/raid1/www/Hosts/bankrupt/TCRAP_Public/200605.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
Friday, June 5, 2020, Vol. 23, No. 113
Headlines
A U S T R A L I A
BBY LTD: ASIC Further Suspends the AFS Licence
COOL BREEZE: Dimmeys Owner Sells Land Holding in Brunswick
D.O.M.E. ASSOCIATION: Second Creditors' Meeting Set for June 12
DIGITAL INCUBATOR: Second Creditors' Meeting Set for June 12
INCITEC PIVOT: Egan-Jones Lowers Senior Unsecured Ratings to BB+
LOCKYER QUARRY: Second Creditors' Meeting Set for June 11
MAYFAIR 101: Fund's Prize Asset Under a Cloud, Inquiry Reveals
SPEEDCAST COMMUNICATIONS: S&P Assigns 'BB' Rating on DIP Term Loan
VIRGIN AUSTRALIA: Richard Branson Pushes for Ownership Stake
C H I N A
REMARK HOLDINGS: Incurs $25.6 Million Net Loss in 2019
I N D I A
AJINTHA INDUSTRIES: CRISIL Migrates B+ Rating to Not Cooperating
ARYACON CONTRACTORS: CRISIL Reaffirms B+ Rating on INR6cr Loan
AXWELL GRANITO: CRISIL Migrates B+ Debt Rating to Not Cooperating
BAIT LOGITECH: CRISIL Migrates 'B-' Rating from Not Cooperating
CAUVERY TIMBER: CRISIL Migrates D Debt Ratings to Not Cooperating
CELEBRITY FASHIONS: CRISIL Moves B+ Debt Ratings to Not Coop.
CHOPRA ALLOYS: CRISIL Assigns B+ Rating to INR14cr Loans
CHOPRA HOTEL: CRISIL Migrates D Debt Rating to Not Cooperating
CONCORDE DESIGNS: CRISIL Migrates D Ratings to Not Cooperating
DEVA INTERIORS: CRISIL Moves B- Debt Rating to Not Cooperating
DHOOT DAL: CRISIL Migrates 'B' Debt Rating to Not Cooperating
DIAMONDSTAR: CRISIL Migrates D Debt Ratings to Not Cooperating
DRJ IMPEX: CRISIL Moves B+ Debt Ratings to Not Cooperating
DYNAMIC MEGA: CRISIL Migrates B+ Debt Rating to Not Cooperating
ENKAY FOAM: CRISIL Migrates 'B' Debt Rating to Not Cooperating
ESHWARNATH CONSTRUCTIONS: CRISIL Moves 'D' Ratings to Not Coop.
G. B. AGRO: CRISIL Migrates B+ Debt Ratings to Not Cooperating
GIRIN DEKA: CRISIL Migrates 'C' Debt Rating to Not Cooperating
HARITHA FERTILISERS: CRISIL Moves 'D' Rating to Not Cooperating
IL&FS GROUP: Rejigs Team to Boost Asset Sale
JAI KARNI: CRISIL Reaffirms B+ Rating on INR8cr Cash Loan
KRISH AGRO: CRISIL Assigns B+ Rating to INR12cr Cash Loan
LOKESH INFRAPROJECT: CRISIL Assigns B- Rating to INR10cr Loan
MANJUNATHA INDUSTRIES: CRISIL Moves B Rating to Not Cooperating
MONOTYPE INDIA: Insolvency Resolution Process Case Summary
MUNJANI BROTHERS: CRISIL Migrates 'D' Rating to Not Cooperating
N.S. VAISHNO DEVI: Insolvency Resolution Process Case Summary
NATH SOLVENT: Insolvency Resolution Process Case Summary
P. KALIKURICHI: CRISIL Assigns B+ Rating to INR5cr Cash Loan
POLYGOLD PRE-CURED: Insolvency Resolution Process Case Summary
POLYMECHPLAST MACHINES: CRISIL Cuts Rating on INR5cr Loan to B+
PP TELECELL MARKETING: Insolvency Resolution Process Case Summary
RKB GLOBAL: CRISIL Migrates 'B' Debt Rating to Not Cooperating
SELVAKUMAR MILLS: CRISIL Revokes Suspension on B+ Debt Ratings
SHALIMAR WORKS: CRISIL Reaffirms 'C' Rating on INR22.55cr Loan
SHRIAMAN AGROVET: CRISIL Reaffirms B+ Rating on INR5.40cr Loan
SHRISHTI ELECTROMECH: CRISIL Moves B+ Debt Ratings to Not Coop.
VISHWA SAMUDRA: Insolvency Resolution Process Case Summary
J A P A N
KOBE STEEL: Egan-Jones Lowers Senior Unsecured Ratings to B+
P A K I S T A N
PAKISTAN WATER: S&P Assigns 'B-' ICR, Outlook Stable
S I N G A P O R E
HATTEN LAND: Bondholders Agree to Defer Repayment For Second Time
HYFLUX LTD: Subsidiary's Ex-HR Manager Charged with Corruption
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A U S T R A L I A
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BBY LTD: ASIC Further Suspends the AFS Licence
----------------------------------------------
The Australian Securities and Investments Commission has extended
the suspension of the Australian financial services (AFS) licence
held by BBY Limited (BBY) until June 30, 2021, effective May 27,
2020.
The terms of the suspension allow the BBY AFS licence to continue
in effect for the following purposes only:
* to ensure that clients of BBY continue to have access to an
external dispute resolution scheme;
* to ensure that clients of BBY continue to have access to the
National Guarantee Fund;
* to ensure that the receivers and liquidators have the legal
authority to transfer a client's "holder identification
number" to another market participant with instructions
from the client or to convert a licensee sponsored
holding to an issuer sponsored holding in accordance
with the ASX Settlement Operating Rules; and
* to ensure BBY continues to be required to have arrangements
for compensating retail clients for loss or damages suffered
as a result of breaches of the Corporations Act by the
companies or their representatives.
On May 28, 2015, ASIC suspended the AFS licence held by BBY for a
period of three years.
This followed the appointment of Stephen Vaughan and Ian Hall as
joint administrators to BBY on May 17, 2015. Steven Parbery and
Brett Lord were appointed receivers and managers of BBY on
May 18, 2015. ASIC notes that from October 29, 2019 Rahul Goyal and
Scott Langdon of KordaMentha are the appointed receivers and
managers of BBY.
On May 27, 2018, ASIC decided to extend the suspension for a
further 12 months until May 28, 2019.
On May 27, 2019, ASIC decided to extend the suspension until
May 31, 2020.
Under the Corporations Act, ASIC has the power to suspend or cancel
an AFS licence, without holding a hearing, where the AFS licence is
held by a body corporate which is placed under external
administration.
BBY has a right to seek a review of ASIC's decision at the
Administrative Appeals Tribunal.
COOL BREEZE: Dimmeys Owner Sells Land Holding in Brunswick
----------------------------------------------------------
Nicole Lindsay at The Sydney Morning Herald reports that the
Zappelli family, owners of the under-liquidation Dimmeys discount
retail chain, is selling a 3885 square metre land holding in
Brunswick worth around AUD15 million.
The move comes as Doug Zappelli buys Dimmeys for the third time in
25 years, SMH says.
According to the report, the swag of Brunswick warehouses and a
handful of tired single-fronted weatherboards make up the offering
at 8-24 Peveril Street and 17-19 Cozens Street, opposite the
Brunswick Tram Depot and close to Moreland Railway Station.
Agents Killen Thomas has the off-market listing but rebuffed any
questions, SMH says.
SMH relates that Mr. Zappelli told Capital Gain he wouldn't sell
for less than AUD15 million and any deal would help get him out of
debt.
Mr. Zappelli said the Covid-19 crisis had worsened Dimmeys position
as all cash flow dried up.
He hopes to reopen the Victorian shops next week but will lease out
the interstate properties, the report says.
Mr. Zappelli doesn't technically own the business now. According
to documents lodged with the corporate regulator, he transferred
his stake in Cool Breeze Clothing to his children Luke and Nicole
Zapelli in 2013-14.
That's when Dimmeys last went bust, the report notes. Dimmeys
collapsed in 2013 after Mr Zappelli, Dimmeys and the family's
Starite Distributors were hit with a AUD3 million fine over the
sale of faulty and dangerous items. Mr Zappelli was also banned
from directorships for six years.
The biggest creditor in the current Cool Breeze Clothing collapse
is Starite Distributors which is owed AUD6.68 million, SMH
discloses citing the liquidator's report.
SMH says the Zappellis have made plenty from Dimmeys over the
years, selling the flagship Richmond store to developers in 2008
for AUD16 million. The Goulburn store was sold for AUD5.1 million
earlier this month.
Dimmeys holding company Cool Breeze Clothing was put into voluntary
administration last November after 166 years of trading. Last
month, it went into liquidation with Hall Chadwick.
D.O.M.E. ASSOCIATION: Second Creditors' Meeting Set for June 12
---------------------------------------------------------------
A second meeting of creditors in the proceedings of D.O.M.E
Association Inc has been set for June 12, 2020, at 2:30 p.m. via a
teleconference facility.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 11, 2020, at 4:00 p.m.
Domenico Alessandro Calabretta and Grahame Ward of Mackay Goodwin
were appointed as administrators of D.O.M.E Association on May 7,
2020.
DIGITAL INCUBATOR: Second Creditors' Meeting Set for June 12
------------------------------------------------------------
A second meeting of creditors in the proceedings of The Digital
Incubator Pty Ltd has been set for June 12, 2020, at 11:00 a.m. at
Jirsch Sutherland, Level 27, at 259 George Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 11, 2020, at 5:00 p.m.
Daniel Jean Civil of Jirsch Sutherland was appointed as
administrator of Digital Incubator on May 11, 2020.
INCITEC PIVOT: Egan-Jones Lowers Senior Unsecured Ratings to BB+
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 29, 2020, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Incitec Pivot Limited to BB+ from BBB-.
Headquartered in Southbank, Australia, Incitec Pivot Limited is a
diversified industrial chemicals company that manufactures and
distributes industrial explosives, industrial chemicals, and
fertilizers.
