/raid1/www/Hosts/bankrupt/TCRAP_Public/211209.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, December 9, 2021, Vol. 24, No. 240
Headlines
A U S T R A L I A
CLUB GAMING: First Creditors' Meeting Set for Dec. 17
ENVIROCHAR PTY: Second Creditors' Meeting Set for Dec. 16
JWM CONTRACTING: Second Creditors' Meeting Set for Dec. 16
STRATMONT PTY: Second Creditors' Meeting Set for Dec. 16
C H I N A
CHINA AOYUAN: Fitch Lowers LT Foreign Currency IDR to 'C'
CHINA EVERGRANDE: Bondholders Yet to Be Paid as Grace Period Ends
I N D I A
134 INFRA: Ind-Ra Moves 'BB+' LT Issuer Rating to Non-Cooperating
AARTI INFRA-PROJECTS: CARE Keeps D Debt Ratings in Not Cooperating
ALASKA FABTECH: CRISIL Keeps D Debt Ratings in Not Cooperating
ANIL KUMAR: Ind-Ra Moves 'BB-' LT Issuer Rating to Non-Cooperating
ANMOL ASSOCIATES: Ind-Ra Affirms & Withdraws BB LT Issuer Rating
ANUPAM INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating
BGR MINING: Ind-Ra Affirms & Withdraws 'D' Long-Term Issuer Rating
BRILLIANT ETOILE: Ind-Ra Withdraws 'BB' Bank Loan Rating
CAMEX LIMITED: Ind-Ra Corrects October 8, 2020 Rating Release
CAMEX LIMITED: Ind-Ra Lowers Long-Term Issuer Rating to 'BB-'
EARTHCON UNIVERSAL: CRISIL Keeps D Debt Ratings in Not Cooperating
EASTERN SILK: CRISIL Keeps D Debt Rating in Not Cooperating
FURUKAWA MINDA: CRISIL Keeps B Debt Rating in Not Cooperating
GMR KAMALANGA: CARE Reaffirms D Rating on INR4,459.80cr Loans
HEATHER INFRA: CRISIL Withdraws D Rating on INR3cr Bank Debt
INDROYAL PROPERTIES: CARE Keeps D Debt Rating in Not Cooperating
INTERJEWEL PRIVATE: CARE Keeps D Debt Ratings in Not Cooperating
JANA HOLDINGS: Ind-Ra Assigns 'B+' to Non-Convertible Debts
KAMRUP PACKAGING: CRISIL Keeps B Debt Ratings in Not Cooperating
KEDARNATH COMMOTRADE: CARE Keeps D Debt Ratings in Not Cooperating
KRISHNA CONTAINERS: CRISIL Keeps D Ratings in Not Cooperating
KRISHNA SAHAKARI: Ind-Ra Affirms 'B' Bank Loan Rating
M.S. SOLVENT: CARE Lowers Rating on INR7.50cr Long-Term Loan to C
MARKOLINES INFRA: Ind-Ra Gives BB+ Issuer Rating, Outlook Stable
N. K. BHOJANI: CRISIL Keeps D Debt Ratings in Not Cooperating
N.V. KHAROTE: CARE Keeps D Debt Ratings in Not Cooperating
NANCY KRAFTS: CRISIL Keeps D Debt Ratings in Not Cooperating
NEW LAXMI: Ind-Ra Moves 'BB' LT Issuer Rating to Non-Cooperating
PNP INFRAPROJECTS: CRISIL Assigns B Rating to INR60cr Cash Loan
RELIANCE INFRASTRUCTURE: Ind-Ra Affirms 'D' LT Issuer Rating
SARAL HOME: Ind-Ra Moves BB+ Bank Loan Rating to Non-Cooperating
SENAPATI MOTORS: CRISIL Keeps D Debt Rating in Not Cooperating
SHANKAR RAMCHANDRA: Ind-Ra Gives BB+ Issuer Rating, Outlook Stable
SHIVANSH DIAMOND: CARE Keeps D Debt Rating in Not Cooperating
SHRINET AND SHANDILYA: CRISIL Withdraws D Rating on INR25cr Loan
SIMPLEX CASTING: Ind-Ra Hikes Long-Term Issuer Rating to 'B'
SUSEE PREMIUM: CARE Keeps D Debt Rating in Not Cooperating
VDB PROJECTS: Ind-Ra Affirms & Withdraws 'BB+' LT Issuer Rating
VEENDEEP OILTEK: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
[*] INDIA: 1,149 Cases Went for Liquidation as of Sept. 30
N E W Z E A L A N D
AUCKLAND ALUMINIUM: Creditors' Proofs of Debt Due Jan. 12
OBJECTIVE ACUITY: Creditors' Proofs of Debt Due Jan. 10
PHOENIXIA LIMITED: Creditors' Proofs of Debt Due on Jan. 6
S I N G A P O R E
DESIGN STUDIO: Commences Wind-Up Proceedings
DSG PROJECTS: Commences Wind-Up Proceedings
FX TRADE: Creditors' Proofs of Debt Due on Jan. 7
SUN ELECTRIC: Court Enters Wind-Up Order
S R I L A N K A
SRI LANKA: Plunge Into Organic Farming Brings Disaster
- - - - -
=================
A U S T R A L I A
=================
CLUB GAMING: First Creditors' Meeting Set for Dec. 17
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Club Gaming
Financial Services Pty Ltd will be held on Dec. 17, 2021, at 11:00
a.m. at the offices of Worrells Solvency & Forensic Accountants
Suite 4, Level 3, 26 Duporth Avenue, in Maroochydore, Queensland.
Dane Hammond of Worrells Solvency & Forensic Accountants were
appointed as administrators of Club Gaming on Dec. 7, 2021.
ENVIROCHAR PTY: Second Creditors' Meeting Set for Dec. 16
---------------------------------------------------------
A second meeting of creditors in the proceedings of Envirochar Pty
Ltd has been set for Dec. 16, 2021, at 11:00 a.m. via electronic
means only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Dec. 15, 2021, at 4:00 p.m.
Mitchell Griffiths of Rapsey Griffiths Turnaround + Advisory was
appointed as administrator of Envirochar Pty on Nov. 16, 2021.
JWM CONTRACTING: Second Creditors' Meeting Set for Dec. 16
----------------------------------------------------------
A second meeting of creditors in the proceedings of JWM Contracting
Pty Ltd has been set for Dec. 16, 2021, at 10:00 a.m. at the
offices of virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Dec. 15, 2021, at 5:00 p.m.
Anne Meagher of SV Partners was appointed as administrator of JWM
Contracting on Nov. 11, 2021.
STRATMONT PTY: Second Creditors' Meeting Set for Dec. 16
--------------------------------------------------------
A second meeting of creditors in the proceedings of Stratmont Pty
Ltd, formerly Trading as OviCare, has been set for Dec. 16, 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 Dec. 15, 2021, at 4:00 p.m.
Richard Lawrence and Richard Albarran of Hall Chadwick were
appointed as administrators of Stratmont Pty on Nov. 11, 2021.
=========
C H I N A
=========
CHINA AOYUAN: Fitch Lowers LT Foreign Currency IDR to 'C'
---------------------------------------------------------
Fitch Ratings has downgraded China Aoyuan Group Limited's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'C' from 'CCC-'.
Fitch has also downgraded the senior unsecured rating and the
ratings on the outstanding US-dollar senior unsecured notes to 'C',
from 'CCC-', with the Recovery Rating remaining at 'RR4'.
The downgrade reflects Fitch's view that a default or default-like
process has begun, based on the company's announcement that it has
not made payments or reached an agreement with creditors regarding
its offshore financing, after it received notice from creditors
demanding payment on financings with principal amount of around
USD651 million following recent rating actions by rating agencies.
Aoyuan has not provided further information to Fitch beyond its
public announcements.
KEY RATING DRIVERS
Non-Payment of Financing: Aoyuan announced on 2 December 2021 that
it received notice from creditors seeking repayment of an aggregate
principal amount of USD651.2 million, for which Aoyuan or its
entities are borrowers or guarantors. The demands for payment were
a result of the recent rating downgrades by rating agencies. Aoyuan
had not made any payment as at the date of the announcement or
reached an agreement on alternative payment arrangements with these
creditors. It is communicating with the creditors to resolve the
non-payment.
Fitch believes Aoyuan's public bonds are not among the USD651.2
million of financing affected by the demands for repayment, because
acceleration of payment for Aoyuan's public bonds cannot be
triggered solely by rating downgrades, but must be accompanied by
other events, including change of control. However, Fitch believes
the non-payment of the above principal amount means that a default
or default-like process has begun. The non-payment may also trigger
acceleration of repayment of other offshore financing.
Maturing Public Bonds: Fitch estimates that Aoyuan has CNY8.8
billion of public capital-market debt maturing or becoming puttable
through to end-2022, including USD688 million in senior notes due
in January 2022 and USD200 million of notes that turn puttable in
June 2022. The company also has a USD250 million bond due in
September 2022 and a CNY1.5 billion bond turning puttable in that
month.
ESG - Governance: Aoyuan has an ESG Relevance Score of '4' for
Financial Transparency. The company appears to have weaker access
to its reported consolidated cash balance than what it earlier
guided in terms of the level of cash at the rated-entity level.
This has a negative impact on the credit profile, and is relevant
to the ratings in conjunction with other factors.
DERIVATION SUMMARY
Aoyuan's ratings are driven by its stressed liquidity and its
non-payment of offshore financing for which creditors had demanded
payment be accelerated.
KEY ASSUMPTIONS
-- A 4% annual rise in average land costs in 2021-2024;
-- Unsold land bank life maintained at around 2.5 years,
excluding urban redevelopment projects;
-- Selling, general and administrative expenses at 6%-8% of
revenue.
Key Recovery Rating Assumptions:
-- The recovery analysis assumes that Aoyuan would be liquidated
in a bankruptcy.
-- Fitch assumes a 10% administrative claim.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realised in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
-- 70% advance rate to accounts receivable;
-- 30% advance rate to investment properties, as the investment
property rental yield was close to 2%;
-- 60% advance rate to land and buildings;
-- 60% advance rate to adjusted net inventory;
-- Aoyuan's available cash is higher than its trade payables;
Fitch gives a 60% advance rate to its excess cash after
deducting three months of contracted sales.
The allocation of value in the liability waterfall results in
recovery corresponding to a Recovery Rating of 'RR4' for the senior
unsecured offshore bonds.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Resolution of non-payment of its financing, and repayment of
the principal of its maturing offshore public bonds, without
the use of a distressed debt exchange (DDE).
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Commencement of a DDE;
-- Announcement that the issuer entered into bankruptcy filings,
administration, receivership, liquidation or other formal
winding-up procedure, or otherwise ceased business.
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
Large Maturities: The company had available cash of CNY51.8 billion
at end-1H21, excluding restricted cash and restricted deposits for
project construction, but did not provide the cash balance that is
freely available to repay its capital-market debt. Fitch believes a
majority of the cash is likely to be at the project level, but
Fitch is unable to verify this with the company. Aoyuan's next
capital-market maturity is in January 2022, during which USD688
million of bonds will mature. It will then have a USD200 million
bond that will become puttable in June 2022.
ISSUER PROFILE
Aoyuan is one of the 30 largest property developers in China, with
about 370 projects with a total gross floor area of around 57
million square metres at end-2020. Guangdong accounted for 28% of
its total land bank by gross floor area. Aoyuan also has properties
in Canada and Australia.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has excluded CNY8.3 billion deposited in designated accounts
from cash in Fitch's leverage calculation and included this as
inventory.
Restricted bank deposits of CNY7.7 billion are included in cash to
calculate net debt, as these are mainly pledged for obtaining bank
loans.
ESG CONSIDERATIONS
China Aoyuan Group Limited has an ESG Relevance Score of '4' for
Financial Transparency. The company appears to have weaker access
to its reported consolidated cash balance than what it earlier
guided in terms of the level of cash at the rated-entity level.
