/raid1/www/Hosts/bankrupt/TCRAP_Public/210916.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
Thursday, September 16, 2021, Vol. 24, No. 180
Headlines
A U S T R A L I A
18 ROWLANDS: Second Creditors' Meeting Set for Sept. 22
BOART LONGYEAR: Moody's Affirms 'C' Sr. Unsecured Notes Rating
BRIGHTE GREEN 2020-1: Moody's Hikes Rating on Class E Notes to Ba2
GOLDEN CENTURY: Owners Save Restaurant from Collapse
GULF MANGANESE: First Creditors' Meeting Set for Sept. 22
TRITON TRUST 2019-3: S&P Raises Class E Notes Rating to BB+ (sf)
C H I N A
FANTASIA HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR
GUANGZHOU R&F: Fitch Corrects September 13 Ratings Release
IDEANOMICS INC: Increases Chief Revenue Officer's Salary to $450K
INDUSTRIAL & COMMERCIAL: Moody's Rates New AT1 Bonds 'Ba1(hyb)'
QUTOUTIAO INC: Incurs RMB209.5 Million Net Loss in 2nd Quarter
RONSHINE CHINA: S&P Downgrades ICR to 'B', Outlook Stable
I N D I A
AADHISHIVA ENTERPRISES: CARE Keeps D Rating in Not Cooperating
APEEJAY TEA: ICRA Lowers Rating on INR135cr LT Loan to D
AZURE POWER: Moody's Assigns Ba2 Rating to $414MM Sr. Unsec. Notes
BALAJI SUGARS: ICRA Keeps D Debt Ratings in Not Cooperating
BRS ENTERPRISES: Insolvency Resolution Process Case Summary
CICB-CHEMICON PVT: ICRA Hikes Rating on INR6cr Loan to B
COMPARE POLICY: Insolvency Resolution Process Case Summary
DWARKA TEXTILE: CARE Keeps D Debt Rating in Not Cooperating
EURO INDIA: Insolvency Resolution Process Case Summary
GANDHI ENTERPRISES: ICRA Keeps D Debt Rating in Not Cooperating
GDJD EXPORTS: ICRA Reaffirms B+ Rating on INR8.0cr Cash Loan
GIRDHARILAL SUGAR: Insolvency Resolution Process Case Summary
GLOBAL ENVIRO: ICRA Keeps D Debt Ratings in Not Cooperating
HAND IN HAND: ICRA Withdraws B+ Rating on INR15cr Term Loan
HARITHA FERTILIZERS: ICRA Keeps D Debt Ratings in Not Cooperating
HARPREET COLOR: ICRA Lowers Rating on INR14.40cr LT Loan to D
IIFL FINANCE: Fitch Affirms 'B+' LT IDR, Outlook Stable
JET AIRWAYS: Defers Fresh Take-Off Plans for the Fourth Time
KERALA INFRASTRUCTURE: Fitch Affirms 'BB' LT IDRs, Outlook Stable
MAGUS METAL: ICRA Keeps D Ratings in Not Cooperating Category
MAHADEV COLD: CARE Lowers Rating on INR8.0cr LT Loan to B-
MANAPPURAM FINANCE: Fitch Affirms 'BB-' LT IDRs, Outlook Stable
MI SOLAR: ICRA Reaffirms B- Rating on INR3.25cr Term Loan
MNR COTTONS: ICRA Keeps B+ Debt Ratings in Not Cooperating
MUTHOOT FINANCE: Fitch Affirms 'BB' LT IDRs, Outlook Stable
MYSTIC MONK: Insolvency Resolution Process Case Summary
NAGARJUNA FERTILIZERS: Insolvency Resolution Process Case Summary
NAVYA AGRO: Insolvency Resolution Process Case Summary
OPTICS & ALLIED: ICRA Keeps B+ Debt Ratings in Not Cooperating
PADMAVATI GINNING: CARE Keeps D Debt Rating in Not Cooperating
PRAKASH STAINLESS: CARE Keeps D Debt Rating in Not Cooperating
PUSHP PREM: CARE Keeps D Debt Ratings in Not Cooperating
R. AYUSH: CARE Keeps B- Debt Rating in Not Cooperating Category
RADHEKRISHNA COTTON: ICRA Withdraws B+ Rating on INR7cr LT Loan
S D RICE: ICRA Keeps B Debt Rating in Not Cooperating Category
SATISH SUGARS: ICRA Keeps B+ Debt Ratings in Not Cooperating
SHRIRAM TRANSPORT: Fitch Affirms 'BB' LT IDRs, Outlook Now Stable
SLV POWER: ICRA Lowers Rating on INR105cr Loans to D
TATA STEEL: Moody's Upgrades CFR to Ba1, Outlook Remains Stable
TECHNO POWER: Insolvency Resolution Process Case Summary
UMA JEWELLERS: ICRA Keeps D Debt Ratings in Not Cooperating
UTTARAYAN STEEL: Insolvency Resolution Process Case Summary
VISHWAKSHARA MEDIA: Insolvency Resolution Process Case Summary
VITTHAL GAJANAN: CARE Keeps D Debt Rating in Not Cooperating
I N D O N E S I A
BANK NEGARA: Moody's Rates USD AT1 Capital Securities 'Ba3(hyb)'
J A P A N
JTB CORP: Sells Tokyo Headquarters to Raise Funds
N E W Z E A L A N D
LAMONT WINES: Receivership Concluded After Debts Settled
S I N G A P O R E
2BY2 YACHTS: Court to Hear Wind-Up Petition on Oct. 1
DIGITAL ALPHA: Placed Under Judicial Management
GEO ENERGY: S&P Places 'CCC' Rating on CreditWatch Positive
INTER-PACIFIC: JMs Used by Banks, Ex-Director's Lawyers Claim
VELOQX PRIME: Creditors' Proofs of Debt Due on Oct. 14
V I E T N A M
VIETNAM AIRLINES: Government Fund Subscribes to Rights Issue
[*] VIETNAM: 28% of Realty Trading Floors Face Bankruptcy
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A U S T R A L I A
=================
18 ROWLANDS: Second Creditors' Meeting Set for Sept. 22
-------------------------------------------------------
A second meeting of creditors in the proceedings of 18 Rowlands
Apartments Pty Ltd has been set for Sept. 22, 2021, at 11:00 a.m.
via teleconference.
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. 21, 2021, at 4:00 p.m.
Simon Richard Miller and Daniel Lopresti of Clifton Hall were
appointed as administrators of 18 Rowlands on Aug. 18, 2021.
BOART LONGYEAR: Moody's Affirms 'C' Sr. Unsecured Notes Rating
--------------------------------------------------------------
Moody's Investors Service downgraded Boart Longyear Limited's
Corporate Family Rating to C from Ca and Probability of Default
rating to D-PD from Ca-PD. Moody's also affirmed a Ca rating of
Boart Longyear Management Pty Limited's senior secured notes and a
C rating of senior unsecured notes. The speculative grade liquidity
rating remains SGL-4. The outlook changed to stable from negative.
Downgrades:
Issuer: Boart Longyear Limited
Corporate Family Rating, Downgraded to C from Ca
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Affirmations:
Issuer: Boart Longyear Management Pty Limited
Senior Secured Regular Bond/Debenture, Affirmed Ca (LGD4)
Senior Unsecured Regular Bond/Debenture, Affirmed C (LGD6)
Outlook Actions:
Issuer: Boart Longyear Limited
Outlook, Changed To Stable From Negative
Issuer: Boart Longyear Management Pty Limited
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The action follows the filing of Chapter 15 petition by the company
on August 17, 2021, which Moody's views as a default. Chapter 15
proceedings will allow the company to request that the US
bankruptcy court formally recognize the company's previously
announced restructuring proceedings occurring in Australia. On May
13, 2021, Boart reached an agreement with majority of lenders on
the proposed recapitalization plan that is expected to reduce the
company's total debt to under $200 million by converting
approximately $795 million of debt to equity with the allocation of
new common equity determined through designation of secured and
unsecured equity entitlements and based on the respective
conversion ratios, calculated as a percentage of the face amount of
debt. Boart also commenced proceedings to seek the recognition of
the Boart's Creditors Schemes under Chapter 15 of the U.S.
Bankruptcy Code and plans to redomicile from Australia to Canada.
Subsequent to the completion of the recapitalization scheduled for
September 23, 2021 (Creditors Schemes Implementation Date), Moody's
will withdraw Boart Longyear Management Pty Limited's debt
ratings.
Headquartered in Salt Lake City, Utah, Boart Longyear Limited is
incorporated in Australia and listed on the Australian Securities
Exchange Limited. The company provides drilling services and
complimentary drilling products and equipment, principally for the
mining and metals industries. Revenues for the twelve months ended
December 31, 2020 were $657 million.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
BRIGHTE GREEN 2020-1: Moody's Hikes Rating on Class E Notes to Ba2
------------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on five classes
of notes issued by Brighte Green Trust 2020-1.
Issuer: Brighte Green Trust 2020-1
Class A Notes, Upgraded to Aa1 (sf); previously on Oct 29, 2020
Definitive Rating Assigned Aa2 (sf)
Class B Notes, Upgraded to A1 (sf); previously on Oct 29, 2020
Definitive Rating Assigned A2 (sf)
Class C Notes, Upgraded to A3 (sf); previously on Oct 29, 2020
Definitive Rating Assigned Baa1 (sf)
Class D Notes, Upgraded to Baa3 (sf); previously on Oct 29, 2020
Definitive Rating Assigned Ba1 (sf)
Class E Notes, Upgraded to Ba2 (sf); previously on Oct 29, 2020
Definitive Rating Assigned B1 (sf)
The transaction is a securitisation of a portfolio of Australian
unsecured green consumer, Buy Now Pay Later receivables originated
by Brighte Capital Pty Ltd (Brighte).
RATINGS RATIONALE
The upgrades were prompted by (1) an increase in note subordination
available for the affected notes, (2) the good performance of the
underlying portfolio to date, and (3) Brighte's accumulation of
additional historical data and operational track record since the
transaction closing date.
Brighte was established in 2015, with significant origination
growth beginning in 2018. Moody's has almost one additional year of
strong and stable performance data for Brighte since the
transaction closing date.
Following the September 2021 payment date, the note subordination
available for the Class A, Class B, Class C, Class D and Class E
Notes has increased to 20.2%, 14.6%, 10.6%, 5.2% and 4%
respectively, from 13.3%, 9.6%, 6.9%, 3.4% and 2.6% at closing.
As of end-August, 0.7% of the outstanding pool was 30-plus day
delinquent and 0.1% was 90-plus day delinquent. The portfolio has
incurred 0.3% (as a percentage of the original portfolio balance)
of losses to date, all of which have been covered by excess
spread.
Based on the observed performance to date and loan attributes,
Moody's has maintained its default assumption at 3% of the
outstanding portfolio balance (equivalent to 2.2% of the original
portfolio balance). Considering Brighte's longer track record which
shows strong and stable performance, Moody's has lowered its
portfolio credit enhancement assumption to 24% from 28% at
closing.
The principal methodology used in these ratings was "Moody's
Approach to Rating Consumer Loan-Backed ABS" published in September
2021.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations, and (2) an increase in credit enhancement
available for the notes.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in credit enhancement available for
the notes, and (3) a deterioration in the credit quality of the
transaction counterparties.
GOLDEN CENTURY: Owners Save Restaurant from Collapse
----------------------------------------------------
Sarah Sharples at news.com.au reports that an iconic Sydney eating
destination and late night hangout is set to relaunch after it was
rescued from the brink of collapse.
Golden Century Seafood Restaurant on Sussex Street in the Chinatown
district went into administration in August after serving
Sydneysiders for 31 years.
The eatery, which was famed for its wall-to-wall crab and lobster
tanks, went into voluntary administration after being unable to
negotiate a new lease agreement, the report says.
According to news.com.au, the AUD4.5 million rescue plan, which was
proposed by the family behind the restaurant, received overwhelming
support from creditors.
It will be part funded by the bulk sale worth AUD1.15 million of
wines from Golden Century's vault to one buyer.
That's slightly below the original AUD1.2 million proposed due to
damaged or unfit bottles identified, the report says.
news.com.au relates that the plan will also allow the Wong family
to clear its debts and pay most employee entitlements, including
outstanding wages to 65 employees.
But employees will only get 47.4 cents in the dollar for redundancy
entitlements.
news.com.au adds that liquidator Desmond Teng from Chifley Advisory
said it would be up to the owners whether they come back this year
or next year, taking into account the impact of lockdowns and the
pandemic.
"There are lot of puzzle pieces they need to put together and there
is quite a lot to commit to at this time," he told news.com.au.
"Rent is not cheap, employees are expensive and there is not much
revenue at the moment, and with lockdown the city is dead."
But he said the rescue plan was a good outcome, supported by
employees who hope to come back when the restaurant is back up and
running, the report relays.
"It allows a reset and now the owners can have a bit more space to
rethink and re-strategise when they would like to trade again,
subject to the Covid-19 problem and subject to entering into a
lease with good commercial terms, whether it's in the same premises
or different premises - they have time to think about that now,"
the report quotes Mr. Teng as saying.
The restaurant's kitchen and equipment will be surrendered to ANZ
bank, the report notes.
Visited by celebrities such as Lady Gaga and Rihanna and frequented
by politicians, the restaurant had made a profit of almost
AUD825,000 for the end of the 2020/21 financial year, but suffered
significant losses of AUD450,000 between July 1 and August 30 this
year.
Despite its popularity, accounts revealed the restaurant had been
struggling with losses since 2018, suffering a AUD1.1 million
downturn in the 2018 financial year and another AUD590,000 hit in
the 2019 financial year, news.com.au notes.
The restaurant was founded by Eric and Linda Wong, who moved to
Australia from Hong Kong.
GULF MANGANESE: First Creditors' Meeting Set for Sept. 22
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Gulf
Manganese Corporation Ltd will be held on Sept. 22, 2021, via
virtual meeting technology.
Bryan Kevin Hughes of Pitcher Partners was appointed as
administrator of Gulf Manganese on Sept. 10, 2021.
TRITON TRUST 2019-3: S&P Raises Class E Notes Rating to BB+ (sf)
----------------------------------------------------------------
S&P Global Ratings raised its ratings on four classes of notes
issued by Perpetual Corporate Trust Ltd. as trustee for Triton
Trust No.8 Bond Series 2019-3. At the same time, S&P affirmed its
ratings four classes of notes. The transaction is a securitization
of prime residential mortgages originated by Columbus Capital Pty
Ltd. (Columbus).
S&P said, "The rating actions reflect our view of the credit risk
of the pool, which has been amortizing in line with our
expectation. Credit support provided in percentage terms has
increased as the pool paid down. This credit support comprises note
subordination for all rated notes as well as mortgage insurance
covering about 54% of the loans in the portfolio. Current
loan-to-value ratios across the pool has been declining, decreasing
our expectation of loss for the pool."
As of June 31, 2021, the pool has a balance of about A$678 million
and a pool factor of about 70%. The pool's weighted-average
loan-to-value ratio was 60% and weighted-average seasoning was 36
months.
Since close, arrears performance of the pool has been favorable
compared with the Standard & Poor's Performance Index (SPIN) for
prime loans. As of June 31, 2021, loans more than 30 days in
arrears make up 0.22% of the pool, of which 0.15% are more than 90
days in arrears. There are no loans with COVID-19-related hardship
arrangements in the pool, and no losses to-date.
Because the notes are currently paying on a sequential basis,
credit support will continue to build up over time for the notes,
until the pro-rata tests are met.
S&P's expectation is that the various mechanisms to support
liquidity within the transactions, including an amortizing
liquidity facility, principal draws, and a loss reserve that builds
up from excess spread, are sufficient under its cash-flow stress
assumptions to ensure timely payment of interest.
A fixed- to floating-rate interest-rate swap is provided by
National Australia Bank Ltd. to hedge the mismatch between receipts
from any fixed-rate mortgage loans and the variable-rate notes.
Ratings Raised
Triton Trust No.8 Bond Series 2019-3
Class B: to AA+ (sf) from AA (sf)
Class C: to A+ (sf) from A (sf)
Class D: to BBB+ (sf) from BBB (sf)
Class E: to BB+ (sf) from BB (sf)
Ratings Affirmed
Triton Trust No.8 Bond Series 2019-3
Class A1-AU: AAA (sf)
Class A1-5Y: AAA (sf)
Class A2: AAA (sf)
Class AB: AAA (sf)
=========
C H I N A
=========
FANTASIA HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings revised its rating outlook on Fantasia Holdings
Group Co. Ltd. to negative from stable. At the same time, it is
affirming its issuer credit rating on the company and its long-term
issue rating on its outstanding U.S. dollar senior notes at 'B'.
S&P said, "The negative outlook indicates that we could lower the
ratings if Fantasia does not execute its plan in a timely manner,
such that its liquidity remains insufficient to meet its debt
maturities.
"We revised the outlook to negative to reflect the execution risk
surrounding the company's debt reduction and refinancing plan in
the next six to 12 months. The plan includes cost savings from
operations and sales of stakes in projects to boost liquidity,
because refinancing in the offshore capital market has become less
feasible amid the current market volatility. The plan will
nonetheless take away resources from business needs, adding
pressure to Fantasia's ability to generate steady cash inflows,
especially when the property market turns less supportive in the
second half of the year.
"We affirmed the rating because the company's proactive measures
for tackling its refinancing needs mitigate some of the risk."
Despite the execution risk, Fantasia appears to have internal
resources and assets that could generate sufficient cash flows to
cover bond maturities for the next six to 12 months.
Fantasia will need to pay down offshore maturities until the
offshore capital market is more receptive to refinancing.
The plan to source equity financing for its Beijing and Qingdao
projects, part of which is to fund a bond repayment in December,
has reached the final stage, only pending cash payment from buyers.
But the company still needs to raise more funds to tackle its 2022
bond maturities. It intends to cut land spending and introduce
partners into its large-scale projects.
Fantasia has senior notes of about US$762 million due in the
remainder of 2021 and US$1.15 billion due in 2022. And their yields
are at heightened levels that could prevent new issuances,
indicating escalating refinancing risks. Bond maturities in 2022
are concentrated in the second half, and refinancing prospects
hinge on the execution of the company's asset sales plans in the
next six to 12 months.