LOCKYER QUARRY: Second Creditors' Meeting Set for June 11
---------------------------------------------------------
A second meeting of creditors in the proceedings of Lockyer Quarry
Pty. Ltd has been set for June 11, 2020, at 2:00 p.m. at the
offices of Rodgers Reidy, Level 9, River Quarter, at 46 Edward
Street, in Brisbane, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 9, 2020, at 2:00 p.m.
David James Hambleton and James Marc Imray of Rodgers Reidy were
appointed as administrators of Lockyer Quarry on March 3, 2020.
MAYFAIR 101: Fund's Prize Asset Under a Cloud, Inquiry Reveals
--------------------------------------------------------------
Jonathan Shapiro and Liam Walsh at Australian Financial Review
report that receivers have raised the alarm about the transfer of a
key software asset from one part of the under-fire Mayfair 101
investment group to another -- on the promise of repayment in 15
years.
AFR relates that the transfer was uncovered as part of a receiver
inquiry involving Mayfair 101's currently frozen IPO Wealth fund.
Companies associated with the fund, into which investors have
poured in AUD82 million, might be put into liquidation, the Supreme
Court of Victoria heard on May 29, AFR says.
"It must be very, very distressing for investors," AFR quotes
Justice Ross Robson as saying. "They're very, very large sums of
money."
According to AFR, the court hearing was held to determine the next
steps in the receivership process and Justice Robson questioned
whether a liquidator should be appointed.
AFR relates that an accountant representing an investor also raised
concerns whether the fund itself was a "Ponzi scheme" and the
trustee, Vasco, had been "asleep at the wheel", the court heard.
Vasco's lawyer, Carrie Rome-Sievers, rejected any suggestion of a
lack of diligence by the trustee, the report says.
Vasco oversees the fund, which has lent AUD77 million to another
Mayfair 101 entity called IPO Wealth Holdings.
IPO Wealth Holdings, in turn, has made investments in companies
including Indian software accounting start-up Accloud and
restaurant payments app Liven.
It's all part of the Mayfair 101 group, which made a splash with
the purchase of Dunk Island last year and has raised more than
AUD210 million in total, including its Mayfair Platinum products,
according to the report.
AFR notes that Mayfair 101, founded by James Mawhinney, 36, has
already been battling legal action from the Australian Securities
and Investments Commission over its advertising.
But problems deepened when IPO Wealth Holdings this month missed
repayments on its loan of AUD3 million back to its sister fund.
AFR relates that the fund's trustees had receivers appointed to IPO
Wealth Holdings and 16 special purpose investment entities.
The receivers, Hamish MacKinnon and Nicholas Giasoumi of Dye & Co,
submitted to the court results of a preliminary investigation into
the IPO Wealth business.
Among the most startling revelations was that the main investment
-- a stake in Indian accounting software firm Accloud -- had
actually been transferred from a direct holding to another entity
in the Mayfair 101 group dated January 2019, according to AFR. This
was for more than EUR12 million (AUD20 million), to be paid back in
15 years.
The matter has been adjourned to June 24 to allow the receiver more
time to investigate, and to allow Mr. Mawhinney to respond to the
eventual findings, the report adds.
Mayfair Wealth Partners Pty Ltd, trading as Mayfair Platinum, and
Online Investments Pty Ltd, trading as Mayfair 101, promote two
debenture products to wholesale investors (Mayfair debenture
products):
* M+ Fixed Income Notes, which are unsecured promissory notes
issued by M101 Holdings Pty Ltd; and
* M Core Fixed Income Notes, which are secured promissory
notes issued by M101 Nominees Pty Ltd.
SPEEDCAST COMMUNICATIONS: S&P Assigns 'BB' Rating on DIP Term Loan
------------------------------------------------------------------
On June 3, 2020, S&P Global Ratings assigned its point-in-time 'BB'
issue-level rating to Speedcast Communications Inc.'s US$90 million
first-out senior secured, superpriority debtor-in-possession (DIP)
term loan. S&P also assigned a 'BB-' issue-level rating to the
company's US$90 million, second-out superpriority roll-up DIP term
loan.
Speedcast Communications Inc. is a satellite service provider
currently operating under the protection of Chapter 11 of the U.S.
Bankruptcy Code, following a filing on April 23, 2020. S&P rates
Speedcast Communications Inc. and its parent Speedcast
International Ltd. (collectively Speedcast), which guarantees the
DIP facility, on a consolidated basis.
The DIP facility consists of a US$90 million first-out new money
term loan, and a US$90 million second-out roll-up loan, which
refinanced a like-amount of Speedcast's prepetition first-lien
debt.
S&P's 'BB' issue-level rating on Speedcast's first-out US$90
million new money term loan and 'BB-' issue rating on the
second-out US$90 million roll-up term loan reflect itsr view of the
credit risk borne by the DIP lenders.
This risk includes the:
-- company's ability to meet its financial commitments during
bankruptcy through our debtor credit profile (DCP) assessment,
prospects for full repayment through reorganization and emergence
from Chapter 11 via our capacity for repayment at emergence (CRE)
assessment, and
-- potential for full repayment in a liquidation scenario via our
additional protection in a liquidation scenario (APLS) assessment.
S&P said, "Our 'b+' DCP reflects our view of Speedcast's weak
business risk profile and aggressive financial risk profile.The
issue ratings also consider the potential recovery prospects on the
DIP loans, which are reflected in our CRE and APLS assessments.
"Our CRE assessment of favorable coverage of the DIP debt in an
emergence scenario indicates coverage of between 150% and 250%.
This emergence scenario provides an uplift of one notch over the
DCP, resulting in a 'BB-' issue-level rating. We assess repayment
prospects for purposes of the CRE assessment on the basis that all
of the DIP facilities are required to be repaid in full in cash at
emergence, consistent with superpriority status under the U.S.
Bankruptcy Code.
"Our APLS assessment indicates greater than 125% total value
coverage in a liquidation scenario for the new money term loan
tranche, resulting in an additional one-notch uplift. However, the
roll-up loan has less than 125% total value coverage after the
value waterfall, and therefore, there is no APLS uplift for this
tranche.
"We attribute Speedcast's voluntary bankruptcy filing to liquidity
pressures. The stresses are in part due to integration difficulties
stemming from the Globecomm acquisition, the company's aggressive
growth strategy, and challenging end-markets that have been heavily
affected by COVID-19 disruptions. Nevertheless, the bankruptcy
filing does not materially change our view of the business." In
S&P's view, Speedcast's weak business risk profile reflects the
following:
-- Moderately weaker EBITDA margins for the year ending Dec. 31,
2020, compared with that in recent periods due to high fixed costs
in a challenging operating environment.
-- Leading position in the niche remote satellite service market
and capital-light model, albeit with a small scale relative to the
broader telecommunications industry.
-- Modest barriers to entry. Communications is mission-critical
for many of Speedcast's customers and switching costs limit
competition. That said, we do not view these barriers as
insurmountable, as indicated by the contestability of key
contracts.
-- Some revenue visibility from multiyear contracts and reasonable
geographic and customer industry diversity.
From a financial risk perspective, our DCP reflects a substantially
reduced debt burden in bankruptcy due to the stay on prepetition
debt (US$679.1 million at the time of filing). In addition, the DCP
reflects the relatively moderate, funded DIP debt (US$180 million,
which includes US$90 million from the roll-up of prepetition debt).
S&P said, "We note the company has no requirement to pay adequate
protection payments in the form of interest to the prepetition term
lenders. Even so, we are mindful about the level of DIP debt
relative to the company's expected EBITDA over the next 12 months,
given a global recession due to the COVID-19 pandemic affecting key
maritime and energy end-markets."
In addition to reported debt, S&P's leverage calculation during the
bankruptcy period includes operating and finance lease liabilities
that it expects to remain in place throughout the bankruptcy
process. The present value of operating leases adds about US$44
million to reported debt.
VIRGIN AUSTRALIA: Richard Branson Pushes for Ownership Stake
------------------------------------------------------------
Patrick Hatch at The Sydney Morning Herald reports that Virgin
Australia's billionaire co-founder Richard Branson wants to invest
up to AUD100 million in the collapsed airline to maintain a
minority ownership stake alongside one of two private equity
bidders when it emerges from administration.
SMH says Mr. Branson's Virgin Group owned 10 per cent of Virgin
Australia when the coronavirus pandemic grounded its fleet and
forced it into voluntary administration in April owing AUD6.8
billion.
According to SMH, the Virgin Group has signalled it wanted to "play
a role" in the airline's future but it has not been clear if that
would include owning some of the carrier, or simply maintaining the
Virgin brand and the associated licensing fees, which were around
AUD15 million a year.
With the race to buy the airline this week narrowing down to two
contenders -- Cyrus Capital Partners and Bain Capital -- sources
close to Virgin Group and the sale process confirmed Mr. Branson's
investment vehicle has told both bidders it wants to invest
alongside them and own a stake in the carrier, SMH relays.
SMH relates that Mr. Branson's group has flagged it would be
willing to inject AUD50 million to AUD100 million into the new
company, according to two sources, giving it a stake of around 10
per cent to cement its ongoing involvement, secure a seat on the
board and give it a level of influence over the airline's strategy,
the sources said.
According to the report, the British entrepreneur -- who launched
the Australian airline as Virgin Blue two decades ago -- has been
selling shares in his space-travel firm Virgin Galactic to support
his other businesses that have been devastated by COVID-19,
offloading $US300 million (AUD430 million) worth last month and
flagging this week he could sell another $US200 million.
While there were 20 diverse bidders circling Virgin at one point,
the two finalists both have existing relationships with Mr.
Branson, the report notes.
SMH says Cyrus backed Mr Branson in 2005 to establish Virgin
America, which they sold to Alaska Air for $US2.6 billion in 2015.
Cyrus and Virgin Atlantic (which is 51 per cent-owned by Mr
Branson) bought the British airline Flybe in February last year
with a plan to rebrand it Virgin Connect. However, the airline went
into administration in March this year.
Meanwhile the Virgin Group and Bain Capital are joint venture
partners in the cruise liner business Virgin Voyages, which was
supposed to launch earlier this year but has been mothballed due to
the coronavirus pandemic.
A spokesman for the Virgin Group declined to comment on its
willingness to invest in the airline, but reaffirmed it would
continue to work with administrators Deloitte, bidders and the
management team "in a sustainable way for the benefit of customers,
employees and communities," SMH adds.
