/raid1/www/Hosts/bankrupt/TCRAP_Public/210111.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, January 11, 2021, Vol. 24, No. 2
Headlines
A U S T R A L I A
AUSTRALIAN FASHION: In Urgent Talks with Potential Buyer
EWOS HOLDINGS: Second Creditors' Meeting Set for Jan. 19
WRIDGWAYS PTY: In Liquidation; 1st Creditors Meeting Set for Jan 12
C H I N A
ALIBABA GROUP: Shuts Music Streaming Platform Xiami
LUCKIN COFFEE: Group of Executives Demands CEO's Termination
REDSUN PROPERTIES: Moody's Assigns B3 Rating to Proposed USD Notes
I N D I A
ACHAL CASHEWS: ICRA Raises Ratings on INR29cr LT Loan to B+
ACHAL INDUSTRIES: ICRA Raises Ratings on INR18cr Loans to B+
ERAM MOTORS: ICRA Assigns B Rating to INR40cr Loans
FIELD MOTOR: ICRA Keeps B+ Debt Ratings in Not Cooperating
GOVIND CABLE: ICRA Keeps B Debt Ratings in Not Cooperating
GOYAL AGENCIES: CRISIL Reaffirms B+ Rating on INR39cr Cash Loan
HIMADRI FOODS: Insolvency Resolution Process Case Summary
IL&FS GROUP: Solar Power Unit Repays Entire Debt of INR845 crore
J.I. ENTERPRISES: ICRA Keeps B on INR9cr Loans in Not Cooperating
JAI BHOLE: ICRA Lowers Rating on INR12cr LT Loan to B+
JET AIRWAYS: NCLT Tells DGCA, MoCA to Clear Stance on Slots
KHED ECONOMIC: ICRA Hikes Rating on INR430cr Term Loan to B-
MARUTI INTERNATIONAL: CRISIL Moves B Rating From Not Cooperating
MICROFINISH VALVES: CRISIL Withdraws B Rating on INR5cr Loan
MUMBAI INT'L AIRPORT: CRISIL Cuts Rating on INR175cr Loan to D
PALLAVA GRANITE INDIA: CRISIL Reaffirms B- Rating on INR4cr Loan
PALLAVA GRANITE: CRISIL Reaffirms B- Rating on INR8cr Loans
PALLAVA RED: CRISIL Reaffirms B- Rating on INR27cr Loans
PICCADILY HOLIDAY: ICRA Lowers Rating on INR28cr LT Loan to B+
RASHI STEEL: ICRA Keeps D on INR82cr Loans in Not Cooperating
SAMRAT FERRO: CRISIL Upgrades Rating on INR9cr Cash Loan to B-
SHUBHLAXMI GUM: ICRA Withdraws B Rating on INR7cr Cash Loan
TRIVIK HOTELS: CRISIL Raises Ratings on INR10cr Loans to B
J A P A N
[*] JAPAN: Traditional Bars Face Final Blow Amid Covid Emergency
S I N G A P O R E
VIKING OFFSHORE: SGD4MM Share Placement Plan Falls Through
- - - - -
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A U S T R A L I A
=================
AUSTRALIAN FASHION: In Urgent Talks with Potential Buyer
--------------------------------------------------------
Dean Blake at Inside Retail reports that Australian Fashion Labels
has entered voluntary administration and is holding "urgent" talks
with a potential buyer, according to administrator Duff & Phelps.
The fashion house, co-founded by Melanie and Dean Flintoff,
operates labels BKNR, Finders Keepers, C/MEO Collective, Keepsake
and The Fifth Label, the report says.
According to Inside Retail, Marcus Ayres, partner at Duff & Phelps,
said the business' employees entitlements and salaries are paid,
but it will struggle to continue trading without a deal due to an
unrevealed level of debt owed to Bendigo and Adelaide Bank, Tigers
Logistics and the Federal Government's Export Finance Australia.
"This next 48 hours is critical, we're pretty clear what the
position is. We're trying to lock down all the key suppliers to
allow us to continue to trade," The Australian quotes Mr. Ayres as
saying, Inside Retail relays. "That's critical for the next month.
There is a suitor in the wings. Based on the preliminary
discussions that we believe the director had with this party it
would seem like we should make our best endeavours to try and keep
the business operational and pursue that proposal.''
The Australian said the business had been operating as online-only
in an attempt to pare down operating costs, but that it has
effectively no working capital and can't afford to recapitalise,
with the Covid-19 pandemic hindering the sales needed to cover the
business' operations, reports Inside Retail.
Marcus William Ayres and Brett Stephen Lord of Duff & Phelps were
appointed as administrators of Australian Fashion Labels Pty Ltd,
Australian Fashion Labels Holdings Pty Ltd, and BNKR Online Pty Ltd
on Jan. 6, 2021.
EWOS HOLDINGS: Second Creditors' Meeting Set for Jan. 19
--------------------------------------------------------
A second meeting of creditors in the proceedings of Ewos Holdings
Pty Ltd has been set for Jan. 19, 2021, at 11:00 a.m. via virtual
meeting.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 18, 2021, at 4:30 p.m.
Daniel Obrien of DVRM was appointed as administrator of Ewos
Holdings on Dec. 3, 2020.
WRIDGWAYS PTY: In Liquidation; 1st Creditors Meeting Set for Jan 12
-------------------------------------------------------------------
ATN reports that SV Partners' Timothy Brace and Peter Gountzos have
been appointed liquidators of relocation company WridgWays Pty Ltd,
according to an Australian Securities and Investments Commission
(ASIC) filing.
ATN relates that the first meeting of creditors of the company,
formerly known as Santa Fe Holdings Australia, to be held on
January 12, will consider whether to appoint a committee of
inspection, and if so, who are to be the committee's members.
ATN has sought comment from the administrators, who were appointed
on December 30, in this matter.
However, Melbourne-based Wridgways Australia remains open for
business, according to an update posted on the company website
dated Jan. 8, ATN relays.
"WridgWays Australia has recently undergone a re-engineering of the
business in order to successfully overcome the impact of Covid-19
on the entire relocation services industry," the company statement
noted.
"As a result, we have placed three non-core legal entities into
administration.
"We continue to operate as usual and do not expect any impact to
either our valued employees or the services provided to our loyal
customers and suppliers."
WridgWays was established in 1892 by Ernest Wridgway.
Wridgways Australia Limited provides specialized logistic services
to international and national customers, including government
bodies, the corporate sector and private individuals. The Company's
services provided include furniture removal, packaging, high
value/fragile product transportation, storage and import and export
services.
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C H I N A
=========
ALIBABA GROUP: Shuts Music Streaming Platform Xiami
---------------------------------------------------
ShanghaiDaily.com reports that Alibaba Group's music streaming
platform Xiami has announced its closure due to weak market
performance.
"After 12 years of accompanying each listener, it's hard to say
goodbye!" a notice on its official website read, ShanghaiDaily.com
relays.
According to the report, Alibaba will unplug the service on March
5, and users will no longer be able to stream, download or comment
on albums and songs from February 5. They will have one month to
transfer music streaming lists and other digital assets.
It stopped users from purchasing new digital albums and paying for
membership at 10 a.m. on January 5 and started to allow music
playlists to be transferred toward other music streaming service,
the report says.
Streaming histories and paid memberships will be discontinued, and
all relevant personal information will be removed, according to
privacy rules.
ShanghaiDaily.com says domestic consultancy iiMedia expects China's
digital music market to increase to 36.8 billion yuan (US$5.7
billion) by 2023 from around 25 billion yuan in 2019, with an
estimated user base of 800 million.
According to ShanghaiDaily.com, online music industry watchers
pointed out that online music patents caused problems for Xiami's
operation model, while a lack of promotional resources led to
stagnant growth in the competitive marketplace.
Xiami's active user base is the 11th largest in the music streaming
sector, ShanghaiDaily.com discloses citing mobile application
tracking service Talking Data. The top three are KuGou Music,
Tencent's QQ Music and KuWo. Both Kugou and Kuwo are Tencent
affiliates.
Xiami was acquired by the Alibaba Group in 2013.
LUCKIN COFFEE: Group of Executives Demands CEO's Termination
------------------------------------------------------------
Shen Xinyue and Anniek Bao at Caixin Global report that a group of
managers at embattled Luckin Coffee Inc. have demanded the board of
directors immediately dismiss CEO Guo Jinyi and launch an
independent investigation into his conduct, accusing him of
cronyism and incompetence, according to a letter reviewed by
Caixin.
The letter offers a glimpse into the internal pains of the
embattled coffee chain, which has been mired in debt after copping
to a $300 million accounting fraud in April, Caixin relays.
Signed by seven vice presidents and dozens of others, the letter
called for Mr. Guo's dismissal, accusing him of cronyism, abuse of
power and being incapable of making the right decisions for the
company, Caixin reports.
Based in China, Luckin Coffee Inc., provided non-alcoholic
beverages. The Company offered various types of coffee.
In July 2020, Luckin Coffee has called in liquidators to oversee a
corporate restructuring and negotiate with creditors to salvage its
business, less than four months after shocking the market with a
US$300 million accounting fraud, South China Morning Post said.
The start-up company named Alexander Lawson of Alvarez & Marsal
Cayman Islands and Tiffany Wong Wing Sze of Alvarez & Marsal Asia
to act as "light-touch" joint provisional liquidators (JPLs) under
a Cayman Islands court order, it said in a regulatory filing in New
York. The move was in response to a winding-up petition by an
undisclosed creditor, it added.
The appointments will create a stable platform to allow the company
and its advisers to negotiate and restructure its financial
obligations, the Xiamen, Fujian-based coffee chain said in the
filing. It hired Houlihan Lokey as financial advisers to implement
a workout with creditors, SCMP disclosed.
REDSUN PROPERTIES: Moody's Assigns B3 Rating to Proposed USD Notes
------------------------------------------------------------------
Moody's Investors Service has assigned a B3 senior unsecured rating
to the proposed USD notes to be issued by Redsun Properties Group
Limited (B2 positive).
The outlook is positive.
Redsun plans to use the proceeds from the proposed notes to
refinance its existing offshore debt.
RATINGS RATIONALE
"Redsun's B2 corporate family rating reflects the company's long
operating history of developing mass-residential properties in
Jiangsu province, its high-quality land bank and its strong sales
execution, as demonstrated by its sales growth," says Cedric Lai, a
Moody's Vice President and Senior Analyst.
"Meanwhile, its rating is constrained by the company's limited but
developing funding channels, modest credit metrics and high
exposure to join-venture businesses which weakens corporate
transparency," adds Lai.
