/raid1/www/Hosts/bankrupt/TCRAP_Public/220929.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
Thursday, September 29, 2022, Vol. 25, No. 189
Headlines
A U S T R A L I A
ELLUME LIMITED: Rich Lister Bruce Mathieson Caught Up in Collapse
FIRSTMAC MORTGAGE 2022-4: S&P Assigns Prelim BB Rating to E Notes
GROW SURGE: Second Creditors' Meeting Set for Oct. 4
HIGHPOINT PTY: Second Creditors' Meeting Set for Oct. 4
IC TRUST 2022-1: Moody's Assigns (P)B2 Rating to AUD5.8MM C Notes
INDUSTRIAL CONTAINERS: First Creditors' Meeting Set for Oct. 5
INTEGRATED GREEN: Supreme Court Judge Appoints Liquidator
OLYMPUS 2022-1: S&P Assigns BB+ (sf) Rating to Class E Notes
OVATO LIMITED: IVE Group Completes Purchase of Select Assets
PEPPER I-PRIME 2020-1: S&P Raises Class F Notes Rating to BB-(sf)
PEPPER RESIDENTIAL NO.34: S&P Assigns Prelim B+ Rating to F Notes
RESIMAC TRIOMPHE 2022-2: S&P Assigns B+ (sf) Rating to Cl. F Notes
TEKNO PERFORMANCE: Placed Into Voluntary Liquidation
TOUCHLINE PTY: Second Creditors' Meeting Set for Oct. 4
UNREAL STEEL: First Creditors' Meeting Set for Oct. 5
C H I N A
CHINA EVERGRANDE: Shenzhen Govt-Owned Firm to Complete 4 Projects
CHINA HONGQIAO: Moody's Ups CFR to Ba2 & Alters Outlook to Stable
CHINA SCE GROUP: Fitch Cuts Foreign Currency IDR to 'B-'
CIFI HOLDINGS: Fitch Lowers LongTerm IDRs to 'BB-', Outlook Neg.
GOME HOLDINGS: Fails to Pay Workers, May Lay Off More Staff
RED STAR: S&P Downgrades Long-Term ICR to 'B-', Outlook Negative
YANKUANG ENERGY: Fitch Affirms 'BB+' Foreign Currency IDR
H O N G K O N G
MEX GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
I N D I A
BALAJI COTTON: CARE Keeps B- Debt Rating in Not Cooperating
BALMUKH GOLDJEWEL: Insolvency Resolution Process Case Summary
CHD DEVELOPERS LIMITED: Insolvency Resolution Process Case Summary
ESES BIO-WEALTH: CRISIL Keeps D Debt Ratings in Not Cooperating
GOVIND ELECTRICA: Insolvency Resolution Process Case Summary
GR MULTIFLEX PACKAGING: Insolvency Resolution Process Case Summary
HEADWAY LIFE: CARE Assigns B+ Rating to INR19cr LT Loan
ILD HOUSING: CARE Lowers Rating on INR33.48cr LT Loan to D
INDIA DAIRY: CARE Keeps B Debt Rating in Not Cooperating
INTERCON CONTAINER: Insolvency Resolution Process Case Summary
J.B. COTTON: CARE Keeps B- Debt Rating in Not Cooperating
JAHANGIR BIRI: CRISIL Keeps D Debt Ratings in Not Cooperating
JAIPRAKASH ASSOCIATES: SBI Files Insolvency Plea
JALARAM GINNING: CARE Keeps B- Debt Rating in Not Cooperating
JEPH BEV PRIVATE: Insolvency Resolution Process Case Summary
KARVY RENEWABLE: CRISIL Keeps C Debt Rating in Not Cooperating
MOGALS EDUCATIONAL: CRISIL Keeps D Ratings in Not Cooperating
N. C. FOODS: CARE Keeps B- Debt Rating in Not Cooperating
NALANDA BUILDERS: CRISIL Keeps D Debt Ratings in Not Cooperating
OM MOTORS: CARE Keeps B-/A4 Debt Rating in Not Cooperating
OM SHARDA: CARE Keeps B+ Debt Rating in Not Cooperating Category
OPAL ASIA: Insolvency Resolution Process Case Summary
PIPE & METAL: CRISIL Keeps D Debt Ratings in Not Cooperating
PMR INFRASTRUCTURES: CRISIL Keeps D Ratings in Not Cooperating
PUSHPA BUILDERS: Insolvency Resolution Process Case Summary
