/raid1/www/Hosts/bankrupt/TCRAP_Public/220817.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, August 17, 2022, Vol. 25, No. 158
Headlines
A U S T R A L I A
CENTRAL HOTEL: First Creditors' Meeting Set for Aug. 23
CHAN & NAYLOR: Second Creditors' Meeting Set for Aug. 23
COOLMAN HAULAGE: First Creditors' Meeting Set for Aug. 23
PARAMOUNT HAIR: Second Creditors' Meeting Set for Aug. 23
POWER CLUB: Second Creditors' Meeting Set for Aug. 23
SAPPHIRE XXVI 2022-1: S&P Assigns Prelim B+ (sf) Rating on F Notes
C H I N A
CHINA EVERGRANDE: Hong Kong Audit Watchdog Expands Probe Into Unit
I N D I A
ALTRA COTTON: CRISIL Assigns B+ Rating to INR10cr Cash Loan
BISMILLAH JEWELLERS: CRISIL Withdraws B Rating on INR8cr Loan
CHARTERED SPEED: CRISIL Withdraws B+ Rating on Long Term Loan
CSK DEVELOPERS: CRISIL Assigns B+ Rating to INR10cr Capital Loan
GREENBILT INDUSTRIES: CRISIL Cuts Rating on INR21cr LT Loan to D
L.G. AGRO: CRISIL Moves B+ Debt Rating from Issuer Not Cooperating
MALWA FRESH: CRISIL Moves B Debt Ratings from Not Cooperating
MANYA ENTERPRISE: CRISIL Assigns B+ Rating to INR15cr Cash Loan
MARINO FOOD: CRISIL Lowers Rating on INR18cr Term Loan to D
METENERE LIMITED: CRISIL Keeps D Debt Rating LT/ST Loans
NABHA STEELS: CRISIL Assigns B+ Rating to INR20cr Loans
NOKHA COLD: CRISIL Withdraws B Rating on INR15cr Cash Loan
O2Z TRADING: CRISIL Lowers Rating on INR38.25cr Loan to B+
PRIMACY INDUSTRIES: Ind-Ra Keeps D Issuer Rating in NonCooperating
PRJC GROUP: CRISIL Lowers Rating on INR9.5cr Cash Loan to D
R J BUILDCON: CRISIL Withdraws B+ Rating on INR4cr Overdraft
RAMKY INFRA: CRISIL Moves C Debt Rating to Not Cooperating
RS TRUST: Ind-Ra Assigns BB Bank Loan Rating, Outlook Stable
TREVI HOSPITAL: CRISIL Assigns B+ Rating to INR10cr LT Loan
TULIP STAR: Supreme Court Rules in Favour of ARCIL
VANI TOBACCOS: CRISIL Reaffirms B+ Rating on INR9cr Loans
VARAD BUILDERS: CRISIL Raises Rating on INR10cr Loans to B+
VEEKESY SLIPPERS: CRISIL Reaffirms B Rating on INR7cr Cash Loan
VEL TRUST: Ind-Ra Assigns BB Bank Loan Rating
VELLAPALLY CONSTRUCTIONS: CRISIL Rates INR1.75cr Loan at B+
VVG PAPER: CRISIL Lowers Rating on INR19.25cr LT Loan to B
N E W Z E A L A N D
AHEAD LIMITED: Creditors' Proofs of Debt Due on Oct. 9
ASSET RELOCATIONS: Creditors' Proofs of Debt Due on Sept. 16
CANTERBURY TRELLIS: Creditors' Proofs of Debt Due on Sept. 10
DAMNED FINE: Commences Wind-Up Proceedings
FOOD Z: Commences Wind-Up Proceedings
FP IGNITION 2011-1: Moody's Assigns B3 Rating to Class F Notes
TCD 2015: Creditors' Proofs of Debt Due on Oct. 9
WISDOM HOUSE: FMA Makes Interim Stop Order
X FACTOR: Directors Breached Duties, Liquidators Reveal
P H I L I P P I N E S
DITO CME: Posts PHP15.4BB Net Loss in 6 Months Ended June 30
S I N G A P O R E
HODLNAUT TRADING: Files Judicial Management in Singapore
ZIPMEX: Assets of Thailand's Users Locked Until Restructuring Deal
S O U T H K O R E A
SSANGYONG MOTOR: Posts KRW30.3B Net Loss in Half Yr. Ended June 30
S R I L A N K A
SRI LANKA: S&P Affirms 'SD' Foreign Currency Sovereign Ratings
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A U S T R A L I A
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CENTRAL HOTEL: First Creditors' Meeting Set for Aug. 23
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Central
Hotel Holdings Pty. LTD. will be held on Aug. 23, 2022, at 11:00
a.m. via teleconference.
Jarvis Lee Archer of Revive Financial was appointed as
administrator of the company on Aug. 11, 2022.
CHAN & NAYLOR: Second Creditors' Meeting Set for Aug. 23
--------------------------------------------------------
A second meeting of creditors in the proceedings of Chan & Naylor
Liverpool Operating Pty Ltd has been set for Aug. 23, 2022, at
11:00 a.m. via virtual meeting 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 Aug. 22, 2022, at 4:00 p.m.
Steve Naidenov of Ashton Chase Group was appointed as administrator
of the company on July 19, 2022.
COOLMAN HAULAGE: First Creditors' Meeting Set for Aug. 23
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Coolman
Haulage Pty Ltd will be held on Aug. 23, 2022, at 9:00 a.m. at the
offices of Robson Cotter at Unit 1, 78 Logan Rd, in Woolloongabba.
William Roland Robson of Robson Cotter Insolvency Group was
appointed as administrator of the company on Aug. 11, 2022.
PARAMOUNT HAIR: Second Creditors' Meeting Set for Aug. 23
---------------------------------------------------------
A second meeting of creditors in the proceedings of Paramount Hair
Extensions Pty Ltd has been set for Aug. 23, 2022, at 10:00 a.m.
via teleconference.
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 Aug. 22, 2022, at 5:00 p.m.
Michael Caspaney of Menzies Advisory was appointed as administrator
of the company on July 19, 2022.
POWER CLUB: Second Creditors' Meeting Set for Aug. 23
-----------------------------------------------------
A second meeting of creditors in the proceedings of Power Club
Limited has been set for Aug. 23, 2022, at 11:00 a.m. via Zoom
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 Aug. 22, 2022, at 4:00 p.m.
Andrew MacNeill and Justin Howlett of SMB Advisory were appointed
as administrators of the company on July 19, 2022.
SAPPHIRE XXVI 2022-1: S&P Assigns Prelim B+ (sf) Rating on F Notes
------------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to eight
classes of nonconforming and prime residential mortgage-backed
securities (RMBS) to be issued by Permanent Custodians Ltd. as
trustee of Sapphire XXVI Series 2022-1 Trust. Sapphire XXVI Series
2022-1 Trust is a securitization of nonconforming and prime
residential mortgages originated by Bluestone Group Pty Ltd. and
Bluestone Mortgages Pty Ltd. (collectively Bluestone).
The preliminary ratings S&P has assigned to the floating-rate RMBS
to be issued by Permanent Custodians Ltd. as trustee for Sapphire
XXVI Series 2022-1 Trust reflect the following factors.
The credit risk of the underlying collateral portfolio and the
credit support provided to each class of notes are commensurate
with the ratings assigned. Note subordination and excess spread
provide credit support. S&P's assessment of credit risk considers
Bluestone's underwriting standards and approval process, and
Bluestone's strong servicing quality.
The rated notes can meet timely payment of interest and ultimate
payment of principal under the rating stresses. Key rating factors
are the level of subordination provided, the provision of a
liquidity facility, the principal draw function, the yield reserve,
retention amount built from excess spread, and the provision of an
extraordinary expense reserve. S&P said, "Our analysis is on the
basis that the rated notes are fully redeemed via the principal
waterfall mechanism under the transaction documents by their legal
final maturity date, and we assume the notes are not called at or
beyond the call-option date."
S&P said, "Our ratings also consider the counterparty exposure to
Commonwealth Bank of Australia as bank account provider and
National Australia Bank Ltd. as the liquidity facility provider and
interest rate swap provider. The transaction documents for the
facilities include downgrade language consistent with S&P Global
Ratings' counterparty criteria.
"We have also factored into our ratings the legal structure of the
trust, which is established as a special-purpose entity and meets
our criteria for insolvency remoteness."
Preliminary Ratings Assigned
Sapphire XXVI Series 2022-1 Trust
Class A1S, A$90.00 million: AAA (sf)
Class A1L, A$210.00 million: AAA (sf)
Class A2, A$55.00 million: AAA (sf)
Class B, A$7.40 million: AA (sf)
Class C, A$7.20 million: A+ (sf)
Class D, A$13.00 million: BBB (sf)
Class E, A$6.80 million: BB+ (sf)
Class F, A$7.00 million: B+ (sf)
Class G1, A$2.50 million: Not rated
Class G2, A$1.10 million: Not rated
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C H I N A
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CHINA EVERGRANDE: Hong Kong Audit Watchdog Expands Probe Into Unit
------------------------------------------------------------------
Reuters reports that Hong Kong's audit regulator said on Aug. 15 it
has initiated an enquiry into the financial statements of China
Evergrande Group's property services unit and its former auditor
after questions were raised following the developer's probe into
seized deposits worth $2 billion of the unit.
According to Reuters, the Financial Reporting Council (FRC) said in
a statement it was investigating the 2020 and first half of 2021
financial statements of Evergrande Property Services, as well as
the audit carried out by PwC on its 2020 annual accounts.
"The FRC identified questions about the classification of
restricted bank deposits and other loans, the measurement of pledge
guarantees given and the disclosure of related party transactions
in the accounts, and related questions about the audits," it said.
Reuters relates that Evergrande said on July 22 an internal probe
had found that $2 billion of funds held by Evergrande Property
Services had been pledged to guarantee financing by the group for
debt repayment. In the end, banks seized the money, cleaning out
much of the unit's cash.
Reuters says the audit watchdog first announced in October it was
investigating Evergrande's accounts and their audit by PwC because
it had concerns about the adequacy of reporting on whether it could
continue operating as a going concern.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
Evergrande had CNY1.97 trillion (US$311 billion) of liabilities at
the end of June 2021. Once China's biggest developer by sales,
Evergrande fell into distress as cash dried up and the group
overstretched itself on borrowings and ventures into car
manufacturing.
Evergrande hired outside financial advisers Houlihan Lokey and
Admiralty Harbour Capital in September 2021 to engage with
creditors soon after it ran into a liquidity squeeze. It has since
worked with more advisers in the past two months by turning to
China International Capital Corp, BOCI Asia and Zhong Lun Law Firm
on its debt workout plan.
As reported in the Troubled Company Reporter-Asia Pacific in June
2022, Fitch Ratings has withdrawn the Long-Term Foreign-Currency
Issuer Default Ratings (IDR) of 'RD' on Chinese homebuilder China
Evergrande Group and its subsidiaries, Hengda Real Estate Group
Co., Ltd and Tianji Holding Limited. Fitch has also withdrawn the
senior unsecured ratings of Evergrande and Tianji of 'C', with a
Recovery Rating of 'RR6', as well as the rating on the
Tianji-guaranteed senior unsecured notes issued by Scenery Journey
Limited of 'C', with a Recovery Rating of 'RR6'. Fitch has
withdrawn the ratings as Evergrande and its subsidiaries have
chosen to stop participating in the rating process. Therefore,
Fitch will no longer have sufficient information to maintain the
ratings. Accordingly, Fitch will no longer provide ratings or
analytical coverage for Evergrande and its subsidiaries.
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I N D I A
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ALTRA COTTON: CRISIL Assigns B+ Rating to INR10cr Cash Loan
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of Altra Cotton & Oil Industries (ACOI).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B+/Stable (Assigned)
The rating reflects exposure to volatility in cotton prices and to
regulatory framework, modest scale of operations and weak financial
risk profile of ACOI. These weaknesses are partially offset by
extensive experience of the promoters in the textile-ginning
industry.
