/raid1/www/Hosts/bankrupt/TCRAP_Public/240502.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, May 2, 2024, Vol. 27, No. 89
Headlines
A U S T R A L I A
BONZA AVIATION: Recovery 'Unlikely,' Transport Minister Says
BUILD X: First Creditors' Meeting Set for May 7
FRESH LEAF: First Creditors' Meeting Set for May 7
MS7 ENTERPRISES: First Creditors' Meeting Set for May 7
NR & PR PTY: First Creditors' Meeting Set for May 7
ODYSSEY EQUITY: Sentenced for Failing to Lodge Financial Reports
TASMANIAN AIR: First Creditors' Meeting Set for May 6
C H I N A
CHINA HONGQIAO: Fitch Correct April 24 Ratings Release
CHINA VANKE: To Exit Non-Core Biz, Divest Assets for Liquidity
CIFI HOLDINGS: Proposes Key Debt Terms With as Much as 85% Haircut
GREENTOWN CHINA: Fitch Affirms 'BB-' ICR & Alters Outlook to Stable
JINKE PROPERTY: Prepared Initial Plan for Court-Led Restructure
JRSIS HEALTH: HHC Raises Going Concern Doubt
WEST CHINA CEMENT: Fitch Lowers LongTerm IDR to B+, Outlook Neg.
I N D I A
AMBICA TIMBERTRADE: ICRA Keeps D Debt Rating in Not Cooperating
AZAD IMPEX: ICRA Keeps D Debt Ratings in Not Cooperating Category
BALAJI RAW: CARE Keeps D Debt Rating in Not Cooperating Category
CHADHA SUGARS: ICRA Keeps D Debt Ratings in Not Cooperating
CITY TILES: ICRA Keeps D Debt Ratings in Not Cooperating Category
EAGLE CONTINENTAL: ICRA Keeps D Debt Ratings in Not Cooperating
FRONTLINE BUILDERS: ICRA Keeps B+ Debt Rating in Not Cooperating
GANESH FIRE: ICRA Keeps D Ratings in Not Cooperating Category
GO FIRST: Weigh Liquidation After Court Order on Planes
GS MALLS: ICRA Keeps B+ Debt Rating in Not Cooperating Category
IREO HOSPITALITY: ICRA Keeps D Debt Ratings in Not Cooperating
JS ESTATES: ICRA Keeps B+ Debt Rating in Not Cooperating Category
KSK MAHANADI: NCLT Admits Aditya Birla Arc's Insolvency Plea
MADHUCON GRANITES: ICRA Withdraws D Rating on INR82.06cr Loan
MADHUVAN PRASAD: ICRA Keeps B+ Debt Rating in Not Cooperating
MANAPPURAM FINANCE: Fitch Gives BB-(EXP) on New USD Sec. Notes
MANGALAM METALS: ICRA Keeps B- Debt Rating in Not Cooperating
MIXED BAG: ICRA Keeps D Debt Rating in Not Cooperating Category
NAV VIDYA: ICRA Keeps B+ Debt Rating in Not Cooperating Category
PRITHVI DEVELOPERS: ICRA Keeps D Debt Rating in Not Cooperating
PROTAC FOODS: ICRA Keeps D Debt Ratings in Not Cooperating
RAICHUR LABORATORIES: ICRA Keeps D Rating in Not Cooperating
RAJ RATAN: ICRA Keeps D Debt Ratings in Not Cooperating Category
RAMCO EXTRUSION: ICRA Keeps B+ Debt Ratings in Not Cooperating
S.K.R. CONSTRUCTIONS: ICRA Keeps B+ Ratings in Not Cooperating
SHIRDIWALE SAI: ICRA Keeps D Debt Rating in Not Cooperating
V.M. BAKERY: ICRA Keeps D Debt Ratings in Not Cooperating
VEEKESY POLYMERS: CRISIL Lowers Rating on INR16cr Cash Loan to B+
VENKATESWARA RICE: ICRA Keeps D Debt Ratings in Not Cooperating
VIJETA PROJECTS: ICRA Keeps D Debt Ratings in Not Cooperating
I N D O N E S I A
MEDCO ENERGI: Fitch Hikes LongTerm IDR to 'BB-', Outlook Stable
N E W Z E A L A N D
DONG RUNE: Creditors' Proofs of Debt Due on May 13
KIWICHEAPCARS LIMITED: Court to Hear Wind-Up Petition on May 31
LCNZ ROTORUA: Creditors' Proofs of Debt Due on May 16
LOMAI PROPERTIES: Court to Hear Wind-Up Petition on May 10
PULOTU TRUST: Court to Hear Wind-Up Petition on May 17
P H I L I P P I N E S
PH RESORTS: Reports Annual Net Loss of PHP4.2BB in 2023
S I N G A P O R E
AJ MANAGEMENT: Court Enters Wind-Up Order
NDC CONSULTING: Creditors' Meetings Set for May 14
SAAM SOLUTIONS: Court to Hear Wind-Up Petition on May 17
SRM EXPRESS: Court to Hear Wind-Up Petition on May 10
T S TAY: Creditors' Proofs of Debt Due on May 31
S O U T H K O R E A
DOOSAN BOBCAT: S&P Upgrades ICR to 'BB+' on Robust Profitability
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A U S T R A L I A
=================
BONZA AVIATION: Recovery 'Unlikely,' Transport Minister Says
------------------------------------------------------------
News.com.au reports that Transport Minister Catherine King said it
is unlikely budget airline Bonza will make a financial comeback
after the regional budget airline plunged into voluntary
administration on April 30.
Thousands of travellers were left stranded and confused after a
former business partner of the embattled airline abruptly
repossessed all of four of its Boeing 737 MAX 8 planes in Australia
overnight, taking passengers and the airline by surprise,
news.com.au says.
According to news.com.au, Ms. King said her department would
continue assisting passengers stranded mid-journey but conceded it
was not likely that the airline would continue trading.
"The administrators, we have been speaking to them overnight,
they're trying to get the airline back up and running. I think they
have got to look at the books a fair bit. It's unlikely that will
happen," Ms. King told ABC on May 1.
"Planes are certainly cancelled until May 2 at the very least, and
then customers will need to get on to the Bonza website or on to
the administrators to find out what the next steps are." Leading
accountancy firm Hall Chadwick will act as the airline's
administrator and determine whether the airliner has a viable
future in Australia's tight airline market.
Ms. King did not confirm whether the company had requested a
financial assistance package from the federal government and said
it was a matter for the airline to "come forward," news.com.au
relates.
She said the customer situation remained her department's chief
priority, urging passengers who have found themselves stuck at a
regional hub to contact her office's hotline.
"I was concerned that people weren't able to get a person to talk
to so I stood up my department hotline which is still operating
this morning at 1800 069 244," Ms. King told ABC, news.com.au
relays.
"I got public servants in my department just so people have someone
to talk to, so they can get information about how to get on a
Virgin, Qantas or Jetstar flight. Virgin, Qantas and Jetstar have
frankly been magnificent."
"If you're in a regional centre you may need to get to a hub where
they fly out of, but certainly that hotline is available today."
News.com.au adds that Treasurer Jim Chalmers described the downfall
of the low-cost airline as "disappointing"
"I feel for any stranded passengers, that's one of the reasons why
the Transport Minister with her usual level of diligence has made
sure she's been speaking to the other airlines to make sure that we
can try to get people home where they are stuck," he told ABC RN
earlier.
"This is a very unfortunate set of events for the workers at that
company and also for people who are stuck."
Richard Albarran, Kathleen Vouris, Brent Kijurina and Cameron Shaw
of Hall Chadwick were appointed Administrators of the Company on
April 30, 2024.
Sunshine Coast-based Bonza was unveiled in October 2021 and its
first flight took off in January 2023. It operates Boeing
737-Max-8 planes and is backed by 777 Partners, an investment group
based in Miami, Florida. It originally flew 27 routes to 17
destinations but started cutting services during its first six
months.
BUILD X: First Creditors' Meeting Set for May 7
-----------------------------------------------
A first meeting of the creditors in the proceedings of Build X
Construction Group Pty Ltd will be held on May 7, 2024, at 11:00
a.m. at the offices of O'Brien Palmer, Level 9, 66 Clarence Street,
in Sydney, NSW, and virtually.
Liam Bailey of O'Brien Palmer was appointed as administrator of the
company on April 24, 2024.
FRESH LEAF: First Creditors' Meeting Set for May 7
--------------------------------------------------
A first meeting of the creditors in the proceedings of Fresh Leaf
Limited will be held on May 7, 2024, at 11:00 a.m. via virtual
facilities only.
Paul Stuart Harlond, Vaughan Neil Strawbridge and Ross Andrew
Blakeley of FTI Consulting (Australia) were appointed as
administrators of the company on April 24, 2024.
MS7 ENTERPRISES: First Creditors' Meeting Set for May 7
-------------------------------------------------------
A first meeting of the creditors in the proceedings of MS7
Enterprises Pty Ltd, LCS Electrical & Data (QLD) Pty Ltd, LCS
Electrical & Data (VIC) Pty Ltd, and Dyirranga Ltd will be held on
May 7, 2024, at 3:00 p.m. at Level 2, 72 Pitt Street, in Sydney,
NSW, or via Zoom.
Henry Kwok and Antony Resnick of dVT Group were appointed as
administrators of the company on April 24, 2024.
NR & PR PTY: First Creditors' Meeting Set for May 7
---------------------------------------------------
A first meeting of the creditors in the proceedings of NR & PR Pty
Ltd formerly known as Evolve Roofing Pty Ltd will be held on May 7,
2024, at 11:00 a.m. at Level 9, 60 Pitt Street, in Sydney, NSW, and
virtually.
Michael Hogan and Christian Sprowles of HoganSprowles were
appointed as administrators of the company on April 24, 2024.
ODYSSEY EQUITY: Sentenced for Failing to Lodge Financial Reports
----------------------------------------------------------------
Australian Financial Services Licensee Odyssey Equity Finance Pty
Ltd (Odyssey) of Keilor East, Victoria, was sentenced on April 24,
2024 in the Dandenong Magistrates' Court for failing to lodge
financial reports with ASIC for each of the financial years ending
June 30, 2020, 2021 and 2022.
Odyssey, an Australian financial services licensee, was charged
with:
* three counts of contravening s989B of the Corporations Act
for failing to lodge a profit and loss statement and balance
sheet; and
* three counts of contravening s989C of the Corporations Act
for failing to lodge an auditor's report with the profit and
loss statement and balance sheet.
Odyssey had pleaded guilty on March 7, 2024. At the sentencing
hearing on April 24, 2024, Odyssey via its legal representatives,
submitted that Odyssey's failure to lodge financial reports with
ASIC was not intentional but a result of the director's ill
health.
Her Honour Medina was not satisfied that the director's medical
treatment prevented compliance and noted that he had capacity to
engage and instruct lawyers. However, his ill health and plea of
guilty were mitigating factors.
Odyssey was discharged without conviction upon giving security by
entering into a recognizance in the sum of $2,500 to be of good
behaviour for a period of 12 months, pursuant to section 19B of the
Crimes Act 1914 (Cth).
A special condition of the bond is that Odyssey is required to
comply with outstanding reporting obligations within the period of
the bond.
Australian financial services licensees often manage large
quantities of client funds and the failure to lodge annual accounts
and audit reports hampers ASIC's ability to determine the true
financial position of a licensee, and the value of funds held on
behalf of clients.
The matter was prosecuted by the Commonwealth Director of Public
Prosecutions following a brief and referral from ASIC.
TASMANIAN AIR: First Creditors' Meeting Set for May 6
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Tasmanian
Air Tours Pty Ltd will be held on May 6, 2024, at 10:00 a.m. at the
offices of Apex Advisory Australia, Suite 12, Level 1, 11 Morrison
Street, in Hobart, TAS, and via electronic facilities.
Adam Johnston of Apex Advisory Australia was appointed as
administrator of the company on April 23, 2024.
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C H I N A
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CHINA HONGQIAO: Fitch Correct April 24 Ratings Release
------------------------------------------------------
Fitch Ratings issued a correction of a press release on China
Hongqiao Group Limited published on April 24, 2024. This version
omits the mention of a Recovery Rating that was not assigned.
The amended press release is as follows:
Fitch Ratings has affirmed China Hongqiao Group Limited's
(Hongqiao) Long-Term Foreign-Currency Issuer Default Rating (IDR)
and senior unsecured notes at 'BB+'. The Outlook is Stable.
The rating reflects Hongqiao's position as one of the world's
largest aluminium smelters, with a competitive cost position that
is supported by high raw-material self-sufficiency and sustained
low leverage. The Stable Outlook reflects its expectation that
Hongqiao will maintain its strong business and financial profile.