R. R. PIPES: CARE Keeps D Debt Rating in Not Cooperating
ROHINI METALS: CRISIL Keeps D Debt Rating in Not Cooperating
SARADHAMBIKA PAPER: CARE Lowers Rating on INR6cr LT Loan to B
SAVITRI SWADESHI: CARE Keeps B- Debt Rating in Not Cooperating
SHIVOM COTSPIN: CARE Lowers Rating on INR24.17cr LT Loan to B
SIMRAN FOOD: CARE Keeps B Debt Rating in Not Cooperating Category
SINNAR THERMAL: Insolvency Resolution Process Case Summary
SPICEJET LTD: Continues at 50% Capacity, 80 Pilots on Unpaid Leave
STANDARD PAPER: CRISIL Keeps D Debt Rating in Not Cooperating
STARLITE BUILDERS: Insolvency Resolution Process Case Summary
ULTRA ALLUMINIUM: CARE Keeps C Debt Rating in Not Cooperating
VARDHMAN ENTERPRISE: CRISIL Keeps D Ratings in Not Cooperating
M A L A Y S I A
KHEE SAN: Gets Court Nod to Proceed with Scheme of Arrangement
KONSORTIUM TRANSNASIONAL: To Exit Express Bus Business
N E W Z E A L A N D
APFT LIMITED: Court to Hear Wind-Up Petition on Oct. 4
ICE WORLD: Creditors' Proofs of Debt Due on Oct. 20
NEW ZEALAND LIVESTOCK: Creditors' Proofs of Debt Due on Nov. 3
RESIMAC VERSAILLES 2020-1: S&P Affirms BB(sf) Rating on Cl. E Notes
SHANE MOORE: Court to Hear Wind-Up Petition on Oct. 4
WOODGROWTH INVESTMENTS: Creditors' Proofs of Debt Due on Oct. 18
S I N G A P O R E
GLOBAL ADVENTURE: Commences Wind-Up Proceedings
GLOBAL CONQUEST: Commences Wind-Up Proceedings
GOQUO PTE: Creditors' Proofs of Debt Due on Oct. 26
S.A.M. MARKETING: Court Enters Wind-Up Order
SAMTRADE CUSTODIAN: Court Enters Wind-Up Order
V I E T N A M
HANOI POWER: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
HO CHI MINH CITY POWER: Fitch Affirms 'BB' Foreign Currency IDR
VIETNAM OIL: Fitch Affirms 'BB' Foreign Currency IDR, Outlook Pos.
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A U S T R A L I A
=================
ELLUME LIMITED: Rich Lister Bruce Mathieson Caught Up in Collapse
-----------------------------------------------------------------
Australian Financial Review reports that pubs baron Bruce Mathieson
has emerged as one of the biggest investors in collapsed COVID-19
rapid test maker Ellume, owed almost AUD11 million via various
investment entities.
Other major creditors in the business, revealed in meeting notes
lodged with the Australian Securities and Investments Commission,
include specialist hybrid credit fund manager Pure Asset Management
(also owed close to AUD11 million), German biotech Qiagen (owed
AUD15.4 million) and Hong Kong's Kaifa Technologies (owed AUD22.3
million), the Financial Review discloses.
About Ellume Limited
Ellume Limited develops, manufactures, and commercializes the next
generation of digitally enabled diagnostic products for healthcare
professionals and consumers.
Joanne Dunn and John Park of FTI Consulting were appointed as
administrators of Ellume Limited on Aug. 31, 2022.
FIRSTMAC MORTGAGE 2022-4: S&P Assigns Prelim BB Rating to E Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to seven of the
eight classes of prime residential mortgage-backed securities
(RMBS) to be issued by Firstmac Fiduciary Services Pty Ltd. as
trustee for Firstmac Mortgage Funding Trust No.4 Series 2022-4.