Analytical Approach
Unsecured loan of INR1.47 crore as on March 31, 2022, from the
promoters and related parties on has been treated as 75% equity and
remaining 25% as debt as the loan is subordinate to bank debt and
likely to be retained in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to volatility in cotton prices and to regulatory
framework: Cotton being an agricultural commodity, its availability
depends on the monsoon. Moreover, government interventions and
fluctuations in global cotton output lead to sharp fluctuations in
cotton prices. Any abrupt change in regulation can distort market
prices and affect profitability of players in the cotton value
chain, including ginners.
* Modest scale of operations: The textile-ginning industry is
highly fragmented, and the consequent intense competition may
continue to constrain scalability, pricing power and profitability.
Revenue is estimated at INR39.4 crore in fiscal 2022.
* Weak financial risk profile: Financial risk profile should remain
constrained by low cash accrual and high debt. Gearing was 3.56
times as on March 31, 2022, and total outside liabilities to
adjusted networth ratio was 3.85 times. Debt protection metrics
were subdued, with interest coverage and net cash accrual to total
debt ratios of 0.97 time and 0.01 time, respectively, for fiscal
2022.
Strength:
* Extensive experience of the promoters: The promoters have more
than a decade of experience in the textile-ginning industry; their
strong understanding of market dynamics and healthy relationships
with suppliers and customers should continue to support the
business.
Liquidity: Stretched
Bank limit utilization was high at around 87.7% for the 12 months
through May 2022. Current ratio was 1.08 times on March 31, 2022.
However, in the absence of any repayment obligation over the medium
term, the entire cash accrual – projected at more than INR10 lakh
per annum – will aid liquidity.
Outlook: Stable
ACOI will continue to benefit from extensive experience of the
promoters and their established relationship with clients.
Rating Sensitivity factors
Upward factors
* Revenue growth of 20% per annum and steady operating margin,
leading to higher-than-expected cash accrual
* Significant improvement in the financial risk profile
Downward factors
* Revenue dropping by 25% each fiscal or steep decline in
profitability
* Large, debt-funded capital expenditure
ACOI, set up in 2016, is owned & managed by Mr. Ankitkumar Patel
and his family members. The firm is engaged in cotton ginning and
pressing at its facility in Vadnagar (Mehsana in Gujarat).
BISMILLAH JEWELLERS: CRISIL Withdraws B Rating on INR8cr Loan
-------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Bismillah Jewellers Private
Limited (BJPL) to 'CRISIL B/Stable/Issuer Not Cooperating'. CRISIL
Ratings has withdrawn its rating on bank facility of BJPL following
a request from the company and on receipt of a 'no dues
certificate' from the banker. Consequently, CRISIL Ratings is
migrating the ratings on bank facilities of BJPL from 'CRISIL
B/Stable/Issuer Not Cooperating to 'CRISIL B/Stable'. The rating
action is in line with CRISIL Ratings' policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING'; Rating Withdrawn)
BJPL, set up in 2004, is promoted by Mr. Mohammed Fazlulla Baig,
Mr. Manzoor Ahemed, Mr. Athaur Rahaman Khan, Mr. Mohammed Asadullah
Baig, and Mr. Raffeq Ahmed.
CHARTERED SPEED: CRISIL Withdraws B+ Rating on Long Term Loan
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Chartered
Speed Limited (CSL) continues to be 'CRISIL B+/Stable/CRISIL A4
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
Short Term Rating - CRISIL A4 (ISSUER NOT
COOPERATING; Rating Withdrawn)
CRISIL Ratings has been consistently following up with CSL for
obtaining information through letters and emails dated January 11,
2022 and January 15, 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 CSL. This restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the rating on bank facilities of
CSL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
CRISIL Ratings has withdrawn its ratings on the bank facilities of
CSL on the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with CRISIL
Ratings' policy on withdrawal of its ratings on bank loans.
Incorporated in May 2007, CSPL is promoted by Mr. Pankaj Gandhi and
his family members. It provides intra-city, intercity, staff and
school transport, and mobile cab services in Gujarat, Madhya
Pradesh, Rajasthan, and Maharashtra. The company also offers
commercial vehicle body building and fabrication in a variety of
options and configurations. The registered office is in Ahmedabad.
CSK DEVELOPERS: CRISIL Assigns B+ Rating to INR10cr Capital Loan
----------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable/CRISIL A4'
ratings on the bank facilities of CSK Developers (CD).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Bank
Guarantee 23.73 CRISIL A4 (Assigned)
Proposed Working
Capital Facility 10 CRISIL B+/Stable (Assigned)
Term Loan 1.27 CRISIL B+/Stable (Assigned)
The rating reflects CD's susceptibility to tender-based operations
and nascent stages of operation. These weaknesses are partially
offset by extensive industry experience of the partners.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to tender-based operations: Revenue and
profitability entirely depend on the ability to win tenders. Also,
entities in this segment face intense competition, thus requiring
to bid aggressively to get contracts, which restricts the operating
margin to a moderate level. Also, given the cyclicality inherent in
the construction industry, the ability to maintain profitability
margin through operating efficiency becomes critical.
* Nascent stages of operation: The firm was established in 2021 and
has limited track record of operations. Consequently, the
scalability can be constrained on account of order flow from
customers. Nascent stages of operation will continue to impinge the
scalability over the medium term.
Strength:
* Extensive industry experience of the partners: The partner has an
experience of around two decades in civil construction industry.
this has given them an understanding of the dynamics of the market
and enabled them to establish relationships with suppliers and
customers.
Liquidity: Stretched
In the absence of working capital limits, partner's capital has
been sufficient to manage WC requirement. Management is expecting
new working capital limits and the utilization of the same over the
medium term will remain key rating sensitivity factors over the
medium term. Current ratio has remained moderate at around 6 times
as on March 31, 2022.
Outlook: Stable
CRISIL Ratings believe CD will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity factors
Upward factors
* Stabilization of operations marked by completion of more than 40%
of the ongoing project in TCKICP and the realization of the same
while maintaining moderate operating margin of more than 8%
* Efficient working capital management and moderate capital
structure
Downward factors
* Derailment in the execution of the project and delay in the
realization leading to net cash accruals of less than INR1 crore in
FY23
* Intense working capital management or major debt-funded capex
plans leading to modest capital structure
CD was recently established in September 2021 as a partnership firm
to carry out civil construction work in Tamil Nadu, primarily
related to road, canals, water supply, etc. Firm is owned and
managed by Mr. S Chandrasekaran and Mr. T. Kalyansundaram.
GREENBILT INDUSTRIES: CRISIL Cuts Rating on INR21cr LT Loan to D
----------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of
Greenbilt Industries Private Limited, as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 21 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with Greenbilt
and has sought information through letters and emails dated April
20, 2022 and June 8, 2022, among others, apart from telephonic
communication. However, the issuer has remained non-cooperative.
'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 has been
arrived at without any management interaction and is based on the
best available or limited or dated information on the company. Such
non co-operation by a rated entity may be a result of weakening in
its credit risk profile. These ratings with the 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings has not received any information on either the financial
performance or strategic intent of Greenbilt, which restricts the
ability to take a forward-looking view on the credit quality of the
entity. Hence, CRISIL Ratings believes that the rating action on
Greenbilt is consistent with 'Assessing Information Adequacy
Risk'.
Consequently, the ratings have been downgraded to 'CRISIL D Issuer
Not Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating',
citing lack of information and management cooperation and adverse
information in the public domain.
The downgrade reflects the delay in payment of principal and
interest amount on the term loan.
Promoted by Mr. Aditya Agrawal, Greenbilt was incorporated on June
4, 2012. The company is setting up a manufacturing unit of aerated
autoclave concrete blocks, with an installed capacity of 1,71,000
cubic meter per annum at Durg district (Chhattisgarh).
L.G. AGRO: CRISIL Moves B+ Debt Rating from Issuer Not Cooperating
------------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of L.G. Agro Industries (LG
Agro) to 'CRISIL B/Stable Issuer Not Cooperating'. However, the
management has subsequently started sharing requisite information,
necessary for carrying out comprehensive review of the rating.
Consequently, CRISIL Ratings is migrating the rating on bank
facilities of LG Agro to 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B+/Stable (Migrated
from 'CRISIL B/Stable ISSUER
NOT COOPERATING')
The rating reflects the extensive experience of its promoters in
the rice milling industry. This strength is partially offset by
modest scale of operations amid intense competition, susceptibility
of profitability margins to changes in paddy prices and government
regulations and average financial risk profile.
Analytical Approach
Unsecured loans from partners and relatives of INR5.24 crore has
been treated as debt as these are interest-bearing.
Key Rating Drivers & Detailed Description
Strengths:
* Extensive experience of promoters: Presence of more than two
decades in the rice segment has enabled the promoters to establish
strong relationship with customers and suppliers. Further the
partners and relatives have been infusing funds in the form of
unsecured loans as and when required.
Weaknesses:
* Modest scale of operations amid intense competition: Though
revenue improved in fiscal 2022, scale of operations continues to
remain modest at around INR100 crore because of intense competition
in the rice milling industry and limited value addition. The scale
is likely to improve over the medium term.
* Susceptibility to changes in government regulations and
fluctuations in paddy prices: Cost of paddy accounts for 85-90% of
the production cost, and hence, the operating margin is highly
susceptible to any volatility in paddy prices. Moreover, the
government periodically introduces regulations such as a change in
the policy pertaining to rice procurement.
* Average financial risk profile: Net worth was moderate at around
INR23.15 crore as of March 31, 2022, while gearing is at 1.38 times
as on March 31, 2022. However, debt protection metrics remain
modest, with net cash accrual to total debt and interest coverage
ratios of 0.03 time and 1.49 times, respectively, for fiscal 2022.
Liquidity: Stretched
Cash accrual is expected to be over INR1.4-2.0 crore which are
tightly matched against the repayment obligations over the medium
term. The bank limit utilization was high at around 89 percent for
the past twelve months ended May-22. The promoters are likely to
extend support in the form of unsecured loans to meet its working
capital requirements and repayment obligations.
Outlook: Stable
CRISIL Ratings believes LG Agro Industries will continue to benefit
over the medium term from the experience of its promoters and
established customer relationships.
Rating Sensitivity factors
Upward Factors
* Revenue growth of 15-20% while maintaining operating margin above
3.75% leading to higher net cash accrual
* Improvement in debt protection metrics and return on capital
employed
Downward Factors
* Steep decline in revenue and operating margin to below 3%
resulting in lower cash accruals
* Larger than expected debt funded capex weakening the capital
structure.
Set up in 2003 as a partnership firm by Mr. L Srinivas, Mr. L
Srikanth, and Ms. L Lalitha, LG Agro mills and processes paddy into
rice, and also generates by-products such as broken rice, bran, and
husk at its unit in Nalgonda, Telangana.
MALWA FRESH: CRISIL Moves B Debt Ratings from Not Cooperating
-------------------------------------------------------------
Due to inadequate information and in line with the Securities and
Exchange Board of India guidelines, CRISIL Ratings had migrated its
rating on the long-term bank facilities of Malwa Fresh Foods (MFF)
to 'CRISIL B/Stable Issuer Not Cooperating'. However, the firm's
management has started sharing the information necessary for a
comprehensive review of the rating. Consequently, CRISIL Ratings is
migrating the rating to 'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Long Term Loan 5 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Term Loan 2.45 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Term Loan 12.77 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
The rating reflects the firm's modest scale of operations and large
working capital requirement. These weaknesses are partially offset
by the partners' extensive experience in the fruits and vegetables
trading business and their funding support.
Analytical Approach
Unsecured loan (INR3.64 crore as on March 31, 2022) extended by the
partners and related parties has been treated as debt as it has
been repaid over the past years.
Key Rating Drivers & Detailed Description
Weakness:
* Large working capital requirement: Operations remain working
capital intensive as reflected in gross current assets of 282 days
as of March 31, 2022, on account of large inventory and
receivables. The firm holds inventory of about six months—apples
are procured during October-December and sold during April-June.
The controlled atmosphere technology helps store apples for longer,
increasing their shelf life. Peas are procured in January-March and
sold during October-December. Receivables are large as payments are
realised in 3-4 months. Resultantly, reliance on bank lines is high
(97.6% on average over the 12 months through June 2022), with a few
instances of over-utilisation, which is regularized on time.
* Modest scale of operations: Scale of operations remains modest
revenue was INR24 crore in fiscal 2022, similar to INR22-23 crore
in fiscals 2018 and 2019, and profitability has declined due to
increased revenue contribution from trading in fiscal 2022. The
cold storage industry has a large number of players. The intense
competition and trading business will keep the firm's operating
margin range-bound over the medium term. Any ramp-up of operations
along will remain a key monitorable.
