/raid1/www/Hosts/bankrupt/TCRAP_Public/220518.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, May 18, 2022, Vol. 25, No. 93
Headlines
A U S T R A L I A
AUSTRALIAN ALPACA: First Creditors' Meeting Set for May 26
ELPHINSTONE ENTERPRISES: Second Creditors' Meeting Set for May 24
MODULUM HOMES: First Creditors' Meeting Set for May 25
SPHERE HEALTHCARE: Second Creditors' Meeting Set for May 23
C H I N A
CHINA HONGGIAO: Fitch Hikes LongTerm Foreign Currency IDR to BB+
I N D I A
CALL EXPRESS: CRISIL Lowers Rating on INR50cr LT Loan to B-
EXCEL OVERSEAS: CRISIL Keeps D Debt Ratings in Not Cooperating
GEETA HEEMGHAR: CRISIL Keeps D Debt Ratings in Not Cooperating
GODAVARI STEELS: CRISIL Cuts Rating on INR7cr Loan to B
H. R. CONSTRUCTION: CRISIL Keeps B+ Ratings in Not Cooperating
HI-TECH PHARMA: CRISIL Keeps B Debt Ratings in Not Cooperating
HPCL-MITTAL ENERGY: Fitch Alters Outlook on 'BB' IDR to Stable
ICED DESSERTS: CRISIL Keeps B Debt Rating in Not Cooperating
LAXMI VENKATADRI: CRISIL Keeps B+ Debt Ratings in Not Cooperating
NATRAJ MOTELS: CRISIL Keeps D Debt Ratings in Not Cooperating
OLIVER ENGINEERING: Insolvency Resolution Process Case Summary
PARAMESWARA POULTRY: CRISIL Keeps D Ratings in Not Cooperating
PURNA FISHERIES: CRISIL Keeps B Debt Ratings in Not Cooperating
RAJ TRADERS: CRISIL Keeps B Debt Ratings in Not Cooperating
SILVER AND ART: CRISIL Keeps B Debt Ratings in Not Cooperating
SNEH QUALITY: CRISIL Keeps B+ Debt Ratings in Not Cooperating
J A P A N
ONKYO HOME: Files for Bankruptcy, Owes JPY3.1 Billion
N E W Z E A L A N D
DAIRY NUTRACEUTICALS: Court to Hear Wind-Up Petition on June 3
GO PACIFIC: Court to Hear Wind-Up Petition on May 27
J BODLE: Court to Hear Wind-Up Petition on May 27
TITAN BULK: Multispares NZ Files Winding-Up Petition
S I N G A P O R E
PUMA ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
S O U T H K O R E A
SSANGYONG MOTOR: KG Group Selected as Designated Buyer
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A U S T R A L I A
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AUSTRALIAN ALPACA: First Creditors' Meeting Set for May 26
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Australian
Alpaca Fleece Limited, "Australian Alpaca Connection" and "The
Ardent Alpaca" and "Kuna", will be held on May 26, 2022, via
virtual meeting.
Richard Rohrt of Hamilton Murphy was appointed as administrator of
Australian Alpaca on May 16, 2022.
ELPHINSTONE ENTERPRISES: Second Creditors' Meeting Set for May 24
-----------------------------------------------------------------
A second meeting of creditors in the proceedings of Elphinstone
Enterprises Pty Ltd has been set for May 24, 2022, at 9:00 a.m. at
via video conferencing.
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 May 23, 2022, at 4:00 p.m.
Benjamin Ismay and Scott Newton of Shaw Gidley Port Macquarie were
appointed as administrators of Elphinstone Enterprises on April 11,
2022.
MODULUM HOMES: First Creditors' Meeting Set for May 25
------------------------------------------------------
A first meeting of the creditors in the proceedings of Modulum
Homes Pty Ltd will be held on May 25, 2022, at 10:30 a.m. virtual
meeting technology.
Peter Goodin of Magnetic Insolvency was appointed as administrator
of Modulum Homes on May 13, 2022.
SPHERE HEALTHCARE: Second Creditors' Meeting Set for May 23
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Sphere
Healthcare Pty. Limited has been set for May 23, 2022, at 3:00 p.m.
via webinar facilities only.
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 May 20, 2022, at 4:00 p.m.
Philip Campbell Wilson of Grant Thornton Australia Limited was
appointed as administrator of Sphere Healthcare on April 6, 2022.
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C H I N A
=========
CHINA HONGGIAO: Fitch Hikes LongTerm Foreign Currency IDR to BB+
----------------------------------------------------------------
Fitch Ratings has upgraded China Hongqiao Group Limited's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB+' from 'BB'.
The Outlook is Stable. Fitch has also upgraded the ratings on its
USD300 million 7.125% senior notes due 2022, USD200 million 7.375%
senior notes due 2023 and USD500 million 6.25% senior notes due
2024 to 'BB+' from 'BB'.
The upgrade is due to Hongqiao's strong financial position,
smoother capital market debt maturity and improving business
profile. Its FFO net leverage stayed below our previous trigger of
2.0x for two consecutive years, its capital market maturities were
more spread out by end-2021 than end-2020 and its capacity
migration is mostly on schedule.
Hongqiao's ratings reflect its position as one of the world's
largest aluminium smelters, with a competitive cost base supported
by high raw-material self-sufficiency. Hongqiao's ratings are
constrained by limited product and geographical diversification.
The Stable Outlook reflects Fitch's expectation that Hongqiao's
industry-leading profitability will allow it to maintain net
leverage at a level that is commensurate with its rating, even
against the current backdrop of high power costs.