KEY RATING DRIVERS
Improved Margin and Low Leverage: Fitch expects the EBITDA margin
to improve to around 20% in 2024 and remain at a similar level in
the medium term. This is based on its expectation of stable average
selling prices and decreasing raw material costs, such as thermal
coal prices.
Fitch forecasts leverage will continue to trend down in 2024-2026
after incorporating Hongqiao's USD1.8 billion expected investment
in the Sinmandou project, as a result of decent cash generation
during the period. EBITDA margin improved to 19% in 2023, from 16%
in 2022, on lower raw material costs, while EBITDA net leverage
decreased to 1.5x, from 1.7x, due to the margin recovery.
Large Scale, High Self-Sufficiency: Hongqiao's large operating
scale and vertical integration support its market-leading
profitability. It is the world's second-largest primary aluminium
producer with around 6.5 million tonnes of capacity. Hongqiao
accounted for around 15% and 9% of domestic and global primary
aluminum production, respectively, in 2023. In addition, it had
full self-sufficiency in bauxite, over 70% sufficiency in alumina
and over 50% sufficiency in electricity in 2023.
Reliance on Short-Term Debt: Around 75% of Hongqiao's total debt of
CNY70 billion was short term by end-2023, up from 68% at end-2022.
However, this is mitigated by the company's sustained low leverage
and strong free cash flow (FCF) generation backed by high
profitability. In addition, a high portion of its short-term debt
is retained as cash, while the balance is used to fund its working
capital, which is short term in nature.
Hongqiao also continues to selectively issue longer-term debt,
particularly for capex. Access to longer-term financing is enhanced
by its solid banking relationships, with support from minority
shareholder CITIC Group. Management indicated that its preference
for short-term debt is driven by the cost advantage rather than the
unavailability of longer-term funding. Fitch may take a more
negative view of Hongqiao's high reliance on short-term debt if
there is evidence that its ability to issue longer-term debt is
weakened or if its FCF generation falls.
Limited Diversification Mitigated: Hongqiao has limited product,
geographical and customer diversification. However, its
geographical concentration has improved after the relocation of 30%
of its capacity to Yunnan province, with another 15% in the
medium-term pipeline. Over 70% of 2023 revenue came from primary
aluminium, with its five-largest customers and largest customer
accounting for 45% and 34% of revenue, respectively. Nevertheless,
the high product and customer concentration is mitigated by the
product's commoditised nature and diverse, high-quality
end-demand.
Key-Man Risk Moderated: CITIC Group has a 12% shareholding in
Hongqiao and is represented by two board members. It is involved in
Hongqiao's funding decisions and banking and capital-market
relationships. This reduces key man risk arising from the 64% share
ownership by Hongqiao's chairman and family.
DERIVATION SUMMARY
Hongqiao is comparable with its Fitch-rated peers Alcoa Corporation
(BB+/Stable) and Aluminum Corporation of China Limited (Chalco,
A-/Negative).
Hongqiao has a less sophisticated product range than Alcoa, but it
maintains a higher EBITDA margin due to the scale and efficiency of
its core aluminium smelting business. Hongqiao's EBITDA net
leverage is lower than Alcoa's, and Alcoa has better operational
and end-market diversity.
Hongqiao and Chalco have similar aluminium revenue scale. Chalco
has lower profitability and higher leverage, but has better
financial flexibility with higher interest coverage and better
liquidity. Chalco's rating also reflects its government-related
entity status.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Total aluminum capacity to remain at 6.5 million tonnes with an
over 90% utilisation rate
- EBITDA margin of around 21% between 2024 and 2027 amid stable
average selling prices and normalising energy costs
- Capex to average around 6% of revenue between 2024 and 2027 for
facility maintenance, technology upgrades and relocation
- Dividend pay-out ratio of around 50% between 2024 and 2027
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Meaningful improvement in maturity profile and funding sources
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Net debt/EBITDA remaining above 2.0x
- Material increase in reliance on short-term financing
- Sustained negative FCF generation
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch calculates Hongqiao had total debt of
CNY70 billion and short-term debt of CNY53 billion at end-2023
(including strategic investments of CNY3.8 billion), of which CNY19
billion was capital-market debt. It had available cash of CNY32
billion, and CNY32 billion in unused bank facilities. These are
uncommitted facilities, but Fitch believes they are adequate as
committed facilities are uncommon in China. Fitch expects Hongqiao
will be able to roll over bank borrowings due to its healthy
banking relationships.
ISSUER PROFILE
Hongqiao, the world's second-largest primary aluminium producer,
currently has around 6.5 million tonnes of smelting capacity,
behind Chalco's 7.4 million tonnes, accounting for around 9% of
global production.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
China Hongqiao
Group Limited LT IDR BB+ Affirmed
senior unsecured LT BB+ Affirmed
CHINA VANKE: To Exit Non-Core Biz, Divest Assets for Liquidity
--------------------------------------------------------------
Bloomberg News reports that China Vanke Co. will exit non-core
operations and divest assets as the developer seeks to boost
liquidity amid the sector's unprecedented downturn, according to a
memo from a shareholder meeting on April 30.
Bloomberg relates that the company will "trim down" and adjust its
model for raising money, Chairman Yu Liang said in the meeting. It
will also exit all businesses except for the three main operations,
which focus on property development, real estate management
services and rentals.
"The company has made a comprehensive weight loss plan to
coordinate debt reduction and high quality growth," Bloomberg
quotes Yu as saying. "We will withdraw, clean up or transfer
financial investment in other businesses outside the three main
operations."
The chairman also pledged in the meeting to reduce interest-bearing
debt by more than CNY100 billion ($13.8 billion) in the next two
years, Bloomberg relays.
According to Bloomberg, the state-backed developer has become the
latest flashpoint in the nation's property crisis, underscoring the
severity of the sector's challenges. Once China's largest
developer, Vanke now joins a list of large companies including
Country Garden Holdings Co. in a fight for survival.
Vanke said in March that it aimed to reduce interest-bearing debt
by more than half in five years. It is also preparing an asset
package totaling about CNY130 billion to use as collateral as it
seeks new bank loans, people familiar with the matter said earlier
in April, Bloomberg recalls.
Vanke is seeking to assuage concerns about its ability to stave off
default. It plans to increase efforts to complete large-scale asset
transactions, with a goal of hitting CNY20 billion every year.
In March, Bloomberg reported that Vanke was in talks with banks
over a plan to swap bond holdings worth tens of billions of yuan in
principal into secured debt. The swap would help Vanke avoid a
public default while giving banks collateral to protect against any
potential losses.
Vanke has also faced market rumors and controversies recently
involving a local partner, Bloomberg relates. Executives denied
speculation that the government banned managers above the group
vice-president level from traveling overseas after a chief partner
in Central China went absent without officially taking leave,
according to an exchange filing.
Vanke faces a maturity wall in 2025, when CNY36.2 billion of
onshore and offshore bonds come due, according to S&P Global. As of
the end of 2023, the company had accessible cash of CNY36.3
billion, S&P estimated.
JPMorgan Chase & Co. lowered its recommendation on the shares to
underweight in early April, saying Vanke faces a "challenging"
period of deleveraging and relying on the support of banks and
state-owned enterprises, Bloomberg adds.
About China Vanke
China Vanke Co., Ltd. operates real estate development businesses.
The Company provides housing renovation, housing loans, real estate
brokerage, and other businesses. China Vanke also operates
logistics, material supply, and other businesses.
As reported in the Troubled Company Reporter-Asia Pacific on May 1,
2024, Moody's Ratings has downgraded the following ratings of China
Vanke Co., Ltd. and its wholly-owned subsidiary, Vanke Real Estate
(Hong Kong) Company Limited.
1. China Vanke's corporate family rating to Ba3 from Ba1;
2. Backed senior unsecured rating on the medium-term note (MTN)
program of Vanke Real Estate to (P)B1 from (P)Ba2; and
3. Backed senior unsecured rating on the bonds issued by Vanke Real
Estate to B1 from Ba2.
The MTN program and senior unsecured bonds are supported by a deed
of equity interest purchase undertaking and a keepwell deed between
China Vanke, Vanke Real Estate and the bond trustee.
The entities' outlooks have been revised to negative. Previously,
their ratings were on review for downgrade.
The TCR-AP recently reported that S&P Global Ratings lowered its
long-term issuer credit rating on China Vanke Co. Ltd. to 'BB+'
from 'BBB+', and its long-term issuer credit rating on China
Vanke's subsidiary, Vanke Real Estate (Hong Kong) Co. Ltd. to 'BB'
from 'BBB'. S&P also lowered the issue rating on Vanke HK's senior
unsecured notes to 'BB' from 'BBB'.
The negative outlook on China Vanke reflects S&P's expectation that
the company's contracted sales could decline further over the next
12 months amid a prolonged industry downturn. China Vanke's
financial position could also weaken if the company fails to
execute its asset disposal plans.
CIFI HOLDINGS: Proposes Key Debt Terms With as Much as 85% Haircut
------------------------------------------------------------------
Bloomberg News reports that CIFI Holdings Group Co. said it has
reached an agreement with a key creditor group on some terms of a
restructuring plan that could cut the principal on its debt by as
much as 85%, a reversal from the company's expectations of "no
haircut" a year ago.
Bloomberg relates that Shanghai-based CIFI's latest proposal
involves reducing debt by around $3.3 billion to $4 billion, while
asking bondholders to swap existing debt for new notes with tenors
ranging from two to six years, according to a Hong Kong exchange
filing dated April 29.
CIFI's shares rose as much as 28% in Hong Kong trading on April 29,
alongside a broader rally in China property stocks. A Bloomberg
Intelligence gauge of builders' shares jumped more than 12%, the
most since November 2022, hopes of more policy easing.
According to Bloomberg, CIFI, which first defaulted on a
convertible bond in October 2022, laid out six options for debt
reduction, one of which with as much as an 85% haircut, or loss on
the principal, if creditors choose to be paid in cash. CIFI said it
is still in talks with the creditors and hasn't entered into any
legally binding agreement.
The developer last laid out a preliminary offshore debt plan in
March 2023, saying that it expected no haircut. It also set a
seven-year limit on how long the debt could be extended.
Of the six options CIFI set out in the latest filing, five involved
haircuts of between 50% and 85%, Bloomberg notes. The maturities in
certain options have also been extended to seven to nine years if
certain contracted sales benchmarks aren't met.
Bloomberg says the worsening restructuring terms are symptomatic of
the deteriorating situation in China's real estate sector.
Developer sales have continued to slump and are expected to fall a
further 30% in April from a year ago, according to Bloomberg
Intelligence estimates. Defaulted companies such as CIFI face even
greater obstacles in selling units amid wariness from potential
home buyers.
CIFI said it has 68 projects in China that have been shortlisted
for government funding aid. One of its projects was granted CNY150
million ($20.7 million) of new funding, it said.
About CIFI Holdings
CIFI Holdings (Group) Co. Ltd. is an investment holding company
principally engaged in property businesses. The Company mainly
operates through three segments. Property Development segment is
engaged in the development and sales of office properties,
commercial properties and residential properties in China. Property
Investment segment is engaged in the leasing of investment
properties developed or purchased by the Company for the rental
income and the appreciation of the properties' values. Property
Management, Project Management and Other Property Related Services
segment is engaged in property management and project management in
China.
As reported in the Troubled Company Reporter-Asia Pacific, in
October 2022, Fitch Ratings has downgraded China-based property
developer CIFI Holdings (Group) Co. Ltd.'s Long-Term Foreign- and
Local-Currency Issuer Default Ratings to 'CC' from 'BB-'. Fitch has
also downgraded CIFI's senior unsecured rating and the ratings on
the outstanding notes to 'CC' with a Recovery Rating of 'RR4', from
'BB-'. All the ratings have been removed from Rating Watch
Negative.
The downgrade reflects CIFI's rising liquidity risks, amid market
reports that it failed to make an interest payment for its
convertible bonds (maturing April 8, 2025) that was due in early
October, and that it was also seeking to delay certain principal
and interest payment for other financial obligations.
The TCR-AP also reported on Oct. 19, 2022, that Moody's Investors
Service has downgraded CIFI Holdings (Group) Co. Ltd.'s corporate
family rating to Ca from B3 and senior unsecured rating to C from
Caa1. The outlook remains negative.
GREENTOWN CHINA: Fitch Affirms 'BB-' ICR & Alters Outlook to Stable
-------------------------------------------------------------------
S&P Global Ratings, on April 24, 2024, revised its rating outlook
on Greentown China Holdings Ltd. to stable from positive. At the
same time, S&P affirmed its 'BB-' long-term issuer rating on the
company.
The stable outlook reflects S&P's expectation that Greentown will
maintain its business competitiveness and smooth access to various
funding channels over the next 12 months despite the market
downturn.