S&P said, "We believe Fantasia will be able to refinance or extend
part of its domestic bonds of about Chinese renminbi (RMB) 1.7
billion due or puttable in November and December. About RMB3.5
billion of the total RMB5.2 billion of trust loans (as of June 30,
2021) will come due within one year. We expect roll over or
refinancing of such debt if the company maintains stable
operations, given it has pledged property project assets against
most of its trust loans."
Fantasia estimates about RMB21 billion saleable resources from
urban renewal projects will be converted in 2022. These projects
will not only alleviate pressure for land replenishment but also
provide opportunities for stake sales. Fantasia sold equity stakes
in two of its urban renewal projects in 2019 and 2020, which
generated sizable cash inflows before project completion. Given
most of these projects are in Shenzhen, which generally supports
better margins, they should be easier to sell down than other
ordinary development projects.
Potential monetization of non-core business segments, such as the
senior housing and rental apartments in the U.S., can be used as an
offshore debt repayment source. In S&P's base case, it has not
factored in such asset disposals given their uncommitted nature.
Fantasia also has about RMB10 billion of cash at its holding
company level as of June 2021, which is readily accessible
according to the management, but would impact operations and future
liquidity position to some extent if it is largely deployed for
repayment. This may not be the first course of action but could
provide liquidity buffer.
The company's business operations will be tested, given resources
will be diverted away from land and construction.
S&P said, "We expect the company will need continued land
replenishment to sustain sales growth. Its total land bank of 17.5
million square meters includes some large-scale projects that will
only be launched in phases. As Fantasia will prioritize debt
repayment, we forecast that land investment will be reduced to
25%-30% of contracted sales, from about 30%-35% in the past two
years. As a result, total sales will shrink by 5%-10% in 2022 and
2023 under our projection.
"Although the company achieved satisfactory sales growth of 60%
year on year in the first six months of 2021, we expect toughening
market conditions will put pressure on its sell-through and cash
collection in the second half. We observed a slowdown in mortgage
releases in some tier-two cities and municipalities where Fantasia
operates. The company's sales prospects in the second half,
especially the peak months of September and October, will be
crucial to support liquidity."
Weaker performance may also impact asset sales prospects given
potential partners or buyers care about the original owners'
liquidity position. Project sales are in general becoming more
difficult as developers face tight liquidity and become more
cautious in making large-scale acquisitions.
S&P said, "The negative outlook reflects our view that Fantasia's
operational stability is being tested because it will need to use
internal cash and resources to pay down debt. Its cost cutting and
asset disposal plan may burden the company's cash flows and add to
operational uncertainties. This could lower operational prospects
at a time when the property market and cash collection in various
cities show signs of slowing.
"We could lower the rating if Fantasia cannot generate sufficient
liquidity for servicing its debt in the next six to 12 months. This
could happen if the company does not execute its cost reduction and
asset sales plan on a timely basis, or if its cash flows from
operations significantly weaken.
"We could also lower the rating if: (1) Fantasia's revenue is
weaker than our forecast while gross margin stays low, such that
its EBITDA interest coverage falls below 1x, or consolidated or
look-through debt-to-EBITDA ratio (after proportionately
consolidating joint venture [JV] projects) rises above 10x; or (2)
the company's capital structure become more vulnerable such that
the weighted average maturity (WAM) is less than two years.
"We may revise the outlook to stable if Fantasia can settle its
repayment needs in the next six to 12 months through generating
sufficient cash flow, while improving its capital structure such
that its WAM is sustainably above two years. At the same time, the
company needs to maintain its consolidated and look-through
debt-to-EBITDA ratio below 10x and its EBITDA interest coverage at
above 1x."
Fantasia is a Shenzhen-based residential and commercial property
developer. The company's projects are mainly located in Chengdu,
Tianjin, and several cities along the Pearl River Delta and Yangtze
River Delta. Color Life Services Group Co. Ltd., the property
management subsidiary, is separately listed on the Hong Kong stock
exchange.
GUANGZHOU R&F: Fitch Corrects September 13 Ratings Release
----------------------------------------------------------
This is a correction of a release published on 13 September 2021.
It corrects the last factor that could lead to negative rating
action/downgrade.
Fitch Ratings has revised the Outlook on Long-Term Foreign Currency
Issuer Default Ratings (IDRs) of China-based Guangzhou R&F
Properties Co. Ltd. and subsidiary R&F Properties (HK) Company
Limited (RFHK) to Negative from Stable, and affirmed the IDRs at
'B+'. Fitch has also affirmed Guangzhou R&F's and RFHK's senior
unsecured rating at 'B+', with a Recovery Rating of 'RR4'.
The Negative Outlook reflects Guangzhou R&F's limited access to
funding amid ongoing refinancing needs in the coming 12 months.
Fitch believes that the company has a number of options to address
these upcoming debt maturities, with CNY782 billion of total
saleable resources and continued strong contracted sales in 1H21.
The company is also in discussions for a number of asset disposals,
which could bring in additional liquidity. However, these plans are
subject to execution risk and may leave the company with limited
liquidity buffer.
KEY RATING DRIVERS
Significant Upcoming Maturities: Guangzhou R&F has CNY12 billion of
capital-market debt maturing or becoming puttable in the next 12
months: CNY3.0 billion in 2H21, and CNY9.0 billion in 1H22. By
comparison, the company's cash balance (including restricted cash)
was CNY29 billion at end-June 2021.
The company plans to maintain cash at similar levels for normal
operations. It also plans to address the debt maturities through
cash generated from operations (that is, contracted sales net of
expenses) and asset disposals but these are subject to execution
risks.
Refinancing Hinges on Contracted Sales: Guangzhou R&F expects to
generate substantial cash flow from operations by reaching its
full-year sales target of CNY150 billion, according to its
refinancing plan. Management remains confident of reaching the
target, as there is sufficient saleable resources for 2H21 and
sales in 2H21 are usually stronger than 1H21. Contracted sales were
CNY83 billion in 8M21, an increase of 5% yoy.
Asset Disposals to Deleverage: The company's 1H21 asset sales were
around CNY 5.6 billion, including logistic parks as well as
residential, office and retail buildings. The company is open for
discussion on other disposals to help it deleverage and meet debt
maturities. Guangzhou R&F can monetise its large portfolio of
investment properties, which totalled CNY34 billion at end-2020, as
well as hotels with a market value of about CNY55 billion. However,
Fitch believes asset disposals are subject to execution risk.
Reduced Access to Capital Markets: Guangzhou R&F's access to
onshore and offshore bond markets appears limited, although the
company issued US dollar bonds in February 2021. Fitch expects
access to offshore bond markets will remain limited. It may be
challenging for the company to issue or extend puttable onshore
bonds and offshore bonds under current market conditions, in
Fitch's view.
Ongoing Reduction in Leverage: Leverage, measured by net
debt/adjusted inventory, fell to 46% in 2020 from 55% in 2019, and
remained at similar levels at end-June 2021. The company will
continue to limit spending on land acquisition to preserve
liquidity. Guangzhou R&F spent 10% of contracted sales on land
acquisition in 2020 and 4% in 1H21.
Off-Balance-Sheet Debt Appears Low: The company's non-controlling
interest (NCI) position remained low at only 3% of equity at
end-June 2021. As a result, Fitch believes its risk from
off-balance-sheet debt is much lower than that of peers. It also
means that the company has more flexibility to dispose of stakes in
development projects compared with developers that have high NCI.
DERIVATION SUMMARY
Guangzhou R&F's CNY139 billion in attributable contracted sales in
2020 was much larger than the CNY50 billion-105 billion of 'BB-'
rated peers. It was also larger than most 'B+' peers and at a
similar level to that of Yango Group Co., Ltd. (B+/Stable). Yango
has a faster churn rate, but Guangzhou R&F's revenue was higher and
its land bank size is almost twice as large, providing Guangzhou
R&F with more flexibility on land acquisitions to control
leverage.
Guangzhou R&F has a long land-bank life compared with peers and its
geographical diversification is comparable with that of 'BB+' and
'BB' rated peers. Its operation, which is spread across more than
100 cities, is more geographically diversified than that of CIFI
Holdings (Group) Co. Ltd.'s (BB/Stable) more than 50 cities. The
geographical spread of both companies' operations should mitigate
risk from local policy intervention and economic volatility, but
Guangzhou R&F has a tighter liquidity position than 'BB-' and 'B+'
category peers.
Guangzhou R&F's attributable contracted sales are nearly double
that of Zhenro Properties Group Limited (B+/Positive). Zhenro's
average selling price is 30% higher than that of Guangzhou R&F with
a faster churn rate. However, Zhenro has a shorter land-bank life
of around two years, which limits its control over land acquisition
costs. Zhenro's 2020 leverage was 5pp lower than that of Guangzhou
R&F, but Zhenro has a larger NCI position.
RFHK's ratings are supported by the strong linkage with its parent,
Guangzhou R&F. RFHK is positioned as its parent's main offshore
financing platform, in a similar way to Vanke Real Estate (Hong
Kong) Company Ltd (BBB+/Stable), a subsidiary of China Vanke Co.,
Ltd. (BBB+/Stable).
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for Guangzhou R&F:
-- Attributable contracted sales of CNY141 billion a year in
2021-2023;
-- EBITDA margin, excluding capitalised interest from cost of
sales, at around 25% in 2021-2023;
-- CNY14 billion-21 billion a year for land acquisition in 2021
2023;
-- CNY54 billion-56 billion a year for construction in 2021-2023;
-- 10%-12% of revenue for selling, general and administrative
costs in 2021-2023.
KEY RECOVERY RATING ASSUMPTIONS
-- 4x EBITDA multiple to derive Guangzhou R&F's going-concern
value;
-- Apply the liquidation value approach, as a liquidation of the
assets results in a higher return to creditors;
-- 10% administration claim;
-- 70% advance rate to accounts receivable;
-- 70% advance rate to adjusted net inventory to reflect the
above 20%-25% EBITDA margin;
-- 54% advance rate to Guangzhou R&F's investment properties;
-- 60% standard haircut to net property, plant and equipment;
-- 100% advance rate to restricted cash.
The resulting recovery rate corresponds to a Recovery Rating of
'RR2' for Guangzhou R&F. However, the Recovery Rating is capped at
'RR4' because, under Fitch's Country-Specific Treatment of Recovery
Ratings Criteria, China falls into Group D of creditor
friendliness, and instrument ratings of issuers with assets in the
group are subject to a soft cap at the issuer's IDR and a Recovery
Rating of 'RR4'.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- The rating Outlook will be revised to Stable if Guangzhou R&F
is able to sustain improvement in its liquidity position, debt
maturity profile, and if the company's bond market access is
normalised.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Weakening of business profile due to poor funding access;
-- Continued interruption in bond market access;
-- Significant deterioration in leverage.
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
Weak Liquidity: The company had CNY29 billion of cash (including
CNY16 billion of restricted cash) as of 1H21, which was not enough
to cover CNY52 billion of short-term debt in the next 12 months.
The company has provided a refinancing plan, which includes
generating cash from operations and asset disposals, but these
depend on continued contracted sales or are subject execution
risks.
ISSUER PROFILE
Founded in 1994, Guangzhou R&F is a property developer focusing on
medium and higher-end property developments and targeting sales to
middle and upper-middle income residents. It also engages in hotel
development, commercial operation, property management and
architectural and engineering design.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch's calculation of CNY272 billion in adjusted inventory at
end-2020 includes the following: properties under development;
completed properties held for sale; land-use rights; prepayments
for the acquisition of land-use rights; buildings; properties under
construction; investment properties; amounts due from NCIs; and
investment in, and amounts due from, joint ventures and associates.
Customer deposits, amounts due to NCIs, and amounts due to joint
ventures and associates are deducted from the summation of items
mentioned previously. Fitch has adjusted the value of investment
properties based on the higher of 4% rental yield or cost.
Amounts due to major shareholders and entities controlled by them
are treated as other payables instead of Guangzhou R&F loans.
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.
IDEANOMICS INC: Increases Chief Revenue Officer's Salary to $450K
-----------------------------------------------------------------
Ideanomics, Inc. has agreed to increase the base salary for Kristin
Helsel, the company's chief revenue officer, to $450,000. The
employment agreement for Ms. Helsel otherwise remains in its
current form.
About Ideanomics
Ideanomics is a global company focused on the convergence of
financial services and industries experiencing technological
disruption. Its Mobile Energy Global (MEG) division is a service
provider which facilitates the adoption of electric vehicles by
commercial fleet operators through offering vehicle procurement,
finance and leasing, and energy management solutions under its
innovative sales to financing to charging (S2F2C) business model.
Ideanomics Capital is focused on disruptive fintech solutions and
services across the financial services industry. Together, MEG and
Ideanomics Capital provide their global customers and partners with
leading technologies and services designed to improve transparency,
efficiency, and accountability, and its shareholders with the
opportunity to participate in high-potential, growth industries.
The Company is headquartered in New York, NY, with operations in
the U.S., China, Ukraine, and Malaysia.
Ideanomics reported a net loss of $106.04 million for the year
ended Dec. 31, 2020, compared to a net loss of $96.83 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$698.05 million in total assets, $145.39 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, $7.72 million in redeemable non-controlling interest, and
$543.68 million in total equity.
INDUSTRIAL & COMMERCIAL: Moody's Rates New AT1 Bonds 'Ba1(hyb)'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba1(hyb) foreign-currency
rating to the proposed USD-denominated undated additional tier 1
(AT1) capital bonds to be issued by Industrial & Commercial Bank of
China Ltd (ICBC, A1 stable).
The assigned ratings are subject to receipt of final
documentations, the terms and conditions of which are not expected
to change in any material way from the draft documents that Moody's
has reviewed.
RATINGS RATIONALE
The Ba1(hyb) rating is three notches below ICBC's Adjusted Baseline
Credit Assessment (BCA), reflecting the structure of the proposed
issuance and Moody's assumption that investors of these securities
face the risk of full or partial compulsory write-off of the AT1
capital bonds upon the occurrence of the relevant non-viability
trigger event.
The AT1 capital bonds rank junior to ICBC's deposits, other senior
obligations, all subordinated indebtedness and any obligations
issued or guaranteed by ICBC that rank senior to the AT1 capital
bonds, and rank senior to all claims of shares capital of ICBC.
Under the terms and conditions of the proposed AT1 capital bonds, a
compulsory write-off will be triggered if a non-viability trigger
event occurs. A non-viability trigger event will occur upon the
earlier of (1) the China Banking and Insurance Regulatory
Commission having determined that ICBC will not be able to exist if
there is no conversion or write-off of ICBC's capital; and (2) the
relevant regulatory departments having determined that ICBC will
not be able to exist if the public sector does not provide a
capital injection or other equivalent support.
The rating also incorporates the possibility of impairment
associated with the cancellation of the distributions. Such an
impairment could occur before ICBC reaches the point of
non-viability. Under the proposed terms and conditions, the AT1
capital bonds will pay fixed-rate semi-annual distributions, which
will be reset periodically, and ICBC may choose not to pay
distributions on a non-cumulative basis. The distributions on the
AT1 capital bonds are fully discretionary, but any cancellation of
distributions (in whole or in part) on the AT1 capital bonds will
restrict ICBC from making any distributions to ordinary
shareholders.
ICBC's standalone BCA is baa1 and its Adjusted BCA, which
incorporates no affiliate support, is the same as its BCA. China
does not have an Operational Resolution Regime for banks.
Therefore, Moody's applies a basic Loss Given Failure approach in
rating ICBC's debt securities. While Moody's assesses that ICBC's
deposits and senior debt are likely to receive a very high level of
support from the Government of China (A1 stable) in times of need,
Moody's does not assume that AT1 capital bonds - which are designed
to absorb losses - will receive extraordinary government support.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The rating of ICBC's AT1 capital bonds could be upgraded if ICBC's
BCA is upgraded. Moody's could upgrade ICBC's BCA if China's credit
conditions improve with strong economic recovery supported by a
less intensive credit growth, and the bank's capitalization
strengthens, with an improvement in its CET1 ratio consistently
above 14% while its profitability maintained at around the current
level.
The rating of ICBC's AT1 capital bonds could be downgraded if
ICBC's BCA is downgraded. Moody's could downgrade ICBC's BCA if the
operating environment weakens significantly, for example, if
China's economic growth moderates further or corporate financial
leverage continues to increase. Moody's could also downgrade ICBC's
BCA if the bank's (1) profitability, as measured by net
income/tangible banking assets, reduced, which could be a result of
much weaker asset quality, and is consistently below 0.8%; and (2)
capitalization weakens, with a deterioration in its CET1 ratio to
consistently below 12%.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Banks Methodology
published in July 2021.
Industrial & Commercial Bank of China Ltd, headquartered in
Beijing, reported total assets of RMB35.1 trillion as of June 30,
2021. ICBC is a global systemically important bank as designated by
the G-20's Financial Stability Board.
QUTOUTIAO INC: Incurs RMB209.5 Million Net Loss in 2nd Quarter
--------------------------------------------------------------
Qutoutiao Inc. reported a net loss of RMB209.49 million on RMB1.20
billion of net revenues for the three months ended June 30, 2021,
compared to a net loss of RMB222.10 million on RMB1.44 billion of
net revenues for the three months ended June 30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of RMB358.53 million on RMB2.49 billion of net revenues
compared to a net loss of RMB753.92 million on RMB2.85 billion of
net revenues for the same period during the prior year.
Mr. Eric Siliang Tan, chairman and chief executive officer of
Qutoutiao, commented, "We will continue to run a balanced strategy
with our overall business, investing into promising growth
initiatives while optimizing the financial position of the more
mature segments. We will maintain the highest standard of
compliance and continue to make positive contributions to the
future growth of a dynamic industry and the wider society."
As of June 30, 2021, the Company had RMB2.94 billion in total
assets, RMB3.37 billion in total liabilities, RMB1.13 billion in
total redeemable non-controlling interests, and a total deficit of
RMB1.56 billion.
