated in 1999 and is engaged in the manufacture
of curtain fabrics primarily catering to the premium segment of the
market. The company has its registered office in Andheri, Mumbai
and manufacturing facility is set up at Tarapur in Maharashtra.
GANDHI ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Gandhi
Enterprises in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 50.95 [ICRA]D/[ICRA]D ISSUER NOT
limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Mr. Mahendra Gandhi and his two cousins, Mr. Bhupendra Gandhi and
Mr. Chandresh Gandhi, established M/s. Gandhi Enterprises in 1984
as a partnership firm. The principal business of this firm is to
export CPD. Concurrently, the Gandhi family also set up M/s Chayya
Gems for the CPD business. Mr. Mahendra Gandhi was the senior
partner of both these firms, and over the years, most of the
business was routed through M/s Chayya Gems. In FY2006, Mr.
Mahendra Gandhi and Mr. Chandresh Gandhi decided to part ways with
M/s Chayya Gems. Subsequent to the separation, both cousins
concentrated their efforts on promoting the business of M/s. Gandhi
Enterprises till FY2011. In FY2012, GENTP's business was further
split into two companies—Gandhi Enterprises and Akshar Impex
Private Limited (AIPL). Currently, GENTP's business is driven by
Mr. Mahendra Gandhi, while AIPL is managed by Mr. Chandresh Gandhi.
GENTP operates its CPD business through facilities in Gujarat
(Surat, Ahmedabad and Vishnagar), while its head office is in
Mumbai.
GLOBAL ENVIRO: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Global
Enviro Air System Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA] D/[ICRA] D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.00 [ICRA] D; ISSUER NOT
Fund Based/CC COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
Short Term– 3.75 [ICRA] D; ISSUER NOT
Non Fund Based COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
Long Term/ 1.25 [ICRA] D/[ICRA]D; ISSUER NOT
Short Term- COOPERATING; Rating continues
Unallocated to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Global Enviro Air Systems Private Ltd is the flagship company of
the Global group which began operations in 1999 and it undertakes
manufacturing and installation of pollution control equipment which
includes Clean Rooms, HVAC (Heating, Ventilation and Air
Conditioning) systems, Bag Filters, Centrifugal Blowers, Axle Flow
Blowers, Dust Extraction Systems, Fume Extraction Systems etc.
HARITHA FERTILIZERS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Haritha
Fertilizers Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 31.00 [ICRA] D; ISSUER NOT
Fund Based/CC COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
Long Term/ 4.00 [ICRA] D/[ICRA]D; ISSUER NOT
Short Term- COOPERATING; Rating continues
Unallocated to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 2006, HFL is involved in the manufacturing of
nitrogen-phosphorous-potassium (NPK) fertilizers. The company has
two manufacturing facilities with installed capacity of 1.50 lakh
metric tonne per annum each. The unit-I is located at
Ankireddypalli village in Ranga Reddy district and unit-II is
located at Damaracherla village in Nalgonda district of Telangana.
The company sells products under own brand "Nandi" in Telangana.
HEMANI INDUSTRIES: ICRA Lowers Rating on INR11.63cr Loan to B+
--------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Hemani
Industries Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 11.63 [ICRA]B+ (Stable) ISSUER NOT
Term Loan COOPERATING; Rating
downgraded from
[ICRA]BB+(Stable) and
continues to remain under
Issuer Not Cooperating
Category
Long Term– 1.41 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating
Limits downgraded from
[ICRA]BB+(Stable) and
continues to remain under
Issuer Not Cooperating
Category
Short term– 75.00 [ICRA]A4 ISSUER NOT
Fund based COOPERATING; Rating
Working capital downgraded from [ICRA]A4+
Facilities and continues to remain
under Issuer Not Cooperating
category
Short term- 8.00 [ICRA]A4 ISSUER NOT
Fund based/ COOPERATING; Rating
non-fund based downgraded from [ICRA]A4+
bank facilities and continues to remain
under Issuer Not Cooperating
category
Rationale
The rating downgrade is attributable to the lack of adequate
information regarding Hemani Industries Limited's performance and
in turn, the uncertainty around its credit risk. ICRA assesses
whether the information available about the entity is commensurate
with its rating and reviews the same as per its "Policy in respect
of non-cooperation by a rated entity" available at www.icra.in. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the same
may not adequately reflect the credit risk profile of the entity,
despite the downgrade. As part of its process and in accordance
with its rating agreement with Hemani Industries Limited, ICRA has
been trying to seek information from the entity to monitor its
performance.
Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of the requisite
information and in line with the aforesaid policy of ICRA, a rating
view has been taken on the entity based on the best available
information.
Incorporated in 1994, Hemani Industries Limited ('HIL') is engaged
in the business of manufacturing Agrochemical Intermediates
(Pesticides and Pesticides Intermediates) as well as Pigment
Intermediates. While under the latter, the company manufactures
only one product- 3,3' Dichlorobenzidine (DCB), the agrochemical
intermediate segment includes a diverse range of products including
Metaphenoxy Benzaldehyde (MPB) and other technicals like
Cypermethrin, Permethrin and Metamitron. The company is a
Government recognized export house and presently has three
manufacturing units, one each at Vapi, Ankleshwawar and Dahej
(Bharuch) in Gujarat.
JITF URBAN: ICRA Reaffirms B+ Rating on INR26.83cr Term Loan
------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of JITF
Urban Waste Management Bathinda Limited (JITF-B), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based
Term Loan 26.83 [ICRA]B+ (Negative); reaffirmed
Rationale
The rating continues to factor in the continued uncertainty
regarding the cash flow generation for JITF Urban Waste Management
Bathinda Limited (JITF-B), given its ongoing dispute with the
Municipal Corporation of Bathinda (MCB) for its municipal solid
waste (MSW) management project in the region. The matter is
currently under arbitration. The management claims that there has
been non-fulfilment of certain conditions/obligations under the
concession agreement (CA) by the MCB, which has resulted in the
subsequent termination of the CA. Earlier, JITF-B faced significant
delays in commissioning of its waste processing and disposal (P&D)
facilities, which led to lower-than-anticipated revenue generation
and operating losses. Nevertheless, the rating factors in JITF-B's
parentage (the PR Jindal Group) and consistent support from the
promoter entities by way of equity infusion and unsecured loans
(INR108.1 crore as on March 31, 2021) to fund its operating losses
and debt servicing obligations.
Key rating drivers and their description
Credit strengths
* Consistent funding support from promoters: JITF-B's promoters
(the PR Jindal Group) have consistently infused funds in the
company for funding its losses and supporting debt servicing
obligations. As on March 31, 2021, the promoters infused around
INR108.1 crore in the entity by way of equity capital, preference
shares, unsecured loans and compulsorily convertible debentures
(CCDs). Going forward as well, additional promoter support is
envisaged for meeting the cash flow shortfalls.
Credit challenges
* Uncertainty on operations and future cash flow generation: JITF-B
has terminated the CA with the project concessioning authority, the
MCB, and the matter is currently under arbitration. This has led to
uncertainty regarding the future operations and cash flows of the
entity.
* Losses at operating level: Waste collection activities entail
high operating costs. This, coupled with JITF-B's low scale of
operations and delays in commencement of P&D facilities, led to
continuous operating losses since the commencement of operations.
This has necessitated additional promoter support for funding
losses and meeting its debt obligations.
Liquidity position: Stretched
JITF-B has a stretched liquidity profile as it continues to report
losses, with its business operations remaining suspended post the
termination of the CA and the ongoing arbitration against the MCB.
The repayments and interest servicing for the project capex, as
well as operating losses, have been funded by promoters. Going
forward, the company is likely to require additional promoter
support for meeting its operational expenses as well as debt
servicing.
Rating sensitivities
Positive factors – A rating upgrade looks unlikely, given the
uncertainity regarding the commencement of operations and prolonged
arbitration.
Negative factors – Given that the project is not progressing, the
rating may be further downgraded if the quantum of support from
promoters is inadequate to meet its operational expenses as well as
debt servicing, or if the necessary financial support is not
received in a timely manner.
JITF-B is a special purpose vehicle (SPV) promoted by JITF Urban
Infrastructure Limited (JUIL) to develop and implement MSW
management system in Bathinda. JITF-B entered into a 25-year CA
with the MCB in 2011, which allowed it to develop and implement a
sustainable MSW management system to scientifically manage MSW and
utilise it to produce compost, refuse derived fuel (RDF) and
dispose the residual matter in an environment-friendly manner.
However, due to the ongoing dispute, the CA has been terminated and
operations have been suspended. JITF-B is a part of the
infrastructure vertical of the PR Jindal Group, which is housed in
the listed company—JITF Infralogistics Ltd (JIL).
