/raid1/www/Hosts/bankrupt/TCRAP_Public/191028.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, October 28, 2019, Vol. 22, No. 215
Headlines
A U S T R A L I A
ANGELO GROUP: First Creditors' Meeting Set for Nov. 1
ESCA DISTRIBUTING: First Creditors' Meeting Set for Nov. 4
EVO PIZZA: First Creditors' Meeting Set for Nov. 4
GILBERT CIVIL: First Creditors' Meeting Set for Nov. 4
LISA ZOE: First Creditors' Meeting Set for Nov. 4
PLATINUM STAR: First Creditors' Meeting Set for Nov. 5
STELLER GROUP: Director 'Misappropriated' AUD15MM Investor Funds
STYLERUNNER PTY: Enters Voluntary Administration
STYLERUNNER PTY: First Creditors' Meeting Set for Nov. 4
VIRGIN AUSTRALIA: S&P Rates US$425MM Senior Unsecured Notes 'B'
C H I N A
AGILE GROUP: Moody's Rates Proposed USD Sr. Unsec. Notes Ba3
GUANGDONG ZHENRONG: Claims $5.66 Billion from Mercuria
NANJING CONSTRUCTION: Defaults on US$27.7MM Bond Payment
I N D I A
AIREFF DETOX: Insolvency Resolution Process Case Summary
ALFA TRANSFORMERS: CRISIL Migrates B Rating to Not Cooperating
AMRICON AGROVET: Insolvency Resolution Process Case Summary
ASHRO TEXTILES: CRISIL Cuts Rating on INR2.3cr LT Loan to D
ATLANTIC PROJECTS: Insolvency Resolution Process Case Summary
AVANI TOWERS: Insolvency Resolution Process Case Summary
BAGGA LUXURY: CRISIL Lowers Rating on INR10cr Cash Loan to D
BALA TECHNO: Insolvency Resolution Process Case Summary
BHOORATHNOM CONSTRUCTION: Ind-Ra Moves BB- Rating to NonCooperating
BHUSHAN POWER: NCLAT Asks ED, MCA to Reach Consensus on Assets
CADCHEM LABORATORIES: CRISIL Withdraws D Rating on INR7.25cr Loan
CADCHEM LABORATORIES: Ind-Ra Affirms Then Withdraws D Issuer Rating
EAGLE CORPORATION: Insolvency Resolution Process Case Summary
ELDORADO ENTERTAINMENT: Insolvency Resolution Process Case Summary
EMU LINES PRIVATE: Insolvency Resolution Process Case Summary
ESHAL FOODS: Insolvency Resolution Process Case Summary
EURO INDIA: CRISIL Maintains B- Rating in Not Cooperating
FINECRETE ECO-BLOCKS: Insolvency Resolution Process Case Summary
GALAXY COTTON: Insolvency Resolution Process Case Summary
GAURAV EXPORTRADES: CRISIL Lowers Rating on INR15cr Loan to 'D'
GOALTORE COLD: CRISIL Raises Rating on INR6cr Loan to 'B'
GOVIND RUBBER: CRISIL Moves D Rating to Not Cooperating Category
GRACE INTERNATIONAL: CRISIL Lowers Rating on INR10.5cr Loan to D
HIMSKAF SYSTEMS: Insolvency Resolution Process Case Summary
KANIK ELECTRONICS: Insolvency Resolution Process Case Summary
KINETA GLOBAL: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
MAWANA FOODS: CRISIL Migrates B- Rating From Not Cooperating
MEGHA PLAST: CRISIL Lowers Rating on INR7cr Cash Loan to 'D'
MICRO EDUCATION: CRISIL Assigns B+ Rating to INR10cr LT Loan
MINOP INNOVATIVE: CRISIL Migrates C Rating to Not Cooperating
PADMAVAHINI TRANSFORMERS: CRISIL Ups INR4.75cr Loan Rating to B+
R. K. DALL: CRISIL Assigns B+ Rating to INR12cr Cash Loan
RA FASHIONS: CRISIL Lowers Rating on INR2.59cr Term Loan to 'D'
RANJU AUTOMOBILES: CRISIL Cuts Rating on INR11cr Loan to 'D'
ROHTAS PROJECTS: Insolvency Resolution Process Case Summary
ROYSONS CERAMICS: CRISIL Lowers Rating on INR12.50cr Loan to D
RUNGTA IRRIGATION: Ind-Ra Affirms 'B-' Long Term Issuer Rating
SAI RAM: Ind-Ra Assigns 'B+' LT Issuer Rating, Outlook Stable
SHIVAM ISPAT: CRISIL Hikes Rating on INR8.25cr Term Loan to B-
SHRI SHYAMJEE: CRISIL Assigns B+ Rating to INR2.0cr Cash Loan
SIR SHADI: CRISIL Migrates C Rating to Not Cooperating Category
SRI NAGESHWAR: CRISIL Assigns B+ Rating to INR1cr LT Loan
SRI VENKATALAXMI: CRISIL Assigns B+ Rating to INR6cr LT Loan
SRI VISHNU: Insolvency Resolution Process Case Summary
SUSTAINABLE AGRO-COMMERCIAL: Ind-Ra Lowers Bank Loan Rating to 'B'
SUYOG DEVELOPMENT: CRISIL Migrates B+ Rating From Not Cooperating
UJJAWAL SAWERA: CRISIL Assigns B+ Rating to INR1cr New LT Loan
UV EXPORTS PRIVATE: Insolvency Resolution Process Case Summary
VINAYAKA CASHEW: CRISIL Reaffirms B+ Rating on INR12cr Loan
I N D O N E S I A
MNC INVESTAMA: S&P Alters Outlook to Negative & Affirms 'B-' ICR
J A P A N
SOFTBANK GROUP: Moody's Affirms Ba1 CFR, Outlook Stable
S I N G A P O R E
CHINA FISHERY: MAS, CAD End 4-Year Probe with 'No Further Action'
YUUZOO NETWORKS: Loses Harbin Project Over Inability to Raise Funds
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A U S T R A L I A
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ANGELO GROUP: First Creditors' Meeting Set for Nov. 1
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Angelo Group
Pty Ltd will be held on Nov. 1, 2019, at 10:30 a.m. at the offices
of Jirsch Sutherland, Level 12, at 460 Lonsdale Street, in
Melbourne, Victoria.
Malcolm Kimbal Howell of Jirsch Sutherland was appointed as
administrator of Angelo Group on Oct. 23, 2019.
ESCA DISTRIBUTING: First Creditors' Meeting Set for Nov. 4
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Esca
Distributing Pty Limited will be held on Nov. 4, 2019, at 10:00
a.m. at the offices of Jirsch Sutherland, Level 27, at 259 George
Street, in Sydney, NSW.
Andrew John Spring and Trent Andrew Devine of Jirsch Sutherland
were appointed as administrators of Esca Distributing on Oct. 23,
2019.
EVO PIZZA: First Creditors' Meeting Set for Nov. 4
--------------------------------------------------
A first meeting of the creditors in the proceedings of Evo Pizza
Pty Ltd (LITTLE CAESARS PIZZA (AUS)) will be held on Nov. 4, 2019,
at 10:30 a.m. at the offices of Jirsch Sutherland, Level 27, at 259
George Street, in Sydney, NSW.
Andrew John Spring and Trent Andrew Devine of Jirsch Sutherland
were appointed as administrators of Evo Pizza on Oct. 23, 2019.
GILBERT CIVIL: First Creditors' Meeting Set for Nov. 4
------------------------------------------------------
A first meeting of the creditors in the proceedings of Gilbert
Civil Solutions Pty Ltd will be held on Nov. 4, 2019, at 11:00 a.m.
at the offices of SM Solvency Accountants, Level 10/144, at Edward
Street, in Brisbane, Queensland.
Brendan Nixon of SM Solvency Accountants was appointed as
administrator of Gilbert Civil on Oct. 24, 2019.
LISA ZOE: First Creditors' Meeting Set for Nov. 4
-------------------------------------------------
A first meeting of the creditors in the proceedings of Lisa Zoe Pty
Ltd Trading as Lynk Realty will be held on Nov. 4, 2019, at 11:00
a.m. at the offices of BPS Recovery, Level 18, at 201 Kent Street,
in Sydney, NSW.
Mitchell Warren Ball of BPS Recovery was appointed as administrator
of Lisa Zoe on Oct. 24, 2019.
PLATINUM STAR: First Creditors' Meeting Set for Nov. 5
------------------------------------------------------
A first meeting of the creditors in the proceedings of Platinum
Star Asset Pty Ltd, trading as Hog's Breath Cafe, Rockingham, will
be held on Nov. 5, 2019, at 10:00 a.m. at Eagle Room, Level 24
Allendale Square, at 77 St Georges Terrace, in Perth, WA.
Mathieu Tribut of GTS Advisory was appointed as administrator of
Platinum Star on Oct. 24, 2019.
STELLER GROUP: Director 'Misappropriated' AUD15MM Investor Funds
----------------------------------------------------------------
Larry Schlesinger at Australian Financial Review reports that
forensic accountants are investigating whether a director of a
company associated with failed Melbourne property developer Steller
"misappropriated" AUD15 million of investor funds in the lead-up to
its sudden collapse earlier this year, according to documents filed
with ASIC.
AFR says details of the investigations and allegations are revealed
in minutes of the first meetings of creditors of 19 Steller
subsidiaries placed in the hands of joint administrators Tim Brace,
Peter Gountzos and Michael Carrafa from SV Partners, appointed on
September 20 by co-founder Nicholas Smedley. Those minutes were
filed with the Australian Securities and Investments Commission in
accordance with the Insolvency Practice Rules.
The Steller group had more than 100 companies as part of its
corporate group, the report notes.
According to AFR, the allegedly misappropriated money was part of
about AUD40 million raised from mostly high-net-worth Chinese
investors to help fund Steller's now defunct pipeline of apartment,
aged care and hospitality projects.
The companies which raised and distributed the money are all in
administration.
AFR relates that minutes of the first meetings of creditors of 16
companies held concurrently and meetings for two further companies
all contain details of the alleged misappropriation of funds.
According to these minutes filed with ASIC, "there have been
allegations of misappropriation of funds totalling AUD15 million by
a director in the group," AFR relays.
They go on to say: "In circa August 2019, Nicholas Smedley engaged
TF Accountants to commence forensic accounting services for the
group and in particular SPF Funds Management Limited to investigate
the allegations. At the time of our appointment, these
investigations are incomplete. The administrators will need to
investigate and review the allegations." The allegation is not made
against Mr. Smedley.
In a separate meeting of creditors for another Steller company, the
minutes include a discussion about a AUD3.5 million creditor claim
made by a company with links to the director at the centre of the
allegations, AFR reports.
AFR relates that the minutes record Mr. Smedley as saying this
money was "never received into the company bank accounts". A former
director said the amount claimed was "only a balance sheet journal
entry".
A spokesman for Mr. Smedley, who is working towards a deed of
company arrangement according to the minutes of the creditors
meetings, said he was trying to get the best outcomes for
investors.
An ABC report earlier this month, based on an affidavit filed in
the Victorian Supreme Court by Mr. Smedley, said mediation figure
Mick Gatto had been hired by at least one investor to try to
recover money invested in various Steller funds, AFR relays.
ASIC documents filed in relation to the Steller funds management
entities show investors--most of them Chinese--invested amounts
between AUD1 million and AUD5 million in Steller funds, the report
discloses.
The Australian Financial Review understands returns were offered of
8 per cent and higher with investments used to secured residency
visas through the Significant Investor Visa (SIV) scheme.
According to the minutes, a statutory demand was made against
Steller Investment Notes by one investor in respect of an unpaid
investment note and associated interest, AFR says. This had expired
meaning the creditor had the legal right lodge an application to
wind up the company.
Alongside the investors in the Steller funds, Asian lender OCP is
owed AUD93 million and Atlas Advisors AUD160 million across the
group, according to the minutes cited by AFR.
OCP has appointed receivers from McGrath Nicol and Atlas
controllers from Kordamentha over first mortgage assets. None of
the Steller businesses are trading, adds AFR.
About Steller Group
Steller Group was a Melbourne-based residential and commercial
property developer.
On July 1, 2019, Keith Crawford, Matthew Caddy and Jason Preston of
McGrathNicol were appointed as Receivers of Melbourne-based
Development Steller Pty Ltd and a number of related entities and
assets.
The appointments were made by OCP Asia, a Hong Kong and
Singaporean-based financier which provided funding to the Steller
group, secured by the assets over which the Receivers have been
appointed.
STYLERUNNER PTY: Enters Voluntary Administration
------------------------------------------------
9news.com.au reports that leading activewear and health company
Stylerunner has entered voluntary administration, with the online
store owing about AUD2 million to creditors.
According to 9news.com.au, the company was founded by twin sisters
Julie and Sali Stevanja in 2012, and quickly grew into a
multi-millionaire business. But administrator AS Advisory has been
appointed to take the wheel after it went into receivership on Oct.
23.
The report relates that the website, which sells activewear and
health products, is still operating as normal, and its Instagram
account has made no mention of the receivership.
The website describes how the company was formed.
"In 2012, Stylerunner founder Julie Stevanja was based in London
working for a tech start-up and attending Bikram yoga five times a
week.
"Although living in one of the most fashionable cities in the
world, it was here that she found that she wasn't able to find a
big enough selection of stylish activewear to meet her needs."
It currently sells clothing from brands like Nike, Adidas, Puma and
Under Armour.
The Australian Financial Review reported that they appeared to be
an appetite for investors for the business to be recapitalised.
Sali Stevanja left Stylerunner in 2015, and clothing empire Gazal
now owns 59 per cent of the company. Gazal also owns brands like
Van Heusen, Bisley and Pierre Cardin.
STYLERUNNER PTY: First Creditors' Meeting Set for Nov. 4
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Stylerunner
Pty Ltd will be held on Nov. 4, 2019, at 11:00 a.m. at the offices
of Chartered Accountants Australia and New Zealand, Level 1, at 33
Erskine Street, in Sydney, NSW.