Strengths:
* Partners' extensive experience and funding support: The partners
have experience of over a decade in trading through group entities.
Their experience and knowledge of the industry helped in setting up
the cold storage unit and has resulted in a strong clientele. The
partners and related parties have provided support in the form of
unsecured loan of INR3.64 crore as on March 31, 2022.
Liquidity: Poor
Bank limit utilisation was high at 97.55% on average over the 12
months through June 2022 on account of large working capital
requirement driven by sizeable inventory. Cash accrual is expected
over INR2.47 crore against term debt obligation of INR1.2 crore
over the medium term and will cushion liquidity. The partners
provide support in the form of unsecured loan. Current ratio was
2.4 times on March 31, 2022.
Outlook: Stable
CRISIL Ratings believes MFF will continue to benefit from the
entrepreneurial experience of the partners.
Rating Sensitivity Factors
Upward factors
* Sustained increase in revenue and stable operating margin,
leading to cash accrual of INR5 crore
* Improvement in the working capital cycle leading to moderation in
bank limit utilization
Downward factors
* Further stretch in the working capital cycle weakening the
liquidity and financial risk profile
* Decline in net cash accrual below INR1.5 crore on account of
lower revenue or operating profit
MFF was set up in December 2013 as a partnership firm by Mr. Rahul
Garg, Mr. Amit Garg, Mr. Sukhwinder Singh, Mr. Ajay Gupta and Mr.
Inderjit Singh. The firm has set up a controlled-atmosphere cold
storage facility with capacity of 6500 tonnes (with 32 chambers) at
Rampura Phul, Punjab. Commercial operations began in April 2017. It
provides cold storage facility for potatoes and apples, along with
other products, for institutional customers. The firm also trades
in fruits and vegetable and will use 50% of the capacity post
expansion by 1,000 tonne in fiscal 2020 for trading stock.
MANYA ENTERPRISE: CRISIL Assigns B+ Rating to INR15cr Cash Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of Manya Enterprise (ME).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B+/Stable (Assigned)
The rating reflects significant saleability risks associated with
its ongoing projects, susceptibility to cyclicality in the film
exhibition sector and ME's modest liquidity and financial risk
profiles. The firm recorded operating income of INR1.1 crore in
fiscal 2022 on account of low footfall in multiplexes. In fiscal
2023, operating income is expected to be INR2.75 crore because of
strong content pipeline and increase in footfalls in multiplexes.
Furthermore, the firm is undertaking capital expenditure (capex)
for a new movie theatre in Ahmedabad, Gujarat, which is expected to
ramp up from fiscal 2024. Timely commercialisation and
stabilisation of the capex remains a rating sensitivity factor.
These weaknesses are partially offset by the partners' extensive
experience in the real estate business, low offtake risk and steady
rental income earned by the firm from the Osia Hypermart in
Ahmedabad.
Key rating drivers and detailed description
Weaknesses:
* Exposure to risks inherent in the film exhibition business:
Fluctuations in profitability, which are inherent in the film
exhibition business, will continue to affect operations, though the
impact is expected to be cushioned marginally by improved scale of
operations and diversified revenue from rental income. Multiplex
players, given their high fixed costs, will remain dependent on
occupancy, which is driven by the success of films. Other forms of
entertainment and new content distribution platforms, including
over-the-top, will continue to expose the firm to challenges of
sustaining profitability and growth.
* Modest liquidity and financial risk profile: Networth of the firm
was negative INR5.59 crore, as of March 31, 2022, due to capital
withdrawals made by the partners for development and distribution
fees required for their business expansion plan to set up a new
movie theatre in Ahmedabad. Consequently, the current ratio of the
firm remains low at 0.11 time as of March 31, 2022 and is expected
to remain below 1 time over the medium term.
Strengths:
* Extensive experience of the partners: Extensive industry
experience in film distribution has enabled the partners to
establish a track record of successful project implementation.
Moreover, need-based funding support from them in the form of
unsecured loans over the medium term, will continue to aid the
business and liquidity risk profiles.
* Stable revenue backed by long-term lease agreement: The
chargeable commercial area of 1,160.9 square foot (sq ft) is leased
to Osia Hypermart for nine years. The contract has a lock-in of
three years. Furthermore, the lease agreement includes an
escalation clause. This lease agreement will help maintain the
business risk profile over the medium term by ensuring revenue
visibility and cash inflow.
Liquidity: Stretched
Net cash accrual was negative INR5.45 crore against nil term debt
obligation in fiscal 2022. Net cash accrual is expected to improve
to INR0.3 crore in fiscal 2023 and remain above INR0.5 crore in
fiscals 2024 and 2025, against nil debt obligation. Any shortfall
is expected to be met by the cushion in the working capital limit
and unsecured loans from the partners. Overdraft facility of INR15
crore was utilized at 32.34% on average in the eight months through
June 2022.
Outlook: Stable
CRISIL Ratings believes ME will continue to benefit from its
partners' extensive industry experience.
Rating sensitivity factors
Upward factors:
* Improvement in the financial risk profile and continuous
accretion to reserves with networth above INR2.0 crore
* Increase in revenue by more than 25% with stable operating margin
and net cash accrual above INR1 crore
Downward factors:
* Decline in revenue by more than 25% or stretch in the working
capital cycle impacting the liquidity risk profile
* Large, debt-funded projects, weakening the capital structure of
the firm
ME was established as partnership firm in 2018. It is involved in
real estate & film exhibition business. It is owned and managed by
Mr. Bipinbhai N Patel, Mr. Dhruv B Patel and Ms Parulben B Patel.
MARINO FOOD: CRISIL Lowers Rating on INR18cr Term Loan to D
-----------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of Marino
Food Products Private Limited, as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 8 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Term Loan 18 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with Marino 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 Marino, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Marino is consistent with 'Assessing Information Adequacy Risk'.
CRISIL Ratings has downgraded its rating on the bank facilities of
Marino to 'CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable
Issuer Not Cooperating' based on publicly available information.
Marino, incorporated in May 2010 by Mr. Om Prakash Chhawnika,
manufactures confectionery items. It is based in Hyderabad.
METENERE LIMITED: CRISIL Keeps D Debt Rating LT/ST Loans
--------------------------------------------------------
CRISIL Ratings said the rating for the bank facilities of Metenere
Limited continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (ISSUER NOT
COOPERATING)
Short Term Rating - CRISIL D (ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with Metenere for
obtaining information through letters and emails dated
April 30, 2022 and June 30, 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 Metenere, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Metenere is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Metenere continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Incorporated in 1997, Metenere, promoted by Mr. Raman Gupta and his
family, began operations in lead recycling, and subsequently
diversified into manufacturing tin products. In fiscals 2009 and
2010, a new capacity to manufacture aluminium was set up.
Shrey Industries Pvt Ltd (SIPL), part of the Gupta group, was
merged with Metenere, effective April 1, 2012. SIPL manufactured
aluminium billets/extrusions, rods, and alloys from aluminium
scrap.
NABHA STEELS: CRISIL Assigns B+ Rating to INR20cr Loans
-------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
bank facilities of Nabha Steels and Metals-Mandi (NSM).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (Assigned)
Term Loan 17 CRISIL B+/Stable (Assigned)
The rating reflects NSM's exposure to risks related to ongoing
project and presence in a highly competitive industry. These
weaknesses are partially offset by its extensive industry
experience of the promoters.
Analytical Approach:
Unsecured loans of INR4.15 crore as on March 31'2022 treated as 75%
equity and 25% debt.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to project risks: Majority of the project will be
completed till mid of August 2022 and currently, company
undertaking testing activities. Operations are expected to get
commercialize in next 1-2 months though timely stabilization of
operations at the unit thereby leading to improvement of business
risk profile of NSM will be a key monitorable.
* Presence in a highly competitive industry: Demand risk is also
expected to be moderate as the industry is highly fragmented marked
by low entry barriers. Also, will be exposed to intense competition
from other players in the segment. Timely completion and successful
stabilization of its operations at the new unit will remain a key
rating sensitivity factor.
Strength:
* Extensive industry experience of the partners: The promotes have
an experience of over a decade in the industry and have good market
understanding. This has given them an understanding of the dynamics
of the market and enabled them to establish relationships with
suppliers and customers. Further, need and time-based support from
partners will continue to support the business over the medium
term.
Liquidity: Stretched
The company is availing debt of INR17 crores, leading to debt
obligation above INR2 crore per annum. As the company is yet to
commence operations, timely commencement and sufficient cash
accrual will be key monitorable. The partners will likely to
provide need-based support by way of equity or unsecured loans.
Outlook: Stable
CRISIL Ratings believes that NSM will benefit over the medium term
from its partners extensive industry experience.
Rating Sensitivity factors
Upward factors
* Timely completion of project without any time or cost overrun
* Reports significant revenue and profitability leading to cash
accruals of INR2.5-3 crore or more.
Downward factors
* Delay in project completion or commencement of operations leading
to low cash accruals of less than 2 crore.
* Debt-funded capex, impacting the financial risk profile,
especially liquidity.
NSM was established as partnership firm Feb'2021. It is based in
Punjab and currently setting up new manufacturing steel unit in 2
phases. In first phase the firm will install a Induction Furnace
for manufacturing of Billet with the capacity of 84 MT/day, and in
second phase firm will set up 79.80 M.T/day rolling mill for steel
strips, TMT, wire rod, angle, channel, strips, rounds, flats, bar,
structures and other rerolled product.
NSM is owned and managed by Mr. Karan Gupta and Mr. Shikhar Goyal
and expected to commence its operation from October 2023.
NOKHA COLD: CRISIL Withdraws B Rating on INR15cr Cash Loan
----------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Nokha Cold Store Private
Limited (NCS; part of the Nokha group) to 'CRISIL B/Stable/Issuer
Not Cooperating'. CRISIL Ratings has withdrawn its rating on bank
facility of NCS following a request from the company and on receipt
of a 'no dues certificate' from the banker. Consequently, CRISIL
Ratings is migrating the ratings on bank facilities of NCS from
'CRISIL B/Stable/Issuer Not Cooperating to 'CRISIL B/Stable'. The
rating action is in line with CRISIL Ratings' policy on withdrawal
of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING'; Rating Withdrawn)
Analytical Approach
CRISIL Ratings has combined the business and financial risk
profiles of NCS, Nokha Timber Store (NTS), Nokha Agrotech Pvt Ltd
(NAPL), M/s Chunnilal Ramchandra (CR), and CR Commtrade Pvt Ltd
(CRT). This is because the entities, collectively referred to as
the Nokha group, have common promoters and management and are in
the same line of business.
The Nokha group, based in Bikaner, is promoted by Mr. Hanuman
Jhanwar and his family. The group trades in agri products,
including guar gum, pulses, oil seeds, and DOC among others.
NCS, incorporated in 1999, has a cold storage facility with
capacity of 9,500 metric tonne (MT). It buys, stores, and sells
agri-produce.
NAPL is also a cold storage facility with capacity of 15,000 MT. It
began commercial production in May 2019.
NTS, CRT, and CR trade in agri- commodities/products.
O2Z TRADING: CRISIL Lowers Rating on INR38.25cr Loan to B+
----------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
O2z Trading & Industries Private Limited to 'CRISIL B+/Stable' from
CRISIL BB-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Long Term Loan 38.25 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects expected weakening of company's financial
risk profile, especially liquidity, on account of low debt service
coverage ratio (DSCR). DSCR in FY 22 is estimated at around 1.1
times, which is expected to subside to below 1 time over the medium
term on account of expected increase in term debt repayments.
Though timely realization from debtors would aid the cash flows,
sustained improvement in DSCR will remain a key rating sensitivity
factor. Financial risk profile shall weaken too over the medium
term as on account of debt funded capital expenditure towards
setting up of new hydro power project, capital structure is
expected to turn leveraged.
The rating also factors in modest scale of operations as on account
of lower revenue from the trading segment, amid covid induced
challenges, overall revenue declined to INR10.6 crore in fy22 from
INR12.1 crore during previous year. Sustained improvement in
revenue driven by stable plant load factor (PLF) generation,
execution of construction projects and improved contribution from
trading segment will remain a key monitorable.