In FY2021, JITF-B reported a net loss of INR12.1 crore on an
operating income (OI) of INR0.2 crore compared to a net loss of
INR2.9 crore on an OI of INR0.4 crore in FY2020.
KARUNA VENTURES: Ind-Ra Affirms BB- Non-Convertible Debentures
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed the rating of
Karuna Ventures Private Limited's (KVPL) proposed non-convertible
debentures (NCDs) as follows:
-- INR500 mil. Series I NCDs* coupon rate 9.15% affirmed with IND
BB-/Stable rating; and
-- INR1.50 bil. Series II NCDs* coupon rate 9.15% affirmed with
IND BB-/Stable rating.
*Unallocated
The rated NCDs are backed by the share cover of 2.0x of the listed
equity shares of Strides Pharma Science Limited (Strides; 'IND
A+'/Stable) and both principal and accrued interest would be
payable on the maturity date scheduled for the 24th and 37th
month from the date of allotment for Series I and II NCDs,
respectively. The rating addresses the timely payment of interest
and principal by the final maturity date of the NCDs, in accordance
with the transaction documents.
KEY RATING DRIVERS
Credit Linkage with the Issuer and Promoter Group Companies: Given
the cross-default clause mentioned under the event of default
(EoD), the ratings of the share-backed NCDs are capped by the
standalone credit rating of KVPL. While establishing the credit
profile of KVPL, Ind-Ra has taken comfort from the financial and
managerial flexibility amongst the promoter and his group
companies, and also, from their shareholding in two listed entities
viz. Strides and Solara Active Pharma Sciences Limited (Solara).
Security Cover: The rating of the NCDs reflects the exclusive
security package consisting of:
- a first ranking pledge over the shares of Strides in favor of
the Debenture Trustee in accordance with the terms of the share
pledge agreement; and
- the personal guarantee issued by the promoter, Arun Kumar
Pillai, in favor of the debenture trustee;
- the joint and several corporate guarantees issued by the Pronomz
Ventures LLP (PVLLP) and Karuna Business Solutions LLP (KBLLP), in
favor of the debenture trustee;
- a first ranking hypothecation over the cash collateral account
and all assets, investments, cash-flows and receivables of the
issuer, in favor of the debenture trustee in accordance with the
terms of the deed of hypothecation;
The security cover constitutes a required share collateral cover of
2.0x NCD principal amount plus the accrued interest, provided in
the form of listed shares of Strides or the cash collateral. The
share collateral cover would be calculated using the share price
lower of the closing price and volume-weighted average price for
the last trading day.
Volatility of Pledged Shares: The analysis of the structure and
sufficiency of the available share cover is based on the ability of
the structure to withstand a decline in the share price
commensurate with the assigned rating, within the transaction
tenure, so as to minimize the probability of any payment shortfall
on the payment due date. Ind-Ra assesses the liquidity of the
shares, characterized by the average trading volume of the shares
in last one year. Higher liquidity reduces the number of days the
debenture trustee would take to liquidate the pledged shares in the
open market and believed to have lesser impact on the price of the
share. For the current NCDs, the share security providers have to
pledge approximately 6.58 million shares of Strides, which would
take only five days to liquidate, assuming the average trading
volume over the last one year.
Strong Support from Share Security Provider: The promoter, Arun
Kumar Pillai, PVLLP and KBLLP will be accountable for covering any
shortfall on the maturity date of each series pursuant to the
personal and corporate guarantee provided as a part of the security
cover. The agency believes the promoter support to cover the
interest and principal payment is indispensable, given the low
operating profit of the issuer. The promoter along with the other
two share security providers/ guarantors have a shareholding of
21.29% of Strides. Ind-Ra considers the availability of
unencumbered shareholding of share security provider as a positive
factor, given their increased capability to sustain a price
correction and the resultant top-up requirement.
Share Security Providers' Holding (as a percentage of total shares
outstanding of Strides Pharma Science)
Liquidity Indicator – Stretched: KVPL's liquidity is underpinned
by the strong financial support from the promoters and the other
group entities. KVPL has unmatched liability and cash flow profile,
as interest payments are currently being serviced from interest and
rental income coming from the other promoter group entities.
However, a significant portion of the debt is from the promoter and
the group companies, and it is unsecured in nature and subordinated
to the external debt of INR103.3 million with a tenor of 15 years.
Excluding the internal debt, the net leverage (including the
corporate guarantee given to Dairy Power Ltd) would be 1.5x at
FYE21, as per Ind-Ra's calculations. KVPL had a cash and bank
balance of INR1.56 million at FYE21. Ind-Ra believes KVPL has
well-established banking relationships and prudent ability to plan
ahead for refinancing and contingencies. The company's liquidity
profile is likely to remain stretched over the medium term,
resulting from its business model, which demands the redeployment
of surplus in the new ventures of the group and sporadic returns
from these investments.
Restrictive Structural Covenants: The share-backed NCDs benefit
from the following structural covenants that safeguard the
investors' interest:
Cash collateralization events are defined as follows:
- share security provider should collectively own at least 21.29%
of Strides' equity share capital
- financial indebtedness (including guarantees, indemnities,
shortfall undertaking, and letter of comfort) for the promoter
group should not exceed INR5 billion
- disposal of Solara's shares for more than INR3 billion
- change in management control in respect of Strides or Solara
On the occurrence of the cash collateralization event, the issuer
is obliged to deposit cash equal to the total outstanding NCDs'
obligation within two business days. The issuer will have 45 days
to rectify the breach of the cash collateralization event.
Mandatory redemption events are defined as follows:
- Credit rating withdrawal, suspension of the rating or
classification of the issuer into the non-cooperating category
- Share price falling by over 50% of the share price calculated
three business days prior to the date of allotment
Mandatory redemption events mandate the issuer to redeem the NCDs
in full within two business days.
The key clauses in the EoD are:
- non-payment of the NCDs on the respective maturity date;
- cross default to the issuer or any other promoter group
companies
- failure to deposit the upcoming NCDs obligation amount, fifteen
days prior to the NCDs' payment date
- maintenance of adequate share security cover of 2.0x of the
NCDs' obligation amount, including failure to top-up if the share
security cover reduces to 1.82x.
- breach of covenants
- insolvency
On the occurrence of an EoD, the debenture trustee, upon the
written instructions of the debenture holders holding not less than
15% in value of the NCDs' principal amount, may declare that all or
part of the outstanding debentures are payable on demand, including
the acceleration of payment.
RATING SENSITIVITIES
Positive: A significant improvement in the issuer's operating
performance, led by higher interest, dividend and rental income on
a sustainable basis, could lead to a positive rating action.
Negative: The NCD rating is sensitive to the performance of the
pledged stock, which is reflected by its average daily return,
volatility and liquidity, share cover ratios and the soundness of
the legal structure, along with the effectiveness of multiple
protection-based triggers that result in accelerated redemption
events.
In addition, developments that could, individually or collectively,
lead to a negative rating action are:
- a significant increase in the external debt (including corporate
guarantee) to EBITDA ratio
- the absence of adequate and timely funding support from the
promoters and other promoter group companies.
COMPANY PROFILE
Incorporated on August 7, 2009, KVPL provides management & business
consultancy services, and construction services of commercial
buildings. The company is wholly owned by Arun Kumar Pillai and his
family.
MAGUS METAL: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Magus
Metal Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
CC 'Issuer Not Cooperating'
Category
Long-term– 1.90 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
TL 'Issuer Not Cooperating'
Category
Long-term– 1.10 [ICRA]D; ISSUER NOT
COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
Magus Metals Private Limited (MMPL) was started as R.R. Metals
Private Limited in the year 1990. Later in the year 2001, the name
of the company was changed as Magus Metals Private Limited. From
inception, the company is into manufacturing of non ferrous metals
from the scrap generated by smelters like Hindustan Zinc limited
and Binani Zinc Limited. The company manufactures cadmium, zinc
sulphate, copper cathode and zinc ingots. The factory is situated
at Chotuppal, Nalgonda Dist, Telangana.
MAHATHI SOFTWARE: Ind-Ra Lowers Long-Term Issuer Rating to 'D'
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Mahathi Software
Private Limited's (MSPL) Long-Term Issuer Rating to 'IND D' from
'IND BB'. Simultaneously, the agency has reassigned MSPL a
Long-Term Issuer Rating of 'IND B' with a Stable Outlook.
The instrument-wise rating actions are:
-- INR48 mil. (reduced from INR270 mil.) Term loan*# due on
December 2032 downgraded and reassigned with IND B/Stable
rating; and
-- INR14.3 mil. (reduced from INR30 mil.) Fund-based working
capital limit*# downgraded and reassigned with IND
B/Stable/IND A4 rating.
#The final rating has been assigned following the receipt of the
financing documents to the satisfaction of Ind-Ra.
* Downgraded to 'Provisional IND D' and assigned final rating of
'IND D' before reassigning.