The preliminary ratings assigned to the prime floating-rate RMBS
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. Credit support for the rated notes is
provided by subordination, excess spread, and lenders' mortgage
insurance (LMI). The credit support provided to the rated notes is
sufficient to cover the assumed losses at the applicable rating
stress. S&P's assessment of credit risk considers Firstmac Ltd.'s
(Firstmac's) underwriting standards and approval processes, which
are consistent with industry-wide practices, and the strong
servicing quality of Firstmac, and the support provided by the LMI
policies on 50.7% of the loan portfolio.
The rated notes can meet timely payment of interest--excluding the
residual interest due on the class B, class C, class D and class E
notes--and ultimate payment of principal under the rating stresses.
Key rating factors are the level of subordination provided, the LMI
cover, the liquidity reserve, the principal draw function, the
interest-rate swap, and the provision of an extraordinary expense
reserve. S&P's analysis is on the basis that the notes are fully
redeemed by their legal final maturity date, and it does not assume
the notes are called at or beyond the call date.
S&P said, "Our ratings also take into account the counterparty
exposure to Westpac Banking Corp. as bank account provider and
Commonwealth Bank of Australia as interest-rate swap provider. The
transaction documents for the facilities include downgrade language
consistent with our counterparty criteria.
"We also have 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
Firstmac Mortgage Funding Trust No.4 Series 2022-4
Class A-1, A$1,500.00 million: AAA (sf)
Class A-2, A$123.50 million: AAA (sf)
Class A-3, A$52.90 million: AAA (sf)
Class B, A$46.10 million: AA (sf)
Class C, A$22.00 million: A (sf)
Class D, A$10.10 million: BBB (sf)
Class E, A$4.80 million: BB (sf)
Class F, A$5.30 million: Not rated
GROW SURGE: Second Creditors' Meeting Set for Oct. 4
----------------------------------------------------
A second meeting of creditors in the proceedings of Grow Surge Pty
Ltd has been set for Oct. 4, 2022, at 4:00 p.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 Oct. 4, 2022, at 10:00 a.m.
Jason Tang and Ozem Kassem of Cor Cordis were appointed as
administrators of the company on Sept. 9, 2022.
HIGHPOINT PTY: Second Creditors' Meeting Set for Oct. 4
-------------------------------------------------------
A second meeting of creditors in the proceedings of Highpoint Pty
Ltd has been set for Oct. 4, 2022, at 3:00 p.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 Oct. 4, 2022, at 10:00 a.m.
Jason Tang and Ozem Kassem of Cor Cordis were appointed as
administrators of the company on Sept. 9, 2022.
IC TRUST 2022-1: Moody's Assigns (P)B2 Rating to AUD5.8MM C Notes
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Moody's Investors Service has assigned the following provisional
ratings to the notes to be issued by Perpetual Corporate Trust
Limited as trustee of IC Trust 2022-1.
Issuer: IC Trust Series 2022-1
AUD61.0 million Class A Notes, Assigned (P)A3 (sf)
AUD3.9 million Class B Notes, Assigned (P)Ba2 (sf)
AUD5.8 million Class C Notes, Assigned (P)B2 (sf)
AUD9.3 million Class D Notes are not rated by Moody's
IC Trust 2022-1 is a cash securitisation of non-conforming consumer
and commercial auto loans extended to borrowers in Australia. The
loans were originated by Fin One Pty Ltd (Fin One, unrated) and Fin
One Commercial Pty Ltd (Fin One Commercial, unrated), both wholly
owned subsidiaries of Investors Central Limited (unrated) and are
serviced by Fin One.
Fin One, a privately owned non-bank lender, was established in 2010
with a focus of providing auto loans to non-conforming consumer
borrowers in the Australian market. In 2016, the lender expanded
into financing of commercial auto loans.
RATINGS RATIONALE
The provisional ratings take into account, among other factors, an
evaluation of the underlying receivables and their expected
performance, evaluation of the capital structure and credit
enhancement provided to the notes, availability of excess spread
over the life of the transaction, the liquidity reserve in the
amount of 2.50% of the stated balance of the notes, the legal
structure, and the experience of Fin One as servicer and the
availability of a back-up servicer.
According to Moody's, the transaction benefits from credit
strengths such as the high level of excess spread that is available
to cover losses from defaulted receivables and the availability of
a yield reserve.