Andrew Schwarz and Matt Adams of AS Advisory were appointed as
administrators of Stylerunner Pty on Oct. 23, 2019.
VIRGIN AUSTRALIA: S&P Rates US$425MM Senior Unsecured Notes 'B'
---------------------------------------------------------------
S&P Global Ratings said that it has assigned its 'B' issue rating
to Virgin Australia Holdings Ltd.'s (B+/Stable/--) US$425 million
five-year senior unsecured 144a notes. S&P also assigned a recovery
rating of '5' to the notes. S&P expects the company to use the
proceeds to part finance the group's purchase of the remaining 35%
economic interest of its Velocity frequent flyer business from
Affinity Equity Partners.
In S&P's opinion, full control of Velocity will somewhat benefit
the group's earnings profile and discretionary cash flow. S&P
believes this will allow Virgin Australia to more optimally deploy
capital across business lines that are currently structurally
separated, providing greater opportunities for synergies. In
addition, ending the cash leakage of distributable earnings to
minority interests will also have a financial benefit and will
somewhat improve the group's financial flexibility.
The issue rating is one notch lower than the issuer credit rating,
indicating modest recovery prospects (10%-30%, rounded down
estimate 15%) for unsecured creditors in the event of a default.
This reflects primarily the group's highly encumbered asset base
and capital-light business model. S&P notes that Virgin is
accumulating unencumbered physical assets, which may improve the
recovery prospects for senior unsecured debt over time.
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C H I N A
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AGILE GROUP: Moody's Rates Proposed USD Sr. Unsec. Notes Ba3
------------------------------------------------------------
Moody's Investors Service assigned a Ba3 senior unsecured rating to
Agile Group Holdings Limited's (Ba2 stable) proposed USD senior
perpetual capital securities.
The perpetual securities will be issued directly by Agile and rank
pari passu with all of its other present and future unsecured and
unsubordinated obligations.
Agile will use the proceeds from the proposed bonds to refinance
existing debt.
RATINGS RATIONALE
"The proposed perpetual securities will extend Agile's debt
maturity profile and will not have a material impact on its credit
metrics, as it will mainly use the proceeds to refinance existing
debt," says Kaven Tsang, a Moody's Senior Vice President.
Agile's Ba2 corporate family rating (CFR) reflects its strong
market position and solid track record of property development in
its core markets of Guangdong and Hainan, its disciplined financial
management, good liquidity with good access to the offshore debt
and banking markets, and low land costs.
At the same time, the company's Ba2 CFR reflects its geographic
concentration, exposing it to the risk of changes to local
regulations, and the execution and financial risks associated with
its expansion into new businesses.
Agile's Ba3 senior unsecured ratings are one notch lower than its
CFR due to structural subordination risk. This risk reflects the
fact that the majority of claims are at the operating subsidiaries.
These claims have priority over Agile's senior unsecured claims in
a bankruptcy scenario.
In addition, the holding company lacks significant mitigating
factors for structural subordination. As a result, the likely
recovery rate for claims at the holding company will be lower.
The Ba3 senior unsecured rating for the proposed perpetual capital
securities also considers the following factors:
(1) Moody's treatment of the proposed perpetual securities as pure
debt instruments. Moody's therefore does not apply any equity
treatment to these securities.
(2) The fact that the securities will rank pari passu with all of
Agile's other present and future senior obligations.
Moody's expects that Agile's debt leverage, as measured by
revenue/adjusted debt, will recover to around 70% by 2020 from 52%
in the 12 months ended June 2019, as revenue growth will outpace
adjusted debt growth. This recovery will in turn be supported by
moderate presales growth and growing revenue contributions from
Agile's non-property businesses.
Likewise, Moody's expects Agile's EBIT interest coverage will
recover to around 4.0x from 2.9x over the same period. These
projected metrics will support the company's Ba2 CFR.
Moody's expects that Agile will achieve moderate growth in presales
to RMB110-RMB130 billion over the next 12-18 months from RMB103
billion in 2018, while its revenue will grow to RMB65-RMB80 billion
from RMB56 billion over the same period.
In the first nine months of 2019, the company's presales--along
with presales from its joint ventures and associates — grew 24.5%
year-on-year to RMB87.6 billion, following 14% year-on-year growth
in 2018. These numbers leave the company on track to meet its
presales target for the full year 2019 and will support revenue
growth in the next 12-18 months.
Moody's also expects that Agile will control its debt growth by
taking a disciplined approach towards land acquisition and new
business expansion, such that its adjusted debt will grow only
around 10% to RMB110-RMB115 billion over the next 12-18 months from
RMB104 billion at December 31, 2018.
In terms of environmental, social and governance (ESG) factors, the
Ba2 CFR has considered Agile's concentrated ownership by its key
shareholder, the Chen family, which held a total 67.1% stake in the
company as of June 30, 2019. The Ba2 CFR has also considered the
family's track record of injecting equity of around HKD1.6 billion
into the company to support its liquidity and refinancing needs
during the difficult time in 2014. In addition, the company's
listing on the Hong Kong Stock Exchange means it needs to comply
with certain internal governance structures and disclosure
standards under the Corporate Governance Code.
Agile's liquidity position is good. Its cash holdings of RMB41.6
billion at June 30, 2019 could fully cover its RMB36.1 billion in
short-term debt as of the same date. Moody's expects that over the
next 12 months, Agile's cash holdings and operating cash flow will
be sufficient to cover its short-term debt, committed land premiums
and dividend payments.
Agile's stable outlook reflects Moody's expectation that the
company will maintain its disciplined approach to land acquisitions
and new business expansion, thereby improving its financial metrics
over the next 12-18 months.
Upward rating pressure could develop if Agile grows its scale while
maintaining (1) a strong liquidity position; and (2) sound credit
metrics, with adjusted revenue/debt above 95%-100% and
EBIT/interest coverage above 5.0x-5.5x on a sustained basis.
Downward rating pressure could develop if Agile's presales decline
or the company turns to an aggressive expansion strategy in its
property or non-property businesses such that its credit metrics
weaken, with its EBIT/interest coverage failing to return to 3.5x
or adjusted revenue/debt failing to trend back to 70%.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
GUANGDONG ZHENRONG: Claims $5.66 Billion from Mercuria
------------------------------------------------------
Caixin Global reports that global energy trader Mercuria Group is
facing more than CNY40 billion ($5.66 billion) of claims from a
bankrupt Chinese state-backed company related to fuel oil trading
contracts years ago that could possibly turn out to have been a
hoax.
The bankruptcy administrator for Chinese fuel trader Guangdong
Zhenrong Energy Co. is submitting a demand for arbitration to the
Singapore International Arbitration Centre as Mercuria's Singapore
subsidiary refused to provide proof in a dispute regarding the
contracts, Caixin says citing people close to the bankruptcy
administrator.
Caixin relates that the bankruptcy administrator for Guangdong
Zhenrong, a subsidiary of China's once military-backed commodity
giant Zhuhai Zhenrong Group and one of China's largest players in
the global energy market before its bankruptcy, filed a breach of
contract claim to Mercuria on Sept. 19, threatening it would bring
the dispute to arbitration if Mercuria failed to respond within
seven days.
Under 261 fuel oil trading contracts Zhenrong entered with Mercuria
between January 2013 and September 2014, Mercuria issued a letter
of guarantee confirming it received $5.4 billion and CNY5.3 billion
from Zhenrong but never delivered the goods as agreed nor provided
the original bills of lading for the goods, the bankruptcy
administrator said, Caixin relays.
Mercuria said it needs more time to review documents dated five
years ago and promised to respond by Oct. 11, sources told Caixin.
Mercuria also said it fulfilled its obligations and did not breach
the contracts, the sources said.
Mercuria asserted that the letter of guarantee was canceled, and it
proposed to meet with Zhenrong's bankruptcy administrator in
Singapore, the sources, as cited by Caixin, said.
In an Oct. 15 letter, the bankruptcy administrator asked Mercuria
to provide proof within three days to show that Zhenrong confirmed
Mercuria's fulfillment and cancellation of the letter of guarantee
before the two parties could meet in Beijing or Hong Kong,
according to the sources, Caixin relays.
Caixin relates that Mercuria's response indicated former executives
at Mercuria and Zhenrong had arrangement that these trading
contracts were not for actual fulfillment but for obtaining credit
from banks, a person close to Zhenrong's bankruptcy administrator
said.
"Normally, it's understandable if there were no original bills of
lading for one or two transactions, but no original bills of lading
for all the 261 transactions, and the letter of guarantee promising
to provide the original bills of lading was allegedly canceled, and
now they also refuse to provide proof to show Zhenrong confirmed
Mercuria's fulfillment and cancellation of the letter of
guarantee," Caixin quotes the person close to Zhenrong's bankruptcy
administrator as saying.
Caixin says Mercuria expressed surprise that Zhenrong filed a claim
for transactions five years ago, calling the allegations
groundless. "Guangdong Zhenrong had never raised any objection
before and continued to conduct business with Mercuria since then,
and Guangdong Zhenrong didn't suffer any loss from the transactions
with Mercuria," Mercuria said.
Caixin adds Mercuria said it would defend its interests. If the
lawsuit continues, Mercuria will require Zhenrong's bankruptcy
administrator to disclose relevant information since it started
business with Zhenrong in 2011, including internal communications
and meeting minutes, bank accounts, shareholder structure, internal
audit reports, board meeting minutes and transaction records.
Guangdong Zhenrong's debt crisis began unfolding in late 2014 when
the company started to miss interest payments to banks, the report
notes. As of April 2017, the company had defaulted on CNY21.5
billion of bank loans, Caixin discloses.
Sources close to Guangdong Zhenrong said the company used
fabricated trade documents to obtain massive loans. A Caixin
investigation found that Guangdong Zhenrong set up a complicated
business network with affiliated companies to arrange trade deals
and obtain loans from banks, and cash flows among the companies
have remained opaque.
Guangdong Zhenrong Energy Co., Ltd. engages in the trade and
investment of energy and natural resources commodities.
NANJING CONSTRUCTION: Defaults on US$27.7MM Bond Payment
--------------------------------------------------------
Zhu Liangtao and Liu Jiefei at Caixin Global reports that the
financial crisis that's engulfed privately owned Nanjing
Construction Industrial Group Co. Ltd. deepened last week after it
failed to pay bondholders a total of CNY195.7 million ($27.7
million) due on Oct. 24, people familiar with the matter said.
Investors in an CNY800 million five-year bond issued in October
2016 had an option to sell the debt back to the company on the
third anniversary of the sale. As a result of some holders
exercising their right, the company was obliged to repay CNY150
million on Oct. 24, Caixin relates citing a stock exchange filing
made in September. On top of that, the engineering-to-housing
conglomerate owed CNY45.7 million in interest payments on the bond
which it also failed to pay, sources told Caixin. The company has
yet to make a formal announcement to the stock exchange.
Caixin says Nanjing Construction Industrial's failure to honor its
obligations was not unexpected, given the size of its debts and
previous defaults. Caixin, citing data compiled by Wind
Information, discloses that there are currently nine bonds with a
total value of CNY7 billion under the name of Nanjing Construction
Industrial that have been affected by default.
At the end of 2018, the company had CNY67.4 billion worth of assets
and CNY48.1 billion worth of liabilities, including
interest-bearing debts of CNY27.8 billion, Caixin notes citing a
stock exchange filing in August. However, documents seen by Caixin
from a meeting of bondholders said the company's financial debt
amounted to more than CNY60 billion.
According to Caixin, problems first emerged at Nanjing Construction
Industrial, previously known as Nanjing Fullshare Holding Group Co.
Ltd. at the end of 2018. The company, which is controlled by local
businessman Ji Changrong, warned that it might not be able to pay
back a total of CNY1.3 billion worth of trust and loan products,
which in turn would trigger defaults on CNY4.5 billion worth of
bonds, the report recalls.
Caixin relates that the company survived that crisis after the
Nanjing government coughed up money it owed the company for work it
had carried out on previous projects, allowing the group to repay
its loans.
But while Nanjing Construction Industrial managed to ward off that
crisis, another was soon looming when it couldn't come up with the
money to repay the principal and interest on a CNY2 billion
privately placed "green" bond after all investors exercised their
put option to sell their bonds back to the company early, Caixin
says.
Caixin notes that when companies get into severe financial
difficulties, it's standard practice for local governments and the
local financial regulators to coordinate with creditors to set up a
committee to try and resolve the debt problems. A committee has
been set up to deal with Nanjing Construction Industrial and
comprises of representatives from 18 financial institutions who are
owed a combined CNY45.1 billion.
The first meeting was held in August attended by 61 financial
institutions who have claims of CNY61.8 billionn over the company,
according to minutes of the meeting seen by Caixin.
Caixins says the debt committee is chaired by the Nanjing branch of
China Citic Bank and other members include the Nanjing branches of
Hengfeng Bank, Zheshang Bank, Huishang Bank, and China Everbright
Bank, the Jiangsu branch of Bank of Communications, and Huarong
Huitong, an asset management company.
Nanjing Construction Industrial is trying to put together a debt
restructuring plan for creditors but one source close to the matter
told Caixin that many investors and market participants are not
optimistic about the prospects for the plan.
Nanjing Construction Group Co. Ltd. provides engineering
construction services. The Company contracts and constructs
buildings, municipal projects, foundation works, equipment
installation projects, and steel structure works.
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AIREFF DETOX: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: M/s Aireff Detox Private Limited
303, Sigma IT Park
Rabale TTC Industrial Area
Navi Mumbai 400701
Insolvency Commencement Date: October 10, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: April 7, 2020
Insolvency professional: Kamal Kumar Naulakha
Interim Resolution
Professional: Kamal Kumar Naulakha
101, Yusuf Building
43 Mahatma Gandhi Road
Fort, Mumbai 400001
E-mail: knaulakha@outlook.com
Last date for
submission of claims: October 23, 2019
ALFA TRANSFORMERS: CRISIL Migrates B Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Alfa
Transformers Limited (ATL) to 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 8.46 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 10.04 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Foreign Exchange .13 CRISIL A4 (ISSUER NOT
Forward COOPERATING; Rating Migrated)
Letter of Credit 5.25 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term .62 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with ATL for obtaining
information through letters and emails dated September 30, 2019 and
October 4, 2019 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of ATL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on ATL is consistent
with 'Scenario 4' outlined in the 'Framework for Assessing
Consistency of Information'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of ATL to 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating'.