The proposed bond issuance will lengthen Redsun's debt maturity
profile and improve its liquidity without having a material impact
on its credit profile, because the company will use the proceeds to
refinance maturing debt.
Moody's expects Redsun's debt leverage, as measured by
revenue/adjusted debt, will be 50%-55% in the next 12-18 months
from 55% for the 12 months that ended June 2020 as debt growth will
likely offset revenue growth amid the company's debt-funded
business expansion. Similarly, Moody's forecasts Redsun's EBIT
interest coverage will be 1.6x-1.8x in the next 12-18 months from
1.8x for the 12 months that ended June 2020 and 1.6x in 2019.
Redsun's total contracted sales grew 28% to RMB74.3 billion in the
first 11 months of 2020 compared with the same period in 2019
despite the impact from the coronavirus outbreak. Moody's believes
Redsun's solid market position in Jiangsu province and sufficient
saleable resources will enable the company to further grow its
contracted sales to RMB85-90 billion in 2021.
Redsun's B3 senior unsecured debt rating is one notch lower than
the company's B2 CFR due to structural subordination risk. The
subordination risk refers to the fact that the majority of Redsun's
claims are at its operating subsidiaries and, in the event of a
bankruptcy, have priority over claims at the holding company. In
addition, the holding company lacks significant mitigating factors
for structural subordination. Consequently, the expected recovery
rate for claims at the holding company will be lower.
Redsun's liquidity is adequate. Moody's expects the company's cash
holdings and operating cash flow will be sufficient to cover its
debt maturities and committed land premiums in the next 12-18
months.
In terms of environmental, social and governance considerations,
Moody's has taken into consideration Redsun's concentrated
ownership by its key shareholder, Zeng Huansha, who held a 72.29%
direct and indirect stake in the company as of the end of June
2020. Moody's has also considered the presence of three independent
nonexecutive directors on the company's seven-member board of
directors, the fact that independent nonexecutive directors chair
both the audit and remuneration committees, and the presence of
other internal governance structures and standards as required
under the Corporate Governance Code for companies listed on the
Hong Kong Stock Exchange.
Moody's regards the impact of the deteriorating global economic
outlook amid the rapid and widening spread of the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The positive outlook reflects Moody's expectation that Redsun will
continue to achieve strong contracted sales growth, maintain its
credit metrics, and improve its access to both offshore and onshore
funding channels in the next 12-18 months.
Redsun's rating could be upgraded if the company improves its debt
leverage and funding channels while maintaining its strong
contracted sales growth.
Credit metrics indicative of a potential upgrade include debt
leverage rising above 55%, EBIT/interest coverage rising above
2.0x-2.25x and cash/short-term debt rising above 1.25x, all on a
sustained basis.
Redsun's rating is unlikely to be downgraded in the near term
because of the positive outlook. However, the outlook could be
revised to stable if the company fails to improve its credit
metrics or fails to maintain adequate liquidity in the next 12-18
months.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Founded in 1996, Redsun Properties Group Limited listed on the Hong
Kong Stock Exchange in July 2018. Its headquarters are in Shanghai
and Nanjing.
Redsun engages in real estate development, commercial properties
and hotel operations in China. At 30 June 2020, the company's total
saleable resources comprised a gross floor area of around 18.37
million square meters, with its footprint spread across 41 cities
in China.
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I N D I A
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ACHAL CASHEWS: ICRA Raises Ratings on INR29cr LT Loan to B+
-----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Achal
Cashews Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 2.50 [ICRA]B+ (Stable); upgraded
Fund-based– from [ICRA]B- (Stable)
Term Loan
Long-term– 26.50 [ICRA]B+ (Stable); Upgraded
Fund-based– from [ICRA]B- (Stable)
Cash Credit
Rationale
For arriving at the rating, ICRA has taken a consolidated view of
the group, comprising Achal Industries (AI), Achal Industries
Private Limited (AIPL) and Achal Cashews Private Limited (ACPL),
considering the common management, along with strong operational
and financial linkages between them. They are collectively referred
as the Achal Group. The rating upgrade favourably factors in the
improvement in the Achal Group's operating profit margins to 8.60%
in FY2020 from 1.22% in FY2019 owing to decrease in raw cashew nut
(RCN) prices, which is expected to continue in FY2021 on the back
of soft RCN prices. The rating considers the expected equity
infusion of INR4.75 crore in AIPL in FY2021 to fund the company's
working capital requirement and reduction in interest cost with
lower utilisation of working capital limits. The rating positively
notes the promoters' experience of more than three decades in the
cashew processing industry, along with its established distribution
channel across domestic and export markets as well as farmers for
the procurement of RCNs.
The rating, however, is constrained by its weak financial risk
profile with negative net worth levels, interest cover of 1.24
times and Debt/OPBIDTA of 4.89 times in FY2020. The rating is also
constrained by the Group's moderate scale of operations with
revenues of INR89.95 crore in FY2020 and intense competition owing
to the fragmented nature of the industry. The Group has achieved a
revenue of INR49.23 crore in 7M FY2021 compared to INR48.25 crore
in 7M FY2020 and is expected to achieve an operating income of more
than INR90 crore in FY2021. Similar to other players in the
industry, the entity's margins are vulnerable to volatility in
cashew price movements and forex fluctuations.
The Stable outlook reflects ICRA's expectation that the Achal Group
would be able to sustain the revenues and operating margins at
FY2020 levels.
Key rating drivers and their description
Credit strengths
* Experienced promoters in cashew processing industry: The
promoters of the Achal Group have more than three decades of
experience in the cashew processing industry. Further, it has
established relationship with its suppliers resulting in ease of
procurement of RCNs.
* Diversified customer base: The company sells processed cashew
kernels to distributors, wholesalers, institutional buyers,
supermarkets and dealers in the international as well as domestic
markets. The Group has a network of more than 50 distributors
across India. It has a long-term relationship with several of its
buyers in the domestic market who deal exclusively with the Group.
Credit challenges
* Weak financial risk profile: The Group's net worth is negative
owing to net losses in FY2018 and FY2019. The coverage indicators
are modest with interest cover of 1.24 times and Debt/OPBIDTA of
4.89 times in FY2020 due to high debt levels and low margins. The
total debt of INR37.83 crore mainly includes unsecured loan of
INR24.89 crore and the rest includes working capital borrowing of
INR12.44 crore and term loan of INR0.05 crore.
* Margins exposed to volatility in cashew prices and foreign
exchange fluctuations: The procurement of RCN is seasonal. The
prices of cashew kernels and RCNs vary on a daily basis, depending
on the international demand-supply scenario, exposing the company's
margins to the price fluctuations. Moreover, the availability of
RCNs is subject to agroclimatic risks. The Group's operating
margins increased to 8.60% in FY2020 from 1.22% in FY2019 owing to
decrease in RCN prices. The operating margins are expected to
sustain at above 8% levels in FY2021.
* Intense competition with low product differentiation and value
addition limiting pricing flexibility: The company faces stiff
competition from a large number of small units. The Indian players
face competition from other countries in the export market. The
industry is highly fragmented because of the low entry barriers
owing to the low capital and technology intensive nature of
operations. The industry is highly dependent on labour and is
affected by labour shortage issues from time to time. The lack of
product differentiation and intense competition restricts its
bargaining position and pricing flexibility.
Liquidity position: Adequate
The Group's liquidity profile remains adequate with moderate
utilisation of working capital limits in the past 12 months ending
October 2020. Further, modest capex plans and low repayment
obligation in the near term to support its liquidity
position.
Rating sensitivities
Positive triggers - ICRA may upgrade the rating if the
profitability and cash accruals improve, leading to a strong net
worth position. Moreover, interest coverage of more than 2.0 times
on a sustained basis may trigger a rating upgrade.
Negative triggers - Negative pressure on the rating could arise if
the margins decrease leading to deterioration of coverage
indicators or any delay in debtors result in further weakening of
the liquidity position.
Incorporated in 1982, Achal Cashews Private Limited is involved in
processing organic as well as conventional RCNs to cashew kernels,
apart from processing small quantity of almonds as well. In
addition, the company sells cashew byproducts such as cashew shells
and peels. The company is promoted by Mr. G. Giridhar Prabhu and
his family. It has an established processing capacity of ~15 metric
tonnes per day and generates almost its entire revenues from the
domestic market. Apart from ACPL, the group comprises Achal
Industries Private limited which is also involved in processing
RCNs into finished cashew kernels as well as in trading RCNs; Achal
Primenuts Private Limited, Achal Industries and Achal Farm Products
Private Limited, which manage retail outlets in Bangalore and
Mangalore, respectively.
ACHAL INDUSTRIES: ICRA Raises Ratings on INR18cr Loans to B+
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Achal
Industries Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 16.00 [ICRA]B+(Stable); Upgraded
Fund-based– from [ICRA]B-(Stable)
Cash Credit
Long-term- 2.00 [ICRA]B+(Stable); Upgraded
Unallocated From [ICRA]B-(Stable)
Short-term– 15.00 [ICRA]A4; Reaffirmed
Fund-based–
interchangeable
Rationale
For arriving at the rating, ICRA has taken a consolidated view of
the group, comprising Achal Industries (AI), Achal Industries
Private Limited (AIPL) and Achal Cashews Private Limited (ACPL),
considering the common management, along with strong operational
and financial linkages between them. They are collectively referred
as the Achal Group. The rating upgrade favourably factors in the
improvement in the Achal Group's operating profit margins to 8.60%
in FY2020 from 1.22% in FY2019 owing to decrease in raw cashew nut
(RCN) prices, which is expected to continue in FY2021 on the back
of soft RCN prices. The rating considers the expected equity
infusion of INR4.75 crore in AIPL in FY2021 to fund the company's
working capital requirement and reduction in interest cost with
lower utilisation of working capital limits. The rating positively
notes the promoters' experience of more than three decades in the
cashew processing industry, along with its established distribution
channel across domestic and export markets as well as farmers for
the procurement of RCNs.
The rating, however, is constrained by its weak financial risk
profile with negative net worth levels, interest cover of 1.24
times and Debt/OPBIDTA of 4.89 times in FY2020. The rating is also
constrained by the Group's moderate scale of operations with
revenues of INR89.95 crore in FY2020 and intense competition owing
to the fragmented nature of the industry. The Group has achieved a
revenue of INR49.23 crore in 7M FY2021 compared to INR48.25 crore
in 7M FY2020 and is expected to achieve an operating income of more
than INR90 crore in FY2021. Similar to other players in the
industry, the entity's margins are vulnerable to volatility in
cashew price movements and forex fluctuations. The Stable outlook
reflects ICRA's expectation that the Achal Group would be able to
sustain the revenues and operating margins at FY2020 levels.