"We have been greatly heartened by the amazing public support for
Virgin Australia and we are pleased that the process being run by
the administrator has attracted such a high-quality group of
bidders committed to the revival of the airline," he said.
Bain and Cyrus have until June 22 to make binding offers for Virgin
and Deloitte intends to chose one of those bids by the end of June
to then present for a creditors vote in mid-August, SMH says.
About Virgin Australia
Brisbane, Queensland-based Virgin Australia is Australia's
second-largest airline. It commenced services in 2000 as Virgin
Blue, wholly owned by the Virgin Group.
As reported in the Troubled Company Reporter-Asia Pacific on April
22, 2020, Bloomberg News related that Virgin Australia Holdings
Ltd. became Asia's first airline to fall to the coronavirus after
the outbreak deprived the debt-burdened company of almost all
income. Administrators at Deloitte, who have taken control of the
Brisbane-based carrier, aim to restructure the business and find
new owners within months. More than 10 parties have expressed an
interest, Deloitte related on April 21.
Virgin Australia, which has furloughed 80% of its 10,000 workers,
will continue to operate some flights for essential workers,
freight and the repatriation of Australians, Bloomberg said. The
airline's frequent flyer program is a separate company and is not
in administration.
Richard John Hughes, John Greig, Vaughan Strawbridge and Sal Algeri
of Deloitte were appointed as administrators of Virgin Australia,
et al., on April 20, 2020.
The company owes AUD6.8 billion to lenders, bondholders, aircraft
lessors, trade creditors and employees.
On April 29, 2020, the company and certain affiliates filed
petitions pursuant to Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York.
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C H I N A
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REMARK HOLDINGS: Incurs $25.6 Million Net Loss in 2019
------------------------------------------------------
Remark Holdings, Inc., reported a net loss of $25.61 million for
the year ended Dec. 31, 2019, compared to a net loss of $21.56
million for the year ended Dec. 31, 2018.
Revenue for fiscal 2019 was $5.0 million, down from $10.1 million
during fiscal 2018. Regulatory changes in China's financial
services market caused the company to discontinue its FinTech
services during 2018, which was responsible for $3.7 million of the
revenue decline. Remark's revenue from AI-based solutions fell by
$0.7 million during the year as a result of factors such as the
celebrations related to the 70th anniversary of the founding of the
People's Republic of China, the ongoing US-China trade war which
caused disruption in supply chain management, extended project
testing and customization work on larger projects and, finally,
working capital constraints. Additionally, the company's
advertising and other revenue decreased $0.6 million due to the
sale of banks.com and the company's other personal financial
services Internet domains in 2018, the effects of which were
partially offset by a modest increase in e-commerce sales.
"We spent the last three months of 2019 repositioning our business
for success in 2020 by streamlining costs and focusing on recurring
revenue generating lines of business," said Kai-Shing Tao, chairman
and chief executive officer of Remark Holdings. "Winning major
contracts from the likes of China Mobile has positioned us for
substantial revenue growth in 2020," Mr. Tao added. "We are also
announcing that, after fortifying our cash position, we paid in
full all our outstanding obligations to MGG under our financing
agreement with them, which significantly deleverages our balance
sheet while simultaneously putting us in position to fulfill our
existing contract backlog and invest in expanding our AI product
offerings like thermal imaging and scanning."
As of Dec. 31, 2019, the Company had $14.83 million in total
assets, $42.56 million in total liabilities, and a total
stockholders' deficit of $27.73 million.
Total cost and expense for 2019 was $27.8 million, a decrease from
the $54.6 million reported in 2018. The decrease is primarily
attributable to a $12.4 million decrease in stock-based
compensation expense due the 2018 fiscal year including a large
grant to the company's CEO, while no such large grant occurred in
2019. A decrease in cost of sales as a result of the
discontinuation of FinTech services also significantly contributed
to the cost and expense decrease, while declines in payroll and
related cost as a result of headcount reductions also contributed
to the decrease. The cost and expense decreases were partially
offset by an increase of approximately $2.1 million in the bad debt
allowance resulting from an increased risk that certain trade
receivables may not be fully collected, and a $0.3 million increase
in impairment charges.
Operating loss declined to $22.8 million in fiscal 2019 from $44.5
million in fiscal 2018 commensurate with the cost and expense
declines.
Net loss from continuing operations totaled $23.0 million or $0.52
per diluted share in the fiscal year ended Dec. 31, 2019, compared
to a net loss from continuing operations of $18.6 million, or $0.48
per diluted share in the fiscal year ended Dec. 31, 2018.
At Dec. 31, 2019, the cash and cash equivalents balance was $0.3
million, compared to a cash position of $1.4 million at Dec. 31,
2018. Cash declined primarily due to timing of payments related to
elements of working capital, offsetting proceeds from common stock
issuances.
Cherry Bekaert LLP, in Atlanta, Georgia, the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated May 29, 2020, citing that the Company has suffered recurring
losses from operations and negative cash flows from operating
activities and has a negative working capital and a stockholders'
deficit that raise substantial doubt about its ability to continue
as a going concern.
Subsequent Event
Earlier on May 28, 2020, Remark paid MGG approximately $12.7
million, representing full settlement of all loan principal,
accrued but unpaid interest and accrued but unpaid service fees
outstanding under the financing agreement, plus reasonable costs
and expenses incurred by MGG to settle the account. As a result of
the full repayment, all liens on the company's assets, including
the investment in Sharecare, were removed.
"With the cleanup of our balance sheet behind us and our
strengthened cash position, we can now focus on building out our
global platform of AI-based solutions for the Fortune 500 companies
we are servicing," concluded Mr. Tao.
A full-text copy of the Annual Report is available for free at the
Securities and Exchange Commission's website at:
https://is.gd/EzSyeK
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com/-- delivers an integrated suite of
AI solutions that enable businesses and organizations to solve
problems, reduce risk and deliver positive outcomes. The company's
easy-to-install AI products are being rolled out in a wide range of
applications within the retail, financial, public safety and
workplace arenas. The company also owns and operates digital media
properties that deliver relevant, dynamic content and ecommerce
solutions. The company is headquartered in Las Vegas, Nevada, with
additional operations in Los Angeles, California and in Beijing,
Shanghai, Chengdu and Hangzhou, China.
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I N D I A
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AJINTHA INDUSTRIES: CRISIL Migrates B+ Rating to Not Cooperating
----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Ajintha
Industries Private Limited (AIPL) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 1 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with AIPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 AIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on AIPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of AIPL to 'CRISIL B+/Stable Issuer not cooperating'.
AIPL is an Aurangabad, Maharashtra based company incorporated in
2017, by Mr Veerendra Mangale and Mrs Manisha Panchakshri. The
company is engaged in installation and maintenance of electrical
panels, electrical poles, and assembling and trading of electrical
components.
ARYACON CONTRACTORS: CRISIL Reaffirms B+ Rating on INR6cr Loan
--------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of Aryacon Contractors and Engineers (ACE).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL A4 (Reaffirmed)
Cash Credit 6 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect ACE's modest scale of operations,
amidst intense competition and geographical concentration in
revenue. These weaknesses are partially offset by the extensive
experience of the partners in civil construction industry, moderate
working capital cycle, and the firm's comfortable financial risk
profile.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations amidst intense competition: Revenue
of INR17.69 crore reported in fiscal 2019, and around INR23 crore
estimated in fiscal 2020, reflects the modest scale of operations.
Exposure to intense competition and risk related to the
tender-based nature of business, limit scalability and operating
margin. Moreover, the nationwide lockdown imposed to contain spread
of the Covid-19 pandemic, could impact timely allocation of funds
for civil works, floating of new tenders, and timely clearances.
Hence, overall impact on revenue shall remain a key monitorable for
firms like ACE.
* Exposure to geographic concentration in revenue: With 100% of
revenue derived from Kerala, events such as slowdown in
infrastructure spending in Kerala or operational delays, may affect
order inflow and, thus, constrain revenue growth.
Strengths:
* Extensive experience of the partners: The three-decade-long
experience of the partners in the civil construction business, and
the firm's successful track record of execution, have ensured a
steady flow of orders. Orders worth nearly INR33.5 crore as on
March 31, 2020 to be executed over the next 12-18 months, offer
moderate revenue visibility.
* Comfortable financial risk profile: Capital structure is marked
by low gearing and total outside liabilities to adjusted net-worth
ratios of 0.76 time and 1.25 times, respectively, as on March 31,
2019; the ratios are estimated to be less than 1 time as on March
31, 2020. Debt protection metrics are adequate, with interest
coverage and net cash accrual to adjusted debt ratios of 4.12 times
and 0.18 time, respectively, in fiscal 2019, and estimated around 5
times and 0.2 time, respectively, in fiscal 2020.
* Moderate working capital requirement: The working capital cycle
remains moderate reflected in estimated gross current assets) of
around 80-85 days as on March 31, 2020 (97 days, a year ago), due
to deposits maintained with authorities. Inventory and receivables
are moderate estimated to be in the range of 25-30 days and 40-45
days, respectively, as on March 31, 2020. The working capital cycle
is expected to remain at similar levels over the medium term owing
to estimated increase in receivables cycle and inventory in fiscal
2021.
Liquidity Stretched
Liquidity is marked by cash accrual of INR1.5-2 crore, in fiscals
2021 and fiscal 2022, against the maturing annual debt of INR9
lakh. Utilisation of bank limit of INR6 crore averaged 33% over the
12 months through March 2020. Cash and bank balance stood at
INR1.07 crore as on March 31, 2019. Withdrawal of capital by the
partners has adversely impacted cash accrual earlier, and remains a
key rating monitorable.
Outlook: Stable
CRISIL believes ACE will continue to benefit from the extensive
experience of its partners, and their healthy relationships with
clients.
Rating Sensitivity factors
Upward Factors
* Substantial growth in revenue up to 20% and sustenance of
operating margin, leading to higher cash accrual
* Sustenance of working capital cycle with sustained financial risk
profile
Downward Factors
* Stretch in working capital cycle with GCAs increasing to more
than 200 days, thus impacting the financial risk profile and
stretch in liquidity
* Significant decline in revenues and profitability, weakening the
business risk profile
ACE was formed as a partnership firm between Mr Gireesh G Nair and
Mr S Shyam in 2002. The Kerala-based firm constructs tunnels for
hydroelectric projects, power houses, dams, and other types of
heavy construction works.