As of June 30, 2021, the Company had cash, cash equivalents,
restricted cash and short-term investments of RMB1,021.8 million
(US$158.3 million), compared to RMB985.8 million as of Dec. 31,
2020. Net operating cash outflow during the second quarter of 2021
was RMB15.0 million.
While the Company continues to execute business plans to improve
their liquidity position, the Convertible Loan which the Company
issued with principal amounting to US$171.1 million (RMB1,180.6
million) will mature in April 2022 and has been classified as a
current liability as of June 30, 2021. Given the significance of
the loan, the Company said there is uncertainty regarding the
Company's ability to repay the Convertible Loan upon maturity,
which raises substantial doubt about the Company's ability to
continue as a going concern. The second quarter 2021 unaudited
financial information does not include any adjustment that is
reflective of this uncertainty.
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/1733298/000156459021047208/qtt-ex991_6.htm
About Qutoutiao Inc.
Qutoutiao Inc. -- https://ir.qutoutiao.net -- operates innovative
and fast-growing mobile content platforms in China with a mission
to bring fun and value to its users. The eponymous flagship mobile
application, Qutoutiao, meaning "fun headlines" in Chinese, applies
artificial intelligence-based algorithms to deliver customized
feeds of articles and short videos to users based on their unique
profiles, interests and behaviors.
Qutoutiao reported a net loss of $1.10 billion in 2020, a net loss
of $2.68 billion in 2019, and a net loss of $1.94 billion in 2018.
RONSHINE CHINA: S&P Downgrades ICR to 'B', Outlook Stable
---------------------------------------------------------
On Sept. 14, 2021, S&P Global Ratings lowered its issuer credit
rating on Ronshine China Holdings Ltd. to 'B' from 'B+'.
S&P said, "The stable outlook reflects our view that Ronshine will
maintain satisfactory sales and cash collection. At the same time,
we expect the company to control its land spending, such that it
retains good ability to meet its upcoming bond maturities and other
debt obligations.
"Ronshine's project margins will likely remain low for the next two
years. We expect the company's gross margin to remain low at
11%-12% in 2021 and only moderately improve to 12%-13% in 2022,
from 10% in the first half of 2021. We believe Ronshine is still in
the process of recognizing its lower margin projects, which it
acquired in 2016-2018 at high cost in an overheated market. Many of
these projects are later affected by price caps. We anticipate the
company has about Chinese renminbi (RMB) 10 billion in projects
with gross margins of less than 10% set to be recognized in the
second half of 2021, and another RMB20 billion in 2022 and 2023."
Ronshine's margin is substantially lower than peers, even those
that have a similar focus on higher-tier cities with strict price
caps.
Ronshine's high reliance on public auctions in higher-tier cities
will continue to constrain margins in the longer term. Besides
primary development in Zhengzhou and Taiyuan, the company still
relies heavily on public auctions for land replenishment to acquire
over 90% of its saleable resources. Ronshine also favors cities or
land parcels that provide promising sell-through, such as Hangzhou
and the Yangtze River Delta region. That said, these land parcels
generally leave limited profitability due to intense competition.
In the first half of 2021, S&P estimates over 50% (in terms of land
costs) of the company's land purchased was in Hangzhou, with 71%
within the Yangtze River Delta region.
S&P said, "We forecast average gross margins for these newly
acquired projects to remain at 15%-17%, with specific projects as
low as 10%. While these projects provide better liquidity and
faster cash collection, they are not risk-free, as we have seen
market momentum change quickly in recent years due to frequent
policy adjustments in higher-tier cities.
"Land replenishment needs will limit debt reduction. We believe
Ronshine is seeking to maintain its current operating scale and
gradually slow its land acquisitions to preserve liquidity. As of
end June 2021, the company's unsold land bank was about 19.9
million square meters, which we estimate can only support growth
for two to 2.5 years. We anticipate the company will maintain
spending on land at about RMB25 billion in 2021, and RMB22 billion
to RMB24 billion in 2022, compared with about RMB30 billion in
2020. This should lead to moderate debt reduction to RMB65 billion
in 2021 and RMB62 billion to RMB64 billion in 2022, from RMB69.7
billion at the end of the first half of 2021.
"Despite the debt decline, we forecast Ronshine's leverage (ratio
of debt to EBITDA) will remain high at 8.6x-8.8x in 2021 and
7.3x-7.8x in 2022 due to lower-than-peer profitability."
Ronshine has good liquidity and quality project sell-through to
support its debt maturities.As of June 2021, the company had
sufficient unrestricted cash (RMB27.3 billion) to cover its bullet
maturities and is likely to generate operating cash flow of RMB3
billion to RMB4 billion in the second half of 2021, and RMB4
billion to RMB5 billion in 2022. The company may also further
control its land acquisitions to meet its refinancing needs.
Ronshine's key strength relates to its quality projects in
higher-tier cities, which provide good visibility in cash
generation and support its good liquidity position. S&P said, "We
expect the company will continue to achieve about 70% sell-through
on its sales launches, as well as 80%-82% in cash collection over
the next 12-18 months. The company also has minimal exposure to
trust financing, which we estimate at less than 3% of total debt."
S&P said, "Still, market volatility will weigh on Ronshine's
ability to refinance. While we believe the company will be able to
handle repayments, the margin of error is decreasing with its
deteriorated access to refinancing, which is highlighted by the
higher yields on its outstanding offshore senior notes. Ronshine
has been able to tap the domestic bond market but at a smaller
amount against its maturities. We believe the situation could stay
tough if regulations remain tight for developers, and Ronshine may
need to increasingly rely on internal cash and new borrowing to
service its debt."
After repaying US$592 million in senior notes and RMB2 billion in a
domestic bond issue in August, the company faces about RMB2.5
billion in onshore and offshore bond maturities or put options in
the remainder of 2021; and RMB6.7 billion in the first half of 2022
and RMB10 billion in the second half of 2022. Actual repayments
could be smaller as RMB7.1 billion of the company's RMB9.4 billion
in domestic bonds are put options, for which we believe the company
can negotiate with holders to adjust coupons.
S&P said, "The stable outlook reflects our view that Ronshine will
deliver strong sales, good cash collection, and control its land
investments, such that it maintains good ability to meet its
upcoming bond maturities and other debt obligations.
"We also believe the company's leverage will remain high as the
company's low project margins will only moderately improve over the
next two years. This is on the back of the company prioritizing
liquidity over margins in new land acquisitions.
"We may lower the rating if we believe Ronshine's ability to
service its upcoming bond maturities and other debt obligations is
weakening, as demonstrated by: (1) sizable depletion of cash
balance; (2) weaker sales performance and cash collections; or (3)
aggressive land acquisitions. An indicator would be its cash level
being unable to cover its short-term debt.
"We could also lower the rating if we Ronshine's debt-to-EBITDA
ratio stays above 10x, which could be due to a sharp decline in
cash generation from sales or an unexpected revenue slippage and
margin decline against our base case.
"We may raise the rating if Ronshine maintains a healthy debt
maturity profile after having repaid its debt come due. An
indicator would be a weighted average maturity of above two years.
At the same time, it will need to significantly improve its
leverage through higher revenue growth and stronger profitability
while it controls debt growth. The company's consolidated
debt-to-EBITDA ratio improving to below 6.5x and proportionately
consolidated leverage falling to about 6.0x could indicate such
leverage improvement."
=========
I N D I A
=========
AADHISHIVA ENTERPRISES: CARE Keeps D Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Aadhishiva
Enterprises (AE) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.35 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 21, 2020, placed
the rating(s) of AE under the 'issuer non-cooperating' category as
AE had failed to provide information for monitoring of the rating
and had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. AE continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 7, 2021, August 17, 2021 and August 27, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Aadhishiva Enterprises (AE) is a proprietorship concern established
by Mr. Prathap Chandran in July 2007. AE is engaged in trading of
imported cashews and is operating in 3 facilities in Kerala
(Nedumpana and Pooyappally in Kollam and Attingal in
Thiruvananthapuram). AE imports raw cashews from African countries
like Ivory Coast, Ghana, Tanzaniya, Benin etc. and once the goods
reaches the port (Tutucorin or Cochin), the goods are taken to the
processing units and undergo the process of borma (process of
heating the cashews kernels), Shelling, peeling, grading and
packing. AE has got a centralized packing unit in Kollam where the
packing is done based on customer requirements.
APEEJAY TEA: ICRA Lowers Rating on INR135cr LT Loan to D
--------------------------------------------------------
ICRA has downgraded the ratings of bank facilities of Apeejay Tea
Limited (ATL) to [ICRA]D/[ICRA]D from [ICRA]BB/[ICRA]A4. The
ratings continue to remain in the Issuer Not Cooperating category
owing to non-submission of no default declaration.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Fund-based- 135.00 Downgraded to [ICRA]D ISSUER
Bank Facilities NOT COOPERATING from
[ICRA]BB(Negative) ISSUER
NOT COOPERATING
LT-Fund-based- 412.00 Downgraded to [ICRA]D ISSUER
Term Loans NOT COOPERATING from
[ICRA]BB(Negative) ISSUER
NOT COOPERATING
ST-Fund-based- 33.75 Downgraded to [ICRA]D ISSUER
Bank Facilities NOT COOPERATING from [ICRA]A4
ISSUER NOT COOPERATING
LT/ST-Fund-based- 39.00 Downgraded to [ICRA]D/[ICRA]D
Bank Facilities ISSUER NOT COOPERATING from
[ICRA]BB(Negative)/[ICRA]A4
ISSUER NOT COOPERATING
LT/ST-Unallocated 38.25 Downgraded to [ICRA]D/[ICRA]D
ISSUER NOT COOPERATING from
[ICRA]BB(Negative)/[ICRA]A4
ISSUER NOT COOPERATING
Rationale
The revision of ratings factors in delays by ATL in meeting its
debt obligations in a timely manner. ICRA, in its earlier releases,
had highlighted the continued pressure on the liquidity position of
the company owing to sizeable interest and repayment obligations
due in FY2022 and also noted that ATL's debt coverage indicators
and liquidity position are likely to remain depressed in FY2022 and
the cash flows from operations are unlikely to be sufficient to
meet its debt service obligations, thus exposing the company to
refinancing risks.
Key rating drivers and their description
Credit strengths
* Established position of the company in the domestic bulk tea
industry: ATL is an established producer of bulk tea (in both CTC
and orthodox varieties), accounting for around 2% of India's tea
production. ATL's tea commands a premium over auction averages
because of its established position in the industry, superior
quality and increasing proportion of orthodox tea production. The
company also exports a portion of its production. Such exports (~7%
of revenues in FY2020), which are of superior quality, command a
healthy premium compared to the domestic auction averages.
* Focus on increasing share of orthodox teas to support
realizations: The company has augmented its orthodox tea production
in the recent years, which commands a significant premium over the
CTC variety of tea. Also, continued focus on improving the overall
quality of the produce, is likely to support the overall tea
realisation of the company, going forward.
Credit challenges
* Delay in debt-servicing: ATL has not met its debt obligation in a
timely manner. The tight liquidity position owing to its lossmaking
tea operations and significantly high debt repayment requirements
have led to the delay in its debt servicing.
* Weak financial risk profile: ATL had reported significant net
losses of around INR115.0 crore in FY2020. In FY2021, while the
company is estimated to report a slight profit at the operating
level, high interest expenses are estimated to result in
significant cash losses in FY2021 as well. In the current year, an
increase in wage rates, would result in a considerable increase in
costs for all the NI bulk tea players, including ATL. Any
significant reversal in price improvement of the last year would
lead to a deterioration in the financial performance of all
NI-based bulk tea companies including ATL. In addition, high
interest expenses are likely to keep ATL's net profitability under
pressure.
* Continued high external debt with considerable debt repayment
requirement relative to cash accruals stretch the liquidity
Position: ATL had continuously reported operating and cash losses
in the last five financial years. In FY2021, the net performance is
estimated to remain weak, adversely impacting the debt coverage
indicators and liquidity position of the company. ICRA notes that
the Group has infused funds/extended unsecured loans to support the
company's liquidity in the previous year. In the current year,
given the high debt quantum with sizeable interest and repayment
obligations, the overall credit metrics and liquidity position of
the company would continue to remain under pressure, exposing ATL
to refinancing risks.
* Risks associated with tea for being an agricultural commodity as
well as the inherent cyclicality of the fixed-cost intensive tea
industry: Tea production depends on agro-climatic conditions, which
subject it to agro-climatic risks. Moreover, tea estate costs are
primarily fixed with labour-related costs, which are independent of
the volume produced, accounting for around 60% of the production
cost. This leads to variability in profitability and cash flows of
bulk tea producers such as ATL. The company's comparatively lower
yield in kg/ha further accentuates the risks associated with the
fixed cost intensive nature of operations.
Liquidity position: Poor
The liquidity of ATL is Poor as evidenced by the delay in it
meeting its debt obligation. Significant operating losses incurred
over the years adversely impacted the liquidity position. Sizeable
interest and repayment obligations in the current year are likely
to keep the liquidity position significantly under pressure in the
near to medium term.
Rating sensitivities
Positive factors – The rating could be upgraded if the company is
able to timely service its debt obligations on a sustained basis.
Negative factors – Not applicable.
Apeejay Tea Limited is a part of the Kolkata-based Apeejay Group,
which in addition to tea has interests in shipping, hospitality,
real estate and retail. ATL carries out the bulk tea businesses of
the Group through its 17 gardens and operates the packet tea
business under Apeejay Typhoo brand. The overall operating profile,
however, is determined by the performance of the bulk tea
operations, which account for ~95% of its income.
AZURE POWER: Moody's Assigns Ba2 Rating to $414MM Sr. Unsec. Notes
------------------------------------------------------------------
Moody's Investors Service has assigned a definitive Ba2 rating to
Azure Power Energy Ltd's (APEL) US$414 million 3.575% senior
unsecured notes due August 2026.
The outlook is stable.
APEL will use the proceeds from the USD notes to refinance the
company's US$500 million senior notes due 2022 and to subscribe to
or lend the INR-denominated debt to be issued or borrowed by 16
restricted subsidiaries of Azure Power Global Limited (APGL) in the
restricted group (RG).
The restricted subsidiaries will use the INR proceeds primarily to
repay existing INR debt and related prepayment charges.
The US dollar senior notes are secured by a first-priority pledge
over Azure Power Energy's capital stock.
The Indian rupee debt issued by Azure RG is secured by (1) certain
movable and immovable assets of the restricted subsidiaries (2) 51%
share pledges, (3) rights under project documents, and (4)
first-priority exclusive charge by way of hypothecation over the
onshore debt payment account, the mandatory cash sweep account and
the onshore debt enforcement proceeds. The Indian rupee debt is
also cross-guaranteed by the restricted subsidiaries.
RATINGS RATIONALE
The Ba2 rating of the senior unsecured notes reflects the
underlying credit quality of the RG, given APEL's reliance on cash
flow from the RG's non-convertible debentures and external
commercial borrowing repayments to meet its own debt servicing
requirements.
Moody's analysis of the RG's underlying credit quality considers
(1) the diversity and operating track record of the RG's renewable
projects, (2) expectation of stable cash flow underpinned by
long-term fixed-tariff power purchase agreements (PPAs) during the
bond tenor (3) the RG's exposure to financially weak off-takers, 4)
moderate financial leverage and (5) experienced management and
committed shareholders.
About two-thirds of the RG's capacity is contracted to state-owned
distribution companies (DISCOMs), which typically have weak
standalone financial profiles. Nevertheless, Moody's considers the
RG's counterparty risk exposure to be manageable at the current
rating level, given (1) the rating agency's expectation of
continued support from the respective state governments for these
DISCOMs, (2) the diversity of the RG's asset portfolio, which
reduces exposure to individual off-takers and (3) about 34% of RG's
capacity is contracted with sovereign linked entities like NTPC
Limited (Baa3 negative) and Solar Energy Corporation of India Ltd.
The terms of the USD notes include a scheduled amortization and
mandatory cash sweep, which help to improve the financial profile
of the RG over the bond tenor.
The Ba2 rating of the notes also considers the hedging program
undertaken by APEL to manage US dollar/Indian rupee exchange rate
movements. This entails a full hedge for the coupon and a
combination of swaps and call spread hedge for the principal.
Moody's expects the RG to have moderate financial leverage, with
its funds from operations (FFO) to debt at around 7%-12% over
2022-26. This leverage level supports the RG's credit quality. The
group's FFO/debt will likely improve to the upper end of the range
over the term of the senior notes, on the back of scheduled debt
amortization and cash sweeps.
The RG faces manageable refinancing risk, considering (1) APGL's
alternative structures for refinancing, such as corporate bonds or
a modified restricted group, and (2) scheduled amortization and
cash sweeps equivalent to around 31% of the original principal.
The terms of the Indian rupee debt include a cap on the RG's total
indebtedness and limitations on dividends and other payment types
to its parent and affiliates, which reduces the risk of cash
leakage.
In terms of environmental, social and governance (ESG) factors, the
RG benefits from positive macroeconomic and sectoral trends in
renewable energy and has low exposure to carbon transition risk.
The group's renewable energy business is aligned with India's
target to reduce its carbon footprint to meet nationally determined
contributions.
RATIONALE FOR STABLE OUTLOOK
The stable outlook reflects Moody's expectation of stable cash flow
from the RG's long-term PPAs and the absence of construction risk
for the group's portfolio of assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
An upgrade of the rating is unlikely, given the limited
opportunities available to the RG to meaningfully increase its
revenue, both organically and on a sustained basis. Over time,
Moody's could upgrade the rating if the RG's FFO/debt exceeds 10%
on a sustained basis.
Moody's could downgrade the rating if (1) the RG's operating
performance weakens as a result of sustained liquidity stress or if
its FFO/debt declines below 5% on a sustained basis, or (2) its
off-takers' credit quality declines to an extent that pressures the
RG's standalone credit quality.
The principal methodology used in this rating was Power Generation
Projects Methodology published in June 2021.
Azure Power Energy Ltd is a special purpose vehicle that was
incorporated in Mauritius in 2017 as a wholly owned subsidiary of
Azure Power Global Limited (APGL). The restricted subsidiaries
under the USD notes issuance are wholly or majority owned
ultimately by APGL. The restricted subsidiaries operate solar power
plants with a total capacity of 611 MW as of July 2021.