Set up by Mr D K Das in 1982, ATL manufactures small distribution
transformers and offers related technical assistance and services,
including repair work. Units are in Bhubaneswar and Vadodara.
AMRICON AGROVET: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Amricon Agrovet Private Limited
158, Lenin Sarani
Kolkata 700013
Insolvency Commencement Date: September 30, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: March 30, 2020
(180 days from commencement)
Insolvency professional: Asim Kumar Bose
Interim Resolution
Professional: Asim Kumar Bose
002A, T-IV, Dwitiya
Uttara Housing Complex
New Town Rajarhat
North 24 Parganas
Kolkata 700157
E-mail: asimkumarbose09@gmail.com
Last date for
submission of claims: October 23, 2019
ASHRO TEXTILES: CRISIL Cuts Rating on INR2.3cr LT Loan to D
-----------------------------------------------------------
CRISIL has downgraded the rating to 'CRISIL D' from 'CRISIL
B/Stable' on the long-term bank facilities of Ashro Textiles
Private Limited (ATPL; part of the Ashro group). The downgrade
reflects recent delays in meeting repayment obligations of term
loan by the company.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (Downgraded from
'CRISIL B/Stable')
Long Term Loan 2.3 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Fund- 1.7 CRISIL D (Downgraded from
Based Bank Limits 'CRISIL B/Stable')
Working Capital 1.0 CRISIL D (Downgraded from
Term Loan 'CRISIL B/Stable')
The rating continues to reflect the group's large working capital
requirements, modest scale of operations in an intensely
competitive industry, and aggressive capital structure. These
weaknesses are partially offset by the extensive experience of the
promoters in the readymade garments industry.
Analytical Approach
CRISIL has combined the business and financial risk profiles of RA
Fashions Pvt Ltd (RAFPL) and ATPL. This is because the companies,
collectively referred to as the Ashro group, have common management
and are in the same line of business, leading to operational and
financial linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirements: Operations are working
capital intensive and should remain so over the medium term. Gross
current assets were 258 days as on March 31, 2019, driven, in turn,
by inventory and debtors of 140 and 112 days, respectively.
Inventory remains high as the group maintains a large variety of
products.
* Modest scale of operation: Intense competition continues to
constrain scalability, and therefore, bargaining power with
customers and suppliers: revenue was INR31 crore in fiscal 2019.
* Aggressive capital structure: Capital structure is weak because
of low networth and high dependence on borrowings. Networth was
INR2.51 crore as on March 31, 2019, and gearing and total outside
liabilities to adjusted networth were 6.64 times and 3.00 times,
respectively.
Strengths
* Extensive experience of the promoters: Benefits from the
promoters' experience of around 30 years, and their healthy
relationships with customers should continue to support business
risk profile.
Liquidity: Poor
There has been delays in meeting repayment obligations of term loan
due to stretch in liquidity. This is primarily due to stretch in
working capital requirements of the company.
Rating sensitivity factors
Upward factor
* Track record of timely servicing of debt obligations for at least
90 days
* Sustained improvement in financial risk profile, especially
liquidity
ATPL and RAFPL were incorporated in 2011 by Mr Ravinder Agarwal.
The group manufactures readymade garments for men and women. The
weaving unit is in Wada (Thane) and the stitching unit in
Bengaluru.
ATLANTIC PROJECTS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Atlantic Projects Limited
2/3/D, Deb Lane, 1st Floor
Kolkata, West Bengal 700014
Insolvency Commencement Date: October 15, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: April 11, 2020
(180 days from commencement)
Insolvency professional: Anil Anchalia
Interim Resolution
Professional: Anil Anchalia
16B Robert Street, 2nd Floor
Kolkata 700012
E-mail: anilanchalia@yahoo.com
- and -
Apex Insolvency Professionals LLP
Central Plaza
41 B.B. Ganguly Street
5th Floor, Room No. 5A
Kolkata 700012
E-mail: atlantic.cirp@gmail.com
Last date for
submission of claims: October 29, 2019
AVANI TOWERS: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Avani Towers Private Limited
Avani Heights 59A
Chowringhee Road
Kolkata 700020
Insolvency Commencement Date: October 15, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: April 11, 2020
Insolvency professional: Jitendra Lohia
Interim Resolution
Professional: Jitendra Lohia
Klass Insolvency Resolution Professionals
Private Limited
Todi Chamber
2 Lal Bazar Street
2nd Floor, Room No. 204 & 205
Kolkata 700001
West Bengal
E-mail: jitulohia@knjainco.com
ip.jitulohia@gmail.com
Last date for
submission of claims: October 29, 2019
BAGGA LUXURY: CRISIL Lowers Rating on INR10cr Cash Loan to D
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Bagga Luxury Motorcars LLP (BLML) to 'CRISIL D' from 'CRISIL
B+/Stable'. The downgrade reflects delays by the firm in servicing
its debt obligations due to stretched liquidity.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The rating also factors in BLML's modest scale of operations in the
intensely competitive automobile dealership industry and average
financial risk profile. These weaknesses are partially offset by
the extensive experience of the partners.
Key Rating Drivers & Detailed Description
* Delay in meeting debt obligation
Cash accrual remained insufficient to meet debt obligation, leading
to delays in repayment of loan.
Weaknesses
* Modest scale of operations and intense competitive pressure
Intense competition continues to constrain scalability, with
revenue remaining modest at INR41 crore in fiscal 2019. Moreover,
the luxury car segment, especially in India, already has many
foreign manufacturers; the entry of a few more overseas players
will only intensify competition.
Strength
* Extensive experience of the partners
Benefits from the partners' experience of nearly 15 years should
continue to support business risk profile. Apart from dealing in
Maserati cars via BLML, the partners deal in two-wheelers of Suzuki
and Yamaha via Planet Automotive Pvt Ltd, passenger cars of
Hyundai, and medium and heavy commercial vehicles of Ashok Leyland
Ltd through Petal Motocon Pvt Ltd.
Liquidity: Poor
Liquidity is inadequate to meet obligations on term debt.
Rating sensitivity factors
Upward factor
* Track record of timely servicing of debt obligations for at least
90 days
* Sustained improvement in financial risk profile, especially
liquidity
BLML was established on April 24, 2015, as a limited liability
partnership firm, by between Mr Sukhbir Singh Bagga and Ms Khushboo
Kaur Bagga. The firm has a dealership for Maserati's luxury cars in
Ahmedabad.
BALA TECHNO: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Bala Techno Industries Limited
Registered office:
Falta Industrial Growth Centre
Sector-III, Falta 24pgs(S)
P.S. Falta, West Bengal 743504
Principal office:
P-22, C.I.T. Road
Scheme 55, Kolkata 700014
West Bengal
Insolvency Commencement Date: October 15, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: April 11, 2020
(180 days from commencement)
Insolvency professional: Anil Anchalia
Interim Resolution
Professional: Anil Anchalia
16B Robert Street, 2nd Floor
Kolkata 700012
E-mail: anilanchalia@yahoo.com
- and -
Apex Insolvency Professionals LLP
Central Plaza
41 B.B. Ganguly Street
5th Floor, Room No. 5A
Kolkata 700012
E-mail: btil.cirp@gmail.com
Last date for
submission of claims: October 29, 2019
BHOORATHNOM CONSTRUCTION: Ind-Ra Moves BB- Rating to NonCooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Bhoorathnom
Construction Company Private Limited's (BCCPL) Long-Term Issuer
Rating to the non-cooperating category. The issuer did not
participate in the rating exercise despite continuous requests and
follow-ups by the agency. Therefore, investors and other users are
advised to take appropriate caution while using these ratings. The
rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR160 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING) /
IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR720 mil. Non-fund-based working capital limit migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 3, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1972, Hyderabad-based BCCPL constructs roads and
water pipeline projects for the state and central government of
India.
BHUSHAN POWER: NCLAT Asks ED, MCA to Reach Consensus on Assets
--------------------------------------------------------------
BloombergQuint reports that the National Company Law Appellate
Tribunal on Oct. 25 asked the divergent Enforcement Directorate and
the Ministry of Corporate Affairs to discuss and reach a consensus
on the attachment of assets of Bhushan Power & Steel Ltd.
According to BloombergQuint, the ministry and directorate have
locked horns over the issue. While the ED is of the opinion that it
can attach the property of BPSL under the Prevention of Money
Laundering Act, the corporate affairs ministry has been maintaining
that ED can not do so as the company is under the insolvency
proceedings.
The case is currently being heard by the NCLAT, the report says. A
three-member bench headed by Chairperson Justice SJ Mukhopadhaya
said there was no question of amendment of laws, and both the wings
of the central government should settle the issue.
"Sort it out. You are the two wings of the same government," the
bench said, BloombergQuint relays.
Moreover, the appellate tribunal said that ED can claim its dues,
which is from the proceeds of crime, under the Insolvency and
Bankruptcy Code as an operational creditor.
"The amount generated would be under the meaning of operational
debt and ED can claim this under the IBC," NCLAT said.
BloombergQuint relates that the bench further said, "sell it and
give to the creditors. Whatever you are entitled, you would get it.
There is no question of amendment of law," said NCLAT.
The appellate tribunal has directed to list the matter on Nov. 18
for next hearing, the report notes.
Earlier, ED in an affidavit filed before NCLAT had said that the
appellate tribunal has no jurisdiction over the properties attached
by the agency under the PMLA, BloombergQuint notes.
BloombergQuint says the validity of the attachment could be
examined by an adjudicating authority only under the PMLA, and
hence the NCLAT should vacate its order passed on Oct. 14,
directing it to release the assets of BPSL.
On Oct. 14, the NCLAT had directed the ED to release BPSL
properties attached by the agency on the JSW Steel plea, alleging
siphoning of funds by its erstwhile promoters.
"It is submitted that the provisional attachment order dated Oct.
10, 2019 passed under Section 5 of PMLA Act is not amenable to the
jurisdiction of this Hon'ble tribunal (NCLAT) and its validity can
only be examined by the adjudicating authority under Section 8 of
the PMLA," ED had said in an affidavit filed before the appellate
court, BloombergQuint relays. "There is no power under the IBC to
interfere with a provisional attachment order passed," it had
said.
On Oct. 10, the ED had attached assets worth over INR4,025 crore of
debt-ridden BPSL in connection with its money laundering probe
linked to an alleged bank loan fraud by its former promoters,
BloombergQuint recalls.
JSW Steel, which has emerged as successful bidder for BPSL with its
bid of INR19,700 crore, filed an appeal against ED's move before
the NCLAT, which had on Oct. 14 directed them to be immediately
released in favour of the resolution professional of the
debt-ridden firm.
Questioning the NCLAT authority, the ED had asked the tribunal to
vacate its earlier order and dismiss the appeal filed by JSW Steel
Ltd., the successful resolution applicant, says BloombergQuint.
About Bhushan Power
Bhushan Power and Steel Limited manufactures and markets steel
products. It offers flat products, such as coated products,
galvanized/galvalume, color coated products, cable tapes, and cold
rolled products; and long products, including iron making and
sponge iron products. The company also provides steel pipes, hollow
steel sections, grooved pipes, and carbon steel tubes.
Mahendra Kumar Khandelwal was appointed as the IRP in the case
under an order passed by the National Company Law Tribunal (NCLT)
on July 26, 2017.
Bhushan Power, which owes over INR37,000 crore to a consortium of
lenders led by Punjab National Bank, was among 12 large companies
identified by the Reserve Bank of India against which banks were
directed to initiate insolvency proceedings, according to
LiveMint.com. Barring Era Infra Engineering Ltd, petitions have
been admitted in all other cases, LiveMint.com noted.
CADCHEM LABORATORIES: CRISIL Withdraws D Rating on INR7.25cr Loan
-----------------------------------------------------------------
CRISIL has withdrawn its ratings on the bank facilities of Cadchem
Laboratories Limited (CLL) on the request of the company and
receipt of a no objection certificate from its bank. The rating
action is in line with CRISIL's policy on withdrawal of its ratings
on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.25 CRISIL D (ISSUER NOT
COOPERATING; Rating
Withdrawn)
Long Term Loan 4.30 CRISIL D (ISSUER NOT
COOPERATING; Rating
Withdrawn)
Non-Fund Based 3.25 CRISIL D (ISSUER NOT
Limit COOPERATING; Rating
Withdrawn)
CRISIL has been consistently following up with CLL for obtaining
information through letters and emails dated February 26, 2019 and
June 24, 2019, among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as they are arrived at without any management
interaction and are based on best available or limited or dated
information on the company'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CLL. This restricts CRISIL's
ability to take a forward CLL is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of Information
with CRISIL BB rating category or lower. Based on the last
available information, the rating on bank facilities of CLL
continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of CLL on
the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
Incorporated in 1985 as Chandigarh Drugs Pvt Ltd, CLL began
commercial production in 1988 and got its current name in 1995. It
manufactures APIs for use in pain killers and blood thinning
agents. The company's facility is in Chandigarh. Operations are
managed by Mr Navneet Gupta.
CADCHEM LABORATORIES: Ind-Ra Affirms Then Withdraws D Issuer Rating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed and withdrawn
Cadchem Laboratories Ltd.'s Long-Term Issuer Rating of 'IND D'.
The instrument-wise rating actions are:
-- The 'IND D' rating on the INR80 mil. Fund-based working
capital limit (Long-term)* affirmed and withdrawn;
-- The 'IND D' rating on the INR31.28 mil. Term loan (Long-term)*
due on March 2026 affirmed and withdrawn; and
-- The 'IND D' rating on the INR32.50 mil. Non-fund-based working
capital limit (Short-term)* affirmed and withdrawn.