Key rating drivers and their description
Credit strengths
* Experienced promoters in cashew processing industry: The
promoters of the Achal Group have more than three decades of
experience in the cashew processing industry. Further, it has
established relationship with its suppliers resulting in ease of
procurement of RCNs.
* Diversified customer base: The company sells processed cashew
kernels to distributors, wholesalers, institutional buyers,
supermarkets and dealers in the international as well as domestic
markets. The Group has a network of more than 50 distributors
across India. It has a long-term relationship with several of its
buyers in the domestic market who deal exclusively with the Group.
Credit challenges
* Weak financial risk profile: The Group's net worth is negative
owing to net losses in FY2018 and FY2019. The coverage indicators
are modest with interest cover of 1.24 times and Debt/OPBIDTA of
4.89 times in FY2020 due to high debt levels and low margins. The
total debt of INR37.83 crore mainly includes unsecured loan of
INR24.89 crore and the rest includes working capital borrowing of
INR12.44 crore and term loan of INR0.05 crore.
* Margins exposed to volatility in cashew prices and foreign
exchange fluctuations: The procurement of RCN is seasonal. The
prices of cashew kernels and RCNs vary on a daily basis, depending
on the international demand-supply scenario, exposing the company's
margins to the price fluctuations. Moreover, the availability of
RCNs is subject to agroclimatic risks. The Group's operating
margins increased to 8.60% in FY2020 from 1.22% in FY2019 owing to
decrease in RCN prices. The operating margins are expected to
sustain at above 8% levels in FY2021.
* Intense competition with low product differentiation and value
addition limiting pricing flexibility: The company faces stiff
competition from a large number of small units. The Indian players
face competition from other countries in the export market. The
industry is highly fragmented because of the low entry barriers
owing to the low capital and technology intensive nature of
operations. The industry is highly dependent on labour and is
affected by labour shortage issues from time to time. The lack of
product differentiation and intense competition restricts its
bargaining position and pricing flexibility.
Liquidity position: Adequate
The Group's liquidity profile remains adequate with moderate
utilisation of working capital limits in the past 12 months
ending October 2020. Further, modest capex plans and low repayment
obligation in the near term to support its liquidity
position.
Rating sensitivities
Positive triggers – ICRA may upgrade the rating if the
profitability and cash accruals improve, leading to a strong net
worth position. Moreover, interest coverage of more than 2.0 times
on a sustained basis may trigger a rating upgrade. Negative
triggers – Negative pressure on the rating could arise if the
margins decrease leading to deterioration of coverage indicators or
any delay in debtors result in further weakening of the liquidity
position.
Incorporated in 2016, Achal Industries Private Limited is involved
in processing organic as well as conventional RCNs to cashew
kernels, apart from processing small quantity of almonds as well.
In addition, the company sells cashew byproducts such as cashew
shells and peels. The company is promoted by Mr. G. Giridhar Prabhu
and his family. It has an established processing capacity of ~15
metric tonnes per day and generates almost its entire revenues from
the domestic market. Apart from AIPL, the group comprises Achal
Cashews Private limited which is also involved in processing RCNs
into finished cashew kernels as well as in trading RCNs; Achal
Primenuts Private Limited, Achal Industries and Achal Farm Products
Private Limited, which manage retail outlets in Bangalore and
Mangalore, respectively. Achal Industries has been converted from
proprietorship to partnership firm and all operating activities of
Achal Industries were taken over by Achal Industries Private
Limited from January 2018. The assets of Achal Industries have been
leased to Achal Industries Private Limited from 1st February 2018.
ERAM MOTORS: ICRA Assigns B Rating to INR40cr Loans
---------------------------------------------------
ICRA has assigned rating to the bank facilities of Eram Motors
Private Limited (EMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term
Fund-based–CC 38.00 [ICRA]B (Stable); assigned
Long-term
Fund-based–TL 12.00 [ICRA]B (Stable); assigned
Short-term
Non-fund
based-BG 9.00 [ICRA]A4; assigned
Rationale
The assigned ratings factor in EMPL's modest financial profile as
reflected by weak return metrics over a declining scale in the
backdrop of the ongoing demand slowdown in the automobile
industry.
Consequently, the company's high dependence on external borrowings
has kept its capital structure and coverage indicators stretched.
The ratings are also constrained by the inherently low margins in
the dealership business and the intense competition from other
Mahindra & Mahindra (M&M) dealers as well as dealers of other OEMs
in Kerala, which exerts pressure on its sales and profit margins.
However, the ratings draw comfort from EMPL's established position
in the North Kerala market as the leading dealer of M&M. It
benefits from the strong market position of M&M in the utility
vehicles (UV) and van segment in India. The ratings favourably note
the strong promoter background and the financial support received
by the company in the form of unsecured loans. The ratings consider
EMPL's diversified revenue profile with income from sales of
high-margin spares and service, pay-out from financiers and
commission from insurance companies providing stability to its
revenues to an extent.
The Stable outlook on the [ICRA]B rating reflects ICRA's opinion
that EMPL will continue to benefit from its established presence in
North Kerala market and the financial flexibility as a part of a
strong promoter group.
Key rating drivers and their description
Credit strengths
* Strong promoter background: EMPL is a part of the Eram Group,
which is based in Gulf Cooperation Council (GCC) region and is a
diversified conglomerate mainly operating in oil and gas, power and
utilities, travel, food, healthcare and automotive sectors. The
Group is promoted by Dr. Sideek Ahmed, who has over 25 years of
business experience in varied enterprises. The company has thus
received regular support from the promoters in the past in the form
of interest-free unsecured loans when required (Rs. 11.25 crore as
on March 31, 2020), apart from INR30.00 crore retained in the
business for long term. However, these funds have been mainly
utilised towards its capex requirements.
* Proven track record as authorised dealer of M&M (third largest
player in UV segment): EMPL is the authorised dealer of passenger
UV and light commercial vehicles for M&M in eight districts of
Kerala since 2010. M&M is the third largest player in the Indian
passenger UV market, after Maruti Suzuki India Limited and Hyundai
Motor India Limited. The established presence of the principal
augurs well for the company's prospects going forward.
* Diversified revenue streams: The company's revenue stream
comprises service income from workshop, sales of spares and
accessories, payout from financiers and commission from insurance
companies, which provide stability to its revenues to some extent.
Sales of spares and service income contributed to 18.86% and 7.99%,
respectively, of EMPL's revenues in FY2020 against 8.54% and 4.65%,
respectively, in FY2019.
Credit challenges
* Decline in revenues in FY2020 and H1 FY2021 owing to weak ongoing
demand: The company's operating income (OI) witnessed a steep
decline of 24.55% in FY2020. This was primarily owing to the
overall slowdown in the automobile industry leading to lower sales
volume in all the segments and more particularly in utility and van
segments. Moreover, the lockdown in March 2020 end affected
year-end and H1 FY2021 sales. EMPL's revenues in FY2021 are
expected to be impacted by the slowdown in demand because of weak
consumer sentiments amid the Covid-19 pandemic. Buying passenger
vehicles is a discretionary purchase decision, so an improvement in
consumer sentiments and an overall growth in the economy remain
crucial.
* Thin margins, leveraged capital structure and stretched coverage
indicators: The auto dealership business is characterised by thin
profit margins as the margins on vehicles are determined by the
OEMs with the dealers having low bargaining power. EMPL's
profitability has continued to be weak as reflected by operating
margin of 1.88% and ROCE of 3.43% in FY2020. Owing to its thin
operating margins, the company has been reporting losses over the
last five years except FY2018 leading to erosion of net worth.
Assuming part of the interest-free unsecured loans as capital, the
company's adjusted gearing stood high at 2.05 times as on March 31,
2020. The other coverage indicators remained weak including Total
debt/OPBITDA at 7.69 times, interest coverage at 1.55 times and
DSCR at 0.80 times as on March 31, 2020. While it has implemented
cost rationalisation measures in the current year, sustained
improvement in the credit metrics remains to be seen.
* Intense competition from other automobile dealers: The company's
margins remain low due to the trading nature of operations and
inherently low margins in the dealership business. Further, stiff
competition in Kerala owing to the presence of various other
automobile brand dealers exerts further pressure on its sales
volume and margins.
Liquidity position: Stretched
The company has sizeable repayment obligation of INR2.0 crore in
FY2021 towards its term loans. While the average utilisation of the
CC limits stood high at 87% during March 2020 to November 2020,
there was high utilisation in its inventory funding facility,
including that beyond the drawing power. However, the same remained
within the sanctioned limits for a few months in H1 FY2021. The
above factors, along with low free cash balances reflect EMPL's
stretched liquidity position.
Rating sensitivities
Positive triggers - The ratings may be upgraded if there is a
revival in demand for automobiles and higher profitability
resulting in improved debt coverage metrics. Further, improvement
in liquidity or interest coverage greater than 1.8 times, on a
sustained basis, may trigger a rating upgrade.
Negative triggers - EMPL's ratings could be downgraded if there is
any further weakening in its liquidity position.
Incorporated in 2010, EMPL operates as an authorised dealer of
passenger UV and light commercial vehicles for M&M with 19 branches
across eight districts of Kerala. Formerly incorporated as ITL
Motors, the company was converted into EMPL in 2015, under the
versatile Eram Group. Mr. Siddeek Ahmed, the Chairman and Managing
Director of Eram Group, as well as EMPL, is based in Saudi Arabia.
The company has showrooms in Calicut, Kannur, Kasaragod, Kottakkal,
Malappuram, Palakkad, Thrissur and Wayanad in Kerala.
In FY2020, on provisional basis, the company reported a net loss of
INR1.60 crore on an OI of INR380.35 crore compared to a net loss of
INR5.26 crore on an OI of INR504.11 crore in FY2019. As per
provisional figures, in H1 FY2021, it achieved sales of INR42.17
crore.
FIELD MOTOR: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the ratings for the INR22.59 crore bank facilities of
Field Motor Private Limited continue to 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B+ (stable) ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 1.09 [ICRA]B+ (Stable) ISSUER NOT
Term Loan COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
Fund based- 16.50 [ICRA]B+ (Stable) ISSUER NOT
Cash credit COOPERATING; Rating Continues
(e DFS) to remain under the 'Issuer
Not Cooperating' category
Fund Based- 4.00 [ICRA]B+ (Stable) ISSUER NOT
Ad hoc cash COOPERATING; Rating Continues
(e DFS) to remain under the 'Issuer
Not Cooperating' category
Fund Base- 1.00 [ICRA]B+ (Stable) ISSUER NOT
Cash credit COOPERATING; Rating Continues
(Spares and to remain under the 'Issuer
Lubes) Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
www.icra.in
Incorporated in 2001, FMPL is engaged in the automobile dealership
business of Toyota Kirloskar Motor Private Limited and has three
showrooms with 3S facilities (Sales-Services-Spares) in Cuttack,
Rourkela and Sambalpur, Odisha. The company also has two centres
with 1S facility (Sales) in Bhubaneswar and Angul, both in Odisha.