Listed on the New York Stock Exchange, APGL is a leading solar
power company in India, with a total capacity of 6,995 MW
(including 853 MW under construction and 4,000 MW committed solar
plants) across 23 states in India as of July 2021. APGL is 50.3%
owned by Caisse de depot et placement du Quebec (CDPQ, Aaa stable)
and the remainder of the company is owned by other shareholders.
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 under
Term Loan '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.
BRS ENTERPRISES: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: M/s. BRS Enterprises & Trading Limited
Shop No. 2, Beside Nuzen Hair Oil
Police Station Road, IDA
Bollaram, Jinnaram Md Bollaram
Telengana 502325
Insolvency Commencement Date: August 5, 2021
Court: National Company Law Tribunal, Coimbatore Bench
Estimated date of closure of
insolvency resolution process: February 1, 2022
(180 days from commencement)
Insolvency professional: CS Bhaskar B
Interim Resolution
Professional: CS Bhaskar B
4/447A, 7th Street
Aruna Nagar, K. Vadamadurai
PO, Coimbatore 641017
E-mail: bhasja@gmail.com
Last date for
submission of claims: August 25, 2021
CICB-CHEMICON PVT: ICRA Hikes Rating on INR6cr Loan to B
--------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Cicb-Chemicon Pvt. Ltd. (CCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based: 6.00 [ICRA]B(Stable); upgraded from
Working capital [ICRA]B-(Stable)
facilities
Non-fund based 8.00 [ICRA]A4; reaffirmed
facilities
Rationale
The rating upgrade of CCPL factors in an improvement in the order
book position to INR15.1 crore as of July 2021 on the back of major
orders received from reputed clients, which provide medium term
revenue visibility. Besides, CCPL made improvement in profit
margins in FY2020 and FY2021 compared to losses in the past. The
rating continues to factor in the long track record of promoters in
manufacturing of heat exchangers, pressure vessels, CO2 injection,
storage systems, air and gas dryers and other process equipment and
the company's reputed clientele.
The ratings, however, remain constrained by CCPL's small scale of
operations and intense competition from established players. The
ratings are also constrained by the high working capital-intensive
nature of operations, as reflected in stretched receivables and
high inventory holdings. Besides, the financial profile remains
weak, reflected by a low net worth base and weak debt coverage
metrics. The profits are susceptible to volatility in raw material
prices, although immediate procurement of raw materials on receipt
of order protects its profitability to a large extent.
The Stable outlook assigned to the company reflects ICRA's
expectation that CCPL would continue to maintain its credit profile
with a comfortable order book position and expected order
execution.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters: CCPL was established in 1971
as Chemical Industries Consulting Bureau to provide consultancy
services to chemical industries. In 1979, it was incorporated as a
private limited company called CICB Chemicon Pvt. Ltd. The
promoters of the company have more than four decades of experience
in manufacturing of heat exchanger,
pressure vessel and CO2 compressor.
* Established relationship with customers: The company has an
established relationship with reputed customers, resulting in
repeat orders over the years. The company executed orders for Tata
Steel Limited, Ingersoll Rand India Limited, Indian Oil Corporation
Limited etc. in the past and has orders from SEW, Mannesmann, Suez
etc at present. The unexecuted order book of INR15.1 crore as of
July 2021 provides medium-term revenue visibility.
Credit challenges
* Small scale of operations and weak financial profile: CCPL's
overall scale of operations remained small, with revenue of
INR9.2-9.8 crore in FY2020 and FY2021. Further, its small scale
exposes the company to the risk of business downturn and its
ability to absorb a temporary disruption and leverage fixed costs.
CCPL reported operating profits in FY2020 and FY2021 after
incurring losses for four years till FY2019. However, the return
and coverage metrics have remained weak, as reflected in a gearing
of 4.1 times as of March 31, 2021, DSCR and Debt/OPBDIT of 1.4
times and 8.9 times, respectively in FY2021. However, CCPL's
revenue is expected to improve with improved order book position.
* High working capital intensity of operations: The company
operates in a high working capital-intensive business with a
manufacturing cycle of 5-10 months and has to keep an inventory for
the same, considering the delivery lead time for raw materials. The
company has sizeable receivable outstanding for more than six
months and any write-offs could further deteriorate CCPL's
financial profile.
* Vulnerable to fluctuation in raw material prices: CCPL's profit
margins remain susceptible to adverse movement in raw material
prices as the ability to pass on any upward movement in cost to the
customers remains limited due to the fixed price nature of
equipment supply contracts. However, immediate procurement of raw
materials on receipt of order protects its profitability to a large
extent.
* Intense competition from established players: The orders are
awarded by the clientele through open tendering process. The
process equipment industry is highly fragmented, which exposes the
company to intense competition and may induce pricing pressure.
Liquidity position: Stretched
The company's liquidity position is stretched as evident from its
high average working capital utilization of 80% of the sanctioned
limits of INR6 crore between March 2020 and July 2021 owing to high
debtors and inventory days. Further, the net cash accruals are
expected to tightly match the debt repayments in FY2022 (repayment
obligation of INR1.09 crore). Going forward, the company's ability
to efficiently recover its receivables and improve its working
capital cycle and liquidity will remain crucial from the credit
perspective.
Rating sensitivities
Positive factors – ICRA could upgrade the ratings if the company
is able to improve its order book position, resulting in a
substantial growth in revenue and profitability along with a better
liquidity position.
Negative factors – Pressure on the ratings could arise if there
is a significant decline in revenues and profitability, resulting
in operating losses or deterioration in its liquidity position.
Incorporated in 1971, Chemical Industries Consulting Bureau was
formed to provide consultancy services to chemical industries. In
1979, it was incorporated as a private limited company,
CICB-Chemicon Pvt. Ltd. The company primarily manufactures
engineering goods, including compressors, heat exchangers, pressure
vessels, air and gas dryers and provides complete turnkey solutions
from installation of the product to after-sale services. It is a
project-based company having a manufacturing unit in Bangalore
(recently shifted from Mangalore) with a capacity of 100-150 tonnes
a year.
COMPARE POLICY: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Compare Policy Insurance Web Aggregators Private Limted
Registered office:
Ground Floor, B-50 & New No. B-273
New Ashok Nagar
New Delhi 110096
Corporate office:
First Floor, D-56
Sector-2
Noida-201301
Insolvency Commencement Date: September 6, 2021
Court: National Company Law Tribunal, Bench-IV, New Delhi
Estimated date of closure of
insolvency resolution process: March 5, 2022
(180 days from commencement)
Insolvency professional: Santanu Kumar Samanta
Interim Resolution
Professional: Santanu Kumar Samanta
C-170, Golf View Apartments
Saket, New Delhi 110017
E-mail: santanukumar@yahoo.com
cirp.comparepolicy@gmail.com
Last date for
submission of claims: September 24, 2021
DWARKA TEXTILE: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Dwarka
Textile Park (DTP) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.60 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 31, 2020, placed the
rating(s) of DTP under the 'issuer non-cooperating' category as DTP
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. DTP continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 16, 2021, June 26, 2021, July 6, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
DTP was established in the year 2014 and is promoted by Mr. Deepak
Samandariya and Mr. Gokul Marda. The firm is in process of setting
up a terry towel manufacturing unit having four sections for cone
dyeing, fabric dyeing, sizing and printing of the yarn. The
manufacturing facility of the firm is located at Solapur with a
proposed installed capacity of 3,12,000 kg for cone dyeing;
9,36,000 kg for fabric dyeing; 12,48,000 kg for sizing section;
4,68,000 kg for printing section. The total cost of the project is
estimated at INR19.75 crore.
EURO INDIA: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Euro India Cylinders Limited
Registered office:
B/301, Sun Vision Classic
FP No. 14, Hanuman Road
Vile Parle (East)
Mumbai 400057
Maharashtra, India
Factory:
Plot No. 588-617, New Area
Kandla Special Economic Zone
Gandhidham (Kutch) 370230
Gujarat, India
Insolvency Commencement Date: September 7, 2021
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: March 6, 2022
(180 days from commencement)
Insolvency professional: CS Manish Baldeva
Interim Resolution
Professional: CS Manish Baldeva
G-02, Salasar Jyot CHS Ltd.
Bageshree Park, Shivsena Gali
Station Road
Bhayander (West) 401101
Thane, Maharashtra
India
E-mail: manish@csmanishb.in
eurocyl.irp@gmail.com
Last date for
submission of claims: September 23, 2021
GANDHI ENTERPRISES: ICRA Keeps D Debt Rating 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 limits 50.95 [ICRA]D/[ICRA]D ISSUER NOT
COOPERATING; Rating
Continues to remain under
'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
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.
GDJD EXPORTS: ICRA Reaffirms B+ Rating on INR8.0cr Cash Loan
------------------------------------------------------------
ICRA has reaffirmed the ratings on certain bank facilities of GDJD
Exports (GDJD), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 8.00 [ICRA]B+ (Stable); Reaffirmed
Fund-based
Cash Credit
Short-term
Unallocated 1.40 [ICRA]A4; Reaffirmed
Rationale
The ratings continue to be constrained by GDJD modest financial
profile, characterized by its stretched coverage indicators as a
result of its thin profit margins. The company's margins are low
because of its trading operations and intense competition
prevailing in the yarn trading segment. Besides, its capital
structure remains leveraged, characterized by total debt/tangible
net-worth of 2.1 times as on March 31, 2021, because of the
company's modest net worth, as the partner withdrew capital
continuously, and external borrowings were relatively higher. The
ratings continue to consider the susceptibility of the firm's
profitability to foreign exchange fluctuations on the unhedged
exposure. The ratings, nevertheless, continue to derive comfort
from the firm's long operational track record, the promoters'
extensive experience in the yarn trading segment and its
long-standing relationship with its key suppliers. The ratings
positively factor in the firm's diversified customer base, which
mitigates the risk of customer concentration and ensures revenue
stability, as seen in the past.
The Stable outlook reflects ICRA's expectations that GDJD will
continue to benefit from the extensive experience of its partners,
its diversified customer base and its long association with its key
suppliers.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters: GDJD's key promoter, Mr.
Bharat Kumar Shah, has extensive experience of over two decades in
the textile segment, especially in yarn trading. Besides, GDJD,
established in 1990, has a long operational track record in the
segment.
* Long association with key suppliers and diversified customer
profile: The firm has over two decades of association with its key
suppliers, which ensures timely availability of products and
favorable credit terms. Its customer base remains fairly
diversified, with the top-five customers accounting for 43% and 48%
of its revenues in FY2020 and FY2021, respectively. Although the
customer churn rate has been relatively high, the firm has been
able to compensate for the loss by expanding to new geographies and
acquiring new customers. The firm has recently entered Singapore
and Taiwan, among others, and expects stable business volumes from
the aforesaid regions, which is likely to support its near-term
revenue growth.
Credit challenges
* Modest financial profile characterized by stretched
capitalization and coverage indicators: Given the highly fragmented
nature of the yarn trading segment, the firm faces intense
competition, which coupled with low value-add operations and
product differentiation, restricts its profitability. The thin
profit margins lead to stretched coverage indicators—interest
coverage, debt service coverage ratio and total debt/OPBDITA of 1.1
times, 1.2 times and 6.5 times, respectively, in FY2021 (as per
provisional financials) as compared to 1.6 times, 1.1 times and
10.6 times in FY2020. Besides, its capital structure remains
leveraged with a gearing of 2.1 times as of March 31, 2021, owing
to its modest net-worth position of INR4.9 crore as of March 31,
2021 and its reliance on external borrowings is high. The firm's
net-worth continue to be vulnerable to the risk of capital
withdrawals associated with its partnership nature.
* Susceptibility of margins to foreign exchange fluctuations: The
firm derives its entire revenues from exports and its receivables
are largely denominated in foreign currency. Although it partially
hedges its foreign exchange exposure, its profitability remains
susceptible to adverse foreign exchange fluctuations on the
unhedged exposure.
Liquidity position: Stretched
The firm's liquidity position remains stretched, characterized by
limited availability of buffer in its working capital facilities
and moderate free cash balance. Its working capital utilization was
high, the average utilization was 83% of the sanctioned limits
(INR8.0 crore of packing credit facility) from 2020 to March 2021.
Rating sensitivities
Positive factors – ICRA could upgrade the ratings if the firm is
able to improve its debt protection metrics and capital structure
on a sustainable basis.
Negative factors – Negative pressure on ratings could arise if
the firm's debt protection metrics and liquidity worsen and/or if
the company incurs losses at a net level on a sustained basis.
Established in 1990, GDJD trades various varieties of yarn such as
cotton yarn, polycot yarn, polyester yarn and viscose yarn, along
with small quantity of fabrics. The firm procures raw material from
spinning mills across India and supplies the yarn to customers in
several overseas markets, with Singapore, Taiwan and Bangladesh as
key export destinations. GDJD is managed by the three
partners—Mr. Bharat Kumar Shah, Mrs. Hema Bharat Shah and Mr.
Tapan Tanmay B Shah.
GIRDHARILAL SUGAR: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Girdharilal Sugar and Allied Industries Limited
45/47-A, Industrial Area No. 1
A.B. Road Dewas
MP 455001
IN
Insolvency Commencement Date: August 17, 2021
Court: National Company Law Tribunal, Indore Bench
Estimated date of closure of
insolvency resolution process: February 13, 2022
Insolvency professional: Ashish Kanodia
Interim Resolution
Professional: Ashish Kanodia
5, Hetal Apt, 1st Floor
Above ArtiScan Centre
N.S. Road, Mulund (W)
Mumbai City
Maharashtra 400080
E-mail: ashishkanodia@abnjca.com
- and -
JMVD Legal, 402
Asha Dilpasand Imperial
South Tukoganj Indore
Opposite High Court Gate No. 3
Indore M.P.
E-mail: irp.girdharilal@gmail.com
Last date for
submission of claims: September 16, 2021
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 COOPERATING;
Fund Based/ Rating continues to remain under
CC 'Issuer Not Cooperating'
Category
Short Term– 3.75 [ICRA]D ISSUER NOT COOPERATING;
Non Fund Based 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.
HAND IN HAND: ICRA Withdraws B+ Rating on INR15cr Term Loan
-----------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Hand in Hand India (HIHI) at the request of the company and in
accordance with ICRA's policy on withdrawal and suspension.
However, ICRA does not have information to suggest that the credit
risk has changed since the time the rating was last reviewed. The
Key Rating Drivers, Liquidity Position, Rating Sensitivities, have
not been captured as the related instruments are being withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based–
Term Loan 15.00 [ICRA]B+(Stable); Withdrawn
HIHI is a part of the Hand in Hand Group, established as a public
charitable trust in November 2002. Dr. Kalpana Sankar and Mr. Percy
Bernevik are the co-founders of HIHI and Dr. Kalpana Sankar is the
Managing Trustee. HIHI is currently engaged in activities for women
empowerment, microfinance, child labor elimination, village
upliftment and natural resource management. The trust's operations
are spread across Tamil Nadu, Madhya Pradesh and Rajasthan. As of
September 30, 2019, HIHI had a modest microfinance portfolio of
INR45.8 crore catering to 72,223 members and 24,426 active
borrowers through 29 branches across eight districts. HIHI reported
a net surplus of INR0.13 crore on an asset base of INR85.7 crore in
FY2019 against a net surplus of INR0.12 crore on an asset base of
INR102.3 crore in FY2018.
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 COOPERATING;
Fund Based/ Rating continues to remain under
CC '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.
HARPREET COLOR: ICRA Lowers Rating on INR14.40cr LT Loan to D
-------------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of
Harpreet Color Vision (P) Limited (HCV), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 14.40 [ICRA]D; Downgraded from
Fund Based [ICRA]BB-(Negative)
limits
Rationale
The rating downgrade considers the recent instances of
overutilization of the working capital facility for more than 30
days owing to HCV constrained liquidity position due to the impact
of the pandemic on operations and high working capital intensity
owing to high inventory and stretched receivables. The rating is
also constrained by HCV's weak financial profile, characterized by
its small scale of operations, which were severely impacted due to
the Covid19 pandemic. Its gearing stood high at 4.6 times, and
coverage indicators were stretched with an interest coverage ratio
of 0.3 times and Total debt/OPBDITA of 31.2 times in FY2021. The
rating also factors in the intense competition in the industry that
limits HCV's pricing flexibility and the risk of technology
obsolescence, which requires continuous upgrade of processes and
products. However, extensive experience of the promoters in the
consumer durable industry provides comfort.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters: The promoters have over two
decades of experience in the consumer durable industry. Even before
the incorporation of HCV, the promoters were involved in marketing
of TVs.
Credit challenges
* Instances of irregularity in debt servicing: There have been
overutilisation of HCV's working capital facilities in May and June
2021, which remained for more than 30 days. HCV's liquidity
position was severely constrained as the pandemic had impacted its
operations. Besides, HCV has high working capital intensity owing
to high inventory and stretched receivables. As a result, the
company was not able to service interest on overdraft facilities,
leading to continuous overutilization for more than 30 days.
* Small scale of operations, impact of the Covid-19 pandemic on
revenues: HCV's scale of operations has been small with revenues of
INR24.1 crore in FY2021. HCV's revenues declined significantly by
52% in FY2021 due to the Covid-19 pandemic. The revenues were again
impacted by the second wave of the Covid-19 in Q1 FY2022. However,
the company is expecting an improvement in revenues from H2 FY2022,
anticipating better demand in the television segment post the
second wave, along with the introduction of new product range which
includes home theaters, projectors and towers.
* Weak financial profile: HCV has a weak financial profile,
characterized by a high gearing of 4.6 times, stretched coverage
indicators with an interest coverage ratio of 0.3 times and Total
debt/OPBDITA of 31.2 times in FY2021. Besides, high working capital
intensity in the business due to high receivable and inventory
constraints the liquidity position of the company.