At the same time, Moody's notes that the transaction features some
credit weaknesses such as high proportion of borrowers with lower
credit scores and exposure to interest rate risk.
In addition, Moody's notes that Fin One is a specialist servicer of
non-conforming auto loans. In an event of servicer transfer, there
is a risk of higher level of defaults in the portfolio, if the
substitute servicer does not have the same specialised approach to
servicing as Fin One. Furthermore, Moody's notes Fin One's
relatively limited securitisation experience (the lender started
securitising only in 2021) and its concentrated ownership
structure.
Notable transactional features are as follows:
While the assets in the pool are fixed rate, the rated notes bear
a floating rate of interest — bank bill swap rate (BBSW) plus the
respective fixed note margins. There is no hedging in this
transaction, which represents a material risk in a rising interest
rate environment. Moody's have taken this into account in Moody's
analysis by incorporating BBSW increases over the life of the
transaction.
Once step-down conditions are satisfied, all notes, excluding the
class D notes, will receive their pro-rata share of principal.
Step-down conditions include, among others, that the subordination
to the Class A notes is at least 1.5 times the initial level of
subordination, and that there are no unreimbursed charge-offs.
A yield reserve will be available to cover interest payment
shortfalls on the required payments and any losses not covered by
the excess spread. The reserve is not funded at closing and will
build up from excess spread up to an amount of 2% of the initial
invested amount of the notes, that is AUD1,600,000. If the notes
are not redeemed on the call date, all excess available income will
be trapped in the yield reserve.
Perpetual Corporate Trust Limited is the back-up servicer. If Fin
One is terminated as servicer, Perpetual will take over the
servicing role in accordance with the standby servicing deed and
its back-up servicing plan.
Key model and portfolio assumptions:
Moody's portfolio credit enhancement ("PCE") — representing the
loss that Moody's expects the portfolio to suffer in the event of a
severe recession scenario — is 48.0%. Moody's mean expected
default rate for this transaction is 15.8% and the assumed recovery
rate is 10.0%. Expected defaults, recoveries and PCE are parameters
used by Moody's to calibrate its lognormal portfolio loss
distribution curve and to associate a probability with each
potential future loss scenario in Moody's cash flow model to rate
auto ABS.
The assumed default rate and PCE are higher than that for other
Australian auto ABS, reflecting the non-conforming nature of the
securitised portfolio. The lower-than-average assumed recovery rate
reflects Fin One's historical experience.
Key pool features are as follows:
The weighted average seasoning of the portfolio is 8.7 months,
while the weighted average remaining term is 51.4 months;
Weighted average Equifax credit score for the pool is 504. Around
54.1% of loans in the pool are to borrowers with Equifax credit
score below 500;
Interest rates in the portfolio range from 12.0% to 26.0%, with a
weighted average interest rate of 20.2%;
Around 83.6% of the loans are secured by used vehicles;
Around 59.3% of the pool is composed of consumer loans and 40.7%
of the pool is composed of commercial loans.
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:
Upgrade
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the ratings. Moody's current expectations of loss
could be better than its original expectations because of fewer
defaults by underlying obligors. The Australian job market is a
primary driver of performance.
Ratings could also be upgraded, reflecting the accumulation of
experience by the servicer, together with a lowering of operational
risk associated with relatively small originators.
Downgrade
Levels of credit protection that are insufficient to protect
investors against current expectations of loss could lead to a
downgrade of the ratings. Moody's current expectations of loss
could be worse than its original expectations because of more
defaults by underlying obligors. The Australian job market is a
primary driver 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.
INDUSTRIAL CONTAINERS: First Creditors' Meeting Set for Oct. 5
--------------------------------------------------------------
A first meeting of the creditors in the proceedings of Industrial
Containers Pty. Limited (trading as Vaclift) will be held on Oct.
5, 2022, at 11:00 a.m. via Zoom.
Claudio Trimboli of Charles & Co. was appointed as administrator of
the company on Sept. 21, 2022.
INTEGRATED GREEN: Supreme Court Judge Appoints Liquidator
---------------------------------------------------------
Newcastle Herald reports that a Supreme Court judge has labelled
the failure of a company to secure a US$90 million loan to keep it
afloat, contrary to a series of announcements to the Australian
Stock Exchange, as a "matter of significant concern".