KEY RATING DRIVERS
Large Scale, Self-Sufficiency: Hongqiao's large operating scale and
low costs continued to deliver strong profitability. Hongqiao is
100% self-sufficient in bauxite and alumina and had 65% sufficiency
in electricity in 2021. Revenue rose by 33% to CNY114 billion in
2021 and the EBITDA margin widened by 2pp to 29% as strong
aluminium prices were partially offset by high electricity costs in
self-generated and purchased electricity on high thermal coal
prices. It continued to have positive free cash flow.
Sustained Profitability, Low Leverage: Fitch expects profitability
to remain solid in 2022, as tight global supply and steep energy
costs will support aluminium prices, in line with our metal and
mining price assumptions. Net debt to EBITDA dropped to 0.5x in
2021 from 1.3x in 2020 on the strong profitability and modest
capex. We expect 2022 net leverage to stay low at around 0.4x on
strong aluminium prices, stable margins and reasonable capex of
around CNY8 billion, mainly for capacity migration to Yunnan.
Better Debt Maturity Profile: Hongqiao's maturity profile improved
in 2021 on favourable market conditions and multiple funding
channels. Short-term capital market maturities fell to 30% of the
total by end-2021 from over 50% at end-2020. It repaid some debt
through cash, onshore bond and US dollar convertible bond issuance,
share placements and strategic investors in a subsidiary in 2021.
Fitch does not expect liquidity issues in 2022 as its cash can
cover short-term debt. It may refinance debt, depending on market
conditions.
Capacity Migration to Strengthen Profile: Hongqiao is relocating
two projects to Yunnan from Shandong. A 2 million tonne capacity
relocation to Wenshan Yunnan was announced at end-2019, with 1
million tonnes completed. Another 2 million tonne relocation to
Honghe Yunnan is in the preliminary assessment phase with
construction likely to begin in 2022 or 2023 and take three-five
years to complete.
The new capacity in Yunnan will have access to cheaper renewable
energy and lower production costs, as well as policy and funding
support from the Yunnan provincial government. Completion of the
migration will also provide better geographical diversification.
Limited Diversification: After the relocation is completed,
Hongqiao's operations will be concentrated in Yunnan, with 60% of
total capacity, and Shandong, with the remaining 40%. Hongqiao's
customer base will not change after the relocation as end-customers
will also move to Yunnan.
Hongqiao's customer concentration is high, as sales to its five
largest customers and sales to the largest customer accounted for
approximately 56.6% and 38.3% of the company's total sales in 2021.
The company's product offerings are concentrated in primary
aluminium, which contributed close to 80% of gross profit in 2021.
Value-added products only accounted for 10% of total gross profit.
DERIVATION SUMMARY
Comparable Fitch-rated peers include Alcoa Corporation
(BBB-/Stable), Aluminum Corporation of China Limited (Chalco,
A-/Stable) and Jiangsu Shagang Group Co., Ltd. (Shagang,
BBB-/Stable).
Hongqiao has a less sophisticated product range than Alcoa, but it
maintains a higher EBITDA margin due to the scale and efficiency of
its core aluminium smelting business. Hongqiao's FFO net leverage
is similar to Alcoa's, but Alcoa has much better operational and
end-market diversity.
Chalco's aluminium segment is smaller than that of Hongqiao, which
has consistently higher profitability and maintains lower and less
volatile net leverage. However, Chalco's rating benefits from its
linkage to its parent, Aluminum Corporation of China (A-/Stable).
Hongqiao has a smaller operating scale than Shagang but a higher
EBITDA margin due to the low-cost position from high vertical
integration and lower leverage. Both issuers generate positive free
cash flow. However, Shagang has better product diversification
through wider product offerings and more value-added products.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Total aluminium capacity to remain at 6.5 million tonnes
-- EBITDA margin of around 26%-29% between 2022 and 2025, mainly
supported by the company's high raw material self-sufficiency
-- Capex of CNY7.5 billion-8 billion per year between 2022 and
2025 primarily to support capacity migration to Yunnan
-- 50% dividend payout ratio between 2022 and 2025
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Meaningful improvement in product, customer and geographical
diversification in addition to successful Yunnan migration
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- FFO net leverage sustained above 2.0x
-- Net debt/EBITDA sustained above 2.0x
LIQUIDITY AND DEBT STRUCTURE
Comfortable Liquidity: Hongqiao had total debt of CNY65 billion at
end-2021 and short-term debt totalling CNY30 billion, of which
around CNY9 billion were bonds outstanding. The company had
available cash of CNY49 billion and unused uncommitted credit
facilities of around CNY23 billion. Its ability to raise funds
onshore remains strong. The company's cash balance is adequate to
cover short-term debt.
ISSUER PROFILE
Hongqiao is the second largest primary aluminium producer in the
world with around 6.5 million tons of smelting capacity, behind
Aluminum Corporation of China (A-/Stable) with around 7.2 million
tons. Hongqiao accounts for around 14% and 8% of domestic and
global primary aluminum production respectively.