* Intense competition and risk of technological obsolescence
necessitate continuous upgradation of processes and products: The
company faces stiff competition from other unorganized players and
Chinese imports, which limit its pricing flexibility and bargaining
power with customers, thereby putting pressure on its revenues and
margins. HCV operates in a price-sensitive market, wherein any
material price revision may affect its revenues and margins. The
electronic products industry is also characterized by continuous
product and process innovation as well as rapid adoption of new
technology. Given the risk of technological obsolescence, the
industry players are required to undertake continuous upgradation
to remain competitive.
Liquidity position: Poor
The company's liquidity position is poor, given the marginal
cushion available in the working capital limits, as reflected in
high utilization of the working capital limit along with continuous
overutilization in the past. Given the working capital intensive
nature of the business and the impact of the ongoing pandemic on
HCV's revenues and profitability, its liquidity position is likely
to remain constrained in the near term. However, the company had
recently received sanction of additional GECL loan of INR1.44
crore, which can support the liquidity to some extent.
Rating sensitivities
Positive factors – The rating could be upgraded if the company
demonstrates a track record of regular debt servicing.
Incorporated in 1998, HCV assembles different variants of
televisions under its own brand, Futec. The company is promoted by
Mr. H. S. Malhotra and Mr. Harpreet Singh, who have two decades of
experience in manufacturing and marketing of TVs. Till FY2016, the
company mainly sold cathode ray tube (CRT) TVs. However, it has now
started making LED TVs as well. Moreover, it imports speakers from
China and sells the same under its own brand. Its production
facility is in Noida. The main market of the products includes
tier-II and tier-III cities in Uttar Pradesh, Uttarakhand, Haryana,
Rajasthan, Punjab, Bihar, and a few pockets of Delhi-NCR.
IIFL FINANCE: Fitch Affirms 'B+' LT IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) on IIFL Finance Limited at 'B+' with a Stable Outlook. The
ratings on the company's medium-term note (MTN) programme and
senior debt under the programme have also been affirmed.
KEY RATING DRIVERS
IDR
IIFL Finance's rating is driven by its standalone credit profile
and takes into account the company's moderate domestic franchise,
diversified loan book and improved loss-absorption buffers set
against a somewhat opportunistic strategic record. The rating also
reflects Fitch's view of persistent impairment risk as the Covid-19
pandemic continues to pressure IIFL Finance's higher-risk loan
segments, as well as a more confidence-sensitive funding structure
comprised predominantly of secured, wholesale borrowing.
Activity appears to be rebounding quickly after a severe second
wave of coronavirus cases. Fitch expects a robust sequential
recovery for the remainder of the fiscal year ending March 2022
(FY22) as local vaccinations gather pace. However, the pandemic's
unpredictable nature continues to pose downside risks to Fitch's
economic forecasts.
Fitch sees ongoing downside risk to asset quality, with further
impairments expected due to IIFL Finance's exposure to higher-risk
real-estate development, SMEs and microfinance; around 40% of
on-balance sheet loans and securities investments in 1QFY22. The
reported non-performing asset (NPA) ratio of 2.2% at end-1QFY22 was
only modestly higher than the 2.0% at end-FY21, but further
deterioration is likely from the significant 13% of gross loans
classified as Stage 2, and real-estate loans where a considerable
proportion of projects face completion delays. These are likely to
take time to resolve.
Meanwhile, gold-backed loans expanded rapidly across the industry
as customers turned to this secured form of borrowing - which is
perceived by lenders to be lower risk - to access additional
liquidity over the past 12-18 months, aided by a rise in gold
prices. The company expanded gold-backed loans by almost 40% yoy to
reach around 31% of loans under management by 1QFY22. This pace of
growth may pressure risk-control resources, while increasing
susceptibility to a plunge in gold prices. IIFL Finance's adequate
collateral policies, backed by the regulator's 75% loan-to-value
ceiling, mitigates the risk in such a scenario.
Fitch expects credit costs to remain elevated in the near term,
weighing on profitability. Nonetheless, profitability should be
supported by sustained loan growth, despite potential margin
pressure should current low interest rates be lifted over the
coming one to two years. Loan loss reserves of about 4.1% of gross
loans and the standalone regulatory Tier 1 ratio of 17.8% at
end-1QFY22 (end-FY20: 3.4% and 13.1%, respectively) should form a
moderate buffer against impairment losses. Fitch also expects
continued profit generation and off-balance sheet funding to
support broadly steady balance-sheet leverage (end-FY21
debt/tangible equity: 6.0x), though at the higher end of rated
peers'.
Fitch views IIFL Finance's funding and liquidity profile as weaker
than that of rated peers. Funding access has been adequate, despite
the recent coronavirus surge, partly aided by supportive monetary
policy. Positive short-term asset-liability maturity gaps help to
support the liquidity profile, along with the contingent liquidity
buffer. However, there is a greater reliance on specific
encumbrance of lower-risk gold and home loans to raise funds, and
the liquidity buffer is dependent on continued access to approved
but undrawn bank lines.
MTN PROGRAMME AND SENIOR SECURED DEBT
IIFL Finance's MTN programme and foreign-currency senior secured
notes issued under the programme are rated at the same level as its
Long-Term Foreign-Currency IDR. Indian non-bank financial
institution (NBFI) borrowings are typically secured and Fitch
believes that non-payment of the senior secured debt would best
reflect the entity's uncured failure. NBFIs can issue unsecured
debt in the overseas market, but such debt is likely to constitute
a small portion of their funding and thus cannot be viewed as the
primary financial obligation.
The senior secured debt carries a Recovery Rating of 'RR4'. This
reflects Fitch's expectation of 'Average' recovery prospects in the
event of default, in accordance with Fitch's criteria for entities
with a Long-Term IDR of 'B+' or below.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
IDR
-- The ratings are unlikely to be upgraded in the near term in
light of the ongoing risks to the economic outlook and IIFL
Finance's asset quality. Further out, a steadier, lower-risk
loan mix, more diverse funding profile and stronger contingent
liquidity coverage comprised of high-quality liquid assets
would be positive for the credit profile - as long as the
operating environment and IIFL Finance's other credit metrics
remain consistent with a higher rating.
MTN PROGRAMME AND SENIOR SECURED DEBT
Any upgrade of IIFL Finance's Long-Term Foreign-Currency IDR will
lead to similar action on its MTN programme and senior secured
debt. There is no upside to the Recovery Rating as it is already at
the highest level possible for an issuer in India.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
IDR
-- A severe deterioration in asset quality resulting in weakened
short-term liquidity and reduced funding access would lead to
negative rating action. The ratings may also be downgraded if
the gross Stage 3 and restructured loan ratio were to exceed
7.0%, debt/tangible equity were to rise above 7.0x or the
liquidity buffer were to fall below three months of upcoming
debt repayments without a clear and timely path to
improvement.
MTN PROGRAMME AND SENIOR SECURED DEBT
The MTN programme and senior secured notes would be downgraded in
the event of a downgrade of IIFL Finance's Long-Term
Foreign-Currency IDR, or if Fitch believes recovery prospects on
the senior secured debt are likely to weaken to below 30%. The
Recovery Rating will be revised to 'RR5' in this scenario.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ISSUER PROFILE
IIFL Finance is a non-deposit-taking non-bank financing company in
India, with assets under management of roughly USD6 billion at
end-March 2021. Incorporated in 2004, it is part of the broader
India Infoline group, which encompasses securities and
asset-management businesses housed under separate entities.
ESG CONSIDERATIONS
IIFL Finance has an ESG Relevance Score of '3' for Customer
Welfare, compared with the standard score of '2' for the finance
and leasing sector. This reflects the company's retail-oriented
business model, which exposes it to risks around fair lending
practices and pricing transparency as well as repossession,
foreclosure and collection practices. Aggressive practices in these
areas may subject the company to legal, regulatory and reputational
risk that may weaken its credit profile. The score reflects Fitch's
view that these risks are adequately managed by the company and
have a low impact on its credit profile at present.
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.
JET AIRWAYS: Defers Fresh Take-Off Plans for the Fourth Time
------------------------------------------------------------
The Economic Times of India reports that the new owners of Jet
Airways have deferred the commencement of its operations for the
fourth time in a year, even as the airline continues to be trapped
in legal wrangles with lenders and employees.
In a press release, they said Jet, India's oldest surviving private
carrier, would start operations between January and March next
year, ET relays.
ET says the Jalan Kalrock Consortium (JKC) that acquired the
bankrupt airline had initially planned to resume its operations in
the summer of 2021, the schedule for which, according to the
country's aviation regulator, starts on the last Sunday of March.
One of the owners, Dubai-based businessman Murari Lal Jalan, had
said it would start in July 2021, ET relates. Later, the company's
court-appointed resolution professional reportedly said the airline
would start flying by December 2021. London's Kalrock Capital is
the other partner in the consortium.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited was one of
India's top airlines founded by Naresh Goyal. It provided
passenger and cargo air transportation services as well aircraft
leasing services. It operated flights to 66 destinations in India
and international countries.
Jet Airways on April 17, 2019, halted all flight operations after
its lenders rejected its plea for emergency funds.
On June 20, 2019, the National Company Law Tribunal (NCLT), Mumbai
Bench, accepted an insolvency petition against Jet Airways filed by
its creditors as they attempt to recover some of their dues.
Ashish Chhawchharia of Grant Thornton India has been named as the
resolution professional in the case. Law firm Cyril Amarchand
Mangaldas will represent the interests of the lenders' consortium,
according to a Reuters report.
Creditors have filed claims worth INR30,907 crore, according to
Financial Express. The RP has so far admitted claims worth over
INR14,000 crore.
Jet Airways would be acquired by an investor consortium under a
multi-million dollar resolution plan approved by the carrier's
creditors on Oct. 17, 2020.
KERALA INFRASTRUCTURE: Fitch Affirms 'BB' LT IDRs, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Kerala Infrastructure Investment Fund
Board's (KIIFB) Long-Term Foreign- and Local-Currency Issuer
Default Ratings (IDR) at 'BB'. The Outlook is Stable.
Fitch has also affirmed KIIFB's INR50.0 billion medium-term note
(MTN) programme and the INR21.5 billion 9.723% senior secured notes
due 2024 under the programme at 'BB'. The notes, issued by KIIFB
directly, are unconditionally and irrevocably guaranteed by India's
State of Kerala (BB/Stable) acting through the Finance Department
of Kerala.
KEY RATING DRIVERS
'Very Strong' Status, Ownership, Control: KIIFB is a statutory body
set up by the Government of Kerala (GoK) under the Kerala
Infrastructure Investment Fund Act, 1999 (the Act). It has a
special legal status whereby its liabilities are automatically
transferred to the state in a default.
KIIFB follows the GoK's plan to finance and implement various
infrastructure projects and its board consists of existing and
former government officers as well as independent members. In
addition, a fund trustee and advisory commission acts as KIIFB's
trustee to ensure there is no diversion of funds.
'Very Strong' Support Record: The state government is statutorily
mandated to guarantee the payment of principal and interest of any
funds that KIIFB proposes to raise. In addition, the state
government has created a dedicated ringfenced fund to help KIIFB's
debt servicing. The fund draws on the entire petroleum cess and a
progressive step-up share of up to 50% of the motor-vehicle tax
collected by the state.
'Strong' Socio-Political Default Implications: Fitch's assessment
reflects KIIFB's designated role as an exclusive financing vehicle
for critical infrastructure-development projects. The projects span
various public sectors, including transportation and urban
infrastructure development, power generation, agriculture,
education and healthcare. The development of these sectors is
crucial to improve the state's living standards and for its
sustainable economic growth.
'Very Strong' Financial Default Implications: KIIFB is a proxy
financing platform for large-scale and capital-intensive state
projects. KIIFB had approved projects with total investment
exceeding INR630 billion as of end-July 2021 and had made project
disbursements of around INR129 billion. Fitch regards KIIFB's
creditworthiness as directly linked to that of the GoK, with the
direct guarantee embedded in the legal portion of the Act. KIIFB's
insolvency would directly affect the GoK's credibility.
DERIVATION SUMMARY
Under Fitch's Government-Related Entities (GRE) Rating Criteria,
KIIFB's GRE support score is assessed at 50 points, reflecting a
combination of a 'Very Strong' assessment for status, ownership,
control and support record and financial implications of default,
and 'Strong' socio-political implications of default. In addition,
KIIFB's debt is 100% guaranteed by the GoK, which leads to its
ratings being equalised with those of Kerala, irrespective of other
factors' assessments.
Fitch does not assess KIIFB's Standalone Credit Profile (SCP), as
Fitch believes the SCP is not meaningful to the IDRs. KIIFB acts
mainly as a financing platform, raising debt to fund infrastructure
projects on behalf of Kerala. KIIFB's IDRs are mainly supported by
the strong credit support from its sponsor, Kerala.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade of Fitch's assessment of the creditworthiness of
Kerala may trigger a positive rating action on KIIFB.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A significant weakening of KIIFB's strategic importance to the
state, dilution of the state government's shareholding and/or
reduced state government support, may result in a downgrade;
-- A downgrade may also stem from weaker fiscal performance or
increased indebtedness of Kerala, leading to a deterioration
in its creditworthiness.
Any rating action on KIIFB's IDRs would result in a similar action
on the ratings of the MTN programme and the drawdowns.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ISSUER PROFILE
KIIFB was founded in November 1999. The Act was amended in 2016,
under which KIIFB was empowered to raise money through financial
instruments approved by the Securities and Exchange Board of India
and the Reserve Bank of India, to accelerate the state's
infrastructure investment.
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.
MAGUS METAL: ICRA Keeps D Ratings in Not Cooperating Category
-------------------------------------------------------------
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– 1.90 [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.
MAHADEV COLD: CARE Lowers Rating on INR8.0cr LT Loan to B-
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Mahadev Cold Storage (MCS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
To remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 6, 2020, placed the
rating(s) of MCS under the 'issuer non-cooperating' category as MCS
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. MCS continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 22, 2021, July 2, 2021, July 12, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of non-availability of
requisite information.
Aligarh (Uttar Pradesh) based Mahadev Cold Storage (MCS) a
partnership firm was incorporated in 2007 by Shri Indra Pal Singh,
Smt. Manju Devi, Smt. Kalpana Tiwari, Shri Varun Kumar Rathore,
Shri Arun Kumar Rathore and Shri Pushkar Kumar Rathore. MCS is
engaged in renting of its cold storage facility for potatoes to the
local farmers in Aligarh with multi chambers.
MANAPPURAM FINANCE: Fitch Affirms 'BB-' LT IDRs, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed India-based Manappuram Finance Limited's
(MFIN) Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'BB-'. The Outlook is Stable.
KEY RATING DRIVERS
IDRS
MFIN's ratings reflect its moderate franchise in niche gold-backed
financing, which constitutes 67% of the consolidated portfolio and
underpins its typically steady asset quality due to the security of
liquid gold collateral, its liquid balance sheet due to the
short-tenor nature of gold loans, resilient access to funding as
well as satisfactory leverage. This is balanced against a shifting
business model that reflects a higher appetite for risk, and a
history of regulatory compliance findings.
MFIN has pursued higher growth in the previous four years in
riskier segments, such as microfinance, low-cost housing and auto
loans. This has slowed in the past few quarters as MFIN refocused
on lower-risk gold loans due to economic uncertainty. However,
Fitch believes the company may look to gain exposure to these
segments again in the medium term with an improving economic
environment. Fitch views rapid growth outside MFIN's core
competencies as a sign of a higher risk appetite.
A rising proportion of non-gold loans could increase asset quality
risks in the medium to long term. Even so, gold loans formed the
bulk of the consolidated portfolio at end-June 2021, underpinning
MFIN's steady asset quality. This is due to the security of liquid
gold collateral, which can be auctioned fairly reliably in the
event of delinquency. This was demonstrated by MFIN during 1QFY22
as gold prices declined amid a curtailed economic activity leading
to borrowers' stress.
MFIN's gold-backed loans expanded rapidly during the first half of
the financial year ended March 2021 (FY21) as customers turned to
this secured form of borrowing, which lenders perceive as lower in
risk, to access additional liquidity - aided by a rise in gold
prices. This raises MFIN's susceptibility to a sharp fall in gold
prices. However, a regulatory loan/value ceiling of 75% and
standardised valuation and auctioning procedures provide a buffer
against gold-price falls.
MFIN's business model benefits from high and stable yields, which
is characteristic of lenders with a mostly rural borrower profile.
The healthy net interest margin underpins its wide pretax profit of
7.8% of assets in 1QFY22 (7.6% in FY21). A rising mix of non-gold
loans, which tend to earn lower risk-adjusted returns, may temper
profitability - unless the company can preserve underwriting
quality and capture sufficient scale and diversification benefits
to offset this pressure as it expands.
On the qualitative aspects, Fitch believes MFIN carries greater
key-person risk due to the significant involvement of the founder.
This, along with a history of compliance lapses, suggest greater
governance risks relative to higher-rated peers, although MFIN has
strengthened its practices in recent years and continues to do so.
MFIN is mostly wholesale-funded but has resilient access to funding
due to lender confidence in its gold-lending portfolio. Its funding
sources are reasonably diversified - bank loans form 44% of the
total borrowings, while non-convertible debentures, commercial
paper and foreign borrowings form the balance. MFIN's
asset-liability profile is adequately matched, supported by its
short-tenor gold loans. Faster growth in long-tenor products could
change this over time, although MFIN plans to maintain a
well-matched asset and liability management profile by increasing
its liability tenor by replacing short-tenor funding with
long-tenor borrowings.
MFIN's debt/tangible equity of 2.6x at end-June 2021 (3.2x at
end-March 2021) benefits from high internal capital generation.
Leverage is likely to increase modestly in the medium term with the
rise in loan growth, although Fitch expects it to remain generally
commensurate with the current rating, in the next one to two years,
supported by internal generation.
MTN PROGRAMME AND SENIOR SECURED DEBT
The ratings on MFIN's medium-term note (MTN) programme and
foreign-currency senior debt are at the same level as its Long-Term
Foreign-Currency IDR.
Indian non-bank financial institution (NBFI) borrowings are
typically secured, and Fitch believes that non-payment of their
senior secured debt would best reflect uncured failure of the
entity. NBFIs can issue unsecured debt in the overseas market, but
such debt is likely to constitute a small portion of their funding
and thus cannot be viewed as their primary financial obligations.