KEY RATING DRIVERS
The downgrade reflects several instances of overutilization of the
fund-based working capital limits by MSPL during September-December
2020, due to delays in receipt of receivables from its US customers
owing to the COVID-19 outbreak.
The reassignment of the 'IND B' rating reflects MSPL's utilization
of its fund-based working capital facilities within the sanctioned
limits with one bank during January-August 2021. However, the
company continued to overutilize its fund-based limits for average
7-10 days each month with another bank during November 2020-August
2021.
Liquidity Indicator - Poor: The company reported several instances
of overutilization of its fund-based limits during the 12 months
ended August 2021. The cash flow from operations declined to
INR25.1 million in FY21 (FY20: INR41.6 million, FY19: INR138.7
million) due to a decrease in absolute EBITDA and unfavorable
changes in working capital. The working capital cycle elongated to
154 days in FY21 (FY20: 101 days), due to an increase in the
receivable period to 163 days (FY20: 111 days, FY19: 73 days).
However, the free cash flow improved to INR12.8 million (FY20:
INR7.2 million), owing to a decline in capex to INR11.7 million
(INR34.4 million). FY21 financials are provisional in nature.
The ratings are also constrained by MSPL's weak credit metrics. The
interest coverage (operating EBITDA/gross interest expense)
deteriorated to 2.5x in FY21 (FY20: 5.1x) and the net leverage
(total adjusted net debt/operating EBITDAR) to 4.3x (1.9x), mainly
due to the decrease in the absolute EBITDA to INR69.4 million
(INR158.0 million).
The ratings also factor in the company's modest EBITDA margin with
a return on capital employed of 4.4% in FY21 (FY20: 14.4%). The
operating margin deteriorated to 34.8% in FY21 (FY20: 50.5%) owing
to a decline in services revenue on account of a slowdown in the
software business. In 4MFY22, the company recorded EBITDA margin of
28%. Ind-Ra expects the margin to remain low in FY22, due to
continuing lower revenue from the services business along with
increased overhead cost, as well as loss of one of its major
customer Allscripts Healthcare Solutions, Inc. (Allscripts).
The ratings remain constrained by MSPL's small scale of operations.
In FY21, the revenue declined to INR199.3 million in FY21 (FY20:
INR312.7 million), due to the slowdown in the software business
owing to a decline in the number of patients admitted to hospitals
for reasons other than COVID-19. It recorded lower revenue of
INR44.2 million in 4MFY22, due to the loss of its major customer.
As a result, Ind-Ra expects the revenue in FY22 to be lower than
FY21. However, MSPL's another key customer Andor Health LLC plans
to expand into new markets in FY22; therefore, the management
expects MSPL's business to pick pace from 4QFY22.
The ratings are also constrained by MSPL's high geographical
concentration risk as the company generates majority of its entire
revenue from the software business in the US. Furthermore,
following the loss of its major customer, the company derives its
software business revenue solely from Andor Health, indicating
customer concentration risk. The company's customer-retention
ability in the lease rental business is yet to be seen as one of
its three tenants will extend its lease agreement at the same
rental cost by end-September 2021. The agreements with the
remaining two tenants is set to expire in 2022.
However, the ratings are supported by the company's two decades of
experience in the software business and experienced management.
RATING SENSITIVITIES
Negative: A further stretch in the liquidity position, along with
a further decline in the revenue or EBITDA, resulting in a
sustained deterioration in the credit metrics, could lead to a
negative rating action.
Positive: An improvement in the liquidity position, along with a
substantial growth in the revenue and EBITDA margin, leading to an
improvement in the credit metrics, all on a sustained basis, could
lead to a positive rating action.
COMPANY PROFILE
Incorporated in 2001, MSPL provides software services to healthcare
organizations. The company is also engaged in leasing of a
three-storey building with a built-up area of 1,35,000sf in
Rushikonda, Vishakapatnam to various software companies.
MNR COTTONS: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of MNR
Cottons Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term- 12.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based/TL COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long Term- 5.80 [ICRA]B+ (Stable) ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in June 2011, MNR Cottons Private Limited is engaged
in production of cotton yarn. The company is promoted by Mr. M.
Anantha Reddy and his family members. The company's manufacturing
unit is in Pothulamadugu Village in Mahaboobnagar district of
Telangana. The company specializes in manufacturing cotton yarn of
30s carded counts. The company commenced its commercial production
in June 2013 with a capacity of 13,056 spindles. MCL increased its
manufacturing capacity to 16320 spindles in FY2016 at a cost of
INR5.27 crore. The Capex was funded through term loan of INR3.42
crore and the rest through equity infusion and cash accruals.
OPTICS & ALLIED: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Optics &
Allied Engineering Pvt. Ltd in the 'Issuer Not Cooperating'
category. The rating is denoted as [ICRA]B+ (Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 3.50 [ICRA]B+(Stable)ISSUER NOT
Fund based COOPERATING; Rating continues
CC to remain under 'Issuer Not
Cooperating' category
Long Term– 4.00 [ICRA]B+(Stable)ISSUER NOT
Fund based COOPERATING; Rating continues
TL to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Optics and Allied Engineering Private Limited, established in 1985
by Mr. Rajendra Kotaria, manufactures precision optical components
including prism, mirrors, polymer optical components, LED
backlights, technical plastic parts and inspection instruments
like microscopes, vision systems and magnifiers. The company is
located in Bommasandra Industrial area, Karnataka with an employee
base of 120. The company is ISO 9001:2008 certified. The majority
stake of OAEPL is held by Babylone SA, the holding company of
Gaggione SAS. Gaggione has a long presence in the optical industry
since 1948 and provides technical guidance to OAEPL.
PHTHALO COLOURS: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Phthalo Colours &
Chemicals (India) Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR127.5 mil. Fund-based working capital limits (Long-
term/Short-term) migrated to non-cooperating category with
IND D (ISSUER NOT COOPERATING) rating; and
-- INR138.3 mil. Term loan (Long-term) due on May 2024 migrated
to non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
August 18, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1991, Phthalo Colours & Chemicals (India) Limited
manufactures phthalocyanine pigments such as green, alpha blue and
beta blue at its plant in Vapi in Gujarat under the Rangday brand.
RADHEKRISHNA COTTON: ICRA Withdraws B+ Rating on INR7cr LT Loan
---------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Radhekrishna Cotton Industries at the request of the company and
based on the No Objection Certificate/Closure certificate received
from the banker. However, ICRA does not have information to suggest
that the credit risk has changed since the time the rating was last
reviewed. The Key Rating Drivers, Liquidity Position, Rating
Sensitivities, Key Financial indicators have not been captured as
the rated instruments are being withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 7.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Cash Credit
Long Term- 0.43 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Term Loan
Established in 2015 as a partnership firm, Radhekrishna Cotton
Industries (RCI) is engaged in ginning and pressing of raw cotton.
The firm's manufacturing facility is located at Tankara, Rajkot in
Gujarat. The unit is currently equipped with 30 ginning machines
and one pressing machine. It has an installed capacity to produce
250 cotton bales per day/15,300 MTPA of pressed cotton.
The firm is actively managed by four key partners namely Mr.
Shaileshbhai L. Kakasaniya, Mr. Virjibhai B. Kakasaniya, Mr.
Narbherambhai B. Kakasaniya and Mr. Jagdishbhai V. Kakasaniya. They
have extensive experience in the cotton ginning business by virtue
of their association with other entities engaged in similar line of
business.
RADIANT ORGANICS: ICRA Lowers Rating on INR7.00cr LT Loan to B+
---------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Radiant
Organics Private Limited (ROPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 7.00 [ICRA]B+(Stable)ISSUER NOT
Fund based COOPERATING; Rating downgraded
Cash Credit from [ICRA]BB (Stable) and
continues to remain in the
'Issuer Not Cooperating'
category
Short Term- 0.30 [ICRA]A4; ISSUER NOT
Non Fund COOPERATING; Rating continues
Based–Bank To remain under 'Issuer Not
Guarantee Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding ROPL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Radiant Organics Private Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance, but
despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, a rating view has
been taken on the entity based on the best available information.
ROPL was originally incorporated in 1964 as a partnership firm
before being converted into a private limited company in 1994. It
was promoted by Mr. Hasmukh Anandpara for the trading of chemicals,
inks, and adhesives. ROPL is an authorized distributor of chemicals
of reputed companies like Jubilant Life Sciences Limited, Grasim
Industries Limited, and Henkel Adhesives India.
ROPL has a subsidiary, Radiant Plastruders (I) Private Limited,
which is engaged in manufacturing flexible packaging material.
RELIANCE INFRA: Wins $632MM Arbitration Against Delhi Metro
-----------------------------------------------------------
Bloomberg News reports that Reliance Infrastructure Ltd. won a
four-year battle for control of money from an arbitration award
that it says it needs to repay lenders.