Hongqiao is a vertically integrated aluminium producer with its own
bauxite supply in Guinea; it's also 100% self-sufficient in alumina
over 60% self-sufficient in power generation. Hongqiao's aluminum
cost base ranks in the 2nd quartile on the global cost curve due to
its highly vertically integrated operation and large economies of
scale.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
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I N D I A
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CALL EXPRESS: CRISIL Lowers Rating on INR50cr LT Loan to B-
-----------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of Call
Express Construction India Private Limited (CECPL) to 'CRISIL
B-/Stable ISSUER NOT COOPERATING' from 'CRISIL B+/Stable ISSUER NOT
COOPERATING.'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 50 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL B+/Stable' ISSUER NOT
COOPERATING)
Proposed Term Loan 5 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL B+/Stable' ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with CECP for
obtaining information through letters and emails dated April 20,
2022, 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of CECPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CECPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CECPL is revised to 'CRISIL B-/Stable ISSUER NOT COOPERATING' from
'CRISIL B+/Stable ISSUER NOT COOPERATING'
The rating revised reflects the high information adequacy risk and
instances of delayed payments to operational creditors by CECPL, as
per publicly available information.
Set up in 2006, CECPL is currently developing a residential real
estate project at Chennai. The company is promoted by Mr. Ramesh
and his family.
EXCEL OVERSEAS: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Excel
Overseas Private Limited (EOPL) continues to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Packing Credit 4.6 CRISIL D (Issuer Not
Cooperating)
Packing Credit 5.0 CRISIL D (Issuer Not
Cooperating)
Packing Credit 13.63 CRISIL D (Issuer Not
Cooperating)
Packing Credit 10.76 CRISIL D (Issuer Not
Cooperating)
Post Shipment 25.1 CRISIL D (Issuer Not
Credit Cooperating)
Post Shipment 6.63 CRISIL D (Issuer Not
Credit Cooperating)
Post Shipment 27.28 CRISIL D (Issuer Not
Credit Cooperating)
Post Shipment 15.00 CRISIL D (Issuer Not
Credit Cooperating)
CRISIL Ratings has been consistently following up with EOPL for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of EOPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on EOPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
EOPL continues to be 'CRISIL D Issuer Not Cooperating'.
EOPL was set up in 1988 as a proprietary concern in 1988 by Mr.
Ramesh Shah, and was reconstituted as a private limited company in
2007. The company trades in rough and polished diamonds and is also
engaged in cutting and polishing of diamonds.
GEETA HEEMGHAR: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Geeta
Heemghar Private Limited (GHPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 0.48 CRISIL D (Issuer Not
Cooperating)
Cash Credit 4.72 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 4 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 0.74 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GHPL for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of GHPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GHPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GHPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
GHPL, incorporated in 2012 by Mr Shyamal Dandapat, provides cold
storage facilities in Medinipur, West Bengal, to potato farmers and
traders; it also trades in potatoes.
GODAVARI STEELS: CRISIL Cuts Rating on INR7cr Loan to B
-------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of
Godavari Steels (GS) to 'CRISIL B/Stable Issuer Not Cooperating'
from 'CRISIL BB-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Electronic Dealer 7 CRISIL B/Stable (ISSUER NOT
Financing COOPERATING; Revised from
Scheme(e-DFS) 'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
CRISIL Ratings has been consistently following up with GS for
obtaining information through letters and emails dated February 28,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of GS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GS is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of GS
Revised to 'CRISIL B/Stable Issuer Not Cooperating' from 'CRISIL
BB-/Stable Issuer Not Cooperating'.
GS was set up in 1990 by the proprietor, Mr Pawan Kumar Agarwal.
This Hyderabad-based firm trades in steel sheets and plates, and
iron plates.
H. R. CONSTRUCTION: CRISIL Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of H. R.
Construction Company (HRCC) continue to be 'CRISIL B+/Stable/CRISIL
A4 Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 10 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 4 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Working 6 CRISIL B+/Stable (Issuer Not
Capital Facility Cooperating)
CRISIL Ratings has been consistently following up with HRCC for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HRCC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HRCC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HRCC continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
HRCC was established in 2005 and is promoted Mr Harish Nagar. The
firm undertakes civil work for government entities such as Northern
Railways, Noida Development Authority, and Madhya Pradesh Road
Development Corporation.
HI-TECH PHARMA: CRISIL Keeps B Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Hi-Tech
Pharma (HTP) continue to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long 3.24 CRISIL B/Stable (Issuer Not
Term Bank Cooperating)
Loan Facility
Secured Overdraft 5.25 CRISIL B/Stable (Issuer Not
Facility Cooperating)
Term Loan 1.51 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HTP for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HTP, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HTP
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HTP continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Established in the year 1999 as a partnership firm and is owned and
managed by Mr. Venkata Ramana Reddy N and N Sailaja. They are in
the business of the production of a wide range of Premixes and
Probiotics and has focus on the three areas which are Nutrition,
Environment and Health management for Aquatic and Poultry animals.
HPCL-MITTAL ENERGY: Fitch Alters Outlook on 'BB' IDR to Stable
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on India-based HPCL-Mittal
Energy Limited's (HMEL) Long-Term Issuer Default Rating (IDR) to
Stable from Negative, and affirmed the IDR at 'BB'. The agency has
also affirmed the ratings on the USD375 million 5.25% senior
unsecured notes due 2027, and USD300 million 5.45% senior unsecured
notes due 2026 at 'BB-'.
The Outlook revision reflects recovery in HMEL's credit metrics to
levels adequate for its standalone credit profile (SCP) of 'b+'
ahead of Fitch's expectations, and lower downside risks to Fitch's
profitability estimates, given improved refining industry
conditions and mechanical completion of HMEL's petrochemical
project.