Greentown's focus on premium products in higher-tier cities could
support its competitive position amid the market downturn. The
company has a long operating record and good brand recognition in
developing high-end residential properties in first- and
second-tier cities in China, especially in the more economically
developed Yangtze River Delta region. This enables Greentown to
gain market share in China's property market, which has reduced in
size. As per China Real Estate Information Corp., Greentown's
nationwide sales (of self-investment projects) ranking improved to
no. 7 in 2023 from no. 19 in 2020.
As of end-2023, 80% of Greentown's landbank is in higher-tier
cities and 57% is in the Yangtze River Delta region. As much as 84%
of the company's land investments during the year were in higher
tier cities, of which 58% were in Hangzhou, Shanghai, and Beijing.
Greentown therefore has less volatile sales amid the prolonged
industry downturn. S&P has therefore revised its assessment of the
company's business risk profile to satisfactory from fair.
Greentown's reducing JV exposure could help mitigate financial
risk. Such a strategy could safeguard the company from contagion
financial risks arising from JV partners. It could also improve
Greentown's operating efficiency and access to cash at the project
level.
Greentown has been reducing its cooperation with JV partners since
the market downturn in 2021. This is reflected in an increase in
consolidation and attributable ratios in Greentown's land
investments and contracted sales. The attributable ratio of land
investments has improved to 74% in 2023, from 69% in 2022 and 58%
in 2021. Attributable sales accounted for 66% of the company's
contracted sales in 2023, compared with 58% in 2022 and 54% in
2021.
S&P said, "We expect Greentown's contracted sales to drop and its
margins to remain under pressure in 2024-2025.This is mainly due to
the still-weak overall homebuying sentiment in China. The company's
total salable resources (on land bank basis) fell 24% to Chinese
renminbi (RMB) 629.2 billion in 2023 owing to more controlled land
investments. We believe Greentown's weakening sales and margins
will temper its business strengths. We have therefore neutralized
the company's positive comparable rating analysis score.
"We estimate Greentown's contracted sales (excluding contracted
sales from its project management business) will drop to RMB170
billion in 2024 and RMB160 billion in 2025, from RMB194.3 billion
in 2023. In the first quarter of 2024, the company had contracted
sales of RMB37.2 billion, 24% lower than in the same period in
2023. This is still better than an industry average of 47.5%
year-on-year decline. Greentown's attributable contracted sales
fell 15% in the same period.
"Meanwhile, we estimate Greentown's gross profit margin for the
property development business will dip to 11.0% in 2024 from 11.3%
in 2023. The margin should gradually recover to 12.2% in 2025 and
15.0% in 2026 as most of the low-margin projects acquired around
2021 would have got recognized.
"We estimate Greentown's leverage will remain elevated in
2024-2025. We expect the company to gradually reduce its debt,
mainly by reducing external guarantees to unconsolidated projects
and repaying some of the debt using internal resources. However,
the S&P Global Ratings-adjusted debt-to-EBITDA ratio would likely
remain high at 7.6x in 2024, and increase further to 8.2x in 2025,
before improving to 7.4x in 2026. The high leverage will be chiefly
due to dropping contracted sales and compressed margins for the
property development business in 2024-2025. As such, we believe
Greentown's deleveraging could be slower than we previously
expected."
Greentown's access to funding channels remains intact. The company
is one of the few Chinese developers that continue to have smooth
access to onshore debt capital market without the need of credit
enhancement. This is partially due to the support of Greentown's
state-owned single-largest shareholder, China Communications
Construction Group Ltd. (CCCG). CCCG owns close to 29% of Greentown
and consolidates the company.
Greentown raised RMB8.3 billion in 2023 and RMB2 billion in the
first quarter of 2024 by issuing unsecured onshore bonds. The
company redeemed RMB5.15 billion in onshore bonds in the first
quarter of 2024. Greentown still has RMB6.9 billion in onshore
bonds and US$150 million in offshore bonds due in the rest of the
year. S&P believes the company will address the upcoming maturities
mainly through refinancing. Greentown will also likely pay down
some of the debt using internal resources.
S&P said, "The stable rating outlook reflects our expectation that
Greentown will maintain its business competitiveness in China's
property development market over the next 12 months. We also expect
the company to continue to have smooth access to various funding
channels to support its business operations and liquidity.
"We may lower the rating if Greentown's contracted sales and
profitability deteriorate significantly below our expectation, or
the company's business expansion is more aggressive, such that its
financial leverage weakens. Consolidated EBITDA interest coverage
dropping below 1.5x or the consolidated and look-through
debt-to-EBITDA ratio approaching 10x for an extended period may
indicate a deterioration of the credit profile.
"We could also lower the rating if Greentown's access to funding
channels weakens, resulting in a weaker liquidity position.
"Further, we could downgrade Greentown if our assessment of CCCG's
support for the company weakens.
"We may revise upward our assessment of Greentown's stand-alone
credit profile if the company achieves satisfactory contracted
sales and sustainable improvement in profitability. The
consolidated EBITDA interest coverage improving to well above 2.5x
and consolidated and look-through debt-to-EBITDA ratios staying
well below 8x on a sustainable basis could indicate such
improvement. At the same time, Greentown should continue to
maintain smooth access to various funding channels."
S&P may raise the rating if: (1) CCCG's support to Greentown
strengthens and the group's credit profile remains stable; and (2)
Greentown has a better record of integrated operations and
financial management with the group.
JINKE PROPERTY: Prepared Initial Plan for Court-Led Restructure
---------------------------------------------------------------
Reuters reports that Jinke Property Group has prepared a
preliminary plan to restructure debt, it told investors on April
30, after becoming the first Chinese-listed developer accepted for
re-organisation by a domestic court last week.
The company, based in southwestern Chongqing, is among many
developers defaulting on debt since the sector slipped into crisis
in mid-2021 but is the first to file its restructuring plan with a
Chinese court, Reuters says.
Reuters relates that the Shenzhen-listed company has hired CICC as
adviser, and has been communicating with creditors and potential
strategic investors, it added. In June, it signed a strategic pact
with a unit of China Great Wall Asset Management.
It said it had won support from the Chongqing municipal government,
which recently set up a task force to help resolve related risks,
the minutes showed.
Reuters could not immediately reach Jinke officials to seek
comment.
Jinke has previously said its re-organisation will be jointly led
by the court and a manager, in addition to the company.
According to Reuters, S&P Ratings said Jinke's reorganisation could
serve as a template for other distressed companies.
"The outcome will provide insight to offshore investors on the
benefits of court-led debt resolutions in China," it said in a
statement last week.
"The event may also reset investors' sense of risk on developers'
offshore debt - for better or worse."
A court-led process is more constructive for issuers because it
would result in a comprehensive restructuring package by cutting
debt and injecting fresh equity, the ratings agency added.
The agency expected claims of offshore and onshore bond investors
would rank equally, with both creditors and shareholders likely to
take haircuts, Reuters relays.
Jinke Property Group Co., Ltd. principally engages in the
development and distribution of real estates. The Company mainly
operates through three segments. Real Estate segment is primarily
engaged in the development of residential and commercial
properties, as well as the development and operation of industrial
estates. Community Integrated Services segment mainly provides
property management services. New Energy segment consists of wind
power and photovoltaic power generation. The Company is also
involved in hotel management, gardening and architecture decoration
businesses. The Company operates its business in domestic market,
mainly in Chongqing and Jiangsu Province, China.
JRSIS HEALTH: HHC Raises Going Concern Doubt
--------------------------------------------
Forest Hills, New York-based HHC has expressed that there is
substantial doubt about the ability of JRSIS Health Care
Corporation to continue as a going concern.
HHC, the Company's auditor since 2021, issued a "going concern"
qualification in its report dated April 26, 2024, filed together
with JRSIS's Form 10-K Report submitted to the U.S. Securities and
Exchange Commission for the fiscal year ended December 31, 2023.
The auditor cited the Company has suffered recurring significant
losses which resulted significant accumulated deficiency in
stockholders' equity and has a net capital deficiency. These
factors raise substantial doubt about the Company's ability to
continue as a going concern, the auditor said.
For the years ended December 31, 2023 and 2022, the Company
incurred a significant net loss of $94,588 and $673,260, the
recurring operating loss result in an accumulated deficit of
$3,442,898 as of December 31, 2023. The Company generated cash
inflows form its operation for the year ended December 31, 2023 of
$516,724 and had a working capital deficit of $446,337. Management
believes these factors raise substantial doubt about the Company's
ability to continue as a going concern for the next 12 months.
The continuation of the Company as a going concern through the next
12 months is dependent upon (1) the continued financial support
from its external financing, including bank loans and issuance of
its shares to potential shareholders. Management believes that it
can obtain additional bank loans and the issuance of common shares
of the Company is available if the Company effort to do so, and (2)
further implement management's business plan to extend its
operations and generate sufficient revenues and cash flows to meet
its obligations. The Company's operation is on the upward trend,
and management believes that the Company's operation can generate
enough revenues and cash to meet its obligation in the normal
course of business. While the Company believes in the viability of
its strategy to increase sales volume and in its ability to raise
additional funds, there can be neither any assurances to that
effect, nor any assurance that the Company will be successful in
securing sufficient funds to sustain the operations.
Management believes that the actions presently being taken to
obtain additional funding and implement its strategic plan provide
the opportunity for the Company to continue as a going concern.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/y64dwh9b
About JRSIS Health Care
JRSIS Health Care Corporation provides medical services. The
Company offers both Western and Chinese medical practices,
including pediatrics, dermatology, traditional Chinese medicine,
internal medicine dentistry, general surgery, rehabilitation
science, and gynecology. JRSIS Health Care serves patients in
China.
As of December 31, 2023, the Company has $2,144,525 in total
assets, $2,305,177 in total liabilities, and $160,652 in total
deficit.
WEST CHINA CEMENT: Fitch Lowers LongTerm IDR to B+, Outlook Neg.
----------------------------------------------------------------
Fitch Ratings has downgraded West China Cement Limited's (WCC)
Long-Term Issuer Default Rating (IDR) and senior unsecured rating
to 'B+' from 'BB-'. The Outlook on the IDR remains Negative. Fitch
has also downgraded the rating on WCC's USD600 million senior
unsecured notes due July 2026 to 'B+' from 'BB-'. The Recovery
Rating on the senior notes is 'RR4'.
The action is driven by WCC's higher business risk, sustained
negative free cash flow (FCF) and rising leverage, due mostly to
its high overseas capex. The Negative Outlook reflects
uncertainties on FCF turning positive, especially in light of its
substantial maturity in 2026.
KEY RATING DRIVERS
Rising Geographical Risks: WCC has been expanding rapidly overseas
in the past three years, and Fitch expects its offshore EBITDA
contribution to increase to 60% by end-2024 and close to 70% by
end-2025, up from around 45% in 2023. Most of the EBITDA growth
comes from countries with higher business risk such as Ethiopia
('RD'), Mozambique ('CCC+') and the Republic of Congo ('CCC+').
Fitch views increasing exposure to these higher-risk countries a
constraint on rating headroom, despite a wider margin and EBITDA
contribution.
Capex Drives Leverage: Sustained high overseas capex, accompanied
by rising leverage, has meant that WCC's FCF generation has been
negative since 2020. Net EBITDA leverage rose to 3.8x by end-2023
(2022A: 3.2x) despite a growing EBITDA generation to CNY2.9 billion
(2022A: 2.8 billion), due to its high annual capex of CNY2.9
billion (2022A:3.0 billion).
However, Fitch expects net leverage to decline to 3.0x in 2024,
driven mostly by higher overseas EBITDA generation of around CNY2.2
billion, as well as lower capex of around CNY2.0 billion. Fitch
expects capex to come down further to CNY1.5 billion in 2025,
allowing the company to generate CNY1.0 billion of FCF.
Looming 2026 Maturity: WCC has a USD600 million bond due in July
2026, but Fitch does not expect the company to be able to refinance
the full amount via capital markets, but rather to address
repayment via a combination of internal cash flow generation and
refinancing. Fitch expects WCC's access to offshore bank funding to
remain open, while internal cash accumulation will help to address
the full amount of its bond maturity. It is unclear how committed
the company is to scale back capex, should operating cash flow fail
to rise as rapidly as management expects.
Stable Operation in China: Fitch expects WCC's operation in China
to generate CNY1.5 billion of EBITDA per annum (2023: CNY1.6
billion), as the company's strong market position in Shaanxi
continued to support its sales volume and margin during the
industry-wide downturn in 2023. WCC has a 25% market share in
Shaanxi and a 75% market share in southern Shaanxi. Fitch does not
expect material capex for its Chinese operations.
DERIVATION SUMMARY
WCC is larger, with wider margins and broader geographic
diversification than Uzbekistan-based cement producer United Cement
Group plc (UCG, B+/Positive). However, UCG has a much stronger
financial profile, with positive FCF and lower leverage.