This has a negative impact on the credit profile, and is relevant
to the rating[s] in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CHINA EVERGRANDE: Bondholders Yet to Be Paid as Grace Period Ends
-----------------------------------------------------------------
The Financial Times reports that some investors in China Evergrande
said they have not received crucial bond payments after the expiry
of a 30-day grace period on Dec. 6, as the world's most indebted
developer edges closer to a formal default.
The FT relates that the company, which has delayed several
international bond payments over recent months after a liquidity
crisis forced it to battle for its survival, had $82.5 million in
coupons due on Dec. 6 - days after it signalled the need to
restructure its debt.
One investor with a stake in the bonds, who asked to remain
anonymous, said he had not received any funds as of early afternoon
Hong Kong time on Dec. 7, and was awaiting an announcement over the
coming days confirming whether the payment had been made, according
to the FT.
"I think it's unlikely they will have paid, but it's possible," he
said, pointing to delays in the processing of bond payments.
Another employee of a US asset manager told the Financial Times no
payments had been received on Dec. 7.
Missed deadlines this week could trigger an official default for
Evergrande, months after its initial failure to make an interest
payment in late September sparked volatility across global markets,
the FT says.
According to the FT, the company's problems have prompted a
reckoning over the health of China's real estate sector and
widespread expectations of one of the biggest restructurings in the
country's history.
In a sign of the severity of the situation, Beijing on Dec. 6
signalled its first substantial policy loosening since the early
days of the coronavirus pandemic, in a move widely seen as designed
to reassure investors bracing for Evergrande's possible default.
The Hang Seng Mainland Properties index rose by as much as 4.1 per
cent on Dec. 7 after the country's central bank said it would free
up RMB1.2 trillion ($188 billion) of liquidity for the banking
system by cutting the share of deposits that financial institutions
must hold in reserve by 50 basis points, the FT relays.
Evergrande, which has rarely addressed its delayed payments in
official filings, said on Dec. 3 it had received a demand related
to guarantees on $260 million of debt.
It added that "there is no guarantee that the group will have
sufficient funds to continue to perform its financial obligations"
and that it "plans to actively engage with offshore creditors to
formulate a viable restructuring plan," the FT reports.
According to the FT, rating agency S&P said late on Dec. 7 the
payment demand would not likely constitute a default event yet.
"Regardless, we believe that default looks inevitable for
Evergrande," analysts wrote.
The coupon payments due on Dec. 6 and guarantees referred to on
Dec. 3, worth a combined $343 million, are equivalent to the value
of shares sold late last month by Evergrande chair Hui Ka Yan - a
transaction that reduced his stake in the group to 68 per cent from
77 per cent. Evergrande has not said if Hui would use the proceeds
to help pay down its debts, the report notes.
The FT adds that the company's shares rebounded as much as
8.3 per cent on Dec. 7 after it announced the establishment of a
risk management committee with members from large state-controlled
companies.
Evergrande's liquidity crisis has over recent months spread across
China's economically important real estate developer sector.
Another big developer, Kaisa, had a $400 million bond maturing on
Dec. 7 and investors last week turned down an offer to extend its
maturity.
"The key question on investors' minds is whether the government is
willing to change its policy stance on the property sector," the
report quotes Zhiwei Zhang, chief economist at Pinpoint Asset
Management, as saying.
The cut to the banks' reserve requirement ratio sent the Hang Seng
China Enterprises index up 1 per cent on Dec. 7.
But analysts were sceptical that the measures would feed through to
the real economy and property sector quickly after new data showed
China's property slowdown worsened last month.
"We expect liquidity to bottom out in the second quarter of 2022 at
the earliest," the FT quotes Griffin Chan, a China property
research analyst at Citigroup, as saying. He added that any easing
would mostly benefit safer players in the real estate sector rather
than those in urgent need and was "likely not enough" to offset
property sales shortfalls.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
30, 2021, Fitch Ratings has downgraded to 'C' from 'CC', the
Long-Term Foreign-Currency Issuer Default Ratings (IDRs) of Chinese
homebuilder, China Evergrande Group, and its subsidiaries, Hengda
Real Estate Group Co., Ltd and Tianji Holding Limited. Fitch has
affirmed the senior unsecured ratings of Evergrande and Tianji at
'C', with a Recovery Rating of 'RR6', as well as the
Tianji-guaranteed senior unsecured notes issued by Scenery Journey
Limited at 'C', with a Recovery Rating of 'RR6'.
S&P Global Ratings' rating for China Evergrande Group and its
subsidiaries Hengda Real Estate Group Co. Ltd. and Tianji Holding
Ltd. was lowered to 'CC' from 'CCC' last September 15, 2021. S&P
also lowered its long-term issue rating on the U.S. dollar notes
issued by Evergrande and guaranteed by Tianji to 'C' from 'CCC-'.
=========
I N D I A
=========
134 INFRA: Ind-Ra Moves 'BB+' LT Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated 134 Infra LLP's
Long-Term Issuer Rating to the non-cooperating category. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Therefore, investors and
other users are advised to take appropriate caution while using
these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR1.210 bil. Term loan due on October 2022 migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 20, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
134 Infra was converted into a limited liability partnership from a
partnership firm on December 15, 2017. The 14-partner firm is
engaged in the construction of residential and commercial real
estate projects in Surat, Gujarat.
AARTI INFRA-PROJECTS: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Aarti
InfrA-Projects Private Limited (AIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 26.23 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short 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 October 27, 2020, placed the
rating(s) of AIPL under the 'issuer non-cooperating' category as
AIPL 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. AIPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
September 12, 2021, September 22, 2021, October 2, 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. Further, rating assigned to the letter of credit facility
has been withdrawn as the company has surrendered the same.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Nagpur-based, Aarti Infra-Projects Private Limited (AIPL) was
incorporated in May 2006 and is a part of the Mandhana Group of
Industries. Promoted by Mr. Kanhaiyalal S Mandhana, and its entire
shares are held by the Mandhana family. AIPL operates in three
verticals viz, irrigation projects (barrage/dam radial gates and
others), thermal power projects (fabrication and erection of heavy
structures for power station and others) and hydro power projects
(automatic tilting gates, high radial gates etc.
ALASKA FABTECH: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Alaska
Fabtech Private Limited (AFPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.75 CRISIL D (Issuer Not
Cooperating)
Cash Credit 4.50 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 1.75 CRISIL D (Issuer Not
Cooperating)
Packing Credit 2 CRISIL D (Issuer Not
Cooperating)
Term Loan 4 CRISIL D (Issuer Not
Cooperating)
Term Loan 9 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with AFPL for
obtaining information through letters and emails dated August 19,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of AFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AFPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
AFPL, based in Derabassi (Punjab), manufactures terry towels, bath
robes, hooded towels, and children's bibs. It was incorporated in
2011 to take over SR Industries Ltd (SRIL). In April 2012, after
all the legal formalities were completed, the new management took
over and renamed it AFPL. Mr Shankar Bansal manages operations.
ANIL KUMAR: Ind-Ra Moves 'BB-' LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Anil Kumar &
Company's Long-Term Issuer Rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND
BB-(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING)
rating; and
-- INR409.8 mil. Non-fund-based working capital limits migrated
to non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
November 5, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1986 as a partnership concern, Uttar Pradesh-based
Anil Kumar & Company primarily undertakes electrical and civil
contracts for state government entities in Uttar Pradesh.
ANMOL ASSOCIATES: Ind-Ra Affirms & Withdraws BB LT Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Anmol Associates'
(AA) Long-Term Issuer Rating at 'IND BB' and has simultaneously
withdrawn it. The Outlook was Stable.
The instrument-wise rating actions are:
-- The 'IND BB' rating on the INR50 mil. Fund-based limits*
affirmed and withdrawn; and
-- The 'IND A4+' rating on the INR200 mil. Non-fund-based
limits** affirmed and withdrawn.
*Affirmed at 'IND BB'/Stable/'IND A4+' before being withdrawn
**Affirmed at 'IND A4+' before being withdrawn
Ind-Ra is no longer required to maintain the ratings, as it has
received a no-objection certificate from the rated facilities'
lender. This is consistent with the Securities and Exchange Board
of India's circular dated March 31, 2017 for credit rating
agencies.
KEY RATING DRIVERS
The affirmation reflects AA's continued small scale of operations.
Its revenue improved marginally to INR1,475.68 million in FY21
(FY20: INR1,270.33 million) due to the easing out of COVID-19 led
restrictions. FY21 financials are provisional in nature.
Liquidity Indicator – Stretched: AA's average maximum utilization
of fund-based limits was 77% during the last 12 months ending
October 2021. The company's moderate net working capital cycle,
although negative, improved to 76 days in FY21 (FY20: negative 92
days). The cash flow from operations deteriorated to INR91.12
million in FY21 (FY20: INR180.20 million) due to an increase in the
other current assets and consequent decline in the other current
liabilities. Furthermore, the free cash flow deteriorated to
INR84.50 million in FY21 (FY20: INR108.71 million) despite any
major capex. Anmol's cash and cash equivalents deteriorated to
INR2.42 million at FYE21 (FYE20: INR42.25 million). Anmol does not
have any capital market exposure and relies on banks and financial
institutions to meet its funding requirements.
The ratings factor in AA's strong credit metrics with its gross
interest coverage (operating EBITDA/gross interest expense)
improving 7.11x in FY21 (FY20: 6.89x) and the net financial
leverage (adjusted net debt/operating EBITDA) to 0.27x (0.38x). The
credit metrics improved yoy in FY21 due to an increase in the
absolute EBITDA to INR130.21 million (FY20: INR106.79 million).
The ratings are also supported by AA's healthy EBITDA margin, which
improved to 8.82% in FY21 (FY20: 8.41%). The return on capital
employed was 40.60% in FY21 (FY20: 36.80%).
COMPANY PROFILE
Established in 2013, AA is engaged in the construction of roads and
building, and irrigation works. It is an approved Class-A civil
contractor for Uttar Pradesh Public Works Departments and Class-AA
contractor for the Lucknow Development Authority and Uttar Pradesh
Irrigation Department.
ANUPAM INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Anupam
Industries Limited (AIL) continue to be 'CRISIL D/CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Fund Based 160.0 CRISIL D (Issuer Not
Facilities-LT Cooperating)
Non-Fund Based 190.0 CRISIL D (Issuer Not
Facilities-ST Cooperating)
CRISIL Ratings has been consistently following up with AIL for
obtaining information through letters and emails dated August 19,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of AIL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AIL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AIL continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
AIL was set up by JC Patel as a proprietorship concern in Anand
(Gujarat) in 1973; it was reconstituted as a closely public limited
company in 1998. AIL manufactures different types of cranes
(including the electric overhead, gantry, and tower variants),
which are used in the steel, power, construction, ports, and
defense segments. It is one of the largest overhead crane suppliers
in India.
BGR MINING: Ind-Ra Affirms & Withdraws 'D' Long-Term Issuer Rating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed BGR Mining &
Infra's Long-Term Issuer Rating at 'IND D' and has simultaneously
withdrawn it.
The instrument-wise rating actions are:
-- INR1.015 bil. Fund-based working capital limits (Long-
term/Short-term)* affirmed and withdrawn;
-- INR5.635 bil. Non-fund-based working capital limits (Short-
term)* affirmed and withdrawn; and
-- INR1,149.59 bil. Term loans (Long-term)* due on March 23
affirmed and withdrawn.
*The ratings were affirmed at 'IND D' before being withdrawn.
KEY RATING DRIVERS
The affirmation reflects BGR's lack of timely debt servicing track
record for three consecutive months.
The rating withdrawal of the instrument rating follows the receipt
of a no-objection certificate from the BGR's lenders for the rated
instruments. Consequently, the Long-term Issuer Rating has also
been withdrawn.