AXWELL GRANITO: CRISIL Migrates B+ Debt Rating to Not Cooperating
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Axwell Granito
Private Limited (AGPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 10 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Long Term Loan 20.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with AGPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 AGPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on AGPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of AGPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
AGPL, established in Morbi in 2016 and started commercial
operations from Jan 2018, manufactures double charge and soluble
salt vitrified tiles. The company is promoted by Mr Balkrishna
Ambani, Mr Krushnakan Ambani, Mr Rajendrakumar Manvar, and Mr
Jagdish Ambani.
BAIT LOGITECH: CRISIL Migrates 'B-' Rating from Not Cooperating
---------------------------------------------------------------
Due to inadequate information, CRISIL, in line with Securities and
Exchange Board of India guidelines, had migrated its rating on the
long-term bank facility of Bait Logitech Private Limited (BLPL) to
'CRISIL B-/Stable/CRISIL A4 Issuer Not Cooperating'. BLPL has
subsequently provided the necessary information and CRISIL has
migrated the ratings to 'CRISIL B-/Stable/CRISIL A4' from 'CRISIL
B-/Stable/CRISIL A4 Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6.6 CRISIL A4 (Migrated from
'CRISIL A4 ISSUER NOT
COOPERATING')
Cash Credit 5.5 CRISIL B-/Stable (Migrated
from 'CRISIL B-/Stable
ISSUER NOT COOPERATING')
The ratings reflect BLPL's subdued financial risk profile because
of small net worth and high working capital intensity of operation
affecting the liquidity profile. These weaknesses are partially
offset by the extensive experience of its management in the
logistics and liaison services industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Subdued financial risk profile: Net worth is estimated to remain
subdued at around INR5 crore as on March 31, 2020 (Rs 4.5 crore a
year earlier), which exposes credit risk profile to sudden changes
in business conditions. Gearing is also estimated to remain high at
around 3.7 times as on March 31, 2020. Debt protection indicator is
also estimated to remain moderate at around 2 times in fiscal
2020.
* Large working capital requirement: Gross current assets (GCA)
days are estimated to be at around 315 days as on March 31, 2020,
because of stretched receivables and sizeable inventory. Operations
will remain working capital intensive over the medium term.
Strength
* Extensive experience of management: Though BLPL was incorporated
in 2010, management's extensive experience in the steel industry
has helped to establish healthy relationship with customers and
suppliers, resulting in repeat orders.
Liquidity Poor
Liquidity is likely to remain weak over the medium term, driven by
tightly matched cash accrual against debt repayment. Also, bank
limit was almost fully utilized over the 6 months ended March
2020.
Outlook: Stable
CRISIL believes BLPL will continue to benefit from its experienced
management.
Rating Sensitivity factors
Upward Factors
* Improvement in working capital cycle with GCA days lower than 250
days.
* Average utilization of bank limits lower than 90% for a period of
at least 3 months.
* Higher than expected sales and profitability leading to higher
net cash accruals.
Downward Factors
* Lower than expected sales and profitability leading to net cash
accruals lower than INR1.5 crores.
* Stretch in working capital cycle affecting the liquidity
profile.
Incorporated in May 2010 in Bhubaneswar and promoted by Mr Brahma
Nanda Mishra, BLPL was set up to provide logistics and liaison
services for the iron ore mining industry. It also fabricates heavy
steel structures, and provides project and mining consultancy
services. Unit is in Tangi, Odisha.
CAUVERY TIMBER: CRISIL Migrates D Debt Ratings to Not Cooperating
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Cauvery Timber
and Saw Mill (CT) to 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Letter of Credit 4 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with CT for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 CT, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CT is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of CT to 'CRISIL D/CRISIL D Issuer not cooperating'.
Set up as a partnership concern in 2004, CT trades in timber,
mainly in Tamil Nadu. The firm has established relationships with
timber depots and saw mills spread across the region, and has a
stockyard in Toothukudi.
CELEBRITY FASHIONS: CRISIL Moves B+ Debt Ratings to Not Coop.
-------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Celebrity
Fashions Limited (CFL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.25 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Export Packing 30.00 CRISIL B+/Stable (ISSUER NOT
Credit COOPERATING; Rating Migrated)
Foreign Bill 21.00 CRISIL B+/Stable (ISSUER NOT
Discounting COOPERATING; Rating Migrated)
Funded Interest 17.35 CRISIL B+/Stable (ISSUER NOT
Term Loan COOPERATING; Rating Migrated)
Letter of Credit 6.25 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 13.45 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Working Capital 5.21 CRISIL B+/Stable (ISSUER NOT
Term Loan COOPERATING; Rating Migrated)
CRISIL has been consistently following up with CFL for obtaining
information through letters and emails dated April 30, 2020 and May
6, 2020 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 CFL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CFL 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 CFL to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Incorporated as a private limited company in 1988 and later
reconstituted as a public limited company in 2005, CFL is primarily
engaged in manufacture and exports of woven cotton garments for men
and women.
CHOPRA ALLOYS: CRISIL Assigns B+ Rating to INR14cr Loans
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Chopra Alloys (CA).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B+/Stable (Assigned)
Long Term Loan 8 CRISIL B+/Stable (Assigned)
The rating reflects CA's exposure to risks related to the
implementation of the ongoing project and leveraged capital
structure. These weaknesses are partially offset by the extensive
experience of the partners in the steel industry and established
clientele.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks related to implementation of ongoing project:
In the wake of sizable capital expenditure (capex) of around INR27
crore initiated by the firm, completion and funding risks are high.
As the economic slowdown witnessed earlier has worsened with the
nation-wide lockdown imposed owing to Covid-19 pandemic, timely
completion of the project will remain a key monitorable. Since
majority of the project funding is estimated from promoter's own
sources, therefore timely infusion of the same will remain
critical.
* Highly leveraged capital structure: Capital structure is
leveraged with gearing estimated at over 5 times as on March 31,
2020 and networth at a modest INR3 crore. In the wake of sizeable
capex plan, capital structure is expected to remain leveraged over
the medium term.
Strengths
* Extensive experience of the partners and established clientele:
The partners' experience of over four decades in the steel
industry, their understanding of the dynamics of the market, and
healthy relationships with suppliers and customers should continue
to support the business. Revenue has grown at compound annual rate
of 36% over the last three fiscals and turnover is estimated to
have touched INR150 crore in fiscal 2020 (Rs 103 crore till
December 2019).
Liquidity Poor
Cash accruals are expected to remain moderate at INR2-3 crore
annually against maturing debt of INR1.3 crore and INR1.8 crore in
fiscals 2021 and 2022, respectively. Bank lines are highly utilised
at over 90% for the 10 months through December 2019. On account of
the significant capex undertaken, funding support from the partners
will remain a monitorable.
Outlook: Stable
CRISIL believes CA will continue to benefit from the extensive
experience of its partners, and healthy relationships with
clients.
Rating sensitivity factors
Upward factors
* Timely completion of the project resulting in significant
improvement in the scale of operations along with stable
operating margin, leading to cash accruals of over INR4 crore per
fiscal.
* Improvement in the capital structure.
Downward factors
* Decline in revenue or profitability leading to cash accruals of
less than INR2 crore.
* Delay in project completion.
* Further weakening in the liquidity and financial profile.
Established in 2006, CA is a partnership firm of Mr Deepak Chopra,
Mr Pankaj Chopra, Mr Aman Chopra and Mr Baldev Raj Chopra. It
manufactures steel ingots at its plant in Ludhiana, Punjab having
an installed capacity of 55,000 tonne per annum. Mr Baldev Raj
Chopra has more than four decades of experience in the industry.
CHOPRA HOTEL: CRISIL Migrates D Debt Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Chopra Hotel &
Resorts (CHR) to 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 11.1 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with CHR for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 CHR, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CHR is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of CHR to 'CRISIL D Issuer not cooperating'.
CHR, a partnership firm set up in 2013, has recently established a
44-room three star hotel in Jalandhar (Punjab) for which it has a
marketing and management tie up with Ramada Encore (a brand under
Wyndham Hotel Chain). The hotel commenced operations in January
2017. Mr Kamal Chopra, his two sons, Mr Umesh Chopra and Mr Ravish
Chopra, and nephew, Mr Gaurav Chopra are the promoters.
CONCORDE DESIGNS: CRISIL Migrates D Ratings to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Concorde
Designs Private Limited (CDPL) to 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 10 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with CDPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 CDPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CDPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of CDPL to 'CRISIL D/CRISIL D Issuer not cooperating'.
CDPL, incorporated in 2002, is promoted by Mr. Anvay Madhukar Naik.
It designs and constructs interior works for corporate customers
and provides architectural consulting.
DEVA INTERIORS: CRISIL Moves B- Debt Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Deva Interiors
Private Limited (DIPL) to 'CRISIL B-/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 8 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with DIPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 DIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DIPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of DIPL to 'CRISIL B-/Stable/CRISIL A4 Issuer not
cooperating'.
Established in 1995 by Mr. R.P. Singh, Chennai-based DIPL is
engaged in the interior designing for office spaces, commercial
real estate ventures, banks and retail Showrooms among others. DIPL
offers wide range of services including electrification and related
installation works, providing furniture and other civil works like
carpentry and plumbing etc. Since inception, the company has
executed various projects in different locations including Chennai,
Mumbai, Bhubaneswar, Bangalore, Bhopal and Hyderabad.
DHOOT DAL: CRISIL Migrates 'B' Debt Rating to Not Cooperating
-------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Dhoot Dal Mill
(DDM) to 'CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 9.5 CRISIL B/Stable (ISSUER NOT
Credit COOPERATING; Rating Migrated)
CRISIL has been consistently following up with DDM for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 DDM, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DDM is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of DDM to 'CRISIL B/Stable Issuer not cooperating'.
DDM was established in 1982 by Mr. Hansraj, Mr. Murlidhar and
Uttam. The firm is engaged in processing of guar seeds to produce
refined guar splits and guar gum. It has its manufacturing facility
based in Jodhpur.
DIAMONDSTAR: CRISIL Migrates D Debt Ratings to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Diamondstar to
'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Packing Credit 1.71 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Post Shipment 2.58 CRISIL D (ISSUER NOT
Credit COOPERATING; Rating Migrated)
Proposed Short Term 9.71 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Diamondstar for
obtaining information through letters and emails dated February 29,
2020 and March 19, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 Diamondstar, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on
Diamondstar is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL BB'
rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Diamondstar to 'CRISIL D Issuer not cooperating'.