According to the report, Justice Kate Williams was assessing
Integrated Green Energy Solutions' (IGE) financial position in 2021
following an application by Sydney-based property developer Charles
McIntosh's Mac Wealth Holdings (Singapore) to place it in
liquidation over a AUD12.4 million debt.
Mac Wealth loaned the company AUD10 million and was owed at least
AUD2.4 million in interest, Newcastle Herald says.
Newcastle Herald relates that the circumstances surrounding the
AUD10 million loan are now the subject of another battle due in the
Supreme Court next month between Mr. McIntosh and Newcastle
accountant Paul Siderovski and his accounting firm SiDCOR,
following disputed allegations of commercially misleading conduct.
IGE had ambitious plans to turn plastics into fuel and applied to
the court in May 2021 for an adjournment of Mr. McIntosh's winding
up application, claiming it was in the process of securing millions
in funding that would save it from liquidation.
But the court heard from IGE's then administrator Trent Devine, of
Jirsch Sutherland, who was appointed three days before the hearing,
Newcastle Herald relays. He detailed an initial list of creditors
owed about AUD40 million.
"His inquiries had been sufficient to allow him to accept without
hesitation in cross-examination that IGE is insolvent and is likely
to have been insolvent for some time," the report quotes Justice
Williams as saying.
Newcastle Herald says the court heard IGE made at least five
announcements to the ASX between August 2019 and January 2020 about
delays in securing the US$90 million loan from US-based Structured
Growth Capital (SGC), which IGE was reliant on to remain afloat and
complete planned plastic-to-fuel plants in Amsterdam and England.
Reasons for the delays included the COVID-19 pandemic, changes to
the loan agreement and stability of "major markets".
According to Newcastle Herald, Justice Williams raised concern
about the language used by IGE in its ASX public announcements, and
other correspondence, about the likelihood of the loan
eventuating.
She said it professed "commitment", but was couched in terms of 'in
a position to', 'expectation' and 'anticipation', which fell short
of an actual agreement.
Asking for more time to secure funding, IGE executive chairman Paul
Dickson detailed a number of possible funding sources, but Justice
Williams said "assuming" SGC was willing to provide the loan, the
repeated delays demonstrated it was "unable to do so," Newcastle
Herald relays.
"The adjournment of the winding up application will have the effect
of deferring the appointment of a liquidator who would be in a
position to take such steps as they may consider appropriate to
investigate potential insolvent trading claims against directors
and any other recovery action," she said.
Newcastle Herald relates that IGE provided a letter from SGC to the
court indicating that some money had been placed with two overseas
banks in October 2020 ready to be transferred, but no money was
ever paid.
Justice Williams noted a discrepancy in the letter which listed the
loan amount as US$50 million, while the loan agreement was for
US$90 million.
"No funds flowed from SGC to IGE under the SGC loan agreement in
the period of almost four years since it was signed on or about 6
July 2017," she said.
Justice Williams ordered a liquidator be appointed to take control
of IGE, the report notes.
OLYMPUS 2022-1: S&P Assigns BB+ (sf) Rating to Class E Notes
------------------------------------------------------------
S&P Global Ratings assigned its ratings to seven classes of prime
residential mortgage-backed securities (RMBS) issued by Perpetual
Corporate Trust Ltd. as trustee of Olympus 2022-1 Trust. Olympus
2022-1 Trust is a securitization of prime residential mortgages
originated by Athena Mortgage Pty Ltd. (Athena). This is the first
stand-alone RMBS transaction rated by S&P Global Ratings consisting
fully of loans originated by Athena.
The ratings we have assigned to the floating-rate RMBS 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
Athena's underwriting standards and approval process. Its
assessment also takes into account Athena's servicing and
underwriting standards.
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, a loss reserve partially funded at transaction
close and built up from excess spread, the principal draw function,
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
National Australia Bank Ltd. as bank account provider and Westpac
Banking Corp. as the liquidity facility 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."