A two-judge panel of the Indian Supreme Court on Sept. 9 upheld the
2017 arbitration award in favor of the Anil Ambani's unit. The
arbitration tribunal award is worth over INR46.6 billion ($632
million) including interest, Bloomberg relates citing Reliance
Infrastructure's annual report.
Bloomberg says the verdict is a crucial victory for Ambani as his
telecom firms are in bankruptcy and he is contesting a personal
insolvency case lodged by the country's largest lender. Reliance
Infra shares jumped by the daily limit of 5 per cent after the
court order.
Bloomberg relates that Reliance will use the money to pay lenders,
the company's lawyers had said during the case hearings, following
which the top court had barred banks from marking the company's
accounts as non-performing assets. The final ruling in the case
also lifts the court's restriction on lenders.
A detailed copy of the court ruling is awaited.
According to Bloomberg, Reliance Infrastructure's unit had in 2008
entered into a contract with Delhi Metro for running the country's
first private city rail project till 2038. Following disputes over
fee and operations in 2012, Ambani's firm stopped operating the
capital's airport metro project and initiated an arbitration case
against Delhi Metro alleging violation of contract and sought a
termination fee.
About Reliance Infrastructure
Reliance Infrastructure Limited (RIL) is the flagship company of
the India-based Reliance Group, led by Anil Dhirubhai Ambani,
active in the energy and infrastructure businesses. R-Infra has an
in-house engineering-procurement-construction/EPC division that is
active in the power and road segments.
CARE Ratings on March 4, 2021, said RIL has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. In line with the extant SEBI guidelines, CARE's
Ratings moved RIL's Long-Term and Short-Term bank facilities and
NonConvertible Debentures to CARE D; Issuer Not Cooperating.
SAROJA AVIATION: ICRA Keeps B- Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Saroja
Aviation Limited (SAL) in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B-(Stable) ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term- 29.00 [ICRA]B-(Stable) ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
The rating action has been taken in accordance with ICRA's policy
in respect of non-cooperation by a rated entity available at
www.icra.in.
Incorporated in March 2017, SAL is engaged in the business of
aircraft leasing. The company owns one aircraft, a Boeing 737- 800,
MSN 37960, which had been leased to Jet Airways from March 2017 to
October 2021. However, following the shutdown of operations of Jet
Airways, the aircraft was dry leased to TATA SIA Vistara with
effect from June 2019. The company is managed by a board of
directors and does not have any employees. Administrative
activities such as maintenance of books and records are primarily
outsourced to Canyon Corporate and Trust Solutions Limited. Ecovis
DCA Limited acts as the servicer and provides operational and
technical support services to the company. Ratna Saroj Inc. holds
100% stake in the company, with Mr. Rakesh Shankarlal Tulshyan as
the ultimate beneficiary.
SATISH SUGARS: ICRA Keeps B- Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Satish
Sugars Limited in the 'Issuer Not Cooperating' category. The rating
is denoted as [ICRA]B+ (Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 69.80 [ICRA]B-(Stable)ISSUER NOT
Fund based COOPERATING; Rating continues
CC to remain under 'Issuer Not
Cooperating' category
Long Term– 110.20 [ICRA]B-(Stable)ISSUER NOT
Fund based COOPERATING; Rating continues
TL to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Satish Sugars Limited is situated at Gokak Taluka of Belgaum
district in North Karnataka. It started operations in SY2001 as a
1,250 TCD Khandasari unit. At present, it has 10,000 TCD sugarcane
crushing capacity, 31 MW cogeneration unit and 60 KLPD distillery.
SSL is promoted by Mr. Satish Jarkiholi and his family.
SEASONS HEALTHCARE: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Seasons
Healthcare Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA] B+(Stable)/[ICRA] A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 3.00 [ICRA]B+ (Stable) ISSUER NOT
CC Limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund Based- 0.60 [ICRA]B+ (Stable) ISSUER NOT
TL Limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short Term– 5.08 [ICRA] A4; ISSUER NOT
Non Fund Based COOPERATING; Rating continues
To remain under 'Issuer Not
Cooperating' category
Unallocated 1.32 [ICRA] B+(Stable)/[ICRA]A4;
Limits ISSUER NOT COOPERATING; Rating
continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 1996, is into manufacturing of Absorbent Cotton
Wool, Gauze, Bandages, Sterile Surgical Dressings, Infusion Sets,
etc. The manufacturing unit is located in Hayatnagar Mandal,
Hyderabad. The company is also into trading of Surgical Disposbales
& Consumables, Medical Equipment, Hospital Furniture, Medical
Devices and Drugs & Medicines. The major customers of the company
are government departments and institutions in Andhra Pradesh and
Telangana.
SHIVAM JEWELS: ICRA Lowers Rating o INR18cr LT Loan to B+
---------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Shivam
Jewels, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 0.73 [ICRA]B+ (Stable) ISSUER NOT
Term loan COOPERATING; Rating downgraded
from [ICRA]BB+ (Stable)and
continues to remain in the
'Issuer Not Cooperating'
Category
Long Term- 18.00 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating downgraded
from [ICRA]BB+ (Stable)and
continues to remain in the
'Issuer Not Cooperating'
Category
Long Term/ 16.27 [ICRA]B+ (Stable)/[ICRA]A4
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating downgraded from
[ICRA]BB+ (Stable)/[ICRA]A4+
and Rating continues to
remain under the 'Issuer Not
Cooperating' category
Short Term– 0.50 [ICRA]A4 ISSUER NOT
Non-Fund COOPERATING Rating downgraded
Based from [ICRA]A4+ and continues
to remain under Issuer Not
Cooperating category
Rationale
The rating downgrade is attributable to the lack of adequate
information regarding Shivam Jewels's performance and in turn, the
uncertainty around its credit risk. ICRA assesses whether the
information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by a rated entity" available at www.icra.in. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the same
may not adequately reflect the credit risk profile of the entity,
despite the downgrade.
As part of its process and in accordance with its rating agreement
with Shivam Jewels, ICRA has been trying to seek information from
the entity to monitor its performance. Despite repeated requests by
ICRA, the entity's management has remained noncooperative. In the
absence of the requisite information and in line with the aforesaid
policy of ICRA, a rating view has been taken on the entity based on
the best available information.
Shivam Jewels (SJ) is a family-run partnership firm established in
June 2013. The firm is managed by four partners namely Mr.
Ghyansham Shanker, Mr. Ashwin Shanker, Mr. Nikunj Shanker and Mr.
Sanjay Shanker. SJ is engaged in import of rough diamonds and
manufacturing and export of cut & polished diamonds and deals in
diamonds ranging from 10 cents to 5.99 carats, having clarity
ranging from IF to I3 with color D-M. The firm has its registered
office in Mumbai and manufacturing facility in Surat.
SIDDHARTH CARBOCHEM: ICRA Lowers Rating on INR4.94cr Loan to B+
---------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Siddharth Carbochem Products Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term– 4.94 [ICRA]B+(Stable)ISSUER NOT
Fund based COOPERATING; Rating downgraded
Cash Credit from [ICRA]BB+ (Stable) and
continues to remain in the
'Issuer Not Cooperating'
Category
Short Term- 38.06 [ICRA]A4; ISSUER NOT
Non Fund COOPERATING; Rating continues
Based Limits to remain under 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding Siddharth Carbochem Products Limited performance and
hence the uncertainty around its credit risk. ICRA assesses whether
the information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by a rated entity" available at www.icra.in. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity, despite the downgrade. As part of its process and in
accordance with its rating agreement with Siddharth Carbochem
Products Limited, ICRA has been trying to seek information from the
entity so as to monitor its performance, but despite repeated
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, a rating view has been
taken on the entity based on the best available information.
Established in 1984, SCPL is engaged in manufacture and trading of
a range of specialty chemicals and bulk drugs. The company is
promoted and managed by Mr. Ashesh Jain. The company currently
markets three main products viz. Methyl Salicylate (various
grades), Salicylic acid & Aspirin (acetyl salicylic acid) catering
to the analgesic therapeutic segment, and the flavour & fragrance
applications. The manufacturing facility of SCPL is located in
Jalgaon, Maharashtra and is GMP (Good Manufacturing Practices)
compliant, approved by FDA (US Food and Drug Administration) and
ISO 9001, 14001 & 18001 accredited.
SIKAR BIKANER: Ind-Ra Moves 'D' Loan Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sikar Bikaner
Highway Ltd.'s bank loans rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND D
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR4.0^ bil. Senior project bank loans (Long-term) migrated to
non-cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
^The total outstanding (including penal interest) was INR3,934
million, as of August 31, 2020.