WCC has a wider EBITDA margin, greater geographical diversification
and more diversified funding channels than Chinese stainless steel
producer Guangyang Antai Holdings Limited (B/Stable). Their
leverage profiles are similar. Guangyang Antai has limited growth
potential, along with limited capex and neutral FCF. In comparison,
WCC has high capex but also stronger growth potential.
KEY ASSUMPTIONS
Fitch's Key Assumptions within its Rating Case for the Issuer:
- Revenue to increase by 24% in 2024, 17% in 2025 and 8% in 2026
(2023: 6%);
- EBITDA margin at around 34%-37% over 2024-2026 (2023: 32%);
- Capex of CNY2.0 billion in 2024, CNY1.5 billion in 2025 and
CNY1.5 billion in 2026.
RECOVERY ANALYSIS
- Going-concern EBITDA of CNY2.9 billion;
- Multiplier of 4x for EBITDA from China, and 1.5x for offshore
EBITDA;
- 16% administrative claim;
- Fitch estimates the waterfall generated recovery computation
(WGRC) is 52% on the offshore senior unsecured debt, which would
map to a Recovery Rating of '3'. The Recovery Rating is capped at
'RR4', or 30-50% estimated recoveries according to Fitch's
Country-Specific Treatment of Recovery Ratings.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Evidence of clear plans to address the 2026 maturity
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Failure to generate positive FCF by end-2024
- Sustained declining cash balances
LIQUIDITY AND DEBT STRUCTURE
No Immediate Capital Market Maturities: WCC had total available
cash of CNY1.0 billion including cash pledged for bank loans, and
unused banking facilities of CNY1.2 billion as of end-2023. Fitch
believes cash sources are adequate to pay back its short-term debt
of CNY3.6 billion, as the majority of the short-term debt is
onshore working-capital loans, which Fitch expects to be rolled
over. WCC has one bond issue outstanding, the USD600 million
offshore notes due July 2026.
ISSUER PROFILE
WCC primarily produces and markets cement and related products.
Total production capacity is 31.8 million tonnes (mt) per annum.
The majority of its capacities (27mt) are situated in China, while
the remaining 4.8mt were located in other countries as of end-2023
- including 2mt in Mozambique, 1.3mt in Ethiopia and 1.5mt in the
Democratic Republic of Congo.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
West China Cement
Limited LT IDR B+ Downgrade BB-
senior
unsecured LT B+ Downgrade RR4 BB-
=========
I N D I A
=========
AMBICA TIMBERTRADE: ICRA Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA has kept the Long-Term and Short-Term rating for the Bank
facilities of Ambica Timbertrade Pvt. Ltd. in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]D;ISSUER NOT
COOPERATING/[ICRA]D;ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term- 3.00 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
Short-term 27.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term– 5.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Ambica Timbertrade Pvt. Ltd., ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Ambica Timber Trade Private Limited (ATPL) is a privately owned
company which is engaged in the timber trading business. It has its
sales offices located in Nangloi (Delhi) and branch office at
Gandhidham (Gujarat). The company procures timber mainly from
Malaysia, Singapore and New Zealand. The variety of timber imported
comprises mainly 'Meranti', 'pine', and 'arau' which are mainly
used in furniture making and light construction work. The imported
timber logs after reaching Kandla port are transported to ATPL's
factory in Gandhidham (Gujarat) located at 17 Kms away from the
port. All the sawn timber produced at Gandhidham (Gujarat) is sold
locally to traders and builder located mainly in Punjab, Haryana,
Uttar Pradesh, Gujarat and Maharashtra. The nature of the work is
low value additive, and the company faces high competition from
numerous other players operating in the industry, which results in
modest profitability for the company. However, robust demand
potential on the face of real estate development witnessed across
the country results in positive demand outlook for the company's
products.
AZAD IMPEX: ICRA Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has kept the Long-Term and Short-Term rating for the Bank
facilities of Azad Impex Private Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]D;ISSUER NOT
COOPERATING/[ICRA]D;ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 4.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 38.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Azad Impex Private Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Azad Impex Private Limited (AIPL) is a privately owned company
which is engaged in the timber trading business. It has its sales
offices located in in Munda (Delhi), Jind (Haryana) and Gandhi Dham
(Gujarat). The company procures timber from Malaysia, New Zealand &
Ghana etc. The variety of timber imported comprises mainly
'Meranti', 'Sal', 'Arau', and 'Kapur' which are mainly used in
furniture making and light construction work. The imported timber
logs after reaching Kandla port are transported to AIPL's factory
in Gandhi Dham (Gujarat) located at a distance of 15 KMs away from
the port. At the factory, the logs are cleaned and sawed to make
clean squared timber blocks as well as different shapes of moulding
and beading as per customers' requirements and specifications. All
the sawn timber produced at Gandhi Dham (Gujarat) is sold locally
to traders, builders located mainly in Delhi, Rajasthan, Punjab,
Haryana and Gujarat. The nature of the work is low value additive,
and the company faces high competition from numerous other players
operating in the industry, which results in modest profitability
for the company.
BALAJI RAW: CARE Keeps D Debt Rating in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sri Balaji
Raw and Parboiled Rice Mills Private Limited (SBRPRMPL) continues
to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 20.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Ltd. had, vide its press release dated February 21,
2023, placed the rating(s) of SBRPRMPL under the 'issuer
non-cooperating' category as SBRPRMPL 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. SBRPRMPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated January 7, 2024, January 17,
2024, January 27, 2024.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'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).
Incorporated in June 2013, Sri Balaji Raw and Parboiled Rice
Private Limited (SBRPRMPL) is promoted by by Mr. Tatikonda
Viswanadham and Mrs. Tatikonda Savithri. Mr. Tatikonda Viswanadham
is operating two other rice mills, namely, M/s. Pallavi Enterprises
and M/s. Girija Modern Rice Mills. SBRPRMPL operates on leased
premises and machinery of Girija Modern Rice Mills and Pallavi
Enterprises. The company hired machinery capacity of 250 TPD (out
of 350 TPD total capacity) from Girija Modern Rice Mills and 150
TPD (out of 250 TPD total capacity) from Pallavi Enterprises. Both
of these firms are currently operational and continue to do so till
the management decides, after which, they would operate under the
name of Sri Balaji Raw and Parboiled Rice Mills Private Limited.
The facilities leased include 12 acres of land, machinery, 53
self-owned Lorries, 2.5 MW cogeneration bio-mass power plant and a
warehouse to store up to 20,000 MT of different varieties of
paddy.
CHADHA SUGARS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has kept the Long-Term and Short-Term rating for the Bank
facilities of Chadha Sugars & Industries Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as"[ICRA]D;ISSUER NOT
COOPERATING/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term 6.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term– 109.80 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 168.33 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long Term- 40.46 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Chadha Sugars & Industries Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
CSIL was incorporated in 2004. The company is a part of the Late
Mr. Hardeep Chadha Group which has business interests in diverse
areas such as real estate, sugar, liquor, paper etc. CSIL has set
up a 4500 TCD sugar plant (expanded to 5000 TCD), 26 MW
co-generation unit, 30 KLPD grain-based distillery and 30 KLPD
molasses-based distillery. The plant is located at village Teri
Afghana in Gurdaspur district of Punjab.
CITY TILES: ICRA Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has kept the Long-Term and Short-Term ratings of City Tiles
Limited in the 'Issuer Not Cooperating' category. The rating is
denoted as [ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 14.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term– 35.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 22.52 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long Term- 12.48 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with City Tiles Limited, ICRA has been trying to seek information
from the entity so as to monitor its performance. Further, ICRA has
been sending repeated reminders to the entity for payment of
surveillance fee that became due. Despite multiple requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, the rating has been continued to the "Issuer Not
Cooperating" category. The rating is based on the best available
information.
City Tiles Limited was incorporated in 2002 as a manufacturer of
ceramic tiles, by Mr R. D. Patel. Since then the company has
extended production capacities as well as the product range. CTL is
currently engaged in the business of manufacturing and outsourcing
of vitrified tiles. The manufacturing facility of the company is
located near Himmatnagar in Gujarat having an installed capacity of
about 14,000 square meters per day of vitrified tiles. CTL markets
its tiles under a single brand name "City Tiles".
EAGLE CONTINENTAL: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has kept the Long-term and Short-term rating for the bank
facilities of Eagle Continental Foods Private Limited in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 2.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term/ 47.50 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Fund Based- remain under 'Issuer Not
Cash Credit Cooperating' Category
Long-term/ 30.50 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Unallocated remain under 'Issuer Not
Cooperating' Category
As part of its process and in accordance with its rating agreement
with Eagle Continental Foods Private Limited, ICRA has been trying
to seek information from the entity so as to monitor its
performance. Further, ICRA has been sending repeated reminders to
the entity for payment of surveillance fee that became due. Despite
multiple requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
ECFPL, formerly known as Eagle Potteries Private Limited (EPPL),
was incorporated in 1982. The promoters of the company are Mr.
Shahid Ali Qureshi and Mr. Sajid Ali Qureshi, both of whom have
extensive experience in the buffalo meat processing industry. The
company has an integrated plant with slaughtering, processing,
packaging, freezing and cold storage facilities at Dasna in the
Ghaziabad district of Uttar Pradesh. ECFPL's facility was closed
and sealed by Ghaziabad Development Authority (GDA) and Central
Pollution Control Board (CPCB). As per the management as well as
various media articles, the plant's operation was forced to shut
down since January 20, 2018. Since then, the company was operating
from a third-party's processing facility (Al Nasir Exports Private
Limited) in the vicinity by paying fixed processing charges.
FRONTLINE BUILDERS: ICRA Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------------
ICRA has kept the Long-Term rating for the Bank facilities of
Frontline Builders in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable);ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 50.00 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
Limits to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with Frontline Builders, ICRA has been trying to seek information
from the entity so as to monitor its performance. Further, ICRA has
been sending repeated reminders to the entity for payment of
surveillance fee that became due. Despite multiple requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, the rating has been continued to the "Issuer Not
Cooperating" category. The rating is based on the best available
information.
Frontline Builders was founded in 2016 as a partnership firm and
has its registered office in Hyderabad. The firm develops
residential real-estate properties. FB is constructing a
residential property called Frontline Seven in Koka pet, Hyderabad
on a land parcel of 7 acres (4.50 acres being the firm's share) in
JDA (the firm's share is 89%) with individual landowners.
GANESH FIRE: ICRA Keeps D Ratings in Not Cooperating Category
-------------------------------------------------------------
ICRA has kept the long-term and Short-term ratings of Shri Ganesh
Fire Equipments (P) Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as [ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term 3.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term– 3.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Shri Ganesh Fire Equipments (P) Limited, ICRA has been trying
to seek information from the entity so as to monitor its
performance. Further, ICRA has been sending repeated reminders to
the entity for payment of surveillance fee that became due. Despite
multiple requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Shri Ganesh Udyog (India) was established in 1981 as a
proprietorship firm of Mr. Shri Gahesh Lal. Subsequently the firm
was reconstituted into a private limited company (Shri Ganesh Fire
Equipment Private Limited- SGFEPL) in 2010. Currently, it is being
managed by Mr. Lal's son, Mr. Raj Kishore. The company has three
manufacturing facilities, two in Delhi and one in Bihar. SGFEPL, an
ISO 9001:2008 certified company has been engaged in the
manufacturing of complete range of fire fighting vehicles, pumps,
equipments and accessories. SGFEPL is engaged in fabrication of
fire fighting vehicles like water tender, foam tender, DCP tender,
crash fire tender, trailer fire pumps etc. and special purpose
vehicles such as water cannon vehicles for riot control
operations.
GO FIRST: Weigh Liquidation After Court Order on Planes
-------------------------------------------------------
Reuters reports that lenders to Go First will meet this week to
discuss options for the bankrupt airline, including liquidation,
after a court order allowed lessors to take back their planes, two
bankers with Go First's creditors said on April 30.
"There is no value left in the airline after the court order and
chances of revival seem very grim," one of the bankers said.
Go First's resolution professional did not immediately respond to a
Reuters' email seeking comment.
The airline owes a total of INR65.21 billion ($780.88 million) to
its creditors, which include Central Bank of India, Bank of Baroda,
IDBI Bank and Deutsche Bank.
The Committee of Creditors (CoC) met on April 29 and another
meeting is scheduled for May 2, both sources said, Reuters relays.
The two bankers did not wish to be identified because they are not
authorised to speak with the media, Reuters notes.
Go First has received two bids under the formal bankruptcy process
- one from a consortium which includes budget carrier SpiceJet's
managing director Ajay Singh and Busy Bee Airways, and the second
from Sharjah-based Sky One, Reuters previously reported.
Sky One's Chairman Jaideep Mirchandani said that despite the
deregistration of leased planes, the company was prepared to bring
in their own assets and resources to revive the airline, if its bid
was successful, according to Reuters.