Ratings Assigned
Olympus 2022-1 Trust
Class A1S, A$99.80 million: AAA (sf)
Class A1L, A$260.00 million: AAA (sf)
Class A2, A$22.60 million: AAA (sf)
Class B, A$5.40 million: AA (sf)
Class C, A$4.80 million: A (sf)
Class D, A$3.00 million: BBB (sf)
Class E, A$1.20 million: BB+ (sf)
Class F, A$3.20 million: Not rated
OVATO LIMITED: IVE Group Completes Purchase of Select Assets
------------------------------------------------------------
With revenue last year of circa AUD760 million, diversified
marketing and communications business IVE Group Limited - with the
assistance of Grant Thornton - has successfully completed the
acquisition of selected printing and finishing assets of Ovato
Limited.
As a result of the transaction and when fully integrated, IVE will
become the only comprehensive Heat Set Web Offset (HSWO) print
producer in Australia. The transaction return metrics are predicted
to significantly uplift IVE's FY23 revenue (additional expected
annual revenues of AUD160 million) and generate meaningful
shareholder value.
Grant Thornton acted as IVE's advisors throughout the multi-faceted
transaction and advised IVE on all financial and structuring
aspects of the transaction.
Said Jahani, National Managing Partner - Financial Advisory at
Grant Thornton said: "We helped our client, IVE work through a very
complex road to deliver with a number of innovative solutions to
deliver a successful outcome. The transaction had many challenges
which we were able to navigate through with the IVE team. These
included Ovato being in Voluntary Administration which meant the
transaction had to be completed in an expedited timeframe, IVE
requiring the approval of the Australian Competition and Consumer
Commission (ACCC), and the management of multiple stakeholders.
"In addition, the expedited timeframe was essential in order to
give certainty to Ovato's customers, suppliers, lenders and
employees regarding the future of the business. We're proud to have
assisted IVE in this transaction to ensure the continuity of
product and service delivery to existing Ovato customers."
About Ovato
Headquartered in Pyrmont, Australia, Ovato Limited (ASX:OVT) --
https://www.ovato.com.au/ -- provides marketing, digital premedia,
commercial printing, letterbox delivery, and magazine distribution
services in Australia and New Zealand. The company prints and
distributes catalogues, magazines, books, brochures and flyers,
stationery, newspapers, directories, packaging, and point of sale
products. It serves customers in the retail, publishing, ecommerce,
FMCG, and other sectors. The company was formerly known as PMP
Limited and changed its name to Ovato Limited in February 2019.
Chris Hill, Ben Campbell and Ross Blakeley of FTI Consulting were
appointed as administrators of Ovato Limited and related entities
on July 21, 2022.
Ovato announced to the ASX on July 21 that ongoing volatile market
conditions, the increased cost of raw materials and legacy cost
issues had continued to impact the business and led to the decision
to appoint administrators, Stuff.co.nz said.
PEPPER I-PRIME 2020-1: S&P Raises Class F Notes Rating to BB-(sf)
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S&P Global Ratings raised its ratings on seven classes of notes
issued by Permanent Custodians Ltd. as trustee of Pepper I-Prime
2018-2 Trust and Pepper I-Prime 2020-1 Trust. At the same time, S&P
affirmed its ratings on eight classes of notes. The transactions
are a securitization of prime residential mortgages originated by
Pepper Homeloans Pty Ltd. (Pepper).
S&P said, "The rating actions reflect our view of the credit risk
of the pools, which have been amortizing in line with our
expectations. Credit support comprises note subordination for all
rated notes and excess spread to the extent available. Current
loan-to-value ratios across the pools have been declining, lowering
our expectations of losses for the pools.
"Our expectation is that the various mechanisms to support
liquidity within the transactions, including an amortizing
liquidity facility and principal draws, are sufficient under our
cash-flow stress assumptions to ensure timely payment of
interest."
S&P has factored into its analysis the arrears performance of these
transactions. For the 2018-2 transaction, the arrears performance
generally has been higher relative to the Standard & Poor's
Performance Index (SPIN) for prime loans in the past 12 months. For
the 2020-1 transaction, arrears performance has generally tracked
equal to or below the SPIN for prime loans in the past 12 months.