Note: ISSUER NOT COOPERATING; the ratings were last reviewed on
September 4, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Sikar Bikaner Highway, which is wholly-owned by IL&FS
Transportation Networks Limited ('IND D'), is a special purpose
company incorporated to undertake the widening and operations of a
combination of a two-lane and a four-lane highway (National Highway
11) in Rajasthan. The concession grantor is the Public Works
Department of the government of Rajasthan. The concession is for 25
years, with a right to collect toll during the concession. The
security and terms of the subordinate debt agreement is junior to
the senior debt.
TEKZA CERAMIC: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Tekza
Ceramic LLP in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 5.00 [ICRA]B+ (Stable) ISSUER NOT
Working Capital COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund-based 7.00 [ICRA]B+ (Stable) ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Non-fund-based 2.00 [ICRA]A4; ISSUER NOT
Bank Guarantee COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' Category
Rationale
The rating continues to remain under "Issuer Not Cooperating
category" is because of lack of adequate information regarding
Tekza Ceramic LLP performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity.
As part of its process and in accordance with its rating agreement
with Tekza Ceramic LLP, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, a rating view has been
taken on the entity based on the best available information.
Established in March 2018, as a limited liability partnership firm,
Tekza Ceramic LLP commenced commercial production in March 2019.
Its product profile comprises vitrified parking tiles of 300 X 300
mm. Tekza's manufacturing unit is located at Morbi, the ceramic
tile manufacturing hub of Gujarat and is equipped to manufacture
68040 metric tonnes (MT) of tiles per annum.
UMA JEWELLERS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Sri Uma
Jewellers India Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA] D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 10.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based/CC Rating continues to remain under
'Issuer Not Cooperating'
Long Term- 1.50 [ICRA]D ISSUER NOT COOPERATING;
Unallocated Rating continues to remain under
'Issuer Not Cooperating'
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Sri Uma Jewellers India Private Limited (SUJIPL) operates an
exclusive Tanishq (Titan Industries Ltd) show room in leased
premises in A.S.Rao Nagar in Hyderabad since March, 2009. All the
ornaments sold are manufactured and supplied by Titan Industries
Ltd..The showroom has been set up to fulfil the norms and standards
of Titan with respect to display, stocking and selling. All
interiors, furniture and fixtures have been set up by Uma Jewellers
in accordance to the show room plan designed and approved by Titan
Industries Ltd. The agreement with Tanishq is a franchisee
agreement entered on 30th March, 2009 that is valid up to 29th
March, 2019. The company sells only to domestic retail customers.
The sales include income from sale of gold and jewellery, income
from general exchange products and income from Tanishq exchange
products. Advertisements,
canvassing, discounts, gifts are the various marketing activities
undertaken to attract the customers. During some special promotions
offered by Tanishq, the company receives more incentives. The
pricing policy is set by Tanishq and the average realization is as
per the norms of Titan Industries Ltd.
UNI MEDICOLABS: ICRA Lowers Rating on INR22.57cr Loan to B+
-----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Uni
Medicolabs (UML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based– 17.50 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; revised from
[ICRA]BB+ (Stable), continues
Under 'Issuer Not
Cooperation' category
Fund-based– 22.57 [ICRA]B+ (Stable) ISSUER NOT
Term Loans COOPERATING; revised from
[ICRA]BB+ (Stable), continues
Under 'Issuer Not
Cooperation' category
Non-fund Based 3.60 [ICRA]A4 ISSUER NOT
COOPERATING; revised from
[ICRA]A4+, continues under
'Issuer Not Cooperation'
Category
Unallocated 1.33 [ICRA]B+ (Stable)/[ICRA] A4
ISSUER NOT COOPERATING;
revised from [ICRA]BB+
(Stable)/[ICRA]A4+, continues
under 'Issuer Not
Cooperation' category
Rationale
The rating downgrade is because of lack of crucial information
regarding UML's performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in. The lenders, investors and other market
participants are thus advised to exercise appropriate caution while
using this rating as the rating may not adequately reflect the
credit risk profile of the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with UML, ICRA has been trying to seek information from the entity
so as to monitor its performance, but despite repeated requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, a rating view has been
taken on the entity based on the best available information.
UML was incorporated 2006 and became operational in 2009. The firm
was started by Mr. Harshad Vaid, who has been in the pharmaceutical
distribution business since 1970 through Uni Agencies Chemicals
Private Limited (UACPL), another Group company involved in API
trading. UML manufactures antibiotics, capsules, tablets,
injectables and syrups for reputed pharmaceutical companies in the
domestic market. The firm acquired another manufacturing unit in
May 2018 for INR10.25 crore. Currently, it has two non-beta and one
beta manufacturing facilities in Pharma City, Dehradun.
UNITED HOTELS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of United
Hotels & Properties Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as [ICRA] D ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 2.50 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain under
'Issuer Not Cooperating'
Category
Fund Based- 9.50 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Rating continues to remain under
'Issuer Not Cooperating'
Category
Unallocated 23.00 [ICRA] C/[ICRA]A4 ISSUER NOT
limits COOPERATING; Rating continues to
remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 1992, UHPL was acquired by the present management
in 2007. UHPL had leased out its assets (land, building and other
equipment) in Bhubaneswar to S. P. Jaiswal Estates Private Limited
(SPJEPL), the flagship company of the HHI Group, till FY2012. From
FY2013, the company is managing the Bhubaneswar property and has
set up a hotel in Pune, branded The HHI Pune.
VIJAY SABRE: ICRA Withdraws C Rating on INR10.90cr LT Loan
----------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Vijay Sabre Safety Private Limited at the request of the company
and based on the No Objection Certificate/Closure Certificate
received from its banker. However, ICRA does not have information
to suggest that the credit risk has changed since the time the
rating was last reviewed. The Key Rating Drivers,
Liquidity Position, Rating Sensitivities, Key financial indicators
have not been captured as the rated instruments are being
withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 10.90 [ICRA]C; ISSUER NOT
Based Limits COOPERATING; Withdrawn
Short-term Non- 8.98 [ICRA]A4; ISSUER NOT
Fund Based COOPERATING; Withdrawn
Limits
Incorporated in 1988 by Mr. Jitendra Salot, VSSPL is engaged in
manufacture and trading of fire and safety equipments. Its
manufacturing and trading units are located at Silvassa and
Umbergaon in Gujarat.The company is ISO 9000:2001 certified and its
product range is approved by BIS (Bureau Of Indian Standards).
VSSPL has been an authorised distributor of Scott Health & Safety
Limited in India since inception. It's group concern, Vijay Latex
Products Private Limited ([ICRA]D; withdrawn) is engaged in
manufacturing of rubber gloves.
VIVIANA VITRIFIED: ICRA Moves B+ Debt Ratings to Not Cooperating
----------------------------------------------------------------
ICRA has moved the long-term and short-term ratings for the bank
facilities of Viviana Vitrified Private Limited (VVPL) to the
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]B+ (Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based- 8.41 [ICRA]B+ (Stable) ISSUER NOT
Term loan COOPERATING; Ratings moved
to Issuer Not Cooperating'
category
Fund-based- 3.00 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; Ratings moved
to Issuer Not Cooperating'
category
Non-fund based- 2.25 [ICRA]A4; ISSUER NOT
Bank Guarantee COOPERATING; Ratings moved
to Issuer Non-Cooperating
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in November 2015, Viviana Vitrified Private Limited
(VVPL) commenced the manufacturing of digitalized ceramic wall
tiles in May 2018. Its manufacturing facility is located at Morbi,
Gujarat, with an installed capacity to produce 36 lakhs boxes of
ceramic wall tiles per annum. VVPL manufactures wall tiles in three
different dimensions – 12"X12", 12"X18' and 12"X24".
=================
I N D O N E S I A
=================
WIJAYA KARYA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Negative
-----------------------------------------------------------------
Fitch Ratings has affirmed Indonesia-based contractor PT Wijaya
Karya (Persero) Tbk's (WIKA) Long-Term Foreign- and Local-Currency
Issuer Default Ratings (IDR) at 'BB-'. At the same time, Fitch
Ratings Indonesia has affirmed WIKA's National Long-Term Rating at
'A-(idn)'. The Outlook is Negative.
The affirmation reflects Fitch's view that WIKA's liquidity and
refinancing risk will be manageable in the medium term, although
its ability to reduce its high leverage, measured as seasonally
adjusted net debt/EBITDA, has been hampered by the prolonged
Covid-19 pandemic, which disrupted its operations.
Fitch believes WIKA remains one of the country's important
government-related entities (GRE) in the construction sector. It
has the largest order book and a better credit profile than other
GRE contractors. WIKA has an aggregate score of 15 based on Fitch's
GRE rating criteria due to Fitch's assessment of the government's
strength and incentive to provide support. This results in WIKA's
IDR and National Long-Term Rating benefitting from a three-notch
uplift to its Standalone Credit Profile (SCP) of 'b-' and
'bbb-(idn)', respectively.