GOVIND CABLE: ICRA Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA said the ratings for the INR13.00-crore bank facilities of
Govind Cable Industries (GCI) continue to remain under 'Issuer Not
Cooperating' category'. The ratings are denoted as "[ICRA]B
(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.00 [ICRA]B (Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
Short Term- 7.00 [ICRA]A4 ISSUER NOT
Non-Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Govind Cable Industries (GCI) was established in 1978 to
manufacture power, control and instrumentation cables mainly for
steel and power sectors. The firm caters to Government entities or
private dealers who supply to Government entities. The
manufacturing facility is located at the industrial area of
Sahibabad in Ghaziabad, Uttar Pradesh.
GOYAL AGENCIES: CRISIL Reaffirms B+ Rating on INR39cr Cash Loan
---------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the bank
facilities of Goyal Agencies Private Limited (GAPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 39 CRISIL B+/Stable (Reaffirmed)
Working Capital
Demand Loan 10 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 10 CRISIL A4 (Reaffirmed)
The rating continues to reflect the company's large working capital
requirement and leveraged capital structure, as reflected in high
total outside liabilities to adjusted networth (TOLANW) ratio.
These weaknesses are partially offset by the extensive experience
of the promoters in the industrial equipment trading business and
diversified product portfolio
Key Rating Drivers & Detailed Description
Weaknesses:
* Large working capital requirement: Gross current assets (GCAs)
were 290 days in fiscal 2020, driven by inventory of around 137
days. The company extends credit of around 90 days to its customers
and gets limited credit of around 30 days from its suppliers,
resulting in large working capital requirement. CRISIL believes
operations will remain working capital intensive over the medium
term.
* Highly leveraged capital structure: The TOLANW was 5 times as on
March 31, 2020, on account of higher reliance on debt to fund the
working capital requirement of the business. CRISIL believes with
GAPL continuing to rely on external debt to fund its working
capital requirement, the capital structure will continue to remain
leveraged over the medium term also.
Strengths:
* Extensive experience of the promoters and diversified product
portfolio: Presence of around five decades in the industrial
machinery trading business has enabled the promoters to
successfully set up sales offices in Punjab, Chandigarh,
Uttrakhand, Jammu and Kashmir, and Haryana and establish healthy
relationships with customers and the principle supplier. GAPL
operates in various verticals such as robotics, machinery,
chemicals and spare parts, with a highly diversified product
portfolio that allows the company to cater to different industries
and reputed client base in the Indian domestic market.
Liquidity: Poor
Net cash accrual is expected at INR0.92 crore, over the medium
term, against maturing debt obligation of INR0.4-0.5 crore. Bank
limits were highly utilised at 92% on average over the 12 months
through October 2020. The promoters have supported the company in
the form of need-based unsecured loan of INR5.58 crore as on March
31, 2020.
Outlook: Stable
CRISIL believes GAPL will continue to benefit from the extensive
experience of its promoters and established relationships with its
principal supplier.
Rating Sensitivity factors
Upward factors
* Sustainable increase in revenue by 20% with stable operating
margin
* Improvement in GCAs to 180 days
Downward factors
* Decrease in cash accrual to less than INR0.7 crore, impacting the
liquidity
* Higher reliance on external borrowings, leading to more leveraged
capital structure
Set up in 1958 in Jalandhar, Punjab, as a partnership firm by Mr
Rajinder Prashad and his family members, the firm was reconstituted
as a closely held public limited company in 1985. GAPL trades in
industrial machinery such as welding, cutting and grinding
equipment.
HIMADRI FOODS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Himadri Foods Limited
A-173/2, TTC Industrial Area
MIDC Village
KoperKhairane
Navi Mumbai, Mumbai
Thane MH 400701
IN
Insolvency Commencement Date: December 9, 2020
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: June 7, 2021
Insolvency professional: Ramchandra Dallaram Choudhary
Interim Resolution
Professional: Ramchandra Dallaram Choudhary
9/B, Vardan Complex
Near Vimal House
Lakhudi Circle
Navrangpura
Ahmedabad 380014
E-mail: rdc_rca@yahoo.com
cirp.himadrifoods@gmail.com
Last date for
submission of claims: January 19, 2021
IL&FS GROUP: Solar Power Unit Repays Entire Debt of INR845 crore
----------------------------------------------------------------
The Hindu BusinessLine reports that IL&FS Solar Power Limited
(ISPL), a group company of IL&FS, has paid up its entire debt of
INR845 crore.
This debt has been repaid to all its creditors which include
financial and operational debt, tax and statutory dues, IL&FS said,
BusinessLine relays.
According to BusinessLine, ISPL had taken up construction and
financing of a 100 MW AC solar power project in Bellary for Embassy
Energy Private Limited (EEPL). The project was commissioned in 2018
and ISPL had raised secured and unsecured loans for the same. EEPL,
as the project owner, was servicing ISPL through an equated monthly
instalment (EMI) structure under a deferred payment agreement
(DPA).
As per the DPA, EEPL has pre-paid the financial assistance provided
by ISPL towards this project. The prepayment by EEPL has enabled
ISPL to pay back the debt, BusinessLine relates. ISPL will continue
to provide certain services to EEPL in this project till the final
resolution in accordance with the Resolution Framework is approved
by NCLAT. This payment by ISPL supports the overall resolution
process for the IL&FS Group and will be a key intermediate step in
the resolution of ISPL, an entity for which no bids were received
pursuant to the publicly solicited bid process launched in November
2018, the report states.
In its last progress report, IL&FS said that it has resolved
INR19,100 crore of the group's debt, BusinessLine discloses. It has
around INR99,000 crore in total debt. IL&FS is in the process of
selling off assets and repaying debt despite some hiccups caused by
the pandemic, which has delayed resolution, adds BusinessLine.
About IL&FS
Infrastructure Leasing & Financial Services Limited (IL&FS) --
https://www.ilfsindia.com/ -- is an infrastructure development and
finance company based in India. It focuses on the development and
commercialization of infrastructure projects, and creation of value
added financial services. The company operates in Financial
Services, Infrastructure Services, and Others segments.
The Indian government, in October 2018, stepped in to take control
of crisis-ridden IL&FS by moving the National Company Law Tribunal
(NCLT) to supersede and reconstitute the board of the firm which
has defaulted on a series of its debt payments, according to Indian
Express. This was said to be an attempt to restore the confidence
of financial markets in the credibility and solvency of the
infrastructure financing and development group.
J.I. ENTERPRISES: ICRA Keeps B on INR9cr Loans in Not Cooperating
-----------------------------------------------------------------
ICRA said the ratings for the INR9.00-crore bank facilities of J.I.
Enterprises continue to remain under 'Issuer Not Cooperating'
category'. The ratings are denoted as "[ICRA]B (Stable); ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.00 [ICRA]B (Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
Long term- 0.44 [ICRA]B (Stable) ISSUER NOT
Fund based COOPERATING; Rating Continues
term loan to remain under the 'Issuer
Not Cooperating' category
Long Term- 2.56 [ICRA]B (Stable) ISSUER NOT
Unallocated COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
The firm was established in 2003 as a proprietorship firm by Mr.
Rajeev Kumar. Initially the firm was carrying out rice milling
operations from leased plant. However, in the year 2010 firm
purchased its own rice milling plant thus increasing its scale of
operations. Firm is having its manufacturing unit at Nadana Road,
Taraori, Karnal with an installed milling capacity of 2 tons per
hour of paddy and sorting capacity of 4 tons per hour. JIE is
engaged in the business of processing and trading of rice in
domestic market. However, the firm is involved in indirect export
sales to Nigeria and Kuwait.
JAI BHOLE: ICRA Lowers Rating on INR12cr LT Loan to B+
------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Jai
Bhole Steel Tubes Private Limited (JBST), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating downgraded
from [ICRA]BB- (Stable) and
continues to remain in the
'Issuer Not Cooperating'
Category
Rationale
The ratings are downgrade because of lack of adequate information
regarding JBST performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Jai Bhole Steel Tubes Private Limited ICRA has been trying to
seek information from the entity so as to monitor its performance,
but despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 1, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
JBST was incorporated in 2004 in the name of SVD Steels Private
Limited, which was later on changed to its current name in 2007.
The company manufactures ERW precision tubes of round, square and
elliptical shapes. The manufacturing unit of the company is located
in Ludhiana, Punjab.
JET AIRWAYS: NCLT Tells DGCA, MoCA to Clear Stance on Slots
-----------------------------------------------------------
The Hindu BusinessLine reports that the Mumbai Bench of the
National Company Law Tribunal (NCLT) has issued a notice to the
Directorate General of Civil Aviation (DGCA) and Ministry of Civil
Aviation (MoCA), asking them to clear their stance on Jet Airways'
erstwhile slots and appear for a hearing on January 12.
This comes even as the two-judge Bench is hearing an application on
behalf of the Resolution Professional (RP), Ashish Chhawcharria, to
approve the resolution plan submitted by Kalock Capital and Murari
Lal Jalan, BusinessLine says.
BusinessLine relates that the lawyer appearing on behalf of the RP
told the Bench: "Slots are a vital part of the plan, and it is
important that the DGCA and MoCA submit their stance on the same."
A slot is a date and time at which an airline's aircraft are
permitted to depart or arrive at an airport, the report notes.
Prior to its grounding in April 2019, Jet Airways had 700 such
slots, and operated a total of 110 aircraft, BusinessLine
discloses. MoCA had temporarily allocated the domestic and
international slots to other airlines to overcome the capacity
deficit. All airlines including SpiceJet, IndiGo, Air India, GoAir
and Vistara had received the slots, with SpiceJet ending up with
the most.
In 2019, DGCA and MoCA representatives had said they would
"positively consider" returning Jet's slots if a firm plan was
presented during the hearing.
At its peak, Jet had 22,000 employees, including 6,000 on contract.
According to company sources, it still has over 4,500 employees on
its payroll, BusinessLine notes.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited was one of
India's top airlines founded by Naresh Goyal. It provided
passenger and cargo air transportation services as well aircraft
leasing services. It operated flights to 66 destinations in India
and international countries.