As of Aug. 31, 2022, loans greater than 90 days in arrears
represent 0.15% for 2018-2 and 0.17% for 2020-1. Losses to date
have been minimal and all have been covered by excess spread. There
have been no charge-offs to any of the notes.
For the raised ratings in both transactions, constraining factors
on the magnitude of upgrades are the exposure to various
characteristics that may be more sensitive to changes in the
economic environment. These characteristics include investment
loans, interest-only loans, relatively higher loan-to-value ratios,
and exposure to properties with valuations greater than $1 million,
which are more susceptible to volatility. An additional
constraining factor for 2018-2 is borrower concentration risk,
which S&P expects to increase as the pool continues to amortize;
the largest 10 borrowers make up 8.37% of the pool.
Ratings Raised
Pepper I-Prime 2020-1 Trust
Class B: to AAA (sf) from AA (sf)
Class C: to AA (sf) from A (sf)
Class D: to A- (sf) from BBB (sf)
Class E: to BBB- (sf) from BB (sf)
Class F: to BB- (sf) from B (sf)
Pepper I-Prime 2018-2 Trust
Class C: to AA+ (sf) from AA (sf)
Class F: to BB (sf) from B+ (sf)
Ratings Affirmed
Pepper I-Prime 2020-1 Trust
Class A1-a: AAA (sf)
Class A2: AAA (sf)
Pepper I-Prime 2018-2 Trust
Class AR-u: AAA (sf)
Class A1-a: AAA (sf)
Class A2: AAA (sf)
Class B: AAA (sf)
Class D: A (sf)
Class E: BBB (sf)
PEPPER RESIDENTIAL NO.34: S&P Assigns Prelim B+ Rating to F Notes
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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 Pepper Residential Securities Trust No.34. Pepper
Residential Securities Trust No.34 is a securitization of
nonconforming and prime residential mortgages originated by Pepper
Homeloans Pty Ltd.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including its view that the credit support is sufficient
to withstand the stresses it applies. The credit support for the
rated notes comprises note subordination and excess spread. The
assessment of credit risk takes into account the underwriting
standard and centralized approval process of the seller, Pepper
Homeloans.
-- The availability of a retention amount and amortization amount,
which will all be funded by excess spread, but at various stages of
the transaction's term. They will have separate functions and
timeframes, including reducing the balance of notes outstanding.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity facility
equal to 1.5% of the outstanding balance of the notes, principal
draws, and a yield-enhancement reserve--to the extent it is
funded--are sufficient under its stress assumptions to ensure
timely payment of interest.
-- That S&P also has factored into its ratings the legal structure
of the trust, which has been established as a special-purpose
entity and meets our criteria for insolvency remoteness.
Ratings Assigned
Pepper Residential Securities Trust No.34
Class A1-s, A$150.0 million: AAA (sf)
Class A1-a, A$225.0 million: AAA (sf)
Class A2, A$70.5 million: AAA (sf)
Class B, A$25.5 million: AA (sf)
Class C, A$10.5 million: A (sf)
Class D, A$7.5 million: BBB (sf)
Class E, A$3.5 million: BB (sf)
Class F, A$3.5 million: B+ (sf)
Class G, A$4.0 million: Not rated
RESIMAC TRIOMPHE 2022-2: S&P Assigns B+ (sf) Rating to Cl. F Notes
------------------------------------------------------------------
S&P Global Ratings assigned its ratings to eight classes of prime
residential mortgage-backed securities (RMBS) issued by Perpetual
Trustee Co. Ltd. as trustee for RESIMAC Triomphe Trust - RESIMAC
Premier Series 2022-2. RESIMAC Triomphe Trust - RESIMAC Premier
Series 2022-2 is a securitization of prime residential mortgage
loans originated by RESIMAC Ltd.
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including that this is a closed portfolio, which means
no further loans will be assigned to the trust after the closing
date.
-- S&P's view that the credit support is sufficient to withstand
the stresses it applies. This credit support comprises note
subordination for the rated notes and lenders' mortgage insurance
on 23.7% of the loan portfolio, which covers 100% of the face value
of these loans, accrued interest, and reasonable costs of
enforcement.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including principal draws, and a
liquidity facility equal to 0.75% of the outstanding balance of the
rated notes, are sufficient under its stress assumptions to ensure
timely payment of interest.