Diamondstar, set up in 1967, cuts and polishes diamonds. It
predominantly deals in large diamonds in shapes such as marquise,
pear, and round. The firm has three partners, Mr Rupesh Shah and Mr
Nilesh Shah.
DRJ IMPEX: CRISIL Moves B+ Debt Ratings to Not Cooperating
----------------------------------------------------------
CRISIL has migrated the rating on bank facilities of D. R. J. Impex
Private Limited (DRJIPL) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 1.25 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Overdraft 5.50 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with DRJIPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 DRJIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DRJIPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of DRJIPL to 'CRISIL B+/Stable Issuer not cooperating'.
DRJIPL, incorporated in 2014 by Mr Dev Rishi Jain, manufactures
chicory. The manufacturing plant at Etah (Uttar Pradesh) has
installed capacity of 45 tonne per day and produces dried chicory
cubes, roasted chicory and other derivatives of chicory. Commercial
production began in 2015 and by 2017, the company achieved 40-45%
of capacity; revenue was INR6.58 crore in fiscal 2017.
DYNAMIC MEGA: CRISIL Migrates B+ Debt Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Dynamic Mega
Mart Private Limited (DMMPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 6.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with DMMPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 DMMPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DMMPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of DMMPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
DMMPL is promoted by the Mittal family, based in Solan, Himachal
Pradesh. The company is a distributor for multiple mobile brands in
the state.
ENKAY FOAM: CRISIL Migrates 'B' Debt Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Enkay Foam
Private Limited (EFPL) to 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with EFPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 EFPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on EFPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of EFPL to 'CRISIL B/Stable Issuer not cooperating'.
Incorporated in 1990, EFPL is promoted by Mr Mayank Jain and Mr
Saurabh Jain. The company manufactures industrial foam of 9-50
density. This is used in industries such as furniture, garments,
footwear, automobiles, and packaging.
ESHWARNATH CONSTRUCTIONS: CRISIL Moves 'D' Ratings to Not Coop.
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Eshwarnath
Constructions (ECS) to 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 5 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with ECS for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 ECS, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on ECS is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of ECS to 'CRISIL D/CRISIL D Issuer not cooperating'.
Set up in 1997 as a partnership firm ECS executes civil
construction work for the Southern Railways and private players in
Tamil Nadu. Operations are managed by Mr M Athmanathan.
G. B. AGRO: CRISIL Migrates B+ Debt Ratings to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of G. B. Agro
Products (GBAP) to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 2.75 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Bank 0.75 CRISIL B+/Stable (ISSUER NOT
Guarantee COOPERATING; Rating Migrated)
Proposed Cash 1.25 CRISIL B+/Stable (ISSUER NOT
Credit Limit COOPERATING; Rating Migrated)
Proposed Long Term 0.25 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GBAP for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 GBAP, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GBAP is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of GBAP to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
GBAP, which was set up as a partnership firm in fiscal 2003,
manufactures, mills, processes, and polishes various categories of
rice. The firm caters to the retail market through its own brands,
such as Red Garden, and Kitchen King, which also account for bulk
of the revenue. The rice is sold via brokers who further sell it to
marts and retail shops. The firm also undertakes custom milling for
government entities and thus, is part of the pubic distribution
system. Operations are managed by M. Rajesh Bindal and Mrs Madhu
Bindal.
GIRIN DEKA: CRISIL Migrates 'C' Debt Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Girin Deka
(GD) to 'CRISIL C/CRISIL A4 Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 10 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 4 CRISIL C (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GD for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 GD, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GD is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of GD to 'CRISIL C/CRISIL A4 Issuer not cooperating'.
GD was formed as a proprietorship firm of Mr Girin Deka in 1991.
The Guwahati-based firm undertakes construction of roads and
bridges, for government departments in Assam.
HARITHA FERTILISERS: CRISIL Moves 'D' Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Haritha
Fertilisers Limited (HFL) to 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 31 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with HFL for obtaining
information through letters and emails February 29, 2020 and March
19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 HFL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on HFL is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of HFL to 'CRISIL D Issuer not cooperating'.
Incorporated in 2006, HFL is involved in the manufacturing of
nitrogen-phosphorous-potassium (NPK) fertilisers. The company has
two manufacturing facilities with installed capacity of 1.50 lakh
metric tonne per annum each. The unit-I is located at
Ankireddypalli village in Ranga Reddy district and unit-II is
located at Damaracherla village in Nalgonda district of Telangana.
The company sells products under own brand 'Nandi' in Telangana.
IL&FS GROUP: Rejigs Team to Boost Asset Sale
--------------------------------------------
The Times of India reports that IL&FS Group has undertaken a top
fleck reshuffle after its chief operating officer N Sivaraman, who
was leading the asset-monetisation programme for the beleaguered
group, put in his papers.
According to the report, three executives will now lead the asset
monetisation and InvIT (Infrastructure Investment Trusts) programme
as the group, which saw the government take charge a little under
two years ago, races against time to sell assets to realise as much
value as possible. At last count, the government was hoping to
raise around INR55,000 crore to repay a debt of nearly INR94,000
crore. While the estimate was pre-lockdown, some of the assets may
now see more muted Interest, given that a few of the bidders
themselves are facing financial distress, the report notes.
TOI relates that the government is keen that the current board led
by Uday Kotak will expedite the whole process, which has extended
far beyond what the Centre had originally expected, raising
concerns.
With the new team in place, IL&FS is hoping to complete the
exercise faster. Under the new arrangement, Ashwani Kumar, who
currently heads the energy vertical and had successfully divested
IL&FS stake in the wind energy business to Orix, will now lead the
non-road sector asset monetization program, the report adds.
About IL&FS
Infrastructure Leasing & Financial Services Limited (IL&FS) --
https://www.ilfsindia.com/ -- is an infrastructure development and
finance company based in India. It focuses on the development and
commercialization of infrastructure projects, and creation of value
added financial services. The company operates in Financial
Services, Infrastructure Services, and Others segments.
As reported in the Troubled Company Reporter-Asia Pacific, the
Indian Express related that the Indian government, in October 2018,
stepped in to take control of crisis-ridden IL&FS by moving the
National Company Law Tribunal (NCLT) to supersede and reconstitute
the board of the firm which has defaulted on a series of its debt
payments. This was said to be an attempt to restore the confidence
of financial markets in the credibility and solvency of the
infrastructure financing and development group.
JAI KARNI: CRISIL Reaffirms B+ Rating on INR8cr Cash Loan
---------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facility of Jai Karni Tradings Private Limited
(JKTPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect a weak financial risk profile. This
weakness is partially offset by the extensive experience of the
promoters in the betel nut trading business and prudent working
capital management.
Key Rating Drivers & Detailed Description
Weakness:
* Weak financial risk profile: The networth was small at INR4.25
crore and gearing high at 6.93 times, as on March 31, 2019. Large
debt and moderate profitability resulted in modest debt protection
metrics, reflected in interest coverage and net cash accrual to
total debt ratios of 1.21 times and 0.1 time, respectively, for
fiscal 2019.
Strength:
* Extensive industry experience of the promoters: The promoters
have been in the business for over 10 years and have developed a
sound understanding of the dynamics of the local market, which
helps anticipate price trends and calibrate purchasing and stocking
decisions. The experience should continue to help build business
relationships.
Liquidity Stretched
Bank limit utilisation was stretched at around 70% during the 12
months through March 2020. The promoters are likely to extend
support in the form of equity and unsecured loans to meet working
capital requirement and repayment obligation.
Outlook: Stable
CRISIL believes JKTPL will continue to benefit from the extensive
industry experience of the promoters.
Rating Sensitivity factors
Upward factors
* Sustained revenue growth of 20% per fiscal along with improvement
in the financial risk profile.
* Maintenance of relationship with major vendors
* Improvement in the working capital cycle
Downward factors
* A stretch in receivables or pile-up of inventory, adversely
affecting liquidity
* Decline is revenue by more than 20% per fiscal.
* Weakening of relationship with major vendors
JKTPL, incorporated in September 2016, is promoted Mr Anandmal
Sethia and Mr Arun Kumar Sethia. The company trades in betel nuts.
KRISH AGRO: CRISIL Assigns B+ Rating to INR12cr Cash Loan
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Krish Agro Farms Private Limited (KAFPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12 CRISIL B+/Stable (Assigned)
The ratings reflect susceptibility to climatic conditions and to
volatility in raw material prices, and a limited scale of
operations amid intense competition. These weaknesses are partially
offset by the extensive experience of the promoter in the
agricultural industry, a moderate working capital cycle and the
favorable location of the plant near farmers.
Analytical Approach
Unsecured loans have been treated as neither debt nor equity.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to climatic conditions and to volatility in raw
material prices: The crop yield of agricultural commodities is
dependent on adequate and timely monsoon. Thus, the company is
exposed to the risk of limited availability of its key raw material
during a weak monsoon. Also, production may be impacted by pests or
crop infection, leading to higher unpredictability in production
and pricing of agro commodities and derived products.
* Limited scale of operations amid intense competition: Though
revenue has improved in fiscal 2019, the scale of operations
remains modest because of intense competition in the rice milling
industry and limited value addition. The scale is likely to remain
subdued over the medium term.
Strengths
* Extensive industry experience of the promoter: The promoter has
an experience of more than two decades in the rice-milling
business. This has given him an understanding of the dynamics of
the market, and enabled him to establish relationships with
suppliers and customers.
* Moderate working capital cycle: Gross current assets were 76-109
days over the past three fiscals (76 days as on March 31, 2019) as
against over 170 days for some peers. The company is required to
extend a long credit period in keeping with industry standards, as
customers are small and medium-size player who require credit.
Furthermore, to meet business requirement, it holds moderate work
in process and other inventory which can cater to sudden large
orders which may come its way.
* Favourable location of the plant near farmers: The processing
unit is in the Hooghly district of West Bengal, which is close to
paddy growing areas. This ensures easy availability of raw
material.
Liquidity Stretched
* High bank limit utilization: Average utilization was around 99%
during the 13 months through March 2020.