Jet Airways on April 17, 2019, halted all flight operations after
its lenders rejected its plea for emergency funds.
On June 20, 2019, the National Company Law Tribunal (NCLT), Mumbai
Bench, accepted an insolvency petition against Jet Airways filed by
its creditors as they attempt to recover some of their dues.
Ashish Chhawchharia of Grant Thornton India has been named as the
resolution professional in the case. Law firm Cyril Amarchand
Mangaldas will represent the interests of the lenders' consortium,
according to a Reuters report.
Creditors have filed claims worth INR30,907 crore, according to
Financial Express. The RP has so far admitted claims worth over
INR14,000 crore.
Jet Airways would be acquired by an investor consortium under a
multi-million dollar resolution plan approved by the carrier's
creditors on Oct. 17, 2020.
KHED ECONOMIC: ICRA Hikes Rating on INR430cr Term Loan to B-
------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Khed
Economic Infrastructure Private Limited (KEIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 430.00 Rating downgraded to [ICRA]D
Term Loan From [ICRA]B- and
simultaneously upgraded to
[ICRA]B-
Rationale
The rating downgrade to [ICRA]D follows the recent change made in
ICRA's approach towards default recognition in cases where an
account continues to remain irregular at the time when the
resolution plan (RP) is not invoked by the lenders. As per a recent
clarification taken by ICRA from the RBI, for cases where the RP is
not invoked, a continued overdue status is to be construed as
default.
In August 2020, KEIPL had applied to its lenders for a loan
restructuring relief. At the same time, the company had missed its
due payments in view of its stressed cash flows and in anticipation
of a favorable restructuring of loans. For the period during which
the company's restructuring application was being reviewed by the
lenders, ICRA had not recognized the missed payments as default in
accordance with its published approach. However, once the RP was
not invoked and the account continued to remain irregular, ICRA has
now recognised default based on the recent clarifications taken by
ICRA from the RBI, as opposed to its earlier approach published in
September 2020 as per which
such instances were not construed as default.
It may be noted that on December 11, 2020, KEIPL had cleared its
past dues and the account is currently regular.
Further, the rating has been simultaneously upgraded to [ICRA]B- as
the company has received infusion of INR120 crore from one of the
Group company because of which its credit profile has undergone a
significant change. Accordingly, while upgrading the rating of
KEIPL from the default category even prior to the passage of the
cooling period of 90 days from the date when the account became
regular, ICRA has made an exception to its policy. This is in
accordance with ICRA's Policy on Default Recognition and the
exceptions allowed therein.
The rating, however, remains under "Watch with Developing
Implications" as ICRA understands that the sponsors of KEIPL are in
the process of extending a corporate guarantee for the rated
facilities. The "Watch" designation reflects the uncertainty around
whether the corporate guarantee will be executed or not. In case
the said corporate guarantee is executed, the rated facilities may
experience a sharp rating upgrade. ICRA will resolve the "Watch"
upon reviewing the
terms of the corporate guarantee as and when it is executed.
Alternatively, the "Watch" will be resolved, and the rating will be
reviewed in case the sponsors retract the plan to extend the
corporate guarantee.
Key rating drivers and their description
Credit strengths
* Strategic location near Pune's industrial hub, Chakan Industrial
belt and Port Trust: Khed city is in close proximity to existing
industrial zones around Pune, like Chakan, Pimpri Chinchwad,
Talegaon and Ranjangaon. It is also well connected to other parts
of the country with close proximity to NH - 50 and overseas
locations through the JNPT (160 km) and Lohegaon airport in Pune.
Credit challenges
* Lumpy cashflows as against sizeable monthly debt obligations,
weak liquidity position: The revenue streams of KEIPL are linked to
proceeds from execution of agreement for sale/lease of land parcels
and have remained weak over the recent past due to delay in some of
the deal finalisations due to the pandemic. Moreover, the ticket
size of such transactions is generally large and has led to lumpy
cashflows for KEIPL in the past.
* Significant marketing risk given sizeable residual leasable area
and competition in the vicinity: Significant marketing risk exists
due to large area (1,152 acres) to be sold/leased. As on August 18,
2020 only 259.2 acres of the area was sold/leased. Further,
existence of another large multi-product SEZ project in the
vicinity (Navi Mumbai SEZ, India Bulls SEZ in Nashik) along with
other sector specific SEZs in Pune increases the marketing risk.
Liquidity position: Poor
Cash flow from operations are expected to remain weak in FY2021.
The company has received infusion of INR120 crore in December 2020
of which INR110 crore has been utilized for clearing the past dues
and part prepayment of debt.
Rating sensitivities
Positive triggers - The rating could be upgraded after assessment
of the proposed corporate guarantee along with assessment of the
credit risk profile of the guarantor.
Negative triggers - Any weakening of the credit risk profile which
impacts the debt serving ability of the company may result in a
rating downgrade.
Khed Economic Infrastructure Private Limited, a Special Purpose
Vehicle (SPV) jointly promoted by Kalyani Group (KG) and
Maharashtra Industrial Development Corporation (MIDC), is
undertaking to implement a sector specific SEZ, DTA and IIA over an
area of 1705 Ha in Khed Taluka near Pune District in the State of
Maharashtra. KEIPL had signed lease agreement with MIDC for 1,200
Ha land on December 18, 2009 and for 505.62 Ha land on June 30,
2010. The above lease is for an initial period of 95 years,
extendable for a further period of 95 years. Earlier, company was
planning to setup multiproduct SEZ in 1,000 Ha however the plan is
now revised to setup 100Ha SEZ and develop remaining 900Ha area as
Integrated Industrial Area (IIA) under Maharashtra Industrial
Policy, 2013 and / or as Domestic Tariff Area. KEIPL has received
final approval for partial de-notification for 257 Ha in April
2017.
MARUTI INTERNATIONAL: CRISIL Moves B Rating From Not Cooperating
----------------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI
guidelines, had migrated its ratings on bank facilities of Maruti
International - New Delhi (MI) to 'CRISIL B/Stable Issuer Not
Cooperating'. However, the management has subsequently started
sharing the information, necessary for carrying out comprehensive
review of the rating. Consequently, CRISIL is migrating its rating
to 'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL's rating continue to reflect MI's modest small scale of
operations and large working capital requirement. These weaknesses
are partially offset by the extensive experience of the proprietor
in the trading of dry fruits and poppy seeds.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations
* Scale of operations may remain modest over the medium term.
Though revenue has grown to INR11.35 crore in fiscal 2020, aided by
higher sales of poppy seeds, it remains a key monitorable. Exposure
to intense competition and limited bargaining power with clients
constrain scalability and profitability. Revenue of INR5.5 crore
has been booked for the first half of fiscal 2021.
* Large working capital requirement: Gross current assets were
sizeable at 167 days as on March 31, 2020, driven by large
inventory of nearly 60 days, given the lead time required for
imports. Large credit extended by the suppliers partly eases
pressure on the working capital cycle.
Strength
* Extensive experience of the promoter: Benefits from the
three-decade-long experience of the proprietor in the trading of
dry fruits and poppy seeds , his strong understanding of local
market dynamics, and healthy relationships with customers and
suppliers should continue to support the business.
Liquidity: Poor
Liquidity is poor. Expected cash accrual of over INR1.8 crore,
should cover the maturing term debt of INR0.20 crore over the
medium term. Bank limit utilisation averaged around 20% for the 12
months ended September 30, 2020. Current ratio was low at 0.89 time
on March 31, 2020. Investment of around INR5 crore in shares,
debentures and mutual funds, as on March 31, 2020, also aid
liquidity.
Outlook Stable
CRISIL believes MI will continue to benefit from the extensive
experience of its proprietor in the agro commodity trading
business.
Rating Sensitivity factors
Upward factors:
* Sustained revenue growth of 20% and improvement in financial risk
profile over the medium term
* Better working capital management, with gross current assets
declining to 100 days
Downward factors:
* Decline in revenue by 20%, leading to lower net cash accrual and
weaker liquidity
* Any debt-funded capital expenditure, constraining the financial
risk profile
MI was set up in 2006, by the proprietor, Mr Harish Goyal. The New
Delhi-based firm trades in dry fruits and poppy seeds.
MICROFINISH VALVES: CRISIL Withdraws B Rating on INR5cr Loan
------------------------------------------------------------
CRISIL has withdrawn its ratings on the bank facilities of
Microfinish Valves Private Limited (MVPL) on the request of the
company and after receiving a no objection certificate from the
bank. The rating action is in-line with CRISIL's policy on
withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 20 CRISIL A4 (Issuer Not
Cooperating) (ISSUER NOT
COOPERATING; Rating Withdrawn)
Foreign Bill 5 CRISIL B/Stable (Issuer Not
Discounting Cooperating)
Packing Credit 5 CRISIL A4 (Issuer Not
Cooperating) (ISSUER NOT
COOPERATING; Rating Withdrawn)
Term Loan 29 CRISIL B/Stable (Issuer Not
Cooperating)
Cash Credit/ 40 CRISIL B/Stable (Issuer Not
Overdraft facility Cooperating)
CRISIL has been consistently following up with MVPL for obtaining
information through letters and emails dated March 31, 2020 and
September 30, 2020 among others, apart from telephonic
communication. However, the issuer has remained non-cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Due to lack of communication with the management, CRISIL failed to
receive the information required for reviewing MVPL, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes that the rating action on
MVPL is consistent with 'Assessing Information Adequacy Risk'.
CRISIL has Continues the ratings on the bank facilities of MVPL' to
'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of MVPL on
the request of the company and after receiving a no objection
certificate from the bank. The rating action is in-line with
CRISIL's policy on withdrawal of its rating on bank loan
facilities.
Incorporated in 1971, MVPL manufactures a variety of valves,
including the ball, gate, and globe variants. Customers include
players in the oil and gas, power, chemical, petrochemical,
fertiliser, and pharmaceutical industries in India and abroad. The
integrated facility of around 13,500 square metre in Ittigatti
village near Hubbali (Karnataka) has a capacity of 95,000 pieces
per annum.
Micro Finish Valves Inc. (MVI), established in fiscal 2011 in the
US, is the marketing subsidiary of MVPL.
