/raid1/www/Hosts/bankrupt/TCRAP_Public/201111.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
Wednesday, November 11, 2020, Vol. 23, No. 226
Headlines
A U S T R A L I A
ACN 122 909 040 PTY: First Creditors' Meeting Set for Nov. 18
ALICE MCCALL: Placed in Administration; 8 Stores Closed
ARVENSYS TECHNOLOGIES: First Creditors' Meeting Set for Nov. 19
TIGER RESOURCES: First Creditors' Meeting Set for Nov. 17
[*] AUSTRALIA: Experts Expect Surge of Insolvencies in 2021
C H I N A
REDCO PROPERTIES: S&P Assigns B Rating to USD Sr. Unsecured Notes
I N D I A
A.S. JUTE: Ind-Ra Moves B- LT Issuer Rating to Non-Cooperating
ALAKNANDA HYDRO: CARE Lowers Rating on INR3,938.05cr Loan to D
AMBALIKA SUGAR: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
ARTEMIS AUTO: CARE Lowers Rating on INR14.50cr LT Loan to D
BAJORIA AGRO: CARE Lowers Rating on INR32cr LT Loan to D
CALYPSO AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
CAMSON AGRI: CARE Lowers Rating on INR10cr LT Loan to C
ELITE INFRAPROJECTS: CARE Keeps D Debt Ratings in Not Cooperating
ENES TEXTILE: Ind-Ra Withdraws BB LT Issuer/Non-Cooperating Rating
GARG ISPAT: CARE Keeps D Debt Ratings in Not Cooperating Category
HAYATH FOODS: CARE Lowers Rating on INR10.41cr LT Loan to C
HUBLI COTTON: CARE Keeps D Debt Rating in Not Cooperating Category
KEVIN MET PACK: CARE Moves D Debt Rating to Not Cooperating
KOMMINENI INFOTECH: CARE Lowers Rating on INR6.0cr LT Loan to D
LAKSHMI ENGINEERING: CARE Cuts Rating on INR9cr LT Loan to C
METRO AGRI: CARE Keeps D Debt Ratings in Not Cooperating Category
MIL INDUSTRIES: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
MUMBAI INTERNATIONAL: Ind-Ra Revises B Bank Loan Ratings to RWE
NAYAAB JEWELS: CARE Keeps D Debt Ratings in Not Cooperating
ONGOLE AROGYA: CARE Keeps D Debt Rating in Not Cooperating
P.M AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
PALANI ANDAVAR: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
POPULAR GROUP: CARE Keeps D Debt Rating in Not Cooperating
RCL PAPER: CARE Keeps D Debt Ratings in Not Cooperating Category
RELIABLE POLYESTER: CARE Lowers Rating on INR5.50cr LT Loan to D
RENUKA FARMERS: CARE Keeps D Debt Rating in Not Cooperating
ROLTA INDIA: Ind-Ra Affirms 'D' Long Term Issuer Rating
SAI DURGA: CARE Keeps D Debt Ratings in Not Cooperating Category
SAIDHAM OVERSEAS: CARE Assigns D Rating to INR50.03cr Term Loan
SANTLAL INDUSTRIES: CARE Cuts INR60cr LT Loan Rating to C
SIDHARTHA BUILDHOME: CARE Keeps D Debt Ratings in Not Cooperating
SMC PROJECTS: Ind-Ra Assigns 'BB' LT Issuer Rating, Outlook Stable
SMR PLANTATION: Ind-Ra Lowers Long Term Issuer Rating to 'BB'
SMT. SHAKUNTLA: CARE Keeps D Debt Ratings in Not Cooperating
ST. MARYS RUBBERS: Ind-Ra Lowers Long Term Issuer Rating to 'BB'
STAR AGRIINFRASTRUCTURE: CARE Cuts Rating on INR17.63cr Loan to D
STAR AGRIWAREHOUSING: CARE Cuts Rating on INR29.35cr Loan to D
TERRACIS TECHNOLOGIES: CARE Keeps D Ratings in Not Cooperating
TRINITY INDIA: Ind-Ra Moves BB+ Issuer Rating to Non-Cooperating
UNITON INFRA: CARE Lowers Rating on INR15cr LT Loan to B
VISHWARAJ SUGAR: Ind-Ra Affirms BB Issuer Rating, Outlook Negative
M A L A Y S I A
AIRASIA GROUP: AAX Set to Amend Debt Restructuring Plan
DAYA MATERIALS: Auditors Express Disclaimer of Opinion
N E W Z E A L A N D
LIFETIME INCOME: A.M. Best Places B(Fair) FS Rating Under Review
S I N G A P O R E
HIN LEONG: HSBC Sues Lim Family, Employee to Recover US$85.3MM
S O U T H K O R E A
JEJU AIR: Net Loss Widens to KRW66.8BB in Quarter Ended Sept. 30
STX OFFSHORE: KDB-led Creditors Invite Bidders for Stake
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A U S T R A L I A
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ACN 122 909 040 PTY: First Creditors' Meeting Set for Nov. 18
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of ACN 122 909
040 Pty Ltd, trading as Modscape Pty Ltd, will be held on Nov. 18,
2020, at 2:30 p.m. at Unit 52/41-49 Norcal Road, in Nunawading,
Victoria.
Peter Goodin of Magnetic Insolvency was appointed as administrator
of ACN 122 909 040 Pty Ltd on Nov. 6, 2020.
ALICE MCCALL: Placed in Administration; 8 Stores Closed
-------------------------------------------------------
Eloise Keating at SmartCompany reports that the administrators for
fashion retailer Alice McCall have closed eight of the company's 12
stores, as they prepare the business to continue operating with a
reduced store footprint, after COVID-19 took a toll on the
well-known brand.
Administrator Ian Purchas from SV Partners was appointed to the
business on Nov. 8 and told SmartCompany on Nov. 10 the decision to
close stores was made on Nov. 9.
By Monday evening [Nov. 9], eight Alice McCall stores were
permanently closed, including four stores in New South Wales,
located at Bondi, Paddington, Chatswood and Miranda.
The Alice McCall store at Chadstone shopping centre in Victoria was
also closed on Nov. 9, as were the stores at Claremont in Western
Australia, Pacific Fair on the Gold Coast and Chermside in
Brisbane.
Fashion designer Alice McCall launched the brand in 2004, and in
2009, expanded by adding an online store and venturing into China
with a dedicated e-commerce site and physical store, which has
since closed, SmartCompany discloses.
SmartCompany says the business had been operating with 14 stores in
Australia prior to the COVID-19 pandemic, however, Purchas says two
of those stores did not open up again when restrictions were
lifted.
While the total number of employees affected by this week's
closures was not available, Mr. Purchas confirmed no head office
staff have been made redundant, according to SmartCompany.
"Obviously, with the closure of eight out of 12 stores, there are a
number of redundancies," SmartCompany quotes Mr. Purchas as saying,
adding that the majority of affected employees are casuals.
A "small number" of permanent store-related retail staff have also
been affected.
SmartCompany says the remaining four retail stores are continuing
to trade, as is the company's online store, and Purchas says there
is "no intention" to close the business completely.
Instead, the administrators "expect to go forward with a reduced
number of stores", including three flagship stores in Melbourne,
Sydney and Brisbane.
The administrators will continue to monitor the performance of
these stores, he said, with the online part of the business having
achieved "very strong" performance throughout the pandemic,
SmartCompany relays.
SmartCompany notes that the business' main revenue sources come
from the online and wholesale parts of the business, with Purchas
saying the retail stores were challenged by both COVID-19 and
ongoing rent concerns, which were further exacerbated by the
pandemic.
"She has a very strong following, but the inability of people to go
into stores because of COVID restrictions hit top-line revenue,"
the report quotes Mr. Purchas as saying.
Creditors of the business include landlords, suppliers, employees
and a related entity that holds the company's intellectual
property, including trademarks, Mr. Purchas, as cited by
SmartCompany, said.
The first meeting of creditors is scheduled to take place on
November 18, the report notes.
SmartCompany adds that Alice McCall said in a statement on Nov. 9
it was with a "heavy heart" that administrators were appointed to
her business.
"Due to the unprecedented effects that COVID-19 has had on our
economy, as well as some unsustainable bricks-and-mortar rental
obligations, I have had to make a necessary decision to edit down
my business, with the objective of building a more sustainable
business model for the future," she said.
ARVENSYS TECHNOLOGIES: First Creditors' Meeting Set for Nov. 19
---------------------------------------------------------------
A first meeting of the creditors in the proceedings of Arvensys
Technologies Pty Ltd will be held on Nov. 19, 2020, at 9:30 a.m.
via virtual meeting.
Jonathon Kingsley Colbran and Frank Lo Pilato of RSM Australia
Partners were appointed as administrators of Arvensys Technologies
on Nov. 9, 2020.
TIGER RESOURCES: First Creditors' Meeting Set for Nov. 17
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Tiger
Resources Limited will be held on Nov. 17, 2020, at 11:30 a.m. via
virtual meeting.
Robert Michael Kirman and Robert Conry Brauer of McGrathNicol were
appointed as administrators of Tiger Resources on Nov. 5, 2020.
[*] AUSTRALIA: Experts Expect Surge of Insolvencies in 2021
-----------------------------------------------------------
Edmund Tadros at The Australian Financial Review reports that
insolvency experts expect to be hit by a wave of company collapses
from January 1 after temporary relief measures to help businesses
through the COVID-19 economic crisis expire.
Practitioners in the area have spent the quieter-than-normal period
working on existing insolvency matters, catching up on training and
helping out in other service lines, according to leaders at three
firms in The Australian Financial Review Top 100 Accounting Firms
list.
AFR relates that the economic downturn caused by the coronavirus
pandemic led the federal government to make two major changes to
the way insolvencies are dealt with in Australia, alongside
providing subsidy programs such as JobKeeper.
According to the report, the first insolvency-related measure was
to introduce temporary relief rules for struggling companies and
individuals. The temporary insolvency rules, which now run until
December 31, increased the thresholds at which creditors could
issue a demand on a company to initiate bankruptcy proceedings, and
the time that a company had to respond to any demand, AFR says.
The second change, which kicks in from 2021, will allow small
businesses with liabilities of up to AUD1 million to continue
trading for up to 20 business days while they develop a debt
restructuring plan, AFR relates.
The temporary insolvency relief measures have cut work in the area
to the extent that "55 per cent of insolvency firms remain on
JobKeeper themselves", said John Winter, the CEO of the Australian
Restructuring Insolvency and Turnaround Association, according to
AFR.
"The market remains at the quietest levels on record, particularly
for firms specialising in insolvency. Firms that are
multi-disciplinary have been less hard hit," AFR quotes Mr. Winter
as saying.
He said the number of insolvencies across the country was "50 per
cent down on the usual pre-COVID baseline".
"Most insolvency firms are well aware that there are busy times
ahead [and] they have worked to retain their staff or are prepared
to rotate support staff in from other areas of diversified
practices when that demand arises," Mr. Winter said.
According to the report, Pitcher Partners' Andrew Yeo said he
expected a return to a more normal level of insolvencies next
year.
"Historically the lead up to Christmas can be a busy time for
business owners, struggling with financial difficulties during the
year, wanting to start the following year with a clean slate. It
will be interesting to see whether this occurs this year also," Mr
Yeo, an insolvency partner, said, AFR relays.
"We expect an increase at the start of 2021 with the removal of the
insolvent trading safe harbour exemption and the return to normal
settings for statutory demands, bankruptcy notices and wind-ups
through the courts generally – albeit there will be a slight
delay in this converting to actual appointments."
Revenue at the firm is up 1 per cent to AUD264 million in the 2020
financial year, according to the Financial Review Top 100
Accounting Firms list.
Pitcher Partners' insolvency and turnaround practice has six
partners and about 60 professionals and accounts for less than 5
per cent, or less than AUD13 million, of the firm's turnover.
Mr. Yeo said the team had had new insolvency appointments amid the
COVID-19 pandemic.
"We had a number of significant insolvency matters that commenced
during COVID, which partly offset the general slowdown in the
court-based appointments," the report quotes Mr. Yeo as saying.
"Having said that, we used the time to catch up on the outstanding
tail of work on various matters and increased our internal staff
training."
The insolvency experts at another Top 100 firm, RSM, had kept busy
by working in other business lines, said national chairman Jamie
O'Rourke.
"While we have noticed a downturn, it does not seem to be as
significant as our competitors. Work is being won and appointments
are being made -- it is just at a significantly lower rate than
usual," AFR quotes Mr. O'Rourke as saying.
"Our reconstruction and recovery team members have remained fully
occupied and employed. Where the need has arisen, we have kept them
busy by providing opportunities in other areas of our business
under controlled secondment programs across the RSM network."
RSM is one of the best-performing firms in its segment, with income
up 9 per cent in FY20 to AUD220.7 million despite the pandemic.
Insolvency work is worth about 7 per cent, or AUD16 million, of
total income, AFR discloses.
AFR adds that insolvency practitioners at another firm, Pilot
Partners, have kept busy doing other work, including
"non-distressed business sales" amid the COVID pandemic.
"We're undertaking work in the general restructuring area and other
types of corporate advisory work," the report quotes partner Nigel
Markey as saying. "We're also advising on non-distressed business
sales. They're businesses that have been assisted by COVID, like
transport. The other area we're seeing a bit of movement in is
not-for-profits where, from a restructuring perspective, some are
consolidating into other like-minded organisations.
"There is also existing insolvency work that will continue. We also
have staff seconded out to other areas of the firm."
AFR relates that Mr. Markey said creditors would wait until the
insolvency relief rules expired at the end of the year before
making claims.
"The moratorium extends until the end of December so, practically
speaking, creditors will wait until January 1 to issue any
statutory demands for payment. We think that it will come on
through to the end of the financial year and beyond," he said.
"The role of the Tax Office is also important. They are one of the
most active petitioning creditors seeking winding up orders against
companies, for unpaid taxes. They've gone into a COVID hiatus and
are expected to come back on track next year."
Mr. Markey is sceptical that there will be much take-up of the new
insolvency rules for companies with liabilities of up to AUD1
million that will kick in from January 1.
"We think there won't be as much uptake on the new measures -- much
like the safe harbour provisions from a few years ago – as a lot
of businesses simply won't qualify for it," he said.
"It'll be of assistance to people, but only those who come forward
early. [Business owners] don't seek advice early enough a lot of
the time. They don't act until they're forced to act."
Revenue at Pilot Partners grew more than 7 per cent, to AUD13.7
million, in FY20, the Top 100 Accounting Firms list shows, AFR
says. Insolvency work was worth between 15 per cent and 20 per
cent, or between AUD2 million and AUD2.7 million, of revenue, Mr.
Markey said.
The full Financial Review Top 100 Accounting Firms list will be
printed in the Accounting & Consulting section on November 25.
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C H I N A
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REDCO PROPERTIES: S&P Assigns B Rating to USD Sr. Unsecured Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issue rating to the
U.S. dollar-denominated senior unsecured notes proposed by Redco
Properties Group Ltd. (B/Stable/--). The company also announced a
tender offer to repurchase its outstanding U.S. dollar bonds due in
May 2021 at 101% of the principal amount. The issue rating is
subject to our review of the final issuance documentation.
Proceeds from the issuance will be mainly used for refinancing
existing debt.
S&P said, "We equalize the issue rating with the issuer credit
rating on Redco because the proposed notes are not significantly
subordinated to other debt in the company's capital structure. As
of June 30, 2020, we estimate Redco's capital structure consists of
about Chinese renminbi (RMB) 10.3 billion in secured debt, RMB9.6
billion in unsecured debt, and other borrowings issued at the
holding company level. Our estimate is based on Redco's June 30,
2020, reported data and the subsequent senior note issuances in
July and August. Adding the amount of the proposed issuance, the
company's priority debt ratio will be below our notching down
threshold of 50%, versus 52% now.