The rating reflects low DSCR and modest scale of operations of the
company. These weaknesses are partially offset by extensive
experience of promoters in the industry.
Key Rating Drivers & Detailed Description
Weakness:
* Low debt service coverage ratio: Debt service coverage ratio
(DSCR), estimated at around 1.1 times during fy22, is expected to
decline to below 1 time on account of increased repayment towards
existing loans. O2z had incurred a debt-funded capital expenditure
to set-up a hydro power project, the term loan repayments of which
are expected to increase from fy23 onwards, hence leading to
moderation of DSCR. Though timely realization from debtors would
aid the cash flows, sustained improvement in DSCR will remain a key
rating sensitivity factor.
* Modest scale of operations: Because of decline in trading sale,
overall revenue declined in fy22 and stood modest at around INR10.6
crore (Rs 12.1 crore during previous fiscal). Trading business was
impacted in fy22 on account of covid induced demand challenges.
Though company has penetrated in construction segment and has also
received letter of intent (LOI) from J&K government, the project
execution is yet to commence. Going forward, sustained improvement
in revenue driven by stable plant load factor (PLF) generation,
execution of construction projects and improved contribution from
trading segment will be closely monitored.
Strengths:
* Extensive experience of promoter: The promoters have an
experience of over 6 years in independent power producers & energy
traders' industry. They have successfully commissioned one hydro
power plant in October 2020 and are in the process of construction
of second plant which is expected to get commissioned by November
2023. Further, the promoters have also diversified into
construction segment wherein LOI is also received from J&K
government. CRISIL believes that diversified revenue stream will
aid the business risk profile of O2z over the medium term, though
sustained growth in revenue across business segments will be
closely monitored.
Liquidity: Poor
DSCR is expected to subside to below 1 time over the medium term on
account of increase in term debt obligation; it is estimated at
around 1.1 times during fy22. Though liquidity will remain partly
aided by timely realization from debtors and cushion in bank lines,
sustained improvement in DSCR will remain a key rating sensitivity
factor. Bank limit utilization average at around 78.91% over past
12 months through April 30, 2022.
Outlook: Stable
CRISIL Ratings believes that O2z will continue to remain benefitted
from its promoter's extensive experience and diversified revenue
stream.
Rating Sensitivity factors
Upward factors
* Average DSCR over the course of loan tenure to remain over 1.25
times
* Sustained increase in scalability driven by improved contribution
from all the business segments
Downward factors
* More than expected debt-funded capex impacting the liquidity
Average DSCR over the course of loan tenure declining below 1 time
O2Z Trading & Industries Private Limited (O2Z) was incorporated in
2013 by the Zaroo family. The company is primarily into the export
of Kashmiri handicraft items crafted by a group of 200 local
artisans. O2z has its showrooms in Mumbai, Delhi, Muscat, Kuwait &
UAE. O2Z has recently completed construction of a 5 MW hydro power
plant on a small tributary river of Ahlan at Ichoo district of
Anantnag in J&K. The project was commissioned in March 2020 and is
promoted by Mr. Obaid Ishaq Zaroo and Mr. Ovaice Ishaq Zaroo.
PRIMACY INDUSTRIES: Ind-Ra Keeps D Issuer Rating in NonCooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Primacy
Industries Limited's Long-Term Issuer Rating of 'IND D (ISSUER NOT
COOPERATING)' in the non-cooperating category and has
simultaneously withdrawn it.
The instrument-wise rating actions are:
-- INR285.4 mil. Term loan* due on September 30, 2020 maintained
in non-cooperating category and withdrawn;
-- INR1.40 bil. Fund-based limits# maintained in non-cooperating
category and withdrawn; and
-- INR52.8 mil. Non-fund-based working capital limits^ maintained
in non-cooperating category and withdrawn,
*Maintained at IND D (ISSUER NOT COOPERATING) before been
withdrawn
# Maintained at IND D (ISSUER NOT COOPERATING) /IND D (ISSUER NOT
COOPERATING) before been withdrawn
^ Maintained at IND D (ISSUER NOT COOPERATING) before been
withdrawn
Key Rating Drivers
Ind-Ra has maintained the ratings in the non-cooperating category
because the issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency. Ind-Ra is
no longer required to maintain the ratings, as the agency has
received a no-objection certificate from the lenders. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017 for credit rating agencies. Ind-Ra
will no longer provide analytical and rating coverage for the
company.
Company Profile
Established in 2005, Primacy Industries manufactures scented
decorative wax candles and air fresheners of different varieties at
its manufacturing facilities in Mangaluru and Gujarat.
PRJC GROUP: CRISIL Lowers Rating on INR9.5cr Cash Loan to D
-----------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Prjc Group Of Industries (PRJC) to 'CRISIL D Issuer
Not Cooperating' from 'CRISIL B/Stable Issuer not cooperating' due
to delays in interest servicing of the Guaranteed Emergency Line of
Credit(GECL) for the past three months through July 2022 by the
firm and the account is classified as SMA-2 by the bank as on
date.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Cash Credit/ 8.0 CRISIL D (ISSUER NOT
Overdraft facility COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with PRJC for
obtaining information through letters and emails dated March 31,
2021, April 23, 2021 and May 24, 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 PRJC, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PRJC
is consistent with 'Assessing Information Adequacy Risk'.
PRJC was established in 2017 as a proprietorship firm by Mr.
Chikaru Brahma. The firm crushes stone at its facility in Chirang,
Assam.
R J BUILDCON: CRISIL Withdraws B+ Rating on INR4cr Overdraft
------------------------------------------------------------
CRISIL Ratings has withdrawn its ratings on the bank facilities of
R J Buildcon Private Limited (RJ) on the request of the company and
receipt of a no objection certificate from its bank.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5.05 CRISIL A4/Issuer Not
Cooperating (Withdrawn)
Overdraft Facility 4 CRISIL B+/Stable/Issuer Not
Cooperating (Withdrawn)
Term Loan 0.95 CRISIL B+/Stable/Issuer Not
Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with RJ for
obtaining information through letters and emails dated March 21,
2022 and March 25, 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 RJ. This restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RJ is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the rating on bank facilities of RJ
continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
CRISIL Ratings has withdrawn its ratings on the bank facilities of
RJ on the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with CRISIL
Ratings' policy on withdrawal of its ratings on bank loans.
Incorporated in March 2008, RJ is promoted by Mr. Shailesh Jalkote
and his family and primarily undertakes road construction
contracts. The company has executed projects for PMC, Pune PWD,
PCMC and NHAI.
RAMKY INFRA: CRISIL Moves C Debt Rating to Not Cooperating
----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Ramky
Infrastructure Limited (RIL) to 'CRISIL C Issuer Not Cooperating'
from 'CRISIL C'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating 1,214.82 CRISIL C (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with RIL for
obtaining information through letters and emails dated June 27,
2022, July 8, 2022, July 20, 2022 and July 25, 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 RIL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RIL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of RIL to 'CRISIL C Issuer Not Cooperating' from
'CRISIL C'.
Analytical Approach
CRISIL Ratings has combined the business and financial risk
profiles of RIL and its special purpose vehicle (SPV) Sehore Kosmi
Tollways Ltd where the company has extended corporate guarantee of
INR5.12 crore. The company has also extended corporate guarantee to
its SPV, Srinagar Banihal Expressway Ltd. However, given the
validity of the same is being contested in the High Court, the debt
of these SPVs have not been consolidated with RIL. CRISIL Ratings
has moderately combined the business and financial risk profiles of
RIL with its subsidiaries to the extent of support requirement.
RIL, the flagship company of the Ramky group, was incorporated as
Ramky Engineers Pvt Ltd in 1994 to provide civil and environmental
engineering consultancy services. In 1998, it started executing
civil and environmental engineering, procurement, and construction
projects, primarily in the water and waste-water sector.
Subsequently, it expanded into road, building, irrigation, and
industrial construction. In 2003, the company got its present name
and was thereafter reconstituted as a public limited company. RIL
principally operates in two business segments: construction (under
RIL) and development (under SPVs). In the development business, the
group constructs roads under built-operate-transfer (BOT modes,
industrial parks, special economic zones, and bus terminals.
RIL's debt was restructured in June 2015 by the Joint Lenders Forum
comprising seven lenders.
RS TRUST: Ind-Ra Assigns BB Bank Loan Rating, Outlook Stable
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated R.S. Trust's (RST)
bank facilities as follows:
-- INR130.00 mil. Fund-based working capital limits assigned with
IND BB/Stable rating;
-- INR21.24 mil. Bank loans assigned with IND BB/Stable rating;
-- INR18.76 mil. Proposed bank loans assigned with IND BB/Stable
rating.
Key Rating Drivers
The rating reflects RST's small scale of operations, with its total
revenue falling to INR247.87 million in FY22 (FY21: INR215.52
million) from INR434.80 million in FY18, due to a fall in the
student headcount. Tuition fee was the prime source of income,
which accounted for 98% on average to its total income, during
FY16-FY22. In FY21, hostel and transportation fee receipts declined
sharply as the classes were conducted online due to the
COVID-19-led lockdown. Ind-Ra expects the revenue to grow gradually
over the medium term, on account of marginal growth in the student
headcount. Its FY22 financial was provisional in nature.
Liquidity Indicator – Stretched: RST's liquidity profile is
stretched due to its small scale of operations and low cash
position. The trust relies on a single bank for funding and does
not have any access to the capital market. The cash and bank
balance (unencumbered) remained low at below INR37 million during
FY16-FY22. The cash and bank balance declined 16.77% yoy to
INR29.91 million in FY22, due to changes in the working capital.
The trust has availed INR130 million working capital facility from
bank and its average utilization was low at 10.33% for the 12
months ended June 2022, as it maintained the credit balance in the
account for a few months during the period. Furthermore, the
liquidity profile is supported by the trustee's funds in the form
of interest-free unsecured loans. The trust's debt-service
commitments stood at INR16.81 million (6.78% of the total income)
in FY22 (FY21: INR22.57 million; 10.47%), and they are likely to be
INR25.39 million (84.90% of unencumbered cash and balance
outstanding at FYE22) for FY23. Ind-Ra expects the liquidity
profile to improve over the medium term, due to the absence of any
capex plans and the maintenance of the operating profitability.
The rating factors in RST's moderate-to-low operating profitability
during FY16-FY22. The operating margin increased to 36.44% in FY21
(FY20: 15.17%), due to higher yoy fall in operating expenditure
than the operating income. During the COVID-19 lockdowns, the
classes were conducted online, which led to a sharp decrease in
operating expenses in FY21. With the lockdown having been lifted,
its institutions resumed in-person classes during FY22, which
increased the operating expenses 11.44% yoy to INR152.34 million.
However, the operating margin increased marginally to 38.54% in
FY22, on the back of 15.26% yoy growth in operating income due to
an increased student headcount. The operating margin is likely to
come down to below 30% for FY23, due to a further increase in the
operating expenses on account of the resumption of the in-person
classes throughout the year.
RST's student base increased to 3,741 in FY22 (FY21: 3,449), mainly
due to an increased enrolment for engineering courses. The overall
student headcount declined to 3,216 in FY20 (FY16: 4,869), due to
the closure of its nursing and physiotherapy college. In FY22,
college students accounted for 71% of its total student headcount,
while its school made up 29%. The overall capacity utilization
increased to 79% in FY22 (FY21: 67%). Ind-Ra expects the student
headcount to grow slowly in the medium term, due to the
availability of its infrastructure.
The trust had a moderate debt burden (debt/earnings before
interest, tax and depreciation (EBITDA)) of 1.19x in FY22 (FY21:
1.90), mainly due to a 23.70% yoy fall in total debt to INR114.03
million. Ind-Ra expects the debt burden to increase for FY23, due
to a likely marginal reduction in its EBITDA.
The ratings, however, are supported by the trust's comfortable
coverage ratios. The debt service coverage ratio increased to 5.68x
in FY22 (FY21: 3.49x), while the interest service coverage ratio
rose to 17.89x (4.51x), due to an increase in its EBITDA along with
a reduction in its debt service commitments. Its EBITDA increased
38.48% yoy to INR95.53 million in FY22 (FY21: INR78.82 million;
FY20: INR56.92 million). Ind-Ra expects the coverage ratio to
reduce marginally in FY23, due to a likely reduction in its EBITDA,
on account of a likely increase in its operational expenses
following the resumption of the in-person classes.