MUMBAI INT'L AIRPORT: CRISIL Cuts Rating on INR175cr Loan to D
--------------------------------------------------------------
CRISIL has downgraded its rating on the bank loan facilities of
Mumbai International Airport Limited (MIAL) to 'CRISIL D/CRISIL D'
from 'CRISIL C/CRISIL A4' while removing the ratings placed on
Rating Watch with Negative implications'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 175 CRISIL D (Downgraded from
'CRISIL C/Watch Negative'
and removed from Watch)
Bank Guarantee 330 CRISIL D (Downgraded from
'CRISIL A4 ' and removed
from Watch)
Letter of Credit 50 CRISIL D (Downgraded from
'CRISIL C/Watch Negative'
and removed from Watch)
Letter of Credit 250 CRISIL D (Downgraded from
'CRISIL C/Watch Negative'
and removed from Watch)
Cash Credit 330 CRISIL D (Downgraded from
'CRISIL A4 ' and removed
from Watch)
Rupee Term Loan 8646.74 CRISIL D (Downgraded from
'CRISIL C/Watch Negative'
and removed from Watch)
The rating action reflects continuation of delays in servicing of
the debt obligations beyond December 31, 2020. MIAL had applied for
restructuring its ADF, project and working capital loan facilities
in line with the Reserve Bank of India (RBI) circular dated June 7,
2019, under the change in management clause. The company has
requested lenders to take September 30, 2020, as the cut-off date
for the proposed restructuring [1]. As the application for
restructuring was made before the debt obligation was due and as
the cash flow of MIAL has been severely impacted because of
Covid-19 related disruptions, CRISIL had not treated the missed
debt obligation as default till date in line with the August 2020
circular of the Securities and Exchange Board of India[2]. However,
CRISIL understands that no final decision or implementation
timelines on the proposed restructuring plan have been finalised
till January 4, 2021. Hence, CRISIL has taken treated delays in
debt servicing beyond December 31, 2020 as default on debt
obligations.
CRISIL has noted that Adani Airport Holdings Limited (AAHL) has
entered into binding agreements with: (i) Bid Services Division
(Mauritius) Limited for the acquisition of 13.5% of paid up equity
share capital of MIAL; and (ii) ACSA Global Limited (“ACSA”)
for acquisition ~10% of paid up equity share capital of MIAL.
CRISIL has also noted the intent of MIALs promoter companies (GVK
group) to cooperate with AAHL in acquisition of their holding
company level debt by AAHL from its various lenders. Upon
acquisition of this debt, AAHL may convert the acquired debt to
equity in MIALs promoter companies on mutually agreed terms,
subject to obtaining necessary regulatory approvals. These
developments can have bearing on MIALs credit profile hence will be
a monitorable.
The ratings reflect MIAL's exposure to risks associated with
construction of a greenfield airport at Navi Mumbai and weakened
liquidity on account of delay in real estate monetisation. These
weaknesses are partially offset by the company's strong market
position as the developer and operator of Chhatrapati Shivaji
Maharaj International Airport, Mumbai, and regulated returns from
aeronautical (aero) revenue.
[1] MIAL had paid debt obligation due on September 30, 2020 in the
month of December 2020. MIAL had not paid debt obligation due from
October 30, 2020 onwards.
[2] December 31, 2020 is the last date of relaxation from default
recognition due to restructuring of debt as per SEBI circular dated
August 31, 2020
Analytical Approach
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MIAL and Navi Mumbai International
Airport Ltd (NMIA). This is because both airports will serve the
common catchment of the Mumbai Metropolitan Area and have common
management and board members, leading to a complementary strategy
in the operations phase. Furthermore, MIAL is likely to provide
timely, need-based support to NMIA for project implementation and
stabilisation of operations.
Key Rating Drivers & Detailed Description
Weaknesses
* Weakened liquidity and dependence on real estate monetisation for
RESD loans: More-than-expected equity infusion in NMIA, delays in
real estate monetisation and weakening cash flow on account of the
pandemic has hit MIAL's cash liquidity. It has unencumbered cash of
about INR12 crore in escrow account and unutilized available
working capital lines of INR170 crore as of January 4, 2021. This
weakened liquidity profile and pandemic hit operations have
constrained ability to service debt, and the company has requested
its lenders to restructure its debt. The lenders' final view on the
said proposal and recovery in traffic at airports will be important
determinants of MIAL's credit profile.
The company had RESD loan of around INR302 crore (including accrued
interest during moratorium period) on September 1, 2020, to be
repaid from proceeds of real estate lease deposits. There have been
prolonged delays in monetisation of around 17 acres. This has led
to pressure on liquidity for servicing of RESD loans.
* Exposure to regulatory risks: The regulatory regime for airport
operators in India is still evolving as is evident from the delay
in the release of various control period tariff orders. The tariff
order of the second control period will continue till December 2020
as per recent AERA Order Risks associated with regulatory
uncertainty remain, including timeliness in the tariff-setting
process. Furthermore, the excess tariff collected in the second
control period may be trued-down and lead to a tariff decline in
the third control period (scheduled from fiscals 2020 to 2024).
* Implementation risks associated with the NMIA project: NMIA's
project is expected to be executed over three years. While the
project may benefit from a regulated tariff structure and healthy
demand potential, it will remain exposed to timely implementation
and ramp-up risks.
Strengths
* Strong market position as the developer and operator of the
Chhatrapati Shivaji Maharaj International Airport, Mumbai: MIAL is
the exclusive developer and operator of the second largest airport
in India. The airport is strategically located in the heart of a
key metro city, thereby attracting a strong flow of domestic and
international passengers. It also enjoys exclusivity for 30 years
(extendable by 30 years). Traffic has fallen on account of
economic slowdown and travel restrictions because of the pandemic.
Passenger traffic declined more than 90% in April-August 2020 in
comparison to the corresponding period of the previous year. That
said, attractive location and a large catchment area should ensure
recovery in traffic as the economy normalises.
* Regulated returns in the form of aero revenue: There are three
major revenue streams: aero, non-aero and real estate. Aero formed
around 50% of revenue in fiscal 2020 and is regulated by Airport
Economic Regulatory Authority. It is fairly visible and stable
given that there is fixed return on aero capex and true-up of
revenue.
Furthermore, MIAL is structured as a special-purpose vehicle and
cash flow is ring-fenced. Supervision by AAI, with its board
presence, for strategy decisions and related-party transactions,
presence of an escrow account with a payment waterfall
mechanism-ensuring priority of loan repayment-and a debt service
reserve account (DSRA) support the credit risk profile.
Liquidity: Poor
MIAL has unencumbered cash balance of about INR12 crore in the
escrow and unutilised available working capital lines of INR170
crore. Given the current state of operations, the ability to
generate accrual in the near term is curtailed.
MIAL had paid debt obligation due on September 30, 2020 in the
month of December 2020. MIAL had not paid debt obligation due from
October 30, 2020 onwards as it has applied for restructuring of the
debt with September 30, 2020 as the cut-off date, MIAL has
indicated that the DSRA of around INR213 crore has not been
utilised for debt repayment following the request for restructuring
with September 30, 2020, as the cut-off date.
Rating Sensitivity factors
Upward factors
* For RESD loans: Higher and faster raising of real estate deposits
resulting in timely servicing of debt and build-up of cash buffer
along with track record of timely servicing of debt for 90 days.
* For project loans: Faster ramp-up in cash flow streams and
build-up of adequate and sustainable cash buffer along with track
record of timely servicing of debt for 90 days.
MIAL was incorporated in 2006 to operate, modernise and expand the
Chhatrapati Shivaji Maharaj International Airport in Mumbai under a
30-year concession expiring in 2036 (extendable by 30 years). The
company is a joint venture of the GVK group (50.5% held through GVK
Airport Holdings Ltd), AAI (26%), Bid Services Division (Mauritius)
Ltd (13.5%) and ACSA Global Ltd (10%). In February 2017, MIAL bid
for the development of the Navi Mumbai airport and emerged as the
highest bidder. The project is being implemented through a
subsidiary.
PALLAVA GRANITE INDIA: CRISIL Reaffirms B- Rating on INR4cr Loan
----------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B-/Stable/CRISIL A4' ratings on
the bank facilities of Pallava Granite Industries India Private
Limited (PGIIPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL A4 (Reaffirmed)
Bill Discounting 4 CRISIL B-/Stable (Reaffirmed)
Letter of Credit 1 CRISIL A4 (Reaffirmed)
Proposed Long
Term Bank
Loan Facility 17.5 CRISIL B-/Stable (Reaffirmed)
Term Loan 0.5 CRISIL B-/Stable (Reaffirmed)
Export Packing
Credit 16 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect PGIIPL's working-capital-intensive
operations, average financial risk profile and large loans and
advances to group companies. These weaknesses are partially offset
by the extensive experience of the promoter in the granite
industry.
Analytical Approach
For arriving at the ratings, CRISIL has considered a standalone
approach as PGIIPL's operations are managed independently and there
is minimal financial fungibility expected going forward.
Previously, CRISIL had combined the business and financial risk
profiles of Pallava Granite Industries India Private Limited
(PGIIPL), Pallava Granite Industries Chennai Private Limited
(PGICPL) and Pallava RED Granite Private Ltd (PGPL).
Key Rating Drivers & Detailed Description
Weakness:
* Working capital intensive operations: Operations are working
capital intensive as reflected by gross current asset days of over
276 days as on March 31, 2020. This was majorly on account of high
inventory and receivable days of 70 and 112 days respectively.
* Average Financial risk profile: PGIIPL's financial risk profile
is average marked by gearing and TOL TNW of 3.51 and 7.51 times in
fiscal 2020. Debt protection metrics were moderate as reflected in
interest coverage and NCATD (Net cash accruals to total debt) of
4.52 and 0.17 times in FY2020. The financial risk profile of PGIIPL
is expected to remain average over the medium term.
* Large Loans and Advances to Group Companies: PGIIPL has extensive
exposure to group companies in the form of equity, loans and other
advances. PGIIPL's loans and advances to group companies stood at
around INR20.75 crore as on 31st March 2020. Any further increase
in exposure to the group companies by impinging its own cash
accruals may impact liquidity and will remain a key rating
monitor-able.
Strength:
* Extensive experience of promoters in the granite industry:
PGIIPL's promoter, Mr. Subba Reddy, has over three decades of
experience in the granite industry. The promoter also operates
owned quarries in Tamil Nadu and Andhra Pradesh, which cater to the
majority of the company's raw material requirements.
Liquidity: Stretched
Bank limits were highly utilized at around 97% in the last 12
months ending November 2020. Cash accruals for FY2021 are expected
to be around INR5.9 crore. This is expected to be sufficient
against term debt obligations over the medium term. Further, the
promoters are likely to extend support in the form of equity and
unsecured loans to meet the company's working capital requirements
and repayment obligations, should the need arise. The company has
not obtained interest moratorium on its bank facilities. GECL
(Covid-loan) availed in December is expected to further act as a
cushion to the company's liquidity profile. Current ratio was
modest at 0.95 times on March 31, 2020.