COMPANY PROFILE
Incorporated in 1988, BGR is a Hyderabad-based mining contractor,
majorly involved in overburden removal and coal extraction.
BRILLIANT ETOILE: Ind-Ra Withdraws 'BB' Bank Loan Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Brilliant Etoile
Private Limited's (BEPL) bank facilities rating of 'IND BB (ISSUER
NOT COOPERATING)'.
The instrument-wise rating actions are:
-- The 'IND BB' rating on the INR2.50 bil. Term loan due on March
2023 is withdrawn;
-- The 'IND BB' rating on the INR250 mil. Overdraft (sub-limit of
term loan) is withdrawn; and
-- The 'IND BB' rating on the INR250 mil. Letter of credit (sub-
limit of term loan) is withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-dues certificate from the lender. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017 for credit rating agencies. Ind-Ra
will no longer provide analytical and rating coverage for the
entity. Ind-Ra is no longer required to maintain the ratings, as
the agency has received a no-dues certificate from the lender. This
is consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017 for credit rating agencies. Ind-Ra
will no longer provide analytical and rating coverage for the
entity.
COMPANY PROFILE
Incorporated in February 2017, Brilliant Etoile is an indirect
subsidiary of Country Garden Holdings Co Ltd (CGHCL). CGHCL entered
the Indian real estate market through various subsidiaries
incorporated in various cities in India. Brilliant Etoile has been
incorporated to build and sell real estate projects in
Delhi/National Capital Region.
CGHCL is a leading Chinese property developer and is listed on the
Hong Kong Stock Exchange. As on 31 December 2018, CGHCL had 2,148
projects across mainland China, covering 1,156 counties/towns, 269
cities and 31 provinces, as well as 17 projects outside Mainland
China.
CAMEX LIMITED: Ind-Ra Corrects October 8, 2020 Rating Release
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) rectified Camex Limited's
rating published on October 8, 2020 to correctly state the size of
the issue of the fund-based limits.
The amended version is:
India Ratings and Research (Ind-Ra) has downgraded Camex Limited's
Long-Term Issuer Rating to 'IND BB' from 'IND BB+' while resolving
the Rating Watch Negative (RWN). The Outlook is Stable.
The instrument-wise rating actions are:
-- INR145 mil. (reduced from INR150 mil.) Fund-based limits Long-
term rating downgraded; Short-term rating affirmed; Off RWN
with IND BB/Stable/IND A4+ rating; and
-- INR100 mil. Non-fund-based limits affirmed; Off RWN with IND
A4+ rating.
Analytical Approach: Ind-Ra continues to take a consolidated view
of Camex Limited and its subsidiary Camex HK Limited as both
companies operate in the same line of business.
KEY RATING DRIVERS
The RWN resolution reflects the restoration of supply of raw
materials such as vinyl sulphur, H-acid and cyanuric from China,
which was disrupted by the COVID-19 outbreak. As informed by the
management to Ind-Ra, the company has been able to source raw
materials from China from June 2020 without any hindrances.
The downgrade reflects a decline in the consolidated revenue to
INR1,319 million in FY20 (FY19: INR1,472 million), due to the
disruptions caused by the COVID-19-led lockdown. This, coupled with
an increase in the raw material costs in 4QFY20, caused the
consolidated EBITDA margins to contract to 2.9% in FY20 (FY19:
5.0%). The company's scale of operations remains medium. The
margins were modest with a return of capital employed of 6% in FY20
(FY19: 13%).
The ratings continue to factor in the company's modest credit
metrics. On a consolidated basis, the net leverage (total adjusted
debt/operating EBITDA) improved to 0.5x in FY20 (FY19: 1.6x) and
the interest coverage (operating EBITDA/gross interest expense) to
4.6x (4.1x), owing to a decline in the debt to INR26 million
(INR138 million) and the consequent reduction in the interest
expense to INR8 million (INR18 million).
On a standalone basis, revenue decreased to INR1,225 million in
FY20 (FY19: INR1,403 million) due to the disruptions caused by the
COVID-19 led lockdown. The margins were modest and contracted to
2.9% in FY20 (FY19: 4.8%) on the back of an increase in other
operating expenses. The credit metrics were modest with net
leverage of 0.5x in FY20 (FY19: 1.9x) and interest coverage of 4.5x
(3.8x). The improvement in the credit metrics was owing to a
decline in the debt to INR26 million in FY20 (FY19: INR135 million)
and the consequent reduction in the interest expense to INR8
million (INR18 million).
Liquidity Indicator - Adequate: The ratings are, however, supported
by the company's adequate liquidity with average peak use of the
fund-based and non-fund-based limits of 30% and 27%, respectively,
during the 12 months ended August 2020. The cash flow from
operations declined to INR102 million in FY20 (FY19: INR162
million), on account of an increase in working capital requirement.
Consequently, free cash flow declined to INR100 million in FY20
(FY19: INR152 million). Camex did not avail the Reserve Bank of
India-prescribed moratorium under the COVID-19 relief package for
debt repayment. Camex does not have any major debt-led capex plans
in the near term.
The ratings also remain supported by the company's managing
director's experience of more than three decades in the chemicals
industry.
RATING SENSITIVITIES
Positive: An improvement in the scale of operations along with the
EBITDA margins, while maintaining the liquidity position, all on a
sustained basis, would be positive for the ratings.
Negative: A decline in the EBITDA margins, leading to the interest
coverage reducing below 2.0x on a sustained basis would be negative
for the ratings.
COMPANY PROFILE
Incorporated in 1989, Camex is promoted by Chopra and family. The
company is engaged in the manufacturing and trading of reactive
dyes, intermediates, pigments and specialty chemicals used in the
textile industry.
CAMEX LIMITED: Ind-Ra Lowers Long-Term Issuer Rating to 'BB-'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Camex Limited's
Long-Term Issuer Rating to 'IND BB-' from 'IND BB'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR145 mil. Fund-based working capital limits Long-term rating
downgraded; Short-term rating affirmed with IND BB-
/Stable/IND A4+ rating; and
-- INR100 mil. Non-fund-based working capital limits affirmed IND
A4+ rating.
Analytical Approach: Ind-Ra continues to take a consolidated view
of Camex Limited and its 100% subsidiary Camex HK Limited as both
companies operate in the same line of business.
The downgrade reflects deterioration in Camex's EBITDA margins in
FY21 and its gross coverage declining below 2x in 6MFY22, thereby
breaching the negative sensitivities.
KEY RATING DRIVERS
The downgrade reflects a contraction in Camex's EBITDA margin to
1.95% in FY21 (FY20: 2.68%) owing to an increase in the cost of
traded goods and forex currency fluctuation. The company's absolute
EBITDA deteriorated to INR29.31 million in FY21 (FY20: INR35.35
million) and its return on capital employed stood flat at 5%.
Ind-Ra expects the margin to continue to be modest due to the
increasing prices of trading goods (dyes, chemicals, aluminum and
steel scrap). In 6MFY22, the margin further contracted to 1.01%
(6MFY21: 1.02%) due to a further increase in the cost of goods to
92.04% (6MFY21: 91.3%).
The ratings factor in Camex's weak credit metrics. The company's
gross interest coverage deteriorated to 1.37x in 6MFY22 (FY21:
4.25x; FY20: 4.16x) due to an increase in interest expenses to
INR5.18 million (INR6.89 million; INR8.49 million,6MFY21: INR1.01
million). The company's gross interest coverage marginally improved
yoy in FY21 owing to a decrease in interest expenses, due to low
utilization of working capital limits during the year. The net
leverage (total adjusted net debt/operating EBITDA) deteriorated to
6.21x in FY21 (FY20: 0.92x) due to the infusion of unsecured loans
from group company; however, these unsecured loans were fully
repaid by 30 September 2021. The unsecured loans are interest
bearing and Camex avails and repays the unsecured loans, as per its
requirement. Ind-Ra expects the credit metrics to continue to be
weak due to modest profitability.
The ratings factor in Camex's continued small scale of operations.
The consolidated revenue increased to INR1,501.69 million in FY21
(FY20: INR1,319.20 million), owing to increased domestic sales of
trading nature. Camex commenced an additional trading segment of
metals (aluminum and steel scrap) in FY21, and the same contributed
26.62% to total revenue. In 6MFY22, Camex booked revenue of
INR704.92 million (6MFY21: INR508.28 million). Ind-Ra expects FY22
revenue to be in line with FY21. Camex's standalone revenue
increased to INR1,425.34 million in FY21 (FY20: INR1,225 million).
Its margin contracted to 1.93% in FY21 (FY20: 2.59%) and the
absolute EBITDA to INR27.45 million (INR31.78 million). The gross
interest coverage improved to 4.6x in FY21 (FY20: 4.02x) and net
leverage to 6.61x (1.02x).
Liquidity Indicator - Stretched: The cash flow from operations
turned negative to INR140.51 million in FY21 (FY20: INR106.66
million) on account of an increase in working capital requirement,
leading to the free cash flow turning negative to INR142.55 million
(INR104.45 million). The working capital days elongated to 76 days
in FY21 (FY20: 67 days) due to an increase in receivable days to
102 (85). The company's cash and cash equivalents were low at
INR3.88 million at FYE21 (FYE20: INR4.33 million). The peak average
utilization of fund-based working capital limits were 52.83% and
non-fund-based working capital limits were 71.44% for 12 months
ended September 2021. Camex did not avail of the Reserve Bank of
India-prescribed moratorium over March-August 2020. Currently,
Camex does not have any term loans and no major debt-led capex
plans in the near term.
The ratings, however, remain supported by the company's managing
director's experience of more than three decades in the chemicals
industry.
RATING SENSITIVITIES
Negative: A decline in the EBITDA margins, leading to the interest
coverage sustaining below 1.5x in FY22 and further deterioration in
liquidity position, on a sustained basis would be negative for the
ratings.
Positive: An improvement in the scale of operations along with the
EBITDA margins, and improvement in liquidity position, on a
sustained basis, would be positive for the ratings.
COMPANY PROFILE
Camex incorporated in 1989 is promoted by Chandraprakash Chopra and
family. The company is engaged in the manufacturing and trading of
reactive dyes, intermediates, pigments and specialty chemicals used
in the textile industry. In FY21, Camex commenced the trading of
aluminum and scrap steel.
EARTHCON UNIVERSAL: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Earthcon
Universal Infratech Private Limited (EUIPL; a part of the Earthcon
group) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Rupee 25 CRISIL D (Issuer Not
Term Loan Cooperating)
Rupee Term Loan 100 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with EUIPL for
obtaining information through letters and emails dated September
28, 2021 and October 27, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of EUIPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on EUIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
EUIPL continue to be 'CRISIL D Issuer Not Cooperating'.
EUIPL was incorporated in 2009 as Zayat Infratech Pvt Ltd and got
its present name in 2010. Greater Noida Industrial Development
Authority, through a bid system, allotted a 65,330-square-metre
plot of land in Sector-I, Greater Noida, to a consortium of
Universal Construction Company (a partnership firm), Earthcon
Construction Pvt Ltd, and Omaxe Ltd. For the purpose of allotment
and development of the land, EUIPL was set up as a special purpose
vehicle with shareholding in a ratio of 46:44:10, respectively.
Omaxe Ltd later transferred its shareholding to other
shareholders.
The Earthcon group, promoted by Mr Shabad Khan, constructs
residential and commercial apartments in northern India. Since
inception, the group has delivered various projects, including
villas, cottages, and apartments in Delhi, Noida, Lucknow,
Moradabad, and Nainital.
EASTERN SILK: CRISIL Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Eastern Silk
Industries Ltd (ESIL) continues to be 'CRISIL D; Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating 471.5 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with ESIL for
obtaining information through letters and emails dated September
28, 2021 and October 27, 2021, apart from telephonic communication.