'A' National Ratings denote expectations of a low level of default
risk relative to other issuers or obligations in the same country
or monetary union.
KEY RATING DRIVERS
Manageable Refinancing: WIKA's debt-maturity profile improved after
the refinancing of a IDR5.4 trillion Komodo bond and short-term
bridging loans in 1Q21 into longer-term maturities. Its IDR15
trillion debt maturities in the next 12 months are short-term bank
loans that Fitch expects to be rolled over, based on the company's
record. Fitch believes WIKA will maintain its debt funding access
through solid banking relationships, with 56% of its loans from
state-owned banks.
Delayed Deleveraging: Stricter movement restrictions and
operational disruptions due to rising Covid-19 cases in June-August
2021 will slow WIKA's recovery compared with Fitch's earlier
forecast. Fitch expects slower construction progress and a long
working-capital cycle to keep WIKA's leverage above 7.0x by 2022.
The government may also reallocate its infrastructure budget
towards the pandemic. Fitch expects WIKA to receive material cash
inflows from projects in progress, such as the High Speed Railway
and other toll roads, before end-2021 after a delay.
Fitch expects the easing of restrictions from September 2021 will
support WIKA's recovery from 4Q21, aided by strong new contracts of
IDR10.6 trillion in 1H21 (1H20: IDR3.4 trillion). Fitch thinks
WIKA's strong market position and revenue/order book of 5.9x in
2020 will help it recover when the pandemic eases. Nonetheless, the
Negative Outlook reflects the uncertainty over its recovery. The
latest wave of Covid-19 infections, which will likely affect
economic activity in 3Q21, means that GDP growth may not meet
Fitch's current forecast of 4.8% in 2021.
'Strong' Status, Ownership and Control: The Indonesian state,
WIKA's largest shareholder with a 65% stake, mainly via the
Ministry of State-Owned Enterprises, has strong influence over its
investment decisions, strategy and operations. The government also
holds a golden share that gives it veto power over the appointment
and dismissal of board members, distribution of profit and M&A.
'Weak' Support Record: Fitch believes that government support,
while ongoing, has been insufficient to sustain WIKA's credit
profile during the pandemic. WIKA's leverage has been increasing
steadily since 2019 as the company continued to execute projects
while having to draw on external loans to cover slower cash
receipts, which contributed to the lowering of WIKA's SCP in 2020
from 'b'.
The government last bolstered WIKA's liquidity via a IDR4 trillion
equity injection in 2016. However, the company has since relied on
external funding for its projects, including its strong
relationships with state-owned banks. Fitch believes the government
will continue to prioritise infrastructure to boost economic growth
once the pandemic eases, although there is a risk the government
could reallocate some of the infrastructure budget to pandemic
relief measures, which could slow contract wins for WIKA.
'Moderate' Support Incentive: Fitch thinks a default will have
'Moderate' socio-political implications as other GREs or private
contractors can act as substitutes for WIKA's services, although
there may be temporary disruptions due to WIKA's IDR82 trillion
order book at end-June 2021, including 54% in National Strategic
Projects. WIKA's debt size also has 'Moderate' financial
implications as a default would have a modest effect on the
availability and cost of debt for other GREs while potentially
reducing the state's access to key infrastructure-related funding.
DERIVATION SUMMARY
WIKA can be compared with Indonesian peers PT Hutama Karya
(Persero) (HK: BBB-/AA+(idn)/Stable; SCP: b-/bb(idn)) and PT
Indonesia Asahan Aluminium (Persero) (Inalum, BBB-/Stable; SCP:
b-), as well as Chinese construction company Shanghai Construction
Group Co., Ltd. (SCGC; BBB+/Stable; SCP: bbb-).
WIKA has a GRE score of 15 and its SCP benefits from a three-notch
uplift, while HK and Inalum are rated using a top-down approach of
one notch below the sovereign's 'BBB' rating in light of their GRE
support scores of 35. Fitch believes Inalum's default would have
'Very Strong' implications on the cost and availability of
financing to the Indonesian government and other GREs because Fitch
thinks investors consider Inalum a proxy financing vehicle for the
state due to its significant US dollar bond size.
Fitch assessed HK's status, ownership and control, and support
record factors as 'Very Strong', compared with WIKA's 'Strong' and
'Weak', respectively, to reflect the government's greater role and
influence in HK's operations. The government guarantees a
substantial portion of HK's debt, in addition to frequent and
consistent support for its toll roads.
SCGC has the same GRE score as WIKA, but is rated with two notches
of uplift from its SCP, while WIKA has three notches. A default by
SCGC would disrupt construction projects in Shanghai, but social
consequences would be limited, due to the city's high urbanisation
rate and highly competitive construction sector. WIKA's default
would have a higher impact on Indonesia's national infrastructure
development plan.
WIKA's 'b-' SCP is comparable with HK's SCP of 'b-' and US-focused
contractor Tutor Perini Corporation's (TUT, B+/Stable) rating. Both
WIKA and HK have been hurt by the pandemic and face cash flow
pressure. WIKA has a larger operational scale and ability to
deleverage in the medium term. However, this is balanced by HK's
favourable long-dated maturity schedule, which results in lower
refinancing risk.
WIKA and TUT have strong positions in their niche markets and
comparable operating EBITDA scale in the medium term. WIKA has a
higher profit margin, but Fitch believes TUT will have stronger
free cash flow generation. This, along with Fitch's expectation of
TUT's much stronger financial profile over the next three years,
results in a two-notch gap in the assessment of the companies'
credit profiles.
On the national rating scale, WIKA's SCP of 'bbb-(idn)' is
comparable with Indonesian tower company PT Bali Towerindo Sentra
Tbk's (Bali Tower, BBB+(idn)/Positive) rating. Bali Tower's better
margins and earning visibility due to its non-cancellable long-term
contracts, and lower leverage result in the two- notch difference
with WIKA.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- New contract wins of around IDR26 trillion in 2021 and IDR42
trillion in 2022 (2020: IDR23 trillion);
-- EBITDA margin, including share of profit from joint
operations, of 10%-12% in 2021-2024 (2019: 9.8%);
-- Aggregate capex and investments of around IDR4.1 trillion in
2021.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The following may lead to a revision of the Outlook to Stable:
-- Improvement in WIKA's interest coverage (EBITDA/interest paid)
to above 1.5x on a sustained basis;
-- Ability to generate positive operating cash flow on a
sustained basis;
-- Stronger likelihood of support from the Indonesian government.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Interest coverage decreases below 1.5x on a sustained basis;
-- Further liquidity pressure that results in elevated
refinancing risks;
-- Weakening likelihood of support from the Indonesian
government.
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
Sufficient Liquidity, Manageable Refinancing Risk: Fitch believes
WIKA has sufficient liquidity to manage its refinancing risk within
the next 12-24 months, including its supply-chain financing
obligations. WIKA had available cash of IDR7.6 trillion at end-June
2021, with undrawn short-term bank facilities of IDR3 trillion.
WIKA's IDR15 trillion debt maturing in the next 12 months is made
up entirely of short-term loans that can be rolled over annually
with no maturing long-term loans or debt instruments.
Fitch believes WIKA will maintain its access to funding due to its
status as the country's largest SOE contractor and its close
relationships with banks, particularly SOE banks. WIKA is also
about to issue a total of IDR2.5 trillion in bonds and sukuk in
September 2021, which will be used to refinance some of its
short-term debt into longer maturities.
ISSUER PROFILE
WIKA, 65%-owned by the state, is the largest GRE contractor in
Indonesia with an order book of IDR82 trillion at end-June 2021.
WIKA's construction business is split into four segments -
infrastructure and building, industry, energy and industrial
plants, and property.
SUMMARY OF FINANCIAL ADJUSTMENTS
-- Share of profit from joint operations is included in EBITDA,
as this forms part of WIKA's core operations;
-- Supply-chain financing due to be paid in more than 90 days is
considered debt, as this effectively extends the usual trade
payable cycle;
-- Fitch deducts IDR4 trillion from year-end cash, which is the
difference between year-end cash and average cash balance
between the first and third quarters. This is to iron out
seasonal working capital variances that affect leverage.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
=========
J A P A N
=========
TOSHIBA CORP: To Close 30-Year Chinese Plant in Dalian
------------------------------------------------------
The South China Morning Post reports that Toshiba Corp. has
confirmed it will cease production at its Dalian facility by the
end of September, and the liquidation process will begin next
month, ending its 30-year presence as an economic force in the
city.
Established as a manufacturing base focusing on industrial motors
and broadcast transmitters, Toshiba Dalian was brought to Liaoning
province's second-largest city in 1991 by then deputy mayor Bo
Xilai, an infamous politician now serving life in prison for
corruption, the Post says.
Hundreds of jobs will be lost, as the facility employs about 650
people, the Post discloses.