HMEL's IDR benefits from a two-notch uplift from its SCP of 'b+',
based on Fitch's assessment that its parent Hindustan Petroleum
Corporation Limited (HPCL, BBB-/Negative, SCP: 'bb') has a 'medium'
incentive to support HMEL, in line with Fitch's Parent and
Subsidiary Rating Linkage (PSL) criteria.
We believe that should HMEL's SCP improve, the two-notch uplift
could drive its rating above HPCL's SCP, while being capped a notch
below HPCL's IDR in line with Fitch's revised PSL criteria. This
reflects Fitch's view that HMEL's position within HPCL adds to its
strategic importance for Oil and Natural Gas Corporation Limited's
(BBB-/Negative, HPCL's majority owner) overall downstream
integration, providing incentives to support.
KEY RATING DRIVERS
Improving Leverage: Fitch expects HMEL's net leverage, as defined
by net debt/EBITDA, to improve to 5.7x in FY22 from more than 10
times in FY21, and around 4x by FY24. This is supported by healthy
profit from its refining and petrochemical operations, reducing
capex intensity following completion of the petrochemical project,
limited tax outflows due to accumulated losses for the next few
years, and management commitment to not declare any major dividends
until leverage improves to around 3x.
Favourable Refining Industry Conditions: Fitch expects rising
global demand for refined products along with tightening supply to
support strong refining margins in the near to medium term, though
moderating from the current highs. Singapore gasoline and gasoil
cracks have improved to above pre-Covid-19 levels, with gasoil
cracks at their highest in more than a decade. Lower refined
product exports from China, disruption in product flows from
ongoing geopolitical tensions, and increased uptake of middle
distillates for power generation are driving the tightness.
Petrochemical Project Mechanically Completed: HMEL's new
petrochemical project was completed in April 2022, following a
six-to-nine month delay due to issues around availability of labour
and travel restrictions on international consultants. Project
commissioning is now underway, and Fitch expects the plant to
contribute around USD70 million of EBITDA in FY23 and USD300
million in FY24 as it stabilises and ramps up gradually. HMEL
expects a faster stabilisation, with USD140 million EBITDA in FY23
and USD450 million in FY24.
Strong Asset Quality; Single Refinery: HMEL's strong asset quality
is driven by its high-complexity refinery, which has a Nelson
complexity index of 12.6, one of the highest in APAC. This allows
for the processing of heavy crude oil and optimisation of the
company's product slate, as reflected in HMEL's wider gross
refining margins (GRMs) against regional benchmarks. The benefits
are counterbalanced by the single refinery's higher exposure to
cash-flow volatility from the cyclical nature of the international
refining industry versus refiners with several plants.
Linkages with Parent: HMEL is 49%-owned each by HPCL and Mittal
Energy Investment Pte Ltd, but Fitch believes HPCL has medium
operational and strategic incentives to support HMEL, driving a
two-notch uplift in HMEL's rating from its SCP.
HMEL represents over 26% of HPCL's refining capacity. HMEL is the
sole refinery catering to HPCL's product needs in the north Indian
market, and helps reduce the gap between HPCL's marketing volumes
and refining volumes, with the two having a take-or-pay offtake
agreement for all of HMEL's liquid products (except naphtha). HMEL
also adds to the parent's diversification in petrochemicals from
FY23.
Bond Ratings Notched Down: Fitch has rated HMEL's bonds one notch
below its IDR due to a high proportion of secured debt (around 80%)
in its capital structure. Fitch expects secured debt/EBITDA to stay
above 3x over FY23-FY24, as borrowing for the petrochemical
expansion is mostly on a secured basis. Fitch may remove the
notching impact if and when the proportion of secured debt declines
in a sustainable manner as the company continues to deleverage.
DERIVATION SUMMARY
HMEL's IDR includes a two-notch uplift due to the 'medium'
incentive of support from its parent HPCL. HMEL's output is sold
entirely to HPCL and makes up 26% of HPCL's refining capacity after
expansion, supports HPCL fuel sales in the north Indian market, and
adds to the parent's diversification in petchem from FY23, driving
medium operational and strategic incentive for the parent to
support.
HMEL's SCP of 'b+' is two notches lower than that of HPCL, which is
one of India's largest fuel-marketing companies, with around 11% of
India's refining capacity and 24% market share in fuel retail
outlets, and a better financial profile than HMEL.
PT Saka Energi Indonesia's (Saka, B+/ Negative) IDR also benefits
from a two-notch uplift from its SCP of 'b-' due to the 'medium'
incentive of support from its parent PT Perusahaan Gas Negara Tbk
(PGN, BBB-/Stable). The support is driven by the 'medium' legal
incentive due to the presence of a cross-default provision between
PGN and Saka, and medium 'operational' incentive with the parent
having control over appointment of Saka's board and management.
KEY ASSUMPTIONS
Brent crude oil prices of USD95 a barrel in FY23 and USD75 a barrel
from FY24.
GRMs to average around USD14 per barrel over FY22-FY23, and then
settle at mid-cycle levels of USD12 per barrel from FY24 (USD9 per
barrel over FY20-FY21), supported by a demand recovery and
improving product spreads.
Refinery utilisation rate of around 110% over the rating horizon,
except 98% in FY25 on account of maintenance shutdown.
Capex of INR23 billion in FY23, falling to INR12 billion in FY24 as
the petrochemical project is completed.