"The stable outlook reflects our expectation that Redco will
continue to expand its operating scale and have stable
profitability and effective control over debt leverage over the
next one to two years. The company's rolling 12-month
debt-to-EBITDA ratio slightly improved to about 5.8x as of end June
2020, from 6.3x as of end-2019."
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I N D I A
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A.S. JUTE: Ind-Ra Moves B- LT Issuer Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated A.S. Jute Product
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND B- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR100 mil. Fund-based facilities migrated to non-cooperating
category with IND B- (ISSUER NOT COOPERATING) / IND A4
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 30, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
A.S. Jute Product was incorporated in 2010 at Vishakapatnam, Andhra
Pradesh. It commenced commercial production in 2012. It
manufactures jute products such as jute gunny bags and jute yarns,
which is processed from raw jute.
ALAKNANDA HYDRO: CARE Lowers Rating on INR3,938.05cr Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Alaknanda Hydro Power Company Ltd (AHPCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 3,938.05 CARE D Revised from CARE BBB-
Facilities and removed from under Credit
watch with Negative
Implications
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facilities of AHPCL
takes into account delay in receipt of payments from Uttar Pradesh
Power Corporation Limited (UPPCL) leading to stretched liquidity
position of the company and delays in debt servicing to the
lenders.
Rating Sensitivities
Positive Factors
* Improvement in liquidity position with timely recovery of
payments from UPPCL
* Approval of entire capital cost along with recovery of
differential amount from UPPCL and subsequent reduction in debt
level
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delayed receipt of payments from UPPCL with consequent delays in
debt servicing: AHCPL sells 88% of the power generated to UPPCL
with balance provided as free energy to the State of Uttarakhand.
During the current fiscal, the company has been facing delays in
receipt of payment from UPPCL, the sole off-taker. Considering the
delay in receipt of payment from UPPCL and COVID-19 scenario, the
company opted for availing the moratorium for the period
March-August 2020. During August 2020, AHPCL received a significant
portion of pending dues from UPPCL of INR197.52 crore (against
pending receipt of INR380 crore as on July 31, 2020) which AHPCL
utilized for creation of Debt Service Reserve Account (DSRA) of
INR80 crore with lead banker (Punjab National Bank in the form of
fixed deposit) and also serviced the debt for which moratorium was
availed for March 2020. Despite availability of DSRA, the lenders
have not dipped into it. There has been delay in debt servicing
which have been cleared by Mid-October 2020. However, for debt
servicing pertaining to facilities availed from Bank of Baroda,
there are overdues in interest servicing on account of levy of
processing charges (adjusted against the payments received) which
has been disputed by the company.
* Leveraged capital structure with debt coverage indicators: AHPCL
has a leveraged capital structure with overall gearing ratio of
11.35x as on March 31, 2020 which further deteriorated from 7.82x
as on March 31, 2019 on account of erosion of networth due to
continued losses being reported by the company. The other debt
coverage metrics has also been weak.
* Pending refinancing of debt: The company has availed debt from
ECL Finance Ltd. (Edelweiss) which was to be refinanced in the
current fiscal. While the company availed moratorium on such debt
during the period March – June 2020; it has sought
refinancing/rollover of such debt which is under process by
Edelweiss.
* Hydrological risks associated with run-of-the-river power
generation: Run-of-the-river power is considered an unstable source
of power, as a run-of-the-river project has little or no capacity
for water storage and therefore is dependent on the flow of river
water for power generation. It thus generates more power during
times when seasonal river flows are high and less during lean
period. However, AHPCL has demonstrated healthy operational
performance since the commissioning of the project in June 2015.
Key Rating Strengths
* Experienced promoters in Infra space: Alaknanda Hydro Power
Company Limited (AHPCL) belongs to Hyderabad based GVK group, which
has presence in various segments of the infrastructure space viz.
power, roads, airport (Mumbai Airport) etc.
* Stable operational & financial performance during FY20: AHPCL
reported PLF of about 46% in FY20 as against 41% in FY19. However
it reported lower total operating income by about 5% from INR740.96
crore in FY19 to INR702.25 crore in FY20. During FY19, AHPCL
received INR111.58 crore as arrears pertaining to period FY16-17 on
account of recovery of shortfall of energy charges due to
differential design energy from 1550 MU to 1350 MU. However,
excluding the arrears for the period FY16-17, AHPCL would have
reported total operating income of INR629.38 crore and compared to
the same revenue, AHPCL has reported increase in revenue by about
12% during FY20. However, AHPCL continued to report stable PBILDT
margin at 89.61% in FY20 similar to 89.92% in FY19. This apart,
AHPCL also continued to report net loss during FY20 due to high
interest expenses and depreciation. Nevertheless, the company
reported GCA of INR44.30 crore in FY20 vis-à-vis INR83.55 crore in
FY19.
Liquidity: Stretched
Delayed receipt of payments from off-taker and high debt repayment
obligation has resulted in weakened liquidity profile. The company
has created DSRA of INR80.0 crore (maintained in the form of FD
with lead banker, PNB) which covers one quarter principal and 1.5
months interest servicing. The same remains unutilized as on
October 28, 2020. This apart, the cash credit limit of the company
continues to be fully utilized for last 6 months period ended
September 2020. The company availed moratorium for the period March
2020 to August 2020.
Alaknanda Hydro Power Company Ltd (AHPCL) is a Special Purpose
Vehicle (SPV) promoted by GVK group. The company has set up a 330
MW (4 × 82.5) run-of-the-river hydroelectric power project on
Alaknanda River at Shrinagar, Uttarakhand. The company commenced
commercial operations from June 21, 2015 (as against original
scheduled Commercial Operations Date (COD) of the project of July
31, 2011). AHPCL has signed PPA with UP Power Corporation Ltd
(UPPCL) for selling 88% of the power generated and the balance is
provided as free energy to State of Uttarakhand.
AMBALIKA SUGAR: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shri Ambalika
Sugar Private Limited (SASPL) a Long-Term Issuer Rating of 'IND
BB+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR1.150 bil. Term loans due on March 2026 assigned with IND
BB+/Stable rating; and
-- INR4.350 bil. Fund-based limits assigned with IND BB+/Stable/
IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect SASPL's medium scale of operations. The revenue
improved 24.1% yoy in FY20 to INR5,976 million, primarily on
account of higher sugar sales volumes. Though the cane crushing
period reduced during SS2020 to 111 days (SS2019: 132 days),
deteriorating the capacity utilization to 128% (138%) and
decreasing the recovery rate to 10.36% (11.33%), the sugar sales
volume increased to 144,779MT (108,210MT). The sugar volume sales
had decreased in FY19 (volume sales as per sugar release quota) due
to which the closing stock increased at year-end, increasing the
sugar volume sales in FY20. Sugar realization increased to INR31
per kg in FY20 (FY19: INR29 per kg). FY20 numbers are provisional
in nature.
There was a decline in the sales of energy to INR452 million in
FY20 (FY19: INR568 million) and ethanol segment to INR906 million
(INR1,088 million) due to a decrease in the total cane crushed to
1,066,551MT (1,364,215MT). The total revenue booked during April to
September 2020 was INR2,781.7 million. The management expects an
increase in sugar sales in SS2021 owing to favorable climatic
conditions, resulting in an increase in the recovery rate up to
11.5%, and targeted cane crushing of around 1,800,000 MT coupled
with an expected increase in minimum selling price to INR33 per kg
(FY20: INR31 per kg).
The ratings also reflect SASPL's moderate credit metrics which
deteriorated in FY20 due to an increase in debt to fund capex,
leading to higher interest expenses, coupled with a decrease in
absolute EBITDA to INR1,184 million (FY19: INR1,328 million). The
gross coverage ratio (operating EBITDA/gross interest expense) was
2.2x in FY20 (FY19: 2.7x) and net leverage (total adjusted net
debt/operating EBITDAR) was 5.7x (5.0x). Ind-Ra expects the credit
metrics to improve in FY21, owing to an increase in EBITDA as a
result of an ethanol capacity expansion.
In FY20, SASPL could not translate the revenue growth into EBITDA
mainly on account of the piling-up of inventory due to a low demand
during the year-end. The EBITDAR margin remained modest and
deteriorated to 20% in FY20 from 27.9% in FY19. The ROCE % stood at
12% in FY20 (FY19: 15%).
Liquidity Indicator - Stretched: The average peak utilization of
fund-based limits was 93.4% for the 12 months ended September 2020.
The TOL/TNW ratio was 4.1x in FY20 (FY19: 5.2x). The cash flow from
operations might have turned positive in FY20 (FY19: negative
INR1,440 million), owing to favorable changes in inventory;
however, the free cash flow is likely to have been negative owing
to the debt-led-capex for ethanol capacity expansion. The net
working capital days remained high, despite reducing to 323 days in
FY20 (FY19: 443 days), owing to a high inventory maintained
inherent to the sugar industry coupled with an elongated receivable
period. This was due to the long credit period allowed to traders
owing to the low demand at the year-end. The debt obligations for
FY21 are INR457 million. At end-September 2020, SASPL maintained
sugar stock of 60,000MT worth INR1,860 million. It has paid 100% of
fair and remunerative prices arrears. SASPL did not avail the
COVID-19 moratorium on term loans.
The sugar industry is highly regulated by the government in the
form of regulated/fixed input prices (cane costs) and market-linked
sugar sale prices.
Ind-Ra however favorably factors into the ratings SASPL's fully
integrated nature of operations which aids its realizations,
especially during downturns in the sugar segment. The sugar
manufacturing unit has a capacity of 7,500TCD. Moreover, SASPL has
a 38MW cogeneration facility for which it has a power purchase
agreement with Maharashtra State Electricity Board at the current
rate of INR6.53 per unit for the surplus power. SASPL also has a
license to manufacture ethanol with capacity of 60,000LPD and sell
it to oil companies through tender-based orders at government
regulated rates. The company has incurred capex of INR286.74
million to increase the capacity of its distillery unit 120,000
liters per day and revenue generation will commence from FY21. The
management expects INR2,000 million sales of ethanol to oil
companies in FY21. The capex was funded 76% by term loans of
INR217.2 million and remaining through internal accruals. The capex
is completed and the trial is in process.
Moreover SASPL's promoters have an operational track record of more
than a decade that has led to established relationships with
customers and suppliers.
RATING SENSITIVITIES
Negative: A decline in the scale of operations leading to
deterioration in net leverage remaining above 5.5x on a sustained
basis and the liquidity profile remaining stretched would be
negative for the ratings.
Positive: A reduction in net leverage below 4.5x on a sustained
basis and an improvement in the liquidity profile would be positive
for the ratings.
COMPANY PROFILE
SASPL has an integrated facility to manufacture sugar at 7,500TCD,
generate power at 38MW capacity, and produce ethanol at 12,000LPD
ethanol. It is located in Ahmednagar, Maharashtra. The promoters
are Dilip Kadam and Jangal Wagh.
ARTEMIS AUTO: CARE Lowers Rating on INR14.50cr LT Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Artemis Auto India Private Limited (AIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE BB; Stable; ISSUER NOT
COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had vide its press release dated January 1, 2020 placed the
rating of AIPL under the issuer non cooperating category as it had
failed to provide information for monitoring of the rating. AIPL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated September 9, 2020. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating takes into account the ongoing delays in interest
servicing in the cash credit account by the company ascertained by
CARE as part of its due diligence exercise.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in Servicing of Debt Obligations: CARE as part of its due
diligence exercise interacts with various stakeholders of the
company including lenders to the company and as part of this
exercise has ascertained that there are ongoing delays in interest
servicing in the cash credit account.
Artemis Auto India Private Limited (AIPL) is engaged in the
dealership of passenger cars of Volvo Auto India Private Limited
(VAIL) such as S60, V40, VC60, VC90, etc., spare parts &
accessories and servicing of vehicles. AIPL was incorporated in
2010 by Mrs. B. Umamaheswari, Managing Director and Mrs. Nrithya
Sivaganesh, Director and Mr. B.Sivaganesh.
BAJORIA AGRO: CARE Lowers Rating on INR32cr LT Loan to D
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Bajoria Agro Processing Private Limited (BAPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 32.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B; Stable; ISSUER NOT
COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 13, 2019, placed
the rating(s) of BAPPL under the 'Issuer non-cooperating' category
as BAPPL had failed to provide information for monitoring of the
rating. BAPPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated October 20, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of delays in debt
servicing as per audit report of FY19 downloaded from MCA's
website.
Detailed description of the key rating drivers
At the time of last rating on September 13, 2019 the following were
the rating strengths and weaknesses: (updated for the information
available from Registrar of Companies):
Key rating weaknesses
* On-going delay in debt servicing: As per Audit report for FY19
downloaded from MCA's website, there were delays in debt servicing
owing to stretched liquidity position.
Rajasthan based Bajoria Agro Processing Private Limited (BAPPL) was
incorporated in 2013 and is currently being managed by Mr. Mahender
Gopal Bajoria and Mr. Ankur Bajoria. BAPPL manufactures wheat based
products including maida, sooji, rava and atta at its manufacturing
facility at Abohar, Punjab having a production capacity of about
240 tonnes per day. The company procures it's raw material i.e
wheat from manufactures located in Delhi, Punjab and Harayana.The
company sells it's products to ITC, Bonn, Mrs. Bectors (Cremica) &
SS Foods ITC, Bonn, Mrs. Bectors (Cremica) & SS Foods.
CALYPSO AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Calypso
Agro Industries Private Limited (CAIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale, Key Rating Drivers and Detailed description of
the key rating drivers
CARE had, vide its press release dated August 23, 2019, placed the
rating of CAIPL under the 'issuer non-cooperating' category as
CAIPL had failed to provide information for monitoring of the
rating as agreed to in its Rating Agreement. CAIPL continues to be
non-cooperative despite repeated requests for submission of
information through email dated June 22, 2020, August 4, 2020,
October 7, 2020, October 12, 2020 and numerous phone calls. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 23, 2019 the following were
the rating weakness (Updated for information available from RoC
website):
Key Rating Weaknesses
* Delay in debt servicing obligations: As per interaction with the
banker during last review, there were continuous overdrawals in the
cash credit facility and the account was classified as NPA.
Incorporated in the year 2012, Calypso Agro Industries Private
Limited (CAIPL) was promoted by Mr. Vekanta Ramanrao, Mr. Prakash
Kharat, Mr. Anil Pohekar, Mr. Abhijeet Pohekar, Mr. Amitabh Pohekar
and Mr. Arvind Deshmukh. CAIPL is engaged in the trading of grains.
The major products of the company include pulses, rice and paddy.
CAMSON AGRI: CARE Lowers Rating on INR10cr LT Loan to C
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Camson AgrI Ventures Private Limited (CAV), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10.00 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE B (CE); ISSUER NOT
COOPERATING
Short-term Bank 3.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE A4 (CE); ISSUER NOT
COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 26, 2019, placed the
rating(s) of CAV under the 'issuer non-cooperating' category as CAV
had failed to provide information for monitoring of the rating. CAV
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated September 2, 2020 to September 8, 2020. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the ratings is on account of non-availability of
requisite information due to non-cooperation by Camson AgrIVentures
Private Limited (CAV), with CARE'S efforts to undertake a review of
the rating outstanding, as CARE views information availability risk
as key factor in its assessment of credit risk profile. Further,
ratings also considers default of the one of directors in meeting
debt obligations.
Detailed Rationale& Key Rating Drivers
At the time of last rating on August 26, 2019, the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Significant decline in revenues and erosion of profits: The total
operating income of CAV decreased from INR30.81crore in FY17 to
INR14.05 crore in FY18. Further, CAV has reported net loss of 2.79
crore and 1.21 crore in FY17 and FY18 respectively.