MFIN has ESG Relevance Scores of '4' for Customer Welfare and
Governance Structure, due to a record of business practices,
including customer-related activity, that did not fully comply with
regulatory norms in the past - although MFIN has taken steps to
improve governance and compliance in recent years. The scores
reflect Fitch's assessment that governance and customer-related
practices appear weaker than rated peers', raising regulatory and
reputational risk for MFIN.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
IDRS
-- There is limited upside potential to the ratings in the near
term. In the longer term, an upgrade may be possible only if
the company demonstrates improved branch efficiency in the
gold loan business, indicating a strengthened business
profile, supported by longer record and controlled credit
costs in non-gold segments, and a sustained improvement in
regulatory compliance - provided that its other credit
indicators remain consistent with a higher rating at the time.
MTN PROGRAMME AND SENIOR SECURED DEBT
Fitch may take positive action on the ratings on the MTN programme
and senior secured debt in the event of similar positive action on
MFIN's Long-Term Foreign-Currency IDR.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
IDRS
-- The rating may be downgraded in the event of aggressive growth
in non-gold segments or a rise in debt/tangible equity to
beyond 4.5x, or if higher-than-expected operational risk
losses were to materially affect earnings.
MTN PROGRAMME AND SENIOR SECURED DEBT
Negative action on MFIN's Long-Term Foreign-Currency IDR would
drive similar action on its MTN programme and senior secured debt
ratings.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ISSUER PROFILE
MFIN is a non-deposit-taking, non-bank financing company in India,
with consolidated gross loans of USD3.7 billion at end-March 2021.
For decades it has operated gold-backed lending, which is its
largest loan segment. MFIN has separate subsidiaries for
microfinance and affordable housing finance.
ESG CONSIDERATIONS
MFIN has ESG Relevance Scores of '4' for Customer Welfare and
Governance Structure, as detailed above, which have a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Unless otherwise discussed in this section, the highest level of
ESG credit relevance is a score of '3'. This means the ESG issues
are credit-neutral or have only a minimal credit impact on the
entity, either due to their nature or to the way in which they are
being managed by the entity.
MI SOLAR: ICRA Reaffirms B- Rating on INR3.25cr Term Loan
---------------------------------------------------------
ICRA has reaffirmed the ratings on certain bank facilities of MI
Solar (India) Private Limited (MSIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 3.25 [ICRA]B- (Stable); Reaffirmed
Term Loan
Rationale
The rating reaffirmation factors in MSIPL's weak financial risk
profile, marked by its small scale, weak debt coverage indicators
and poor liquidity position. Further, as its cash flow is dependent
on revenues from the sale of solar power from the already set up
operating expenses (OPEX) projects and small EPC projects, the
counterparty risk remains high; moreover, timely receivables will
be critical to meet the debt repayments. ICRA notes that the
company's profitability remains exposed to intense competition from
many players operating in the solar space. The ratings, however,
continue to favorably factor in the extensive experience of the
promoters in the infrastructure and the renewable space.
The Stable outlook on the [ICRA]B- rating reflects ICRA's opinion
that MSIPL's credit profile is expected to remain stable, backed by
the steady revenue stream from the OPEX segment.
Key rating drivers and their description
Credit strengths
* Established track record of Madhav Group in development of
rooftop/ground mounted solar power projects: The key promoters of
the Madhav Group, Mr. Ashok Khurana and Mr. Amit Khurana, through
their earlier venture, MSK Projects India Ltd (MSK), have over 30
years of experience in executing various projects in the
construction sector on a build, operate and transfer (BOT) and EPC
basis. They have vast experience in handling relatively large-sized
projects and demonstrated a satisfactory track record in the timely
project execution in various construction segments. The promoters
have also demonstrated their project execution capabilities in the
renewable energy segment, particularly in solar power over the past
five years, by executing projects on an EPC and OPEX basis.
Credit challenges
* Weak financial risk profile: Operational since FY2020, MI Solar
has a small scale of operations, with diversion of business to the
group company. Further, the small net worth base and the relatively
high scheduled debt repayments on the outstanding debt have led to
weak coverage indicators and a leveraged capital structure.
Stretched debtors as on March 31, 2021 exert
pressure on the company's liquidity. The ability of the company to
maintain sufficient cash flows to meet its debt obligations will
remain critical from the credit perspective.
* Counterparty credit risk with respect to timely receivables from
counterparties in OPEX and EPC segments; cash inflows will be
critical in meeting debt repayments: The company has developed five
solar rooftop projects till FY2018, all of which have been for
different Government agencies and educational institutions. It has
entered into a 25-year power purchase agreement (PPA) with each of
its clients and is getting regular power generation income from the
same. Operations and maintenance of all five plants is undertaken
in-house by the company. Besides, the company plans to undertake
small-scale EPC projects, which will provide minimal income. Thus,
timely receivables from the EPC and the OPEX segments will be
critical from the credit perspective.
* Margins remains vulnerable to intense competition: The solar
renewable space is fragmented in nature and is characterised
by the intense competition. The margins of the company remain
vulnerable to the intense competition in the EPC industry.
Liquidity position: Poor
MI Solar's liquidity position is poor, with low cash accruals due
to marginal scale of business. Further, high-term loan repayment
obligation couple with high-interest charges has exerted pressure
on the cash flows. The company's free cash balance is inadequate to
support its liquidity profile. Hence, timely funding support from
the promoters/parent entity for meeting any cash flow mismatch is
crucial for its liquidity position.
Rating sensitivities
Positive factors: ICRA could upgrade MI Solar's rating if growth in
the operating income improves the overall credit risk profile and
the liquidity position of the company.
Negative factors: Negative pressure on MI Solar's rating could
arise if there is further stretch in the liquidity position of the
company.
Incorporated in February 2016, MI Solar is a part of the
Vadodara-based Madhav Group. It is involved in setting up
rooftop/ground mount solar power plants. The Madhav Group is
promoted by Mr. Ashok Khurana and his son, Mr. Amit Khurana, who
were the erstwhile promoters of the construction major, MSK
Projects India Ltd (MSK), established in 1976. MSK was later taken
over by the Welspun Group (now known as Welspun Enterprises
Limited) in 2010. The two main entities of the group are Madhav
Infra Projects Limited and Waa Solar Limited which together hold
~96% stake in MI Solar.
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.
MUTHOOT FINANCE: Fitch Affirms 'BB' LT IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed India-based Muthoot Finance Limited's
(MFL) Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'BB'. The Outlook is Stable.
KEY RATING DRIVERS
IDRS
MFL's IDRs reflect its established franchise in gold
jewellery-backed loans, with the highest market share in India in
this niche segment, a history of low credit losses, satisfactory
leverage and an adequate liquidity profile.
MFL's high exposure in loans against gold collateral - 90% of
consolidated loans at end-June 2021 - supports its asset quality,
due mainly to the easy recoverability of such collateral. MFL is
diversifying into microfinance, low-cost housing and auto loans. A
rising risk appetite in less familiar businesses could create more
risk, but gold loans are likely to remain MFL's dominant business
in the medium term.
Gold-backed loans expanded rapidly in the first half of the
financial year ended March 2021 (FY21) as customers turned to this
secured form of borrowing, which lenders perceive as lower in risk,
to access additional liquidity - aided by a rise in gold prices.
Gold prices can be volatile, which raises MFL's susceptibility to a
sharp fall in the precious metal. However, a regulatory loan/value
ceiling of 75% and standardised valuation and auctioning procedures
provide a buffer against gold-price falls.
MFL's credit costs have remained low at 0.4% in FY21 and 0.5%
(annualised) in 1QFY22. Fitch expects the company to remain
sufficiently disciplined in its lending standards during periods of
significant appreciation in gold prices.
Operational risks are high in gold-backed financing due to the
branch-led business model and physical handling of gold collateral.
Such risks may arise from decentralised cash handling, collateral
safe keeping, and lending against stolen or spurious gold.
Constraints due to Covid-19 pandemic containment measures had a
temporary effect on MFL's operations. Various checks and balances
and the company's decentralised branch operations mitigate the
operational risk.
MFL's wide net interest margin and low credit costs continued to
support its profitability in FY21, with a pretax profit of 8.3% of
average assets. The ongoing pandemic has brought about significant
economic challenges for MFL's low-income borrowers, but the impact
on MFL's credit costs and profitability should remain muted due to
the security of its gold loan collateral. Even so, its small
non-gold lending book may see greater pressure. Internal capital
generation and reasonable growth should help sustain moderate
leverage in medium term (June 2021: 3.3x).
MFL benefits from fairly diversified funding sources, including
loans from banks, debentures, commercial paper and foreign
borrowings. Its short-tenor assets support cash inflows and its
positive short-term asset-liability maturity profile. Fitch expects
funding and liquidity to remain broadly resilient for MFL.
MTN PROGRAMME AND SENIOR SECURED DEBT
The ratings on the medium-term note (MTN) programme and
foreign-currency senior debt of MFL are at the same level as its
Long-Term Foreign-Currency IDR.
Indian non-bank financial institution (NBFI) borrowings are
typically secured, and Fitch believes that non-payment of their
senior secured debt would best reflect uncured failure of the
entity. NBFIs can issue unsecured debt in the overseas market, but
such debt is likely to constitute a small portion of their funding
and thus cannot be viewed as their primary financial obligations.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
IDRS
-- MFL's ratings are at the higher end of rated local peers. An
upgrade would hinge on a steady record of expansion in MFL's
franchise beyond the gold-loan market niche along with a
structural improvement in the operating environment, both of
which Fitch views as longer-term possibilities. In such a
scenario, an upgrade would only be possible if the company
maintains satisfactory asset quality, profitability and
balance-sheet metrics commensurate with a stronger rating as
it expands.
MTN PROGRAMME AND SENIOR SECURED DEBT
Fitch may take positive action on the ratings on the MTN programme
and senior secured debt in the event of similar positive action on
the entity's Long-Term Foreign-Currency IDR.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
IDRS
-- The ratings may be downgraded if losses due to operational
risk exceed Fitch's expectations, if asset quality and gold
collateral values weaken sharply and materially diminish MFL's
profitability and capitalisation, or if liquidity coverage or
funding access deteriorate significantly. The ratings may also
be downgraded if debt/tangible equity were to exceed 4.5x for
a prolonged period, or if aggressive expansion in new lending
segments leads Fitch to assess MFL's risk appetite and asset
quality less favourably.
MTN PROGRAMMES, SENIOR SECURED DEBT
Negative action on the entity's Long-Term Foreign-Currency IDR
would drive similar action on its MTN programme and senior secured
debt ratings.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ISSUER PROFILE
MFL is a non-deposit-taking, non-bank financing company in India,
with consolidated gross loans of roughly USD8 billion at end-March
2021. It has a dominant position in gold-backed lending and has a
strong understanding of its customer niche developed over decades
of industry experience.
ESG CONSIDERATIONS
MFL has an ESG Relevance Score of '3' for Customer Welfare,
compared with the standard score of '2' for the finance company
sector. This reflects its retail-focused operations which exposes
it to risks around fair lending practices, pricing transparency and
repossession, foreclosure and collection practices, whereby
aggressive practices in these areas may subject the company to
legal and/or regulatory and reputational risk that may negatively
affect its credit profile. The relevance score of '3' for this
factor reflects Fitch's view that such risks are adequately managed
and have a low impact on the company's credit profile.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means the ESG issues
are credit-neutral or have only a minimal credit impact on MFL,
either due to their nature or to the way in which they are being
managed by MFL.
MYSTIC MONK: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Mystic Monk Designs Private Limited
Z-45, Okhla Industrial Area Phase-II
New Delhi 110020
India
Insolvency Commencement Date: August 24, 2021
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: February 20, 2022
Insolvency professional: CA Pawan Kumar Garg
Interim Resolution
Professional: CA Pawan Kumar Garg
25-A, Pocket-J
Sheikh Sarai-2
New Delhi 110017
E-mail: ca.pawangarg@gmail.com
cirp.mysticmonk@gmail.com
Last date for
submission of claims: September 7, 2021
NAGARJUNA FERTILIZERS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------------
Debtor: M/s. Nagarjuna Fertilizers and Chemicals Limited
Door No. 8-2-248
Nagarjuna Hills Panjagutta
Hyderabad, Telangana 500082
Insolvency Commencement Date: August 27, 2021
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: February 22, 2022
Insolvency professional: Mr. Cherukuri Venkata Ratnababu
Interim Resolution
Professional: Mr. Cherukuri Venkata Ratnababu
8-3-224/1/B, 5th floor
502, Vishnu Classic
Madhura Nagar, Yousufguda
Hyderabad, Telangana 500038
E-mail: cv.ratnababu@gmail.com
cirp.nfcl@gmail.com
Last date for
submission of claims: September 13, 2021
NAVYA AGRO: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Navya Agro Products Private Limited
House No. 3/1, Rajdeep Complex
FA Road, Kumarpara
Guwahati, Kamrup (M)
Assam 781009
Insolvency Commencement Date: August 26, 2021
Court: National Company Law Tribunal, Guwahati Bench
Estimated date of closure of
insolvency resolution process: February 26, 2022
Insolvency professional: Vakati Balasubramanyam Reddy
Interim Resolution
Professional: Vakati Balasubramanyam Reddy
E-505, Galaxy Apartments
Kurla (E), Mumbai 400070
Maharashtra
E-mail: vbsreddy7@gmail.com
Mobile: +918359170484
- and -
House No. 3/1, Rajdeep Complex
FA Road, Kumarpara
Guwahati, Kamrup (M)
Assam 781009
E-mail: navyaagrociro@gmail.com
Last date for
submission of claims: September 13, 2021
OPTICS & ALLIED: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the ratings for the bank facilities Optics &
Allied Engg 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/CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long-term– 4.00 [ICRA]B+ (Stable)ISSUER NOT
Fund Based/TL 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.
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.
PADMAVATI GINNING: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Padmavati
Ginning And Pressing Private Limited (PGPPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 30, 2020, placed the
rating(s) of PGPPL under the 'issuer non-cooperating' category as
PGPPL had failed to provide information for monitoring of the
rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. PGPPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and email dated June 15,
2021, June 25, 2021, July 5, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Padmavati Ginning and Pressing Private Limited (PGPPL) was
originally incorporated in 2000 by Mr. O. H. Agrawal, however, the
control of the company was taken over by Mr. Shyam Sunder Goyal in
August 2011. Post the takeover; the company resumed operations in
November 2011. It is engaged in manufacturing of cotton bales
through cotton ginning & pressing. The company earns its entire
revenues from domestic market. The company procures its raw
material directly from Mandis and through commission agents and
distributes its product through brokers in the states of
Maharashtra and Madhya Pradesh. The company operates 4 branches
located in Maharashtra (Ralegaon, Bori, Parbhani and Tamsa) which
does the work on job-work basis. The plant of the company is
located in Dhule, Maharashtra.
PRAKASH STAINLESS: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Prakash
Stainless Private Limited (PSPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 30, 2020, placed the
rating(s) of PSPL under the 'issuer non-cooperating' category as
PSPL had failed to provide information for monitoring of the rating
and had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. PSPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 15, 2021, June 25, 2021, July 5, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Incorporated in 2004 by Mr. Prakash Kanugo and Mr.Surajmal Burad,
Prakash Stainless Private Limited (PSPL) is engaged in the trading
of stainless steel sheets, coils and plates which have a wide
application the manufacturing of water boilers, furniture, pipes
and automobiles. PSPL purchases goods primarily from domestic
manufacturers and also imports from China. PSPL is part of the
Prakash Group, promoted by Mr. Prakash Kanugo and engaged in the
manufacturing and trading of steel products since 1982. Its
flagship company Prakash Steelage Limited is engaged in the
manufacturing of stainless steel pipes.
PUSHP PREM: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Pushp Prem
Constructions (PPC) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 2.40 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/ 6.00 CARE D; ISSUER NOT COOPERATING;
Short Term Rating continues to remain
Bank Facilities under ISSUER NOT COOPERATING
Category
Short Term Bank 1.60 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release August 5, 2020, placed the
rating(s) of PPC under the 'issuer non-cooperating' category as PPC
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. PPC continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 21, 2021, July 1, 2021, July 11, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Agra, Uttar Pradesh-based Pushp Prem Constructions (PPC) was
established in the year 2012 as a proprietorship firm and started
its commercial operations from 2013. The firm is currently managed
by Mr. Prem Prakash Gupta. The firm is "Class A" contractor and is
engaged in construction works such as construction of R.C.C.
overhead water tanks, pump house, rising main & drainage system,
etc.
R. AYUSH: CARE Keeps B- Debt Rating in Not Cooperating Category
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of R. Ayush
Enterprises (RAE) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
To remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 5, 2020, placed the
rating(s) of RAE under the 'issuer non-cooperating' category as RAE
had failed to provide information for monitoring of the rating and
had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. RAE continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 21, 2021, July 1, 2021, July 11, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Delhi-based R. Ayush Enterprises (RAE) was established in April
2016 as a proprietorship firm and is currently managed by Mr. Ayush
Bansal. The firm is engaged in the wholesale trading of dry fruits,
spices, kirana items, herbs, etc. to local traders based in Delhi.
The firm is managing its operations from Khari Baoli, Delhi.
RADHEKRISHNA COTTON: ICRA Withdraws B+ Rating on INR7cr LT Loan
---------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Radhekrishna Cotton Industries (RCI) 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
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.
S D RICE: ICRA Keeps B Debt Rating in Not Cooperating Category
--------------------------------------------------------------
ICRA has retained the long-term rating of S D Rice Mills in the
'Issuer Not Cooperating' category. The rating is denoted as
[ICRA]B(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 16.50 [ICRA]B (Stable)ISSUER NOT
Fund Based/CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
S D Rice Mill is a partnership firm established in 1983 promoted by
Mr. Darshan Wadhwa and his family members. The firm is primarily
engaged in milling of basmati rice. The firm is also engaged in
converting semi-processed rice into parboiled Basmati rice. SRM's
milling unit is based out of Jalalabad, Distt. Ferozpur, Punjab
which is in close proximity to the local grain market.
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/CC COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Long-term– 110.20 [ICRA]B+ (Stable)ISSUER NOT
Fund Based/TL 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.