* Affirmed at 'IND D' before being withdrawn
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificates from the rated facilities'
lenders. This is consistent with the Securities and Exchange Board
of India's circular dated March 31, 2017 for credit rating
agencies.
KEY RATING DRIVERS
The affirmation reflects CLL's continuous delay in servicing of
term loan principal and interest for the three months ended August
2019.
COMPANY PROFILE
Incorporated in 1985, Cadchem Laboratories manufactures active
pharmaceutical ingredients at its 120 metric tons per annum unit in
Chandigarh.
EAGLE CORPORATION: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Eagle Corporation Private Limited
Shop No. G-01
"ONYX-2", Paldi
Ahmedabad, Gujarat 380007
Insolvency Commencement Date: October 15, 2019
Court: National Company Law Tribunal, Ahmedabad-Gujarat Bench
Estimated date of closure of
insolvency resolution process: April 11, 2020
Insolvency professional: Sunil Kumar Agarwal
Interim Resolution
Professional: Sunil Kumar Agarwal
Tower 6/603, Devnandan Heights
Near Poddar School
New C.G. Road, Chandkheda
Ahmedabad, Gujarat 382424
E-mail: cirp.eaglecorp@gmail.com
anil91111@hotmail.com
- and -
202, Sakar III
Nr. C U Shah College
Opp. Old high Court, Income Tax
Ahmedabad 380014
E-mail: cirp.eaglecorp@gmail.com
anil9111@gmail.com
Last date for
submission of claims: October 31, 2019
ELDORADO ENTERTAINMENT: Insolvency Resolution Process Case Summary
------------------------------------------------------------------
Debtor: M/s Eldorado Entertainment Private Limited
406, 4th Floor Rectangle D-4 District Center
Saket, New Delhi 110017
Insolvency Commencement Date: October 11, 2019
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: April 8, 2020
Insolvency professional: Rajeev Kumar Raizada
Interim Resolution
Professional: Rajeev Kumar Raizada
Flat No. 402
Property No. B-159
Freedom Fighters Enclave
IGNOU Road, New Delhi 110068
E-mail: rajeevraizada@ymail.com
Last date for
submission of claims: October 28, 2019
EMU LINES PRIVATE: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: EMU Lines Private Limited
201/35A, Siddharth Chambers-II Kalu Sarai
Hauz Khas South Delhi
New Delhi 110016
Insolvency Commencement Date: October 15, 2019
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: April 12, 2020
(180 days from commencement)
Insolvency professional: Ashok Kriplani
Interim Resolution
Professional: Ashok Kriplani
10/18, 1st Floor, Old Rajinder Nagar
New Delhi, Delhi 110060
E-mail: ashok.kriplani956@gmail.com
- and -
17/13, GF, Old Rajinder Nagar
New Delhi 110060
E-mail: emulinescirp@gmail.com
Last date for
submission of claims: October 29, 2019
ESHAL FOODS: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: M/s. Eshal Foods Private Limited
Registered office:
JA-809, 8th Floor, DLF Tower-A
Jasola District Centre
New Delhi 110025
Insolvency Commencement Date: September 19, 2019
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: April 14, 2020
(180 days from commencement)
Insolvency professional: Mr. Rajesh Kumar Gupta
Interim Resolution
Professional: Mr. Rajesh Kumar Gupta
F-43, Dilshad Colony East
Delhi 110095
E-mail: rgadv21@gmail.com
- and -
G-22, Lower Ground Floor
Jangpura Extension
New Delhi 110014
E-mail: efpl.cirp@gmail.com
Last date for
submission of claims: October 31, 2019
EURO INDIA: CRISIL Maintains B- Rating in Not Cooperating
---------------------------------------------------------
CRISIL said the ratings on bank facilities of Euro India Fresh
Foods Limited (Euro) continues to be 'CRISIL B-/Stable/CRISIL A4
Issuer not cooperating'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee .5 CRISIL A4 (ISSUER NOT
COOPERATING)
Cash Credit 11.75 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 13.75 CRISIL B-/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 9 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with Euro for obtaining
information through letters and emails dated September 23, 2019 and
September 27, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Euro, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on Euro is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of Euro continues to be 'CRISIL B-/Stable/CRISIL A4
Issuer not cooperating'
Euro, incorporated in fiscal (Formerly known as Euro India Fresh
Foods Private Ltd.) 2009, manufactures potato chips, fried extruded
snacks, namkeen, fruit juice, and core filling snacks, in its plant
at Surat. Products are sold under the brand name, Euro. Operations
are managed by Mr Dinesh Sanspara. The company became listed on the
National Stock Exchange in March 2017.
FINECRETE ECO-BLOCKS: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: Finecrete Eco-Blocks Private Limited
Premises No. 24, Park Street
Anuj Chambers, 3rd Floor, Room No. 3B
Kolkata 700016, West Bengal
Insolvency Commencement Date: October 3, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: March 30, 2020
(180 days from commencement)
Insolvency professional: CA IP Sanjay Kumar Agarwal
Interim Resolution
Professional: CA IP Sanjay Kumar Agarwal
Draupadi Mansion, 3rd Floor
11, Brabourne Road
Kolkata 700001
E-mail: sanjaycal@hotmail.com
Cirp.finecrete@gmail.com
Last date for
submission of claims: October 17, 2019
GALAXY COTTON: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Galaxy Cotton And Textiles Pvt Ltd
Aditya Centre
Phulchhab Chowk, Rajkot
Gujarat 360001
India
Insolvency Commencement Date: October 10, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: April 7, 2020
Insolvency professional: Tejas Shah
Interim Resolution
Professional: Tejas Shah
B 201, Narayan Krupa Avenue
Opp. Prernatirth Derasar
Jodhpur, Satellite
Ahmedabad, Gujarat 380015
E-mail: tejasshah44@yahoo.com
- and -
9/B, Vardan Complex
Lakhudi Circle, Navrangpura
Ahmedabad 380014
E-mail: iptejaskshah@gmail.com
Last date for
submission of claims: October 29, 2019
GAURAV EXPORTRADES: CRISIL Lowers Rating on INR15cr Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Gaurav
Exportrades Private Limited (GEPL) to 'CRISIL D/CRISIL D Issuer Not
Cooperating' from 'CRISIL B-/Stable/CRISIL A4 Issuer Not
Cooperating'. The downgrade reflects delays in repayment of
packing credit facility.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B-/Stable ISSUER NOT
COOPERATING')
Foreign Letter 2 CRISIL D (ISSUER NOT
of Credit COOPERATING; Downgraded from
'CRISIL B-/Stable ISSUER NOT
COOPERATING')
Packing Credit 15 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with GEPL for obtaining
information through letters and emails dated May 20, 2019 and June
26, 2019 among others, among others; apart from telephonic
communication. However, the issuer has remained non-cooperative.
'Investors, lenders, and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as they are arrived at without any management
interaction and are based on best available or limited or dated
information on the company'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of GEPL, which restricts CRISIL's
ability to take a forward-looking view on the entity's credit
quality. CRISIL believes information available on GEPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
GEPL was set up by Mr Mahesh Kumar Gupta in 1991.The company
manufactures and exports knitted garments, and has a facility at
Tirupur, Tamil Nadu.
GOALTORE COLD: CRISIL Raises Rating on INR6cr Loan to 'B'
---------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Goaltore Cold Storage Private Limited (GCSPL) to 'CRISIL B/Stable'
from 'CRISIL B-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Proposed Cash 4 CRISIL B/Stable (Upgraded
Credit Limit from 'CRISIL B-/Stable')
Working Capital 1 CRISIL B/Stable (Upgraded
Demand Loan from 'CRISIL B-/Stable')
The upgrade reflects GCSPL's weak financial risk profile and
intense competition in the highly regulated cold storage industry.
These weaknesses are partially offset by the extensive experience
of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak financial risk profile: Financial risk profile should remain
weak due to muted accretion to reserve: networth is estimated at
INR1.57 crore and gearing at 3.42 times as on
March 31, 2019. Debt protection metrics are below average, with
interest coverage ratios of 1.88 times, in fiscal 2019.
* Intense competition in the highly regulated industry: The potato
cold storage industry in West Bengal is regulated by the West
Bengal Cold Storage Association. Rental rates are fixed by the
state department for agricultural marketing, thereby limiting
players' ability to make profit based on their strengths and
geographical advantages. Furthermore, intense competition limits
pricing power and forces players to offer discounts to ensure
healthy utilisation of the capacity.
Strength:
* Extensive experience of the promoters: Benefits derived from the
two-decade-long experience of the promoters, their strong
understanding of the market dynamics, and healthy relations with
traders and farmers should continue to support the business.
Liquidity: Stretched
Cash accrual is expected at INR1.40 million per annum over the
medium term. Bank limit utilisation averaged 85-90% over the 12
months through August 31, 2019. Current ratio is estimated at 1.27
times as on March 31, 2019. Liquidity is further supported by
equity and unsecured loans provided by the promoters.
Outlook: Stable
CRISIL believes GCSPL will continue to benefit from the promoters'
experience.
Rating sensitivity factors
Upward factor
* Improvement in scale of operations by 20% and stable margin
leading to accrual above INR30 lakh
* TOL/TNW reducing to less than 3 times
Downward factor
* Decline in profitability or increase in overall bank limit
utilisation by at least 10%
* Debt-funded capital expenditure more than 10% of the networth.
Initially established as a partnership firm in 1993, West
Bengal-based GCSPL was reconstituted as a private limited company
in 1997. The company operates a cold storage unit for potato
farmers. Mr Tapan Kumar and his family members are the promoters.
GOVIND RUBBER: CRISIL Moves D Rating to Not Cooperating Category
----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Govind Rubber
Limited (GRL) to 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3.5 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Bill Discounting 4.29 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Bills - Inland 1.26 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 40.18 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Letter of Credit 28.60 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Packing Credit 3.60 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 36.65 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 10.92 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Working Capital 21.00 CRISIL D (ISSUER NOT
Demand Loan COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GRL for obtaining
information through letters and emails dated September 23, 2019 and
September 27, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of GRL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GRL is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of GRL to 'CRISIL D/CRISIL D Issuer not cooperating'.
GRL, incorporated in 1985, is engaged in manufacturing of tyres and
tubes. The company's business operations are overseen by Mr. Vinod
Poddar. GRL has its manufacturing facilities located at Ludhiana,
Punjab.
GRACE INTERNATIONAL: CRISIL Lowers Rating on INR10.5cr Loan to D
----------------------------------------------------------------
CRISIL has downgraded the ratings on bank facilities of Grace
International (GI) to 'CRISIL D Issuer Not Cooperating' from
'CRISIL B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with GI for obtaining
information through letters and emails dated October 16, 2018,
November 28, 2018, December 11, 2018, December 17, 2018 and August
31, 2019 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of GI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GI is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL D' category or lower'.
Based on the last available information, the ratings on bank
facilities of GI downgraded to 'CRISIL D Issuer Not Cooperating'
from 'CRISIL B+/Stable Issuer Not Cooperating'. It was recently
brought to CRISIL's attention that the account has moved to NPA.
GI was set up by Mr. Vikram Jain as a proprietorship firm in 1993.
It trades in buttons, hooks, patches, zipper sliders, cufflinks,
belt buckles, and other garment accessories. Its registered office
is in Delhi.
HIMSKAF SYSTEMS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Himskaf Systems Private Limited
35A/1, 2nd Floor, Shahpur Jat
New Delhi 110049
Insolvency Commencement Date: October 15, 2019
Court: National Company Law Tribunal, Delhi Bench
Estimated date of closure of
insolvency resolution process: April 12, 2020
Insolvency professional: Gulshan Kumar Gupta
Interim Resolution
Professional: Gulshan Kumar Gupta
202, Kumar House
Central Market
Prashant Vihar
Delhi 110085
E-mail: ipgulshan@gmail.com
rp.hmsys@gmail.com
Last date for
submission of claims: October 30, 2019
KANIK ELECTRONICS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Kanik Electronics Private Limited
Registered office:
D-404, Nagarjuna Appartments
Mayur Kunj, Delhi 110096
Address other than registered office where all or any
books of account and papers are maintained:
C-8, Sector-3, Noida
Uttar Pradesh 201301
Insolvency Commencement Date: September 30, 2019
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: March 28, 2020
(180 days from commencement)
Insolvency professional: Ashu Gupta
Interim Resolution
Professional: Ashu Gupta
204, A, 2nd Floor
23, SBI Building
Najafgarh Road Indl Area
Shivaji Marg, Opp DLF Tower
New Delhi 110015
E-mail: ashugupta.cs@gmail.com
irpkanik@gmail.com
Last date for
submission of claims: October 30, 2019
KINETA GLOBAL: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Kineta Global
Limited's Long-Term Issuer Rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND
BB-(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR500 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB- (ISSUER NOT
COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 10, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 2006, Kineta Global Limited is primarily engaged in
the trading of iron ore, building materials such as TMT bars,
cement and granite. It also undertakes engineering, procurement and
construction irrigation projects on sub-contract basis.
MAWANA FOODS: CRISIL Migrates B- Rating From Not Cooperating
------------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI
guidelines, had migrated the rating of Mawana Foods Private Limited
(MFPL) to 'CRISIL B-/Stable/CRISIL A4/Issuer not cooperating'.
CRISIL has withdrawn its rating on bank facility of MFPL following
a request from the company and on receipt of a 'no dues
certificate' from the banker. Consequently, CRISIL is migrating the
ratings on bank facilities of MFPL from 'CRISIL B-/Stable/CRISIL
A4/Issuer Not Cooperating to 'CRISIL B-/Stable/CRISIL A4'. The
rating action is in line with CRISIL's policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.5 CRISIL B-/Stable (Migrated
from 'CRISIL B-/Stable
ISSUER NOT COOPERATING';
Rating Withdrawn)
Letter of credit 3.5 CRISIL A4 (Migrated from
& Bank Guarantee 'CRISIL A4 ISSUER NOT
COOPERATING'; Rating
Withdrawn)
MFPL, which is part of the Shriram group, is a wholly-owned
subsidiary of UIL. The company was named Siel Food and Fertilisers,
and renamed as Siel Edible Oils Ltd in 2006. It was renamed as MFPL
in fiscal 2013. The New Delhi-based company supplies edible oil
products through its retail distribution network, under brands such
as Cornola (corn oil), Ruby (groundnut oil) and Panghat (vanaspati
ghee).