"Our extensive experience as lessors and our comprehensive
portfolio of aviation services uniquely position us to address the
challenges and opportunities presented by Go First's situation,"
Mirchandani said in an emailed response to Reuters.
Lenders may still choose to reject the bids on the table as they
are not happy with the sums offered currently by both applicants,
the second banker said.
The bids include the value of a piece of land offered as collateral
by the airline's promoters, the banker said.
Reuters had earlier reported that lenders had sought higher bids.
While liquidation seems to be the most viable option under the
present circumstances, it will be put to a vote once the committee
formally rejects the two offers or if the applicants back out, both
the bankers said, adds Reuters.
About Go First
Go First, formerly known as GoAir, was an Indian ultra-low-cost
airline based in Mumbai, Maharashtra. Go First was incorporated in
April 2004 as GoAir and commenced flight operations in November the
following year. Its inaugural flight was from Mumbai to Ahmedabad.
The airline is owned by the Wadia Group.
Go First filed an application for voluntary insolvency resolution
proceedings before National Company Law Tribunal (NCLT) on May 2,
2023.
The company said the filing with the NCLT comes after Pratt &
Whitney, the exclusive engine supplier for the airline's Airbus
A320neo aircraft fleet, refused to comply with an order to release
engines to the airline that would have allowed it return to full
operations.
Go First owes INR6,521 crore to its financial creditors, Bank of
Baroda, IDBI Bank, and Deutsche Bank. The airline has a total
liability of about INR11,463 crore to banks, other creditors,
vendors, and others.
On May 10, 2023, the NCLT accepted Go First's voluntary insolvency
petition. The NCLT bench appointed Abhilash Lal as the interim
resolution professional to look after the affairs of Go First and
also suspended its board as part of the insolvency resolution
process.
GS MALLS: ICRA Keeps B+ Debt Rating in Not Cooperating Category
---------------------------------------------------------------
ICRA has kept the Long-Term rating for the Bank facilities of GS
Malls Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable);ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 70.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
ICRA has kept the Long-Term rating for the Bank facilities of GS As
part of its process and in accordance with its rating agreement
with GS Malls Private Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
GSMPL was incorporated in the year 2008 and is promoted by the
Chadha group (a conglomerate with diverse business interests in
construction and operation of multiplexes, shopping malls, land
development, sugar, liquor, paper, health, food and trading of
liquor). The company owns and operates a multiplex cum mall by the
name of "Wave Mall" located at Channi Rama, Opposite Bathandi Road,
Jammu. The mall which commenced operations in 2014, is set up on a
land area of 3.48 acres with the built-up area of 4.45 lacs square
feet (sqft.) comprising retail area of approximately 1.94 lacs
sqft, multiplex area of 0.45 lacs sqft and parking area of 2.07
lacs sqft. The company also runs three cinema screens in the mall
with a total seating capacity of 1042 seats each, under the name of
"Wave Cinemas".
IREO HOSPITALITY: ICRA Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has kept the Long-Term rating of IREO Hospitality Company
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as [ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 60.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term– 863.30 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with IREO Hospitality Company Private Limited, ICRA has been trying
to seek information from the entity so as to monitor its
performance. Further, ICRA has been sending repeated reminders to
the entity for payment of surveillance fee that became due. Despite
multiple requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
IREO Hospitality Company Private Limited (IHCPL) is a SPV sponsored
by IREO which has right to develop approximately 13.5 acres of plot
located at the junction of Golf Course Road and the 150-meter-wide
Golf Course Extension Road in Sector 58, Gurgaon. IHCPL is
undertaking mixed used hospitality development of five-star deluxe
hotel and service apartments including Grade-A office and high
street retail space. The proposed Hospitality Complex would be
developed at the junction of Golf Course Road and Golf Course
Extension Road on a land parcel admeasuring about 13.50 acres. The
hotel and service apartments will operate as "Grand Hyatt Gurgaon"
managed under a branding and management arrangement with the Hyatt
Hotel Corporation chain.
JS ESTATES: ICRA Keeps B+ Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
ICRA has kept the Long-Term rating of JS Estates and Projects
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as [ICRA]B+(stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with JS Estates and Projects Private Limited, ICRA has been trying
to seek information from the entity so as to monitor its
performance. Further, ICRA has been sending repeated reminders to
the entity for payment of surveillance fee that became due. Despite
multiple requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
JS Contractors and Consultants Private Limited was in existence
since 1996 which was renamed as J S Estates & Projects Private
Limited in Jan 2013. The company was initially involved in
undertaking small valued civil contracts (
KSK MAHANADI: NCLT Admits Aditya Birla Arc's Insolvency Plea
------------------------------------------------------------
The Economic Times reports that the National Company Law Tribunal
(NCLT), Hyderabad, on April 30 admitted Aditya Birla ARC's
initiation of insolvency process petition against the personal
guarantees given by the promoters of KSK Mahanadi Power Company
K.A. Sastry and S. Kishore.
ET relates that the two promoters had guaranteed upward of INR4000
crore for loans sanctioned to KSK Mahanadi. Aditya Birla ARC has
largest share of 33.38% in the total claims from KSK Mahanadi
Power, which is around INR32,000 crore.
The duo had signed a guarantee agreement, which is a tripartite
agreement between borrower, lender and guarantor who guarantees
loan payment if the borrower defaults.
The petition was originally filed by the State Bank of India, which
sold its debt to Aditya Birla ARC in 2022.
KSK Mahandai had taken loans to finance a 3600 MW coal-based
Thermal Power project in Chattisgarh in 2009, ET notes.
NCLT, Hyderabad in 2019 had admitted KSK Mahanadi into insolvency
for default of debt of nearly INR1200 crore. The Resolution
professional has admitted claims of INR29,330 crore by lenders of
KSK Mahanadi.
Earlier this month, NCLT had lifted a stay on the resolution
process of KSK Mahanadi, paving the way for the issuance of fresh
expression of interest, ET recalls.
ET relates that the stay was imposed to allow for consolidating the
resolution process of two of KSK Mahanadi's ancillary companies to
fetch better value for the companies undergoing the insolvency
resolution process.
The insolvency resolution process of KSK Mahandai Power had drawn
interest from Adani Power, Vedanta, Naveen Jindal-promoted Jindal
Power, and Megha Engineering in the first round.
KSK Mahanadi Power promoted by KSK Energy Ventures Limited
(KSKEVL), is developing a 3600 MW (6 x 600 MW) domestic coal-based
power project at Nariyara village, Janjgir-Champa District of
Chhattisgarh.
MADHUCON GRANITES: ICRA Withdraws D Rating on INR82.06cr Loan
-------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities and
not reviewed due to lack of information of Madhucon Granites
Limited at the request of the company and based on the No Dues
Certificate (NDC) and No Objection Certificates (NOC) received from
its bankers. The Key Rating Drivers and their description,
Liquidity Position, Rating Sensitivities, Key financial indicators
have not been captured as the rated instruments are being
withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 82.06 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Withdrawn
Term Loan
Short-term– 42.57 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Withdrawn
Cash Credit
Short-term 9.10 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Madhucon Granites Limited, a part of Madhucon Group, was
incorporated in 1994 as a private limited company and is closely
held by the promoters. The company is involved in manufacturing of
polished granite slabs. It has one processing unit at Hosur (Tamil
Nadu) with an installed capacity of 6.5 lakh sq. mtr. The company
also has 13 operational quarries mainly located in Andhra Pradesh,
Tamil Nadu and Karnataka. Madhucon Group has diversified interests
across industries including construction, granite, coal, sugar and
power. MGL has three subsidiaries, namely, Madhucon Sugar and Power
Industries Limited (MSPIL), Nama Granites Private Limited (NGPL-
not operational) and Nama Holdings Pte Limited (NHPL). MSPIL has a
sugar plant in Khammam (Andhra Pradesh) with an installed capacity
of 3500 tons of canes per day and a power plant with a capacity of
generating 24.2 MW from baggase and coal. MSPIL has also
established a distillery unit in 2015 with a capacity of 65 kilo
litres per day. NHPL is a Singapore based entity which has in turn
invested in the Group's Indonesian entities for the procurement of
imported coal; however, the same is currently not operational.
MADHUVAN PRASAD: ICRA Keeps B+ Debt Rating in Not Cooperating
-------------------------------------------------------------
ICRA has kept the Long-term ratings for the bank facilities of
Madhuvan Prasad Infra Private Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]B+(Stable);
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 7.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with Madhuvan Prasad Infra Private Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Madhuvan Prasad Infra Pvt Ltd was incorporated as a Private Limited
Company in 2010 at Manipal, Karnataka. The company is into the
hospitality industry and has built one 3-star hotel named "Hotel
Madhuvan Serai" at Smriti Bhavan Road, Upendra Nagar, Manipal. The
hotel commenced operations on July 19, 2013. It consists of 7
floors with a built-up area of about 55,000 sft. It consists of
Vegetarian and Non-vegetarian Restaurants with a seating capacity
of 120 people each, a Banquet Hall with a seating capacity of 500
people, a Conference Hall with a seating capacity of 100 people and
46 Rooms. The company has leased out some space in the ground floor
to State Bank of India for opening its branch and ATM and to Axis
Bank for ATM. A portion of the cellar area has been leased out for
opening a grocery and stationery shop. The hotel is in close
proximity to Syndicate Bank Head Office, Udayavani Press, KMC
Hospital, MIT College, Medical College, Bus stand and other
Educational Institutions. It is also nearby Udupi, District
headquarters and Malpe beach which is a famous tourist attraction.
MANAPPURAM FINANCE: Fitch Gives BB-(EXP) on New USD Sec. Notes
--------------------------------------------------------------
Fitch Ratings has assigned India-based Manappuram Finance Limited's
(MFIN, BB-/Stable) proposed US dollar-denominated senior secured
notes an expected rating of 'BB-(EXP)'. The final rating is subject
to the receipt of final documentation conforming to information
already received.
The proposed notes will carry a fixed-rate coupon payable
semi-annually and will be secured by collateral, which includes
specified assets and receivables of the issuer. The proposed notes
are also subject to maintenance covenants that require MFIN to
ensure the security coverage ratio is at or greater than 1x at all
times.
MFIN will issue the proposed notes in the international market
under the Reserve Bank of India's external commercial borrowings
framework. They will be issued under MFIN's USD750 million secured
euro medium-term note (MTN) programme, which was updated on 26
April 2024. The update does not affect the programme rating of
'BB-'.
KEY RATING DRIVERS
MFIN's proposed notes are rated at the same level as its Long-Term
Foreign-Currency Issuer Default Rating (IDR) of 'BB-', in
accordance with Fitch's rating criteria.
Most of MFIN's debt is secured and Fitch believes that non-payment
of the company's senior secured debt would best reflect uncured
failure of the entity. MFIN can issue unsecured debt in the
overseas market, but such debt is likely to constitute a small
portion of its funding and thus cannot be viewed as its primary
financial obligation.
For more information on MFIN's key rating drivers and rating
sensitivities, please see "Fitch Affirms Manappuram Finance at
'BB-'; Outlook Stable", published on 4 September 2023.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Any negative action on MFIN's Long-Term Foreign-Currency IDR would
drive similar action on the expected rating on the proposed notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of MFIN's Long-Term Foreign-Currency IDR would result in
corresponding action on the expected rating.
Date of Relevant Committee
01 September 2023
ESG CONSIDERATIONS
MFIN has an ESG Relevance Score of '4' for Customer Welfare - Fair
Messaging, Privacy and Data Security, due to a history of
customer-related business practices that did not fully comply with
regulatory norms. The score reflects its assessment that
customer-related practices appear weaker than at rated peers,
raising regulatory and reputational risk for MFIN. This has a
negative impact on the credit profile and is relevant to the
ratings in conjunction with other factors.
MFIN has an ESG Relevance Score of '4' for Governance Structure,
due to its history of customer-related business practices that did
not fully comply with regulatory norms, which implies that the
company has gaps in its governance structure. The score reflects
its assessment that governance practices appear weaker than at
rated peers, raising regulatory and reputational risk for MFIN.
This has a negative impact on the credit profile and is relevant to
the ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
Manappuram Finance
Limited
senior secured LT BB-(EXP) Expected Rating
MANGALAM METALS: ICRA Keeps B- Debt Rating in Not Cooperating
-------------------------------------------------------------
ICRA has kept the long-term rating of Mangalam Metals & Ores
Limited in the 'Issuer Not Cooperating' category. The ratings are
denoted as "[ICRA]B- (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B- (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with Mangalam Metals & Ores Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Mangalam Metals & Ores Ltd. (MMOL) was initially established as
partnership concern named Mangalam Minerals, prior to being
converted to its present form in Dec-03. The company was promoted
by Mr. R.K. Agarwal, Mr. G.K. Gupta and Mr. S.S. Agarwal, all of
whom had prior experience in steel and iron related industries. The
company was initially involved in the crushing of iron ore and has
a crushing capacity of 50 TPH in Kasia, Barbil, Odisha. However,
all independent crusher units (except those operated by
mine-owners) in Odisha were closed down over the past 2.5 years due
to lack of permissions from the State Government. MMOL's crusher
has been shut down since Dec-10. The company had diversified into
iron ore trading in FY08, and now continues to focus on this
segment. The company does not have any plans for expansion at
present.