"It was becoming difficult to continue operating the base these
days following the termination and transfer of production . . . due
to changes in the business structure of Toshiba Group, such as the
sale of the TV and medical-equipment businesses," Toshiba
Corporation said in a statement to the Post.
"The decision was made to dissolve and liquidate Toshiba Dalian Co.
Ltd as the current production of motors and broadcast transmitters
will be discontinued and there are no plans to start up new
production."
Toshiba said it will pay "adequate economic compensation to
employees, with guidance from the government", adding that the
electronic giant "is developing a wide range of businesses in China
and will continue to work towards further business growth in
China", without elaborating, the Post adds.
About Toshiba Corp.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/--
manufactures and markets electrical and electronic products. The
Company's products include digital products such as PCs and
televisions, NAND flash memories, and system LSIs (large-scale
integrated), as well as social infrastructures such as power
generators, medical equipment, and home appliances.
As reported in the Troubled Company Reporter-Asia Pacific on March
26, 2021, S&P Global Ratings has raised by one notch to 'BB+' its
long-term issuer credit ratings on Japan-based capital goods and
diversified electronics company Toshiba Corp. At the same time, S&P
affirmed its 'B' short-term issuer credit and commercial paper
program ratings. The outlook on the long-term issuer credit rating
is stable.
=================
S I N G A P O R E
=================
SINGAPORE PRESS: Shareholders Approve Media Spinoff Plan
--------------------------------------------------------
The Straits Times reports that shareholders of Singapore Press
Holdings (SPH) have overwhelmingly backed its plan to hive off its
media business, paving the way for the formation of a new company
limited by guarantee (CLG), while potentially unlocking shareholder
value for the mainboard-listed company.
At a virtual extraordinary general meeting held on Sept. 10, 97.55%
of shareholders voted in favor of the transfer of SPH's media
business to the CLG for a nominal sum of $1, the report discloses.
They also gave the green light to a special resolution to convert
each management share held by a management shareholder into one
ordinary share, and the adoption of a new Constitution.
Some 369 million shares were represented by votes cast at the EGM,
which was helmed by SPH chairman Lee Boon Yang, chief executive Ng
Yat Chung and chief financial officer Chua Hwee Song. More than
300 shareholders voted by proxy, the report says.
The Straits Times relates that the move is the first step of a
strategic revamp that could see the privatisation and sale of the
rest of mainboard-listed SPH to Keppel Corp in a $3.4 billion deal.
Shareholders of both companies will vote on the proposed
acquisition at a later date.
SPH, which publishes The Straits Times, announced its plans to
transfer the media business to a not-for-profit company as part of
a strategic review of its various businesses on May 6.
According to the report, the restructuring entails transferring all
media-related businesses, including relevant subsidiaries,
employees, the News Centre and Print Centre along with their
respective leaseholds, as well as all related intellectual property
and information technology assets, to a newly incorporated,
wholly-owned subsidiary, SPH Media Holdings.
The new CLG will initially receive financial help from SPH,
comprising $80 million in cash and $30 million in shares.
It will be chaired by former coordinating minister for
infrastructure and transport minister Khaw Boon Wan, with veteran
journalist and former SPH deputy chief executive Patrick Daniel as
interim chief executive.
Mr Khaw said after the voting results that he welcomes the
shareholders' decisions, as the current business model is not
sustainable, the report relays.
"Delisting the media business is however only a first step, but a
critical one. As a CLG, we will do our utmost to carry out the
mission of providing quality journalism for Singaporeans. We want
high-quality products which are relevant to our readers, to help
them make sense of the world.
"There is much to do by the CLG to further secure SPH Media's
future. But there will still be a transition period before the
listed SPH hands over control to the CLG. I hope that the
transition will not be too long, so that we can start our work
soon."
Shareholders will next vote on Keppel's $2.2 billion bid to
privatise SPH's non-media business. An EGM for this will be called
in October or November, The Straits Times discloses.
Under the proposed scheme, they will receive $2.099 per share,
comprising cash of 66.8 cents per share, 0.596 Keppel Reit units
valued at 71.5 cents per share, and 0.782 SPH Reit units valued at
71.6 cents per share.
With the demerger, SPH will also no longer be subject to the
provisions of the Newspaper and Printing Presses Act (NPPA), which
limits each shareholding to only 5 per cent, the report notes.
About Singapore Press
Singapore Press Holdings Limited -- https://www.sph.com.sg/ --
publishes, prints, and distributes newspapers and magazines. The
Company also invests in properties, provides multimedia,
broadcasting, and telecommunications services, manages shopping
centers and other commercial properties, and operates Internet
portal site.
TEE INT'L: Receives Notice From DBS to Get Mortgaged Property
-------------------------------------------------------------
The Business Times reports that mainboard-listed Tee International
said that it has received a letter on Sept. 9 from lawyers acting
for DBS Bank in which the bank gave notice that it will be
exercising its rights to take possession of the mortgaged property
at 33 Changi North Crescent, one month from the date of service of
the letter.
This was in connection with certain banking facilities provided by
DBS, BT says.
BT relates that Tee International said that it is currently
reviewing the letter with its appointed financial consultant, RSM
Corporate Advisory, as well as its legal advisers, and will take
appropriate action accordingly.
In August, Tee International had filed an application for a
moratorium, the report recalls. In addition, there are three claims
against the company to date, amounting to about SGD13.7 million.
Trading in Tee International's shares has been suspended, the
report notes.
About Tee International
TEE International Limited (SGX:M1Z) -- http://www.teeintl.com/--
an investment holding company, engages in engineering, real estate,
and infrastructure businesses. TEE International Limited has
operations in Singapore, Malaysia, Thailand, Vietnam, Hong Kong,
Australia, and New Zealand. The company was founded in 1980 and is
headquartered in Singapore.
TEE International reported net losses of SGD7.60 million, SGD18.17
million and SGD59.55 million for years ended May 31, 2018, 2019,
and 2020, respectively.
=====================
S O U T H K O R E A
=====================
DOOSAN INFRACORE: Shareholders Approve Capital Reduction
--------------------------------------------------------
Yonhap News Agency reports that Doosan Infracore Co. said Sept. 10
that its shareholders approved a scheme to reduce its capital stock
to improve its financial health.
Under the approval made in a preliminary shareholders meeting, the
company plans to reduce its capital stock by 80% to some KRW78.3
billion (US$67 million) by cutting its common shares' face value to
KRW1,000 from KRW5,000, it said in an emailed statement, Yonhap
discloses.
The shareholders also agreed to rename the company Hyundai Doosan
Infracore Co., which was changed after 16 years, the company said.
Along with the capital reduction, Doosan Infracore plans to raise
up to KRW800 billion this year by selling new shares, Yonhap
discloses.
Before the shareholders meeting, about 10 representatives of
minority shareholders held a press conference, accusing the
company's capital reduction and its proposed sale of new shares.
A share sale usually hurts shareholders' value as it dilutes a
stock valuation and makes the stock price drop, the report
relates.
After the announcement of Doosan Infracore's plan for the capital
reduction and the sale of new shares on Aug. 25, its stock prices
fell 23.5 percent to KRW11,200 on Sept. 9, according to Yonhap.
Yonhap says the capital reduction and others came after
cash-strapped Doosan Heavy Industries & Construction Co. sold a
major stake in Doosan Infracore in December last year to Hyundai
Heavy Industries Holdings Co. (HHIH), the world's largest
shipbuilding group, for KRW850 billion.
Last month, HHIH completed the process to acquire Doosan Infracore
after establishing its second subholding company Hyundai Genuine
Co. to control its construction machinery maker Hyundai
Construction Equipment Co. and the top construction equipment
maker, the report notes.
Doosan Infracore Co. manufactures machinery for construction.
=============
V I E T N A M
=============
VIETNAM OIL & GAS: Fitch Affirms 'BB' Foreign Currency IDR
----------------------------------------------------------
Fitch Ratings has affirmed Vietnam Oil and Gas Group's (PVN)
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with
a Positive Outlook. The agency has also affirmed PVN's senior
unsecured rating at 'BB'.
PVN's IDR is capped by that of its parent, the Vietnam sovereign
(BB/Positive), under Fitch's Government-Related Entities (GRE)
Rating Criteria. The company is wholly owned by the state, which
exerts significant influence over its operating and financial
policies. Fitch assesses PVN's Standalone Credit Profile (SCP) at
'bb+', reflecting the company's conservative financial profile,
diversification and integration.
Fitch expects PVN's EBITDA to double in 2021 to over VND45 trillion
from 2020 due to a recovery in crude oil prices, refining margins
and distribution spreads. Fitch does not expect the current surge
in Covid-19 infections in Vietnam to significantly affect PVN's
earnings recovery, as Vietnam is a net importer of fuels, resulting
in stable demand for the company's gas distribution, fertiliser and
power segments. PVN's EBITDA fell by 45% in 2020 to VND22.6
trillion due to weaker operations across most segments and losses
at upstream and refining operations.