The ratings are further benefits from the trust's long track record
of 25 years and continuous financial support from the trustees and
the group entities in the form of interest-free unsecured loans.
The trust received unsecured loans worth INR90.39 million from the
trustees and the group entities as of FY22.
Rating Sensitivities
Positive: Strong growth in student base, resulting in growth in the
scale of operations along with an improvement in the operating
profitability and the liquidity position could lead to a positive
rating action.
Negative: The inability to maintain the operating profitability,
leading to a deterioration in the debt and coverage metrics and a
stress on the liquidity position will be negative for the ratings.
Company Profile
Established in 1998, RST is promoted by R Rangarajan (founder and
chairman) who is also the founder of the Vel Group. The trust runs
two colleges offering under-graduate and post-graduate courses in
engineering and paramedical. The trust also operates a
matriculation school, which offers KG to 12th standard education.
RST is a part of the Vel group, which also manages Vel Trust (1997)
and Vel Tech Rangarajan Dr. Sagunthala R&D Institute of Science and
Technology.
TREVI HOSPITAL: CRISIL Assigns B+ Rating to INR10cr LT Loan
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of Trevi Hospital (TH).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 10 CRISIL B+/Stable (Assigned)
The rating reflects the firm's geographic concentration in revenue
and exposure to risks related to its ongoing project and expected
leveraged capital structure. These weaknesses are partially offset
by the extensive experience of the partners in the healthcare -
hospitals industry
Key Rating Drivers & Detailed Description
Weaknesses:
* Geographic concentration in revenue: Operations of TH are
localized compared with other corporate hospitals, such as Apollo
Hospitals Enterprise Ltd. This renders entities in the segment
susceptible to the dynamics of a single market. The hospital is
also exposed to competition from try of other big players in the
region.
* Exposure to risks related to the ongoing project: TH is scheduled
to commence its project in August 2023 and has already started
partial operations as of June 2022.The company is expected to face
moderate demand risk, as the industry is highly fragmented. It will
also be exposed to intense competition from other corporate
hospitals. The project is at a very initial stage of implementation
and hence timely completion of its project and successful
stabilization of operations will remain key rating sensitivity
factors.
* Expected leveraged capital structure: TH is expected to have an
below average financial risk profile with high gearing and
moderately high debt protection metrics. The project is
aggressively funded through a debt-equity ratio 2 times.
Strength:
* Extensive experience of the partners: The two-decade-long
experience of the partners, their strong understanding of the
market dynamics and expected healthy relationships with suppliers
and customers will support the business.
Liquidity: Stretched
Cash accrual, expected at over INR1.5 crore per annum, will
sufficiently cover yearly debt obligation over the medium term. The
promoters are expected to infuse equity and unsecured loans to
support the business. The firm has not applied for any working
capital limit. However, timely implementation of the project and
generation of expected cash accrual will be key rating sensitivity
factors.
Outlook: Stable
TH will benefit from the partners' extensive industry experience.
Rating Sensitivity factors
Upward factors
* Timely stabilization of operations at the proposed plant and
significant revenue and profitability.
* It sustained revenue growth of 45 percent over the medium term
while ensuring an improvement in financial risk profile.
Downward factors
* Considerable delay in commencement of operations
* Significantly low cash accrual below 1 crore in the early phase
of operations
* Substantial increase in the working capital requirement weakening
liquidity and the financial risk profile
TH, established in 2021, is setting up a 46-bed hospital at the
Langol district in Imphal, Manipur. Dr Rajkumar Bikramjit Singh, Ms
Rajkumari Sorojini Devi and Ms Rajkumari Ibemu Devi are partners in
the firm. TH is scheduled to commence its project in August 2023
and has already started partial operations as of June 2022.
TULIP STAR: Supreme Court Rules in Favour of ARCIL
--------------------------------------------------
The Economic Times of India reports that the Supreme Court has set
aside the ruling of the National Company Law Appellate Tribunal
(NCLAT) rejecting Asset Reconstruction Co (India) Ltd's claim in
Tulip Star Hotels' insolvency case.
According to ET, the appellate tribunal had accepted the hotel
operator's claim that the ARC filed its case against the company
under the Insolvency and Bankruptcy Code (IBC) after the limitation
period of three years from the date of declaring the asset as
non-performing. But the Supreme Court, in its order on August 1,
noted the extensions sought by Tulip Star Hotels to pay the arrears
and ruled that the entries of debt in the books of account and
balance sheet of a company could be treated as an acknowledgement
of the liability and considered while fixing the limitation period.
The account of Tulip Star Hotels, which along with affiliate firm
Tulip Hotels owns V Hotels in the Juhu area of Mumbai, was declared
non-performing on December 1, 2008, ET recalls. Bank of India,
which had led a consortium of lenders to the company, assigned its
receivables to the asset reconstruction company on December 31 the
same year.
In February 2011, within the three-year limitation period for
filing a formal claim, the company acknowledged its debt and
default and sought an extension of time to repay dues, ET says. It
sought another extension on Rs 239 crore in April 2013, and
subsequently paid Rs 17.50 crore, according to the ARC. The company
acknowledged the liabilities in its financial statements from
2008-2009 to 2016-2017.
ET relates that the ARC approached the National Company Law
Tribunal (NCLT) in April 2018 under the IBC. The hotel group argued
that the case under the 2016 insolvency and bankruptcy law was
filed long after the time of declaring the account an NPA.
The Mumbai bench of the NCLT, rejecting the company's argument,
admitted it for the corporate insolvency resolution process. While
the company successfully challenged the NCLT decision at the NCLAT,
the Supreme court has now set aside the appellate tribunal's
ruling.
"In our considered opinion, an application under Section 7 of the
IBC would not be barred by limitation on the ground that it had
been filed beyond a period of three years from the date of
declaration of the loan account of the corporate debtor as NPA, if
there were an acknowledgement of the debt by the corporate debtor
before the expiry of the period of limitation of three years, in
which case the period of limitation would get extended by a further
period of three years," observed a bench of Justices Indira
Banerjee and JK Maheshwari in its 56-page order, ET relays.
In this matter, the account of the corporate debtor was declared an
NPA in December 2008. The debtor, well within three years,
acknowledged its liability and proposed a settlement. This was
followed by several requests of extension of time to make payment
and revised settlements. The application under section 7(2) of the
IBC was filed on April 3, 2018, well within the extended period of
limitation, the court observed.
VANI TOBACCOS: CRISIL Reaffirms B+ Rating on INR9cr Loans
---------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Vani Tobaccos (VT).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (Reaffirmed)
Export Packing
Credit 6 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect exposure to intense competition,
modest scale of operations and weak financial risk profile. These
weaknesses are partially offset by the extensive experience of the
proprietor in the tobacco trading industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to intense competition: There are several organized and
unorganized players in the tobacco trading business because of
small capital requirement. Scale of operations determines
negotiating power with suppliers and customers and ability to
withstand business downturns.
* Modest scale of operations: Business risk profile is constrained
by small scale and limited operating flexibility. Also, working
capital requirement is large for the tobacco business, as seen in
gross current assets of 349 days as of March 31, 2022, because of
high inventory days of 292 days.
* Weak financial risk profile: Debt protection metrics were weak,
with interest coverage and net cash accrual to total debt ratios of
1.58 times and 0.03 time, respectively, in fiscal 2022. Total
outside liabilities to tangible networth ratio was weak at over 4.9
times as on March 31, 2022 and is expected to be around 4.25 times
as of March 2023.
Strength:
* Extensive experience of the proprietor in the tobacco trading
industry: Proprietor experience of more than 20 years, their
understanding of market dynamics and established relationships with
suppliers and customers will continue to support the business.
Liquidity: Stretched
Bank limit utilization was moderate at around 44% for the 12 months
through June 2022. Cash accrual of over INR34 lakh will be
insufficient to meet yearly term debt obligation of INR40-50 lakh,
over the medium term. However, cushion available in working capital
limit supports liquidity. Current ratio was moderate at 1.24 times
as of March 31, 2022.
Outlook: Stable
CRISIL Ratings believes VT will continue to benefit from its
longstanding relationships with principal suppliers and management
ability to mitigate risks inherent in the trading business.
Rating Sensitivity Factors
Upward factors
* Increase of 40% in revenue and stable operating margin leading to
higher net cash accrual
* Significant improvement in working capital cycle
Downward factors
* Decline in operating margin by more than 250 basis points,
leading to lower net cash accrual
* Large, debt-funded capital expenditure further weakening capital
structure
Established in 1999 as a proprietorship firm by Mr. NV Siva
Koteswara Rao, Andhra Pradesh-based VT trades in tobacco.
VARAD BUILDERS: CRISIL Raises Rating on INR10cr Loans to B+
-----------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of Varad Builders (VB) to 'CRISIL B+/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 2.99 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 7.01 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects the timely and on-track progress in the
execution of the project in line with the expectations. The firm
has completed 70% of its Tower A construction and has successfully
booked around 44% of the available units as on March 2022. The firm
has also received around 60% advance for the units sold which
supports the liquidity profile of the company.
The rating continues to reflect the exposure to project related
risk, susceptibility of the firm to the inherent risks and
cyclicality of the real estate sector in India and exposure to
geographical concentration in revenue. These weaknesses are
partially offset by the extensive experience of the partners in the
real estate sector.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to project related risk: The company has commenced the
construction of Tower A and has completed around 70% of the
construction. The construction of Tower B is expected to commence
in December 2022 and complete by September 2024. The firm will
commence bookings for the second tower as well in the near term.
The second phase of the project would commence post the completion
of the first phase. Any significant delays in the project execution
are likely to result in cost overruns and remain monitorable.
* Vulnerability to risks and cyclicality inherent in the real
estate sector in India and exposure of geographical concentration
in revenue: The real estate sector in India is cyclical, and marked
by volatile prices, opaque transactions, and a highly- fragmented
market structure because of the presence of a large number of
regional players. As majority of the units being constructed by the
company are in Mumbai, any slowdown in the real estate market is
likely to affect demand.
Strengths:
* Extensive experience in residential real estate construction: The
partners have over two decades of experience and have completed
several projects in Mumbai, leading to an established presence and
brand value in the region. Benefits from the partners' expertise
and their strong understanding of local market dynamics should
continue to support the business.
Liquidity: Stretched
The liquidity is stretched marked by expected flow of customer
advances of INR3- 6 crore in fiscals 2023 and 2024, in comparison
to projected costs to be incurred of INR4 crore per fiscal. The
long- term debt obligations are expected to be in the range INR3-5
crore. The liquidity continues to be supported by the promoter and
customer advances.
Outlook Stable
CRISIL Ratings believes that VB will benefit from the extensive
experience of its partners in the real estate industry.
Rating sensitivity factors
Upward factors:
* 50% units booked by March 23 (both towers within phase one) along
with healthy receipts of customer advances
* Faster than expected completion of the project with lower debt
levels
Downward factors:
* Cash buffer ratio deteriorating below 1 time
* Delay or cost overrun in execution of the project
VB is presently developing a project, Prajatitk in Badlapur
(Mumbai). The project comprises of 5 apartment buildings. The firm
was incorporated in 2019 as a partnership by Mr. Chetan Apte and
his family members.
VEEKESY SLIPPERS: CRISIL Reaffirms B Rating on INR7cr Cash Loan
---------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable' rating on the
bank facilities of Veekesy Slippers India Private Limited (VSIPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B/Stable (Reaffirmed)
Long Term Loan 3.1 CRISIL B/Stable (Reaffirmed)
Proposed Fund-
Based Bank Limits 5.27 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect the modest scale of operations and
weal financial risk profile, these weaknesses are partially offset
by well-established brand name.
Analytical Approach
Unsecured loan has been treated as debt.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations amidst intense competition: Revenues
has remained modest at INR25 – 26 Crores, in fiscal 2022, amidst
lower demand and intense competition from other regional entities
and players operating at pan India level. Going forward with
improvement in demand for the products, revenues are expected to
improve in the medium term however no major capital expenditure to
be incurred, will continue to remain modest.