MEGHA PLAST: CRISIL Lowers Rating on INR7cr Cash Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Megha
Plast Private Limited (MPPL) to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Letter of Credit 3 CRISIL D (Downgraded from
'CRISIL A4')
The downgrade reflects delay by MPPL in servicing its debt
obligation for more than 90 days and the account being currently
recognised as non-performing asset (NPA).
The ratings also reflect the company's small scale, exposure to
volatile raw material prices, and large working capital
requirement. These weaknesses are partially offset by the extensive
experience of the promoters.
Key Rating Drivers & Detailed Description
* Delay in servicing debt obligation
The company has delayed repayment of its loans by more than 90 days
and has been classified as a NPA.
Weaknesses
* Small scale of operations
With a small capacity of just 2,100 tonne per annum, scale of
operations is modest: revenue was modest at INR17.59 crore in
fiscal 2018. Intense competition constrains scalability, pricing
power, and profitability.
* Susceptibility to volatile raw material prices
Prices of high-density polyethylene (HDPE) and polypropylene (PP)
granules - the main raw materials - are highly volatile as they are
correlated with crude oil prices in the global market. Also, there
are very few producers of these granules in India. Hence, risks
related to availability and volatile prices of raw materials may
continue to constrain the business.
* Large working capital requirement
Operations are working capital-intensive: gross current assets were
at 386 days as on March 31, 2018, driven by inventory of 210 days.
Considerable work-in-progress inventory of different fabrics is
necessary as the colouring of various cement bags has to be
maintained, and the bags need to be supplied on time to cement
manufacturers.
Strength
* Extensive experience of the promoters
Benefits from the three-decade-long experience of the promoters and
their healthy relationships with suppliers and customers (such as
Dalmia Cements and Star Cements) should continue to support the
business.
Liquidity: Poor
There has been delays in meeting repayment obligations of term loan
due to stretch in liquidity. This is primarily due to stretch in
working capital requirements of the company.
Rating sensitivity factors
Upward factors
* Track record of timely servicing of debt obligations (interest
and instalment) for at least 90 days
* Sustained improvement in financial risk profile, especially
liquidity.
Incorporated in 2002, Meghalaya-based MPPL commenced operations in
November 2005. Mr Trilokchand Agrawal, Mr Suresh Agrawal, and Mr
Ayush Agrawal are the promoters, while Mr Sohan Gupta (the
director) manages the operations. The company manufactures PP/HDPE
bags for cement companies in northeast India.
MICRO EDUCATION: CRISIL Assigns B+ Rating to INR10cr LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Micro Education and Social Welfare Society
(MESWS).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 10 CRISIL B+/Stable (Assigned)
The rating reflects MESWS's high dependence on government
authorities for grants and subsidies along with a modest scale of
operations. These weaknesses are partially offset by the extensive
experience of the trustee, an efficient working capital
management.
Key Rating Drivers & Detailed Description
Weaknesses
* High dependence on government authorities for grants and
subsidies
Societies and non-government organisations providing social
services such as mid-day meals, general awareness programs, and
children education are extensively dependent on grants and
subsidies from government authorities.
* Modest scale of operations
Intense competition may continue to constrain scalability, pricing
power, and profitability. Revenue was modest at INR3.91 crore in
fiscal 2019.
Strengths
* Extensive experience of the trustee
Benefits from the trustee's experience of over a decade, his strong
understanding of local market dynamics, and healthy relations with
customers and suppliers should continue to support the business.
* Efficient working capital management
The working capital is likely to remain prudently managed, as the
society procures monthly food items only based on estimates for the
month. Gross current assets have been less than 40-90 days during
the three fiscals ended March 31, 2019, owing to the absence of any
inventory and debtors.
Liquidity: Stretched
Liquidity may remain stretched. The modest cash accrual --
projected at INR0.3-0.4 crore per annum over the medium term - is
partially supported by the absence of any yearly maturing debt.
Current ratio was moderate at 1.3 times on March 31, 2019. CRISIL
expects liquidity to remain stretched on account of modest NCA.
Outlook: Stable
CRISIL believe MESWS will continue to benefit from the extensive
experience of the trustee, and the established relationship with
clients.
Rating sensitivity factors
Upward factors
* Substantial and sustainable increase in revenue and
profitability, leading to cash accrual of more than INR1.5 crore
* Winning new tenders and sustaining existing ones, thereby
enhancing revenue flow
Downward factors
* Decline in revenue to less than INR1.5 crore
* Large, debt-funded capital expenditure
* Significant stretch in the working capital cycle.
MESWS was set up in 2006 by Mr Lokesh Kumar. This Delhi-based
charitable trust provides services such as mid-day meals, health
check-up and medical camps, and education programs for the poor.
MINOP INNOVATIVE: CRISIL Migrates C Rating to Not Cooperating
-------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Minop
Innovative Technologies Pvt. Ltd. (MITPL) to 'CRISIL C/FC/CRISIL A4
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 9 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 1 CRISIL C (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Short Term 1 CRISIL A4 (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with MITPL for obtaining
information through letters and emails dated
September 23, 2019 and September 27, 2019 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of MITPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MITPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of MITPL to 'CRISIL C/FC/CRISIL A4 Issuer not
cooperating'.
MITPL, incorporated in December 2005, has undertaken a contract for
the development of the Muraidih underground mines (in Jharkhand) of
BCCL and extraction of coal from Muraidih I and III seam. The
company obtained the contract under a consortium with it being the
leader. MITPL is equally owned by families of Mr Biswanath Pan, Mr
Sanjiv Kumar Ganeriwala, and Mr Pravin Parkeria.
PADMAVAHINI TRANSFORMERS: CRISIL Ups INR4.75cr Loan Rating to B+
----------------------------------------------------------------
CRISIL has upgraded the ratings for the long term bank facilities
of Padmavahini Transformers Private Limited (PTPL) to 'CRISIL
B+/Stable' from 'CRISIL B/Stable' while the short term rating is
reaffirmed at 'CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee .2 CRISIL A4 (Reaffirmed)
Cash Credit 4.75 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Inland/Import .30 CRISIL A4 (Reaffirmed)
Letter of Credit
Working Capital .75 CRISIL B+/Stable (Upgraded
Demand Loan from 'CRISIL B/Stable')
The rating upgrade reflects improved business risk profile marked
by revenue of around INR12 crore in FY 2019 compared to INR5.8
crore in FY 2018. In the absence of any major debt funded capex
plans and consistent accretion to reserves gearing has improved to
1.67 times. Working capital management has improved, marked by
reduction in GCA days. Also enhancement in the working capital
limit has reduced the average bank limit utilization. Moreover,
need based USL from promoters continues to support liquidity.
The ratings continue to reflect intense working capital requirement
and modest scale of operations. These weaknesses are partially
offset by Extensive experience of promoter.
Key Rating Drivers & Detailed Description
Weakness:
* Intense working capital requirement: GCA days of more than 300
days as on March, 2019 showcases intense working capital
requirement. The same is due to high inventory days in the range of
200 days.
* Modest scale of operations: Modest scale is reflected in
operating income of INR12 crore, which restricts ability to benefit
from economies of scale.
Strength:
* Extensive experience of promoter: Longstanding presence of
promoter and technological expertise is expected to support
business risk profile over the medium term.
Liquidity: Stretched
Average bank limit utilization for the last 12 months ended on
August, 2019 is modest at around 91%. Net cash accruals is
sufficient against repayment obligations. Current ration as on 31st
March, 2019 is moderate at 1 times.
Outlook: Stable
CRISIL believes PTPL will continue to benefit over the medium term
from the extensive experience of its promoter.
Rating Sensitivity Factor:
Upward factor
* Net cash accruals in excess of INR75 to 80 crores driven by
improvement in scale of operations
* Efficient working capital management and maintenance of moderate
capital structure.
Downward factor
* Reduction in Operating margin to less than 9 per cent
* Larger than expected working capital requirement or debt funded
capex
Incorporated in 1996 and promoted by Mr. R Vathirajan, PTPL
manufactures electrical transformers at its facility in Coimbatore.
R. K. DALL: CRISIL Assigns B+ Rating to INR12cr Cash Loan
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating on the long-term
bank loan facility of R. K. Dall And Food Products (Katni) Private
Limited (RKDFPPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12 CRISIL B+/Stable (Assigned)
The rating reflects the weak financial profile, modest scale of
operations and susceptibility to climatic conditions and volatile
raw material prices. These weaknesses are partially offset by the
extensive experience of the promoters and their funding support.
Analytical Approach
Unsecured loans of INR3.89 crore as on March 31, 2019, extended by
the promoters, have been treated as 75% equity and remaining as
debt, as these are subordinated to external debt and would remain
in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Weak financial risk profile: Small networth of INR5.25 crore as
on March 31, 2019, coupled with large debt, has resulted in gearing
and total outside liabilities to tangible networth ratios of 3.43
times and 3.97 times, respectively, as on the same date. Debt
protection metrics are weak, marked by interest coverage and net
cash accrual to total debt ratios of 1.23 times and 0.02 time,
respectively, estimated for fiscal 2019.
* Susceptibility to climatic conditions and volatility in raw
material prices: Crop yield of agricultural commodities is
dependent on adequate and timely monsoon. Thus, RKDFPPL remains
vulnerable to any shortage of key raw material during a weak
monsoon. Production could also be impacted by attacks of pests or
crop infection, causing uncertainty in production and pricing of
agro commodities and derived products.
* Modest scale of operations: Intense competition in the
agro-products industry keeps the scale of operations moderate, as
reflected in revenue of INR71.22 crore in fiscal 2019. Through
revenue may increase over the medium term, scale may remain modest
and restrict the operating flexibility.
Strength
* Extensive experience of the promoters and their funding support:
The three-decade-long experience of the promoters in the agro
products business, their strong understanding of local market
dynamics, and healthy relationships with customers and suppliers,
will continue to support the business risk profile. The promoters
have also extended continuous funding support via unsecured loans.
Liquidity: Stretched
The liquidity is expected to remain stretched over the medium term.
The cash accruals are expected to remain low at around INR30 lakh
per annum over the medium term against repayment obligation of INR5
lakh. Further, the bank limits have remained fully utilised for 6
months through April 2019. Liquidity is partially supported by
absence of any debt funded capex plans and promoters' funding,
however, going forward, timely enhancement in working capital
limits and quantum of promoters' funding would remain a key rating
sensitivity factor.
Outlook: Stable
CRISIL believe RKDFPPL will continue to benefit from the extensive
experience of its promoter, over the medium term.
Rating sensitivity factor
Upward factor
* Substantial cash accrual or infusion of equity, resulting in
total outside liabilities to tangible networth ratio of less than 3
times
* Improvement in debt protection metrics.
Downward factor
* Decline in profitability or revenue, leading to continued bank
limit utilisation of 98-99%
* Stretch in working capital cycle or unanticipated withdrawal of
unsecured loans
RK Enterprises, established in 1985, processes toor daal. The firm
was converted into a private limited company, called RKDFPPL in
2010.
RA FASHIONS: CRISIL Lowers Rating on INR2.59cr Term Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of RA
Fashions Private Limited (RAFPL; part of the Ashro group) to
'CRISIL D' from 'CRISIL B/Stable'. The downgrade reflects recent
delays in meeting repayment obligations of term loan by the
company.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL D (Downgraded from
'CRISIL B/Stable')
Long Term Loan 1.91 CRISIL D (Downgraded from
'CRISIL B/Stable')
Working Capital 2.59 CRISIL D (Downgraded from
Term Loan 'CRISIL B/Stable')
The rating continues to reflect the group's large working capital
requirements, modest scale of operations in an intensely
competitive industry, and aggressive capital structure. These
weaknesses are partially offset by the extensive experience of the
promoters in the readymade garments industry.
Analytical Approach
CRISIL has combined the business and financial risk profiles of RA
Fashions Pvt Ltd (RAFPL) and ATPL. This is because the companies,
collectively referred to as the Ashro group, have common management
and are in the same line of business, leading to operational and
financial linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirements: Operations are working
capital intensive and should remain so over the medium term. Gross
current assets were 258 days as on March 31, 2019, driven, in turn,
by inventory and debtors of 140 and 112 days, respectively.
Inventory remains high as the group maintains a large variety of
products.
* Modest scale of operation: Intense competition continues to
constrain scalability, and therefore, bargaining power with
customers and suppliers: revenue was INR31 crore in fiscal 2019.
* Aggressive capital structure: Capital structure is weak because
of low networth and high dependence on borrowings. Networth was
INR2.51 crore as on March 31, 2019, and gearing and total outside
liabilities to adjusted networth were 6.64 times and 3.00 times,
respectively.
Strengths
* Extensive experience of the promoters: Benefits from the
promoters' experience of around 30 years, and their healthy
relationships with customers should continue to support business
risk profile.
Liquidity: Poor
There has been delays in meeting repayment obligations of term loan
due to stretch in liquidity. This is primarily due to stretch in
working capital requirements of the company.
Rating sensitivity factors
Upward factors
* Track record of timely servicing of debt obligations for at least
90 days
* Sustained improvement in financial risk profile, especially
liquidity.
ATPL and RAFPL were incorporated in 2011 by Mr Ravinder Agarwal.
The group manufactures readymade garments for men and women. The
weaving unit is in Wada (Thane) and the stitching unit in
Bengaluru.
RANJU AUTOMOBILES: CRISIL Cuts Rating on INR11cr Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded the rating on the long-term bank facility of
Ranju Automobiles Private Limited (RAPL) to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL BB-/Stable Issuer Not Cooperating'. The
downgrade reflects the continuously overdrawn cash credit limit for
more than 30 days.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 11 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with RAPL for obtaining
information through letters and emails dated February 28, 2019, and
March 18, 2019, among others, apart from telephonic communication.