MIXED BAG: ICRA Keeps D Debt Rating in Not Cooperating Category
---------------------------------------------------------------
ICRA has kept the Long -Term rating for the Bank facilities of
Mixed Bag Overseas in the 'Issuer Not Cooperating' category. The
rating is denoted as"[ICRA]D;ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 10.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Mixed Bag Overseas, ICRA has been trying to seek information
from the entity so as to monitor its performance. Further, ICRA has
been sending repeated reminders to the entity for payment of
surveillance fee that became due. Despite multiple requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, the rating has been continued to the "Issuer Not
Cooperating" category. The rating is based on the best available
information.
Mixed Bag Overseas was established as a partnership firm in
February 2016 by Mr. Deepak Gupta and Mr. Ajay Pal. The firm is
involved in trading of mobile accessories including memory cards,
screen guards, batteries etc. The promoters are into the business
for a decade now. Mr. Deepak Gupta is the managing director of the
Josh Group. The group has various companies which sells their
low-cost mobile handsets under the brand name "Josh", primarily
targeting the low-level income customers in the rural and urban
areas of northern India.
NAV VIDYA: ICRA Keeps B+ Debt Rating in Not Cooperating Category
----------------------------------------------------------------
ICRA has kept the long-term rating of Nav Vidya Society for
Education Research & Training in the 'Issuer Not Cooperating'
category. The rating is denoted as [ICRA]B+(Stable); ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 54.35 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with Nav Vidya Society for Education Research & Training, ICRA has
been trying to seek information from the entity so as to monitor
its performance. Further, ICRA has been sending repeated reminders
to the entity for payment of surveillance fee that became due.
Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Nav Vidya Society for Education, Research & Training (NVS) had
entered into an agreement with GD Goenka Pvt. Ltd. for establishing
a school campus in the name of G D Goenka Public School, Gurgaon.
The society has rights to serve as exclusive franchise of GD Goenka
Public School (CBSE board) in Gurgaon. The promoter group has
significant experience in the education
sector, as it already operates the Rohini branch of GD Goenka
Public School since the year 2007, and reputed colleges in Delhi,
namely Maharaja Agrasen Institute of Technology (MAIT), Maharaja
Agrasen Institute of Management Studies (MAIM) and Maharaja Agrasen
Institute of Advanced Studies (MAIA). It has also recently started
operations in Sarita Vihar branch of GD Goenka Public school from
April 2015 onwards.
PRITHVI DEVELOPERS: ICRA Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA has kept the long-term ratings of Prithvi Developers in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Prithvi Developers, ICRA has been trying to seek information
from the entity so as to monitor its performance. Further, ICRA has
been sending repeated reminders to the entity for payment of
surveillance fee that became due. Despite multiple requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, the rating has been continued to the "Issuer Not
Cooperating" category. The rating is based on the best available
information.
Prithvi Developers is a society established in 1996 by Dr Zora
Singh and his family members. It established a private university
by the name Desh Bhagat University under the Punjab Govt's Desh
Bhagat University Act. Desh Bhagat United has its campuses at Mandi
Gobindgarh, Shri Muktsar Sahib, Moga, Chandigarh in Punjab, India
and in Kenya, East Africa. The university offers around 105
undergraduate and post-graduate courses in the field of
Agricultural Sciences, Airlines, Animation, Applied Sciences, Art &
Craft and Fashion Technology, Ayurveda, Commerce, Computer
Sciences, Education, Engineering, Hospitality and Tourism, Hotel
Management, Languages, Law, Management, 2 Media, Nursing,
Performing arts, Physical Education, and the Social Sciences. The
university has a total capacity of 21,000 students with an average
occupancy of 43%.
PROTAC FOODS: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has kept the Long-term rating for the bank facilities of
Protac Foods International Private Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 4.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 18.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Protac Foods International Private Limited, ICRA has been
trying to seek information from the entity so as to monitor its
performance. Further, ICRA has been sending repeated reminders to
the entity for payment of surveillance fee that became due. Despite
multiple requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Incorporated in February 2014, PFIPL started its commercial
operations from July 2016. The company is engaged in processing of
poultry birds for production of dressed and frozen chicken. The
product portfolio of the company consists of fresh chilled chicken,
frozen chicken, chicken cut parts (whole, boneless and portions)
and ready to eat product(marinated chicken pieces). The company's
processing plant is located in Kolar district of Karnataka and has
an installed capacity of processing 6000 birds per hour. However,
with certain capital expenditure yet to undertaken, the current
operational capacity stands at 2500 birds per hour. As per
provisional results for FY2017, the company reported a net loss of
INR5.64 crore on an operating income of INR10.96 crore for the
period from July 2016 to November 2016.
RAICHUR LABORATORIES: ICRA Keeps D Rating in Not Cooperating
------------------------------------------------------------
ICRA has kept the long-term rating of Raichur Laboratories Pvt.
Ltd. in the 'Issuer Not Cooperating' category. The rating is
denoted as [ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 15.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long Term- 5.00 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Raichur Laboratories Pvt. Ltd., ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Raichur Laboratories Pvt. Ltd (RLPL) was incorporated in the year
2013 by Mr. P. Giridhar Gopal and Dr. M. Vijender for setting up a
drug intermediate and API's manufacturing unit. The manufacturing
unit of the company is located at Industrial Growth Centre in
Raichur District of Karnataka. The company has a total reactor
capacity of 75,000 KL.
RAJ RATAN: ICRA Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
ICRA has kept the long-term and Short-term ratings of Raj Ratan
Smelter Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as [ICRA]C+/[ICRA]A4; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/ 18.50 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Fund Based/ remain under 'Issuer Not
Non Fund Based Cooperating' Category
As part of its process and in accordance with its rating agreement
with Raj Ratan Smelter Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Raj Ratan Smelter Limited was incorporated by the Khatri family in
2007 and is involved in the manufacture and sale of mild steel
bars. Its plant, located in Kanpur (UP), has a capacity of 36,000
metric tons (MT) per annum.
RAMCO EXTRUSION: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has kept the long-term ratings of Ramco Extrusion Private
Limited in the 'Issuer Not Cooperating' category. The ratings are
denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 2.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Long Term- 11.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with Ramco Extrusion Private Limited, ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
REPL is engaged in the manufacture of architectural utilities like
aluminum sliding & ladder sections, heat sinks,
round/square/rectangle tubes, miscellaneous sections etc. The
products of REPL mostly find use in construction, electronics,
automotives, medical, transportation etc. The chief components for
manufacture are aluminium ingots and aluminium scrap. The same are
procured mostly from Mumbai or locally. Apart from these, furnace
oil which is required to heat the furnace to the required
temperatures for melting of aluminium is also required.
Additionally chemicals are added like magnesium, degasers etc. to
remove any impurities and/or alter the chemical composition of
aluminium. The latter is done at the request of the customers who
require the presence of alloys in the aluminium. Addition of
chemicals also increases the hardness of the metal. The customers
of REPL are also mostly located within Mumbai. The average credit
period extended to customers and got from suppliers range between
20 days to 1 month. The company maintains inventory of about two
months which stretches working capital thereby pressurizing
liquidity.
S.K.R. CONSTRUCTIONS: ICRA Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has kept the Long-Term and Short-term rating for the Bank
facilities of S.K.R. Constructions in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B+(Stable);ISSUER NOT
COOPERATING/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 23.00 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Non-Fund Based Rating Continues to remain
Others under issuer not cooperating
category
Long Term- 4.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
As part of its process and in accordance with its rating agreement
with S.K.R. Constructions, ICRA has been trying to seek information
from the entity so as to monitor its performance. Further, ICRA has
been sending repeated reminders to the entity for payment of
surveillance fee that became due. Despite multiple requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, the rating has been continued to the "Issuer Not
Cooperating" category. The rating is based on the best available
information.
SKRC is a partnership firm formed in December 2003 by Mr. Sankineni
Krishna Rao and his family members. The firm is registered as a
special class contractor for executing civil construction works for
Roads and Buildings, Irrigation and Panchayat Raj departments of
Telangana. The firm primarily undertakes construction and
maintenance of roads, bridges, canals, irrigation contracts and
other excavation works including electrical, civil and engineering
projects mainly in Telangana.
SHIRDIWALE SAI: ICRA Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
ICRA has kept the long-term rating of Shirdiwale Sai Exim Private
Limited in the 'Issuer Not Cooperating' category. The rating is
denoted as [ICRA]D; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Shirdiwale Sai Exim Private Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
SSPL was incorporated in 2005 and it is a private limited company
and is managed by Mr. Deepak Gupta and his wife Mrs. Pallavi Gupta.
The company is involved in merchant trading of betel nuts and
trading of memory cards used in mobile phones. The company is
involved in both import and export operations. In the last few
years there was not much activity in the business until recently in
July 2015. The company imports betel nuts from Indonesia and
exports to Dubai. The memory card is imported from China and sold
to group companies and also in the domestic market.
V.M. BAKERY: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA has kept the long-term ratings of V.M. Bakery Products Private
Limited in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D/ [ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.40 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 2.80 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term- 2.00 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with V.M. Bakery Products Private Limited, ICRA has been trying to
seek information from the entity to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite repeated
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of the requisite information and in
line with the aforesaid policy of ICRA, the rating has been moved
to the "Issuer Not Cooperating" category. The rating is based on
the best available information.
Incorporated in 2012, VM Bakery Products Private Limited (VMBPPL)
is into the business of manufacturing of bakery products such as
biscuits (~60% of top line in FY2017), cookies (~30% of top line in
FY2017) and other bakery products like rusks and cakes. Company has
its manufacturing facility at Vijayawada, Andhra Pradesh. VMBPPL
commenced commercial operation in April 2016 and is selling its
product under the brand name "Just Breads". Mr. C. Vinay Kumar, the
managing director, has a decade long experience in the bakery
business.
VEEKESY POLYMERS: CRISIL Lowers Rating on INR16cr Cash Loan to B+
-----------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Veekesy Polymers Private Limited (VPPL) to 'CRISIL
B+/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 16 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 12.25 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating action reflects the overall weakening of the credit risk
profile driven by weaker than expected operational performance
resulting in stretched liquidity. The operating margins of the
company have fluctuated from 8.52% to 4.39% in the past ended in
fiscal 2023 which resulted in lower net cash accruals which are
estimated to be in the range of INR1-2.7 crore which are tightly
matched against the term debt repayment obligation of INR4.42
crores and INR8.59 crores for fiscal 2024 and 2025, respectively.
Bank limit Utilization is also high at 92% for the 11 months ended
February 2024.
The rating continues to reflect moderate scale of operation,
Susceptibility of operating profitability to volatility in raw
material prices and Large working capital requirement. These
weaknesses are partially offset by the benefits that the company
derives from being a part of the VKC group and an above average
financial risk profile.
Key Rating Drivers & Detailed Description
Weaknesses:
* Moderate scale of operations: Despite the increase in Revenue,
from INR104 crores in fiscal 2022 to INR129.27 crores in fiscal
2023, the revenue remains modest. Revenue will continue to remain
moderate and is estimated at INR108-120 crore over the medium term.
The company faces intense competition due to the presence of other
players, and thereby limiting bargaining power with customers and
suppliers.
* Susceptibility of operating profitability to volatility in raw
material prices: Since the cost of procuring the major raw material
accounts for a bulk of total production cost, even a slight
variation in rates may drastically impact profitability. The
operating margin is further restricted by the inability to pass on
any sharp increase in input rates to customers because of intense
competition. The operating margins have been in the range of 4% to
10.06% over the past 3 fiscals ended through fiscal 2023. The
company is expected to achieve operating margins of 4-5% in fiscal
2024 and the upcoming years which is in line with any change in raw
material prices.
* Large working capital requirement: Gross current assets (GCAs)
have been increasing for the past four fiscals and were at 184 days
as on March 31, 2023, and are estimated to be similar level going
forward. This is on account of high receivables of 116 days due to
the high credit period being offered to customers and moderate
inventory of 50-70 days being maintained. With no major changes
expected in operating policies, the working capital cycle is
expected to remain large over the medium term.
Strengths:
* Benefits derived from the strong brand presence of VKC in the
Indian footwear market: The promoter's experience of over three
decades, his strong understanding of market dynamics and healthy
relationships with suppliers and customers has helped in
establishing the VKC brand in polyurethane (PU) footwear sector in
India, resulting in estimated revenue of over INR110 crore.