However, the issuer has remained non-cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of ESIL, which restricts CRISIL's
ability to take a forward-looking view on the entity's credit
quality. CRISIL Ratings believes that rating action on ESIL is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of ESIL
continue to be 'CRISIL D; Issuer Not Cooperating'.
ESIL, incorporated in 1946, manufactures silk yarn, made-ups, home
furnishings, fashion fabrics, handloom fabrics, double-width
fabrics, and embroidered fabrics. The manufacturing facilities are
at Anekal and Hobli in Bengaluru, and Nanjangud (all in Karnataka),
and Falta Special Economic Zone (West Bengal).
FURUKAWA MINDA: CRISIL Keeps B Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Furukawa Minda
Electric Private Limited (MFEPL; previously known as Minda Furukawa
Electric Private Limited) continues to be 'CRISIL B/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit & 1.50 CRISIL B/Stable (Issuer Not
Working Capital Cooperating)
Demand Loan
CRISIL Ratings has been consistently following up with MFEPL for
obtaining information through letters and emails dated August 19,
2021 and October 27, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of MFEPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MFEPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MFEPL continue to be 'CRISIL B/Stable Issuer Not Cooperating'.
MFEPL was incorporated in 2006, as a joint venture between the
Furukawa Group (comprising Furukawa Electric Co Ltd and Furukawa
Automotive Systems Inc; 51% stake), a leading Japanese auto
component manufacturer; and MCL (49% stake). In October 2014, MCL
increased its stake to 51%, but subsequently trimmed it to 25% in
December 2018 and that owned by the Furukawa group rose to 75%,
from 49% earlier. MFEPL manufactures wire harnesses, and allied
components such as couplers, terminals, relay box, junction boxes,
and steering roll connectors, primarily for automobiles.
GMR KAMALANGA: CARE Reaffirms D Rating on INR4,459.80cr Loans
-------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of GMR
Kamalanga Energy Limited (GKEL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 3,998.10 CARE D Reaffirmed
Short Term Bank
Facilities 461.70 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The reaffirmation of ratings of GKEL takes into account the
instances of delay in servicing of debt obligations by the company.
Although the liquidity position of the company has improved since
last review, there has been procedural and reconciliation issues
leading to delays in payment of some portion of interest
obligations.
The rating continues to remain constrained by leveraged capital
structure and the elevated level of receivables due from offtakers
which have relatively weak credit profile.
The rating takes note of the promoter's experience in operating
power projects. The rating also takes cognizance of the extent of
capacity tied up through long term power purchase agreement along
with improvement in operational performance of the company during
FY21 (refers to the period from April 1 to March 31) and H1FY22
(refers to the period from April 1 to September 30).
Rating Sensitivities
Positive Factors- Factors that could lead to positive rating
action/upgrade:
* Significant improvement in liquidity profile and reduction in
debt upon realization of receivables
* Timely servicing of debt obligations for more than three months
Detailed description of the key rating drivers
Key Rating Weaknesses
* Instances of delays in debt servicing: In few instances, there
have been shortfall of interest payment as on the due date with
lenders. After reconciliation with the lenders and internal
verification, the shortfall has been serviced after the due date.
Although sufficient balance in account was confirmed by the
company, procedural and reconciliation issues led to delay in debt
servicing in few instances.
* Leveraged capital structure: Continued loss in FY21 had further
eroded the networth leading to overall gearing of 14.51x as of
March 31, 2021 (PY: 12.99x). TD/GCA stood high at 17.35x in FY21
(PY: 17.63x).
* Elevated receivables from financially weak off-takers: Average
collection period of GKEL was 148 days in FY21 (PY: 153 days) which
is high. Substantial receivable as on October 31, 2021 is also
older than 180 days. Upon the receipt of few favorable orders from
various regulatory forums, the regulatory receivable has reduced
from INR1,027 cr as of March 31, 2020 to INR820 cr as of March 31,
2021 and INR750 cr as on October 31, 2021. However, normal
receivable has increased. The weak financial health of its power
off-takers continues to remain a cause of concern for GKEL. The
higher level of Aggregate Transmission and Commercial (AT&C)
losses, the rising power purchase costs and the absence of
cost-reflective tariff regimes have put a strain on the financial
position of its off-takers.
Key Rating Strengths
* Experienced promoter group with experience in developing power
projects: GKEL is a part of GMR group which is a major player in
the infrastructure sector through its flagship company GMR
Infrastructure Limited (GIL) and has been developing projects in
India and abroad in areas such as airports, energy, transportation,
etc. Over the years GMR group has successfully implemented various
power projects and has substantial
experience in developing and operating power projects.
* Long term power purchase agreement in place: GKEL has long term
off-take agreements with GRID Corporation of Odisha (GRIDCO) for
25% of the capacity (262.5 MW), Haryana distribution companies for
31.94% of capacity (335.4 MW) and Bihar State Power Holding Company
Ltd for 27.4% of capacity (287.7 MW). Further, the fresh bidding
was invited by PFC Consulting Limited for 2500 MW in the month of
February 2020 in which GKEL has won bid for 150 MW capacity. The
company is expecting the PPA to be signed soon and the supply to
begin in the near term.
* Satisfactory operational performance: During FY21, the plant
availability factor (PAF) improved to 85.16% (PY: 81.68%), i.e
higher than the normative level. Further, the plant load factor
(PLF) also improved to 77.20% (PY: 63.59%). Competitive variable
tariff of the plant places it high in the merit order dispatch of
off-taking state leading to higher scheduling. PAF and PLF during
YTD-Oct'21 was high at 93.35% and 83.37% respectively.
Liquidity: Stretched
The gross cash accrual projected for GKEL in FY22 is marginal vis a
vis the debt repayment. Average fund-based working capital
utilization of the company has been more than 80% in trailing
twelve months ending July'21. Average collection period of GKEL has
been high in the past due to pending regulatory receivables. The
current ratio of the company continued to be below unity level.
Incorporated in December 2007, GKEL is a special purpose vehicle
promoted by GMR Energy Limited (GEL) which is an
operating-cum-holding company for all power projects of the GMR
Group. GKEL has developed a 1,050 Mega Watt (MW) (3x 350MW)
coal-fired power project at Kamalanga Village, Dhenkanal district,
Odisha. The project cost was initially estimated at INR4,540 crore,
subsequently, there was a cost overrun of INR1,979 crore leading to
the total project cost to INR6,519 crore. The project was funded
through debt of INR4,269 crore and equity of INR2,250 crore (D:E -
65.4: 34.6). The project consisting of 3 units of 350 MW each
achieved COD in April 2013 for Unit-I, November 2013 for Unit-II
and March 2014 for Unit-III respectively.
HEATHER INFRA: CRISIL Withdraws D Rating on INR3cr Bank Debt
------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facilities of
Heather Infrastructure Private Limited (HIPL) on the request of the
company and after receiving no objection certificate from the bank.
The rating action is in-line with CRISIL Rating's policy on
withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Long Term Loan 1.33 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Overdraft Facility 5 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Proposed Long Term 0.67 CRISIL D/Issuer Not
Bank Loan Facility Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with HIPL for
obtaining information through letters and emails dated October 27,
2021 and November 2, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HIPL. This restricts CRISIL
Ratings' ability to take a forward-looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on HIPL is consistent with 'Assessing Information Adequacy Risk'.
CRISIL Ratings has migrated the ratings on the bank facilities of
HIPL to 'CRISIL D/CRISIL D Issuer not cooperating'.
HIPL incorporated in 2008, is primarily engaged in civil
construction works in Kerala. The company has recently ventured
into the real estate segment with 2 residential real estate
projects in Thiruvananthapuram. The company is promoted by Mr.
George Abraham.
INDROYAL PROPERTIES: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Indroyal
Properties Private Limited (IPPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 23.50 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 November 9, 2020, placed the
rating(s) of IPPL under the 'issuer non-cooperating' category as
IPPL 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. IPPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
September 25, 2021, October 5, 2021 and October 15, 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).
Trivandrum-based Indroyal Properties Private Limited (IPPL) is
engaged in development of real estate projects. The ongoing project
"The Uptown" is a high-end luxury residential project comprising of
3 bedroom condominiums, penthouses and garden houses and a total of
213 units. The project was launched in February 2015 and is located
at PMG- Kannammoola Road, Trivandrum.
INTERJEWEL PRIVATE: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Interjewel
Private Limited (IPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 210.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
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 dated December 17, 2020, placed
the rating(s) of IPL under the 'issuer non-cooperating' category as
IPL 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. IPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
November 2, 2021, November 12, 2021, November 22, 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.
InterJewel Private Ltd (IPL) was established as a partnership firm
in 1970, in the name of D. Navinchandra & Co. by Mr Shantibhai
Mehta and Mr. Navinbhai Mehta. The partnership firm was converted
into a private limited company in April 2007, and subsequently
renamed to its current name IPL. The group as a part of its
restructuring process carried out a scheme of amalgamation and
de-merger exercise with effect from April 01, 2009. IPL, now
promoted by Mr. Rupen Kothari, Mr Shrenik Choksi and Mr. Hemal
Choksi, is engaged in the business of importing and processing of
rough diamonds and exporting cut and polished diamonds (CPD) of
various sizes and shapes. The diamond processing activities of IPL
are undertaken at its own manufacturing facilities in Surat. IPL
has its sales offices in Mumbai, Delhi, and Ahmedabad. Currently,
IPL has a 'Rio Tinto Select Diamantaire' status. Day to day
operations of the company is managed by Mr. Hemal Choksi – CEO.
JANA HOLDINGS: Ind-Ra Assigns 'B+' to Non-Convertible Debts
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Jana Holdings Limited's (JHL) non-convertible debentures
(NCDs):
-- INR3 mil. NCDs* affirmed with IND B+/Stable rating; and
-- INR2.25 mil. NCD^ assigned with IND B+/Stable rating.
*Details in Annexure
^Yet to be issued
Analytical Approach: To arrive at the ratings, Ind-Ra continues to
take a consolidated view of the credit profiles of JHL, Jana
Capital Limited (JCL; debt rated 'IND B+'/Stable), and Jana Small
Finance Bank (JSFB). JHL, a subsidiary of JCL, has limited
financial strength. It is a non-operating financial holding company
(NOFHC) of JSFB (42.08% stake held by JHL) and the value of its
investments is derived solely from its shareholding in JSFB. The
value of the stake in JSFB is largely subject to the bank's
incremental performance (banking operations commenced in March
2018) and its ability to manage the credit costs that may emanate
due to pandemic-led disruptions.
The rated NCDs are held by Centrum Group, Manipal Health Systems
Pvt. Ltd. (MHSPL) and TPG Asia VI SF Pte Ltd and are junior to
JHL's other issues. The NCDs held by Centrum Group will mature by
end-December 2021, followed by JHL's other NCDs (not rated by
Ind-Ra) which are held by GIC Pte. Ltd (INR1 billion), Edelweiss
Capital Limited (INR1.55 billion) and TPG Asia VI India Markets Pte
Ltd (INR4.03 billion), and lastly those held by MHSPL.
A common independent director serving on the boards of JHL and
Ind-Ra did not participate in the rating process.
KEY RATING DRIVERS
COVID-19 continues to weigh on JSFB's Asset Quality: JSFB's asset
quality, which improved when its gross non-performing assets
(GNPAs) reduced to 3.2% in FY20 (FY19: 8.1%) on account of reported
write-downs of INR3 billion, came under pressure amid the first and
the second wave of COVID-19. The GNPAs increased to 7.2% in March
2021. Also, the provision coverage ratio including technical
write-offs was at 82% and excluding technical write-offs was at
27.9% at end-March 2021 (end-March 2020: 56.2%). The bank has made
lower provisions on incremental GNPAs as it expects material
recoveries or limited loss given defaults over the near term.