No dividend payments until net debt/EBITDA improves to around 3x by
FY25
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Decrease in HMEL's net leverage to below 5.0x on a sustained
basis leading to an upward revision of its SCP and
consequently an upgrade of its IDR.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Weakening of linkages between HPCL and HMEL;
-- Increase in HMEL's net leverage to over 6.0x for a prolonged
period may lead to a downward revision of its SCP, and
consequently a downgrade of its IDR.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Comfortable Liquidity: HMEL's liquidity is comfortable, with a cash
balance of INR18 billion, petchem capex-related undrawn committed
facilities of INR34 billion, and undrawn secured working-capital
facilities of INR80 billion as of end-March 2022. This is against
INR18 billion of debt maturities (including supplier's credit and
factoring arrangements) in FY23. In addition, HMEL has access to
the domestic debt market where it has strong relationships with
Indian banks, and the offshore market where it raised US dollar
bonds in 2017 and 2019.
ISSUER PROFILE
HMEL, a joint venture between HPCL and Mittal Energy Investment Pte
Ltd, operates a highly complex refinery with capacity of 11.3mt per
year in north India, where it is currently commissioning an
integrated petrochemical plant with capacity of around 2mt per
year.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING PRIOR
---- ------ -----
HPCL-Mittal LT IDR BB Affirmed BB
Energy Limited
senior unsecured LT BB- Affirmed BB-
ICED DESSERTS: CRISIL Keeps B Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Iced Desserts
And Food Parlours (India) Private Limited (IDAF) continues to be
'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with IDAF for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of IDAF, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on IDAF
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
IDAF continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
IDAF was incorporated in 1994 and is promoted by Mr Neeraj Rawal.
Effective April 1, 2016, the company is a del credere agent for the
distribution of UBL in Maharashtra (except Mumbai) and Telangana.
Prior to that, IDAF had operated as a super distributor for UBL and
United Sprits Ltd. It also has two warehouse depots in
Maharashtra.
LAXMI VENKATADRI: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri Laxmi
Venkatadri Agro Food Industries (SLVA) continue to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 1.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Working Capital 2.5 CRISIL B+/Stable (Issuer Not
Demand Loan Cooperating)
CRISIL Ratings has been consistently following up with SLVA for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SLVA, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SLVA
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SLVA continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Established as a partnership firm in 2010 and based in Koppal
(Karnataka), SLVA mills and processes paddy into rice, broken rice,
rice bran, and husk. The firm is promoted by Mr. N Rajgopal, Mr. D
Bheemesh, Mr. N Vijayalaxmi, and Mrs. D. Manjula.
NATRAJ MOTELS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Natraj Motels
Private Limited (NMPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 0.5 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with NMPL for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of NMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NMPL continues to be 'CRISIL D Issuer Not Cooperating'.
NMPL was established in 2007 by Aurangabad-based Mr Kotgire and his
friends to set up a hotel in Aurangabad.
OLIVER ENGINEERING: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Oliver Engineering Pvt Ltd
Registered office:
As on the date of CIRP Order:
3 L.S.C. Pamposh Enclave
Greater Kailash, Part-I
New Delhi 110048
As on the date of Receipt of CIRP Order:
3rd Floor, 108 B Madangir Village
New Delhi, DL 110062
Factory address:
Village-Sandharsi, Tehsil-Rajpura
District-Patiala, Punjab 140417
Insolvency Commencement Date: May 11, 2022
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: October 23, 2022
(180 days from commencement)
Insolvency professional: Akash Shinghal
Interim Resolution
Professional: Akash Shinghal
Khandelwal Jain & Co.
Chartered Accountants
G-8 & 9, Hans Bhawan
BSZ Marg, ITO
New Delhi 110002
E-mail: akash@kjco.net
oliverengg.cirp@gmail.com
Last date for
submission of claims: May 25, 2022
PARAMESWARA POULTRY: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri
Parameswara Poultry Farm Private Limited (SPPL) continue to be
'CRISIL D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 19 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 4.75 CRISIL D (Issuer Not
Cooperating)
Short Term Loan 3.8 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SPPL for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SPPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
SPPL was set up in 2010 by Mr. B Siva Babu and his family members.
The company is engaged in the production of commercial eggs. It is
proposing to undertake a capital expenditure of Rs.700 million
towards expanding its capacity; 80 per cent would be funded by
debt. It is based in Shadnagar (Telangana).
PURNA FISHERIES: CRISIL Keeps B Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Purna
Fisheries Private Limited (PFPL) continue to be 'CRISIL B/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term 4 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with PFPL for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PFPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Incorporated in fiscal 2014, PFPL is promoted by Mr Nagre. The
company is engaged in fish farming at Yeldar reservoir on the Purna
River in Parbhani, Maharashtra, spread across 6272 hectare (16,000
acre).
RAJ TRADERS: CRISIL Keeps B Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Raj Traders -
Shahjahanpur (RT) continue to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Cash 0.5 CRISIL B/Stable (Issuer Not
Credit Limit Cooperating)
Proposed Cash 0.75 CRISIL B/Stable (Issuer Not
Credit Limit Cooperating)
Proposed Fund- 2.13 CRISIL B/Stable (Issuer Not
Based Bank Limits Cooperating)
Proposed Term Loan 0.62 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RT for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of RT, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RT is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of RT
continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
RT, set up in 2016 at Shahajahanpur (Uttar Pradesh), trades in
mobile phones; it is also starting a manufacturing unit to make
non-polythene carry bags. Mr Anuj Agarwal and family are the
promoters.