* Stretched liquidity position and vulnerability of sales and
profitability to agro climatic conditions and crop failure risk:
The current ratio of CAV decreased from 1.12x as on March 31, 2017
to 0.87x as on March 31, 2018. Further, CAV has reported negative
returns in both FY17 and in FY18.
* Exposure to intense competition from chemical fertilizers
manufacturers: The industry is exposed to intense competition from
chemical manufacturers of chemical fertilizers due to its large
scale presence and easy availability. Also, slow effects of bio
tech products over chemical products and low adoption of bio tech
products is anticipated to hamper the growth of the market.
Key Rating Strengths
* Experienced management team: Mr. Dhirendra Kumar, founder of
Camson group holds a M.Sc. in plant genetics and breeding and an
MBA in marketing from the Punjab Agricultural University. He also
holds an MBA in export management from IIFT, New Delhi. Mr. Kumar
has headed the development of 'Zero-residue' products, new
technological platforms and organically viable hybrid seeds. He has
previously worked with ITC Ltd, Pioneer Seeds Co, Ranbaxy and
Coromandal Indag at different positions. Mr. Rohit Sareen,
Managing Director, is an MBA graduate and has worked globally with
Merrill Lynch International and Citibank Singapore Ltd across
various leadership roles. At CAV he is responsible for managing the
company and taking the Fresh & Safe Brand to the end customers.
Analytical Approach: Standalone
The analytical approach has been changed to standalone from credit
enhanced rating as corporate guarantee provided by company (Camson
Bio Technologies Limited) is undergoing Insolvency resolution
process under NCLT. Hence, Credit Enhancement rating approach will
not be valid.
Camson AgrI Ventures Pvt. Ltd. (CAV) was incorporated on January
25, 2013 by Mr. Rohit Sareen and Mr. Nimir Mehta. Camson Bio
Technologies Limited (CBT) is a holding company with 65% stake in
CAV as on March 31, 2015 and balance with Mr. Rohit Sareen (15%)
and Mr. Nimir Mehta (20%). CAV is an integrated provider of
eco-friendly agricultural solutions. CAV is engaged in the business
of contract farming, food processing and trading of seeds and
biocides. The company is majorly engaged in trading activity
(agricultural goods viz. maize and paddy seeds).
ELITE INFRAPROJECTS: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Elite
Infraprojects Private Limited (EIPPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.50 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 6.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 14, 2019, placed the
ratings of EIPPL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The firm continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated January 31, 2020 to September 08, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating dated Augsut 14, 2019 the following were
the Strengths and Weaknesses:
Key Rating Weakness
* Delay in debt servicing: The company has delays in servicing of
debt obligations owing to the stretched liquidity position of the
company Short track record of the company EIPPL was incorporated in
January 2009 and executed around eight contracts completely till
February 2014, amounting to around INR165.62 crores. The works
executed majorly include road works, irrigation works and other
civil construction works. Furthermore, its scale of operations are
small as compared with other industry peers marked by total
operating income of INR49.15 crore during FY13 and low net-worth
base of INR6.98 crore as on March 31, 2013.
* Moderate capital structure with elongated working capital cycle:
EIPPL has a moderate capital structure marked by moderately high
overall gearing of 1.75 times as on March 31, 2013, on account of
high working capital borrowings and increased term loans during
FY12 and FY13 for the purchase of additional 1 Complete definition
of the ratings assigned are available at www.careratings.com and
other CARE publications 2 construction equipment. The total
debt/GCA also stood moderately high at 5.87 times in FY13 on
account of high level of debt of the company and moderate cash
accruals. The company's working capital cycle stood high and
increased from 77 days in FY12 to 120 days in FY13 due to the
increased level of inventory holding days from 33 days in FY12 to
around 60 days in FY13 coupled with higher collection days of 88
days in FY13; the increased inventory level was due to the higher
amount of work in progress as on year ending date.
Key Rating Strengths
* Qualified and experienced promoters of the company: The company
is promoted and managed by Mr. B Narsimha Reddy and Mr. B Nagi
Reddy, who are the directors of the company. Mr. B Nagi Reddy a
graduate and Mr. B Narsimha Reddy an MBA graduate has around
thirteen years of experience in handling the company's activities.
Over the years, the promoters of the company have been able to
establish strong relationship with its customers.
* Significant growth in total operating income during the last
three years ended FY13: The total operating income of the company
has registered a Compounded Annual Growth Rate (CAGR) of 90.10%
during the periods FY11-FY13 (from INR13.60 crore in FY11 to
INR49.15 crore in FY13), backed by increased order book and
execution of contracts in hand. Furthermore, the company has
achieved a total operating income of INR60.30 crore during
11MFY14.
* Healthy albeit concentrated order book position: EIPPL has a
healthy order book position with orders in hand aggregating
INR172.46 crore as on March 15, 2014, to be executed majorly before
March 2016, thus providing long term revenue visibility to the
company. However, EIPPL is exposed to client concentration risk as
the current order book is from three customers, namely, Odisha
Construction Corporation Limited, Concast Infratech Limited and
Back Bone Construction Pvt Ltd. Also, around 68% of the order book
is from a single customer, Back Bone Construction Pvt Ltd. Such
concentrated order book would impact the company's business
turnover/cash flow position significantly in case of any slowdown
in the project execution or weakening of credit profile of the
contractors.
EIPPL was incorporated in the year 2009 by Mr. B Narsimha Reddy and
Mr. B Nagi Reddy. The company is engaged in the execution of civil
construction works such as laying of roads, canal irrigation works
and other civil works for both government and private
organisations. EIPPL mainly undertakes projects for government and
private organisations.
ENES TEXTILE: Ind-Ra Withdraws BB LT Issuer/Non-Cooperating Rating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained ENES Textile
Mills' Long-Term Issuer Rating of 'IND BB (ISSUER NOT COOPERATING)'
in the non-cooperating category and has simultaneously withdrawn
it.
The instrument-wise rating actions are:
-- INR56.22 mil. Term loan* maintained in non-cooperating
category and withdrawn; and
-- INR500 mil. Fund-based working capital limit** maintained in
non-cooperating category and withdrawn.
*Maintained at 'IND BB (ISSUER NOT COOPERATING)' before being
withdrawn
**Maintained at 'IND BB (ISSUER NOT COOPERATING)'/'IND A4+ (ISSUER
NOT COOPERATING)' before being withdrawn
KEY RATING DRIVERS
The ratings have been maintained in the non-cooperating category
before being withdrawn because the issuer did not participate in
the rating exercise despite repeated requests by the agency, and
has not provided information about interim financials, sanctioned
bank facilities and utilization, business plans and projections for
the next three years, information on corporate governance, and
management certificate.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-dues certificate from the one of its lenders
since the limits were closed. The limits were subsequently taken
over by another lender, who has issued a no-objection certificate.
This is consistent with the Securities and Exchange Board of
India's circular dated March 31, 2017 for credit rating agencies.
COMPANY PROFILE
ENES Textile Mills is an integrated apparel manufacturer and
retailer.
GARG ISPAT: CARE Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Garg Ispat
Udyog Limited (GIUL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 6.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 12, 2019,
maintained the rating(s) of GIUL under the 'issuer non-cooperating'
category as Garg Ispat Udyog Limited (GIUL) had failed to provide
information for monitoring of the rating. Garg Ispat Udyog Limited
(GIUL) continues to be non-cooperative despite repeated requests
for submission of information through e-mail communications/
letters dated July 31, 2020, August 31, 2020, September 30, 2020,
Oct 05, 2020, Oct 06, 2020, Oct 19, 2020, Oct 20, 2020 and numerous
phone calls. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. Further, banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been reaffirmed by taking into account
non-availability of information and no due-diligence conducted due
to non-cooperation by Garg Ispat Udyog Limited (GIUL) with CARE'S
efforts to undertake a review of the rating outstanding. CARE views
information availability risk as a key factor in its assessment of
credit risk.
The rating on the company's bank facilities will now be denoted as
CARE D; ISSUER NOT COOPERATING/CARE D; ISSUER NOT COOPERATING.
Detailed description of the key rating drivers
Key Rating Weakness
* Delays in servicing debt obligation: There have been delays in in
servicing of interest obligations on account of stretched liquidity
position.
Delhi based, Garg Ispat Udyog Ltd. (GIUL) was incorporated in 1987
and is being managed by Mr. Manish Gupta, Ms. Nidhi Gupta, Ms. Alka
Gupta and Ms. Kamini Goyal. GIUL is engaged is manufacturing of MS
black pipes, scaffolding, PPG fabricated sheets for Buildings, MS
fabrications etc. GUIL procures key raw-material viz. HR-coil,
aluminum extrusion, aluminum form work from traders. The company
sells its products domestically to real estate developers and
construction contractors.
HAYATH FOODS: CARE Lowers Rating on INR10.41cr LT Loan to C
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Hayath Foods (HYF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.41 CARE C; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B-; ISSUER NOT COOPERATING
Short Term Bank 24.00 CARE A4; ISSUER NOT COOPERATING;
Facilities Rating continues to remain under
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 13, 2019, placed the
ratings of HYF under the 'issuer noncooperating' category as firm
had failed to provide information for monitoring of the rating. The
firm continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated April 2020 to September 8, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the non-availability
of requisite information due to non-cooperation by Hayath Foods
with CARE's efforts to undertake a review of the outstanding
ratings as CARE views information availability risk as key factor
in its assessment of credit risk profile.
Detailed description of the key rating drivers
At the time of last rating dated August 9, 2019, the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Presence in the highly fragmented industry characterized by
intense competition: The company is engaged in processing of fruit
pulps which involves moderate value addition. Moreover, on account
of number of units operating in similar business along with
presence of large sized renowned entities, the competition among
the players remains very high resulting in high fragmentation and
restricts the profitability to an extent.
* Seasonal availability of raw material (Mango) resulting into
working capital-intensive nature of business: Prices of mango are
highly volatile in nature and depend upon factors like, area under
production, yield for the year (4-5 months). The firm has to
procure significantly higher volume of mango to avail bulk discount
from suppliers. Furthermore, mango being seasonal crop, it is
available mainly from April-July, which results in a higher
inventory holding period for the business. The firm receives the
payment from its customers within 60-120 days and makes the payment
to its suppliers within 30-40 days which further resulted in
working capital intensive nature of business. The average
fund-based working capital limits were utilized at 95% during the
past 12 months period ended March 31, 2015.
* Constitution of the entity as a partnership firm: HYF, being a
partnership firm, is exposed to inherent risk of the partners'
capital being withdrawn at time of personal contingency and firm
being dissolved upon the death/retirement/insolvency of the
partners. Moreover, partnership business has restricted avenues to
raise capital which could prove a hindrance to its growth.
Furthermore, there is instances of capital withdrawal INR0.74 crore
during FY14. Susceptibility of margin to fluctuation in exchange
rates HYF is exporting processed products which constituted 25% to
total sales. Due to export there is possibility of susceptible to
fluctuation in currency and which in turn also affects the
profitability margins and the firm does not have any hedging
mechanism to safeguard the same.
Key Rating Strengths
* Experienced promoter for more than four decades in the industry:
The promoters have been engaged in the food processing industry for
more than four decades. Mr. Syed Mateen Aga (Managing Partner), has
more than four decades of experience in this industry through other
associate companies and is actively involved in the day-to-day
operations of the firm. Mr. Syed Tanzeem Aga, Mr. Syed Taheem Aga
and Mr. Syed Tanzil Aga, other three partners has more than 10
years of experience in the same line of business, and looks after
production and other operational activities. All of them belong to
the same family. HYF established in 2007 and has gained reasonable
track record of the firm in term of business operations.
* Location advantage with presence in major mango cultivation area
(Chittor) resulting in easy procurement of mangoes: HYF is well
connected to prominent mango growing belts. The firm enjoys
proximity to the mango growing areas of Chittoor. Hence, it derives
benefits from lower logistics expenditure (both on transportation
and storage), easy availability of labour and procurement of
mangoes at competitive prices, and consistent demand for finished
goods resulting in sustained revenue visibility.
HYF established in 2007 as a partnership firm and plant located at
Tirupathi By-pass road, Cherlapalli village post, Chitoor, Andhra
Pradesh. HYF was promoted by Mr. Syed Mateen Aga, Mr. Syed Tanzeem
Aga, Mr. Syed Taheem Aga and Mr. Syed Tanzil Aga. The firm is
engaged in the processing of various Mango pulp (totapuri &
alphonso) and tomato pulp, and papaya pulp. HYF is an ISO 9001:2000
certified firm. HYF procures its entire raw material (fruits and
vegetables) from the local market, ie, from local farmers and
dealers. HYF sells its products in the domestic market across India
like Andhra Pradesh, Maharashtra, Tamil Nadu, Kerala, Uttar
Pradesh, Gujarat and Karnataka which constituted to about 75% of
the revenue during FY15 (Provisional) and rest of 25% is exported
to UAE, Saudi Arabia and Yemen Arab Republic. About 90% of the
revenue was generated through mango pulp during FY15.
HUBLI COTTON: CARE Keeps D Debt Rating in Not Cooperating Category
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Hubli
Cotton Industries (HCI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.50 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 4, 2019, placed
the rating(s) of HCI under the 'issuer non-cooperating' category as
the firm had failed to provide information for monitoring of the
ratings. The Firm continues to be non-cooperative despite repeated
requests for submission of information through e-mails dated
September 4, 2020 to September 14, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating assigned to the bank facilities of Hubli Cotton
Industries (HCI) continues to be tempered by ongoing
delays/defaults in servicing its debt obligations.
Detailed Rationale& Key Rating Drivers
Key Rating Weakness
* Ongoing delays/defaults in debt servicing: The rated facilities
continues to remain as NPA since September 2018.
Karnataka based, Hubli Cotton Industries (HCI) was established on
July 18, 2015 as a partnership firm and its commercial operations
started from January, 2017. The firm is promoted by Mr.
Maheshchandra P Khandelwal along with his family members. The firm
is engaged in processing of cotton lint and seeds.
KEVIN MET PACK: CARE Moves D Debt Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Kevin
Met pack Private Limited (KMPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 16.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from KMPL to monitor the ratings
vide e-mail communications/letters dated August 11, 2020, August
17, 2020, August 18, 2020, August 25, 2020, August 28, 2020,
October 1, 2020 and numerous phone calls. However, despite CARE's
repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on Kevin Metpack
Private Limited bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings takes into account non-availability of requisite
information and no due-diligence conducted due to noncooperation by
Kevin Metpack Private Limited with CARE'S efforts to undertake a
review of the rating outstanding. CARE views information
availability risk as a key factor in its assessment of credit
risk.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Ongoing delays in interest servicing due to tight liquidity
position.
New Delhi-based Kevin Met pack Private Limited (KMPL) was
incorporated in November 2007 by Mr. Vikas Malu and his family
members. The company is a part of Kuber Group which is engaged in
manufacturing of tobacco products, rental leasing, hotel, spices
and others. The company manufacture metallized cast polypropylene
and polyethylene terephthalate shrink film, and thermoforming grade
polyester for the packaging industry. The company commenced
commercial production in 2013. KMPL manufacturing facilities are
based out in Delhi and Gandhi Nagar (Gujarat), with annual
production capacity of 150 metric tonne per month, as on July,
2019.
KOMMINENI INFOTECH: CARE Lowers Rating on INR6.0cr LT Loan to D
---------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kommineni Infotech Private Limited (KIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B; ISSUER NOT COOPERATING
Short Term Bank 5.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE A4; ISSUER NOT COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 9, 2019, placed
the ratings of KIPL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The firm continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated January 31, 2020 to October 14, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating assigned to bank facilities of Kommineni
Infotech Private Limited takes into account delays in meeting debt
obligation.