* Above average financial risk profile: Moderate networth in the
range of INR22 Crores as on March 31, 2023 ( INR21.42 Cr as on
March 31, 2022) and increase in outside borrowings for working
capital requirements, the capital structure is moderate with
gearing and Total Outside Liabilities to Adjusted Debt (TOL/ANW) at
1.79 times and 2.19 times as on March 31, 2023 and it is estimated
to be in the range of less than 1 times and 2 times over the medium
term. Debt protection metrics are moderate with interest coverage
and Net Cash Accruals to Adjusted Debt (NCA/AD) at 1.63 times and
0.06 time for fiscal 2023 and it is expected to be 1-2 times, in
the upcoming years. With accretion to reserves, improvement in
networth and capital structure.
Liquidity: Stretched
Average Bank limit utilization is 92% in the past 11 months ended
in February 2024.Net Cash accrual is expected at INR2-3.5 crore is
tightly matched against debt obligation of INR3-8 crore, over the
medium term.
Outlook: Stable
CRISIL Ratings believes VPPL will continue to benefit from the
extensive experience of its promoter.
Rating Sensitivity Factors
Upward Factors:
* Growth in revenue and stable operating margin, leading to
higher-than-expected net cash accrual above INR8 crores
* Improvement in working capital cycle with gross current asset
below 120 days.
Downward Factors:
* Significant decline in revenue or decline in operating margins,
leading to accruals less than INR3 crores.
* Increase in TOLANW ratio to above 3 times, due to stretched
working capital cycle.
VPPL is one of the group companies of VKC group. It manufactures
footwear under various brands of VKC.
VENKATESWARA RICE: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has kept the long-term rating of Sri Venkateswara Rice Mill in
the 'Issuer Not Cooperating' category. The rating is denoted as
[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.25 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 0.08 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long Term- 0.67 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Sri Venkateswara Rice Mill, ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Sri Venkateswara Rice Mill is a partnership firm established in
1999 and is involved in the milling of paddy for Production of
non-basmati rice products (raw rice and boiled rice). The milling
unit is located in East Godavari district, Andhra Pradesh with an
installed capacity of 8TPH.
VIJETA PROJECTS: ICRA Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has kept the long term and short-term ratings of Vijeta
Projects & Infrastructures Ltd. in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 80.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 194.50 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Vijeta Projects & Infrastructures Ltd., ICRA has been trying
to seek information from the entity so as to monitor its
performance. Further, ICRA has been sending repeated reminders to
the entity for payment of surveillance fee that became due. Despite
multiple requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Vijeta Projects & Infrastructures Limited (VPIL), established in
the year 1990 by the Singh family, is a closely held public limited
company engaged in executing civil and structural works. The
company is primarily working for various government and semi
government bodies (Central Public Works Department, Jharkhand State
Mineral Development Corp., Sardar Sarovarnarmada Nigam Ltd, etc) in
the states of Jharkhand and Bihar. Though the company works on
projects across multiple sectors like irrigation, civil
construction, roadways, real estate, railways, mining, etc, the
concentration has largely been on irrigation and civil construction
projects.
=================
I N D O N E S I A
=================
MEDCO ENERGI: Fitch Hikes LongTerm IDR to 'BB-', Outlook Stable
---------------------------------------------------------------
Fitch Ratings has upgraded Indonesian oil & gas (O&G) group PT
Medco Energi Internasional Tbk's Long Term Issuer Default Rating
(IDR) to 'BB-' from 'B+'. The Rating Outlook is Stable. The agency
has also upgraded Medco's senior unsecured US dollar notes to 'BB-'
from 'B+', with a Recovery Rating of 'RR4'.
The upgrade reflects improvement in Medco's 1P reserve life to
around eight years by end-2023 (2022: 6.5 years), above its
positive trigger of seven years. This is based on 1P reserves as of
end-2023 and forecast average annual production of 145,000 barrels
of oil equivalent per day (mboepd). Fitch expects upward revision
in ongoing organic capex, and recent acquisitions (Oman Block 60),
to support 1P reserve life above seven years over the next three
years.
Medco's profile reflects an average production scale compared with
'BB' category rated upstream O&G producers, a low-cost position,
and favourable earnings mix via fixed-price contracts. Its earnings
stability and healthy free cash flow generation drives its strong
financial profile. Fitch expects average EBITDA from fixed-price
gas contracts to remain at around 2x interest expenses until 2027
(2023: 2.4x).
KEY RATING DRIVERS
Higher Potential for Reserves: Fitch expects Medco's 1P reserve
will grow due to likely reserve additions from its domestic blocks,
Oman Block 60 and the Tanzania project, over the next three to four
years. The company has revised upward development capex for its
local block, Corridor, following the recent amendment of Corridor's
production-sharing contract (PSC) to a cost-recovery structure,
adding to its reserves.
Medco expects the Tanzania project's revised reserve estimates to
almost double its 1P reserves in the medium term. Fitch believes
reserve accruals can be delayed due to factors beyond Medco's
control, including regulatory approvals. Nevertheless, Fitch views
Medco's 1P reserve life (excluding Tanzania) to stay around or
above seven years in medium term.
PSC Structure Supports Organic Growth: Corridor's latest
cost-recovery structure has improved terms to support economics of
new exploration and development, according to Medco, as it provides
a higher share of profit and has a lower effective tax rate than
its previous cost-recovery structure. This helped Medco revise up
its capex plan for Corridor by USD100 million to USD320 million up
to 2028. Corridor changed to a gross-split structure with a renewed
PSC coming in effect in late-2023, and the regulator recently
approved amending it back to cost-recovery, with a few revised
terms.
High Capex; Strong Financial Profile: Medco has budgeted capex of
around USD1.3 billion during 2024-2027 (2023: USD247 million
excluding acquisitions), mostly for its development programme.
Fitch expects the financial profile to remain strong for its
rating, with EBITDA net leverage - excluding its fully owned
subsidiary, PT Medco Power Indonesia (MPI) - remaining around 2x
(2023: 2.2x) over the medium term. Robust cash flow from operations
(CFO) should support its large capex plans.
Strong Operating Profile: Medco's operating profile benefits from
low cash costs of less than USD10 per barrel of oil equivalent
(boe), countered partly by its production concentration in
Indonesia. Its production scale is comparable with similar rated
O&G producers. Fitch expects average production to remain strong at
145mboepd from 2024 onwards (2023: 160mboepd), despite a drop in
its working interest in the Corridor block from 2024 to 46%, from
54%.
Cash Flow Stability: The company's earnings are less sensitive to
oil price changes than most similarly rated upstream O&G peers, as
almost 70% of Medco's future production will be gas, of which over
65% is sold via long-term fixed-price take-or-pay contracts. These
contracts mitigate price and volume risks, and support robust and
predictable cash flow. Fitch estimates Medco will generate strong
average annual EBITDA of around USD1 billion in 2024-2027, around
35% of which would be via fixed-price contracts.
Acquisitions Remain in Focus: Fitch expects Medco to remain
acquisitive, and Fitch will treat them as event risk. Fitch views
recent acquisition of 20% of non-operating interests in Oman's
Block 60 (producing) and Block 48 (in exploration stage) as credit
neutral. Medco has maintained headroom under Fitch's leverage
sensitivity, even though 68% of the USD713 million deal was funded
via debt. The acquisition increased oil and lowered fixed-price
contracts slightly in Medco's volume mix, but augmented reserves
and geographic diversity.
Power Business Neutral to Ratings: Fitch assesses MPI to be neutral
to Medco's credit profile, as its falls outside the restricted
group (RG) structure defined in Medco's bond documentation. The
covenants limit Medco's investments outside the RG to USD300
million, half of which has been utilised. It also limits cash
outflow from Medco to MPI and other investments outside the RG.
There are no cross-default clauses linking MPI's debt to Medco.
That said, Fitch believes Medco's increasing focus on energy
transition can potentially lead to greater synergies with MPI over
the medium to long term, and Fitch will monitor Medco's ESG
strategy and its impact on the RG.
DERIVATION SUMMARY
Medco's profile compares favourably against Canada's Vermilion
Energy Inc. (BB-/Stable) from its almost 2x larger production
scale, and presence of fixed-price contracts. Vermilion Energy, on
the other hand, has broader geographic diversity, with an asset
presence in North America, Europe and Australia, while Medco
derives 80% of its volume from local assets. Vermilion and Medco
share a similar 1P reserve base, however Vermilion has a better 1P
reserve life (9.7 years: 2022) from its much smaller production
scale. Fitch believes both companies have largely similar financial
profiles.
Colombia's GeoPark Limited (B+/Negative) and Medco have limited
geographic diversification. Medco's profile, however, benefits from
a larger production scale of 160mboepd, compared with GeoPark's
40mboepd, and the presence of fixed-price contracts. Both entities
have a strong financial profile, with GeoPark being modestly
stronger, as Fitch expects it to be a net cash position. Medco has
a longer reserve life than GeoPark's 5.4years (at end-2022). Fitch
expects GeoPark's reserve life to weaken further in the next few
years, which is reflected in its Negative Outlook.
KEY ASSUMPTIONS
- Brent crude prices of USD80/barrel in 2024, USD70 in 2025, and
USD65 during 2026-27
- Gas prices in line with fixed-price contracts, where applicable
- Total production volume of around 145mboepd
- Cash production costs of less than USD10/boe
- Annual capex of above USD320 million over the next four years
- Annual dividend pay-out of 15% of net income
RATING SENSITIVITIES
Factors that could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
Production growth resulting average daily production approaching
175mboepd while maintaining 1P reserve life, and EBITDA net
leverage (excluding MPI) below 1.7x.
Factors that could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
Sustained deterioration in reserve life to below seven years.
Material decline in fixed-price gas contracts in the mix
EBITDA net leverage (excluding MPI) above 2.7x
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Medco, excluding MPI, had cash of around USD290
million and USD516 million of committed undrawn facilities maturing
beyond 12 months as of end-2023, which could cover the USD267
million of debt maturing within a year.
The company has significant annual debt maturities of around
USD500million during 2026-2028, which is when its US dollar notes
mature. Medco has a history of refinancing bond maturities well
ahead of schedule. It bought back around USD1 billion of its
2025-2028 US dollar notes in 2022-2023 through multiple tender
offers and open market purchases. Fitch expects it to generate
sufficient CFO to cover its capex plan.
ISSUER PROFILE
Medco is an Indonesian upstream O&G company, with some
international presence. The company produced 160mboepd of O&G in
2023.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
PT Medco Energi
Internasional Tbk LT IDR BB- Upgrade B+
Medco Oak Tree
Pte. Ltd.
senior unsecured LT BB- Upgrade RR4 B+
Medco Bell Pte. Ltd.
senior unsecured LT BB- Upgrade RR4 B+
Medco Maple Tree
Pte. Ltd.
senior unsecured LT BB- Upgrade RR4 B+
Medco Platinum Road
Pte Ltd
senior unsecured LT BB- Upgrade RR4 B+
Medco Laurel Tree
Pte. Ltd.
senior unsecured LT BB- Upgrade RR4 B+
=====================
N E W Z E A L A N D
=====================
DONG RUNE: Creditors' Proofs of Debt Due on May 13
--------------------------------------------------
Creditors of Dong Rune Homes Limited are required to file their
proofs of debt by May 13, 2024, to be included in the company's
dividend distribution.
The High Court at Auckland appointed Stephen White and Janet
Sprosen of PwC as the liquidators of the company on April 19,
2024.
The company's liquidators may be reached at:
Stephen White
Janet Sprosen
PwC Auckland
Private Bag 92162
Victoria Street West
Auckland 1142
KIWICHEAPCARS LIMITED: Court to Hear Wind-Up Petition on May 31
---------------------------------------------------------------
A petition to wind up the operations of Kiwicheapcars Limited will
be heard before the High Court at Auckland on May 31, 2024, at
10:45 a.m.
Stirling Investment Trust filed the petition against the company on
April 5, 2024.
The Petitioner's solicitor is:
Michael Jones
Ellice Tanner Hart
Level 1, Block E, Lakewood Development
36 Lake Street
Cambridge
LCNZ ROTORUA: Creditors' Proofs of Debt Due on May 16
-----------------------------------------------------
Creditors of LCNZ Rotorua Pty Limited and LCNZ Whangarei Pty
Limited are required to file their proofs of debt by May 16, 2024,
to be included in the company's dividend distribution.
The companies commenced wind-up proceedings on April 16, 2024.
The companies' liquidator is:
Mohammed Tazleen Nasib Jan
Liquidation Management Limited
PO Box 50683
Porirua 5240
LOMAI PROPERTIES: Court to Hear Wind-Up Petition on May 10
----------------------------------------------------------
A petition to wind up the operations of Lomai Properties Limited
will be heard before the High Court at Auckland on May 10, 2024, at
10:00 a.m.