SILVER AND ART: CRISIL Keeps B Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Silver and
Art Palace (SAP; part of the SAP group) continues to be 'CRISIL
B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 18 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term
Bank Loan Facility 6 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SAP for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SAP, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SAP
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SAP continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
For arriving at its rating, CRISIL Ratings has combined the
business and financial risk profiles of SAP, Saraf Carpet Private
Limited, and Saraf Carpet And Textiles LLP. That's because all
these entities, together referred to as the SAP group, have common
promoters and management and are in related lines of business.
SAP mainly retails precious stones, gems, and stone-and
diamond-studded-gold and silver jewellery. The firm also sells
handicrafts and textiles, such as stone-studded carpets. It has a
3000-square-yard exclusive showroom in Jaipur comprising three
floors, each dedicated to jewellery, handicrafts, and textiles. The
firm derives almost all its revenue from sale of these items to
foreign tourists visiting Rajasthan, and has tie-ups with various
tour operators who help in expanding the clientele.
SNEH QUALITY: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the the ratings on bank facilities of Sneh
Quality Spices Private Limited (SQSPL) continue to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 1 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 6 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SQSPL for
obtaining information through letters and emails dated February 8,
2022 and April 18, 2022 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
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SQSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SQSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SQSPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
SQSPL, incorporated in 2010, processes and trades in various
spices, mainly cumin and turmeric powder, chilli, black pepper, and
aniseed under the brand name, Jai Pujari. The company is based out
of New Delhi.
=========
J A P A N
=========
ONKYO HOME: Files for Bankruptcy, Owes JPY3.1 Billion
-----------------------------------------------------
The Mainichi reports that japanese audio equipment maker Onkyo Home
Entertainment Corp. has filed for bankruptcy, with some JPY3.1
billion (about US$24 million) in total liabilities, the company
announced on May 13.
Onkyo said the firm, based in the Osaka Prefecture city of
Higashiosaka, filed for the commencement of bankruptcy proceedings
with the Osaka District Court and its petition was accepted, The
Mainichi relates.
According to The Mainichi, due to a decline in earnings, Onkyo had
been struggling with cash management.
=====================
N E W Z E A L A N D
=====================
DAIRY NUTRACEUTICALS: Court to Hear Wind-Up Petition on June 3
--------------------------------------------------------------
A petition to wind up the operations of Dairy Nutraceuticals
Limited will be heard before the High Court at Auckland on June 3,
2022, at 10:00 a.m.
Bingyao Huang filed the petition against the company on Feb. 4,
2022.
The Petitioner's solicitor is:
David Thomas Broadmore
Buddle Findlay
Level 18, HSBC Tower
188 Quay Street
Auckland 1010
GO PACIFIC: Court to Hear Wind-Up Petition on May 27
----------------------------------------------------
A petition to wind up the operations of Go Pacific Shipping Limited
will be heard before the High Court at Auckland on May 27, 2022, at
10:00 a.m.
Papakura Holdings 2014 Limited, filed the petition against the
company on March 29, 2022.
The Petitioner's solicitor is:
Christina Keil
Merran Keil
Regent Chambers
Level 4, 68 Shortland Street
Auckland
J BODLE: Court to Hear Wind-Up Petition on May 27
-------------------------------------------------
A petition to wind up the operations of J Bodle 101 Limited will be
heard before the High Court at Auckland on May 27, 2022, at 10:00
a.m.
Body Corporate 343476 filed the petition against the company on
March 21, 2022.
The Petitioner's solicitor is:
Jeanne Heatlie
Court One, Level 3
48 Shortland Street
Auckland 1140
TITAN BULK: Multispares NZ Files Winding-Up Petition
----------------------------------------------------
Riley Kennedy at the Otago Daily Times reports that an application
has been filed to liquidate a Mosgiel trucking company for the
second time this year.
Wellington truck parts company Multispares NZ Ltd has filed an
application in the High Court to liquidate Titan Bulk Haulage Ltd.,
the Otago Daily Times relates
Nelson automotive company Lloyd Heslop Motors tried to liquidate
the company in the High Court at Dunedin earlier this year, the
Otago Daily Times recounts. The matter was settled out of court
and was not heard, the Otago Daily Times notes.
Last year, Titan Bulk Haulage -- which is owned by Burns Group 2018
Ltd -- had its assets repossessed by Kiwi Asset Finance, a wholly
owned subsidiary of Kiwibank, the Otago Daily Times relates.
According to the Otago Daily Times, a report prepared by Kiwi Asset
Finance after the repossession, which was publicly available on the
Companies Office website, said Titan Bulk Haulage owed the finance
company $1.47 million.
When contacted, Burns Group co-owner and managing director Malcolm
Burns said "there was no comment" because the outstanding debt had
been paid, the Otago Daily Times states. However, the Otago Daily
Times understands that is not the case.
The application will be heard in the High Court at Dunedin on June
2, the Otago Daily Times discloses.
=================
S I N G A P O R E
=================
PUMA ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Puma Energy's Holdings Pte. Ltd's (Puma
Energy) Long-Term Issuer Default Rating (IDR) at 'BB-' and Puma
International Financing S.A.'s senior unsecured instruments at
'BB-' with a Recovery Rating at 'RR4'. The Outlook is Stable.
The affirmation reflects Fitch's view that Puma Energy's expected
infrastructure disposal will have a neutral impact on its adjusted
debt. Fitch forecasts gross leverage at around 4.0x on a funds from
operations (FFO) lease-and-readily marketable inventory (RMI)
adjusted basis. The rating is constrained by weak fixed charge
cover ratios amid higher rental cost post infrastructure asset
disposal, as well as certain volatility in profitability, for both
EBITDAR and free cash flow (FCF) margins.