Key Rating Weakness
* Delays repayment and account classified as NPA: The firm has poor
liquidity position due to insufficient cash flows, thereby
resulting in delays in servicing debt obligations and the account
has been classified as NPA.
Kommineni Infotech Private Limited (KIPL) was incorporated in the
year 1998 as a Private Limited company. Presently, the directors of
the company are Mr. Praveen Kumar (Managing Director), Mrs Uma
(Director), Mrs Y. Saila Rani (Director) and Mr. Ajay Kumar
(Director). KIPL has its registered office located at Hyderabad and
is engaged in supply, installation and maintenance of computers,
laptops, printers, networking products and related computer
peripherals. The company receives the orders from State and Central
government through participating in tenders (online and offline
bidding) for supply, repairs and annual maintenance services (AMC)
services. The company supplies its products and renders services to
government departments like Andhra Pradesh State Road Transport
Corporation (APSRTC), Telangana State Power Generation Corporation
Limited (TSGENCO), Canara Bank, State Bank of India, Bharat Sanchar
Niagam Limited, Urban Development Department (Government of
Karnataka) among others. However as per MCA website Mr. K Srinivas
(Director) and Mr. K Raghu Ramu (Additional Director).
LAKSHMI ENGINEERING: CARE Cuts Rating on INR9cr LT Loan to C
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Sree
Lakshmi Engineering Works (SLEW), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B-; Stable;
ISSUER NOT COOPERATING
Short Term Bank 1.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 05, 2019 placed the
rating(s) of SLEW under the 'issuer non-cooperating' category as
SLEW had failed to provide information for monitoring of the
ratings. SLEW continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and emails dated January 2020 to October 14, 2020. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the non-availability
of requisite information due to non-cooperation by Sree Lakshmi
Engineering Works with CARE's efforts to undertake a review of the
outstanding ratings as CARE views information availability risk as
key factor in its assessment of credit risk profile.
Detailed description of the key rating drivers
At the time of last rating on August 5, 2019 the following were the
rating strengths and weaknesses:
Key Rating Weakness
* Small scale of operations: The firm was established in the year
2001 and despite long track record of the firm for 16 years; its
scale of operations remained small as compared to other industry
peers marked by total operating income of INR17.19 crore during
FY17 and low net worth base of INR3.23 crore as on March 31, 2017
making it vulnerable to fluctuations in the market conditions.
Further, the works executed include water supply and road works
which are procured from government organizations, representing
concentration of revenues.
* Leveraged capital structure and weak debt coverage indicators:
The capital structure of the firm remained leveraged marked by
overall gearing of 3.04 times as on March 31, 2017 on account of
high working capital borrowings. Total debt/GCA improved from
13.85x in FY16 compared with 11.37x in FY17 due to increase in
gross cash accruals, still remained weak. The PBILDT interest
coverage ratio improved from 1.73x in FY16 to 2.15x in FY17 due to
increase in PBILDT levels and stood satisfactory.
* Elongated working capital cycle days: The operating cycle
improved from 345 days in FY16 to 218 days in FY17 due to reduction
in average collection period and average inventory days. Inspite of
improvement, the average collection period stood high at 121 days
while inventory holding days stood at 97 days in FY17 primarily due
to the delays in payments received from government organizations
and higher amount of work in progress as on year ending date. On
account of these factors, the firm relies on the bank borrowings
for funding their day to day operations and to bridge the gap
between the receivables and payables. The average cash credit
facility utilization of the firm was 70% for the last 12 months
ended November 30, 2017.
* Highly fragmented and intensely competitive business segment:
SLEW is operating in highly competitive and fragmented industry.
The firm witnesses intense competition from both the
organized and largely unorganized players. This fragmented and
highly competitive industry results into price competition thereby
affecting the profitability margins of the companies operating in
the industry.
* Partnership nature of constitution with inherent risk of
withdrawal of capital: Constitution as a partnership has the
inherent risk of possibility of withdrawal of the capital at the
time of personal contingency which can adversely affect its capital
structure. Furthermore, partnership firms have restricted access to
external borrowings as credit worthiness of the partners would be
key factors affecting credit decision for the lenders.
Key Rating Strengths
* Experienced partners in the same line of business for more than a
decade: The firm was established and managed by Mr. K. Amarnatha
Reddy and his family members with around 14 years of experience in
civil contract works. Mr. K. Amarnatha Reddy was handling brick
manufacturing business before starting SLEW and has been
successfully handling water supply works under Municipal
Corporation and Panchayath Raj of Tirupati, Andhra Pradesh since
2001. The industry experience of the partners has helped the firm
in procuring contracts from government organizations.
* Increasing profitability margins: The PBILDT margin has been
increasing y-o- y basis from 6.95% in FY15 to 11.02% in FY17 at the
back of execution of projects y-o-y with relatively better profit
margins. The PAT margin of the firm has been increased from 0.43%
to 4.92% due to increase in PBILDT levels resulting in absorption
of financial expenses and depreciation provisions.
* Medium term revenue visibility from its current order book
position: The firm has satisfactory order book of INR50.36 crore as
on December 15, 2017, compared with the order book of INR3.48 crore
in August 2015 and the same is likely to be completed by September
2018. The said order book is related to laying of pipe lines and
water supply works. The current order book is concentrated with two
customers namely, The Indian Hume Pipe Co. Ltd and Amanulla
Contractor. Furthermore, the firm is expecting one more project of
laying pipeline in Ongole from The Indian Hume Pipe Co. Ltd with
the project cost of INR120 crore.
Tirupati-based SLEW was established by Mr. K. Amarnath Reddy and
his family members in the year 2001 as a partnership concern. The
firm is engaged in civil works such as water supply works, laying
roads and construction of buildings for government bodies such as
Panchayat Raj and Municipal Corporations which are procured through
tenders. The firm has executed several contracts
since its inception and currently has an order book worth around
INR50.36 crore as on December 15, 2017 to be executed by September
2018.
METRO AGRI: CARE Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Metro
Agri-Industries Limited (MAIL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 13.84 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long-term/Short- 2.66 CARE D/CARE D; ISSUER NOT
term Bank COOPERATING; Based on best
Facilities Available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 22, 2019, continued
to place the ratings of MAIL under the 'Issuer Not Cooperating'
category as the company had failed to provide the requisite
information required for monitoring of the ratings as agreed to in
its rating agreement. Metro Agri Industries Limited continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and a letter/email dated Oct 09,
2020. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available Information which
however, in CARE'S opinion is not sufficient to arrive at a fair
rating. The ratings of bank facilities of Metro Agri Industries
Limited are denoted as 'CARE D; Issuer not cooperating'.
Detailed description of the key rating drivers
CARE has not received any information from the company. The review
was conducted on the basis of best available information.
Metro Agri-Industries Limited (MAIL) was incorporated in 2011 by
Mr. Vijay Garg, Mr. Himank Garg and Mrs. Ankita Garg as a limited
company. The company started its production in November 2013 and is
engaged in the business of basmati rice milling and processing of
rice which is sold in the export and domestic markets. The
processing facility is at Tehsil Israna Karnal district in Panipat
(Haryana) with an installed capacity of ~28,800 metric tonnes per
annum (MTPA) as on
March 31, 2015.
MIL INDUSTRIES: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed MIL Industries
Limited's (MIL) Long-Term Issuer Rating at 'IND BB+'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR22 mil. Fund-based facilities affirmed with IND BB+/Stable
rating;
-- INR65 mil. Non-fund-based facilities affirmed with IND A4+
rating;
KEY RATING DRIVERS
The affirmation reflects MIL's continued small scale of operations,
as indicated by revenue of INR609 million in FY20 (FY19: INR411
million; FY18: INR306 million; FY17: INR295 million) due to an
increase in the number of orders received. The growth in revenue
over FY19-FY20 is attributed to the securing of high-value orders
from Coromandel Limited and GE Power India Limited. The company
has achieved a turnover of only INR137 million during 1HFY21
(1HFY20: INR297 million), as its operations were affected for
almost 60 days during 1QFY21 due to the impact of the COVID-19-led
lockdown. As on 20 October 2020, it had an outstanding order book
of INR320 million, scheduled to be executed over the next four
months. Ind-Ra expects MIL's revenue to decline in FY21 because of
the pandemic-led disruptions. The figures for FY20 are provisional
in nature.
The ratings are constrained by the volatility in MIL's operating
profitability due to the fragmented nature of the industrial lining
industry and fluctuations in the prices of its key raw material -
rubber and PTFE resin (a crude derivative). The margin remained
healthy but declined to 15% during FY20 (FY19: 16%, FY18: 7.2%;
FY17:10%) due to an increase in the cost of materials consumed. The
RoCE was 25% in FY20 (FY19: 21%; FY18: 6%; FY17: 7.4%) The
company's margins were higher over FY19-FY20 owing to the receipt
of the high-value orders from Coromandel and GE Power India.
The ratings benefit from MIL's comfortable credit metrics due to
lower dependence on external debts. The interest coverage
(operating EBITDA/gross interest expense) improved to 34x in FY20
(FY19: 18x; FY18: 5.3x; FY17: 7x) because of an increase in the
absolute EBITDA to INR92 million (INR66 million; INR22 million;
INR30 million). The company remained net cash positive, with a
comfortable cash balance of INR163 million in FY20 (FY19: INR11
million) and restricted cash of INR22 million (INR10 million). The
management expects the credit metrics to remain comfortable over
the medium term due to the absence of any major debt-led capex
plans.
Liquidity Indicator - Adequate: MIL's average utilization of the
fund-based and non-fund-based limits was 61% and about 55%,
respectively, for the 12 months ended September 2020. The working
capital cycle remained elongated in FY20 because of the nature of
the business but it improved to 117 days (147 days) owing to a
decline in inventory days (FY20: 89 days; FY19: 126 days) as well
as debtor days (58 days; 80 days). The company's cash flow from
operations has been positive since FY17, and increased to INR144
million in FY20 (FY19: INR24 million) due to the improvement in the
working capital cycle and the increase in the absolute operating
EBITDA. As of March 2020, MIL had an unutilized credit line of
INR7 million, and the company did not have any term loan or
unsecured loan outstanding against its cash and cash equivalent of
INR163 million. MIL did not avail the Reserve Bank of
India-prescribed debt moratorium.
The ratings also continue to be supported by the promoters'
experience of more than five decades in the manufacturing of rubber
and polytetrafluoroethylene lining.
RATING SENSITIVITIES
Negative: Any substantial decline in the operating profitability,
leading to deterioration in the liquidity and credit metrics, with
the interest coverage falling below 2.5x, will be negative for the
ratings.
Positive: An increase in the scale of operations and a stable
operating profitability, resulting in comfortable credit metrics,
all on a sustained basis, will be positive for the ratings.
COMPANY PROFILE
MIL manufactures anti-corrosion and anti-abrasion lining and
products, such as rubber and polytetrafluoroethylene lining, for
chemical and tire manufacturing industries.
MUMBAI INTERNATIONAL: Ind-Ra Revises B Bank Loan Ratings to RWE
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised the Rating Watch
status of Mumbai International Airport Limited's (MIAL) bank
facility ratings to Rating Watch Evolving (RWE) from Rating Watch
Negative (RWN).
The instrument-wise rating actions are:
-- INR61.410 bil. Long-term bank loans Rating Watch revised to
Evolving from Negative with IND B/RWE rating;
-- INR21.550 bil. Long-term bank loan against airport development
fee (ADF) receivables rating watch revised to Evolving from
Negative with IND B/RWE rating;
-- INR3.50 bil. Term loans against real estate deposits due on
May 2025 Rating Watch revised to Evolving from Negative with
IND B/RWE rating; and
-- INR11.350 bil. Bank facilities* Rating Watch revised to
Evolving from Negative with IND B/RWE rating.
*Details in Annexure
Analytical Approach: Ind-Ra continues to factor in the support
provided by MIAL to Navi Mumbai International Airport Private
Limited (NMIAL) to arrive at the ratings. MIAL has undertaken to
support NMIAL's equity requirements and cost overruns and agreed to
provide a corporate guarantee for the replenishment of the latter's
debt service reserve account (DSRA) for four years from the
commencement of operations.
KEY RATING DRIVERS
The RWE reflects the debt restructuring undertaken by MIAL ahead of
its debt-servicing due date of September 30, 2020 and the impact of
the same on its credit profile. On September 29, 2020, the company
submitted to its lenders a proposal to restructure its existing
loans and working capital facilities, delineating the change in
ownership clause under the Reserve Bank of India circular dated
June 7, 2019. MIAL has also applied to restructure its real estate
deposit loan. The company has not paid its debt obligations due in
September and October as the restructuring plan was submitted prior
to the due dates. Ind-Ra will analyze the restructuring plan and
its impact before taking any further rating action.
MIAL's financial profile was severely impaired by the outbreak of
COVID-19, the resultant lockdown and the continued restrictions on
airlines' operations. The total passengers handled by the airport
plummeted 91.9% yoy to 1.86 million in 1HFY21. Ind-Ra has not
recognized the non-payment of debt obligation for September and
October as a default because of the invocation of restructuring,
ahead of the due dates and the intense adverse impact of the
pandemic on the sector. This is in line with the SEBI circular,
released in August 2020, on the relaxation of default due to
restructuring of debt. According to this circular credit rating
agencies are allowed to not consider the non-payment of debt
service as a default if, basis its assessment, the restructuring is
solely on account of COVID-19 related stress. In the absence of
these regulatory relaxations, the agency could have moved the
ratings to a default category.
The existing promoters of MIAL – the GVK Group – has agreed to
cooperate with the Adani Group to take over the debt availed by the
former and thereafter, take ownership of MIAL upon the receipt of
approvals. This change in ownership, along with the approval of the
restructuring plan will have a positive impact on MIAL's ratings.
The management has informed Ind-Ra that under the restructuring
plan, MIAL has sought:
- an additional funded interest term loan for six months until
March 31, 2021;
- an extension of moratorium on the repayment of facilities till
March 31, 2022;
- an extension of tenure and revised repayment schedule,
consequent to the funded interest term loan and moratorium
extensions; and
- a reduction in interest rate for all facilities.
RATING SENSITIVITIES
The RWE indicates that the ratings may be affirmed, upgraded, or
downgraded. The rating was placed on RWE considering the
possibility of rating movements on both sides. In the event of
non-acceptance of the restructuring plan by the lenders, the
ratings could be downgraded to 'IND D' and if the restructuring
plan is successful with a change in the ownership, the ratings
could be upgraded.
COMPANY PROFILE
MIAL is a joint venture company held by a GVK group-led consortium,
comprising GVK Airport Holdings Ltd. (50.5% stake), South
Africa-based Bid Services Division (Mauritius) Limited (13.5%) and
ACSA Global Limited (10%) and Airports Authority of India (26%).
Under a 30-year concession, the government of India has granted
MIAL, the right to operate, maintain, develop, design, construct,
upgrade, modernize, finance, and manage Chhatrapati Shivaji Maharaj
International Airport. MIAL provides domestic and international
airport services to the Mumbai metropolitan area.
NAYAAB JEWELS: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Nayaab
Jewels (NJ) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 17.50 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 0.27 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale, Key Rating Drivers and Detailed description of
the key rating drivers
CARE had, vide its press release dated August 14, 2019, placed the
rating of NJ under the 'issuer noncooperating' category as NJ had
failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. NJ continues to be
non-cooperative despite repeated requests for submission of
information through email dated June 22, 2020, August 4, 2020,
October 7, 2020, October 12, 2020 and numerous phone calls. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on August 14, 2019 the following were
the rating weakness:
Key Rating Weaknesses
* Delay in debt servicing obligations: As per interaction with the
banker dated March 3, 2018, there were continuous delays in
servicing of interest payments and overdrawals in cash credit
facility and the account was classified as NPA.