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.
SHRIRAM TRANSPORT: Fitch Affirms 'BB' LT IDRs, Outlook Now Stable
-----------------------------------------------------------------
Fitch Ratings has revised the Outlook on India-based Shriram
Transport Finance Company Limited's (STFC) Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDR) to Stable, from
Negative, and has affirmed the ratings at 'BB'.
KEY RATING DRIVERS
IDRS
STFC's ratings reflect the company's longstanding franchise in used
commercial-vehicle financing, experienced management, satisfactory
execution record backed by established underwriting processes and
risk controls, and improved loss-absorption buffers.
Fitch has revised the Outlook to Stable as Fitch believes STFC's
credit profile is likely to remain resilient, despite lingering
uncertainty in the macroeconomic outlook due to the Covid-19
pandemic. STFC's operating metrics have improved since the second
half of fiscal year ended March 2021 (FY21) and it has maintained
steady funding access, which Fitch expects will be sustained. The
company has strengthened its capital adequacy, liquidity and
provisioning buffers over the past year, further improving its
defences against credit impairment and refinancing risk.
STFC's high non-performing loan (NPL) ratio of 8.2% at end-June
2021 (FYE20: 8.5%) reflects its exposure to sub-prime borrowers who
fall outside banks' typical customer base. The company adopts a
more accommodative approach in recovering past-due loans, based on
its experience that delinquent borrowers are often able to repay if
allowed more time to do so. This, along with its largely secured
loan book, explains its lower credit losses of around 2.7% of loans
in FY21 (FY20: 2.5%) - which include pre-emptive provisions to
cushion against pandemic-led uncertainties. Moreover, STFC's
provision coverage ratio improved to 93% of NPLs in June 2021
(FYE20: 68%), forming a wider loss-absorption buffer against future
impairment.
STFC's rural and semi-urban customer base underpins its high net
interest margin. This, along with its moderate operating expense
base, resulted in healthy pre-provisioning profitability to gross
loans of around 5.6% in FY21 (FY20: 5.8%), helping to compensate
for the higher impairment risk in its loan book. Fitch expects
earnings to remain supported in the medium-term through sustained
volume growth, careful margin and operating expense management and
adequately contained credit costs.
STFC's leverage improved to 4.6x by end-June 2021, from 5.0x at
end-March 2021 as STFC was able to raise a total of INR37.5 billion
in equity capital since August 2020. This has strengthened its
capital loss-absorption buffers against unexpected losses; its tier
1 capital adequacy ratio increasing to 21% by end-June 2021, from
18% at end-March 2020. Fitch expects little pressure on leverage in
near term as internal capital generation should substantially be
able to support STFC's loan growth targets.
STFC's longer-tenor asset portfolio is generally matched against
its medium-term funding portfolio. Liquidity buffers have increased
relative to a year ago, backed by enlarged holdings of unrestricted
cash and liquid assets. Fitch expects the company to pare this
buffer back once it is more confident of the macroeconomic outlook.
However, it is likely to keep its liquidity buffer commensurate
with its rating to cover near-term debt maturities in case of a
temporary liquidity squeeze. STFC has maintained adequate access to
funding at competitive rates over the past year from diversified
sources, including banks, mutual funds, public deposits,
securitisation and offshore debt.
MTN PROGRAMME, SENIOR SECURED DEBT
The ratings on STFC's medium-term note (MTN) programme and
foreign-currency senior secured debt are at the same level as its
Long-Term Foreign-Currency IDR, while the rupee-denominated senior
secured debt is rated at same level as its Long-Term Local-Currency
IDR in accordance with Fitch's rating criteria.
Indian non-bank financial institution (NBFI) borrowings are
typically secured and Fitch believes that non-payment of senior
secured debt would best reflect an entity's uncured failure. NBFIs
can issue unsecured debt in the overseas market, but such debt is
likely to constitute a small portion of their funding and thus
cannot be viewed as a primary financial obligation.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
IDRS
-- An upgrade is less likely in the near-term in light of the
ongoing uncertainty in the operating environment. In the
longer-term, any upgrade would depend on a material
strengthening in the operating environment and domestic
financial system, together with stable asset-quality trends,
strengthened levels of profitability, and conservative
leverage.
MTN PROGRAMME, SENIOR SECURED DEBT
Any positive action on the MTN programme and senior secured debt
ratings would depend on similar action on STFC's Long-Term IDRs.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
IDRs
-- STFC's rating could be downgraded in the event of materially
weaker asset quality and profitability relative to Fitch's
expectations, significantly diminished funding access or
weakened liquidity coverage either due to a much shorter-term
debt maturity profile or overly thin liquidity buffer.
Leverage consistently greater than 5.5x would weigh on the
rating, as would an increase in risk appetite that reduces
STFC's leverage tolerance.
MTN PROGRAMME, SENIOR SECURED DEBT
Any negative action on STFC's Long-Term IDRs would drive similar
action on its MTN programme and senior secured debt ratings.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ISSUER PROFILE
STFC has a dominant position in used commercial-vehicle financing
and is among India's larger non-bank financial companies. It has a
monoline business model, with a strong understanding of its
customer niche developed over four decades of industry experience.
ESG CONSIDERATIONS
STFC has an ESG Relevance Score of '3' for Customer Welfare,
compared with the standard score of '2' for the finance and leasing
sector. This reflects its retail-focused operation, which exposes
it to risk around fair lending practices and pricing transparency
as well as repossession, foreclosure and collection practices.
Aggressive practices in these areas may subject the company to
legal, regulatory and reputational risk that may damage its credit
profile. The relevance score of '3' for this factor reflects
Fitch's view that such risks are adequately managed and have a low
impact on STFC's credit profile at present.
The highest level of ESG credit relevance, if present, is a score
of '3'. This means the ESG issues are credit-neutral or have only a
minimal credit impact on the entity, either due to their nature or
to the way in which they are being managed by the entity.
SLV POWER: ICRA Lowers Rating on INR105cr Loans to D
----------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of SLV
Power Private Limited (SLVPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 104.60 [ICRA]D; Downgraded from
[ICRA]BB (Stable)
Unallocated
Limits 0.40 [ICRA]D; Downgraded from
[ICRA]BB (Stable)
Rationale
The rating downgrade primarily considers the delays in servicing
debt obligations by SLVPPL in the past six months owing to
lower-than-anticipated cash accruals, resulting from below par PLF
levels led by technical issues with the plant. Infusion of funds by
the promoters/Group concerns in the form of unsecured loans/equity
will remain crucial to support the liquidity and timely debt
servicing in the near term. The rating is further constrained by
the company's weak financial risk profile, characterized by highly
leveraged capital structure and weak debt coverage indicators. The
rating also factors in the limited experience of promoters in
running a hydropower plant.
The rating, however, favorably factors in the revenue visibility
owing to the presence of long-term power purchase agreement (PPA)
with Mangalore Electricity Supply Company Limited (MESCOM) at a
competitive tariff of INR4.16/unit for a tenure of 35 years from
the commercial operations date (COD), i.e., November 2019.
Key rating drivers and their description
Credit strengths
* Long-term PPA with MESCOM gives revenue and cash flow visibility:
The company had signed a PPA with MESCOM at competitive tariff of
INR4.16 per unit for the entire capacity of 24 MW for a period of
35 years, which limits offtake and pricing
risk and, provides revenue and cash flow visibility.
* Low counterparty credit risk with off-taker being MESCOM: The
company supplies the entire power generated to MESCOM (rated ICRA
BBB+ (Stable)/A2) and the payments from MESCOM are satisfactory
with payments generally received within 30-35 days from date of
invoice limiting the counterparty credit risk to an extent.
Credit challenges
* Delays in servicing debt obligations: The company had delayed in
servicing the debt obligations of its term loan facility in the
past six months. Lower-than-anticipated cash accruals against the
high debt obligations have resulted in a tight cash flow position,
resulting in the delay.
* Limited operational track record of the plant with below par
operational performance: The 24 MW hydropower plant commenced
commercial operations on November 21, 2019, wherein the
availability of water was very low, resulting in miniscule
generation in FY2020. Further, since FY2021, the company's PLF
levels have remained low owing to technical issues with the plant.
The company's PLF level was ~12.5% in FY2021 with a generation of
25.90 million units (MUs), resulting in low
revenue of INR9.92 crore against ICRA projection of ~INR25.00
crore. Further, in 4M FY2022 also, the company's PLF level remained
low at ~10.0% with a generation of 6.74 MUs, resulting in a revenue
of ~INR2.50 crore. Notwithstanding this, as with any hydropower
plant, the plant is expected to generate high PLFs during the rainy
months of June, July, August and September which together account
for 80% of yearly generation.
* Weak financial risk profile: The company's capital structure is
highly leveraged, with a gearing of 32.47 times as of March 31,
2021 (provisional financials). However, the adjusted gearing
excluding interest-free unsecured loans from the promoters and
Group concerns stood at 18.79 times as of March 31, 2021. Also, the
debt coverage indicators are weak with interest coverage of 0.39
times, TD/OPBDITA of 28.99 times and DSCR of 0.29 times in FY2021.
* Debt metrics for hydropower projects remain sensitive to PLF
levels and are exposed to hydrological risk: Given the fixed single
part nature of the tariff, the company's revenues and cash flows
remain a function of the PLF levels. The PLF levels remain
vulnerable to availability of water in Aniyur stream which further
depends on rainfall in that region. The generation is further
exposed to hydrological risk, given that the project is not covered
under any deemed generation clause in case of loss of generation
due to shortage of water.
Liquidity position: Poor
SLVPPL's liquidity position is poor as reflected by delays in debt
servicing of term loans in the past six months. The plant's
operational performance has been poor marked by below par PLF
levels, resulting in inadequate cash accruals. Infusion of funds by
the promoters/Group concerns in the form of unsecured loans/equity
will remain crucial to support the liquidity and timely debt
servicing.
Rating sensitivities
Positive factors:
* Regularisation in debt servicing with improvement in PLF levels
will be the key aspect for higher rating
Negative factors:
* Not applicable
SLVPPL is a private limited company promoted by Yenepoya Energy
Private Limited (YEPL) to develop, own and operate a
runof-the-river 24 MW hydropower project on the river Aniyur (a
tributary of Netravati river) near Neriya village in Dakshina
Kannada district. YEPL is part of Yenepoya group of companies
promoted by Yenepoya Mohammed Kunhi and Yenepoya Abdulla Kunhi with
Yenepoya Abdulla Javeed as director. The company has successfully
commissioned the hydropower plant on November 21, 2019 and has a
PPA with Mangalore Electricity Supply Company Limited for a period
of 35 years at a fixed tariff of INR4.16 per unit.
TATA STEEL: Moody's Upgrades CFR to Ba1, Outlook Remains Stable
---------------------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
of Tata Steel Ltd. to Ba1 from Ba2. The rating outlook remains
stable.
"The upgrade to Ba1 reflects our view that Tata Steel's
better-than-anticipated operating performance this fiscal year and
a step-change reduction in gross debt have materially strengthened
its credit metrics. We expect the company's leverage -- measured by
consolidated debt/EBITDA to decline to 1.5x by March 2022 from 6.5x
at March 2020, 3.3x at March 2021 and an estimated 2.1x at June
2021," says Kaustubh Chaubal, a Moody's Vice President and Senior
Credit Officer.
"We project the company will continue to generate large and
positive free cash flow from operations over the next 12-18 months
because of supportive commodity prices, steady product spreads amid
likely persisting strong steel demand," adds Chaubal who is also
Moody's lead analyst on Tata Steel.
RATINGS RATIONALE
Tata Steel's financial policies prioritize debt reduction over
capital expenditure (capex), supported by the company's strong
operating cash flows. Such credit positive initiatives accelerate
debt reduction and better equip the company to tide through
industry downturns. The company's prudent financial strategy and
risk management are a key component of Moody's governance risk
assessment framework.
Tata Steel made a public commitment to reduce the company's gross
debt by at least $1 billion every fiscal year before reinvesting
surplus free cash flow generation into new initiatives. The company
targets net leverage of 2x and EBITDA/interest coverage of 4x,
through the cycle.
The upgrade to Ba1 reflects Tata Steel's conservative financial
policies, which combined with Moody's expectations of strong
operating performance throughout fiscal 2022, will contribute to
further deleveraging and balance sheet strengthening. Moody's
expects the company to reduce gross debt by at least a third -- or
by around $5.8 billion by March 2022 from March 2020 levels. More
importantly, the upgrade reflects the rating agency's expectation
of moderate financial leverage and ample interest coverage for Tata
Steel in a normalized steel price environment due to significant
debt reduction in 2021.
Moody's expects the company to maintain a disciplined approach to
liquidity, capex and shareholder returns. Prudent financial risk
management has contributed to progressive reductions in financial
leverage and the improved credit metrics have increased the
company's cushion to withstand volatility in operations. Tata
Steel's adjusted leverage declined to an estimated 2.1x at June
2021 from 6.5x at March 2020, and will wane further to 1.5x at the
end of this fiscal year on the back of current positive dynamics
for the steel industry. Over time, Moody's forecasts the company's
leverage will track within 1.5x-2x and free cash flows to remain
positive even as the annual capex reaches $1.5 billion.
Tata Steel's performance over the upcoming 12-18 months will remain
strong, in line with the significantly improved operating
environment this fiscal year that will keep near-term metrics
strong for the rating. However, these levels are not likely to be
sustainable when steel prices return to more normalized levels.
Moody's forecasts for Tata Steel are based on the rating agency's
current price sensitivities for steel ($800 per ton for the Indian
operations and $930/ton for Europe) for fiscal 2022. The forecasts
are also based on the mid-point of Moody's price sensitivity range
for the period beyond ($600-$800/ton). These price sensitivities
translate into an EBITDA/ton assumption of $350 for fiscal 2022 and
$230 thereafter for the Indian operations.
Tata Steel's European operations have faced volatile profitability,
Moody's remains cautious in its forecasts and assumes that the
business' profitability will reach $80/ton EBITDA in fiscal 2022
and a long-term sustainable EBITDA/ton of $50 for periods beyond.
The Ba1 CFR is supported by Tata Steel's solidly positioned large
global operations spread across India and Europe. The company's
strong position in India is reflective of its large scale and
strong brand reputation. In addition, its cost-competitive,
vertically integrated operations with in-house production of key
raw materials help to keep its profitability high in the industry.
These credit strengths underpin the company's strong market
position as one of India's leading steelmakers.
The rating continues to incorporate a one-notch uplift, reflecting
Moody's expectation of extraordinary support from its parent Tata
Sons Ltd., should the need arise.
At the same time, the CFR also takes into consideration the
weak-performing European operations that have long been a drag on
the company's consolidated credit metrics, as well as the company's
exposure to the inherently cyclical steel industry.
OUTLOOK
The stable outlook underscores Moody's view that Tata Steel will
continue to strengthen its balance sheet, liquidity profile and
financial policies to enhance its credit quality further. The
stable outlook reflects the view that a supportive operating
environment will help to sustain Tata Steel's improving performance
such that debt/EBITDA leverage trends below 2.0x over the next 12
months.
LIQUIDITY
Tata Steel has good liquidity comprising the following sources:
cash of $1.4 billion at June 30, 2021 and an estimated $6 billion
in operating cash flow in the 18 months until December 2022.
Moody's expects these cash sources to be more than sufficient to
meet the company's capex, debt repayments (including short-term
debt) and dividends aggregating $4.5 billion over the same period.
Given the inherently volatile steel industry, some unevenness in
intra-year working capital is likely, causing the continued
reliance on short-term 364-day working capital facilities. Tata
Steel's association with the Tata brand enables it to have strong
access to domestic capital markets. In addition, the company has
long-standing relationships with Indian and multinational banks.
ESG CONSIDERATIONS
Moody's views the global steel sector as having high environmental
risk, particularly regarding carbon transition risk and waste and
pollution. Steel companies such as Tata Steel operate blast
furnaces that are more exposed to carbon transition risk than
electric arc furnace (EAF) producers, although the latter have high
electricity requirements. The industry's transition to EAF will be
slow and require new capital investment, as well as sufficient
scrap supply.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Tata Steel's significantly improved operating performance in fiscal
2022 and the company's continued debt reduction will result in
credit metrics that are stronger for the rating. However, steel
prices and product spreads will return to normal levels with a more
balanced supply and demand.
Leading indicators for a higher rating include adjusted EBIT
margins above 10%, consolidated leverage below 2.5x and positive
free cash flow generation; all sustained through the cycle.
Conservative financial policies with good liquidity, continued
gross-debt reduction and a prudent mix of debt and equity-funded
capex would also be prerequisites for an upgrade.
While the growing Indian operations will dominate Tata Steel's
consolidated metrics, an upgrade to investment grade would also
require a sustained turnaround of the European operations through
the cycle.
Negative pressure on the rating or outlook could result from weaker
liquidity or from persistently high leverage, with leverage above
3.5x on a sustainable basis over the long-term, and EBIT/interest
coverage below 4x. A deterioration in volumes and margins in the
company's key operating markets, affecting its ability to generate
positive free cash flow, or limited flexibility for capex and
dividend reduction could also pressure the rating. Any change to
Moody's assessment of support from parent Tata Sons could also
cause the rating agency to review the current one-notch uplift in
the CFR.
The principal methodology used in this rating was Steel Industry
published in September 2017.
Tata Steel Ltd. is a leading steel producer with manufacturing
facilities in India (19.3 mt), Europe - the UK (3 mt) and the
Netherlands (7.0 mt), and Southeast Asia (2.4 mt). The UK and the
Dutch operations are housed under Tata Steel UK Holdings Limited.
Tata Steel generated revenues of INR1,824 billion (USD24.3 billion)
and EBITDA of INR439 billion (USD5.9) billion during the 12 months
ended June 2021.