Outlook Stable
CRISIL believes that PGIIPL will continue to benefit over the
medium term from the promoter's extensive industry experience.
Rating Sensitivity factors
Upward factor
* Sustained increase in accretions to reserves, driven by
improvement in revenue and profitability, resulting in improvement
in financial risk profile
* Improvement in working capital cycle with Gross current Asset
Days of less than 150 days.
* Reduction in exposure to group companies
Downward factor
* Any stretch in working capital cycle and deterioration in
liquidity profile
* Decline in the revenues by 15% or operating margins below 10%
PGIIPL is engaged in the manufacturing and exports of polished
granite blocks, slabs and tiles; its day-to-day operations are
managed Mr. Subba Reddy and the company is based out of Chennai.
PALLAVA GRANITE: CRISIL Reaffirms B- Rating on INR8cr Loans
-----------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Pallava Granite Industries Chennai Private Limited (PGICPL) at
'CRISIL B-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 0.5 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.0 CRISIL B-/Stable (Reaffirmed)
Working Capital
Term Loan 2.5 CRISIL B-/Stable (Reaffirmed)
The rating continue to reflect PGICPL's weak financial risk profile
and working-capital-intensive operations. These rating weaknesses
are partially offset by the extensive experience of the group's
promoters in the granite industry.
Analytical Approach
For arriving at the ratings, CRISIL has considered a standalone
approach as PGICPL's operations are managed independently and there
is minimal financial fungibility expected going forward.
Previously, CRISIL had combined the business and financial risk
profiles of Pallava Granite Industries India Private Limited
(PGIIPL), Pallava Granite Industries Chennai Private Limited
(PGICPL) and Pallava RED Granite Private Ltd (PRGPL).
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak Financial risk profile: Capital structure is leverage with
negative networth. The debt protection metrics were also modest
with estimated interest cover and NCATD of 1.13 times and of 1 per
cent in fiscal 2020.
* Working capital intensive operations: Operations are working
capital intensive as reflected by gross current asset days of over
1000 days as on March 31, 2020. This was majorly on account of high
inventory and debtors.
Strength:
* Extensive experience of group's promoters in the granite
industry: PGICPL's promoter, Mr. Subba Reddy, has over three
decades of experience in the granite industry. The promoter also
operates owned quarries in Tamil Nadu and Andhra Pradesh, which
cater to the majority of the group's raw material requirements.
Liquidity: stretched
Bank limits have been highly utilised at above 90% for the year
ended November 2020. PGICPL accruals are expected to be
insufficient against repayment obligation. Accruals are expected to
be less than INR0.1 crores as against repayment obligation of 0.35
crores over the medium term. Unsecured loans will support the
liquidity in near term Unsecured loan stood at INR14.3 crores as on
31 Mach 2020. Current ratio is estimated at less than 1 time as on
March 2020.
Outlook: Stable
CRISIL believes PGICPL will continue to benefit over the medium
term from the promoter's extensive industry experience.
Rating Sensitivity factors
Upward factor
* Substantial improvement in scale of operation and sustenance of
operating margin at more than 10%
* Improvement in working capital cycle
Downward factor
* Further stretch in working capital cycle
* Decline in the revenues by 20% or EBITDA margin of less than 5%
PGICPL processes and exports granite; its day-to-day operations are
managed Mr. Subba Reddy. PGICPL was set up in 1983. Processing unit
is located near Pondicherry in Tamilnadu.
PALLAVA RED: CRISIL Reaffirms B- Rating on INR27cr Loans
--------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Pallava RED Granite Private Ltd (PRGPL) at CRISIL B-/Stable.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 0.5 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 24.0 CRISIL B-/Stable (Reaffirmed)
Working Capital
Term Loan 2.5 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect PRGPL's weak financial risk profile
and working-capital-intensive operations. These rating weaknesses
are partially offset by the extensive experience of the group's
promoters in the granite industry.
Analytical Approach
For arriving at the ratings, CRISIL has considered a standalone
approach as PRGPL's operations are managed independently and there
is minimal financial fungibility expected going forward.
Previously, CRISIL had combined the business and financial risk
profiles of Pallava Granite Industries India Private Limited
(PGIIPL), Pallava Granite Industries Chennai Private Limited
(PGICPL) and Pallava RED Granite Private Ltd (PRGPL).
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak Financial risk profile: Capital structure is leverage with
negative networth. The debt protection metrics were also modest
with estimated interest cover and NCATD of -4.07 times and -31 per
cent in fiscal 2020.
* Working capital intensive operations: Operations are working
capital intensive as reflected by gross current asset days of over
466 days as on March 31, 2020. This was majorly on account of high
inventory and debtors.
Strength:
* Extensive experience of group's promoters in the granite
industry: PRGPL's promoter, Mr. Subba Reddy, has over three decades
of experience in the granite industry. The promoter also operates
owned quarries in Tamil Nadu and Andhra Pradesh, which cater to the
majority of the group's raw material requirements.
Liquidity: Stretched
Bank limits have been highly utilised at above 90% for the year
ended November 2020.PRGPL accruals are expected to be sufficient
against repayment obligation. Accruals are expected to be INR0.5
crores as against repayment obligation of 0.35 crores. Unsecured
loans will support the liquidity in near term. Unsecured loan stood
at 10.7 crores as on 31, March 2020. Current ratio is estimated at
less than 1 time as on March 2020.
Outlook Stable
CRISIL believes PRGPL will continue to benefit over the medium term
from the promoter's extensive industry experience.
Rating Sensitivity factors
Upward factor
* Sustained improvement in scale of operation by 20% and sustenance
of operating margin at more than 5%
* Improvement in working capital cycle
Downward factor
* Further stretch in working capital cycle
* Decline in the revenues by 20%
PRGPL processes and exports granite; its day-to-day operations are
managed Mr. Subba Reddy. PRGPL was set up in 1983. Quarry site is
located near Ongur region in Andhra Pradesh.
PICCADILY HOLIDAY: ICRA Lowers Rating on INR28cr LT Loan to B+
--------------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Piccadily Holiday Resorts Limited (PHRL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 28.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based TL COOPERATING; Rating downgraded
from [ICRA]BB+ (Stable) and
continues to remain in the
'Issuer Not Cooperating'
Category
Rationale
The ratings are downgrade because of lack of adequate information
regarding PHRL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by the rated entity".
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Piccadily Holiday Resorts Limited's (PHRL) ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
PHRL was incorporated in 1982 with an objective to run hotels,
cinemas and other similar activities. The company established its
first hotel in 1986, 'Hotel Piccadily Manali' in Manali, Himachal
Pradesh. Subsequently, in October 2006, PHRL commenced operations
at its Lucknow hotel, 'The Piccadily Lucknow'. Both the properties
are managed and operated by the company itself. As a part of a
family settlement, Piccadily Cinema in Sector 34, Chandigarh, which
was earlier owned by Piccadily Hotels Private Limited (PHPL) was
merged into PHRL w.e.f. April 2006 and PHRL then set up a
three-screen mall-cum-multiplex project named 'Piccadily Square' at
this location, which commenced operations in September 2012. The
project is developed on a 2500 square yards plot which was
initially allotted on a 99-year lease to PHPL in 1973 by the
Chandigarh administration. As a part of the demerger scheme between
the promoter families, the Sector 34 property was demerged from
PHPL and merged into PHRL. Piccadily Holiday Resorts Limited has
recently acquired Kausauli Resorts Private Limited, which has a
hotel property located at Kasauli under the name 'Kasauli Resorts'
with a room capacity of 33.
RASHI STEEL: ICRA Keeps D on INR82cr Loans in Not Cooperating
-------------------------------------------------------------
ICRA said the ratings for the INR82.00-crore bank facilities of
Rashi Steel & Power Ltd Continues to remain under 'Issuer Not
Cooperating' category'. The ratings are denoted as "[ICRA]D ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 82.00 [ICRA]D ISSUER NOT COOPERATING;
Fund Based/ Rating continues to remain in the
Term Loan 'Issuer Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Rashi Steel & Power Limited, promoted by Mr. Amar Agarwal, Mr.
Rakesh Jindal and other promoters in 2009, had set up a 0.4 million
tonnes per annum pelletization cum-beneficiation plant at Bilaspur.
The company had also set up a producer gas plant to replace the
usage of furnace oil, saving power and fuel costs substantially.
SAMRAT FERRO: CRISIL Upgrades Rating on INR9cr Cash Loan to B-
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Samrat Ferro Alloys Pvt Ltd (SFAPL) to 'CRISIL B-/Stable' from
'CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9 CRISIL B-/Stable (Upgraded
from 'CRISIL D ')
The rating upgrade factors in the regularisation of the company's
cash credit account. The company had availed of the moratorium on
the account till August 2020 under the Covid-19 Regulatory Package.
Post the moratorium, the limit was utilised 85% on average in the
three months through November 2020, with no instance of
over-utilisation.
The rating reflects SFAPL's modest scale and weak financial risk
profile. These weaknesses are partially offset by the extensive
experience of the promoters in the pipe and pipe fittings industry
and their funding support.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Intense competition in the pipe and
pipe fittings industry and the tender-based nature of business will
continue to restrict scalability and operating flexibility.
Scalability has been dismal as indicated by revenue of around
INR5.1 crore during fiscal 2020 (Rs 20.9 crore during fiscal 2019),
and shall remain subdued over the medium term with estimated
revenue of around INR3 crore till December 2020 in fiscal 2021.
* Weak financial risk profile: Business losses over the years have
resulted in negative networth and hence a weak capital structure.
Also, debt protection metrics were weak on account of negative
operating profitability. With profitability to remain under
pressure over the medium term, the financial risk profile will
remain weak.
Strength
* Extensive experience of the promoters: The two-decade-long
experience of the promoters in the pipe and pipe fittings industry,
their strong understanding of market dynamics, and established
relationships with suppliers and customers will continue.
Liquidity: Poor
Liquidity is constrained on account of negative cash accrual, but
is partly supported by the promoters' financial support and nil
term debt obligation. Bank limit utilisation averaged 93.4% during
the 12 months through November 2020. The company availed of the
Covid-19 moratorium till August 2020
Outlook Stable
CRISIL believes SFAPL will continue to benefit from the extensive
experience of its promoters and their funding support.