However, the issuer has remained non-cooperative.
'Investors, lenders, and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'issuer not cooperating'. These ratings lack a
forward-looking component as they are arrived at without any
management interaction and are based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of RAPL. This restricts CRISIL's
ability to take a forward-looking view on the company's credit
quality. CRISIL believes information available is consistent with
'Scenario 1' outlined in the Framework for Assessing Consistency of
Information with 'CRISIL BB' rating category or lower. Based on the
last available information, CRISIL has downgraded the rating on the
long-term bank facility to 'CRISIL D Issuer Not Cooperating' from
'CRISIL BB-/Stable Issuer Not Cooperating'.
The downgrade reflects the continuously overdrawn cash credit limit
for more than 30 days.
Established in 1991 as a partnership firm (Ranju Automobiles) and
reconstituted as a private limited company in 2000, RAPL began
operations as a sub-dealer of Bajaj Auto Ltd (BAL). In 1998, it
received dealership of BAL's two-wheelers for Bokaro district in
Jharkhand. In 2009, the company also received dealership for
passenger cars of Hyundai Motor India Ltd for four districts of
Jharkhand.
ROHTAS PROJECTS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Rohtas Projects Limited
Flat No. 2, First Floor
F-50B Madhu Vihar Ext.
Patparganj, New Delhi
East Delhi, DL 110092
IN
Insolvency Commencement Date: September 30, 2019
Court: National Company Law Tribunal, New Delhi Court No. III
Estimated date of closure of
insolvency resolution process: March 27, 2020
(180 days from commencement)
Insolvency professional: Mukesh Gupta
Interim Resolution
Professional: Mukesh Gupta
F-1, Milap Nagar
Uttam Nagar
New Delhi 110059
E-mail: camukeship@rediffmail.com
cirp.rohtas@rediffmail.com
Classes of creditors: Real Estate Allottees
Insolvency
Professionals
Representative of
Creditors in a class: Mr. Arvind Mittal
House No. 264
Sector-55, Faridabad
Haryana 121004
E-mail: rohtas.ar@gmail.com
Mr. Vinod Kumar Chaurasia
A-756, Sector-2, Rohini
New Delhi 110085
E-mail: cavinodchaurasia@gmail.com
Ms. Ramanpreet Kaur
C-1006, Kenwood Tower
Charmwood Village
Surajkund, Faridabad
Haryana 121009
E-mail: ramanpreet@impacca.com
Last date for
submission of claims: October 29, 2019
ROYSONS CERAMICS: CRISIL Lowers Rating on INR12.50cr Loan to D
--------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of Roysons
Ceramics Private Limited (RCPL) to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.35 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Term Loan 12.50 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with RCPL for obtaining
information through letters and emails dated May 20, 2019, and June
26, 2019, apart from telephonic communication. However, the issuer
has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the ratings assigned/reviewed with
the suffix 'issuer not cooperating'. These ratings lack a
forward-looking component as they are arrived at without any
management interaction and are based on best available or limited
or dated information on the company'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of RCPL, which restricts CRISIL's
ability to take a forward-looking view on the entity's credit
quality. CRISIL believes information available on RCPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, CRISIL has downgraded its
rating on the bank facilities of RCPL to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating'. The
downgrade reflects the ongoing delays by RCPL in term loan
repayment and cash credit interest servicing.
RCPL, incorporated in August 2016, manufactures products such as
general castable, calcined clay, high alumina castable and mortar,
magnesite ramming mass, and bed materials. The plant in Burdwan
(West Bengal) has production capacity of 31,200 tonne per annum.
Commercial operations started from February 2018. Mr Saubhik Ray,
Mr Subhankar Ray and Mr Gopal Ray are the directors.
RUNGTA IRRIGATION: Ind-Ra Affirms 'B-' Long Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Rungta Irrigation
Limited's (Rungta) Long-Term Issuer Rating at 'IND B- (ISSUER NOT
COOPERATING)' with a Negative Outlook. The issuer did not
participate in the rating exercise despite continuous requests and
follow-ups by the agency. Thus, the rating is based on the
best-available information. Therefore, investors and other users
are advised to take appropriate caution while using the rating. The
rating will now appear as 'IND B- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR140 mil. Fund-based working capital limits affirmed with
IND B- (ISSUER NOT COOPERATING) /Negative/IND A4 (ISSUER NOT
COOPERATING) rating; and
-- INR80 mil. Non-fund-based working capital limits affirmed with
IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information.
KEY RATING DRIVERS
The affirmation reflects the company's continued small scale of
operations. Revenue dipped marginally to INR577.44 million (FY18:
INR575.70 million) on account of fewer government tenders. During
3MFY19, revenue stood at INR51.93 million, EBITDA at INR6.56
million and interest coverage at 1.98x.
The rating factors in Rungta's modest credit metrics. Gross
interest coverage (operating EBITDA/gross interest expense)
deteriorated to 0.66x in FY19 (FY18: 1.37x) and net leverage (total
adjusted net debt/operating EBITDAR) deteriorated to 11.40x (4.87x)
owing to lower EBITDA level which stood at INR12.65 million in FY19
(FY18: INR36.97 million) due to higher personnel expense and other
expense.
The ratings are constrained by the company's modest margins, which
declined to 2.19% in FY19 (FY18: 6.42%) due to rise in cost
material price, personnel expenses and other expense. Its return on
capital employed was 0.11% in FY19 (FY18: 2.44%).
Liquidity Indicator - Stretched: The company had liquid cash and
cash equivalents of INR9.04 million at FYE19 (FYE18: INR9.30
million) against a total outstanding debt of INR153.24million
(INR189.43 million). Cash flow from operations further improved to
INR27.78 million (FY18: INR3.98 million) owing to favorable changes
in working capital.
The ratings, however, are supported by the promoters' three decades
of experience in manufacturing pipes.
The ratings have been migrated to the non-cooperating category as
the company did not provide Ind-Ra with revised projections data,
latest banker details, updated management certificate and working
capital utilization in a timely manner.
RATING SENSITIVITIES
Negative: Inability to improve the credit metrics will lead to a
rating downgrade.
Positive: An improvement in the credit metrics on a sustained basis
will lead to the Outlook being revised to Stable.
COMPANY PROFILE
Rungta manufactures, designs, assembles and markets pipe-based
sprinkler irrigation systems. It has manufacturing facilities in
Ghaziabad (Uttar Pradesh), Puducherry and Jamshedpur (Jharkhand).
SAI RAM: Ind-Ra Assigns 'B+' LT Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sai Ram Chemicals
a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limit assigned with IND
B+/Stable/IND A4 rating; and
-- INR96.6 mil. Term loans due on March 2024 assigned with IND
B+/Stable rating.
KEY RATING DRIVERS
The ratings reflect Sai Ram Chemicals small scale of operations, as
indicated by revenue of INR587.8 million in FY19 (FY18: INR138.1
million; FY17: INR81.6 million). Growth in revenue was on the back
of increased orders and additions in product portfolio. FY19
financials are provisional in nature.
The ratings also factor in Sri Ram Chemicals modest EBITDA margin
of 4.4% in FY19 (FY18: 14.1%; FY17: 26.0%) with return on capital
employed of 10% (12%; 13%). FY19 margin declined owing to increase
in employee benefit expenses along with volatility in raw material
prices.
The ratings further continue to reflect the firm's modest credit
metrics. Interest coverage (operating EBITDA/gross interest
expense) deteriorated to 2.6x in FY19 (FY18: 4.9x; FY17: 4.6x) and
net leverage (adjusted net debt/operating EBITDA) to 5.5x (1.9x;
1.9x). The deterioration in metrics was attributed to an increase
in total debt (secured and unsecured) to INR146.3 million in FY19
(FY18: INR37.8 million; FY17: INR4.1 million) to fund procurement
of machinery and working capital requirements.
Liquidity Indicator- Poor: The firm's use of its working capital
limits was around 80% during the 12 months ended September 2019.
Its cash flow from operations turned negative to INR122 million in
FY19 (FY18: INR34.9 million; FY17: INR15.9 million) on account of
higher working capital requirement. It had a cash balance of INR3
million at FYE19 (FYE18: INR0.2 million).
The ratings, however, are supported by the partners' experience of
two decades in the pharma industry, leading to established
relationships with customers and suppliers.
RATING SENSITIVITIES
Positive: Net leverage less than 3.5x and increase in revenue and
profitability, leading to an improvement in the credit metrics, all
on a sustained basis, could result in the positive rating action.
Negative: Any further decline in the revenue coupled with
deterioration in the credit metrics and a further stress on the
liquidity position, all on a sustained basis, could result in a
negative rating action.
COMPANY PROFILE
Established in 2015, Sai Ram Chemicals is a partnership firm
engaged in manufacturing and supplier of active pharmaceutical
ingredients and intermediates (API) of all types of industrial
chemicals, solvents and raw materials.
SHIVAM ISPAT: CRISIL Hikes Rating on INR8.25cr Term Loan to B-
--------------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of Shivam
Ispat Private Limited (SIPL) to 'CRISIL B-/Stable/CRISIL A4' from
'CRISIL D/CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2.75 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 3.50 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 4.16 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 1.34 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Working Capital 8.25 CRISIL B-/Stable (Upgraded
Term Loan from 'CRISIL D')
The upgrade reflects timely debt repayment track record post
restructuring of debt in March 2019. Nevertheless, CRISIL will
continue to monitor SIPL's debt servicing, financial risk profile
and liquidity.
The ratings continue to reflect SIPL's weak financial risk profile
and modest scale of operations. However, the company benefits from
the extensive experience of its promoters in the mild steel (MS)
ingot industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations: Scale of operations remains modest in
the intensely competitive ingots industry with volatile margins
impacting business risk profile.
* Weak financial risk profile: Networth was modest and gearing high
at INR2.4 crore and 10.29 times (estimated), respectively, as on
March 31, 2019. Debt protection metrics are weak with interest
coverage ratio of 1.20 time (estimated) for fiscal 2019.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' experience of over three decades and their fund support
should continue to support the business.
Liquidity: Poor
Liquidity remains under pressure, with high bank limit utilisation,
and insufficient accrual for debt servicing. However, support in
the form of funds infusions by promoters is expected to continue in
the event of an exigency, as in the past.
Outlook: Stable
SIPL continues to benefit from the experience of the promoters in
the MS ingot industry.
Rating sensitivity factor
Upward factor
* Strengthening of financial risk profile
* Sharp growth in revenue and profitability leading to higher cash
accruals of Rs.2 crore and above annually
Downward factor
* Weakening in liquidity, because of drop in margins and/or lower
revenues
* Stretch in working capital with gross current assets exceeding
120 days
Set up in 1997, Shivam Ispat Private Limited (SIPL) is engaged in
the manufacturing of Mild Steel (MS) ingots which are used in steel
rolling mills. The company is presently being run by Mr. Vijendra
Kumar Singla. Mr Singla comes from a family which has been in the
steel business for over 50 - 60 years. Mr Singla has over 30 years
of experience in the steel industry primarily through prior
experience in other family concerns. The company is based in Goa
and has an installed capacity of manufacturing 28800 MT of ingots
per annum.
SHRI SHYAMJEE: CRISIL Assigns B+ Rating to INR2.0cr Cash Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the
bank facilities of Shri Shyamjee Agro Industries (SSAI).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Non Fund
based limits 4.81 CRISIL A4 (Assigned)
Overdraft .44 CRISIL A4 (Assigned)
Bank Guarantee 2.75 CRISIL A4 (Assigned)
Cash Credit 2.00 CRISIL B+/Stable (Assigned)
The ratings reflect the small scale of operations and below-average
financial risk profile. These weaknesses are partially offset by
the extensive experience of the proprietor.
Analytical Approach
Unsecured loans extended by the proprietor (Rs 1.12 crore as on
March 31, 2019) have been treated as debt.
Key Rating Drivers & Detailed Description
Weakness:
* Small scale of operations
Intense competition in the rice milling business restricts
scalability of operations for SSAI, as reflected in the small
turnover of around INR6.60 crore in fiscal 2019.
* Below-average financial risk profile
Financial risk profile was marked by a small networth and high
gearing of INR1.05 crore and 3.18 times, respectively, as on March
31, 2019, and may remain constrained by the limited accretion to
reserves and high reliance on external debt. Debt protection
metrics were average, with interest coverage and net cash accrual
to total debt ratios at 1.57 times and 6%, respectively, for fiscal
2019.
Strengths:
* Extensive experience of the proprietor: The three-decade-long
experience of the proprietor in the rice milling business, their
strong understanding of local market dynamics, and healthy
relationships with suppliers and customers, will continue to
support the business risk profile.
Liquidity: Stretched
Liquidity is stretched. Net cash accrual of INR0.20 crore was
reported in fiscal 2019. Expected accrual of INR0.27-0.40 crore per
fiscal, should comfortably cover the maturing debt of around
INR0.02 crore over the medium term. Bank limit utilisation was
moderate, averaging 80% in the 12 months through July 2019. SSAI's
proprietor is likely to offer funding support, whenever necessary,
as in the past.
Outlook: Stable
CRISIL believes SSAI will continue to benefit from the extensive
experience of its proprietor, and established relationships with
clients.
Rating sensitivity factors
Upward factor
* Improvement in financial risk profile with gearing below 2.5
time
* Better working capital management
Downward factor
* Stretch in working capital cycle
* Increase in gearing above 4 times.
SSAI was formed as a proprietorship firm of Mr Mohanlal Agrawal in
2008. The Bilaspur-Chhattisgarh based firm mills and processes
paddy into rice, bran and broken rice.
SIR SHADI: CRISIL Migrates C Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Sir Shadi Lal
Enterprises Limited (SSLEL) to 'CRISIL C Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 71 CRISIL C (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 40.45 CRISIL C (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
SEFASU Loan 18.55 CRISIL C (ISSUER NOT
COOPERATING; Rating Migrated)
Working Capital 70 CRISIL C (ISSUER NOT
Term Loan COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SSLEL for obtaining
information through letters and emails dated July 17, 2019 and
August 19, 2019 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SSLEL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SSLEL is
consistent with 'Scenario 4' outlined in the 'Framework for
Assessing Consistency of Information'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of SSLEL to 'CRISIL C Issuer not cooperating'.