Established in the year, 2003, Nayaab Jewels (NJ) is engaged in the
manufacturing and designing of gems, diamonds, precious and
semi-precious stone studded jewelry in gold, silver and platinum.
The firm is promoted by Mr. Upendra Bothra and Mrs. Manali Bothra.
ONGOLE AROGYA: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ongole
Arogya Hospitals Private Limited (OAHPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 38.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 28, 2019, placed the
ratings of OAHPL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The company continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and email dated April 2020 to September 08, 2020.In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
At the time of last rating on June 22, 2018, the following were the
rating strengths and weakness:
Key Rating Weakness
* Delay in debt servicing: The company is into stretched liquidity
position which resulted in delays in servicing of debt obligations
owing to the company.
Key Rating Strengths
* Experienced promoter: The main promoter of OAHPL; Dr. M.
Anjaneyulu (Managing Director) is a qualified doctor (MBBS) and has
experience of 17 years in Ophthalmology. He has been associated
with several hospitals in the past; Cambell Hospital, Y.S. Raja
Reddy Hospital, L.V. Prasad Eye Hospital (Hyderabad), Aravind Eye
Hospital (Madurai), etc. Further, he commenced a 30 bed eye
hospital in name of 'Aravind Eye Hospital' in Ongole in the year
2000. The MD is member of Indian Medical Association, All India
Ophthalmic Society, Andhra Pradesh Ophthalmic Society, Delhi
Ophthalmic Society and AP Private Nursing Home Associations.
Ongole Arogya Hospitals Private Limited (OAHPL), incorporated as a
Private Limited company in July 2012, was promoted by Mr. M.
Anjaneyulu (Managing Director) and Ms. Manne Madhavi Latha
(Director, W/o Managing Director). The Ongole-based company has set
up a 300-beded super multi-specialty hospital named 'Arogya
Hospitals' at Ongole in Prakasam district of Andhra Pradesh (A.P).
P.M AGRO: CARE Keeps D Debt Rating in Not Cooperating Category
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of P.M Agro
Products Private Limited (PMAPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 30, 2019, placed the
rating of PMAPL under the 'Issuer non-cooperating' category as
PMAPL had failed to provide information for monitoring of the
ratings as agreed to in its rating agreement.PMAPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated June
24, 2020, June 25, 2020, June 26, 2020 , August 4, 2020, October 5,
2020.In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on August 30, 2019, following was the
key rating weakness
Rating Weakness
* Delays in Debt servicing: There was delay in Debt servicing in
past.
PMAPL was incorporated as a private limited company in 2010 to take
over the proprietorship business of M/s P.M Dal Udyog (PDU). PAPL
is engaged in processing and trading of Arhar Dal (Toor dal) and
trading of dal chuni (used as cattle feed) and sells its product
under the brand name Baba Gold, Rasoi Gold, Son Pari and Ganga
Yamuna.
PALANI ANDAVAR: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed The Palani Andavar
Mills Limited's (TPAML) Long-Term Issuer Rating at 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR70.10 mil. (increased from INR54.54 mil.) Term loan due on
March 2027 affirmed with IND BB+/Stable rating;
-- INR70 mil. Fund-based facilities affirmed with IND BB+ / Stable
/IND A4+ rating; and
-- INR16 mil. Non-fund-based facilities affirmed with IND A4+
rating.
KEY RATING DRIVERS
The affirmation reflects TPAML's continued small scale of
operations. Despite an increase in the company's spindle capacity
to 35,072 in FY20 (FY19: 33,878), the company's revenue declined
marginally to INR449.54 million (INR458.72 million) owing to the
halt in production due to the COVID-19 led lockdown in March 2020.
Liquidity Indicator - Stretched: TPAML's elongated net cash
conversion cycle remained unchanged at 211 days in FY20 owing to
its continued high inventory period of 184 days (FY19: 192 days)
due to the seasonal procurement of cotton during October-March. The
company's free cash flows turned positive to INR23.2 million in
FY20 (FY19: negative INR39.24 million) due to the stable working
capital levels and lower capex incurred towards modernization. The
company commenced fresh capex in April 2020 to install a solar
power plant and remodernize some of its existing machinery at a
cost of INR41.3 million. This, Ind-Ra believes, will lead to a
significant decline in its free cash flow in FY21. TPAML's cash
flow from operations improved to INR30.04 million in FY20 (FY19:
INR6.22 million) due to its stable working capital requirement.
Ind-Ra expects the company's cash flow from operations to remain
positive over the medium term, backed by a stable operating EBITDA
and better management of working capital cycle.
The company has repayment obligations of INR11.10 million and
INR22.42 million for FY21 and FY22, respectively, which Ind-Ra
believes will be paid out of its internal accruals and from the
unutilized portion of the working capital limits, if required.
TPAML's average maximum use of the fund-based working capital
limits was around 48% for the 12 months ended September 2020. At
FYE20, the company had cash and cash equivalent of INR0.56 million.
The company availed of the Reserve Bank of India-prescribed debt
moratorium for the term loan installments for March-August 2020.
The ratings are also constrained by TPAML's modest margins, which
contracted to 9.3% in FY20 (FY19: 11.3%) due to a decline in sales
realization to INR282 (INR298). The company's margins are also
susceptible to fluctuation in raw material prices. The return on
capital employed was 8% in FY20 (FY19: 14%).
The ratings, however, are supported by the company's moderate
credit metrics. In FY20, the net leverage (adjusted net
debt/operating EBITDA) remained almost flat at 2.36x (FY19: 2.35x)
on account of a decline in the total debt to INR100.2 million
(INR122.2 million) owing to the scheduled repayment of term loan
and the lower utilization of working capital. However, the interest
coverage (operating EBITDA/gross interest expense) deteriorated to
4.9x in FY20 (FY19: 8.4x) on account of a decline in the operating
EBITDA to INR42.1 million (INR51.8 million) coupled with an
increase in interest expenses due to a new loan, which was taken to
fund capex towards the end of FY19.
The ratings also continue to benefit from the promoters' experience
of over four decades in the spinning industry and the established
track record of the company for over eight decades, which has led
to strong relationships with the customers and suppliers.
RATING SENSITIVITIES
Positive: A substantial growth in the revenue, while maintaining
the EBITDA margin, leading to net leverage reducing below 2x could
be positive for the ratings.
Negative: Any decline in the revenue and the EBITDA margin, leading
to net leverage exceeding 3x could be negative for the ratings.
COMPANY PROFILE
TPAML was incorporated on April 25, 1933, to manufacture cotton
yarn. Its manufacturing unit is located in Udumalpet (Tamil Nadu)
with an installed capacity of 35,072 spindles with 84% capacity
utilization. The day-to-day activities of the company are managed
by the managing director, Girija Parthasarathy along with the joint
managing director, R Mahendran.
POPULAR GROUP: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Popular
Group Mangalore (PGM) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 4, 2019, placed
the rating(s) of PGM under the 'issuer non-cooperating' category as
the firm had failed to provide information for monitoring of the
ratings. The Firm continues to be non-cooperative despite repeated
requests for submission of information through e-mails dated
September 4, 2020 to September 14, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating assigned to the bank facilities of Popular Group
Mangalore (PGM) continues to be tempered by delays/defaults
in servicing its debt obligations.
Detailed Rationale& Key Rating Drivers
Key Rating Weakness
* Ongoing delays/defaults in debt servicing: There are delays in
repayment of installments of the term loan facility.
Popular Group Mangalore (PGM) was established in the year 2014, as
a partnership firm by Mr. B.A. Mohideen, Mr. Abubakar Siddiq, Mr.
B.M. Ishaq and Mr. Nurul Ameen Damudi. The partners are qualified
graduates and each of the partners has 10-15 years of experience in
various field i.e. Constructions and sanitary ware. The firm is
planning to construct commercial complex for lease rental purpose.
RCL PAPER: CARE Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of RCL Paper
and Packaging Limited (RCL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.28 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 2.75 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 20, 2019, placed the
ratings of RCL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The firm continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated January 31, 2020 to October 08, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 20, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Delays in debt servicing: The company has delayed servicing its
debt obligations on account of cash flow mismatch.
RCL Paper and Packaging Limited (RCL) formerly known as RCL
Technologies Limited was incorporated in 1993 as Reddy Computers
Limited and subsequently its name was to RCL Technologies Limited
in the year 2000. Further, On November 5, 2014, the name was
changed to RCL Paper and Packaging Limited. The company is engaged
in the business of digital printing of letter heads, bus tickets,
account books, pin mailers and other printed documents. Initially,
RCI used to outsource the printing works, after receiving order
from its clients, to various third parties, on a job-work basis
till 2011. However they have started own printing unit in 2011. The
company has its servicing facility located at Sanathnagar,
Hyderabad with an installed capacity of 2,000 metric tonnes of
paper per annum. RCL has around 170 customers across Andhra Pradesh
and Telangana states including reputed clients like banks,
A.P.S.R.T.C, Karvy Consultants, etc. The major raw materials of the
company include paper, printing ink and other printing materials
which are procured from domestic suppliers.
RELIABLE POLYESTER: CARE Lowers Rating on INR5.50cr LT Loan to D
----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Reliable Polyester Private Limited (RPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.50 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B+; Stable
and moved to Issuer Not
Cooperating Category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RPPL to monitor the ratings
vide e-mail communications dated July 31, 2020, August 3, 2020,
August 5, 2020, August 7, 2020, August 14, 2020, August 21, 2020,
August 31, 2020, September 2, 2020, September 4, 2020, September 8,
2020, September 10, September 16, 2020, September 30, 2020, October
1, 2020, October 2, 2020, October 6, 2020, October 8, 2020, October
14, 2020, October 16, 2020, October 19, 2020, October 20, 2020,
October 21, 2020, October 22, 2020, October 23, 2020, numerous
phone calls and final remainder dated October 27, 2020. However,
despite CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The ratings on RPPL's
bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating assigned to the bank facilities of RPPL has been revised
due to ongoing irregularities in its debt servicing.
Detailed description of the key rating drivers
At the time of last rating on November 7, 2019 the following were
the key weaknesses (Updated from info available from lender):
Key Rating Weaknesses
* Ongoing delay in debt servicing: As per due diligence with lender
bank facilities of RPPL has been recalled by bank and account is
declared NPA due to poor liquidity position of the associate
concern.
Surat-based (Gujarat) RPPL, a family run business was incorporated
in May 1988, by Mr. Radha Mohan Mittal which is now managed by Mr.
Ruchir Radha Mohan Mittal and Mrs. Esha Ruchir Mittal. The company
is engaged into the manufacturing of greige (unprocessed) polyester
fabrics from polyester yarn (primarily Air Textured Yarn (ATY)),
prior to which it discontinued the operations of manufacturing
polyester yarn. RPPL operates from its sole manufacturing facility
located in Surat (Gujarat) with 135 shuttle-less water jet looms
having an installed capacity of 1.20 crore metres of greige fabric
as on March 31, 2019.
RENUKA FARMERS: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Renuka
Farmers LLP (RFA) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short
term Bank
Facilities 15.00 CARE D/CARE D; ISSUER NOT
COOPERATING; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated September 12, 2019, placed
the ratings of RFA under the 'issuer not cooperating' category as
RFA had failed to provide information for monitoring of the
ratings. RFA continues to be non-cooperative despite repeated
requests for submission of information through phone calls, e-mails
dated October 3, 2020, October 5, 2020, October 7, 2020 and a
letter dated October 3, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on September 12, 2019 the following were
the rating strengths and weaknesses (updated from the information
available from the Ministry of Corporate Affairs):
Key Rating Weaknesses
* Ongoing delays in debt servicing: As per the banker, the account
is classified as NPA.
Jaipur (Rajasthan) based Renuka Farmers LLP (RFA) was formed as a
limited liability partnership in 2017 by Mr. Jaipal Saini with an
objective to primarily engage in trading of different agricultural
commodities including guar seeds, barley, guar gum, mustard seeds,
pulses and wheat. RFA procures the agriculture commodities from
various mandis in Rajasthan as well as directly from farmers and
thereafter supplies to various processing and end user
manufacturing units as well as traders located in the markets of
Rajasthan, Haryana and Madhya Pradesh.
ROLTA INDIA: Ind-Ra Affirms 'D' Long Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Rolta India
Limited's (RIL) Long-Term Issuer Rating at 'IND D (ISSUER NOT
COOPERATING)'. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Thus, the rating is based on the best available information.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings.
The instrument-wise rating actions are:
-- INR8.293 bil. Stand-by letter of credit (short-term) affirmed
with IND D (ISSUER NOT COOPERATING) rating;
-- INR4.0 bil. Fund-based working capital limits (long-term)
affirmed with IND D (ISSUER NOT COOPERATING) rating;
-- INR3.0 bil. Non-fund-based working capital limits (short-term)
affirmed with IND D (ISSUER NOT COOPERATING) rating; and
-- INR12.539 bil. External commercial borrowings (long-term) due
on FY20 affirmed with IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
best available information
KEY RATING DRIVERS
The ratings reflect continued delays in debt servicing by Rolta
India, owing to a tight liquidity position, resulting from
declining revenue and profitability.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could lead to a positive rating action.
COMPANY PROFILE
India-based Rolta India is a technology company with operations in
40 locations across India, North America, Europe, the Middle East
and Australia. It provides IT solutions to various federal, state
and local governments; defense and security agencies; utilities;
financial services, manufacturing, retail and healthcare companies;
and others.
SAI DURGA: CARE Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sri Sai
Durga Infratech India Private Limited (SSDIL) continues to remain
in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/Short 23.00 CARE D/CARE D; ISSUER NOT
Term Bank COOPERATING; Rating continues
Facilities to remain under ISSUER NOT
COOPERATING category
Short Term Bank 5.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated August 28, 2019, placed the
ratings of SSDIL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The company continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and email dated April 2020 to October 14, 2020.In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
At the time of last rating on August 21, 2019 the following were
the rating strengths and weakness:
Key Rating Weakness
* Stressed liquidity position: Due to stressed liquidity position,
there have been delays in honoring the debt service obligations on
time.
Analytical Approach: Standalone
Sri Sai Durga Infratech India Private Limited (SSDIL) was
incorporated in September 2010 to take over the business of Sri Sai
Durga Constructions, a partnership firm started in 2008 by Mr.
Chandra Rangarao and Mrs. Chandra Satvika. The company is engaged
in the civil construction segment with work orders spanning across
construction of building works, water supply
works, electrical works and irrigation works etc.
SAIDHAM OVERSEAS: CARE Assigns D Rating to INR50.03cr Term Loan
---------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Saidham
Overseas Private Limited (SOPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 50.03 CARE D Assigned
Facilities-
Term Loan
Detailed Rationale & Key Rating Drivers
The rating assigned to long term bank facilities of SOPL factors in
instances of delays in servicing of debt obligations by the
company.
Rating Sensitivities
Positive Factors
* Timely servicing of debt obligations for more than three months
and improvement in liquidity profile of the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Instances of delay in servicing of debt obligations: There have
been delays in servicing of debt obligations by the company for
fiscal FY20 (refers to the period April 1 to March 31) as confirmed
with the lenders. The company has paid the debt obligations due on
February 15, 2020 on April 15, 2020. The company has sought
moratorium on the interest and principal repayment obligations from
the lenders for the period of March-August 2020 as per RBI package
and the same has been approved by the lender. The delay in
servicing of debt obligation is mainly attributed to stretched
liquidity position due to lower generation of cash accruals
vis-à-vis debt repayments for the fiscal FY20.