* Weak financial risk profile: Higher operating losses have led to
erosion in net worth to INR2-2.10 crores as on March 31, 2022, from
INR4.2 crores. as of March 31, 2021, which has resulted in
aggressive capital structure as highlighted by gearing which is 6.2
– 6.3 times and total outside liabilities to adjusted net worth
(TOL/ANW) ratio of 9.22 – 9.33 times as of March 31, 2022. Debt
protection metrics were subdued amidst higher operating losses in
fiscal 2022. Improvement in financial risk profile will be a key
monitorable factor over the medium term.
* Large working capital cycle: The working cycle remained large as
on March 31, 2022 as the inventory level was high at 123 days due
to slight slowness in receipts of payments, however respective
measures have been taken to bring it under control. Going forward
with limited disruption it is expected to come down it is expected
to moderate over the medium term.
Strength:
* Well-established brand name: Being a part of VKC group (Division
II), VSIPL has a well-established brand in the domestic footwear
segment, especially in southern India. The company has a network of
over 150 dealers across the country that should continue to support
the business. The company also Benefits from the promoters'
experience of over three decades, their strong understanding of
local market dynamics, and healthy relations with suppliers and
customers should continue to support the business.
Liquidity: Poor
Liquidity is marked by low Cash accrual of INR0.5–INR1.5 Crore
expected in fiscals 2023 and 2024, respectively, against debt
obligation of INR1.04 crores and INR0.71 crores respectively. The
repayment obligation for FY 2023 will be supported by promoters.
Bank limit of INR7 crore was utilized at 100% on average in the
last 12 months ending March 31, 2022, However, the unsecured loans
from the promoters will provide support to overall liquidity
requirement of the company.
Outlook: Stable
CRISIL Ratings believes VSIPL will continue to benefit from
extensive experience of its promoters in the domestic footwear
industry.
Rating Sensitivity factors
Upward factors
* Sustained improvement in revenues and operating margin leading to
net cash accruals of above INR1.5 crores.
* Improvement in working capital cycle should strengthen the
financial risk profile of the company.
Downward factors
* Substantial operating losses resulting in lower net cash
accruals.
* Further stretch in inventory levels leading to gross current
assets of over 300 days.
Incorporated in 2012, VSIPL is a part of the VKC group (Division
II) of companies and is based in Vijayawada, Andhra Pradesh.
Promoted by Mr. Abdul Razak, the company manufactures polyurethane
footwear.
VEL TRUST: Ind-Ra Assigns BB Bank Loan Rating
---------------------------------------------
India Ratings and Research (Ind-Ra) has rated Vel Trust (1997)'s
(VT) bank facilities as follows:
-- INR120.00 mil. Fund-based working capital limits assigned with
IND BB/Stable rating;
-- INR40.35 mil. Bank loans assigned with IND BB/Stable rating;
and
-- INR49.65 mil. Proposed bank loans assigned with IND BB/Stable
rating.
Key Rating Drivers
The rating reflects VT's small scale of operations with stagnant
revenues of around INR300 million over FY16-FY22, except in FY21
when it fell to INR242.26 million, due to a decline in the hostel
and transportation fee receipts on account of the COVID-19
outbreak. Tuition fee income was the prime source of income which
accounted 98% on an average to the total income during FY16-FY22.
Ind-Ra expects the revenue to remain in the same range in FY23 due
to no growth in the student headcount. FY22 financials are
provisional in nature.
Liquidity Indicator – Stretched: VT's liquidity profile is
stretched due to its small scale of operations and low cash
position. The trust relies on a single bank for funding
diversification and does not have access to the capital market.
Although the cash and bank balance (unencumbered) increased to
INR94.49 million in FY22 from INR46.14 million in FY21, Ind-Ra
believes this is a one-off increase due to the exceptional
circumstances created by COVID-19 and is likely to normalize over
the near term. The trust availed INR120 million working capital
facility from banks; its average utilization stood low at 14.05%
for the 12 months ended June 2022 as it maintained credit balance
in the account for most of the time during the period. Furthermore,
VT's liquidity profile is supported by the trustee's funds in the
form of interest-free unsecured loans. The trust's debt-service
commitments stood at INR45.95 million (15.48% of the total income)
in FY22 (FY21: INR42.93 million; 17.72%), and are likely to amount
to INR46.51 million (49.22% of unencumbered cash and balance
outstanding at FYE22) in FY23. Ind-Ra expects the liquidity profile
to improve over the medium term due to the absence of any capex
plans and the maintenance of operating profitability.
The ratings reflect VT's moderate operating profitability during
FY20-FY22. The operating margin increased to 53.61% in FY21 from
23.27% in FY20 as the classes were conducted through online due to
the COVID-19-led lockdown, which led to a sharp fall in the
operating expenses during the year. As the lockdown was lifted and
institutions started conducting physical classes during FY22, the
operating expenses increased and consequently, VT's operating
margin reduced to 44.78%. The operating margin is likely to reduce
below 30% for FY23 due to a further increase in the operating
expenses.
The ratings factor in VT's stable student base; the headcount
remained above 3,400 during FY16-FY22. In FY22, the student
headcount increased 8.91% yoy to 3,999 from 3,672 in FY21, due to
an increased enrolment in engineering courses. The student
headcount of 3,999 in FY22 came 62% from the engineering college
and the rest from arts and science. The capacity utilization stood
high at 90% for FY22 (FY21: 85%). Ind-Ra expects the student
headcount to remain in the same range for FY23 due to no addition
in the infrastructure.
The ratings also reflect the trust's moderate debt burden
(debt/earnings before interest, tax and depreciation (EBITDA)) of
1.09x in FY22 (FY21: 1.87x). The fall in the debt burden in FY22
was mainly attributed to a 39.97% yoy fall in the total debt to
INR145.46 million in FY22. The EBITDA increased 2.35% yoy to
INR132.94 million in FY22. However, Ind-Ra expects the debt burden
to increase in FY23 due to a marginal reduction in the EBITDA.
The ratings are, however, supported by the trust's comfortable
coverage ratios. The debt service coverage ratio of 2.89x (FY21:
3.03x) and interest service coverage ratio of 16.55x (5.14x) in
FY22. The coverage metrics improved during FY21-FY22 due to an
increase in the EBITDA and a reduction in the debt service
commitments. VT's debt service commitments fell 56.33% yoy to
INR42.93 million in FY21. Ind-Ra expects the coverage metric to
reduce marginally for FY23 as the EBITDA is likely to reduce on
account of likely increase in operational expenses on account of
commencement of physical classes in trust run institutions.
The ratings further benefit from the trust's long track record of
24 years and the continuous financial support it receives from the
trustee's and group entities in the form of interest-free unsecured
loans. The unsecured loans received from the trustees and the group
entities stood at INR76.19 million in FY22.
Rating Sensitivities
Negative: An inability to maintain the operating profitability,
leading to deterioration in the debt and coverage metrics and
stress on the liquidity position will be negative for the ratings.
Positive: Strong growth in the student base, resulting in growth in
the scale of operations, along with an improvement in the operating
profitability and the liquidity position could lead to a positive
rating action.
Company Profile
Established in 1997, VT is promoted by Dr. R Rangarajan (Founder
and Chairman) who is also the founder of the Vel Group, which also
manages R.S. Trust and Vel Tech Rangarajan Dr. Sagunthala R&D
Institute of Science and Technology Trust, along with VT. The trust
comprises two educational institutions: Vel Tech Multi Tech Dr.
Rangarajan Dr. Sagunthala Engineering College, and Vel Tech Ranga
Sanku Arts College, offering under-graduate and post-graduate
courses in engineering and in arts and science, respectively, since
1998.
VELLAPALLY CONSTRUCTIONS: CRISIL Rates INR1.75cr Loan at B+
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable/CRISIL A4'
ratings to the bank facilities of Vellapally Constructions (VC).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 19.75 CRISIL A4 (Assigned)
Overdraft Facility 5 CRISIL A4 (Assigned)
Proposed Long Term
Bank Loan Facility 1.75 CRISIL B+/Stable (Assigned)
The ratings reflect VC's susceptibility to tender-based operations
and modest scale of operations. These weaknesses are partially
offset by its extensive industry experience of the promoters and
moderate financial profile.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to tender-based operations: Revenue and
profitability entirely depend on the ability to win tenders. Also,
entities in this segment face intense competition, thus requiring
bidding aggressively to get contracts, which restricts the
operating margin to a moderate level. Also, given the cyclicality
inherent in the construction industry, the ability to maintain
profitability margin through operating efficiency becomes
critical.
* Modest scale of operation: VCs business profile is constrained by
its scale of operations in the intensely competitive Civil
Construction industry. The firm made revenues of INR37.73 crores
for fiscal 2022. VCs scale of operations will continue limit its
operating flexibility.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an extensive experience in Civil Construction industry. This
has given them an understanding of the dynamics of the market and
enabled them to establish relationships with suppliers and
customers.
* Moderate financial profile: VC's capital structure has been at
moderate at less than 1 time over the past 3 years through fiscal
2022. VC's debt protection measures have also been at comfortable
level: interest coverage and net cash accrual to total debt (NCATD)
ratio are at 1.80 times and 0.12 times for fiscal 2022. Networth is
small at INR14.74 crores as of March 31, 2022.
Liquidity: Stretched
Bank limit utilization is high and almost fully utilized over the
past twelve months ended June-2022. Cash accruals are expected to
be around INR3 – 3.5 crore which are sufficient against term debt
obligation of INR0.50 crore over the medium term.
Outlook: Stable
CRISIL Ratings believe VC will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity factors
Upward factors
* Sustained improvement in scale of operations and sustenance of
operating margin, leading to higher cash accruals.
* Improvement in working capital cycle with GCA to less than 150
days
Downward factors
* Decline in profitability or stretch in working capital cycle
leading to accruals less than INR1.5 crore
* Large debt-funded capital expenditure weakens capital structure
and/or witnesses a substantial increase in its working capital
requirements thus weakening its liquidity & financial profile.
VC was established in 1981, it is located in Kottayam, Kerala. VC
is engaged in civil construction works, such as construction of
buildings. VC owned & managed by Mr. Jacob Mathew Vellapally and
his family.
VVG PAPER: CRISIL Lowers Rating on INR19.25cr LT Loan to B
----------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of V.V.G. Paper Industry Private Limited (VVG) to
'CRISIL B/Stable' from CRISIL B+/Stable.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.50 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Long Term Loan 19.25 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects the impact on business risk profile
and financial risk profile. The company has reported EBIDTA margin
of 3.75 percent in fiscal 2022 against CRISIL's earlier expectation
of 9.1 percent and likely to remain around similar levels over the
medium term. This will likely result in further impact on financial
risk profile and liquidity with net cash accruals not sufficient to
meet debt obligation in Fiscal 2023 and the company should depend
on unsecured loans from promoters to meet debt obligation.
Improvement in profitability leading to higher cash accruals will
remain a key sensitivity factor.
The rating reflects vulnerability to volatile raw material prices,
cyclicality in the industrial paper industry and weak financial
risk profile. These weaknesses are partially offset by extensive
experience of the promoters.
Analytical Approach:
Unsecured loans of INR5.10 crore, extended by the promoters as on
March 31, 2022, have been treated as 75% equity and 25% debt, since
these funds do not carry any interest, and are expected to be
retained in the business.
Key Rating Drivers & Detailed Description
Weaknesses:
* Vulnerability to volatile raw material prices and cyclicality in
the industrial paper industry: Operating margin remains susceptible
to volatile raw material (waste paper) prices, which are linked
directly to international prices. Any adverse fluctuation in raw
material prices can impact profitability. Kraft paper is used for
tertiary packaging; thus, offtake depends on industrial production
and other macroeconomic factors, such as gross domestic product
growth and disposable income, due to their strong linkage with
spending on consumer durables and fast-moving consumer goods.
Steady demand is necessary to further ramp-up scale and earnings
amid capacity expansion.
* Weak financial risk profile: Capital structure is negative due to
negative networth on account of losses reported in the last 3
fiscals due to initial stages of operations. Debt Protection
metrics were modest with interest coverage ratio of 1.09 times and
net cash accruals to adjusted debt ratio of 0.01 time in Fiscal
2022.
Strengths:
* Extensive experience of the promoters: The project is being
promoted by the SR group, which has presence in various sectors
such as cement and steel trading, construction and land
development, and stone crushing. Longstanding presence of the
promoter in diversified operations should continue to support the
business.