* Sufficient cash accrual to meet debt obligation: Cash accrual is
expected at INR1.70 crore against term debt obligation of INR1.64,
per fiscal over the medium term.
* Healthy current ratio: The ratio was 1.40 times on March 31,
2019.
* Support from the promoter: The promoter is likely to extend
support through additional unsecured loans to meet working capital
requirement and repayment obligation.
Outlook: Stable
CRISIL believe KAFPL will continue to benefit from the extensive
industry experience of the promoter and established relationship
with clients.
Rating Sensitivity Factors
Upward factors
* Sustained improvement in the scale of operations and sustenance
of the operating margin, leading to cash accrual of above INR3
crore per fiscal
* Improvement in the working capital cycle.
Downward factors
* Decline in profitability or the scale of operations, leading to
cash accrual of below INR2 crore per fiscal
* Any large, debt-funded capital expenditure, weakening the capital
structure
*Increase in debtors to above 45 days.
KAFPL, incorporated in 2013, is owned by Mr Chandra Jeet Shaw. The
company processes and mills non-basmati rice and parmal rice, and
produces broken rice and rice bran, at its unit in Hooghly.
LOKESH INFRAPROJECT: CRISIL Assigns B- Rating to INR10cr Loan
-------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Lokesh Infraproject Private Limited (LIPL; a part of
Lokesh Group) and has assigned its 'CRISIL B-/Stable' rating to the
long-term bank facilities. CRISIL had, on October 20, 2016,
suspended the ratings as the group had not provided the necessary
information for a rating review. It has now shared the requisite
information, enabling CRISIL to assign ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B-/Stable (Assigned;
Suspension Revoked)
The rating reflects the Lokesh group's small scale of operations,
large working capital requirement, and exposure to geographical.
The rating also factors in the group's weak financial risk profile.
These rating weaknesses are partially offset by the extensive
experience of the group's promoters.
Analytical Approach
CRISIL has combined the business and financial risk profiles of
Lokesh Industrial Services Private Limited (LISPL) and LIPL. This
is because both companies, together referred as the Lokesh group,
have common promoters and operational linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: The group's revenue declined to
INR56 crore in fiscal 2019, (from INR80 crore in fiscal 2018), due
to a slowdown in order inflow, and is estimated at INR57 crore in
fiscal 2020. High fixed cost and dip in revenue led to losses for
the group in fiscal 2019. Further, Lokesh group's operations are
largely concentrated in two states making it highly dependent on
local tenders and vulnerable to changes in state government
policies.
* Weak financial risk profile: Financial risk profile is weak,
marked by modest interest coverage ratio of 1.5 times estimated in
fiscal 2020. Capital structure may also remain constrained, with
high total outside liabilities to tangible networth (TOL/TNW) ratio
estimated over 5 times as on March 31, 2020. Networth is estimated
at INR11 crore as on March, 2020.
* Large working capital requirement: Operations are working
capital intensive, as indicated by large gross current assets
estimated at 362 days as on March 31, 2020, primarily driven by
large receivables (especially those outstanding for over six
months).
Strength
* Extensive experience of promoters: The Lokesh group will
continue to benefit from the extensive experience of its promoters
in the mining and material handling business. Over the years it has
established longstanding relationship with its customers.
Liquidity Stretched
The group's liquidity is stretched marked by highly utilized bank
lines. The group's working capital requirements are high thus,
resulting in fully utilized bank lines. The cash accruals are
expected to remain at around INR2.1-2.6 Cr. annually against
repayment obligation of INR2 Cr.
Outlook: Stable
CRISIL believes the Lokesh group will continue to benefit from the
extensive experience of its promoters.
Rating Sensitivity factors
Upward factors
* Significant and sustained growth in revenue and operating margin,
leading to higher cash accrual
* Better working capital management, resulting in TOLTNW ratio
below 2 times
Downward factors
* Lower than expected sales and profitability leading to net cash
accruals lower than INR2 crores
* Continued stretch in the working capital cycle, resulting in high
bank limit utilization
* Weak financial risk profile
LISPL was set up in 2007, by Mr Lokesh Jain and his family members.
The Nagpur (Maharashtra)-based company undertakes execution of
material handling, civil construction (only earthwork), and
logistics-related projects. LIPL, set up in 2011, carries out
mining and excavation activities.
MANJUNATHA INDUSTRIES: CRISIL Moves B Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Manjunatha
Industries (MI) to 'CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.50 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 3.34 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with MI for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 MI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MI is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of MI to 'CRISIL B/Stable Issuer not cooperating'.
Incorporated in 2016, MI gins and presses cotton. The company is
promoted by Mr Aitha Yugander and Mr Aitha Mohan.
MONOTYPE INDIA: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Monotype India Limited
2, First Floor, Rahimtoola House
7, Homji Street
RBI Hornimal Circle
Mumbai
Insolvency Commencement Date: February 18, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: August 25, 2020
Insolvency professional: CA Fanendra Harakchand Munot
Interim Resolution
Professional: CA Fanendra Harakchand Munot
6th Floor, Mafatlal House Building
H T Parekh Marg
Backbay Reclamation
Mumbai 400020
E-mail: fhmunot@gmail.com
Mobile: 9822791945
- and -
1102, Tower B, Level 11
Peninsula Business Park
Senapati Bapat Marg
Lower Parel
Mumbai 400013
Mobile: 7588325800
Last date for
submission of claims: May 31, 2020
MUNJANI BROTHERS: CRISIL Migrates 'D' Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Munjani
Brothers (MB) to 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 21.0 CRISIL D (ISSUER NOT
Credit COOPERATING; Rating Migrated)
Post Shipment 36.5 CRISIL D (ISSUER NOT
Credit COOPERATING; Rating Migrated)
CRISIL has been consistently following up with MB for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 MB, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MB is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of MB to 'CRISIL D/CRISIL D Issuer not cooperating'.
MB was set up in 1986. The firm manufactures cut and polished
diamonds and specialises in small diamonds, such as star and
melees, ranging from 0.01 carat (ct) to 2.00 ct.
N.S. VAISHNO DEVI: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: M/s N.S. Vaishno Devi Developers India Private Limited
15-11-16, Mangalagiri Road
Beside Cloth Market
Guntur AP 522001
IN
Insolvency Commencement Date: May 20, 2020
Court: National Company Law Tribunal, Vijayawada Bench
Estimated date of closure of
insolvency resolution process: November 23, 2020
Insolvency professional: Immaneni Eswara Rao
Interim Resolution
Professional: Immaneni Eswara Rao
40-26-22, Mohiddin Street
Opp. BSNL Exchange
Labbipeta, MG Road
Vijayawada, Krishna
Andhra Pradesh 520010
E-mail: ier_ca@outlook.com
ip.vaishnodevi@gmail.com
Last date for
submission of claims: June 10, 2020
NATH SOLVENT: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Nath Solvent Extractions Pvt Ltd
192, K.M. Stone
G.T. Road, Vill. Mohra
Ambala, Haryana 133004
Insolvency Commencement Date: May 18, 2020
Court: National Company Law Tribunal, Chandigarh Bench
Estimated date of closure of
insolvency resolution process: November 13, 2020
(180 days from commencement)
Insolvency professional: Krishan Rajesh Chaudhary
Interim Resolution
Professional: Krishan Rajesh Chaudhary
879, Sector 40
Near Community Center
Gurgaon, Haryana 122001
E-mail: krajeshchaudhary@gmail.com
- and -
405, New Delhi House
27 Barakhamba Road
Connaught Place
New Delhi 110001
E-mail: cirp.nse@gmail.com
Last date for
submission of claims: June 1, 2020
P. KALIKURICHI: CRISIL Assigns B+ Rating to INR5cr Cash Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the
bank facilities of P. Kalikurichi (PK).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL A4 (Assigned)
Cash Credit 5 CRISIL B+/Stable (Assigned)
The ratings reflect extensive industry experience of the promoter
in the civil construction industry and moderate financial profile.
These rating strengths are partially offset by PK's modest scale of
operations and exposure to intense competition in the fragmented
civil construction industry.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operation: PKs business profile is constrained by
its scale of operations in the intensely competitive civil
construction industry. PKs scale of operations will continue limit
its operating flexibility.
Strength
* Extensive industry experience of the proprietor: The proprietor
have an experience of over three decades in civil construction
industry. This has given them an understanding of the dynamics of
the market, and enabled them to establish relationships with
suppliers and customers.
Liquidity Stretched
Liquidity is stretched on account of modest accruals. However Bank
limits were utilised modestly in the recent twelve months and firm
manages working capital effectively.
Outlook: Stable
CRISIL believe PK will continue to benefit from the extensive
experience of its promoter, and established relationships with
clients.
Rating Sensitivity factors
Upward factors
* Steady improvement of scale of operations and profitability
* Cash accrual over INR 1.25 Crore
Downward factors
* Drop in scale of operations or profitability
* Cash accrual less than INR 0.5 Crore
PK is engaged in diversified civil construction work, mainly
buildings for PWD. PK is owned & managed by Mr. Perumal Naicker
Kalikurichi and is based in Dindigul.
POLYGOLD PRE-CURED: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Polygold Pre-cured Systems Private Limited
205, Adity
Near Urvasi Apartment
Navrangpura
Mithakhali SixRoad
Ahmedabad
GJ 380006
IN
Insolvency Commencement Date: March 16, 2020
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: September 11, 2020
(180 days from commencement)
Insolvency professional: Parag Sheth
Interim Resolution
Professional: Parag Sheth
404, Sachet II
Opp. GLS University
Maradia Plaza Lane
C.G. Road
Ahmedabad 380006
E-mail: pksheth@hotmail.com
cirp.ppspl@gmail.com
Last date for
submission of claims: June 5, 2020
POLYMECHPLAST MACHINES: CRISIL Cuts Rating on INR5cr Loan to B+
---------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Polymechplast
Machines Limited (PML) to 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating' from 'CRISIL BB+/Stable/CRISIL A4+ Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING')
Letter of Credit 1 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with PML for obtaining
information through letters and emails dated May 8, 2020 and
May 13, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 PML, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PML is consistent
with 'Scenario 4' outlined in the 'Framework for Assessing
Consistency of Information'.
Based on the last available information, the ratings on bank
facilities of PML revised to 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating' from 'CRISIL BB+/Stable/CRISIL A4+ Issuer Not
Cooperating'.