* Below average financial risk profile: The company has a below
average financial risk profile characterized by leveraged capital
structure and low debt coverage indicators. The leveraged capital
structure is largely due to high debt and low net worth which is
largely due to accumulated losses. The company reported increase in
total operating income in FY20 (Prov) to INR9.14 crore from INR8.45
crore during FY19 due to better generation levels. However company
is continuously reporting net losses which stood at INR2.46 crore
in FY20 (PY: INR3.54 crore). The interest coverage ratio improved
from 1.21x in FY19 to 1.32x in FY20 due to higher topline resulting
in better PBILDT for the period.
* Subdued operational performance: The operational performance of 5
MW grid connected solar photovoltaic (SPV) power plant constructed
by SOPL at Askandra Village, Jaisalmer district, Rajasthan which
was commissioned on January 09, 2012 remained on the lower side,
though improved from FY19 with CUF (Capacity utilization factor) of
16.78% during FY19 (PY: 15.45%).
Key Rating Strengths
* Long term power off take arrangement: SOPL has signed a Power
Purchase Agreement (PPA) with NTPC Vidyut Vyapar Nigam Limited
(NVVNL) to supply power generated from the 5 MW solar projects for
a period of 25 years from COD which was on January 09, 2012.
According to the PPA, the power is to be sold at a fixed tariff
rate of INR11.75 per KWH. In the event that the payments are
delayed beyond the due date, NVVNL would be liable to pay late
payment surcharge for the delayed amount at 1.25% per month for the
actual period of delay.
Liquidity: Stretched
The liquidity profile of the company is marked by tightly matched
cash accruals to repayment obligations, no working capital limits
and low cash & bank balance. The company has availed the moratorium
on their payment obligations of the term loan as per RBI package
with respect to bank facilities due in the period March 2020 to
August 2020, and the same has been approved by the lenders. The
company has cash balance of INR1.71 crore as on September 30, 2020
and has created DSRA in the form of fixed deposits amounting to
INR2.00 crore as on October 22, 2020.
SOPL was incorporated on June 17, 2019. SOPL is owned by Lambda
Eastern Telecommunication Limited (65%) and Lanco Solar Energy
Private Limited (35%). SOPL has set up a 5 MW solar energy project
in Askandra Village, Jaisalmer district, Rajasthan. The project
achieved Commercial Operations Date (COD) on January 09, 2012. The
company has signed a 25 years long term Power Purchase Agreement
(PPA) with NTPC Vidyut Vyapar Nigam Limited (NVVNL) at a fixed
tariff rate of INR11.75/kWh in January 2011.
SANTLAL INDUSTRIES: CARE Cuts INR60cr LT Loan Rating to C
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Santlal Industries Ltd (SIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 60.00 CARE C; ISSUER NOT COOPERATING
Facilities Revised from CARE B; Issuer not
cooperating; Based on best
available information
Short-term Bank 37.00 CARE A4; ISSUER NOT COOPERATING
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 22, 2019, continued
to place the rating of SIL under the 'Issuer Non-Cooperating'
category as the company had failed to provide the requisite
information required for monitoring of the rating as agreed to in
its Rating Agreement. Santlal Industries Limited continues to be
non-cooperative despite repeated requests for submission of
information through e-mails dated October 20, 2020. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
In view of the publically available information and lack of
management cooperation, CARE has revised the rating for bank
facilities of Santlal Industries Limited from CARE B/ CARE A4;
ISSUER NOT COOPERATING to CARE C/ CARE A4; ISSUER NOT COOPERATING.
Thus, the rating revision is based on the best available
information. The ratings on Santlal Industries Limited's bank
facilities will now be denoted as CARE C/CARE A4; ISSUER NOT
COOPERATING.
Detailed description of the key rating drivers
CARE has not received any information for the review of the ratings
except the financials for FY19 extracted from ROC. However, at the
time of last rating on October 22, 2019 the following were the
rating weaknesses and strengths.
Key Rating Weaknesses
* Moderate Financial Risk Profile: The company has witnessed an
increase in its total income from INR225.22 crore in FY18 to
INR303.25 crore in FY19 (refers to the period April 1 to March 31).
However, the PBILDT margins declined from 10.16% in FY18 to 8.16%
in FY19. At PAT level, the company reported profit of INR14.45 cr
in FY19 (PY: INR6.71 cr). The capital structure is leveraged with
overall gearing of the company at 0.30x as on March 31, 2019 (PY:
1.45x).
* Customer concentration risk: The company sold around 23% of its
produce in the domestic market and approximately 77% to the rice
exporters in FY14. The top 3 customers contributed 47.84% of the
total revenue in FY14 exposing the company to client concentration
risk.
* Susceptible to government regulations: Paddy is the major raw
material for rice processing. The prices of paddy (basmati variety)
are highly volatile due to supply- side constraints like seasonal
nature and exposure to the vagaries of monsoon. The company
procures majority of its raw material during the harvest season,
i.e., October–January. Given the time lag between raw material
procurement and realization of inventory, the company is exposed to
the risk of adverse price movement. Internationally the basmati
rice prices have witnessed a downward trend on the back of supply
surplus, decline in demand for Basmati rice from Iran
which is a major market for Indian rice exports; and
under-developed export markets of Saudi Arabia, Dubai and Europe.
Thereby, SIL, which supplies majorly to rice exporting companies,
faces the risk of export curtailment.
* Susceptible to government regulations: The raw material (paddy)
prices are regulated by the government minimum support price policy
to protect farmer interests; this makes the rice milling industry
vulnerable to government regulations and adverse price movements.
In addition to this, the government has also in the past made many
changes in the rice export policies, which further aggravates the
risk faced by rice milling industry towards government
regulations.
Key Rating Strengths
* Experienced promoters with long track record of operations in
agro business: SIL has a long track record of operations of over a
decade. The company was promoted by Mr. Anil Agarwal, Mr. Anand
Swaroop Agarwal and Mr. Sunil Agarwal in 1999. The promoters have
been engaged in agro-business through its flour manufacturing unit
Rudi Rollers Flour Mills P Ltd since 1989. Additionally, the
promoters have also ventured into various other businesses like
real estate, fertilizer trading and healthcare.
Santlal Industries Ltd (SIL), incorporated in the year 1999 by Mr.
Anand Swaroop Agarwal, Mr. Anil Agarwal and Mr. Sunil Agarwal, is
engaged in milling, processing and manufacture of Basmati rice at
Mainpuri, Uttar Pradesh. The company commenced its operations in
2000 and has an installed capacity of 96,000 Metric Tonnes Per
Annum (MTPAs) as on March 31, 2015. The company is a part of
Santlal Group, which started its business with fertilizers & cloth
trading in 1935 as Santlal Agarwal & Sons.
SIDHARTHA BUILDHOME: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sidhartha
Buildhome Private Limited (SBPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 129.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated April 14, 2017, placed the
rating of SBPL under the 'issuer non-cooperating' category as SBPL
had failed to provide information for monitoring of the rating.
SBPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails dated October 20, 2020,
October 12, 2020 and September 25, 2020. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on September 03, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Delays in debt servicing: There have been on-going delays by SBPL
in servicing of its debt obligations. This could be attributed to
the tight liquidity position of the company owning to slowdown in
real estate market leading to slow sales and collection from
customers.
Key Strengths
* Entrepreneurial experience of Promoters: SBPL is promoted by Mr.
Sidharth Chauhan and Mr. Randhir Singh Chauhan. Mr. Sidharth
Chauhan has been into consolidation and aggregation of land for
more than 15 years for companies like Adani Group, DLF, NYK
Logistics, Panacea Biotech, etc. The group entered into the real
estate development by launching its first project in Gurgaon in the
year 2009. Though the promoters have been in real estate related
activities for long, their vintage in project development
remains limited.
Incorporated in November 21, 1995, SBPL is engaged in the
development of residential/ group housing project in Gurgaon
(Haryana). SBPL (formerly Pashupati Buildwell Pvt Ltd) is promoted
by Mr. Sidharth Chauhan and Mr. Randhir Singh Chauhan . Mr.
Sidharth Chauhan had been into consolidation and aggregation of
land for more than 15 years for companies like Adani Group, DLF,
NYK Logistics, and Panacea Biotech etc. Mr. Randhir Singh is the
father of Mr. Sidharth Chauhan and is a graduate with experience of
over 45 years. He has served the Indian Army for 15 years and has
more than 20 years of experience in banking sector.
SMC PROJECTS: Ind-Ra Assigns 'BB' LT Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned SMC Projects (SMC)
a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR5 mil. Fund-based working capital facility assigned with
IND BB/Stable/IND A4+ rating;
-- INR100 mil. Non-fund-based working capital facility assigned
with IND A4+ rating;
-- INR5 mil. Proposed fund-based working capital facility*
assigned with IND BB/Stable/IND A4+ rating; and
-- INR190 mil. Proposed non-fund-based working capital facility*
assigned with IND A4+ rating.
* Unallocated
KEY RATING DRIVERS
The ratings reflect SMC's small scale of operations as indicated by
revenue of INR712.60 million in FY20 (FY19: INR465.87 million). The
growth in revenue was on account of timely execution of existing
orders. The projects under Pradhan Mantri Awas Yojana Scheme are
executed by the Karnataka Slum Development Board and these projects
contributed about 79.8% to SMC's total revenue in FY20 (FY19: 68%).
The project cash flow is significantly funded by the central
government. As of October 2020, SMC had an unexecuted order book of
INR1,632.90 million (2.29x of FY20 revenue). Furthermore, the firm
was declared as an L1 bidder for a project worth INR4,496.20
million in 2QFY21. SMC's revenue visibility is likely to improve
over the medium-to-long term on the back of its strong order book.
The firm achieved revenue of around INR223.1 million during 5MFY21.
The order execution was affected during April to May 2020 because
of the COVID-19-led lockdown, but picked up from 2QFY21on account
of the relaxation in the lockdown across the country. FY20
financials are provisional.
The ratings are also constrained by the partnership nature of the
organization and geographical concentration risk as its operations
are largely concentrated in and around Karnataka.
Liquidity Indicator - Stretched: SMC's had cash and cash
equivalents of INR29.2 million at FYE20 (FYE19: INR1.8 million). It
has principal repayment obligation of INR1.2 million in FY21. The
firm's average maximum utilization of the fund-based and the
non-fund-based limits was 31.93% and 61.34%, respectively, for the
12 months ended September 2020. SMC's cash flow from operations
improved substantially for the first time over FY17-FY20 to
INR64.3million in FY20 (FY19: INR26.7 million, FY18: INR17.19
million, FY17: INR14.41 million), owing to favorable changes in the
working capital. SMC's bank borrowings have limited diversification
and the firm has no access to capital markets. The firm's working
capital cycle was negative 11 days in FY20 (FY19: negative 12
days), as it receives payment from the government within 10 days as
the payments are made in a timely manner. The firm's debtor
collection period was 5 days in FY20 (FY19: 7 days) and payable
period was 43 days (82 days). The firm did not avail moratorium on
its financial obligations under the Reserve Bank of
India-prescribed COVID-19 relief package scheme.
However, the ratings are supported by SMC's healthy EBITDA margins
of 4.56% in FY20 (FY19: 4.13%) with a return on capital employed of
51% (33%). During FY20, the margin improved slightly primarily on
account of a decrease in sub-contract expenses and labor charges.
The ratings also factor SMC's comfortable credit metrics owing to
the lower debt of INR1.30 million in FY20 (FY19: INR11.74 million).
The net leverage (adjusted net debt/operating EBITDAR) turned
negative to 0.77x in FY20 (FY19: 0.81x). However, the interest
coverage (operating EBITDA/gross interest expense) deteriorated to
14.37x in FY20 (FY19: 37.70x) owing to an increase in interest
expense.
The ratings are also supported by the partners' experience of about
two decades in the execution of civil construction projects.
RATING SENSITIVITIES
Positive: A significant improvement in the revenue, driven by a
strong order book position, along with an improvement in the
liquidity position and the EBITDA margin, on a sustained basis,
would be positive for the ratings.
Negative: Any substantial decline in the scale, EBITDA margin and
credit metrics, resulting from slower-than-expected order execution
and/or further stretch in liquidity position could be negative for
the ratings.
COMPANY PROFILE
SMC Projects (SMC; formerly M/s Syed Mannan) was into EPC
(Engineering Procurement and Construction) segment for the civil
construction in Karnataka. The firm has completed several projects
for the Karnataka Slum Development Board(KSDB), Karnataka Housing
Board(KHB), Karnataka Residential Institutions Society(KRIS)
Construction of Gov down Works, Construction of Girls and Boys
Hostel and other Infrastructure Work. SMC was established in 2010
as a sole proprietorship business and was converted into a
partnership firm in July 2019.
SMR PLANTATION: Ind-Ra Lowers Long Term Issuer Rating to 'BB'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded SMR Plantation
Private Limited's Long-Term Issuer Rating to 'IND BB (ISSUER NOT
COOPERATING)' from 'IND BBB- (ISSUER NOT COOPERATING)'. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency.
The instrument-wise rating actions are:
-- INR264.6 mil. Term loan due on March 2024 downgraded with IND
BB (ISSUER NOT COOPERATING) rating;
-- INR355.0 mil. Fund-based facilities downgraded with IND BB
(ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING)
rating; and
-- INR30.0 mil. Non-fund-based facilities downgraded with IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information
KEY RATING DRIVERS
The downgrade is pursuant to the Securities and Exchange Board of
India's circular SEBI/HO/MIRSD/CRADT/CIR/P/2020/2 dated January 3,
2020. Based on the circular, any issuer with an investment-grade
rating remaining non-cooperative with the rating agency for over
six months should be downgraded to a sub-investment grade rating.
The current outstanding rating of 'IND BB (ISSUER NOT COOPERATING)'
may not reflect SMR Plantation's credit strength as the issuer has
been non-cooperative with agency; therefore, investors and other
users are advised to take appropriate caution while using these
ratings.
COMPANY PROFILE
SMR Plantation was incorporated in 2004 but commenced operations in
December 2017. It processes latex rubber.
SMT. SHAKUNTLA: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Smt.
Shakuntla Educational and Welfare Society (SSEWS) continues to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 148.62 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 50.00 CARE D; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 19, 2019, placed
the rating(s) of SSEWS under the 'issuer non-cooperating' category
as SSEWS had failed to provide information for monitoring of the
rating. SSEWS continues to be non-cooperative despite repeated
requests for submission of information through e-mails dated
October 20, 2020; October 12, 2020 and September 25, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on September 3, 2020 the rating takes
into account delay in servicing of debt by the company.
Smt. Shakuntla Educational & Welfare Society (SSEWS) formed in the
year 1998 with the Registrar of Society under the society
registration act 1860 with the main objective of providing
education. The society is promoted by Mr. Suneel Galgotia, an
educationist from Uttar Pradesh with experience of more than three
decades in the education industry. SSEWS is currently operating two
management colleges as well as one engineering college in Noida
(Uttar Pradesh). Apart from these, the society is also operating
one educational university named Galgotia University. Galgotia
University came into existence after passing of Galgotias
University Act in 2011 by Government of Uttar Pradesh.
ST. MARYS RUBBERS: Ind-Ra Lowers Long Term Issuer Rating to 'BB'
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded St. Marys
Rubbers Private Limited's (St. Marys) Long-Term Issuer Rating to
'IND BB (ISSUER NOT COOPERATING)' from 'IND BBB- (ISSUER NOT
COOPERATING)'. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
The instrument-wise rating actions are:
-- INR220.4 mil. Long-term loans due on March 2024 downgraded
with IND BB (ISSUER NOT COOPERATING) rating;
-- Fund-based limits INR325.0 mil. downgraded with IND BB (ISSUER
NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating;
and
-- INR60.0 mil. Non-fund-based limits downgraded with IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best-available information
KEY RATING DRIVERS
The downgrade is pursuant to the SEBI Circular
SEBI/HO/MIRSD/CRADT/CIR/P/2020/2 dated January 3, 2020. As per the
circular, any issuer having an investment-grade rating remaining
non-cooperative with the rating agency for over six months should
be downgraded to a sub-investment grade rating.