KEY RATING DRIVERS
Strong State Linkages: Fitch assesses the status, ownership and
control factor as 'Very Strong'. PVN's targets are set and approved
by the government. Its management is state-appointed, with the
prime minister appointing its chairperson. PVN is the national oil
company with exclusive rights to Vietnam's oil and gas reserves by
regulation. Fitch regards the support record as 'Strong'. PVN has
not required tangible financial support in at least five years due
to its strong financial profile, although Fitch expects support to
be forthcoming if required.
'Very Strong' State Support Incentive: Fitch assesses the
socio-political implications of a PVN default as 'Very Strong' as
operational disruptions would materially affect Vietnam's energy
value chain. PVN accounts for about a third of the country's
refined product consumption, the majority of gas distribution, and
80% of fertiliser production. Fitch assesses the financial
implications as 'Very Strong' because a default by PVN could
significantly affect the availability and cost of domestic and
foreign financing options for the state and other GREs.
Weak Upstream Operations: PVN's SCP is weighed down by the high
costs and declining production of its upstream operations. The
segment posted EBITDA losses of VND1.55 trillion in 2020 compared
with profit of VND7.2 trillion in 2019 on weaker oil prices and
high cash costs. PVN also expects production to continue falling by
about 5%-11% per annum until 2023 after a drop of about 13% in 2020
due to its aging oil and gas assets. Fitch, however, expects a
recovery in PVN's upstream EBITDA in 2021, driven by Fitch's
forecast for higher crude prices.
PVN's investment plans can support an increase in its gas
production volume over the medium term if well executed. Upstream
gas sales in Vietnam are generally based on long-term volume
contracts with low price volatility.
Downstream Operations to Improve: Fitch expects EBITDA at PVN's
refinery, fertiliser and oil distribution divisions to rise to
VND20 trillion in 2021 from VND6.6 trillion in 2020 as refining
margins and oil distribution spreads improve from the losses and
weaker spreads a year earlier. Prices of refined petroleum products
in Vietnam are usually market driven and PVN's refineries face
import competition from other south-east Asian competitors. It is
upgrading refinery operations to improve capacity and complexity.
Stable Gas, Power Operations: PVN's earnings from power generation
is based on long-term agreements with state power utility Vietnam
Electricity (EVN, BB/Positive), which include cost pass-through
mechanisms. Its gas distribution, which is generally based on fixed
selling prices that are increased annually and sold mostly to EVN's
and PVN's power plants, is less volatile than its upstream and
refining segments. Gas and power EBITDA fell by 25% in 2020 to
VND17 trillion due to lower volume uptake. Fitch expects EBITDA
from these segments to rise by about 12% in 2021 on higher demand.
Strong Financial Profile: Fitch expects PVN to maintain net cash in
2021 and net leverage (net debt to EBITDA excluding its banking
subsidiary) below 2.5x until 2025. Fitch expects PVN's free cash
flow (FCF) to turn negative from 2021 as Fitch factors in some of
its planned upstream and downstream investments. PVN expects
meaningful cash inflows from a planned sale of partial stakes in
some subsidiaries, but the timing and amount are uncertain.
Therefore, Fitch does not account for these in its forecasts,
driving Fitch's negative FCF expectation over the medium term.
PVCombank Restructuring: Fitch excludes Vietnam Public Joint Stock
Commercial Bank (PVCombank) in calculating PVN's credit metrics as
PVN plans to dispose of its 52% stake after the bank's
restructuring. PVCombank accounted for about 70% of PVN's
consolidated debt in 2020. Fitch does not anticipate major
financial support from PVN to PVCombank during the restructuring.
PVCombank's earnings contribution to PVN is also immaterial.
Standalone Credit Profile of 'bb+': The 'bb+' assessment is
supported by PVN's position as Vietnam's largest upstream oil and
gas producer, vertical integration across midstream and downstream
segments, and stable gas distribution and power earnings. It is
weighed down by high-cost upstream operations and Fitch's
expectations of negative FCF over the medium term due to high capex
and investments.
DERIVATION SUMMARY
PVN's IDR will remain equalised with that of Vietnam even if its
SCP deteriorates below the sovereign rating. The assessment is
comparable with that of both EVN and PT Pertamina (Persero)
(BBB/Stable), which are also linked to their sovereigns. PVN's
status, ownership and control by the state is assessed as 'Very
Strong', similar to Fitch's assessment of EVN and Pertamina in
light of their complete state ownership.
The support record factor is assessed as 'Strong' for both PVN and
EVN, compared with 'Very Strong' for Pertamina. PVN and EVN's
assessment reflects Fitch's view that the Vietnamese government is
likely to reduce support through debt guarantees progressively,
although Fitch expects support to be forthcoming, if required. On
the other hand, Pertamina's stronger state support mechanism, such
as subsidy reimbursements, state debt guarantees for specific
projects, and first right of refusal for a majority stake in all
expiring upstream production-sharing contracts, including producing
fields, is likely to continue.
Fitch assesses the financial implications of a default on the
sovereigns and other GREs to be 'Very Strong' for PVN, EVN and
Pertamina. Fitch regards the socio-political implications of a
default as 'Very Strong' for PVN - higher than that of EVN - as any
disruptions to PVN's operations will affect the entire energy value
chain in Vietnam. The 'Strong' assessment for EVN reflects the
presence of other state-owned entities that can step in to produce
power if EVN is in financial distress, and feedstock for power
generation is procured mostly from other state-owned enterprises.
Pertamina's socio-political implications of a default, like PVN's,
are also assessed as 'Very Strong' for similar reasons.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Crude prices in line with Fitch's Brent price deck
assumptions; USD63/barrel (bbl) in 2021, USD55/bbl in 2022 and
USD53/bbl thereafter;
-- Oil production to decline gradually to 3 million tonnes by
2023 from 3.6 million tonnes in 2020;
-- Gas production to decline gradually to 1.2 billion cubic
metres (bnm3) by 2023 from 1.72 bnm3;
-- Refining volume to remain constant;
-- Refining EBITDA to rebound to USD5.5/bbl in 2021 and stay
around USD4.5/bbl up to 2023;
-- Gas distribution volume to fall to 7.5 bnm3 by 2023 from 9.2
bnm3 in 2020;
-- Power sales volume to remain broadly stable at between 20
million and 21 million kWh;
-- Capex of around VND30 trillion in 2021 and VND60 trillion per
annum thereafter.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action on the sovereign.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Negative rating action on the sovereign.
For the sovereign rating of Vietnam, the following sensitivities
were outlined by Fitch in a rating action commentary on 1 April
2021:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Macroeconomic Policy and Performance: Sustained high growth
that reduces the GDP per capita gap vis-à-vis Vietnam's peers
while maintaining macroeconomic stability.
-- Public Finances: Further improvement in public finances, for
example, through sustainable fiscal consolidation and debt
stabilisation over the medium term, as well as a higher
revenue base or a reduction in the risk of contingent
liabilities.
-- Structural: A material reduction in risks posed to the
sovereign balance sheet from weaknesses in the banking sector,
for instance, through improvements in capitalisation,
transparency regarding asset quality and the regulatory
framework.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Macroeconomic: A deterioration in Vietnam's policy mix that
creates risks for macroeconomic stability or leads to an
increase in macroeconomic imbalances, for instance, resulting
in a sustained decline in foreign-currency reserves.
-- Public Finances: Crystallisation of contingent liabilities on
the sovereign's balance sheet, which leads to a failure to
stabilise government debt over the medium term.
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
Strong Liquidity: PVN had a readily available cash balance of
VND170 trillion as of end-2020, excluding PVCombank, compared with
total debt of VND60 trillion, supporting its net cash position.
Fitch does not expect PVN to have difficulties raising funds for
its investment plans, if required, in light of its status as one of
Vietnam's most important state-owned enterprises. PVN could,
however, require access to offshore capital markets over the long
term if it is to execute some of its larger expansion plans.
ISSUER PROFILE
PVN, Vietnam's national oil company, is fully owned by the state
and operates across the entire oil and gas value chain through its
subsidiaries, including upstream, midstream, refining and retail,
with further diversification into fertilisers and power generation.
PVN has undergone several reorganisations since its establishment
in 1977, becoming one of Vietnam's largest economic groups that
contributes substantially to the country's budget and GDP.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
PVN's ratings are linked and capped by that of the sovereign.
ESG CONSIDERATIONS
Vietnam Oil and Gas Group has an ESG Relevance Score of '4' for
Financial Transparency due to the below-average timeliness and
transparency of financial disclosure compared with other rated
corporates, which has a negative impact on the credit profile, and
is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
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