Also, about 8% of the portfolio was restructured for JSFB at
end-March 2021. In case recoveries do not pan out as per the bank's
expectations, JSFB could see incremental credit costs (4%-8%) in
FY22 on the unsecured loans (share of unsecured at end-1QFY22:
59%). Also, the collection efficiencies & recoveries picked up in
the unsecured segment over June-August 2021, supported by the
gradual relaxation of state-wise lockdowns.
Near-term Profitability for JSFB may remain constrained due to High
Credit Costs: JSFB reported a net profit of INR843 million in FY21
(FY20: INR301 million). The bank's performance and liability
structure improved in FY20 and FY21. However, due to the lingering
effects of the first and second wave COVID-19-led lockdowns and low
provisions, the bank could face high credit costs which could
impact its profitability at least over the medium term. Under
stress case, the effects of the scale and repricing of deposits at
lower levels could be offset by incremental credit costs.
High Refinancing and Valuation Risks for Holding Companies: The
issued NCDs face refinancing risks. The NCDs need to be refinanced
to the extent of the principal and the rate of return promised to
the investors. The recently issued NCDs will be partly used for
JHL's upcoming repayments of INR1.4 billion in December 2021 ; the
agency will continue to monitor JHL's further refinancing efforts.
Furthermore, only an increase in JHL's shareholding on account of
the proposed infusion might be insufficient to repay the existing
obligations; hence, the valuation risk is significant and depends
on the bank's standalone performance.
Raising Funds over Near Term Crucial: At FYE21, JSFB reported a
tier 1 capital ratio of 11.75% (FYE20: 13.12%) and a total capital
adequacy ratio of 15.51% (19.31%) which are lower than its peers'.
Furthermore, given the bank's low provisioning levels, its net
NPA/equity stood high at 54.9% at end-March 2021 (end-March 2020:
13.5%) and hence the bank would need to build higher capital
buffers, especially if the recovery slows. JSFB had disclosed in
the Draft Red Herring Prospectus filed with the Securities &
Exchange Board of India in March 2021 that it will undertake a
total capital raise of INR7 billion as part of pre-IPO and the IPO.
Either JHL or JCL is likely to contribute INR4 billion of the same
when the refinance transaction goes through. This capital raise is
crucial over the near term. Also, JSFB has been supported by
regular equity infusions in the past from investors. The bank had
raised INR3.4 billion equity in FY20, INR10.9 billion in FY19 and
INR16.4 billion in FY18 from existing and new investors. As per the
licensing guidelines, the bank was going to list itself on the
stock exchanges by March 2021. However, it has delayed due to the
pandemic and is under process.
Liquidity Indicator for JHL - Poor: JHL does not have cash flows
to service its debt obligations and will have to depend on the
monetization of its stake in JSFB or the secondary sale of shares,
among other options, before the maturity date of the respective
instruments. JHL holds a 42.08% stake in JSFB and is in the
process of listing the bank. JHL and JCL are also in the process of
getting merged for which consent from the 90% creditors is pending.
Ind-Ra expects this merger to be completed over the near term.
Furthermore, the debt raised by both the holding companies are in
the form of zero-coupon bonds that would have lumpy pay-outs on
maturity, adding to the liquidity demands.
Liquidity Indicator for JSFB – Adequate; Deposits Continue to See
Traction: JSFB maintained excess statutory liquidity reserves of
around INR32 billion over FY21, in addition to the cash reserves
that it needs to maintain as part of the regulatory requirement.
The bank's liquidity coverage ratio stood at 1,199.67% at FYE21
(FYE20: 743.98%). Basis the bank's asset liability mismatch (ALM)
statement at end-March 2021, there were no cumulative mismatches
for the period of up to 1 year.
JSFB has also been able to mobilize substantial deposits, with the
term deposits increasing to INR103.1 billion in FY21 (FY20: INR89.4
billion), and the current and savings accounts to INR20.8 billion
(INR7.1 billion). The total deposits stood at INR123.9 billion at
end-March 2021, of which 87.4% have a tenor of more than one year.
Given the substantial traction in low-cost deposits, the cost of
funds for JSFB also improved to 8.3% in FY21 (FY20: 9.4%, FY19:
10.2%). In addition, the bank lowered its interest on deposits in
FY21, which will help it to further reduce its cost of deposits as
they come up for renewals.
Portfolio Mix changing in Favor of Secured: JSFB is strategically
shifting towards a secured loan portfolio and the share of secured
portfolio in its portfolio increased to 40% at end-March 2021 from
29% at end-March 2020. JSFB has also been lowering its group loan
exposure continuously which came down to 36% at end-March 2021 from
around 46% at end-March 2020. Also, the disbursements increased
towards the secured portfolio in 2HFY21. Ind-Ra believes the group
loan portfolio will continue to decline with share of secured
portfolio going up. Ind-Ra believes this will improve the asset
quality of the bank over the medium term.
RATING SENSITIVITIES
Positive: Timely successful merger with JCL and raising of funds as
planned could lead to positive rating action. A significant
improvement in the bank's asset quality, the capitalization and
leverage (advances to equity) and an achievement of material
profitability earlier than as expected by the agency could result
in a positive rating action.
Negative: An inability to raise adequate funds before refinancing
is due could lead to a negative rating action. A sustained weakness
in the bank's asset quality, its capital levels close to the
regulatory minimum consistently or a weakness in the
deposit/liquidity profile could result in a negative rating action.
Any unrelated diversification of the holding company, although
unlikely, could also result in a downgrade.
COMPANY PROFILE
JHL is registered as a NOFHC according to the regulatory
guidelines, and is promoted by JCL, to hold the promoter stake in
JSFB.
KAMRUP PACKAGING: CRISIL Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Kamrup
Packaging Udyog (KPU) continue to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.9 CRISIL B/Stable (Issuer Not
Cooperating)
Term Loan 6.6 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with KPU for
obtaining information through letters and emails dated August 19,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of KPU, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KPU
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
KPU continue to be 'CRISIL B/Stable Issuer Not Cooperating'.
Guwahati (Assam)-based KPU, manufactures different types of
corrugated boxes for use in various fast-moving consumer goods
industries. The unit is located in Kamrup (Assam) and operations
are managed by Mr Arya.
KEDARNATH COMMOTRADE: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Kedarnath
Commotrade Private Limited (KCPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 19.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 25.00 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 November 11, 2020, placed
the rating(s) of KCPL under the 'issuer non-cooperating' category
as KCPL 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. KCPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
September 27, 2021, October 7, 2021, October 17, 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).
Kedarnath Commotrade Private Limited (KCPL) was incorporated in
February 2009 and commenced the commercial operations in December
2015. The company is promoted by Mr. Kishanlal Choudhary who has
more than 3 decades of experience in the Iron and Steel Industry.
He is supported by his son Mr. Sunil Choudhary, who is the managing
director and chief executive officer with an overall experience of
20 years.
KRISHNA CONTAINERS: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Krishna
Containers (KC) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9.3 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 15 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 2.7 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 20 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with KC for
obtaining information through letters and emails dated August 31,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of KC, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KC is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of KC
continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
KC, established in 1999, is promoted by Mr Dinesh Arora and his
family, who have been in the business of oil refining and palm oil
trading for over two decades. It is based in Kanpur, Uttar Pradesh.
The firm trades in crude palm oil (CPO) on a high-seas sale basis.
It imports CPO from Malaysia and sells in the domestic market,
mainly to refineries based in Uttar Pradesh and Punjab. It also
trades in CPO in the domestic market and manufactures corrugated
boxes.
KRISHNA SAHAKARI: Ind-Ra Affirms 'B' Bank Loan Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed The Krishna
Sahakari Sakkare Karkhane Niyamit's (TKSSKN) bank facilities as
follows:
-- INR2,278.21 bil. (increased from INR1,864.54 bil.) Fund-based
working capital facility affirmed with IND B/Stable rating;
and
-- INR721.79 mil. (reduced from INR1,135.46 bil.) Term loan due
on June 2025 affirmed with IND B/Stable rating.
KEY RATING DRIVERS
TKSSKN's ratings continue to be constrained by its weak credit
metrics, owing to its high working-capital requirements and
debt-funded capex incurred during FY18-FY20 to increase its
production capacity to 5,500 tons crushed per day (TCD; FY19: 4,000
TCD) and power capacity to 27MW (12MW). The cooperative's debt
burden (debt/EBITDA) remained high during FY16-FY21 and was at
12.93x in FY21 (FY20: 65.80x). The cooperative's coverage metrics
remained below 1x during FY20-FY21. In FY21, the debt service
coverage ratio was 0.45x in FY21 (FY20: 0.10x) and interest service
coverage ratio was 0.68x (0.14x). FY21 financials are provisional
in nature.
Liquidity Indicator - Stretched: TKSSKN's average maximum
utilization of fund-based limits was 90.31% for the 12 months ended
September 2021, and the utilization is likely to have remained
above 95% during October-November 2021. The average cash conversion
cycle elongated to 362 days in FY21 (FY20: 239 days) due to an
increase in the finished goods' inventory levels owing to a fall in
sales during the year. Ind-Ra expects the cash conversion cycle to
remain long over the medium term, owing to working capital
intensive nature of operations of the sugar industry. At FYE21,
TKSSKN's cash and cash equivalents stood at INR30.90 million
(FYE20: INR1.24 million). The available funds to the total debt
stood at merely 1.72% in FY21 (FY20: 0.63%).
TKSSKN's ratings are continued to be constrained by the
cooperative's volatile operating margins due to cyclical nature of
operations in the sugar industry. The margins ranged between 9% and
15% over FY15-FY21 and improved to 12.93% in FY21 (FY20: 1.84%).
The ratings factor in the cooperative's continued medium scale of
operations, again due to cyclical nature of operations in the sugar
industry. The total operating income declined to INR1,972.51
million in FY21 (FY20: INR2,479.53 million) due to the fall in
sugar sales during the year. The sale of sugar and by products
accounted for 90% of the total FY21 revenue. Ind-Ra expects the
revenue to improve in FY22 on the back of a favorable monsoon
during the year, resulting in improved sugarcane production.
The ratings are supported by the cooperative's promoters' over
three decades of experience in the sugar industry.
RATING SENSITIVITIES
Positive: Events that on a sustained basis may collectively lead to
a positive rating action are:
- operating margins in excess of 15%,
- debt service coverage ratio exceeding 1x, and
- an improvement in the cash conversion cycle.
Negative: Events that may on a sustained basis, individually or
collectively, lead to a negative rating action are:
- operating margins falling to negative levels,
- deterioration in debt metrics, and
- deterioration in the cash conversion cycle.
COMPANY PROFILE
TKSSKN came into existence in 1984 after it received an industrial
license from the government of India under the Industrial Act of
1951. The society was registered on 10 March 1981 under Karnataka
Co-operative Societies Act, 1959. The cooperative operates a
5,500TCD sugar plant and a 27MW capacity cogen power plant in
Athani Taluk of Belgaum district in Karnataka.
M.S. SOLVENT: CARE Lowers Rating on INR7.50cr Long-Term Loan to C
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of M.S.
Solvent Industries (MSI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.50 CARE C; 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 November 25, 2020, placed
the rating(s) of MSI under the 'issuer non-cooperating' category as
MSI 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. MSI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
October 11, 2021, October 21, 2021, October 31, 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.
M.S. Solvent Industries is a partnership firm established in July
2009 by four partners, namely, Mr. Mahendra Singh, Mr. Anil Kumar,
Mr. Harish Kumar and Mr. Daleep Singh sharing profits and losses
equally. The firm is engaged in extraction of rice bran oil at its
processing facility located in Gadarpur (Uttarakhand) with an
installed capacity to extract 40480 Metric Tons per annum as on
June 30, 2017. The firm has started an additional rice mill unit in
November 2016 that has enabled the firm to extract rice bran oil
through milling. Here the rice bran oil will be extracted from the
paddy. This unit has an installed capacity of 8480 metric tons per
annum. M.S. Rice Mill is an associate concern and engaged in the
processing of paddy since 2004.