The ratings continue to reflect the group's geographical and
business diversification, strong underlying demand drivers, which
are partly offset by inherent cash flow volatility from its
sizeable emerging-market exposure. Following the latest
recapitalisation, Fitch views Trafigura as more akin to a
supportive financial investor looking to dispose of its controlling
stake in the foreseeable future. Fitch may reassess its approach if
the parent's behaviour changes, leading to a detrimental impact on
Puma Energy's creditor group.
KEY RATING DRIVERS
Standalone Rating Approach Retained: Fitch views Trafigura's 96.6%
shareholding in Puma Energy as more aligned with an investment that
it is looking to dispose of over the four-year rating horizon than
a fully integrated business. Fitch therefore analyses Puma Energy
on standalone basis despite Trafigura's 96.6% ownership. Changes in
Trafigura's behaviour leading to a material cash leakage from Puma
Energy may lead us to reassess Fitch's view of linkage under its
Parent and Subsidiary Linkage (PSL) Criteria.
Disposal Neutral to Adjusted Debt: Increase in lease-equivalent
debt, due to higher rental costs, will largely offset a reduction
in gross debt from the proceeds of the group's USD1.3 billion
infrastructure asset disposal. It will increase rental costs to
USD281 million per year, under Fitch's Corporate Rating Criteria
(USD31 million above cash rental cost), capitalised at a 6.5x
multiple. The transaction is subject to regulatory approvals and is
expected to complete in 3Q22. Puma Energy plans to use USD285
million to prepay part of its subordinated shareholder loan from
Trafigura on disposal of its infrastructure assets.
Leverage Adequate for Rating: Fitch expects FFO RMI- and
lease-adjusted leverage of around 4.0x when the disposal is
completed. This is on the cusp of Fitch's positive rating
sensitivity and 1.0x higher than expected previously, post the
group's rights issue in 2021. Puma Energy has announced a 2.5x net
debt/ EBITDA (pre-IFRS 16) medium-term target (not adjusted for
inventory), which it expects to comfortably meet in 2023.
Weak Fixed Charge Cover: The rating is constrained by its weak
RMI-adjusted FFO fixed charge cover ratio, which Fitch forecasts at
around 1.5x against 2.5x previously, due to rental costs being
twice as high in 2023 relative to 2021 levels. Although a higher
share of fixed (rental) costs is a burden on Puma Energy's credit
profile, it is somewhat mitigated by greater clarity on the group's
financial policy suggesting some financial discipline.
Lower Earnings: Fitch expects EBITDA (after rents) to trend towards
USD270 million (versus USD470 million previously estimated) over
the next four years. This follows disposals of operations in Angola
(5% of volumes in 2020), Pakistan, and Congo DRC during 2021,
incorporates an USD140 million impact from the infrastructure
disposal and captures slow volume growth over 2022-2025 with some
fixed cost reduction.
Standalone Liquidity Improved: Puma Energy has extended an expanded
revolving credit facility (RCF) by nearly USD100 million more than
previously from a wide pool of banks. A portion of the facility has
a tenor of two years, now included in our liquidity ratio.
Trafigura no longer provides the group its USD500 million committed
nor USD1 billion uncommitted facilities, which were never drawn.
Disposals Reduce Scale: Fitch expects EBITDAR at above USD500
million, which still maps to 'BB' mid-point for scale, although
lower than previously forecast (USD700 million in 2019). Puma
Energy's retail segment is reduced by nearly 550 sites on disposals
of operations in Pakistan and Angola. Angolan operations once
contributed a significant share of reported adjusted EBITDA, before
falling over the years to around 5% in 2021.
Strong Demand Drivers: Puma Energy benefits from strong underlying
demand drivers in emerging markets. It has operations in nearly 40
countries, mainly in emerging markets, with the top 10 contributing
around 75% of its reported 2021 EBITDA (including discontinued
operations, pre-IFRS16). Exposure to emerging markets can make cash
flows more volatile due to currency movements, as experienced in
2020, among other factors.
Limited Oil Price Risk: Puma Energy hedges its physical fuel
supply. All of its supply stock is either pre-sold or hedged
against price fluctuations. Therefore, in evaluating leverage and
interest coverage ratios, Fitch excludes debt associated with
financing RMI and reclassifies the related interest costs as cost
of goods sold. The difference between RMI lease-adjusted and
RMI-unadjusted lease-adjusted FFO net leverage is 0.5x-1.5x.
DERIVATION SUMMARY
Puma Energy's closest peer is Vivo Energy plc (BB+/Stable), which
operates on a smaller scale and with higher concentration in Africa
(over 20 countries). Vivo Energy's capex intensity was lower than
that of Puma Energy, whose significant investments in midstream
infrastructure did not yield sufficient cash flows and led to
increased leverage.
Fitch expects Puma Energy's RMI lease-adjusted gross leverage at
4.0x following its rights issue and various disposals, including
the planned infrastructure sale. This still remains above the
leverage of Vivo Energy, whose rating is supported by a
cash-generative and conservative financial profile, with RMI
lease-adjusted net leverage below 1x.
Puma Energy's retail operations can be compared, to some extent,
with those of EG Group Limited (B-/Positive), a global petrol
filling stations and convenience retail/ food services operator. EG
Group is larger than Puma Energy, its overall scale and
diversification have improved through acquisitions and the group is
present in the mature European, US and Australian markets.