Incorporated in 1978 by Mr. K. R. Bhuva, PML is a company based out
of Vadodara, Gujarat which is engaged in manufacturing of 'GOLD
COIN' brand plastic processing machinery.
PP TELECELL MARKETING: Insolvency Resolution Process Case Summary
-----------------------------------------------------------------
Debtor: P P Telecell Marketing Private Limited
Registered office:
12/401, Sunder Vihar
Outer Ring Road
Paschim Vihar
New Delhi 110087
Also at:
I-12, DSIDC Industrial Complex
Rohtak Road, Nagloi
Delhi 110041
Insolvency Commencement Date: May 27, 2020
Court: National Company Law Tribunal, Bench-V, New Delhi
Estimated date of closure of
insolvency resolution process: November 23, 2020
(180 days from commencement)
Insolvency professional: Ajay Goyal
Interim Resolution
Professional: Ajay Goyal
49, DDA Site No. 1
M Block
New Rajnedra Nagar
New Delhi 110060
E-mail: ajaygoyalca75@gmail.com
ip.pptelecell@gmail.com
Last date for
submission of claims: June 10, 2020
RKB GLOBAL: CRISIL Migrates 'B' Debt Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of RKB Global
Private Limited (RKBGPL) to 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 32.5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Letter of Credit 115.0 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Packing Credit 25.0 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with RKBGPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 RKBGPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RKBGPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of RKBGPL to 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating'.
RKBGPL was originally established as a partnership firm, Rajankumar
& Bros (Impex), in 1978. This firm was reconstituted as a private
limited company in December 2013. The company trades in various
commodities, such as steel plates and hot-rolled coils. It also has
a mining division in Maharashtra, where it undertakes iron ore
mining. RKBGPL's operations are managed by Mr. Virat Shah and his
son, Mr. Alok V Shah.
SELVAKUMAR MILLS: CRISIL Revokes Suspension on B+ Debt Ratings
--------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Sri Selvakumar Mills Private Limited (SSMPL) and has
assigned its 'CRISIL B+/Stable' rating to the long-term bank
facilities. CRISIL had, on October 12, 2015, suspended the ratings
as the company had not provided the necessary information for a
rating review. It has now shared the requisite information,
enabling CRISIL to assign ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Long Term Loan 5 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The rating reflects the working capital intensive operations.
Further, the weakness is partially offset by extensive experience
of the promoters and moderate financial risk profile.
Key Rating Drivers & Detailed Description
Weakness
* Working capital intensive operations: The operations were
working capital intensive in nature as indicated by the gross
current asset days (GCA) days of around 136 days in fiscal 2019,
mainly on account of large inventory holding period of around 71
days and stretched receivable of around 60 days during fiscal 2019.
Going forward, the operations are expected to be working capital
intensive in nature with an estimated GCA of around 130-140 for the
upcoming fiscal.
Strengths
* Promoters' extensive experience: The promoters has been in the
industry for over four decades and have developed deep
understanding of the dynamics of the market. The extensive
experience of promoters will help firm in bringing significant
business linkage over the medium term. CRISIL expects SSMPL to
continue to benefit from its promoters extensive industry
experience over the medium term.
* Moderate Financial Risk Profile: The company has a comfortable
capital structure marked by gearing of around 1.7 times as on 31st
March, 2019 and estimated at around 1.4 times as on 31st March
2020. Net cash accrual to total debt and interest coverage ratios
are estimated at around 0.2 times and 2.5 times respectively, for
fiscal 2020.
Liquidity Stretched
The firm has highly utilized the bank limits due to working capital
intensive business. The net cash accruals (NCA) was adequate
against the repayment obligations during 2019, also the company is
expected to generate sufficient NCA to meet the repayment
obligations in the medium term. The current ratio is estimated at
around 1.15 times in 2020.
Outlook: Stable
CRISIL believes that SSMPL will benefit from its partners'
extensive industry experience.
Rating Sensitivity factors
Upward Factor
* Improvement in the revenue profile and EBITDA margin more than
8%.
* Improvement in working capital requirements.
Downward Factor
* Decline in the revenue and EBITDA margin of less than 3%.
* Stretch in working capital requirements.
SSMPL is based out of Coimbatore, Tamil Nadu, and is engaged in
manufacturing of cotton yarn and fabric.
SHALIMAR WORKS: CRISIL Reaffirms 'C' Rating on INR22.55cr Loan
--------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of The
Shalimar Works (1980) Limited (Shalimar Works) at 'CRISIL C/CRISIL
A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 25.45 CRISIL A4 (Reaffirmed)
Cash Credit/ 6.00 CRISIL C (Reaffirmed)
Overdraft
facility
Letter of Credit 1.00 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 22.55 CRISIL C (Reaffirmed)
The ratings continue to reflect a weak financial risk profile, low
operating efficiency, and customer concentration in revenue. The
company has delayed servicing the term debt contracted from West
Bengal Industrial Development Corporation (WBIDCO) and the
unsecured loan availed from the Government of West Bengal (both the
loans have not been rated by CRISIL) due to weak liquidity. These
weaknesses are partially offset by medium-term revenue visibility
due to moderate orders in hand.
Key Rating Drivers & Detailed Description
Weaknesses:
* Insufficient cash accrual to meet debt obligation: Cash accrual
is likely to be inadequate to service the loan availed from WBIDCO.
As on March 31, 2020, total overdue on the loan was around INR11
crore.
* Weak financial risk profile: The networth is estimated to remain
negative at around INR367 crore as on March 31, 2020, which led to
a leveraged capital structure. An operating loss and negative cash
accrual also resulted in weak debt protection metrics in fiscal
2020.
Strength:
* Moderate orders in hand: As on date, the company has orders of
around INR100 crore mainly from the Indian Army and the Government
of West Bengal, providing steady revenue visibility in the medium
term.
Liquidity Poor
Liquidity is weak due to inadequate cash accrual to meet repayment
obligation on the loan availed from WBIDCO. As on March 31, 2020,
total overdue on the loan was around INR11 crore. Furthermore,
owing to poor liquidity position, the company has not been able to
service repayment obligation towards unsecured loan from Govt. of
West Bengal (outstanding of around INR393 crores as on March 31,
2020).
Rating Sensitivity factors
Upward Factors
* Regularization of all delays in repayment obligation.
* Improvement in profitability leading to positive net cash
accruals.
* Increase in revenues to above INR30 crores.
Downward Factor
* Delay in cash credit limit for more than 30 days.
* Lower than expected topline and profitability leading to lower
net cash accruals.
Shalimar Works was established by the Turner Morrison group in the
late 1890s. In 1980, the company was liquidated and its assets were
acquired by the Government of West Bengal through incorporation of
Shalimar Works. The company builds and repairs ships and is also
engaged in engineering and fabrication of heavy structures.
SHRIAMAN AGROVET: CRISIL Reaffirms B+ Rating on INR5.40cr Loan
--------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Shriaman Agrovet Private Limited
(SAPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.25 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 1.35 CRISIL B+/Stable (Reaffirmed)
Proposed Fund-
Based Bank Limits 5.40 CRISIL B+/Stable (Reaffirmed)
CRISIL has taken cognizance of the restrictions on economic
activity, including closure of all non-essential business, due to
the spread of Novel Coronavirus (Covid-19). This will impact the
company's performance in fiscal 2021 as against CRISIL's earlier
expectations. Impact of Covid-19 related restrictions applicable
post May 31, 2020 will remain a key monitorable.
The rating continues to reflect the modest scale of SAPL's
operations in the intensely competitive poultry industry,
vulnerability to risks inherent in the industry, and a weak capital
structure. These weaknesses are partially offset by the extensive
experience of the promoters, and adequate debt protection metrics.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: Revenue is estimated at around INR19
crore in fiscal 2020 and has been steady for the 3 fiscals through
2020; it may remain steady over the medium term due to better
capacity utilisation. However, intense competition may continue to
constrain scalability, pricing power, and profitability.
* Vulnerability to risks inherent in the poultry industry: The
poultry farming industry is driven by regional demand and supply
factors because of the constraint on transportation due to
perishability of products. Furthermore, there are industry-specific
risks such as frequent outbreaks of disease that may significantly
impact realisations and profitability of players such as SAPL.
* Weak capital structure: Networth is estimated to remain low at
around INR2.54 crore as on March 31, 2020 and with estimated
gearing high at 1.82 times. While networth is likely to remain
stable over the medium term owing to muted accretion to reserve,
gearing may improve with gradual repayment of loans.
Strengths
* Extensive experience of the promoters: Benefits from the
promoters' experience of over 2 decades, their strong understanding
of local market dynamics, and healthy relations with customers and
suppliers should continue to support the business.
* Adequate debt protection metrics: Debt protection metrics are
estimated to remain adequate due to moderate operating
profitability. Interest coverage ratio and net cash accrual to
total debt ratios improved to 2.99 times and 0.15 time,
respectively, in fiscal 2020, against 2.49 times and 0.11 time in
fiscal 2019.
Liquidity Stretched
Cash accrual is projected at over INR0.68- 0.90 crore per annum
over the medium term, is sufficient to meet the yearly maturing
debt of INR0.50 crore. The working capital fund-based line worth
INR3.25 crore was utilised at an average of 88% during the 12
months through March 2020. Current ratio is estimated to remain
moderate at 1.23 times as on March 31, 2020. The company has opted
for moratorium in interest payment of working capital limit.
Outlook: Stable
CRISIL believes SAPL will continue to benefit from the extensive
experience of the promoters.
Rating Sensitivity Factors
Upward Factors
* Substantial increase in revenue with the operating margin at over
8%, leading to higher cash accrual
* Improvement in working capital cycle.
Downward Factors
* Decline in revenue by 30% along with a steep decline in
profitability
* Stretch in working capital cycle
* Any large, debt-funded capital expenditure weakens capital
structure.
SAPL, incorporated in 2015, is a Surguja (Chhattisgarh)-based
company that manufactures poultry feed and cattle feed, at a
capacity of 8 tonne per hour. Mr Gopal Agrawal and his family
members are the promoters.
SHRISHTI ELECTROMECH: CRISIL Moves B+ Debt Ratings to Not Coop.