MARKOLINES INFRA: Ind-Ra Gives BB+ Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Markolines Infra
Private Limited (MIPL) a Long-Term Issuer Rating of 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limits assigned with IND
BB+/Stable/IND A4+ rating;
-- INR25 mil. Non-fund-based working capital limits assigned with
IND A4+ rating; and
-- INR25 mil. Proposed non-fund-based working capital limits
assigned with IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect MIPL's small scale of operations, as indicated
by revenue of INR468 million in FY21 (FY20: INR464.35 million). The
revenue increased marginally in FY21 due to a rise in the number of
repeat orders received by the company as well as increased
execution of orders. In 1HFY22, MIPL booked revenue of INR216.40
million. By end-September 2021, MIPL had confirmed orders worth
INR299 million and had orders in pipeline worth INR190 million
(0.4x of FY21 revenue). Based on the company's monthly billing
system, Ind-Ra expects MIPL to execute orders worth more than
INR239 million until 31 March 2022 from its existing order book.
FY21 numbers are provisional in nature.
Liquidity Indicator - Stretched: The peak average utilization of
the fund-based working capital limits was 99.14% and that of the
non-fund-based working capital limits was 92% for the 12 months
ended September 2021. The fund flow from operations turned
negative at INR22.13 million in FY21 (FY20: INR2.18 million) due to
unfavorable changes in current assets and current liabilities.
However, the liquidity was supported by a guaranteed emergency
credit line of INR10.15 million with a one-year moratorium. The
cash flow from operations increased to INR14.58 million in FY21
(FY20: INR12.93 million) on account of favorable changes in the
working capital. In FY21, the net cash conversion cycle improved to
58 days (FY20: 90 days) on account of a decrease in the receivable
days to 102 days (128 days). The cash and cash equivalents stood at
INR10.76 million at FYE21 (FYE20: INR10.94 million). The debt
obligations amount to INR16.80 million and INR19.78 million in FY22
and FY23, respectively. MIPL had availed the Reserve Bank of
India-prescribed moratorium for March-August 2020.
The ratings factor in the company's average EBITDA margins due to
the nature of the business. The margin rose to 7.84% in FY21 (FY20:
2.63%), owing to a decrease in administration expenses. The margin
stood at 7.95% in 1HFY22. The ROCE was 13% in FY21 (FY20: 7%).
Ind-Ra expects the margins to fall marginally in FY22 owing to
fixed costs, such as power and fuel, water charges, site-related
expenses, and hiring charges, surging to pre-COVID-19 levels
again.
The ratings are supported by MIPL's strong credit metrics due to
low debt levels. The metrics improved in FY21 due to an increase in
the absolute EBITDA to INR36.7 million (FY20: INR12.19 million).
The gross coverage (operating EBITDA/gross interest expense) was
3.14x in FY21 (FY20: 1.17x), and the net leverage (total adjusted
net debt/operating EBITDA) was 2.58x (8.06x). During 1HFY22, the
gross coverage improved further to 4.41x due to a decrease in
interest expenses, resulting from a decrease in the total debt.
Ind-Ra expects the credit metrics to remain strong in FY22 owing to
the scheduled repayments of bank loans.
The ratings are also supported by promoters' experience of more
than two decades in the business of toll operations, route
patrolling and road maintenance across India, barring the northeast
region.
RATING SENSITIVITIES
Negative: Any decline in the revenue and/or EBITDA, leading to the
net leverage exceeding 4x, as well as deterioration in liquidity
position, on a sustained basis, would be negative for the rating.
Positive: Substantial improvement in revenue and EBITDA, leading to
an improvement in the credit metrics as well as an improvement in
liquidity position, on a sustained basis, would be positive for the
ratings.
COMPANY PROFILE
MIPL is involved in toll operations (supplying manpower for
tolls), route patrolling and maintenance of roads. It is promoted
by Sanjay Patil, Vijay Oswal and Karan Bora. Its registered office
is located in Navi Mumbai, Maharashtra.
N. K. BHOJANI: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of N. K. Bhojani
Private Limited (NKBPL) continue to be 'CRISIL D/CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Fund Based 42.25 CRISIL D (Issuer Not
Facilities-LT Cooperating)
Non-Fund Based 7.75 CRISIL D (Issuer Not
Facilities-ST Cooperating)
CRISIL Ratings has been consistently following up with NKBPL for
obtaining information through letters and emails dated August 19,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NKBPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NKBPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NKBPL continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
NKBPL, incorporated in 1996, is promoted and managed by Mr N K
Bhojani. The company manufactures sponge iron, mines iron ore, and
has a dealership contract with Larsen & Toubro Ltd for sale of
spares and for service. Its manufacturing facilities are in Rugudi,
Odisha.
N.V. KHAROTE: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of N.V.
Kharote Constructions Private Limited (NKCPL) continues to remain
in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 7.83 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 December 15, 2020, placed
the rating(s) of NKCPL under the 'issuer non-cooperating' category
as NKCPL 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. NKCPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
October 31, 2021, November 10, 2021, November 20, 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.
Pune (Maharashtra) based NVKCPL, incorporated in 1997 was promoted
by Mr. Ratnakar Narhar Kharote and Mr. Sanjay Narhar Kharote. The
company is engaged in construction of canals and other irrigation
projects for various government departments like Water Resources
Department and Municipal Corporations. NVKCPL is a registered
government contractor {Class- I-A (Without Limit)} with Public
Works Department.
NANCY KRAFTS: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Nancy Krafts
Private Limited (NKPL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 1.25 CRISIL D (Issuer Not
Cooperating)
Export Packing 11.60 CRISIL D (Issuer Not
Credit Cooperating)
Export Packing 5.61 CRISIL D (Issuer Not
Credit Cooperating)
Letter of credit 3.70 CRISIL D (Issuer Not
& Bank Guarantee Cooperating)
Letter of credit 1.80 CRISIL D (Issuer Not
& Bank Guarantee Cooperating)
Proposed Long Term 6.04 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with NKPL for
obtaining information through letters and emails dated August 19,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NKPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NKPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NKPL continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of NKPL and Nancy Krafts (NK).
This is because the two entities, together referred to as the Nancy
group, are in the same line of business, with a common customer
base, and shared promoters and management.
NKPL was established in 1988 as a private-limited company. Nancy
Krafts was set up in 1980 as a partnership.
The two entities manufacture readymade garments, especially for
women and children, at their plants in New Delhi. The entities
cater to the export market and supply their products to retailers
and wholesalers in Latin America, Mexico, Spain, the US, and
Europe.
NEW LAXMI: Ind-Ra Moves 'BB' LT Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated New Laxmi
Industries Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR185.00 mil. Fund-based limit migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR107.27 mil. Term loan due on April 2026 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 27, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2003, New Laxmi Industries manufactures galvanized
steel structures such as angles, channels and so on. The
manufacturing plant is situated in Khurda (Odisha) with a total
production capacity of 29,000mtpa.
PNP INFRAPROJECTS: CRISIL Assigns B Rating to INR60cr Cash Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facilities of PNP Infraprojects Private Limited
(PNPIPPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 20 CRISIL B/Stable (Assigned)
Cash Credit 40 CRISIL B/Stable (Assigned)
The rating reflects the company's weak financial risk profile,
exposure to risks related to the sizeable capital expenditure
(capex) planned in fiscal 2022 and significant exposure to group
companies. The business was impacted in fiscal 2021 by the
nationwide lockdown to contain the spread of Covid-19 resulting in
delays in servicing debt. The weaknesses are partially offset by
the extensive experience of the promoters in the water transport
services industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Sizeable capex compared to scale of operations: PNPIPPL has
planned capex of INR80 crore, mainly to expand its passenger
capacity by building additional jetties. The project will be
undertaken in two phases 62 crore in phase I and the remaining in
phase II'and is expected to be completed within a year. It will be
funded through debt of INR60 crore and INR20 crore from the
promoters. The capex is huge compared to the company's scale of
operations (revenue was INR15.9 crore in fiscal 2021 and networth
INR21.3 crore as on March 31, 2021).
* Weak financial risk profile: The gearing was 2.7 times as on
March 31, 2021 and will remain high over the medium term as 75% of
the proposed capex will be funded through debt. Net cash accrual to
total debt ratio was subdued at 0.09 time in fiscal 2021 and has
been at a similar level since four years. Total outside liabilities
to adjusted networth (TOLANW) ratio was high at 2.96 times as of
March 31, 2021. Interest coverage was moderate at 3.5 times in
fiscal 2021 but will weaken with increase in debt for capex in
fiscal 2022.
The company delayed debt obligations due in June and August 2020 as
business was impacted by the pandemic. Passenger ferry services
were restricted due to lockdowns and operations were limited during
the rainy season. The interest payment was delayed by almost three
months but has been timely since December 2020. NCDs of INR42
crore from its group company, PNP Maritime Services Pvt Ltd were to
be repaid in four yearly installments starting from fiscal 2021. Of
the INR10.7 crore due in fiscal 2021, PNPIPL paid INR7.75 crore and
deferred INR2.95 crore to fiscal 2022.
* Significant exposure to group companies: PNINPL had invested
INR62.5 crore in group companies in the form of equity, loans and
advances (non-interest bearing) as of March 31, 2021, which is
almost 3 times its networth. Moreover, it has provided a corporate
guarantee of INR24 crore towards group company, Reliable Sugar and
Distillery Power Ltd. Any additional exposure to group companies,
impinging its own cash accrual, will constrain liquidity and will
remain a rating sensitivity factor.
Strength
* Extensive industry experience of the promoters: The
two-decade-long experience of the promoters and their strong
understanding of the business dynamics will continue to support
PNPIPPL. The company derives 50-60% of its revenue from group
company PNP Maritime Services Pvt Ltd (50% held by the same
promoters) as fees for port handling and related services.
Liquidity: Poor
Cash accrual is expected at INR5-5.5 crore against debt obligation
of around INR15 crore in fiscal 2022. Working capital facilities of
12.75 crore as on October 31, 2021, are fully utilized. The
promoters are likely to extend support in the form of equity and
unsecured loans to meet working capital requirements and debt
obligation.
Outlook: Stable
CRISIL Ratings believe PNINPPL will continue to benefit from the
extensive experience of its promoter.
Rating Sensitivity factors
Upward factors
* Sustained improvement in TOLANW ratio below 3 times
* Track record of timely payment of debt obligations
Downward factors
* Decline in interest coverage ratio below 1.4 times
* Significant decline in net cash accrual
* Delays in project execution
Incorporated in 2015 and based in Maharashtra, PNPIPPL is owned and
managed by Mrs. Chitralekha Nrupal Patil and Mr Nrupal Jayant
Patil. PNPIPPL is engaged in carrying on the business of
infrastructure provider in all areas of marine and marine
activities and for that purpose to take own, take on license, hire
charter, develop and operate in land port, jetty, inland waterways.
RELIANCE INFRASTRUCTURE: Ind-Ra Affirms 'D' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Reliance
Infrastructure Limited's (R-Infra) Long-Term Issuer Rating at 'IND
D'.
The instrument-wise rating actions are:
-- INR35 mil. Bank facilities (long-term/short-term)# affirmed
with IND D rating; and
-- INR3.85 mil. Non-convertible debentures (NCDs, long-term) ISIN
INE036A07567 issued June 13, 2018 coupon rate 12.5% due on
December 15, 2021 affirmed with IND D rating.
KEY RATING DRIVERS
The ratings reflect R-Infra's ongoing delays in servicing the rated
debt instruments, according to the company's disclosure on the
National Stock Exchange Ltd and the BSE Ltd. The outstanding order
book as of March 31, 2021 was INR148.8 billion.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in an upgrade.