The current outstanding rating of 'IND BB (ISSUER NOT COOPERATING)'
may not reflect the company's credit strength, as the issuer has
been non-cooperative with the agency. Therefore, investors and
other users are advised to take appropriate caution while using
these ratings.
COMPANY PROFILE
Incorporated in 2002, St. Marys manufactures surgical gloves.
STAR AGRIINFRASTRUCTURE: CARE Cuts Rating on INR17.63cr Loan to D
-----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Star
Agriinfrastructure Private Limited (SAIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 17.63 CARE D; ISSUER NOT COOPERATING
Facilities– Rating revised from CARE BB;
Term Loan Stable; ISSUER NOT COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 8, 2020, placed the
rating of SAIPL under the 'issuer non-cooperating' category as
SAIPL had failed to provide information for monitoring of the
rating. The company has subsequently provided partial information
for the rating exercise. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of such partial
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in rating assigned to bank facilities of SAIPL to CARE
D; Issuer non-cooperating takes into account delays in servicing of
term loans in FY20, as reflected in the company's bank statements,
, and in accordance with the applicable SEBI guidelines wrt
recognition of defaults by rating agencies. The company had availed
moratorium from its lenders for term loans from March 2020 to
August 2020. The group on a combined basis continued to demonstrate
PAT loss in FY20 (provisional) after registering a substantial PAT
loss the previous year as well.
Rating Sensitivities
Positive Factors
* Demonstration and track record of timely debt servicing for a
period of 3 consecutive months or more.
* Improvement in scale of operations accompanied by higher
operating and net profits leading to improved liquidity profile
Detailed description of the key rating drivers
Key Rating Weaknesses
* Subdued operational performance of the group leading to stressed
liquidity: The revenue, profitability and cash flow generation of
the group has remained subdued over the past four years
(FY17-FY20). This was on account of reduction in supply chain and
collateral management business due to increasing incidents of
risk.
Key Rating Strengths
* Experienced management: Staragri group is promoted by Mr. Suresh
Goyal, Mr. Amit Goyal, Mr. Amit Khandelwal, and Mr. Amith Aggarwal
having an average industry experience of about two decades. Mr.
Suresh Goyal, the Chairman &
Managing Director of Staragri group has over three decades of
experience in running agriculture and farm related businesses.
Liquidity: Stretched
The liquidity position of the group is stressed due to subdued
profitability and cash accruals. There have been delays in debt
servicing in SAIPL in FY20.
Analytical approach:
For arriving at the ratings, CARE has combined the business and
financial risk profiles of Star Agriwarehousing and Collateral
Management Limited (SACML), Farmers Fortune (India) Private Limited
(FFIPL - 100% subsidiary of SACML) and SAIPL (51% subsidiary of
SACML). This is because these entities, collectively referred to as
the Staragri group, have significant operational linkages and
fungible cash flows, and are under a common management.
Incorporated in 2006, Star Agri Warehousing and Collateral
Management Limited (SACML) is headquartered in Jaipur. SACML and
its group companies together referred to as Staragri group provide
integrated post-harvest management solutions including warehousing
and collateral management for agri-commodities. Staragri offers
storage and preservation and collateral management services for
agri commodities along with allied services such as pest
management, testing & certification and also procurement of agri
commodities. For collateral management, the company has partnership
with about 44 banks/FIs. The procurement business of the group is
handled through FFIPL. The company has its presence in more than
900 warehouses in India spread across 16 states (mainly in the
states of Rajasthan, Maharashtra, Gujarat, Haryana, MP and Bihar).
Staragri group handles around 30 agri commodities, which include
Castor, Toor, Coriander, Paddy, Wheat, Rice Chana etc.
STAR AGRIWAREHOUSING: CARE Cuts Rating on INR29.35cr Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Star
Agriwarehousing and Collateral Management Limited (SACML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 29.35 CARE D; ISSUER NOT COOPERATING
Facilities– Rating revised from CARE BB;
Term Loan Stable; ISSUER NOT COOPERATING
Short term Bank 30.00 CARE D; ISSUER NOT COOPERATING
Facilities– Rating revised from CARE A4;
Non Fund Based ISSUER NOT COOPERATING
Long/Short term 55.00 CARE D/CARE D; ISSUER NOT
Bank Facilities– COOPERATING Rating revised
Fund based/Non From CARE BB; Stable/CARE A4;
Fund based ISSUER NOT COOPERATING
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 8, 2020, placed the
rating of SACML under the 'issuer non-cooperating' category as
SACML had failed to provide information for monitoring of the
rating. The company has subsequently provided partial information
for the rating exercise. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of such partial
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in rating assigned to bank facilities SACML to CARE D;
Issuer non-cooperating takes into account delays in servicing of
term loans in FY20, as reflected in the company's bank statements,
and in accordance with the applicable SEBI guidelines wrt
recognition of defaults by rating agencies. The company had availed
moratorium from its lenders for term loans from March 2020 to
August 2020. The group on a combined basis continued to demonstrate
PAT loss in FY20 (provisional) after registering a substantial PAT
loss the previous year as well.
Rating Sensitivities
Positive Factors
* Demonstration and track record of timely debt servicing for a
period of 3 consecutive months or more.
* Improvement in scale of operations accompanied by higher
operating and net profits leading to improved liquidity profile
Detailed description of the key rating drivers
Key Rating Weaknesses
* Subdued operational performance of the group leading to stressed
liquidity
The revenue, profitability and cash flow generation of the group
has remained subdued over the past four years (FY17-FY20). This was
on account of reduction in supply chain and collateral management
business due to increasing incidents of risk.
Key Rating Strengths
* Experienced management: Staragri group is promoted by Mr. Suresh
Goyal, Mr. Amit Goyal, Mr. Amit Khandelwal and Mr. Amith Aggarwal
having an average industry experience of about two decades. Mr.
Suresh Goyal, the Chairman & Managing Director of Staragri group
has over three decades of experience in running agriculture and
farm related businesses.
Liquidity: Stretched
The liquidity position of the group is stressed due to subdued
profitability and cash accruals. There have been delays in debt
servicing in SACML in FY20.
Analytical approach:
For arriving at the ratings, CARE has combined the business and
financial risk profiles of SACML, Farmers Fortune (India) Private
Limited (FFIPL - 100% subsidiary of SACML) and Star
Agri-infrastructure Pvt. Ltd (SAIPL-51% subsidiary of SACML). This
is because these entities, collectively referred to as the Staragri
group, have significant operational linkages and fungible cash
flows, and are under a common management.
Incorporated in 2006, Star Agri Warehousing and Collateral
Management Limited (SACML) is headquartered in Jaipur. SACML and
its group companies together referred to as Staragri group provide
integrated post-harvest management solutions including warehousing
and collateral management for agri-commodities. Staragri offers
storage and preservation and collateral management services for
agri commodities along with allied services such as pest
management, testing & certification and also procurement of agri
commodities. For collateral management, the company has partnership
with about 44 banks/FIs. The procurement business of the group is
handled through FFIPL. The company has its presence in more than
900 warehouses in India spread across 16 states (mainly in the
states of Rajasthan, Maharashtra, Gujarat, Haryana, MP and Bihar).
Staragri group handles around 30 agri commodities, which include
Castor, Toor, Coriander, Paddy, Wheat, Rice Chana etc.
TERRACIS TECHNOLOGIES: CARE Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Terracis
Technologies Limited (TTL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 45.00 CARE D; Issuer not cooperating;
Facilities– Based on best available
Fund Based Information
Long-term Bank 121.55 CARE D; Issuer not cooperating;
Facilities–Non- Based on best available
Fund Based Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated October 4, 2019, placed the
ratings of TTL under the 'Issuer Not Cooperating' category as the
company had failed to provide the requisite information required
for monitoring the ratings as agreed to in its rating agreement.
TTL continues to be non-cooperative despite repeated requests for
submission of information through email dated Sep 16, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information, which however, in
CARE'S opinion is not sufficient to arrive at a fair rating. The
rating of the bank facilities of Terracis Technologies Limited will
be denoted as 'CARE D; Issuer not cooperating'.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
CARE has not received any information from the company except
financial of FY19 extracted from ROC. However as per the lender
there are on-going delays in debt servicing.
Analytical approach: Consolidated. TTL has four wholly-owned
subsidiaries and one overseas subsidiary (Philippines) with 67%
stake
Terracis Technologies Limited (formerly known as IL&FS Technologies
Limited (ITL)) is a part of IL&FS group. TTL was incorporated on
February 9, 1993 and is engaged in complete end-to-end technology
solutions offering consulting, software development, systems
integration, data digitization and management service and
solutions, performance tuning solutions and IT infrastructure
management services to global customers. TTL works closely with
various government departments (pan India and globally) to create
e-Governance infrastructure. TTL, over the years has developed
significant expertise in developing and delivering citizen centric
IT projects in Public Private Partnership mode in both domestic and
international markets.
TRINITY INDIA: Ind-Ra Moves BB+ Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Trinity India
Forgetech Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will now
appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR35 mil. Proposed long-term loans withdrawn (the company did
not proceed with the instrument as envisaged);
-- INR145 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING) /
IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR55 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING)
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 15, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Pune-based Trinity India Forgetech manufactures forged and machined
components.
UNITON INFRA: CARE Lowers Rating on INR15cr LT Loan to B
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Uniton Infra Private Limited (UIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable;
ISSUER NOT COOPERATING
CARE had, vide its press release dated August 23 2019, placed the
ratings of UIPL under the 'issuer non-cooperating' category as
company had failed to provide information for monitoring of the
rating. The company continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and email dated April, 2020 to September 08, 2020.In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the non-availability
of requisite information due to non-cooperation by Uniton Infra
Private Limited with CARE's efforts to undertake a review of the
outstanding ratings as CARE views information availability risk as
key factor in its assessment of credit risk profile.
Detailed description of the key rating drivers
The ratings assigned to the bank facilities of Uniton Infra Private
Limited (UIPL) are constrained by short track record with modest
scale of operations, financial risk marked by leveraged capital
structure and weak debt coverage indicators, Elongated operating
cycle days. The ratings are underpinned by the experience of the
promoters for more than two decades in construction industry,
satisfactory profitability margins, and stable outlook of
Construction Industry.
Key rating weaknesses
* Short track record and modest scale of operations: The company
was incorporated in the year 2017. Hence the company has short
track record of operations. However the scale of operations of the
company stood modest at INR50.34 crore in FY19 with low net worth
of INR6.81 crore as on 31st March 2019.
* Financial risk marked by leveraged capital structure and weak
debt coverage indicators: The capital structure of the company
marked by debt equity ratio and gearing ratio stood at 0.79x and
2.97x as on 31st March 2019. The debt coverage indicators marked by
Total debt/ GCA and interest coverage ratio stood at 7.60x and
2.71x in FY19.
* Tender based nature of operations: The revenues of the firm are
dependent on the ability of the promoters to bid successfully for
the tenders and execute the same effectively. However the
promoter's long experience in the industry for more than two
decades mitigates the risk to an extent. Nevertheless, there are
numerous fragmented & unorganized players operating in the segment
which makes the civil construction space highly competitive.
Key Rating Strengths
* Experience of the promoters for more than two decades in
construction industry: UIPL is promoted by Mr. Mahesh Bigala
(Managing Director) and Mrs. Shalini Bigala (Director). The
directors are well qualified wherein Mr. Mahesh Bigala, aged 45, is
a post graduate, having experience of 20 years in construction
business. The company is likely to get benefited by its qualified
and experienced promoters.
* Satisfactory profitability margins: The profitability margins of
the company stood satisfactory marked by PBILDT and PAT margins
stood at 11.40% and 4.97% respectively in Fy19.
* Stable outlook of Construction Industry: The construction
industry contributes around 8% to India's Gross domestic product
(GDP). Growth in infrastructure is critical for the development of
the economy and hence, the construction sector assumes an important
role. The Government of India has undertaken several steps for
boosting the infrastructure development and revives the investment
cycle. The same has gradually resulted in increased order inflow
and movement of passive orders in existing order book. The focus of
the government on infrastructure development is expected to
translate into huge business potential for the construction
industry in the long-run. In the short to medium term (1-3 years),
projects from transportation and urban development sector are
expected to dominate the overall business for construction
companies.
Uniton Infra Private Limited (UIPL) was incorporated in the year
2017 with its registered office at Banjara Hills, Hyderabad. The
promoters of the company are Mr. Mahesh Bigala (Managing Director)
and Mrs. Shalini Bigala (Director). They have experience of more
than two decades in Construction Industry. The company is primarily
engaged in construction of buildings, apartments and other
infrastructure works. The company procures its work orders through
online tenders from Greater Hyderabad Municipal Corporation (GHMC),
Telangana.
VISHWARAJ SUGAR: Ind-Ra Affirms BB Issuer Rating, Outlook Negative
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Vishwaraj Sugar
Industries Limited's (VSIL) Long-Term Issuer Rating at 'IND BB'.
The Outlook is Negative.
The instrument-wise rating action is:
-- 2150.00 bil. Fund-based working capital limits affirmed with
IND BB/Negative rating.
Ind-Ra has maintained the Negative Outlook as the credit metrics
continue to be weak and the liquidity position remains stretched.
KEY RATING DRIVERS
The ratings reflect VSIL's continued weak credit metrics due to the
modest EBITDA margins and high debt levels. The metrics improved in
FY20 owing to an increase in the absolute EBITDA to INR384 million
(FY19: INR247 million). The interest coverage was 0.9x in FY20
(FY19: 0.7x) and the net leverage was 8.8x (13.6x). During FY20,
VSIL undertook debt-led capex to expand the capacity of the
distillery unit; consequently, the debt levels increased to
INR3,468 million during the year (FY19: INR3,387 million). In
1QFY21, the debt levels remained high at INR3,015 million. Ind-Ra
expects the metrics to improve further in FY21 because of a likely
increase in the profitability.
The ratings reflect the modest EBITDA margins due to the nature of
the business. The margin rose to 10.4% in FY20 (FY19: 8.6%) owing
to a decrease in the cane volumes purchased. VSIL's ROCE stood at
4% in FY20 (FY19: 2%). With ethanol prices being hiked by the
government from 1 December 2020, Ind-Ra expects the margins to
improve further in FY21.
Liquidity Indicator - Stretched: The average maximum utilization of
the fund-based and non-fund-based limits stood at 94% and 2.7%,
respectively, over the 12 months ended August 2020. The total
outside liabilities to total net worth ratio stood at 2.0x in FY20
(FY19: 2.4x). The cash and cash equivalents stood at INR75 million
at FYE20 (FYE19: INR17 million) against the scheduled debt
repayment of INR120 million in FY21. During FY20, the net working
capital cycle improved to 297 days (FY19: 370 days) owing to a
decrease in the inventory days to 341 days (FY19: 478 days), on
account of an increase in the sugar release quota by the central
government, and a decline in the receivable days to 25 days (FY19:
49 days). VSIL's cash flow from operation turned positive at INR72
million in FY20 (FY19: negative INR113 million), mainly because of
the increase in the EBITDA and favorable changes in the working
capital. The company had availed the Reserve Bank of
India-prescribed moratorium for March-August 2020.
The ratings are also constrained by the inherent volatility and
intense competition faced by companies operating in the sugar
industry. The sector is characterized by a structural weakness in
the form of regulated/fixed input prices (cane costs) and
market-linked sugar prices. Furthermore, the intense competition in
the industry results in the millers paying cane price in excess of
the fair and remunerative price. This leads to volatility in the
margins of sugar players, and results in the accumulation of cane
arrears in the event of a demand-supply imbalance, and a consequent
crash in prices.