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Shrishti
Electromech Private Limited (SEPL) to 'CRISIL B+/Stable/CRISIL A4
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 1.50 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 6.15 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Long Term Loan 1.41 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 9.19 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Proposed Short Term 1.00 CRISIL A4 (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Working Capital 0.75 CRISIL B+/Stable (ISSUER NOT
Demand Loan COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SEPL for obtaining
information through letters and emails dated February 29, 2020 and
March 19, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution 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 SEPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SEPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of SEPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Set up in 2002 as a private limited company by Mr Suresh Tibrewala
and his family in Hyderabad, SEPL manufactures a variety of fans.
VISHWA SAMUDRA: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: M/s Vishwa Samudra Engineering Private Limited
D.No. 59A-8/8-6B1, 4th Floor
Opposite Gurudwar
Gurunanak Road
Vijayawada
Krishna AP 520008
IN
Insolvency Commencement Date: May 26, 2020
Court: National Company Law Tribunal, Vijayawada Bench
Estimated date of closure of
insolvency resolution process: November 22, 2020
Insolvency professional: Immaneni Eswara Rao
Interim Resolution
Professional: Immaneni Eswara Rao
40-26-22, Mohiddin Street
Opp. BSNL Exchange
Labbipeta, MG Road
Vijayawada, Krishna
Andhra Pradesh 520010
E-mail: ier_ca@outlook.com
ip.vishwasamudra@gmail.com
Last date for
submission of claims: June 9, 2020
=========
J A P A N
=========
KOBE STEEL: Egan-Jones Lowers Senior Unsecured Ratings to B+
------------------------------------------------------------
Egan-Jones Ratings Company, on May 29, 2020, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Kobe Steel Ltd. to B+ from BB-. EJR also downgraded the rating
on commercial paper issued by the Company to B from A3.
Headquartered in Kobe, Hyogo, Japan, Kobe Steel Ltd. is a supplier
of aluminum and copper products including core products.
===============
P A K I S T A N
===============
PAKISTAN WATER: S&P Assigns 'B-' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issuer credit rating
to Pakistan Water and Power Development Authority (WAPDA).
S&P views Pakistan Water and Power Development Authority's
(WAPDA's) creditworthiness to be closely tied to that of the
government of Pakistan.
S&P considers WAPDA to be a government-related entity with an
extremely high likelihood of timely and sufficient extraordinary
support from the Pakistani government. This is based on S&P's view
of WAPDA's:
-- Very important role for the government as a major generator of
hydroelectric power, which comprises about 25% of the country's
installed capacity. In addition, WAPDA has an essential role in
managing irrigation, water supply, and flood control in the
country; and
-- Integral link with the government, reflecting its 100%
government ownership through the Ministry of Water Resources, and
our expectation that this will not change in the next three years.
At the moment, all WAPDA's debt is borrowed from the government,
guaranteed by the state, or directly borrowed by the government and
then on-lent to WAPDA. The government closely oversees WAPDA's
operations and defines the company's strategies, including its
investments and borrowings, and WAPDA understands that a default
would put the sovereign's reputation at risk. The government also
appoints WAPDA's chairman and the key management team.
WAPDA has a very ambitious capital expenditure (capex) plan that
will require material external borrowing.
The government of Pakistan intends to significantly increase the
share of hydroelectric power generation in the country's
electricity production mix to 30%-35% by 2030 from 25% currently.
This plan envisages WAPDA completing three new mega hydroelectric
power plants (HPPs) worth $13.5 billion in total, adding 2.96
gigawatts (GW) of capacity in 2025, and 4.5 GW more in 2028. Due to
the size of these projects, the company is likely to generate
heavily negative free operating cash flow (FOCF), at least in the
next three years, which S&P thinks it will cover with new long-term
external borrowings.
Delays in payments for electricity undermine the supportive
framework.
WAPDA's electricity generation business is fully regulated by an
independent body, NEPRA. We tend to see the tariff framework as
supportive for WAPDA as it allows for the pass-through of operating
expenditure (opex), interest expenses, and foreign-currency
fluctuations. The tariff framework also accounts for the asset
base, including construction in progress, which will support
WAPDA's earnings during the heavy construction phase of its capex
plan, with a guaranteed rate of return. S&P also notes that WAPDA
is not exposed to volume generation risk, which is beneficial as it
has natural exposure to hydrological risk.
At the same time, S&P thinks the existing regulation in Pakistan is
impaired by a structural circular debt problem. This relates to the
large number of unpaid electricity bills, past-due government
subsidies to power-distributing companies, and high uncovered
electricity transmission losses. All this leads to a delay in
payments to WAPDA by its sole customer, the Central Power
Purchasing Agency (CPPA). For instance, in 2019, WAPDA's
receivables balance from the agency almost doubled, to Pakistani
rupee (PKR) 194 billion from PKR101 billion. Other risks include
our very high country risk assessment for Pakistan and our view of
a weak payment culture in the country.
WAPDA will remain highly leveraged in the next three-to-five years
due to its investment program.
S&P said, "Given the large investments WAPDA faces until 2028, we
think the company has very limited potential for deleveraging, even
if we take account of the tariff increases driven by its growing
asset base. More specifically, we think that over 2020-2022,
WAPDA's funds from operations (FFO) to debt will fluctuate in the
range of 7%-12%, while debt to EBITDA will be in the range of
5.0x-6.2x. We anticipate that the negative FOCF might reach PKR200
billion-PKR250 billion in each of 2021 and 2022, and that the
company will raise new debt to mitigate this. At the same time, in
our base case, WAPDA's EBITDA grows materially to PKR110
billion-PKR120 billion in 2020, including the consolidation of
special-purpose vehicle (SPV) Neelum Jhelum, and then to PKR140
billion-PKR180 billion in 2021-2022 on the back of tariff
adjustments.
"We see a significant risk of capex budget overruns and
construction delays, which affect our view of WAPDA's financial
policy.
"The three large HPPs that WAPDA aims to start constructing are
rather complicated and technologically advanced. We have observed
significant delays and budget overruns for such projects in the
past. For instance, the Neelum Jhelum 969 megawatt HPP was
originally due to be launched in 2011 for $935 million, but due to
complexity of the project, was only completed in 2018 at a total
cost of $5.1 billion. In addition, this HPP was established
separately from WAPDA in a form of an SPV (it is not consolidated
under the company's accounts), and NEPRA treats it independently
for regulation purposes. However, we think that given WAPDA's 99%
ownership of this SPV and its track record of injecting equity and
providing loans during the construction phase, the company has a
strong financial incentive to support the SPV, which leads us to
consolidate the SPV in our analysis.
"The stable outlook reflects that on the sovereign rating on
Pakistan, as well as our view there is an extremely high likelihood
that the Pakistani government will provide timely and sufficient
financial support to WAPDA. The outlook also balances WAPDA's
favorable tariff framework, solid 25% contribution to the country's
electricity balance, and high margins, against large working
capital swings, a track record of delays in payments from the CPPA,
WAPDA's high debt leverage, and its ambitious capex program that it
will largely finance with debt.
"Given WAPDA's ambitious capex program, we think that its credit
metrics will remain in the highly leveraged category, with FFO to
debt of about 7%-12% in 2020-2022 and debt to EBITDA in the range
of 5.0x-6.2x in the same period. We project that FOCF will remain
significantly negative in the next three years, and we expect the
company to cover this with new borrowings.
"Rating upside potential is limited as we do not expect to rate
WAPDA above the sovereign rating on Pakistan due to the company's
large exposure to the local economy and regulation."
S&P may lower the rating on WAPDA if:
-- S&P lowers the sovereign rating on Pakistan; or
-- WAPDA's liquidity deteriorates materially, which might be the
result of an extensive reliance on short-term debt or significant
delays in payments by the CPPA.
=================
S I N G A P O R E
=================
HATTEN LAND: Bondholders Agree to Defer Repayment For Second Time
-----------------------------------------------------------------
Marissa Lee at The Business Times reports that Hatten Land said on
June 3 that the holders of its US$25 million, 8-per-cent guaranteed
secured bonds due 2020 have agreed to let it defer repayment on the
bonds once again.
According to the report, Hatten Land said on June 3 that the
bondholders have agreed to push the repayment date out to July 8,
2020. The bonds, issued in 2018, were meant to mature on March 8,
but Hatten Land had previously obtained approval to defer that to
June 8, 2020.
BT says the interest rate of 10 per cent applies to the unpaid
principal and interest during the extended period. The terms and
conditions of the bonds remain unchanged.
Hatten Land Limited operates as a property developer. The Company
develops malls, hotels, and residential properties. Hatten Land
serves customers in Singapore and Malaysia.
HYFLUX LTD: Subsidiary's Ex-HR Manager Charged with Corruption
--------------------------------------------------------------
The Business Times reports that the former human resource manager
of a Hyflux subsidiary has been charged with corruption on June 3.
Khoo Chen Ee, 36, who was a manager in Hydrochem, is accused to
have received or agreed to receive about SGD7,000 in "rewards" on
three occasions between August and December 2018 from the director
of Leeds HR Solution, Elumalai Selvakumar, BT says.
Khoo resigned and left Hydrochem in December 2018.
According to BT, Hydrochem is the predecessor of Hyflux. It was set
up by Hyflux founder Olivia Lum in 1989 and became a wholly-owned
subsidiary when Hyflux was incorporated in 2000 ahead of its public
listing. The beleaguered water treatment firm is currently under
criminal investigation for suspected false and misleading
statements, as well as non-compliance with accounting standards.
Khoo, a permanent resident, said in court on June 3 that he intends
to plead guilty. He will be back in court on June 26, BT relays.
BT adds that Corrupt Practices Investigation Bureau (CPIB) did not
say whether Mr. Elumalai is facing any corruption charge, but it
warned that businesses should have a level-playing field to advance
their interests and engage in honest competition.
"Individuals who resort to corrupt means to advance business
interests will have to face the full consequences of the law," it
said in a statement.
Those convicted of a corruption offence can be fined up to
SGD100,000 or sentenced to jail of up to five years or to both, the
report notes.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company engaged WongPartnership LLP as legal advisors and Ernst
& Young Solutions LLP as financial advisors in this process. On
Jan. 29, WongPartnership applied to discharge themselves due to
difficulties relating to "loss of confidence and good cause" in
working with the client. The Company subsequently appointed
Clifford Chance and Cavenagh Law as its legal advisers in WongP's
place.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to Reuters.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
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