COMPANY PROFILE
R-Infra is the flagship company of the Reliance Group, led by Anil
Dhirubhai Ambani, with focus on the energy and infrastructure
businesses. R-Infra has an in-house engineering, procurement and
construction division that is active in the power and road
segments.
SARAL HOME: Ind-Ra Moves BB+ Bank Loan Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Saral Home Finance
Limited's bank loans rating to the non-cooperating category. The
issuer did not participate in the rating exercise despite
continuous requests and follow ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using the rating. The rating will now appear as 'IND BB+
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR43.45 mil. Bank loans migrated to non-cooperating category
with IND BB+ (ISSUER NOT CO-OPERATING) rating.
Note: ISSUER NOT COOPERATING: The rating was last reviewed on
November 18, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the rating.
COMPANY PROFILE
Saral Home Finance (formerly Vishwakriya Housing Finance Ltd.) is a
housing finance company registered and regulated by the National
Housing Bank, a wholly-owned subsidiary of the Reserve Bank of
India.
SENAPATI MOTORS: CRISIL Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Senapati
Motors (SM) continues to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SM for
obtaining information through letters and emails dated August 19,
2021 and October 6, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SM, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SM is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of SM
continue to be 'CRISIL D Issuer Not Cooperating'.
An Orissa-based dealer, SM is involved in the trading of
two-wheelers of TVS Motor Company. The manufacturing facility is in
Jagatsinghpur, Orissa.
SHANKAR RAMCHANDRA: Ind-Ra Gives BB+ Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shankar Ramchandra
Earthmovers Private Limited (SREPL) a Long-Term Issuer Rating of
'IND BB+'. The Outlook is Stable.
The instrument-wise rating actions are given below:
-- INR70.00 mil. Fund-based working capital limits assigned with
IND BB+/Stable/IND A4+ rating;
-- INR240.00 mil. Non-fund-based working capital limits assigned
with IND A4+ rating; and
-- INR69.08 mil. Term loan due on December 2022 assigned with
IND BB+/Stable rating.
The ratings reflect SREPL's stretched liquidity profile. However,
the ratings are supported by the company's healthy profitability.
KEY RATING DRIVERS
Liquidity Indicator - Stretched: The fund-based limits were fully
utilized over the 12 months ended September 2021. The cash and cash
equivalent stood at a low INR37.49 million in FY21 (FY20: INR15.54
million). During FY21, the cash flow from operations rose sharply
to INR417.75 million (FY20: INR33.34 million) owing to an increase
in the payables, mainly due to the mobilization advances availed by
the company. The overall working capital cycle improved sharply to
one day in FY21 (FY20: 237 days) as inventory days fell to 38 days
(197 days) and payable days increased to 172 days (FY20: 99 days).
With an inventory holding and receivable period of two-to-three
months, Ind-Ra expects the cash flow from operations to decline
over the near-to-medium term. Also, since the mobilization advances
entail interest costs, continued availing of the same by SREPL
would be a key monitorable. The principal debt obligation of the
company for FY22 and FY23 amount to INR51.2 million and INR24.50
million, respectively. The figures for FY21 are provisional in
nature.
The ratings reflect SREPL's small scale of operations, as indicated
by revenue of INR1,356.15 million in FY21 (FY20: INR1,303.33
million). Despite COVID-19-led disruptions, the revenue grew in
FY21 on the back of growth in the number of orders received by the
company and steady execution of projects, resulting from the
retaining of laborer's at the worksite through providing
accommodation and other facilities. The company's revenue ranged
between INR410.04 million- 1,356.15 million over FY17-FY21. SREPL
achieved a total revenue of INR850.00 million during 7MFY22.
Furthermore, its order book was worth INR2816.10 million,
translating into 2.08x of FY21 revenue, as of October 2021,
indicating moderate revenue visibility. Consequently, Ind-Ra
expects the company's top-line to improve on a yoy basis in FY22.
The ratings are constrained by SREPL's geographical concentration
risk, as the company has been executing orders only within
Maharashtra.
The ratings are supported by SREPL's healthy profitability. The
margin declined marginally to 15.16% in FY21 (FY20: 15.33%) due to
an increase in raw material costs. The ROCE was 23% in FY21 (FY20:
32%). The margins hovered between 9.90%-15.33% over FY17-FY21.
Ind-Ra expects the profitability to remain healthy in FY22, backed
by revenue growth and a marginal benefit from the price escalation
clause built in the contracts.
The ratings also benefit from the strong credit metrics due to the
healthy margins and low debt levels. The metrics improved in FY21
due to a decline in the total debt to INR223.95 million (FY20:
INR236.70 million) and an increase in the absolute EBITDA to
INR205.58 million (INR199.76 million). The interest coverage
(operating EBITDA/gross interest expense) stood at 8.13x in FY21
(FY20:6.73x) and net leverage (total adjusted net debt/operating
EBITDAR) was 0.91x (FY20: 1.11x). Ind-Ra expects the credit
metrics to weaken slightly but remain strong in FY22, considering
the absence of any debt-led capex plans and likelihood of continued
healthy profitability.
The ratings benefit from the promoters' experience of more than
three decades in the engineering, procurement and construction
business.
RATING SENSITIVITIES
Negative: Any decline in the revenue or profitability or further
deterioration in the liquidity profile would be negative for the
rating.
Positive: A substantial improvement in the revenue while
maintaining the profitability along with an improvement in the
liquidity profile would be positive for the ratings.
COMPANY PROFILE
Incorporated in 1994, SREPL is a class IA contractor in the
engineering, procurement and construction segment. The company is
engaged in civil construction related to roads, bridges, irrigation
and civil work from railways.
SHIVANSH DIAMOND: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shivansh
Diamond Private Limited (SDPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 47.00 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 December 2, 2020, placed the
rating(s) of SDPL under the 'issuer non-cooperating' category as
SDPL 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. SDPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
October 18, 2021, October 28, 2021, November 7, 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).
SDPL was established as a proprietorship firm named as M/s Shivansh
by Mr. Ashutosh Sharma in 1998. This was later converted into a
private limited company in January 2010 promoted by Mr. Ashutosh
Sharma and Mrs. Gunjan Garg. SDPL is engaged in whole-selling and
retailing of diamond and studded gold jewelry. The company in
October 2012 started its retail operations from its Karol Bagh
showroom. SDPL gets most of its jewelry manufactured on job work
basis from Mumbai-based jewelry makers.
SHRINET AND SHANDILYA: CRISIL Withdraws D Rating on INR25cr Loan
----------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facilities of
Shrinet and Shandilya Construction Private Limited (SSCPL) on the
request of the company and after receiving no objection certificate
from the bank. The rating action is in-line with CRISIL Rating's
policy on withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 25 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Overdraft Facility 2 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Proposed Bank 1.5 CRISIL D/Issuer Not
Guarantee Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with SSCPL for
obtaining information through letters and emails dated January 31,
2020, February 19, 2020 and December 18, 2020 among others, apart
from telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SSCPL. This restricts CRISIL
Ratings' ability to take a forward-looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on SSCPL is consistent with 'Assessing Information Adequacy Risk'.
CRISIL Ratings has continued the ratings on the bank facilities of
SSCPL to 'CRISIL D/CRISIL D Issuer not cooperating'.
SSCPL, is a Ghaziabad, Uttar Pradesh-based company, is involved in
providing service of Solar Products & Equipment, Solar Panels in
India.
SIMPLEX CASTING: Ind-Ra Hikes Long-Term Issuer Rating to 'B'
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Simplex Casting
Ltd.'s (SCL) Long-Term Issuer Rating to 'IND B' from 'IND D (ISSUER
NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR350 mil. (reduced from INR500 mil.) Fund-based working
capital limit upgraded with IND B/Stable rating;
-- INR370 mil. (reduced from INR550 mil.) Non-fund-based working
capital limit upgraded with IND A4 rating;
-- INR146.4 mil. Term loan* due on April 2021 is withdrawn; and
-- INR84.6 mil. Term loan due on March 2025 assigned with IND B/
Stable rating.
*Ind-Ra is no longer required to maintain the rating for term loan
as the agency has received a no dues certificate from the lender.
This is consistent with the Securities and Exchange Board of
India's circular dated March 31, 2017 for credit rating agencies.
The upgrade reflects the timely repayment of debt obligations since
August 9, 2020 and an improvement in the company's financial
performance in FY21.
KEY RATING DRIVERS
SCL's revenue increased to INR805.58 million in FY21 (FY20: INR544
million) owing to an increase in the number of orders received.
Till October 2021, SCL booked revenue of around INR450 million. In
FY22, the management expects to achieve revenue of around INR1160
million due to an increase in capacity with the addition of an 80
metric ton-per day furnace and a 10 metric tons holder facility,
which will be operational by end-November 2021. Currently, it has a
furnace with a capacity of 30 metric tons per day.
The company reported modest EBITDA margins of 19.04% with a return
on capital of 8% in FY21, against an EBITDA loss in FY20. This was
because of a reduction in administration cost as a percentage of
revenue to 21.64% in FY21 (FY20: 60.84%), as result of sale of Urla
steel casting foundry unit. Management expects the margins to
improve in FY22, owing to the increase in scale of operations.
The company's credit metrics remained weak despite improving in
FY21. The gross interest coverage (operating EBITDA/gross interest
expense) was 1.52x in FY21 and the net leverage (total adjusted
net debt/operating EBITDAR was 4.82x. Ind-Ra expects the credit
metrics to continue to be weak over the medium term owing to its
high debt levels.
Liquidity Indicator - Poor: SCL's average maximum utilization of
the fund-based limits was 103.55% with multiple instances of
overutilization of up to 30 days and the non-fund-based limits was
26.80% during the 12 months ended October 2021. The cash flow from
operations deteriorated further to negative INR93.25 million in
FY21 (FY20: negative INR72.59 million), due to unfavorable changes
in working capital. The free cash flow improved, although remained
negative at INR98.61 million in FY21 (FY20: negative INR113.28
million). The working capital cycle elongated to 464 days in FY21
(FY20: 355 days), due to an increase in the inventory holding
period to 517 days (379 days). The cash and cash equivalents stood
at INR7.87 million at FYE21(FYE20: INR11.38 million). The company
has also availed a guaranteed emergency credit line of INR84.6
million. SCL availed the Reserve Bank of India-prescribed
moratorium over March-August 2020. However, SRRPL does not have any
capital market exposure and relies on banks and financial
institutions to meet its funding requirements.
However, the ratings are supported by the promoters' over four
decades of experience in iron and steel industry, leading to
established relationships with its customers and suppliers.
RATING SENSITIVITIES
Positive: A substantial improvement in the scale of operations
along with continued healthy EBITDA margins, leading to an
improvement in the net leverage and liquidity position, will be
positive for the ratings.
Negative: Any deterioration in the operating performance, leading
to deterioration in the credit metrics and a further stress in the
liquidity position, will be negative for the ratings.
COMPANY PROFILE
SCL was established in 1970 and was reconstituted as a private
limited company in 1980. In 1993, SCL became a public limited
company and was listed on the Bombay Stock Exchange. The company
manufactures iron and steel casting products, which are used in
various industries such as railways, steel and defense, at its two
manufacturing units, one each in Bhilai and Tedsara.
SUSEE PREMIUM: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Susee
Premium Automobiles Private Limited (SPAPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.48 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 November 6, 2020, placed the
rating(s) of SPAPL under the 'issuer non-cooperating' category as
SPAPL 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. SPAPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
September 22, 2021, October 2, 2021 and October 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).
Susee Premium Automobiles Private Limited (SPAPL) was incorporated
in the year 2008 by Mr. S. Jeyabalan, Mr. J. Rajiv Subramanian and
Ms. J. Nirmala. SPAPL is the authorized dealer of Ford India
Private Limited (FIPL rated IND AAA; stable/IND A1+) for vehicles
and spare parts. It has two operating showrooms named Rockcity Ford
in Trichy and Salem, Tamil Nadu. The company procures the vehicles
and spare parts directly from FIPL's manufacturing units in Gujarat
and Chennai. The registered office is located in Madurai, Tamil
Nadu.