The ratings factor in VSIL's continued medium scale of operations,
as indicated by revenue of INR3,703 million in FY20 (FY19: INR2,864
million). The revenue increased by 29.3% yoy in FY20, primarily
because sugar volumes grew by 35% yoy to 96,803 metric tons (MT)
during the year and sugar realizations rose to INR29.6 per kg
(FY19: INR28.5 per kg). However, the recovery rate decreased to
10.98% in FY20 (FY19: 11.2%). In 1QFY21, VSIL booked revenue of
INR1,120 million. The company's revenue is likely to decrease on a
yoy basis in FY21 owing to a fall in demand because of the
COVID-19-led disruptions.
The ratings benefit from VSIL's fully integrated nature of
operations which aids its realizations, especially during downturns
in the sugar segment. The company has a medium-term power purchase
agreement with five electricity supply companies for the export of
surplus power and contracts with oil marketing companies to supply
ethanol at government regulated rates. VSIL plans to decrease its
sugar sales by 25% from sugar season 2021 and divert a portion of
the cane juice for manufacturing syrup and B-heavy molasses for the
ethanol segment. In addition to this, the bagasse generation will
increase due to the growth in crushing capacity, leading to steam
generation for six months post the crushing period.
The ratings are also supported by VSIL's operational track record
of over 15 years in the industry, which has led to established
relationships with customers and suppliers.
RATING SENSITIVITIES
Negative: Further deterioration in the working capital cycle or the
liquidity position, or deterioration in the operating performance,
would be negative for the ratings.
Positive: A significant improvement in the working capital cycle as
well as the operating performance, leading to the interest coverage
exceeding 1.25x, on a sustained basis, will be positive for the
ratings.
COMPANY PROFILE
Incorporated in 1995, VSIL has an integrated sugar plant with cane
crushing capacity of 11,000 tons cane per day, distillery capacity
of 100 kilo liters per day and co-generation capacity of 36.4MW in
Bellad-Bagewadi, Karnataka. Additionally, the company has a 75
kiloliters per day vinegar manufacturing unit at the plant.
===============
M A L A Y S I A
===============
AIRASIA GROUP: AAX Set to Amend Debt Restructuring Plan
-------------------------------------------------------
The Edge Malaysia reports that Airasia X Bhd (AAX), the low-cost
long-haul affiliate of AirAsia Group Bhd, is expected to file an
amendment to its originating summons next week, to make its debt
restructuring proposal more palatable to the 1,200 unsecured
creditors that the airline is asking to write down their dues.
This was disclosed to Kuala Lumpur High Court Judicial Commissioner
Anand Ponnudurai by the lawyer for AAX on Oct. 30, the report says.
The Edge relates that the matter came up before Anand at a case
management hearing of an application by several of AAX's unsecured
creditors to intervene in the airline's application for leave to
hold a creditors' meeting to vote on its proposed debt
restructuring scheme.
According to The Edge, sources said AAX seeks to amend its
originating summons, as well as some of the terms of its proposed
scheme. This comes as more lessors and creditors have come out
against AAX's proposed scheme that was disclosed on Oct 6.
Under its proposed scheme, AAX is seeking to get at least 75% of
the total debt value of its unsecured creditors to agree to take a
99% haircut, effectively cutting MYR2 billion in current debts and
another MYR61 billion in future liabilities to MYR200 million, The
Edge discloses. It also entails undertaking a 90% share capital
reduction to MYR150 million from MYR1.53 billion currently, and a
consolidation of every 10 existing shares into one consolidated
share.
It is learnt that apart from airport operator Malaysia Airports
Holdings Bhd (MAHB) and aircraft leasing company BOC Aviation Ltd,
Macquarie Aircraft Leasing Services (Ireland) Ltd, Sky High I
Leasing Co Ltd and three other creditors are the latest to file an
intervention application for their objections to the proposed debt
restructuring scheme to be heard. Oct. 30 was initially the date of
the hearing for AAX's application for leave to convene the
creditors' meeting for purposes of voting on the proposed scheme.
The Edge relates that sources said during the case management
hearing, AAX had no objections to the intervention application
filed by the creditors, which means the concerned parties are
allowed to intervene and take a position in terms of the proposed
scheme.
According to sources, Anand has also decided to recuse himself from
the case, as he had previously appeared on behalf of AirAsia in its
dispute with MAHB and the Malaysian Aviation Commission before he
was pulled from private practice into the judiciary last November,
The Edge relays.
It is understood that another case management would be held next
week to fix the leave hearing for the concerned creditors to raise
the reasons for their objections to the proposed debt restructuring
scheme. This is likely to be held before Judicial Commissioner Ong
Chee Kwan.
"At the leave hearing, the creditors will then state if they think
the proposed scheme is not good, unfair, or that they want to be
excluded from the scheme," one source told The Edge.
According to The Edge, sources also said the hearing date for AAX's
application for leave to hold the creditors' meeting to vote on its
proposed scheme is also expected to be fixed at next week's case
management hearing. "Depending on the judge's schedule and subject
to the availability of all the lawyers (representing the scheme
creditors), the hearing could be held at the end of November or
early December. Of course, it is best for AAX to hold the
creditors' meeting as soon as possible," another source added.
On a recent report that AAX plans to revise its scheme to address
concerns raised by MAHB to be excluded from it — as the airport
operator takes the view that it is a secured creditor — sources
said this was not raised during the case management hearing on
Oct. 30, The Edge relates. "There is nothing formal to suggest
their removal (from the scheme) at the moment," said one source.
At the case management hearing, AAX was represented by Foong &
Partners with Gopal Sreenevasan as its lead counsel, The Edge
notes. MAHB and Sky High were represented by Claudia Cheah --
cpy@skrine.com -- of Skrine while BOC Aviation and Macquarie were
represented by Kwan Will Sen -- willsen@lcwpartnership.com -- and
Joyce Lim -- joycelim@lcwpartnership.com -- of Lim Chee Wee
Partnership. David Hoh, counsel for Abdullah Chan, represented
three other creditors.
On Oct. 22, MAHB announced that it was suing AAX to recover MYR78
million in outstanding aeronautical charges, recalls The Edge. The
debt that it is owed is less than 0.01% of the total debt owed in
the proposed scheme, it added.
BOC Aviation had also filed an intervention application in the
court for its objections to the proposed scheme to be heard. It is
seeking about US$30 million in dues from AAX, adds The Edge.
About AirAsia
AirAsia Berhad provides low-cost air carrier service. The company
provides services on short-haul, point-to-point domestic and
international routes. AirAsia, headquartered in Malaysia, operates
from hubs in Malaysia, Thailand, Indonesia, Philippines and India.
As reported in the Troubled Company Reporter-Asia Pacific on July
9, 2020, auditor Ernst & Young said the carrier's ability to
continue as a going concern may be in "significant doubt." In a
statement to the Kuala Lumpur stock exchange, Ernst & Young said
AirAsia's current liabilities already exceeded its current assets
by MYR1.84 billion at the end of 2019, a year when it posted a
MYR283 million net loss, Bloomberg News disclosed. That was before
the coronavirus crisis, which has further hit the carrier's
financial performance and cash flow.
DAYA MATERIALS: Auditors Express Disclaimer of Opinion
------------------------------------------------------
The Star reports that Daya Materials Bhd's independent auditors,
Messrs. Baker Tilly Monteiro Heng PLT, have expressed a disclaimer
of opinion in its recent financial statement.
The Star relates that the company said the disclaimer was for the
audited financial statements of the group and of the company for
the 18-month financial period ended June 30, 2020.
"The company is in the midst of formulating and implementing a debt
restructuring scheme, which is envisaged to address the key matters
in relation to the disclaimer of opinion," it said.
According to The Star, Daya Material said the debt revamp scheme
shall form part of the overall revamp plan to regularise the
financial condition of the company and its subsidiaries pursuant to
Practice Note 17 of the Listing Requirements.
The company has approximately four months to submit its
regularisation plan to the regulatory authorities for approval, The
Star notes.
Among the main points of Messrs. Baker Tilly Monteiro Heng's report
was that during the financial period ended June 30,2020, the group
and the company incurred net losses of MYR59.40 million and
MYR36.35 million respectively, The Star relays.
As of that date, the group's and the company's current liabilities
exceeded their current assets by MYR244.57 million and MYR235.68
million respectively and recorded capital deficiencies of MYR199.76
million and MYR214.87 million respectively, The Star discloses.
About Daya Materials
Daya Materials Berhad -- http://dayagroup.com.my/-- engages in
investment holding and providing management services to its
subsidiaries. The Company's segments include polymer, oil and gas,
technical services and others. The polymer segment manufactures
materials for the power cables and wires industry, and trades other
related polymer compounds and specialty chemical products.
Daya Materials Bhd fell into Practice Note 17 (PN17) status in
February last year after its shareholder equity retreated to under
25% of its issued capital as at Dec. 31, 2017.
The company saw its net loss widen to MYR178.35 million in FY18
from MYR76.67 million in the previous year, as revenue declined
4.1% to MYR281.56 million from MYR293.53 million in FY17.
=====================
N E W Z E A L A N D
=====================
LIFETIME INCOME: A.M. Best Places B(Fair) FS Rating Under Review
----------------------------------------------------------------
AM Best has placed under review with negative implications the
Financial Strength Rating of B (Fair) and the Long-Term Issuer
Credit Rating of "bb" of Lifetime Income Limited (LIL) (New
Zealand).
This Credit Rating (rating) action follows recent regulatory
license conditions imposed on the company by the Reserve Bank of
New Zealand (RBNZ), which will require LIL to hold additional
capital margins in excess of existing regulatory minimums. These
license conditions follow volatility in the company's regulatory
solvency position, with breaches of the minimum solvency margin
identified in fiscal-year 2020. LIL's parent group, Retirement
Income Group Limited, has initiated a capital raising exercise,
which is expected to complete in December 2020. Proceeds from the
capital raise are expected to be downstreamed to LIL in order for
it to comply with the new license conditions imposed by the RBNZ,
as well as to support the next phase of its strategic development
plan. The ratings have been placed under review with negative
implications to reflect uncertainty surrounding the execution of
the planned capital raise and consequently LIL's ability to comply
with its license conditions.
The ratings will remain under review pending completion of the
group's capital raise and until AM Best can assess the impact of
recent developments on LIL's credit rating fundamentals, including
balance sheet strength and enterprise risk management.
=================
S I N G A P O R E
=================
HIN LEONG: HSBC Sues Lim Family, Employee to Recover US$85.3MM
--------------------------------------------------------------
The Straits Times reports that HSBC Holdings is suing the Lim
family and an employee of bankrupt oil trader Hin Leong Trading to
recover US$85.3 million (SGD115.8 million) of US$111.7 million that
they allegedly obtained with bogus invoices and forged documents.
HSBC, which is the firm's largest creditor with about US$600
million owing, is the first bank to take legal action against oil
tycoon Lim Oon Kuin, better known as OK Lim, and his two children
to recover its losses, according to the report.
The Straits Times relates that the bank, which is also suing Serene
Seng Hui Choo, a manager of the corporate affairs department at Hin
Leong, filed the suit in the High Court on October 21.
Hin Leong Trading (Pte.) Ltd. provides petroleum products and
transportation services. The Company offers oil, lubricants,
grease, and diesel products, as well grants storage, terminalling,
trucking, and marine logistics services. Hin Leong Trading serves
customers globally.
Hin Leong Trading and shipping unit Ocean Tankers (Pte.) Ltd. filed
for court protection from creditors on April 17, 2020, as the
former struggles to repay debts of almost US$4 billion.
Hin Leong posted a positive equity of US$4.56 billion and net
profit of US$78 million in the period ended October 31, 2019,
according to the people, who asked not to be identified as the
matter is sensitive, Bloomberg News reported.
But Hin Leong told its creditors that total liabilities reached
US$4.05 billion as of early April, while assets were just US$714
million, leaving a hole of at least US$3.34 billion, according to
screenshots of the presentation to a group of bankers seen by
Bloomberg News.
The balance sheet of the company showed no equity at all as of
April 9, 2020, and warned that "figures obtained from the company
are subject to verification," Bloomberg News added.
On April 27, 2020, the Company was granted interim judicial
management by the Singapore High Court. Goh Thien Phong and Chan
Kheng Tek of PricewaterhouseCoopers Advisory Services (PwC) have
been appointed as interim judicial managers. Ernst & Young (EY),
has been appointed interim judicial manager for Ocean Tankers.
=====================
S O U T H K O R E A
=====================
JEJU AIR: Net Loss Widens to KRW66.8BB in Quarter Ended Sept. 30
----------------------------------------------------------------
Yonhap News Agency reports that Jeju Air Co., South Korea's biggest
low-cost carrier, said on Nov. 10 its net losses widened in the
third quarter from a year earlier due to the impact of COVID-19
pandemic on the airline industry.
Net losses deepened to KRW66.8 billion (US$60 million) in the three
months that ended in September from KRW30.14 billion in the same
period of last year, the company said in a statement.
"Suspended flights on profitable international routes amid the
pandemic continued to weigh on the quarterly results," Yonhap
qoutes a company spokesman as saying.
Operating losses also widened to KRW70.06 billion in the third
quarter from KRW17.36 billion a year ago, Yonhap discloses. Sales
plunged 83 percent to KRW59.55 billion from KRW368.77 billion
during the same period, it said.
According to Yonhap, Jeju Air has suspended most of its 76
international routes since March as countries strengthened entry
restrictions to stem the spread of the COVID-19 pandemic.
As of Nov. 10, four international routes from Incheon to Weihai,
Osaka, Manila and Harbin and nine domestic routes are available.
Yonhap says the budget carrier plans to provide one flight a week
on the route from Incheon to Tokyo beginning on Nov. 21, resuming
the route service after three months.
It halted the Incheon-Tokyo route in August as travel demand dried
up amid the pandemic. But it has offered flights on the
Incheon-Osaka route despite the virus outbreak.
Jeju Air, which operates 44 B737-800 passenger jets, said net
losses deepened to KRW268.81 billion from January to September from
KRW17.5 billion in the year-ago period, Yonhap discloses.
Jeju Air Co., Ltd. operates as an airline carrier in the aviation
industry. The Company provides air transportation services for
passengers, baggage, and cargo within South Korea, Japan, and
Southeastern Asian countries.
STX OFFSHORE: KDB-led Creditors Invite Bidders for Stake
--------------------------------------------------------
Yonhap News Agency reports that mid-sized shipyard STX Offshore &
Shipbuilding Co. said on Nov. 10 that its creditors led by the
Korea Development Bank (KDB) have invited preliminary bidders to
sell their stake in the shipbuilder.
On Nov. 9, the company made public its plan on its website to woo
investors. Ernst & Young Han Young, the sale manager for the deal,
will finalize the bidding by Nov. 23, Yonhap says.
According to Yonhap, the KDB-led creditors wholly own the shipyard
after debt-for-equity swaps and a debt rescheduling program.
STX Offshore started its debt rescheduling program in 2013 and was
released from the program in July 2017.
"The announcement means creditors will accept any ways by bidders
to sell the company," a company official told Yonhap News Agency on
condition of anonymity.
Yonhap relates that the sale will proceed in the form of a
so-called stalking-horse bid, which allows a preliminary preferred
bidder a right to buy assets up for sale unless open bidding falls
through.
A consortium of local private equity fund KH Investment and United
Asset Management Company (UAMCO), South Korea's biggest bad debt
clearer, has been chosen as the preliminary bidder for the purchase
of the shipyard, the report notes.
STX Offshore & Shipbuilding Co. Ltd. is a Korea-based company
mainly engaged in the shipbuilding and offshore business. The
company operates its business through five segments: merchant
vessel, cruise, offshore and specialized vessel (OSV), vessel
apparatus and other segment.
*********
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
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