TECHNO POWER: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Techno Power Combines Private Limited
1/5, Trustpakkam South Street
Mandaveli, Chennai 600028
Tamil Nadu
Insolvency Commencement Date: September 2, 2021
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: February 28, 2022
(180 days from commencement)
Insolvency professional: Narayanaswamy Nageswaran
Interim Resolution
Professional: Narayanaswamy Nageswaran
E 51, Ananyas Nana Nani Phase 4
Kasthuri Naicken Palayam
Vadavali, Coimbatore
Tamil Nadu 641041
E-mail: swamynageswaran@gmail.com
- and -
C/o 1st Floor, Hari Krupa
No. 71/1, Mc Nicholas Road
Off. Poonamallee High Road
Chetpet, Chennai 600031
E-mail: cirp.technopower@gmail.com
Last date for
submission of claims: September 19, 2021
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 Rating Continues to remain under
CC 'Issuer Not Cooperating'
Category
Long-term– 1.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Unallocated 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Sri Uma Jewellers India Private Limited (SUJIPL) operates an
exclusive Tanishq (Titan Industries Ltd) showroom 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 with the showroom 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.
UTTARAYAN STEEL: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Uttarayan Steel Private Limited
Registered office address as per the MCA Records:
7/2-B New Mandi Muzaffarnagar
Muzaffarnagar UP 251001
IN
Factory address:
Khasra No. 960-963
Salempur Rajputan
Roorkee
Uttarakhand 247667
Insolvency Commencement Date: August 25, 2021
Court: National Company Law Tribunal, Allahabad Bench
Estimated date of closure of
insolvency resolution process: February 20, 2022
Insolvency professional: Saurabh Agarwal
Interim Resolution
Professional: Saurabh Agarwal
272/6, Park Road
Laxman Chowk, Dehradun
Uttarakhand 248001
E-mail: agarwalsaurabh19@outlook.com
cirp.uspl@gmail.com
Last date for
submission of claims: September 8, 2021
VISHWAKSHARA MEDIA: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Vishwakshara Media Private Limited
#915, Dhanush Plaza
2nd Floor, Ideal Homes Township
Rajarajeshwari Nagar, B'lore
Bangalore KA 560098
IN
Insolvency Commencement Date: August 17, 2021
Court: National Company Law Tribunal, Bangalore Bench
Estimated date of closure of
insolvency resolution process: February 13, 2022
(180 days from commencement)
Insolvency professional: Addanki Haresh
Interim Resolution
Professional: Addanki Haresh
No. 36/1, 2nd floor
Munivenkatappa Complex
Bellary Road, Ganga Nagar
Bangalore 560032
E-mail: addanki.haresh@gmail.com
vmpl2108@gmail.com
Last date for
submission of claims: September 26, 2021
VITTHAL GAJANAN: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Vitthal
Gajanan Sugar Private Limited (VGSPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 17.60 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 31, 2020, placed the
rating(s) of VGSPL under the 'issuer non-cooperating' category as
VGSPL had failed to provide information for monitoring of the
rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. VGSPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 16, 2021, June 26, 2021, July 6, 2021.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Satara-based (Maharashtra) VGSPL was incorporated in 2013 by Mr.
Chandrakant Pawar, Mr. Yashwant Mali and Mr. Prasad Jugdar. The
company is in the process of setting up a jaggery manufacturing
unit with an installed capacity of 500 tons crushed per day (TCD)
at Satara, Maharashtra.
=================
I N D O N E S I A
=================
BANK NEGARA: Moody's Rates USD AT1 Capital Securities 'Ba3(hyb)'
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 (hyb) rating to Bank
Negara Indonesia (Persero) Tbk (P.T.)'s (BNI) USD-denominated
Additional Tier 1 (AT1) capital securities.
This is the first Basel III-compliant AT1 capital instrument that
is issued by an Indonesian bank.
The rating is assigned based on draft documents reviewed by
Moody's, which are not expected to be materially different from
those in the final documentation.
RATINGS RATIONALE
The Ba3 (hyb) rating is three notches below BNI's baa3 Adjusted
Baseline Credit Assessment (BCA), reflecting the risk of
non-cumulative coupon suspension and principal write-down at the
point of non-viability, as well as subordination during
liquidation.
Moody's does not incorporate any government support into the
rating, as these securities are intended to be loss-absorbing in
the event of financial stress.
The AT1 capital securities are contractual, non-viability preferred
securities. Coupons of these securities could be cancelled on a
non-cumulative basis at the bank's discretion, and on a mandatory
basis subject to the availability of distributable funds,
regulatory capital requirements and regulatory discretion.
The principal amount of these capital securities could also be
partially or fully written down if: (1) the bank's Common Equity
Tier 1 ratio is at or below 5.125%; (2) a competent authority plans
to rescue the bank by injecting capital; (3) the regulator
instructs the bank to do so on grounds of non-viability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The rating of the AT1 capital securities will move in line with the
bank's BCA.
Moody's could upgrade the AT1 rating and BCA if the bank's asset
quality improves, as indicated by a material reduction in its
nonperforming and restructured loans, or if its capital increases
substantially.
On the other hand, Moody's could downgrade the AT1 rating and BCA
if a significant amount of the bank's restructured loans default
and the resulting losses erode its capital.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Banks Methodology
published in July 2021.
Bank Negara Indonesia (Persero) Tbk (P.T.) is headquartered in
Jakarta and reported consolidated assets of IDR875.1 trillion as of
June 30, 2021.
=========
J A P A N
=========
JTB CORP: Sells Tokyo Headquarters to Raise Funds
-------------------------------------------------
The Japan Times reports that travel agency JTB Corp. said Sept. 14
that it sold its Tokyo headquarters as well as another building in
Osaka as it progresses through a restructuring effort aimed at
shoring up its finances after the COVID-19 pandemic killed demand
for its services.
The Japan Times relates that JTB sold the buildings for several
tens of billions of yen to bolster its cash reserves, a company
source said.
The company will continue to use the building in Tokyo's Shinagawa
Ward as its headquarters on a lease contract basis, the source
said.
According to the report, the major travel agency is attempting to
weather the COVID-19 storm as it posted a record net loss of
JPY105.2 billion in the fiscal year ending in March.
Demand slumped due to travel restrictions imposed during the
coronavirus pandemic and the company's capital adequacy ratio
dropped to 6.9% as of the end of March from 24.3% a year ago, the
report discloses.
To cut costs, JTB plans to reduce its group headcount by 7,200 and
close 115 domestic outlets, or about 25% of the total, while
raising JPY30 billion ($271 million) to strengthen its capital base
through a third-party allotment of preferred shares with financial
institutions, The Japan Times relates.
Similarly, its domestic rival H.I.S. Co. sold its head office in
the capital's Minato Ward for JPY32.5 billion to improve its cash
position.
Japan-based JTB Corp. offers travel services. The Company provides
tourist resort development, ticket and hotel booking, travel
information supply, and other services. JTB also operates real
estate marketing, printing, and other businesses.
=====================
N E W Z E A L A N D
=====================
LAMONT WINES: Receivership Concluded After Debts Settled
--------------------------------------------------------
Otago Daily Times reports that the receivership of a Central Otago
vineyard has wrapped up after its debts were settled.
In April, Lamont Wines Ltd was placed in receivership after two
separate parties, including one of its shareholders, appointed
receivers.
Earlier last week, a public notice was issued saying the
receivership ceased on September 2, according to ODT.
The vineyard was launched in 2001 by the McLachlan family and in
2009 it was converted to organic. The company was owned by Craig
and Angela Gasson at the time of receivership, ODT discloses.
On April 8, Duncan Fea, of Findex (NZ) Ltd, was appointed receiver
by Southern Ventures NZ Ltd, under the terms of a General Security
Agreement (GSA) dated June 26, 2017. At the time of the
receivership, Southern Ventures was a 50% shareholder in Lamont,
ODT relates.
On April 15, BDO Christchurch was appointed receiver of the company
under a GSA with Westpac New Zealand Ltd, dated 2014.
However, it was retired after the overdraft to the bank was
refinanced.
At the date of Mr Fea's appointment, the company owed Southern
Ventures NZD641,000 and Westpac NZD140,000.
Southern Ventures repaid Lamont's debt to Westpac, increasing the
amount owed to it to NZD781,000.
In the final receiver's report, Mr. Fea said during the reporting
period a total of NZD207,000 was distributed from the sale of
company assets and control of the company and assets had been
returned to the director, ODT relays.
According to the company office website, Lamont Wines Ltd is now
100% owned by Southern Ventures NZ Ltd.
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S I N G A P O R E
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2BY2 YACHTS: Court to Hear Wind-Up Petition on Oct. 1
-----------------------------------------------------
A petition to wind up the operations of 2BY2 Yachts (FR) Pte Ltd
will be heard before the High Court of Singapore on Oct. 1, 2021,
at 10:00 a.m.
SPBI filed the petition against the company on May 15, 2021.
The Petitioner's solicitors are:
Virtus Law LLP
One Raffles Place
#18-61 Tower 2
Singapore 048616
DIGITAL ALPHA: Placed Under Judicial Management
-----------------------------------------------
Creditors of Digital Alpha Group Pte Ltd, on Sept. 10, 2021, passed
a resolution to place the company under judicial management and
appointed Mr. Yit Chee Wah and Ms. Ellyn Tan Huixian of FTI
Consulting (Singapore) as Judicial Managers.
The company's Judicial Managers can be reached at:
Mr. Yit Chee Wah
Ms. Ellyn Tan Huixian
FTI Consulting (Singapore)
8 Shenton Way #32-03, AXA Tower
Singapore 068811
GEO ENERGY: S&P Places 'CCC' Rating on CreditWatch Positive
-----------------------------------------------------------
On Sept. 14, 2021, S&P Global Ratings placed its 'CCC' rating on
Geo Energy Resources Ltd. (GERL) on CreditWatch with positive
implications.
The CreditWatch with positive implications reflects the likelihood
of an upgrade of GERL once it completes the bond redemption. S&P
expects to resolve the CreditWatch placement by mid-October, where
it would likely raise the issuer credit rating to 'B-'.
S&P said, "We expect GERL's planned bond redemption to eliminate
the prospects of near-term refinancing risk or bond repurchases
below par. On Sept. 12, 2021, the company announced its intention
to repurchase the remaining US$59 million bond at 102%, a year
ahead of its maturity in October 2022, in accordance with the
optional redemption clause in the existing bond document. The
redemption will be funded by GERL's internal cash balance, which
stood at US$120 million as of Sept. 5, with the repurchase to
conclude by Oct. 12 this year. Post-redemption, we believe GERL
will have minimal reported debt, with its adjusted debt-to-EBITDA
ratio improving to 0.1x, compared to 0.5x for the first half of
2021 and 2.0x for 2020. The announced redemption will also remove
uncertainty of capital being allocated to repurchase the remaining
bond below par. The bond is currently trading at 90% of par value.
"GERL's improved cash flow will support leverage, in our view. Over
the next 18 months, we estimate the company will generate
substantially higher operating cash flow--close to four times above
that in 2020. Our assessment considers the strong recovery in coal
prices since the end of 2020, which led to GERL's average selling
price per metric ton (MT) rising more than 30% year on year during
the first half of 2021 to US$41. GERL's cash flow from operations
in the first six months of 2021 amounted to US$55 million, nearly
double that of the same period last year. The Indonesian Coal
Index-4 has increased by a further 45% since June, reaching close
to US$80 in September due to strong demand from China, alongside
tight local supply. We believe this will facilitate the group's
positive free operating cash flow generation and minimal debt, and
provide operational buffer if the external environment were to
deteriorate.
"In resolving the CreditWatch, we would likely raise the rating to
'B-'.This reflects the company's declining reserve life of slightly
more than seven years, modest scale of about 11 million MT
(MMT)-12MMT annually, sensitivity to thermal coal prices, and asset
concentration on two mines. The company's minimal reported debt,
after completing the redemption, and high cash balance supported by
surging coal prices temper these risks, in our view. The rating
also considers the company's evolving business strategy, which may
include potential divestments and diversification. This could
entail a portfolio reconfiguration.
"The CreditWatch placement reflects the likelihood of an upgrade of
our issuer credit rating on GERL following the completion of the
bond redemption. We expect to resolve the CreditWatch placement by
mid-October, where we would likely raise the issuer credit rating
to 'B-'."
INTER-PACIFIC: JMs Used by Banks, Ex-Director's Lawyers Claim
-------------------------------------------------------------
Manifold Times reports that Deloitte & Touche, the Judicial
Managers (JMs) of Inter-Pacific Petroleum (IPP), has been made use
by banks in an "outrageous abuse of process", claim solicitors
representing Dr. Goh Jian Hian, the former Director of IPP, in a
court statement.
Dr. Goh's defence statement written on November 10, 2020 (re-dated
to March 25, 2021) was amongst documents obtained by Singapore
bunkering publication Manifold Times from the High Court during a
September 2021 inquiry; the court is in the midst of seeking
further and better particulars from both parties to continue
proceedings.
The legal suit started in October 2020 after JMs found IPP having a
viable claim against Dr. Goh.
According to Manifold Times, legal fees of the JMs are funded by
the Singapore branch of Maybank and Societe Generale (SocGen), both
major creditors of IPP, looking to respectively recover USD88.3
million and USD81.3 million that they allege to be due to Dr Goh's
negligence as director.
"The Plaintiff's case in HC/S 953/2020 is an attempt by SocGen and
Maybank (either the "Bank"; collectively, the "Banks"), who are
funding the litigation, to circumvent the fact that they have no
basis to make any claim against the Defendant, to avoid scrutiny of
its own conduct and to apply illegitimate pressure on the Defendant
to settle the claim by making sensational allegations, which have
been widely publicised," stated Dr Goh's defence solicitors.
"The JMs of the Plaintiff have allowed themselves to be used in
this outrageous abuse of process.
"The Defendant further says that the JMs of the Plaintiff owe a
duty to act fairly, impartially, honestly and use reasonable
diligence in the discharge of their duties, but they have failed to
discharge this duty and to properly investigate and evaluate the
Banks' claims against the Plaintiff and the Plaintiff's remedies
against the parties actually responsible for the alleged fraud."
Manifold Times relates that the statement noted IPP JMs seeking to
claim in excess of USD156.6 million (exact: USD156,555,338.31) from
Dr Goh on the basis of "solely a single unverified e-mail from
Mercuria" that alleges USD762,371,594 of receivables due on July
2019 to be derived from sham and non-existent transactions.
"The Plaintiff and JMs have not pleaded what losses the Plaintiff
has suffered, but have instead collaborated with the Banks to
improperly use the Plaintiff as a proxy to attempt recovery of what
are the apparent losses of the Banks, who know that they have no
legal basis to recover them from the Defendant," stated lawyers.
They further claimed: "That the JMs have failed to discharge their
duties by blindly helping the Banks mount a false case against the
Defendant."
"That is borne out also by the fact that they have not taken the
simplest of steps to protect the interests of the Plaintiff by
exercising their powers to investigate whether the Banks have any
claim against the Plaintiff or taken steps to recover the alleged
losses from those responsible for the alleged fraud.
"Nor have the Plaintiff or the JMs made the Banks account for their
own conduct, negligence and/or omissions leading up to this alleged
loss."
About Inter-Pacific Petroleum
Inter-Pacific Petroleum (IPP) is principally engaged in wholesale
trade of a variety of goods with ship bunkering as the secondary
activity.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
6, 2019, Deloitte & Touche said on Sept. 5 it has been appointed by
Singapore's high court to act as interim judicial manager for
Inter-Pacific Group Pte (IPG) in an application for a court-led
debt restructuring process. The appointment, following a
nomination by IPG, comes more than two months after IPG unit
Inter-Pacific Petroleum Pte (IPP) had a licence to operate bunker
fuel tankers suspended by Singapore's Maritime Port Authority
(MPA). The MPA detected operational irregularities during an
inspection.
On March 25, 2021, the High Court of Singapore entered an order on
to wind up the operations of IPP. Mr. Lim Loo Khoon and Mr. Tan
Wei Cheong of Deloitte & Touche LLP were appointed liquidators of
the company.
VELOQX PRIME: Creditors' Proofs of Debt Due on Oct. 14
------------------------------------------------------
Creditors of Veloqx Prime Pte Ltd, which is in voluntary
liquidation, are required to file their proofs of debt by Oct. 14,
2021, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on Sept. 7, 2021.
The company's liquidators are:
Thio Khiaw Ping Kelvin
Terence Ng Chi Hou
c/o In.Corp Corporate Recovery Pte Ltd
30 Cecil Street #15-08 Prudential Tower
Singapore 049712
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V I E T N A M
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VIETNAM AIRLINES: Government Fund Subscribes to Rights Issue
------------------------------------------------------------
VnExpress reports that Vietnam's sovereign fund has subscribed to
Vietnam Airlines's rights offering amid its accumulating losses due
to Covid-19.
According to the report, the State Capital Investment Corporation
(SCIC) paid VND6.89 trillion ($303.56 million) to acquire 689.5
million shares and kept its ownership rate in the state-owned
carrier at 31.08%.
HVN's issued VND8 trillion worth of stocks to existing shareholders
to increase its capital, VnExpress says.
Japan's ANA Holdings, the operator of All Nippon Airways which owns
an 8.77% stake in Vietnam Airlines, sold its rights to buy 70
million shares to Vietnam Airlines employees since it is itself
facing financial difficulties.
The carrier estimates its losses for the first half of 2021 at
around VND10.79 trillion, VnExpress notes.
Vietnam Airlines is the national airline of Vietnam and
majority-owned by the Vietnamese government. Vietnam Airlines
operates an extensive network of domestic and regional services
within Southeast and North Asia and international services to
Europe and Australia. Vietnam Airlines joined the SkyTeam alliance
in 2010.
[*] VIETNAM: 28% of Realty Trading Floors Face Bankruptcy
---------------------------------------------------------
VnExpress reports that many real estate trading floors have little
or no business amid Covid-19, and 28% face the risk of bankruptcy,
according to the Vietnam Association of Realtors.
After surveying 500 floors with a total workforce of 75,000, it
said another 32% are struggling to sustain their operations,
VnExpress relays.
Over 80% have had little or no revenues recently and 78% have had
to downsize or furlough employees, VnExpress discloses.
Most said they have not benefited from government assistance. Some
75% said their taxes have not been deferred.
VnExpress adds that the association wants the government to add
realty, including brokerage, to the list of sectors eligible for
relief assistance, and allow trading floors to defer tax and social
insurance premium payments.
*********
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
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***