EG has higher exposure to more profitable convenience and
food-to-go retail than Puma Energy, leading to higher expected
EBITDA and FFO margins of around 5% and nearly 3%, respectively,
versus around 2% and 1.5% for Puma Energy. EG's rating reflects a
weaker financial profile following a period of mainly debt-funded
acquisitions, with FFO lease-adjusted gross leverage falling below
8.0x over the next 12-18 months.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Sales volumes at 16,400,000 m3 for 2022, growing 1.2% in 2023
and 2% from 2024
-- Stable gross profit unit margin over 2022-2025 at USD56-58/m3
-- Working capital outflow of USD76 million in 2022
-- Capex of USD202 million in 2022, followed by USD174 million per
year in 2023-2025
-- Infrastructure disposals to yield USD1,300 million gross
proceeds
-- Cash inflow of USD74 million in relation to 1H22 performance of
the infrastructure business
-- No foreign-exchange impact following Angola disposal
-- No dividends or further M&A (post infrastructure disposal)
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Evidence of sustained unit margins and FFO margin while
maintaining EBITDAR at above USD500 million
-- RMI- and lease- adjusted net debt/EBITDAR sustained below 4.0x
in combination with a record of compliance with its financial
policy
-- RMI-adjusted EBITDAR/interest + rents cover sustainably above
2.0x
-- Enhanced financial flexibility translated into a record of
positive free cash flow (FCF) generation and a sustainable
standalone liquidity profile
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Lack of progress to refinance/extend its RCF by 1Q23
-- RMI- and lease- adjusted net debt/EBITDAR sustained above 5.0x
-- Change in Trafigura's behaviour or policy towards Puma Energy
leading to a potential material cash leakage from the subsidiary,
resulting in Fitch reviewing the linkage with Trafigura under its
PSL Criteria. Assessment of open legal ring-fencing permitting
value extraction from subsidiary combined with free potential
access & effective control of subsidiary's cash by the parent,
especially in combination with the above-mentioned factors, could
result in negative rating action.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Adequate: As of December 31, 2021, Puma Energy had USD364
million cash, after deducting USD88 million restricted cash
relating to the sale of its Australian business. It has refinanced
its committed bank facilities at a higher level of nearly USD700
million, incorporating a two-year tranche of around USD230 million,
which Fitch includes in the liquidity score calculation under
Fitch's methodology.
Available liquidity is lower as Trafigura has now cancelled both
its USD500 million committed and USD1 billion uncommitted
facilities to Puma Energy, used as back-up facilities but were
never drawn. However, with the two-year tranche Puma Energy has
improved its own standalone liquidity.
Subsequent to the completion of the infrastructure disposal and use
of proceeds to repay a number of outstanding credit facilities, the
remaining USD745 million senior notes will mature in 2026, with
materially reduced refinance risk and the potential need for
back-up facilities. Puma Energy also relies on local banks to
provide operating company debt (USD151 million at end-2021), which
are drawings under uncommitted facilities.
ISSUER PROFILE
Puma Energy is a globally integrated midstream and downstream oil
group, operating in nearly 40 countries worldwide across the
Americas, Africa, Europe and Asia Pacific.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
=====================
S O U T H K O R E A
=====================
SSANGYONG MOTOR: KG Group Selected as Designated Buyer
------------------------------------------------------
Yonhap reports that the Seoul Bankruptcy Court on May 13 selected a
consortium led by chemical-to-steel conglomerate KG Group as the
designated buyer of the debt-ridden automaker SsangYong Motor Co.
According to Yonhap, the decision approves the consortium between
KG and homegrown private equity (PE) firm Pavilion PE as the new
candidate to take over the automaker after a previous sales deal
with local electric vehicle maker Edison Motors Co. fell apart.
About SsangYong Motor
Headquartered in Kyeonggi-Do, South Korea, Ssangyong Motor Co. Ltd.
engages in the manufacture and sale of automobiles. The Company
mainly manufactures and sells recreational vehicles (RVs), sports
utility vehicles (SUVs), multi-purpose vehicles (CDVs) and
passenger cars under the brand name of Rexton Sports, Korando,
Korando Sports, Korando Turismo, Tivoli, Tivoli Air and others. The
Company also provides automobile parts. The Company distributes its
products within domestic market and to overseas markets.
Mahindra & Mahindra Ltd. acquired a 70% stake in SsangYong for
KRW523 billion in 2011 and now holds a 74.65% stake in the
carmaker.
As previously reported in the Troubled Company Reporter-Asia
Pacific, SsangYong Motor filed for court receivership on Dec. 21,
2020, as it struggled with snowballing debts amid the COVID-19
pandemic, according to Yonhap News Agency. The decision came after
SsangYong Motor failed to pay KRW60 billion (US$54.8 million) worth
of debts to its three creditor banks.
On April 15, 2021, SsangYong Motor Co. was placed under court
receivership as its Indian parent Mahindra & Mahindra failed to
attract an investor amid the prolonged COVID-19 pandemic and
itscfinancial status is further worsening.
In November 2021, Edison Motors and SsangYong signed a memorandum
of understanding for the purchase and the Seoul Bankruptcy Court
approved the Edison-led consortium to take over SsangYong in
January. Initially, Edison planned to attract financial investors
to raise funds, but the company has been struggling with securing
enough funds for the acquisition. Consequently, SsangYong Motor
canceled the deal to sell its controlling stake to Edison Motors
due to the electric bus maker's payment failure.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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