SSLEL was established in 1933 by Mr. Shadi Lal. The company
manufactures sugar and alcohol at its facilities in Shamli, Uttar
Pradesh. It is listed on the Bombay Stock Exchange.
SRI NAGESHWAR: CRISIL Assigns B+ Rating to INR1cr LT Loan
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facility of Sri Nageshwar Jan Kalyan Samiti (SNJKS).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 1 CRISIL B+/Stable (Assigned)
The rating reflects high dependence on government authorities for
grants, modest scale of operation, weak financial profile and weak
operating efficiencies. These weaknesses are partially offset by
weak operating efficiencies and moderate working capital cycle.
Key Rating Drivers & Detailed Description
Weakness
* High dependence on government authorities for grants:
Societies and non-governmental organizations (NGOs) providing
social services such as agriculture, forest & environment, women &
gender, children education etc. are highly dependent on grants and
subsidies from government authorities
* Modest scale of operation: SNJKSs business profile is constrained
by its moderate scale of operations in the intensely co-operative
society industry. SNJKSs moderate scale of operations will continue
limit its operating flexibility.
Strength
* Extensive industry experience of the promoters: The promoters
have an experience of over two decades in co-operative society.
This has given them an understanding of the dynamics of the market,
and enabled them to establish relationships with suppliers and
customers.
* Low reliance on external debt: The organization has largely
remained debt averse and has not relied on external funds apart
from contribution from members and grants from government
agencies.
Liquidity: Poor
Liquidity is expected to remain poor on account of high reliance on
grants from government to meet operational expenses. Cash accrual
are expected to be around INR1 lakh, however the organization does
not have any repayment obligations to meet. In addition, it will
act as cushion to the liquidity of the company. Current ratio stood
low at 1.18 times on March 31, 2019.
Outlook: Stable
CRISIL believe the organization will continue to benefit from the
extensive experience of its promoter, and established track record
of operations.
Rating Sensitivity Factor
Upward factor
* Sustained improvement in scale of operation by 25% on account of
additional funding in the existing programs
* Addition of new programs to existing portfolio of activities
which results in improved business risk profile.
Downward factor
* Large debt-funded capital expenditure leading to pressure on
financial risk profile
* Witnesses a substantial increase in its working capital
requirements marked by GCA days increasing by over 25%, due to
delay in release of funds from government agencies thus weakening
its liquidity & financial profile.
SNJKS is located in Lucknow (Uttar Pradesh). SNJKS is owned &
managed by Mr. Rajesh Singh. SNJKS is working as a civil society
organization by providing awareness regarding AIDS/Cancer, Women
awareness, Swach Bharat Abhiyan Programme. Also firm runs computer
training programme and food processing training and engaged in
project activities such as Old Age Home Programme.
SRI VENKATALAXMI: CRISIL Assigns B+ Rating to INR6cr LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Sri Venkatalaxmi Agro Foods (SVAF).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 6 CRISIL B+/Stable (Assigned)
The rating reflects SVAF's modest scale of operations and
below-average financial risk profile. These weaknesses are
partially offset by the extensive experience of the partners in the
rice mill industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Despite the firm's presence of over a
decade, scale of operation has remained modest, with revenue of
around INR31 crore in fiscal 2019. In the absence of any
significant capacity and business expansion plans over the medium
term, revenue growth should remain stable.
* Below-average financial risk profile: Financial risk profile is
below average, with a weak capital structure and average debt
protection metrics. Networth and gearing were INR1.71 crore and
2.75 times, respectively, as on March 31, 2019. Interest coverage
and net cash accrual to adjusted debt ratios were 1.86 times and
6%, respectively, in fiscal 2019.
Strength
* Extensive experience of the partners: Benefits from the partners'
experience of around a decade and the firm's strong market presence
should continue to support business risk profile.
Liquidity: Stretched
Liquidity is under pressure. Utilisation of fund-based limit of
INR4.00 crore averaged a high 95% in the 12 months through August
2019 owing to large working capital requirement. Additional
need-based limit granted during the peak season, however, mitigates
the risk arising from high utilisation of bank lines. Net cash
accrual - expected at INR0.5-0.7 crore per annum over the medium
term - should act as cushion to liquidity as there is no repayment
obligation.
Outlook: Stable
CRISIL believes SVAF will continue to benefit from its established
market presence and healthy track record of the management.
Rating sensitivity factors
Upward factor
* Improvement in scale of operations, with operating income of
INR40-45 crore in fiscal 2020
* Efficient working capital management and improvement in capital
structure
Downward factor
* Operating income falling below INR25 crore
* Larger-than-expected working capital requirement or debt-funded
capital expenditure deteriorating financial risk profile.
SVAF was set up as a partnership firm between Ms Kolli
Shanthakumari and her family in 2009. It mills and processes paddy
into rice, broken rice, and idli rawa.
SRI VISHNU: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Sri Vishnu Annamalaiyar Paper Mills Ltd
Flat No. H-208
Sreevatsa Residency Appartments
No. 10, GN Mills Post
Mettupalayam Road
Coimbatore, Tamil Nadu 641029
Insolvency Commencement Date: October 11, 2019
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: April 9, 2020
Insolvency professional: Nagalingam Muthiah
Interim Resolution
Professional: Nagalingam Muthiah
Room No. 708, 7th Floor
Shivalaya Buildings
A Block, Ethiraj Road
Egmore, Chennai 600008
E-mail: mnaga2050@gmail.com
Last date for
submission of claims: October 29, 2019
SUSTAINABLE AGRO-COMMERCIAL: Ind-Ra Lowers Bank Loan Rating to 'B'
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has undertaken the following
rating actions on Sustainable Agro-commercial Finance Ltd's (SAFL)
debt facilities:
-- INR700 mil. Subordinated debt due on June 30, 2021 ISIN
INE511S08015 9.00% coupon rate issued on March 31, 2015
downgraded; Off RWN with IND B/Negative rating; and
-- INR3.265 bil. Bank loans downgraded; Off RWN with IND
B/Negative rating.
KEY RATING DRIVERS
The downgrade and RWN resolution follows a similar rating action on
SAFL's parent, Jain Irrigation System Limited (JISL; 'IND D'). The
rating is constrained by the limited financial flexibility of the
parent, and hence, SAFL. The Negative Outlook reflects Ind Ra's
expectation that SAFL could face difficulty in raising funds to
refinance its existing loans, as it is exposed to contagion risk
post JISL's downgrade due to its operational linkages with the
parent and its marginal strategic importance to the same.
JISL directly holds 49% in SAFL and an additional 21% through
common promoters, and possesses the right to appoint the latter's
senior management. SAFL's board consists of nine members, of which
three are promoter directors as well as directors of JISL.
Furthermore, the chairperson of JISL's board is the chairperson of
SAFL's board.
The ratings reflect the SAFL's weak strategic importance to JISL.
SAFL was formed with the primary objective of supporting JISL's
sales by financing the latter's customers and gradually increasing
its share in JISL's sales. However, SAFL has been gradually
reducing its financing towards JISL's products, thereby reducing
its strategic importance to the parent. In terms of JISL's sales,
SAFL financed around 2.3% of JISL's customers in FY19, primarily in
the micro irrigation segment (FY18: 4.3%). In 1QFY20, JISL's
customers funded by SAFL formed 31% (FY19: 33%, FY18: 59%) of its
total assets under management (AUM); the company is planning to
reduce it further.
The rating also factors in the increasing delinquencies being
faced by SAFL (GNPAs; 180+ days past due ratio was higher at 3.33%
at end-1QFY20; FYE19: 2.96%; FYE18: 2.55%) due to draught
conditions in Maharashtra, which is its primary operating region
(1QFY20: 82% of the total AUM), shrinking loan book (1HFY20:
INR2,808.5 million; FY19: INR3,061.19 million; FY18: INR3,214.53
million) due to its focus on recoveries, and modest profitability
matrix (return on average equity FY19: 3.4%, FY18: 4.9%, FY17:
4.1%).
Liquidity Indicator- Stretched: At end-August 2019, SAFL's
contractual asset liability management statement did not have any
cumulative mismatches in the short term buckets (up to one year).
As of August 31, 2019, total debt repayment of around INR90 million
was scheduled for the next three months (until November 30, 2019).
Against this, SAFL had cash and unutilized bank lines of INR40
million. Furthermore, the company expects collections of about
INR557.2 million, which also supports liquidity. Some of these
expected collections are from lumpy loan accounts, and in case of
delinquencies, may not materialize.
SAFL increased its borrowings to eight banks (mostly public sector
banks) in FY19 from six banks in FY18; however, the funding
diversification remains modest. This along with the contagion risk
could lead to challenges for SAFL while rising fresh funding and
refinancing its existing liabilities. SAFL's existing funding maybe
subject to idiosyncratic actions undertaken by its lenders.
SAFL's leverage levels are modest, with debt/equity of 1.44x in
FY19 (FY18: 1.42x). Over the medium term, Ind-Ra expects the
leverage to remain at existing levels due to high geographic
concentration, increasing delinquencies and limited capital
infusion.
RATING SENSITIVITIES
Positive: A significant improvement in the credit profile of JISL
could lead to a positive rating action. A change in SAFL's board,
ownership and / or management that reflects weakening of linkages
with extant promoter group could also lead to a positive rating
action.
Negative: A negative rating action could also result from
deterioration of the liquidity profile, inability to refinance its
debt obligations in the absence of drop in its advances, increase
in delinquencies or material weakening of capital buffers.
COMPANY PROFILE
SAFL is a Mumbai-based non-banking finance company providing
agriculture and allied financial services. International Finance
Corporation Washington and Mandala Capital AG Limited hold 10% and
20% stake in SAFL, respectively.
SUYOG DEVELOPMENT: CRISIL Migrates B+ Rating From Not Cooperating
-----------------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI
guidelines, had migrated the rating of Suyog Development
Corporation Limited (SDCL) to 'CRISIL B+/Stable/Issuer not
cooperating'. CRISIL has withdrawn its rating on bank facility of
SDCL following a request from the company and on receipt of a 'no
dues certificate' from the banker. Consequently, CRISIL is
migrating the ratings on bank facilities of SDCL from 'CRISIL
B+/Stable/Issuer Not Cooperating to 'CRISIL B+/Stable'. The rating
action is in line with CRISIL's policy on withdrawal of bank loan
ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 24.75 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING';
Rating Withdrawn)
Term Loan 17.25 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING';
Rating Withdrawn)
SDCL, established in 2004, is a part of the Pune, Maharashtra-based
Suyog group, promoted by Mr Bharat Shah. The company undertakes
residential and commercial real estate development, primarily in
Pune. It is presently executing two projects, Suyog Center
(commercial complex) and Suyog Nisarg (residential-cum-commercial
complex).
UJJAWAL SAWERA: CRISIL Assigns B+ Rating to INR1cr New LT Loan
--------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Ujjawal Sawera Samiti (USS) and has assigned its
'CRISIL B+/Stable' rating to the bank facilities of USS .CRISIL had
suspended the ratings on 14th Dec, 2016 on account of
non-cooperation by USS with CRISIL efforts to undertake are view
of the ratings. USS has now shared the requisite information
enabling CRISIL to assign its ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 1 CRISIL B+/Stable (Assigned;
Bank Loan Facility Suspension Revoked)
The rating reflects its modest scale of operations, high dependence
on government authorities for tenders/contracts awarded and its
working capital intensive operations. These weakness are partially
offset by established network of kitchens and track record of
successful contract execution in the past.
Key Rating Drivers & Detailed Description
Weakness
*Modest scale of operations: USS is organised as a not-for-profit
society. The primary purpose of USS is to promote the mid-day meal
scheme and provide free nutritional food in government schools and
other such centers and is present mainly in tier 3 cities. Owing to
low-value meals in limited Tier-3 cities, USS's operations have
remained modest.
* High dependence on government authorities for tenders/contracts
awarded: The mid-day meal is a Government of India program
implemented to provide free nutritional lunches to primary classes
(I-IV) and secondary classes (Class VVIII). These are tender based
contracts awarded by various government authorities. Also the
societies and NGOs supplying food under the scheme need to have the
required food license, which is required to be renewed on a yearly
basis.
The work order is received from local district authority and is
also renewed annually. Thus USS remains exposed to the risk of not
securing ample tenders in a particular year or delay in getting the
licenses renewed.
* Working capital intensive operations: Gross current assets were
at 303.5-249.3 days over the three fiscals ended March 31, 2019.
Its intensive working capital management is reflected in its gross
current assets (GCA) of 303.5 days as on March 31, 2019.
Strength
* Established network of kitchens and track record of successful
contract execution in the past: The society being managed by its
Chairman, Mr. Mahesh Kumar, and secretary, Mr. Ravindra Pal, is
located in Meerut district and provides free meals under the
mid-day meal scheme and other government mandated schemes. The
society has an extensive network of kitchens spread across
districts to service the needs of nearby schools.
Liquidity: Poor
Current ratio are moderate at 1.14 times on March31, 2019 moderate
cash and bank balance of around Rs.1.1 Cr. as on March 31, 2019.
Outlook: Stable
CRISIL believe USS will continue to benefit from the extensive
experience of its promoter, and established relationships with
clients.
Rating Sensitivity Factor
Upward factor
* Increase in Revenue by 25%
* Significant improvement in Gross Current Assets.
Downward factor
* Decline in revenue by 25%
* Decrease in dependence over government for its operations.
USS is a Meerut based organisation operating as a not-for-profit
society and is managed by the Chairman, Mr. Mahesh Kumar and
Secretary, Mr. Ravindra Pal. The society provides free meals under
the mid-day meal scheme and other government mandated schemes. The
society is having license from Food Safety Authority of India.