Liquidity: Stretched
Bank limit utilisation is high at around 98.36 percent for the past
twelve months ended Mar-22. Cash accrual are expected to be around
INR3 to 4.5 crore per annum over the medium term will not be
sufficient to meet the debt obligation of INR4.63 crore in Fiscal
2023 and INR5.84 crore in Fiscal 2024. The promoters are likely to
extend support in the form of equity and unsecured loans to meet
its working capital requirements and repayment obligations.
Negative net worth limits its's financial flexibility, and restrict
the financial cushion available to the company in case of any
adverse conditions or downturn in the business.
Outlook: Stable
CRISIL Ratings believes VVG will continue to benefit from the
extensive experience of its promoters.
Rating Sensitivity factors
Upward factors
* Improvement in Profitability to more than 7.5 percent while
sustaining the revenue at similar levels resulting in higher cash
accruals
* Strengthening of the financial risk profile especially
Downward factors
* De-growth in revenue and profitability leading to lower cash
accrual
* Weakening of the interest coverage ratio to less than 1 time.
VVG, incorporated in 2017, is a Hosur (Krishnagiri, Tamil
Nadu)-based company that set up a plant to manufacture kraft paper.
The plant commenced operations from November 2019. Ms G Neelima and
Mr. Dilip Kumar P are the promoters.
=====================
N E W Z E A L A N D
=====================
AHEAD LIMITED: Creditors' Proofs of Debt Due on Oct. 9
------------------------------------------------------
Creditors of Ahead Limited and Stelen Freight Limited are required
to file their proofs of debt by Oct. 9, 2022, to be included in the
company's dividend distribution.
The High Court at Tauranga appointed Janet Sprosen and Leon Francis
Bowker of KPMG as liquidators of the companies on Aug. 9, 2022.
ASSET RELOCATIONS: Creditors' Proofs of Debt Due on Sept. 16
------------------------------------------------------------
Creditors of Asset Relocations Limited are required to file their
proofs of debt by Sept. 16, 2022, to be included in the company's
dividend distribution.
The High Court at Tauranga appointed Wendy Somerville and Malcolm
Hollis of PwC as liquidators of the company on Aug. 9, 2022.
CANTERBURY TRELLIS: Creditors' Proofs of Debt Due on Sept. 10
-------------------------------------------------------------
Creditors of Canterbury Trellis Limited are required to file their
proofs of debt by Sept. 10, 2022, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Aug. 10, 2022.
The company's liquidators are:
Brenton Hunt
PO Box 13400
City East
Christchurch 8141
DAMNED FINE: Commences Wind-Up Proceedings
------------------------------------------
Members of Damned Fine Food Limited on Aug. 11, 2022, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Grant Bruce Reynolds
Reynolds & Associates Limited
PO Box 259059
Botany
Auckland 2163
FOOD Z: Commences Wind-Up Proceedings
-------------------------------------
Members of Food Z Limited (formerly known as Reem Kebab Limited),
on Aug. 8, 2022, passed a resolution to voluntarily wind up the
company's operations.
The company's liquidator is:
Grant Bruce Reynolds
Reynolds & Associates Limited
PO Box 259059
Botany
Auckland 2163
FP IGNITION 2011-1: Moody's Assigns B3 Rating to Class F Notes
--------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to notes
to be issued by NZGT (FP) Trustee Limited in its capacity as
trustee of the FP Ignition Trust 2011-1 - New Zealand in relation
to Series 2022-1.
Issuer: NZGT (FP) Trustee Limited in its capacity as trustee of the
FP Ignition Trust 2011-1 - New Zealand in relation to Series
2022-1
NZD154.125 million Class A Notes, Assigned Aaa (sf);
NZD7.650 million Class B Notes, Assigned Aa2 (sf);
NZD15.300 million Class C Notes, Assigned A3 (sf);
NZD7.425 million Class D Notes, Assigned Baa3 (sf);
NZD12.375 million Class E Notes, Assigned Ba3 (sf);
NZD13.050 million Class F Notes, Assigned B3 (sf);
The NZD15.075 million Originator Notes are not rated by Moody's.
The transaction is a static cash securitisation of operating and
finance leases extended to New Zealand corporates and small and
medium-sized businesses. The leases are originated and managed by
Eclipx Fleet Holding (NZ) Limited (unrated), a subsidiary of Eclipx
Group (unrated) and secured by passenger cars and commercial
vehicles.
Eclipx Group provide vehicle fleet leasing, fleet management, heavy
commercial vehicle commissioning and management, salary packaging
and novated leasing in the Australian and New Zealand market.
Eclipx Group have been operating for over 40 years.
The securitised portfolio comprises lease instalment cash flows and
residual value cash flows. The present value of the outstanding
lease receivables balance is approximately NZD225.0 million and the
nominal value of estimated RV cash flows amounts to around NZD147.4
million. Due to the right of the lessees to return the vehicle at
contract maturity in order to cover the final lease balance
outstanding under an operating lease, the notes are exposed to both
default and market or residual value risk of the related vehicles.
RATINGS RATIONALE
The definitive rating takes into account, amongst other factors,
(i) an evaluation of the underlying portfolio of leases obligors
(ii) an evaluation of the underlying RV exposure; (iii) back-up
maintenance and servicer solutions; (iv) the credit enhancement
provided by subordination; (v) the liquidity support available in
the transaction by way of principal to pay interest and the
liquidity facility provided by Westpac New Zealand Limited
(A1/P-1/Aa3(cr)/P-1(cr)).
The transaction benefits from credit strengths such as experience
of the originator, diversification of vehicle manufacturer and
lease term dates and strong historical performance of the lease
portfolio. However, Moody's notes that the transaction features
some credit weaknesses such as high lessee concentration and
residual value risk.
The Notes will be repaid on a sequential basis in the initial
stages, until the subordination percentage increases from the
initial 31.5% to 41.0% for the Class A Notes at which point Class A
to Class F notes will be repaid on a pro-rata basis and senior to
the Originator notes. When the outstanding balance of the pool
falls below 20% of the initial pool balance at closing the notes
will once again be repaid on a sequential basis. There are other
portfolio performance triggers which must be met for the notes to
be paid pro-rata.
MODELLING APPROACH
Moody's applies a two-stage approach to modelling transactions with
RV risk. In the first step, Moody's models the expected loss on the
notes due to defaults. In the second step, additional losses
resulting from RV risk are modelled based on the RV haircuts
applied at contract maturity.
For the assessment of lessee default risk Moody's has determined
the lessee default distribution of the portfolio using CDOROM,
which simulates lessee defaults based on asset correlations and
default probabilities assumptions. Moody's assumed a mean lessee
default rate of 3.9%. For cash flow modeling Moody's assumed a
recovery rate following lessee default of 45% . To account for RV
risk in the portfolio Moody's assumes a Aaa; Aa2; A3; Baa3; Ba3 and
B3 haircut of 40.5%; 32.0%; 26.1%; 21.6%; 15.3%; and 8% on RV cash
flows respectively.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
July 2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade or downgrade of the note
ratings include (1) an improvement or deterioration in the credit
quality and performance of the collateral pool, and (2) higher or
lower than expected recoveries on defaulted loans. The New Zealand
economy and the market for used vehicles are primary drivers of
performance.
Other reasons for worse performance than Moody's expects include
poor servicing, error on the part of transaction parties, a
deterioration in credit quality of transaction counterparties, lack
of transactional governance and fraud.
TCD 2015: Creditors' Proofs of Debt Due on Oct. 9
-------------------------------------------------
Creditors of TCD 2015 Limited are required to file their proofs of
debt by Oct. 9, 2022, to be included in the company's dividend
distribution.
The High Court at Tauranga appointed Elizabeth Helen Keene and Luke
Norman of KPMG as liquidators of the company on Aug. 9, 2022.
WISDOM HOUSE: FMA Makes Interim Stop Order
------------------------------------------
The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko has
made an interim stop order that applies to Wisdom House Investment
Partners Limited and Yuen Pok (Paul) Loo, to prohibit them from:
* distributing any restricted communication that relates to the
supply of a financial advice service to any person; and
* supplying a financial advice service to any person; and
* supplying the financial service of keeping, investing,
administering, or managing money, securities, or investment
portfolios on behalf of other persons.
The FMA considers making this interim stop order is necessary to
prevent Wisdom House and Mr Loo causing harm, arising from what
appears to be dishonest and misleading activities.
Previously, the FMA cancelled the transitional financial advice
provider (FAP) licence of Wisdom House in December 2021 after Mr
Loo had engaged in serious misconduct at his previous employer.
The FMA's investigations continue while it considers whether a
permanent stop order is warranted.
It appears that Mr Loo held himself out as a financial adviser to
clients or potential clients of Wisdom House in an email when he is
not permitted to do so. The email also contained statements that
directly or indirectly refer to the supply, or possible supply, of
a financial advice service and are reasonably likely to induce
persons to request the supply of a financial advice service.
Attached to the email was a letter purporting to be from the FMA
confirming that the FMA has granted Wisdom House a FAP licence.
The email to clients and the FMA letter (which appears to be a
forgery) are false or misleading, or likely to mislead or confuse,
and contain a material misdescription or material error. The
materials are a "restricted communication" relating to the supply,
or possible supply, of financial services (namely a financial
advice service).
The FMA advises the public not to engage with, nor to accept offers
of financial services from, and not to provide money to, Mr Loo or
Wisdom House, as the regulator continues to investigate these
matters.
The interim stop order was issued under section 465 of the
Financial Markets Conduct Act 2013. It remains in force until the
close of 5 September 2022. The FMA may issue a permanent stop order
under section 462.
X FACTOR: Directors Breached Duties, Liquidators Reveal
-------------------------------------------------------
Stuff.co.nz reports that liquidators of a Southland shearing
company claim to have identified a breach of director duties,
insolvent transactions and overdrawn shareholders' account claims.
X Factor Shearing was put into liquidation in July 2021, according
to Stuff.
The company was registered in Gore and then Invercargill prior to
liquidation. Directors Hugh and Marion Kidd are listed in
Riversdale.
According to Stuff, the most recent liquidators report, released
August 2, said creditors are owed NZD612,863.
However, NZD1,071,484 in loan accounts to related parties are
assets on the company's books, according to the liquidators
report.
Liquidators have demanded repayment of these loan accounts.
"Although these claims were refuted, we are yet to receive any
supporting evidence. We have instructed our solicitors to pursue
these claims," the liquidators, as cited by Stuff, said.
The Kidds' solicitor has been in prolonged correspondence with the
liquidators, it said in the report.
The Kidds' son manages the company's affairs, the liquidators said
in the report. The son was identified in a previous report as Roger
Kidd.
"Other than a brief conversation with one of the directors on the
date of liquidation, they were unresponsive to our correspondence,"
the KPMG liquidators said in the August 2022 report, Stuff relays.
There had also been a brief conversation with the son, but he was
uncontactable since, the liquidators said.
"We identified a breach of director duties, insolvent transactions
and overdrawn shareholders' current account claims against the
Company's directors/shareholders and issued demand in respect of
this."
X Factor Shearing owes NZD306,347 to IRD, NZD250,445 to unsecured
creditors, NZD49,104 to preferential employee creditors and NZD6966
to a petitioning creditor, liquidators said.
=====================
P H I L I P P I N E S
=====================
DITO CME: Posts PHP15.4BB Net Loss in 6 Months Ended June 30
------------------------------------------------------------
Rappler.com reports that Dito CME, Dennis Uy's holding company for
the third telco and other tech interests, posted losses of PHP15.4
billion in the first semester of 2022, higher than the losses of
PHP3.8 billion in 2021, as foreign exchange losses and expenses
ballooned during the period.
A stock exchange disclosure on Tuesday, August 16, showed Dito
CME's revenues grew tenfold to PHP3 billion, while earnings before
interest, taxes, depreciation, and amortization grew 26% to P2.79
billion.
"We continue to move forward and are very satisfied with our
investment in Dito Telecommunity. The strong growth in Dito's
mobile subscribers in just a little over a year and a quarter from
commercial launch is proof positive that there continues to be a
segment of the market that prefers telco services that are
no-nonsense, fast and reliable," Rappler.com quotes Dito CME
president Eric Alberto as saying.