VDB PROJECTS: Ind-Ra Affirms & Withdraws 'BB+' LT Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed VDB Projects
Private Limited Long-Term Issuer Rating at 'IND BB+' and has
simultaneously withdrawn the rating.
The instrument-wise rating actions are:
-- INR500 mil. Fund-based working capital limits* affirmed and
withdrawn;
-- INR1.040 bil. Non-fund-based working capital limits** affirmed
and withdrawn; and
-- INR44.23 mil. (reduced from INR126.97 mil.) Term loan*** due
on October 26, 2022 affirmed and withdrawn.
*Affirmed at 'IND BB+/Stable /IND A4+' before being withdrawn
**Affirmed at 'IND A4+' before being withdrawn
*** Affirmed at 'IND BB+'/Stable before being withdrawn
Ind-Ra is no longer required to maintain the ratings, as it has
received a no-objection certificate from the rated facilities'
lender. This is consistent with the Securities and Exchange Board
of India's circular dated March 31, 2017 for credit rating
agencies.
KEY RATING DRIVERS
The affirmation reflects VDB's medium scale of operations, as
indicated by revenue of INR879.60 million in FY21 (FY20: INR1921.33
million). The revenue fell by 54.22% in FY21 due to delays in the
execution of projects, as COVID-19-led issues had led to work being
put on hold for six-to-seven months. In 7MFY22, the company booked
a revenue of INR744.75 million. The company's order book amounted
to INR3,500 million as of October 2021, indicating revenue
visibility of 4x of the FY21 revenue. The projects are scheduled to
be executed over FY22-FY23. In view of the aforementioned factors,
Ind-Ra expects VDB's top-line to improve in FY22. The financials
for FY21 are provisional in nature.
The ratings reflect the high customer concentration, as the
National Highways Authority of India (NHAI; 'IND AAA'/Stable)
accounts for 82.60% in the total order book. The Bruhat Bangalore
Mahanagara Palike constitutes the balance.
The ratings also factor in the modest EBITDA margins due to the
highly fragmented nature of the industry, with the presence of a
few large players and a considerable number of small-to-medium
scale entities. Projects in the industry are awarded to contractors
on a competitive bidding basis. The margin fell to 7.64% in FY21
(FY20: 15.04%), due to an increase in the mobilization expenditure.
The ROCE was 10% in FY20 (FY19: 10.2%). The toll plaza collection
project, which offers margins of around 90%, accounted for more
than half of VDB's absolute EBITDA of INR127.97 million in FY21
(FY20: INR167.2 million). During April-October 2021, the company
collected INR87.64 million from the toll plaza. Ind-Ra expects the
absolute EBITDA to increase in FY22, driven by the likely growth in
the revenue
The ratings are also constrained by VDB's weak credit metrics owing
to the modest margins. The gross interest coverage (operating
EBITDA/gross interest expense) deteriorated to 1.34x (2.68x) due to
the fall in the absolute EBITDA. However, the net leverage
(adjusted net debt/operating EBITDA) improved to 0.71x in FY21
(FY20: 1.40x) due to a decline in the total debt, resulting from
the prepayment of long-term loans and decline in the usage of the
short-term debt owing to the availability of sufficient funds in
hand. Ind-Ra expects the interest coverage to improve in FY22, led
by the likely improvement in the absolute EBITDA. The net leverage,
however, is likely to weaken owing to increased usage of working
capital limits and the incurring of debt-led capex for the purchase
of plant machinery for the projects for which the company has bid.
Liquidity Indicator –Adequate: The average maximum utilization of
the fund-based working capital limits was 21.04% during the 12
months ended September 2021. The cash flow from operations remained
positive but declined to INR241.21 million in FY21 (FY20:
INR468.29million) due to unfavorable changes in the working
capital. The company's gross working capital cycle is elongated,
which is not uncommon in the industry. However, the cycle elongated
to 390 days in FY21 (FY20: 162 days) as the receivable days
increased to 134 days (57 days). VDB has principal repayment
obligations of INR16.07 million and INR20.6 million for FY22 and
FY23, respectively.
The ratings are also supported by the founders' experience of about
a decade and a half in the execution of civil construction
projects.
COMPANY PROFILE
Incorporated in 2005, VDB operates in the engineering, procurement,
and construction segment for construction of roads, highways, and
water drains. It is promoted by M Rajagopal Reddy and its
registered office is located at Bangalore, Karnataka. The company
is in the process of executing the projects of NHAI and Bruhat
Bengaluru Mahanagara Palike. The company also operates a toll plaza
near Ballery, Karnataka.
VEENDEEP OILTEK: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Veendeep Oiltek
Exports Pvt Ltd.'s (VOEPL) Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are as follows:
-- INR50 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING)
rating;
-- INR40 mil. Non-fund-based working capital limit migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating;
-- INR20 mil. Proposed fund-based working capital limit migrated
to non-cooperating category with IND BB- (ISSUER NOT
COOPERATING) rating; and
-- INR70 mil. Proposed non-fund-based working capital limit
migrated to non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
November 17, 2020. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Formed in 1994, VOEPL is engaged in the manufacturing and export of
solvent extraction plants, refinery plants, hydrogenation plants
and fractionation plants for the edible oil industry. These plants
are exported in dismantled status and erected, engineered and
constructed by the engineers of VOEPL at the customer's location.
The projects are taken on turnkey basis.
[*] INDIA: 1,149 Cases Went for Liquidation as of Sept. 30
----------------------------------------------------------
The Economic Times reports that as many as 421 cases involving a
realisable value of INR2.55 lakh crore were resolved and 1,149
cases having a liquidation value of INR52,036 crore went for
liquidation under the insolvency law till this September, the
government said on Dec. 7.
Corporate Insolvency Resolution Process (CIRP) is conducted as per
the provisions of the Insolvency and Bankruptcy Code (IBC).
As of September 30, a total of 4,708 CIRPs were initiated under the
IBC, ET discloses.
"The realisable value of 421 cases which were resolved through a
resolution plan as on Sept. 30, 2021 is INR2.55 lakh crore for all
creditors, including financial creditors. The liquidation value of
these companies was INR1.48 lakh crore.
"If no resolution plan is received or no resolution plan is
approved by the Adjudicating Authority, the corporate entity
proceeds to liquidation. Till Sept. 30, 2021, 1,419 CIRPs have
yielded orders for liquidation, having liquidation value of
INR52,036 crore," Finance and Corporate Affairs Minister Nirmala
Sitharaman told the Rajya Sabha on Dec. 7, ET relays.
In a written reply, the minister also said the total amount of
admitted claims of financial creditors in respect of 421 corporate
debtors, which have been resolved through a resolution plan, is
INR7.19 lakh crore while the amount realisable is INR2.46 lakh
crore.
"The Insolvency and Bankruptcy Board of India, the Regulator under
IBC, maintains data on admitted claims and realisable claims, for
each corporate debtor under CIRP," she added.
=====================
N E W Z E A L A N D
=====================
AUCKLAND ALUMINIUM: Creditors' Proofs of Debt Due Jan. 12
---------------------------------------------------------
Creditors of Auckland Aluminium Sales Limited, which is in
voluntary liquidation, are required to file their proofs of debt by
Jan. 12, 2022, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Dec. 1, 2021.
The company's liquidator can be reached at:
Rees Logan
Andrew McKay
BDO Auckland
Level 4, BDO Centre
4 Graham Street
Auckland 1010
New Zealand
OBJECTIVE ACUITY: Creditors' Proofs of Debt Due Jan. 10
-------------------------------------------------------
Creditors of Objective Acuity Limited, which is in voluntary
liquidation, are required to file their proofs of debt by Jan. 10,
2022, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on Dec. 2, 2021.
The company's liquidator can be reached at:
Gareth Russel Hoole
Clive Robert Bish
Ecovis KGA Limited, Chartered Accountants
PO Box 37223
Parnell, Auckland
New Zealand
PHOENIXIA LIMITED: Creditors' Proofs of Debt Due on Jan. 6
----------------------------------------------------------
Creditors of Phoenixia Limited, which is in voluntary liquidation,
are required to file their proofs of debt by Jan. 6, 2022, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on Nov. 29, 2021.
The company's liquidator can be reached at:
Simon Dalton
Matthew Kemp
Gerry Rea Partners
PO Box 3015
Auckland
New Zealand
=================
S I N G A P O R E
=================
DESIGN STUDIO: Commences Wind-Up Proceedings
--------------------------------------------
Members of Design Studio Asia Pte. Ltd., on Nov. 25, 2021, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidators are:
Jason Kardachi
Patrick Bance
Borrelli Walsh Pte Limited (trading as Kroll)
1 Raffles Place Tower 2, #10-62,
Singapore 048616
DSG PROJECTS: Commences Wind-Up Proceedings
-------------------------------------------
Members of DSG Projects Singapore Pte Ltd, DSG Asia Holdings Pte.
Ltd, and DSG Manufacturing Singapore Pte Ltd, on Nov. 25, 2021,
passed a resolution to voluntarily wind up the company's
operations.
The company's liquidators are:
Jason Kardachi
Patrick Bance
Borrelli Walsh Pte Limited (trading as Kroll)
1 Raffles Place Tower 2, #10-62,
Singapore 048616
FX TRADE: Creditors' Proofs of Debt Due on Jan. 7
-------------------------------------------------
Creditors of FX Trade Pte Ltd, which is in voluntary liquidation,
are required to file their proofs of debt by Jan. 7, 2022, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on Dec. 2, 2021.
The company's liquidator is:
Lynn Ong Bee Ling
c/o 133 New Bridge Road
#24-01/02 Chinatown Point
Singapore 059413
SUN ELECTRIC: Court Enters Wind-Up Order
----------------------------------------
The High Court of Singapore entered an order on Nov. 16, 2021, to
wind up the operations of Sun Electric Pte. Ltd.
Sunseap Energy Ptd Ltd filed the petition against the company.
The company's liquidators are:
Gary Loh Weng Fatt
Leow Quek Shiong
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
=================
S R I L A N K A
=================
SRI LANKA: Plunge Into Organic Farming Brings Disaster
------------------------------------------------------
The New York Times reports that the Sri Lankan government campaign
toward organic farming lasted only seven months, but farmers and
agriculture experts blame the policy for a sharp drop in crop
yields and spiraling prices that are worsening the country's
growing economic woes and leading to fears of food shortages.
Prices for some foodstuffs, like rice, have risen by nearly
one-third compared with a year ago, according to Sri Lanka's
central bank, the report relays. The prices of vegetables like
tomatoes and carrots have risen to five times their year-ago
levels. Now Sri Lanka's government, run by members of the Rajapaksa
family, is rushing to avert a crisis.
Late last month, Sri Lanka's plantation minister, Ramesh Pathirana,
confirmed a partial reversal of the policy, telling the country's
Parliament that the government would be importing fertilizer
necessary for tea, rubber and coconut, which make up the nation's
major agricultural exports, The New York Times recalls.
"We will be importing fertilizers depending on the requirement in
the country," Mr. Pathirana told The New York Times. "So far, we
don't have enough chemical fertilizers in the country because we
didn't import them. There is a shortage there."
Food costs are rising around the world as pandemic-related supply
chain knots are slowly unsnarled and as prices rise for feedstocks
like natural gas that are used to make fertilizer and other
supplies, the report says. Sri Lanka added to those pressures with
its own missteps. Chemical fertilizers are essential tools for
modern agriculture.
Still, governments and environmental groups have grown increasingly
concerned about their overuse. They have been blamed for growing
water pollution problems, while scientists have found increased
risks of colon, kidney and stomach cancer from excessive nitrate
exposure, says The New York Times.
*********
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.
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