UV EXPORTS PRIVATE: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: M/s. UV Exports Private Limited
Registered office:
JA-809, 8th Floor, DLF Tower-A
Jasola District Centre
New Delhi 110025
Insolvency Commencement Date: September 19, 2019
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: April 14, 2020
(180 days from commencement)
Insolvency professional: Mr. Rajesh Kumar Gupta
Interim Resolution
Professional: Mr. Rajesh Kumar Gupta
F-43, Dilshad Colony East
Delhi 110095
E-mail: rgadv21@gmail.com
- and -
G-22, Lower Ground Floor
Jangpura Extension
New Delhi 110014
E-mail: uvepl.cirp@gmail.com
Last date for
submission of claims: October 31, 2019
VINAYAKA CASHEW: CRISIL Reaffirms B+ Rating on INR12cr Loan
-----------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Vinayaka Cashew Company (VCC) at 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Packing Credit 12 CRISIL B+/Stable (Reaffirmed)
Proposed Short Term
Bank Loan Facility 4 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the firm's below-average financial
risk profile and large working capital requirement. These
weaknesses are partially offset by the extensive experience of its
promoter, and the firm's established market position, in processing
and exporting cashew kernels.
Key Rating Drivers & Detailed Description
Weakness:
* Below-average financial risk profile: Networth was modest and
total outside liabilities to tangible networth high at INR13.35
crore and 1.33 times, respectively, as on March 31, 2019. Debt
protection metrics were below-average, with net cash accrual to
total debt and interest coverage ratios at (0.84) times and 1.89
times, respectively, in fiscal 2019.
* Working capital-intensive operations: Gross current assets were
high at 226 days as on March 31, 2019, driven by large inventory
and receivables.
Strength:
* Extensive experience of the promoter: Benefits from the
promoter's three decade-long experience in the industry and healthy
relationships with customers and suppliers, should support
business.
Liquidity: Stretched
VCC has stretched liquidity as reflected in the fact that the
firm's expected cash accruals are expected to be at negative 10
crores due to withdrawals against no term loan repayment. Over the
medium term, firm is expected to generate accruals of around
INR0.50-0.75 crores per annum as against no annual repayment
obligations. Firm's month end fund based bank limit utilization
were highly utilized as on March2019. Firm's current ratio was at
about 1.2 times, as at March 31, 2019.
Outlook: Stable
CRISIL believes PCCPL will continue to benefit from the industry
experience of its promoter.
Rating Sensitivity Factor
Upward factor
*Company sustained revenue growth of 10 percent over the medium
term while ensuring an improvement in margins.
*No heavy withdrawals.
Downward factor
*If its business stagnant due to weak demand resulting in stretch
in working capital and rise in GCA days.
*Stretch in liquidity leading to reduction in accruals.
VCC, a partnership firm set up in Kerala in 2005, processes and
exports cashew kernels.
=================
I N D O N E S I A
=================
MNC INVESTAMA: S&P Alters Outlook to Negative & Affirms 'B-' ICR
----------------------------------------------------------------
On Oct. 24, 2019, S&P Global Ratings revised its outlook on
Indonesia-based diversified media company PT MNC Investama Tbk to
negative from stable. At the same time, S&P affirmed its 'B-'
long-term issuer credit rating on the company. S&P also affirmed
the 'B-' long-term issue rating on the senior secured notes issued
by the company.
S&P said, "We revised the outlook on PT MNC Investama Tbk. to
negative from stable because the company has not outlined a
credible and comprehensive strategy to repay or refinance its
guaranteed US$231 million senior secured notes due on May 11,
2021.
"In our view, MNC Investama has limited flexibility to find
alternative funding sources to repay or refinance the notes, given
that they mature in 18 months. Barring asset sales, MNC Investama
will be reliant on debt capital markets, and hence on investor
appetite and yield conditions, to refinance the notes. As a holding
company with limited operations, MNC Investama has limited banking
relationships. We also believe the restructuring of the company's
2013 notes within one month of its original due date in 2018 has
impaired its credit standing in the market and reduced investor
confidence in the sustainability of its capital structure."
MNC Investama is also unlikely to internally generate cash flows
that could materially reduce its refinancing requirements by 2021.
This is because of residual capital spending at its operating
subsidiaries, a leveraged consolidated capital structure, and
reduced dividend payments by operating subsidiaries to service debt
at the holding company level.
MNC Investama has listed assets it could divest to fund debt
repayment, including shares in real estate developer PT MNC Land
Tbk. and financial services provider PT MNC Kapital Indonesia Tbk.
S&P said, "Yet, we view management's willingness to execute those
sales in a timely manner and to a level that would be sufficient to
reduce its debt load substantially as uncertain. The company did
not divest these assets to meet repayment of the 2013 notes, opting
instead for a restructuring transaction that we viewed as a
distressed exchange. Its coal mining operations are unlisted and
poor current coal pricing will complicate a monetization of those
assets."
S&P said, "We believe ongoing interest payments on the notes of
about Indonesian rupiah (IDR) 150 billion (or US$10.4 million)
semiannually will be funded by a combination of cash on hand,
dividends from operating companies, small stake disposals in listed
assets (as MNC Investama did to service interest on its 2013
notes), or one-off upstreaming of funds from subsidiaries. We
expect ordinary dividends from MNC Investama's subsidiary PT Media
Nusantara Citra Tbk. (MNC Tbk.) to remain low at about IDR210
billion, given MNC Tbk.'s focus on its own debt maturities. MNC
Investama, as the ultimate parent, could receive about IDR70
billion of those dividends, based on its effective shareholdings in
MNC Tbk."
MNC Investama's refinancing risk on its sole US$231 million notes
is more pronounced than that on debt held at its operating
subsidiaries. As of June 30, 2019, MNC Investama and its main
nonbank operating companies faced debt repayments of approximately
IDR14.3 trillion (or US$1 billion). The company has limited
operating activities or assets of its own that it can use as a
source of repayment for the notes.
The negative outlook reflects growing refinancing risk at MNC
Investama, and the prospect of a downgrade within the next six
months if refinancing plans do not materialize for the company's
US$231 million senior secured notes due in May 2021.
S&P said, "We could lower the rating by one or more notches if MNC
Investama does not demonstrate more concrete actions toward
refinancing. We may also lower the rating if the company undertakes
capital market transactions related to its 2018 notes that we
assess as constituting a distressed exchange, including capital
market purchases below par."
A positive rating action would be contingent on a sustainable
reduction in refinancing risk and a substantial lengthening of MNC
Investama's debt maturity profile.
=========
J A P A N
=========
SOFTBANK GROUP: Moody's Affirms Ba1 CFR, Outlook Stable
-------------------------------------------------------
Moody's Japan K.K. affirmed SoftBank Group Corp.'s corporate family
rating at Ba1.
The rating outlook remains stable.
This rating action follows SBG's announcement on October 23 that it
will provide significant new financing to The We Company--one of
its investee companies and the parent entity of WeWork Companies,
Inc.
RATINGS RATIONALE
"While this is a significant investment, SBG can comfortably
accommodate it within its large asset portfolio," says Motoki
Yanase, a Moody's Vice President and Senior Credit Officer.
Under the agreement, SBG will provide a $9.6 billion financing
package that includes up to $5.1 billion of credit facilities and
$4.5 billion of equity to The We Company.
Moody's rating affirmation is based on estimates that SBG's pro
forma investment in The We Company would account for around 5% of
its roughly $240 billion portfolio value as of June 2019, so that
its Market Value-Based Leverage would remain below 30%, within the
range assumed for SBG's Ba1 rating. Furthermore, SBG maintains
ample liquidity for the more immediate payments under the package
as well as for its own near-term debt maturities, in accordance
with its financial policy.
The stable outlook takes into account Moody's expectation for a
minor decline in financial flexibility from the incremental debt
that the SBG holding company may issue as part of the package. Many
of the terms of the financing package have yet to be finalized, and
the extent to which the commitments will be drawn is uncertain.
SBG faces some execution risk in turning around WeWork, a troubled
co-working space provider that is contending with liquidity issues
amid steep losses associated with an accelerated build-out of desk
space. Moody's expects SBG's financing package will provide
sufficient liquidity to cover WeWork's cash requirements at least
over the next 12 months.
Establishing adequate corporate governance in the management
transition at WeWork will be a significant consideration in the
success of the SBG-led turnaround. Corporate governance has been a
key issue in WeWork's failed listing, and SBG will be influential
in restructuring the management and the company toward a more
sustainable state.
Moody's would consider a downward rating action if 1) there is a
significant deterioration in the credit quality of SBG's investee
companies, including difficulty in turning around WeWork, so that
the holding company is required to provide further financial
support; 2) cash held at the holding company level diminishes, such
that its cash and committed credit facilities can no longer cover
two years of debt maturities; and 3) the holding company's credit
metrics deteriorate, for example, interest coverage sustained below
1.0x, or if its market-value based leverage above 35%.
A ratings upgrade is unlikely at least during the next 12-18
months, but is possible longer term if SBG's holding company
establishes a favorable track record as an investment holding
company, diversifies its assets through regular asset recycling,
and improves its interest coverage, for example, the holding
company's interest coverage exceeding 2.0x.
The principal methodology used in these ratings was Investment
Holding Companies and Conglomerates (Japanese) published in August
2018.
Headquartered in Tokyo, SoftBank Group Corp. is a Japanese holding
company, with subsidiaries engaged in various businesses, including
telecommunications, internet and other technology businesses.
The following ratings are affected by the rating actions:
- Corporate Family Rating, affirmed at Ba1
- Senior Unsecured Rating, affirmed at Ba1
- Subordinate, affirmed at Ba3
- Outlook: maintained at stable
=================
S I N G A P O R E
=================
CHINA FISHERY: MAS, CAD End 4-Year Probe with 'No Further Action'
-----------------------------------------------------------------
Fiona Lam at The Business Times reports that the Monetary Authority
of Singapore (MAS) and the Commercial Affairs Department (CAD) have
concluded a four-year investigation into beleaguered Pacific Andes
Resources Development (PARD) and its indirectly owned subsidiary,
China Fishery Group.
Both mainboard-listed firms said in filings on Oct. 25 that there
will not be any further action taken with respect to them, as well
as Pacific Andes International Holdings Limited (PAIHL), the
holding company of Hong Kong-listed Pacific Andes International
Holdings, BT relates.
The government agencies had been investigating the companies for an
offence under the Securities and Futures Act, the report notes.
The probe began in August 2015, BT recalls. MAS and CAD required
China Fishery and PARD to provide information and documents for the
period from Oct 1, 2011 to Aug 20, 2015, relating to both companies
and their subsidiaries, as well as their dealings with certain
third parties including the group's trading party. Those third
parties were not interested persons.
The authorities had also requested information for the same period
relating to PAIHL, the report says.
About China Fishery Group
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group
estimated its assets at $500 million to $1 billion and debt at $10
million to $50 million.
The cases are assigned to Judge James L. Garrity Jr.
Weil, Gotshal & Manges LLP has been tapped to serve as lead
bankruptcy counsel for China Fishery and its affiliates other than
CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal
replaces Meyer, Suozzi, English & Klein, P.C., the law firm
initially hired by the Debtors. The Debtors have also tapped
Klestadt Winters Jureller Southard & Stevens, LLP, as conflict
counsel; Goldin Associates, LLC, as financial advisor; RSR
Consulting LLC as restructuring consultant; and Epiq Bankruptcy
Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as
special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11
trustee for CFG Peru Investments Pte. Limited (Singapore), one of
the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as
the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as
special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves
as special litigation counsel.
YUUZOO NETWORKS: Loses Harbin Project Over Inability to Raise Funds
-------------------------------------------------------------------
Lee Meixian at The Business Times reports that YuuZoo Networks
Group (YNG) on Oct. 24 said that the contract it had signed for the
Nordic Sport Town project in Harbin, China has been lost as a
result of YuuZoo's inability to raise funds, due to the continued
share trading suspension and the misuse of company funds by a
former employee.
In December 2017, YuuZoo announced that it had signed a framework
agreement with Chinese state-owned Harbin Water Investment Group,
which manages and controls all water-linked land in Harbin, China,
according to the report.
BT relates that under the framework agreement, YuuZoo agreed to
develop an 85 hectare-large river-fronting area in Harbin.
In May 2018, YuuZoo signed an agreement for an investment of US$5
million into a fully-owned subsidiary to be set up to manage the
project in Harbin, which the agreement valued at US$300 million.
In a follow-up agreement signed in June 2018 between YuuZoo and
Harbin Water Investment Group, further details of the development
project were agreed upon, BT relates.
On June 11, 2019, YuuZoo announced that it had agreed with the
mayor of Harbin on a definitive timetable for the project.
It further announced that the money which the Inland Revenue
Authority of Singapore (Iras) had seized last year has been
returned after being held for more than one year, and that the
funds would be used to pay salaries and expenses related to the
project in Harbin, BT adds.
"Most of the funds returned by Iras were however illegally diverted
and used for other purposes by a former employee of YNG, which
meant the scheduled payments in China could not be made," it said
on Oct. 24, BT relays.
"The Chinese partner had earlier expressed doubts about the ability
of YuuZoo to live up to its commitments considering the continued
share trading suspension imposed by SGX RegCo.
"When the illegal use of the funds returned by Iras prevented the
company from making salary payments to its staff in China, the
Chinese partner cancelled the agreement that it had signed with
YNG."
Trading in YNG shares has been suspended since March 2018, the
report notes.
YuuZoo Networks Group Corporation -- http://www.yuuzoo.com/--
an investment holding company, engages in social networking,
e-commerce, payments, and gaming businesses in Singapore and
internationally. It operates through Network Development and
Franchise Sales; E-Commerce; and Logistic segments. The Network
Development and Franchise Sales segment is primarily involved in
building mobile-optimized device agnostic that targets social
e-commerce networks for businesses and consumers. This segment also
sells franchise and marketing rights. The E-Commerce segment
provides a range of services for online mobile transactions,
including payment processing, advertising, mobile social games, and
other online transactions.
*********
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-
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Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
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Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9482.
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