The company attributed revenue growth to third telco player Dito
Telecommunity, which saw 9.6 million subscribers as of end-June.
Dito CME shares fell 0.5% after the earnings disclosure.
According to Rappler.com, investors have long been concerned about
Mr. Uy's investments, as he had been selling off his previous
acquisitions due to massive debt levels.
As of June, Dito CME's bank loans amounted to PHP64.6 billion.
Non-current liabilities or loans that are not due within the next
12 months amounted to PHP16.65 billion, Rappler.com discloses.
Dito CME's documents also showed that its current liabilities
exceed its assets by PHP149.9 billion. Losses in the first semester
amounting to PHP15.4 billion resulted in a capital deficiency of
PHP18 billion.
"These conditions indicate that a material uncertainty exists that
may cast significant doubt on the Group's ability to continue as
going concern and, therefore, the Group may be unable to realize
its assets and discharge its liabilities in the normal course of
business. Albeit these conditions, management believes that the
Group will be able to meet all its outstanding obligations and
continue to operate as a going concern," Dito CME said in its
filing, Rappler.com relays.
Dito CME currently has loan agreements with the Bank of China
Limited-Singapore Branch ($300 million), China Minsheng Banking
Corporation ($500 million), Bank of China ($450 million), and Bank
of China-Manila ($50 million).
These short-term loans, amounting to $1.3 billion or PHP72.7
billion, were initially scheduled to mature within the year, but
some have been negotiated to be paid in 2023, Rappler.com relates.
"Out of the $1.3 billion in loan facilities through various
financial institutions, $1.18 billion have been drawn and all
originally carried maturity dates from April to October this year,"
Dito CME said.
Dito Telecommunity added that it had renewed its $500-million loan
facility with China Minsheng Banking Corporation to May 2023, while
loan facilities with several Bank of China branches totaling $800
million are in the process of finalization or will be renewed prior
to the maturity dates, according to Rappler.com.
Rappler.com adds that Dito CME chief financial officer Joseph John
Ong said, "We are confident that the bridge loan facilities will be
renewed until such time that these loan availments are converted
into our arranged long-term loans with the same creditor banks."
Headquartered in Taguig, Philippines, DITO CME Holdings Corp.
engages in the provision of telecommunications, multimedia, and
information technology services.
=================
S I N G A P O R E
=================
HODLNAUT TRADING: Files Judicial Management in Singapore
--------------------------------------------------------
Bloomberg News reports that cryptocurrency lender Hodlnaut, which
recently halted withdrawals, filed an application in Singapore to
be placed under a form of creditor protection.
Bloomberg relates that the move enables a temporary pause in legal
claims and proceedings so that the company can focus on a recovery
plan and rehabilitation, Hodlnaut said in a statement on its
website on Aug. 16. It said it filed the application for the
so-called judicial management with the Singapore High Court as of
Aug. 13.
Hodlnaut Trading Limited -- https://www.hodlnaut.com/ -- is a
Singapore-based platform that provides innovative financial
services for individual investors who can earn interest on their
cryptocurrencies.
ZIPMEX: Assets of Thailand's Users Locked Until Restructuring Deal
------------------------------------------------------------------
Nikkei Asia reports that Thai users of a service run by the
Singapore parent of cryptocurrency platform Zipmex face further
uncertainty until a deal is reached to restructure the embattled
digital assets company.
A court hearing held in Singapore on Aug. 15 revealed that frozen
assets of Thai users on the troubled platform held in its Z Wallet
and ZipUp+ products will remain locked until Zipmex reforms its
business, the Nikkei relates.
Jonathan Tang, senior associate at Morgan Lewis Stamford, which is
representing Zipmex in the city-state to protect the company from
bankruptcy, made this clear during the session.
"The general sentiment of the Thai users who have signed up to
ZipUp+ Singapore is that they want their assets in the Z Wallet to
be unfrozen so that they can deal with it," Tang noted in court,
which was conducted virtually, the Nikkei relays.
According to the Nikkei, the lawyer had sought a moratorium period
of five months to allow Zipmex to reach a restructuring deal.
Presiding Justice Aedit Abdullah granted a roughly three-month
reprieve till Dec. 2 instead, with the possibility of a further
extension.
The Nikkei relates that Tang explained that the company has
received three concrete investment proposals to reform itself, with
each investor wanting to pump capital into Zipmex in exchange for a
stake. Two of those proposals included two tranches of $2.5 million
to be injected into the company, the lawyer said.
"The restructuring plan is this: Once the investment is complete,
the company, or rather the [Zipmex] group, will resume withdrawals
on the Z Wallet, such that business will continue as usual for all
customers," he said.
Zipmex filed for bankruptcy protection in Singapore on July 22
after having more than $50 million in exposure to Celsius Network
and Babel Finance -- crypto lenders that have taken hits from the
recent plunge in cryptocurrency prices.
Some 200,000 customers of its Thai business had deposited fiat and
digital currency through the ZipUp+ service, which the Singapore
unit then invested into Celsius and Babel.
"When a Zipmex Thailand customer chooses to place its crypto asset
in the ZipUp+ program under Zipmex Singapore, they then enter into
a new set of terms and conditions with Zipmex Singapore that grant
ownership of the crypto asset to Zipmex Singapore," the report
quotes Tang as saying.
The Nikkei says the platform's troubles surfaced last month in
Thailand when it suspended trading and baht withdrawals. The
company had paused operations, citing market volatility and
liquidity problems faced by its Singapore unit.
It was the first admission by an Asian company of exposure to
U.S.-based Celsius, which has filed for bankruptcy, and Hong
Kong-based Babel, which is restructuring after halting withdrawals,
the report notes.
In court on Aug. 15, Tang said Zipmex received 60 objections to a
proposed moratorium, primarily from Thailand-based creditors with
added claims totaling $1.1 million.
On the other hand, support for the restructuring process amounted
to claims worth $6.5 million, the lawyer said in presenting the
case for the company to be given time to work out a deal, the
Nikkei relates.
In granting the moratorium, Justice Abdullah directed Zipmex to
hold a meeting for its Thailand-based creditors, where the
Singapore legal proceedings should be explained, in addition to the
status of potential restructuring deals. Tang proposed for the
meeting to be held in a month.
"I appreciate there are some questions and concerns, especially
from Thailand," Abdullah said. "I do hope that some of these
arrangements will address at least some of the concerns of the
creditors and all the companies concerned."
About Zipmex
Singapore-based Zipmex Pte Ltd -- https://zipmex.com/ -- is a
digital asset exchange that provides digital access to wealth
generating assets for the mass market. Zipmex offers services for
users in Thailand, Indonesia, Singapore and Australia.
As reported in the Troubled Company Reporter-Asia Pacific on Aug.
1, 2022, Southeast Asia-focused cryptocurrency exchange Zipmex said
it had filed for bankruptcy protection in Singapore, becoming the
latest victim of the global downturn in digital currencies.
Zipmex resumed withdrawals, a day after suspending them on July
20, and said it was working to address its exposure of US$53
million to crypto lenders Babel Finance and Celsius, Reuters said.
Zipmex's solicitors submitted five applications on July 22 seeking
moratoriums to prohibit legal proceedings against Zipmex for up to
six months, the cryptocurrency exchange said on July 27.
=====================
S O U T H K O R E A
=====================
SSANGYONG MOTOR: Posts KRW30.3B Net Loss in Half Yr. Ended June 30
------------------------------------------------------------------
Yonhap News reports that SsangYong Motor Co., the South Korean unit
of Mahindra & Mahindra Ltd., said on Aug. 16 its net losses
narrowed in the first half from a year earlier, helped by increased
exports.
Net losses for the six months ending in June narrowed to KRW30.3
billion (US$23 million) from KRW180.5 billion a year ago, the
company said in a statement, Yonhap discloses.
"Increased exports and companywide cost-cutting efforts helped prop
up the bottom line, resulting in narrowed losses," the statement
said.
According to Yonhap, the company said it will focus on improving
its financial status based on strong sales of the all-new Torres
SUV launched in the domestic market last month in the second half.
Operating losses also narrowed to KRW59.1 billion in the first six
months from KRW177.9 billion during the same period of last year.
Sales rose 24 percent to KRW1.42 trillion from KRW1.15 trillion
during the same period.
To further beef up its lineup, SsangYong plans to launch the
electrified version of the Torres late next year. It also plans to
introduce the electrified version of the Korando SUV under the
project name "KR10" and an electrified pickup truck in 2024.
Yonhap says the SUV-centered company plans to fill most of its
lineups with EV models in the Korean and European markets by 2030
but keep some of the lineups as combustion engine models in
developing markets, such as the Middle East and Latin America.
SsangYong does not have a plan to develop a new diesel-powered
vehicle due to stricter emissions regulations.
Its current product lineup consists of the Torres, Tivoli, Korando,
Rexton and Rexton Sports SUVs.
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 its
financial 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 R I L A N K A
=================
SRI LANKA: S&P Affirms 'SD' Foreign Currency Sovereign Ratings
--------------------------------------------------------------
S&P Global Ratings, on Aug. 15, 2022, affirmed its 'SD' long-term
and 'SD' short-term foreign currency sovereign ratings on Sri
Lanka. At the same time, S&P affirmed its 'CCC-' long-term and 'C'
short-term local currency sovereign ratings. The outlook on the
long-term local currency rating remains negative.
In addition, S&P lowered to 'D' from 'CC' the issue ratings on the
following bonds with missed coupon or principal payments:
-- US$650 million, 6.125% bonds due June 3, 2025.
-- US$1.0 billion, 6.825% bonds due July 18, 2026.
-- US$1.0 billion, 5.875% bonds due July 25, 2022.
-- US$500 million, 6.35% bonds due June 28, 2024.
S&P's transfer and convertibility assessment at 'CC' is unchanged.
Outlook
S&P's foreign currency rating on Sri Lanka is 'SD' (selective
default). It does not assign outlooks to 'SD' ratings because they
express a condition and not a forward-looking opinion of default
probability.
The negative outlook on the local currency rating reflects the high
risk to commercial debt repayments over the next 12 months in the
context of Sri Lanka's economic, external, and fiscal pressures.
Downside scenario
S&P could lower the local currency ratings if there are indications
of nonpayment or restructuring of Sri Lankan rupee-denominated
obligations.
Upside scenario
S&P said, "We could revise the outlook to stable or raise the local
currency ratings if we perceive that the likelihood of the
government's local currency debt being excluded from any debt
restructuring has increased. This could be the case if, for
example, the government receives significant donor funding, which
gives it some time to implement immediate and transformative
reforms.
"We would raise our long-term foreign currency sovereign credit
rating upon completion of the government's bond restructuring. The
rating would reflect Sri Lanka's post-restructuring
creditworthiness. Our post-restructuring ratings tend to be in the
'CCC' or low 'B' categories, depending on the sovereign's new debt
structure and capacity to support that debt."
Rationale
Sri Lanka's external public debt moratorium prevents payment of
interest and principal obligations due on the government's ISBs. As
such, interest payments due June 3, June 28, and July 18 on its
ISBs maturing 2024, 2025, and 2026, and the principal payment on
its July 25, 2022, ISB, would have been affected. Following the
missed payments, and given our expectation that payment will not be
made within 30 calendar days of the due date, S&P has lowered the
issue ratings on these bonds to 'D' (default).
Overdue payments now include the following bonds:
-- US$1.0 billion, 5.875% bonds due 2022.
-- US$1.25 billion, 5.75% bonds due 2023.
-- US$500 million, 6.35% bonds due 2024.
-- US$1.5 billion, 6.85% bonds due 2025.
-- US$650 million, 6.125% bonds due 2025.
-- US$1.0 billion, 6.825% bonds due 2026.
-- US$1.5 billion, 6.20% bonds due 2027.
-- US$1.25 billion, 6.75% bonds due 2028.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
DOWNGRADED
TO FROM
SRI LANKA
Senior Unsecured D CC
RATINGS AFFIRMED
SRI LANKA
Sovereign Credit Rating
Foreign Currency SD/--/SD
Local Currency CCC-/Negative/C
Transfer & Convertibility Assessment
Local Currency CC
SRI LANKA
Senior Unsecured CC
Senior Unsecured CCC-
Senior Unsecured D
SRILANKAN AIRLINES LTD.
Senior Unsecured CC
*********
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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