Rating Sensitivity factors
Upward factors:
* Improvement in scale and profitability leading to cash accrual of
INR0.5 crore
* Efficient working capital management
Downward factors:
* Discontinuation of financial support from the promoters
* Cash credit utilised over 100%
SFAPL, incorporated in 1995 and based in Jammu & Kashmir, is owned
and managed by Mr Sandeep Gulati, Ms Sadhna Gupta and Ms Ritu
Gupta. The company has a pipe manufacturing facility in Sidco
Industrial Complex, Jammu and Kashmir, with capacity of 70,000
tonne per annum.
SHUBHLAXMI GUM: ICRA Withdraws B Rating on INR7cr Cash Loan
-----------------------------------------------------------
ICRA has withdrawn the ratings on certain bank facilities of
Shubhlaxmi Gum Industries (SGI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 7.00 [ICRA]B (Stable); ISSUER NOT
Cash Credit COOPERATING; Withdrawn
Unallocated 1.48 [ICRA]B(Stable)/[ICRA]A4
Limits ISSUER NOT COOPERATING;
Withdrawn
Rationale
The long-term and short-term ratings assigned to SGI have been
withdrawn at the request of the company and based on the No Due
Certificate received from the banker, and in accordance with ICRA's
policy on withdrawal and suspension. ICRA is withdrawing the rating
and it does not have information to suggest that the credit risk
has changed since the time the rating was last reviewed.
SGI is a partnership firm established in August 2013 by Mr.
Hasmukhbhai Varmora and Mr. Jayeshbhai Rupala. The firm commenced
its commercial operations from March 2014 and is engaged in
processing of guar seeds to produce guar gum refine splits and its
by-products like churi and korma. The guar gum refine splits finds
its application as raw material in guar gum powder manufacturing
industries whereas churi and korma are largely used as cattle feed.
The firm carries 3 its operations from its processing facility set
up at Halvad in Surendranagar district of Gujarat having annual
installed capacity of 18,000 MTPA. The firm recorded a net profit
of INR0.02 crore on an operating income of INR49.60 crore in FY2019
as against a net profit of INR0.1 crore on an operating income of
INR52.95 crore in FY2018.
TRIVIK HOTELS: CRISIL Raises Ratings on INR10cr Loans to B
----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Trivik Hotels and Resorts Private Limited (TRIVIK) to 'CRISIL
B/Stable' from CRISIL D.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft 0.75 CRISIL B/Stable (Upgraded
Facility from 'CRISIL D ')
Proposed Fund- 4.83 CRISIL B/Stable (Upgraded
Based Bank Limits from 'CRISIL D ')
Term Loan 4.42 CRISIL B/Stable (Upgraded
from 'CRISIL D ')
The rating revision factors in track record of timely servicing of
debt obligation supported by marginal improvement in operating
performance. With easing of restriction on travel by central and
state government, the company has been witnessing improving cash
flows since July 2020. With revenues of INR5.25 crores during the
year till December 2020, the company is poised to achieve revenues
around INR9-10 crores in the current fiscal, despite impact of
pandemic. Cost efficiencies to support margins and accruals for
fiscal 2021. Liquidity is also supported by unsecured loans from
promoters.
The rating continues its small scale of operations and below
average financial risk profile because of modest networth and
capital structure. However, the company benefits from the extensive
experience of its promoters in the hospitality industry, and the
advantageous location of its hotel.
Key Rating Drivers & Detailed Description
Weaknesses:
* Small scale of operations in the intensely competitive
hospitality industry: Small scale of operations, indicated by
revenue of INR11.6 cr for fiscal 2020, in the intensely competitive
hotel industry will continue to constrain business risk profile.
* Below average financial risk profile: Financial risk profile is
constrained by small networth, aggressive gearing, and inadequate
debt protection metrics. Continued large debt and losses will keep
the financial risk profile weak.
Strength:
* Extensive experience of the promoters in the hospitality
industry, and advantageous location of hotel: The promoters have
been operating a hotel in Bengaluru since fiscal 2013 and have
established relationships with corporate clients because of their
diverse business interests.
Liquidity: Poor
TRIVIK has poor liquidity marked by tightly matched cash accruals
and repayment obligations. Further, during the current year, with
pressure on occupancy due to the pandemic, the cash flows will
remain modest to support working capital requirements. Cash
accruals of around INR0.77 crores are expected to be generated over
the medium term, against debt obligations of around INR0.60 crores
during the corresponding period. The bank limits have been utilized
at around 78 percent for the 8 month period through Nov 2020.
Nevertheless, the promoters and their associates infused around
INR31.1 crores into the business as on date, which is likely to
support liquidity.
Outlook Stable
CRISIL believes that TRIVIK will maintain a stable business risk
profile marked by the extensive experience of the promoters in the
hotel industry.
Rating Sensitivity factors
Upward factors
* Sustained increase in debt service coverage ratio (DSCR) to above
2 times over the medium term
* Improvement in the scale of operations and profitability
Downward factors
* Sustained fall in debt service coverage ratio
* Decline in revenue and profitably, leading to cash accruals of
less than INR0.70 crore.
Trivik was incorporated in 2010 as KSS Hotels and Resorts Pvt Ltd,
and got its present name in 2013. Promoted by Mr J Krishna
Chaitanya Varma, Mr Sri Rama Raju, and Mr A Sri Harsha Varma,
Trivik is constructing a 45-villa, five-star hotel in
Chikkamangalur in Karnataka.
=========
J A P A N
=========
[*] JAPAN: Traditional Bars Face Final Blow Amid Covid Emergency
----------------------------------------------------------------
The Japan Times reports that Yusuke Aoi has seen earnings at his
traditional Tokyo bar plunge since the coronavirus pandemic began
last year, and fears that the area's second state of emergency
could deliver a final blow.
Japan declared a month-long, limited state of emergency in the
capital, Tokyo, and three neighboring prefectures on Jan. 7 to stem
the spread of COVID-19.
The Japan Times relates that the curbs are less stringent than
during last year's emergency period, where people were largely
confined to their homes. This time people are asked to stay at home
after 8:00 p.m. unless they have essential reasons to leave.
As last time, restaurants and bars are asked to close by 8:00 p.m.
and stop serving alcohol an hour earlier, with government subsidies
available to those that abide by the requests.
But with losses already built up and footfall down as people work
from home, owners of Japan's traditional izakaya, which serve small
plates of food with alcohol, are being forced into crushing
choices, according to The Japan Times.
"Customers usually start flocking in around 7," the 29-year-old
manager of "Setouchi Lemon Shokudo" said, The Japan Times relays.
"If we can only serve alcohol until 7, there's no point in staying
open in the evening."
The Japan Times says Aoi's izakaya has seen sales slump 70% since
the pandemic as more people worked from home and avoided crowded
spaces. They have now started serving lunches, but still can't make
ends meet.
Operating with shortened evening hours would bleed him of as much
as JPY1 million a month in labor and utilities, he estimated. "The
damage is less if we close."
According to the report, the areas affected by the current state of
emergency - Tokyo and the three neighboring prefectures of Chiba,
Kanagawa and Saitama are home to about 150,000 restaurants and
bars.
Tokyo-based Teikoku Databank said last week bankruptcies in the
sector hit a high of 780 in 2020, up from the previous record of
732, and many izakaya owners fear the worst, The Japan Times
discloses.
Yasuyuki Shimahara, who owns a central Tokyo izakaya specializing
in fresh tuna, will close until the state of emergency ends, The
Japan Times reports. Although he has applied for government
subsidies, he expects losses to run to around JPY2 million
($20,000) for the month.
"As a business owner, it's not what I want, but I think we have no
choice due to the situation the country's in," the report quotes
Mr. Shimahara as saying.
=================
S I N G A P O R E
=================
VIKING OFFSHORE: SGD4MM Share Placement Plan Falls Through
----------------------------------------------------------
Natalie Choychoy at The Business Times reports that Viking Offshore
and Marine is mulling the next steps for its debt restructuring,
now that a conditional placement agreement - related to a proposed
placement of new shares in the company - has fallen through.
In a bourse filing on Jan. 7, the Catalist-listed firm said among
the conditions precedent to the placement agreement was the
approval of the proposed creditors' scheme - on terms acceptable to
businessman Li Suet Man - by the company's key creditors, BT
relates.
BT says Mr. Li had set a Jan. 6 deadline for the creditors to agree
to the terms of the scheme. This deadline has now lapsed; no
agreement was reached between him and two of the three key
creditors of Viking, namely Luminor Pacific Fund 1 and Luminor
Pacific Fund 2. The indicative scheme terms have thus been
withdrawn, said the group.
According to BT, the conditional placement agreement was entered
into on Nov. 13 last year with Mr. Li, Blue Ocean Capital Partners,
a company owned by the son of executive chairman Andy Lim, as well
as Viking's chief executive Ng Yeau Chong.
The three investors were to subscribe for new shares equivalent to
65.25 per cent, 15.225 per cent and 6.525 per cent respectively, of
the enlarged issued shares, after taking into account new shares to
be issued to creditors as part of the proposed creditors scheme of
arrangement, BT discloses.
From the three investors, a cash consideration of S$3 million,
S$700,000 and S$300,000, was to be raised respectively.
BT relates that Viking said it is now considering its options for
the "appropriate next steps" for debt restructuring, bearing in
mind that its existing statutory moratoria will continue only until
the hearing and determination of the extension applications fixed
for Jan. 14, or until further order of the General Division of the
High Court.
Also, the adjourned hearing of the group's winding-up proceedings
is fixed for Feb. 19 and will proceed in the event that the
existing statutory moratoria are not extended up to or beyond
Feb. 19 at the hearing of the extension applications, it said.
Viking is undergoing a court-supervised process to reorganise its
liabilities, and has been granted moratoria against enforcement
actions and legal proceedings by creditors against the company and
its wholly-owned subsidiary, Viking Asset Management, BT
discloses.
About Viking Offshore
Viking Offshore and Marine Limited -- https://www.vikingom.com/ --
engages in the design, manufacture, project management, and
commissioning of heating, ventilation, air-conditioning, and
refrigeration systems for the marine and offshore industries
worldwide. It operates through Offshore and Marine, and Chartering
Services segments. The company also supplies hydraulic winches and
power packs, as well as deck machinery; and provides system
integration services for telecommunications systems, fire and gas
detection systems, and control and instrumentation systems.
Viking is undergoing a court-supervised process to reorganise its
liabilities, and has been granted moratoria against enforcement
actions and legal proceedings by creditors against the company and
its wholly-owned subsidiary, Viking Asset Management, according to
The Business Times.
Trading of its shares on the Singapore Exchange has been suspended
since June 14, 2019.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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