Seng Hy Tan and Kong Puoy filed the petition against the company on
March 14, 2024.
The Petitioner's solicitor is:
Anthony William Johnson
Martelli McKegg
20th Floor, HSBC Tower
188 Quay Street
Auckland 1010
PULOTU TRUST: Court to Hear Wind-Up Petition on May 17
------------------------------------------------------
A petition to wind up the operations of The Board Of Trustees Of
The Pulotu Trust will be heard before the High Court at Auckland on
May 17, 2024, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on March 21, 2024.
The Petitioner's solicitor is:
Hosanna Tanielu
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
=====================
P H I L I P P I N E S
=====================
PH RESORTS: Reports Annual Net Loss of PHP4.2BB in 2023
-------------------------------------------------------
Bilyonaryo.com reports that PH Resorts (PHR) Group Holdings of
Duterte crony Dennis Uy plunged further into losses last year as
its frantic quest to secure a buyer for its long-postponed Cebu
casino venture has yet to bear fruit.
PHR reported losses of PHP4.213 billion in 2023, up 270 percent
from PHP1.14 billion the previous year, tallying losses of PHP6.7
billion since Mr. Uy's acquisition of H2O Ventures via a backdoor
listing in 2018, Bilyonaryo.com discloses.
According to Bilyonaryo.com, PHR's soaring losses led SGV & Co. to
cast doubts on the firm's ability to crawl out of its deep
financial hole for the fourth consecutive year. SGV highlighted
PHR's escalating deficit (up 161 percent to PHP6.8 billion),
significant net current liabilities (down 62 percent to PHP4.1
billion), and negative operating cash flow (down 50 percent to
PHP72.4 million).
"These conditions indicate that a material uncertainty exists that
may cast significant doubt on the group's ability to continue as a
going concern," said SGV.
Mr. Uy was forced to suspend construction of PHR's Emerald Casino
in 2023 after ultra bilyonaryo Ricky Razon's Bloomberry Resorts
withdrew its offer to buy the Mactan Island, Lapu-Lapu City
project, Bilyonaryo.com recalls. A subsequent deal with AppleOne
Properties also fell through.
Despite these setbacks, PHR received a third purchase offer from
Okada casino operator, Tiger Resort Leisure & Entertainment, which
made partial nonrefundable payments totaling PHP300.1 million.
Bilyonaryo.com says PHR finalized a restructuring agreement with
China Banking Corp. in 2023 and is in talks to renegotiate loans
with the Land Bank of the Philippines.
Mr. Uy's Udenna also pledged to repay Bloomberry's PHP1 billion
down payment by year-end.
"Management believes that considering the progress of the steps
undertaken to date, these financing and capital raising plans are
feasible and will generate sufficient cash flows to enable the
group to meet its obligations when they fall due and address the
group's liquidity requirements to support its operations and the
completion of its projects," PHR said.
PHR started construction of Emerald Casino in 2017. Its seven-year
exclusivity period in Lapu-Lapu City expires this year.
About PH Resorts
PH Resorts Group Holdings Inc. operates as a holding company. The
Company, through its subsidiaries, manages and maintains
tourism-related businesses which includes resort and casino
projects. PH Resorts Group holdings serves customers in the
Philippines.
As of end end-2022, SGV & Co. reported that the company has PHP2.6
billion in capital deficit, PHP11 billion in net liabilities
payable in one year, and PHP146 million in cash deficit, according
to Bilyonaryo.com.
=================
S I N G A P O R E
=================
AJ MANAGEMENT: Court Enters Wind-Up Order
-----------------------------------------
The High Court of Singapore entered an order on April 19, 2024, to
wind up the operations of AJ Management Corporation Pte. Ltd.
Maybank Singapore Limited filed the petition against the company on
March 28, 2024.
The company's liquidators are:
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
NDC CONSULTING: Creditors' Meetings Set for May 14
--------------------------------------------------
NDC Consulting Pte Ltd will hold a meeting for its creditors on May
14, 2024, at 10:30 a.m. at 16 Collyer Quay, #30-01, in Singapore
and via teleconference.
Agenda of the meeting includes:
a. to receiving a statement of the Company’s affairs together
with a list of creditors and the estimated amounts of their
claims;
b. to resolve that Cameron Lindsay Duncan and David Dong-Won
Kim care of KordaMentha Pte Ltd jointly and severally as
Liquidators of the Company for the purpose of such winding
up and that their remuneration be based on their normal
scale rates and be paid out of the Company's assets;
c. to appoint a Committee of Inspection of not more than five
members, if thought fit;
d. to resolve that the Liquidators be at liberty to open,
maintain and operate any bank account or an account for
monies received by them as Liquidators of the Company, with
such bank as the Liquidators deem fit;
e. to resolve that the Liquidators be authorised to exercise
any of the powers provided by Section 144(1)(b), (c), (d),
(e) and (f) of the Insolvency, Restructuring and Dissolution
Act 2018; and
f. Any other business.
SAAM SOLUTIONS: Court to Hear Wind-Up Petition on May 17
--------------------------------------------------------
A petition to wind up the operations of Saam Solutions Pte Ltd will
be heard before the High Court of Singapore on May 17, 2024, at
10:00 a.m.
Maybank Singapore Limited filed the petition against the company on
April 23, 2024.
The Petitioner's solicitors are:
M/s Advent Law Corporation
111 North Bridge Road
#25-03 Peninsula Plaza
Singapore 179098
SRM EXPRESS: Court to Hear Wind-Up Petition on May 10
-----------------------------------------------------
A petition to wind up the operations of SRM Express Services
Private Limited will be heard before the High Court of Singapore on
May 10, 2024, at 10:00 a.m.
Maybank Singapore Limited filed the petition against the company on
April 23, 2024.
The Petitioner's solicitors are:
M/s Advent Law Corporation
111 North Bridge Road
#25-03 Peninsula Plaza
Singapore 179098
T S TAY: Creditors' Proofs of Debt Due on May 31
------------------------------------------------
Creditors of T S Tay Enterprises Pte. Ltd. are required to file
their proofs of debt by May 31, 2024, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on April 20, 2024.
The company's liquidators are:
Mr. Don M Ho
Mr. David Ho
c/o DHA+ pac
63 Market Street
#05-01A Bank of Singapore Centre
Singapore 048942
=====================
S O U T H K O R E A
=====================
DOOSAN BOBCAT: S&P Upgrades ICR to 'BB+' on Robust Profitability
----------------------------------------------------------------
S&P Global Ratings, on April 29, 2024, raised its long-term issuer
credit rating on Korea-based Doosan Bobcat Inc. (DBI) to 'BB+' from
'BB'. At the same time, S&P raised its long-term issue ratings to
'BB+', based on a recovery rating of '3', on DBI's term loan B
(TLB) due 2029.
The stable outlook on DBI reflects S&P's expectation that the
company will maintain its robust profitability and cash flows over
the next 12 months. Support will come from its strong position in
the North American market for compact construction equipment and an
increased buffer in its leverage profile.
S&P forecasts DBI to maintain its solid financial metrics over the
next two years. DBI's financial standing has substantially improved
with its strong operating performance in 2023, surpassing its
previous record year of 2022. Revenue grew 12% to US$7.5 billion
and EBITDA climbed 25% to US$1.3 billion--both historical highs for
the company.
While growth was seen across all of the company's products,
regional growth was led by its mainstay North American business,
where the construction market remained strong in both residential
and nonresidential. DBI gained from higher prices as a result of
supply chain disruptions.
S&P said, "We anticipate some moderation in DBI's operating
performance over the next 12 months as supply chain disruptions
ease and this could lead to declines in order backlog and pricing
power. Although the construction market has held up persistently
until 2023, macroeconomic uncertainties remain and we factor this
into our base case of an operating performance slowdown. We
estimate the company's adjusted EBITDA to decline to about US$930
million in 2024, compared with record levels seen in 2023 (US$1.3
billion) and 2022 (US$1.0 billion), although this is still higher
than levels seen in 2021 and prior.
"Despite our forecasts for operational slowdown and increased
investments, we expect DBI to continue to generate steady free cash
flows. The strong 2023 operating performance boosted DBI's
financial standing. With its prudent financial policy, the company
substantially reduced its adjusted debt levels. DBI's
debt-to-EBITDA ratio fell to 0.2x in 2023, from 0.8x in 2022 and
1.8x in 2021. Adjusted debt fell to US$228 million in 2023 from
US$826 million in 2022 and US$1.2 billion 2021, primarily owing to
its strong free cash flow generation. Reflecting these factors, we
raise the stand-alone credit profile (SACP) of DBI to 'bbb-' from
'bb+'.
"We expect DBI to raise its capital spending over the next two
years while the company expands its production facilities and
increases investments in research and development. This is aligned
with its expansion plan into growth areas such as unmanned
vehicles, artificial intelligence, and hydrogen-powered equipment.
However, despite our forecast for operational downturn in 2024 and
2025, we believe DBI will generate sufficient operating cash flow
to cover its growing investments and shareholder returns. Our base
case forecasts DBI's adjusted debt-to-EBITDA ratio will remain
robust at 0.2x-0.5x in 2024 and 2025, compared with 0.2x in 2023
and 0.8x in 2022.
"DBI's strong dependence on compact construction equipment and the
cyclical construction industry expose its earnings and cash flow to
high volatility. While the proportion of its forklift business has
increased, revenue contributions from compact construction
equipment remained high at 75%-80% in 2023. In our view, this high
concentration exposes DBI to the industry cyclicality of the U.S.
housing market. For instance, a market downturn in 2009 following
the global financial crisis rapidly eroded DBI's profitability and
cash flow. Despite DBI's plans to venture into new businesses, we
do not expect the exposure to the cyclical construction industry to
change materially over the next two to three years.
"We raised the group credit profile based on the improved financial
standing of DE. DE's operational performance strengthened in its
stand-alone business such as gas turbines and nuclear power plants,
as well as the consolidation of DBI. DE's net debt declined to
Korean won (KRW) 1.9 trillion as of end 2023, a material
improvement from the KRW3.4 trillion in 2022 and KRW4.8 trillion in
2021. Based on DE's increase in its financial buffer, we assessed a
higher group credit profile at 'bb-' from 'b+' previously. While
the long-term issuer credit rating on DBI is capped at two notches
above the group credit profile, the higher group credit profile
leads to the issuer credit rating on DBI raising to 'BB+' from
'BB'.
"However, the parent debt capital structure's focus on short-term
funding and its liquidity management remain limiting factors for
the credit profile of the group. While we do not envision
refinancing risks to be material in the near term given DE's good
relationship with the policy banks, its high reliance on short-term
funding may expose DE to liquidity risks in the event of a severe
financial downturn. We do not expect a major transition in DE's
debt capital structure to longer-term funding, given the cost
disadvantages in the next one to two years.
"The stable outlook on DBI reflects our expectation that the
company's financial standing will improve, particularly on lower
adjusted debt. While we expect DBI's operating performance to
somewhat moderate and investments to increase over the next two
years, its strong operating cash flow generation from its business
in North America should help maintain its robust financial
metrics.
"Although the parent DE will likely sustain steady operating
performance and financial metrics over the next one to two years,
we view further improvement in the group credit profile as less
likely. This is mainly because DE's reliance on short-term debt
remains high, and that has led to a somewhat weaker liquidity
profile.
"We could lower the rating on DBI if we revise downward our
assessment of DE's group credit profile. This could occur if: (1)
DE faces mounting liquidity risk, potentially due to difficulties
in refinancing its short-term debt or weakening cash flow amid
tough capital markets; or (2) DE's ratio of debt to EBITDA
approaches or stays above 4x on a sustained basis due to an
aggressive financial policy or deteriorating profitability.
"We could also downgrade DBI if we see a higher possibility that DE
would increase control or negatively intervene in DBI.
"In a remote scenario, we may lower the rating if we revise
downward our assessment of DBI's SACP by two notches to 'bb' from
'bbb-'. This could happen if the company's debt-to-EBITDA ratio
approaches 3.0x on a sustained basis. A severe economic downturn in
the U.S., intensifying competition, or the company's weakening
market position could result in such a scenario."
S&P sees limited further upside from the current ratings limited
over the next 12 months. S&P may raise the rating on DBI only if
all three conditions below are met:
-- DBI's key credit metrics remain strong with its ratio of debt
to EBITDA staying at about or below 1.5x on a sustainable basis.
This could stem from debt reduction on strong cash flow generation
in the coming years and prudent financial policy.
-- DE group transitions its debt capital structure and liquidity
management to a more longer-term structure, while reducing its
reliance on short-term funding.
-- DE maintains its ratio of debt to EBITDA below 3.0x on a
sustainable basis.
*********
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 2024. All rights reserved. ISSN: 1520-9482.
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