-- The extraordinary expense reserve of A$150,000, funded by
RESIMAC Ltd. before closing, available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
Ratings Assigned
RESIMAC Triomphe Trust - RESIMAC Premier Series 2022-2
Class A1, A$420.00 million: AAA (sf)
Class A2, A$30.00 million: AAA (sf)
Class AB, A$25.00 million: AAA (sf)
Class B, A$8.50 million: AA+ (sf)
Class C, A$7.75 million: A+ (sf)
Class D, A$5.00 million: BBB (sf)
Class E, A$1.80 million: BB (sf)
Class F, A$0.80 million: B+ (sf)
Class G, A$1.15 million: Not rated
TEKNO PERFORMANCE: Placed Into Voluntary Liquidation
----------------------------------------------------
Speedcafe.com reports that the company known previously as 'Tekno
Performance', of which Jonathon Webb is sole director, has been
placed into voluntary liquidation with a debt exceeding AUD390,000
to the Australian Taxation Office (ATO).
Speedcafe.com relates that Australian Securities & Investments
Commission (ASIC) records show that a company by the name of
'A.C.N. 605 532 107 PTY LTD' (herein referred to subsequently as
'Tekno Performance') gave notification that it was winding up on
September 19.
That company was previously known as 'TEKNO PERFORMANCE PTY LTD',
from the time of registration on April 28, 2015 until the change to
the current name, which appears to be derived from its Australian
Company Number (ACN: 605 532 107), on September 25, 2019.
Records show that its sole director and secretary is a 'Jonathon
Stephen Webb' born in Sydney on December 10, 1983, while the
current principal place of business is 110 Ferry Road, Southport,
Queensland 4215, and principal place of business immediately prior
was 11 Dixon Street, Yatala, Queensland 4207, Speedcafe.com
discloses.
That Southport address is an exact match for the business which
appears to be trading presently as 'Tekno Bespoke', and the Yatala
address for Tekno Performance's former premises, which also housed
the 'Tekno Autosports' Supercars team before its move south as
'Team Sydney'.
Steven Neville Staatz was appointed external administrator of Tekno
Performance on August 23, Speedcafe.com discloses.
The ATO is listed as both a priority creditor and an unsecured
creditor on the Creditor Listing of Reports which is contained in
documentation lodged by that administrator with ASIC.
The priority creditor figure is AUD44,784.67 while the unsecured
creditor figure is AUD346,917.63.
'Priority creditors' are a special class of unsecured creditor who
have employment entitlements, including government-mandated Super
Guarantee Contributions.
As such, the AUD44,784.67 figure represents unpaid superannuation.
The ATO is the only priority creditor but one of six unsecured
creditors, including 'Jonathon Webb' himself, though those other
five are owed precisely AUD0.00 each, Speedcafe.com says.
Of the five secured creditors, only a 'Stephen John Webb' is owed
money, although that AUD65,000.00 figure is listed under 'Advised'
only rather than 'ROCAP' ('Report on company activities and
property', an ASIC standard for liquidators introduced in 2018).
Notably, while 'Tekno Bespoke' appears to be trading to this day,
the Initial Notice to Creditors states that Tekno Performance
ceased trading in February, according to Speedcafe.com.
"The director disclosed in his submitted Report on Company
Activities and Property (ROCAP) that the Company previously
provided services for vehicle modifications," it reads, in part,
under the section 'Business Operations'.
"The director also advised that business operation ceased trading
on February 24, 2022 due to his ill health, the market decline in
automotive service, with these issues coinciding with the COVID-19
pandemic."
However, the domain 'TEKNOBESPOKE.COM.AU', which is registered to
'Kobe Gett TEKNO Discretionary Trust', was last modified on March
3, 2022, according to internet registration records.
Furthermore, a 'TEKNO BESPOKE PTY LTD' was registered with ASIC on
January 18, 2022, 28 business days before Tekno Performance/'605
532 107' is said to have ceased trading.
It too, counts a 'Jonathon Stephen Webb' who was born in Sydney on
December 10, 1983 as a director, and its official principal place
of business is indeed 110 Ferry Road, Southport, Queensland 4215.
That is, a company with a very similar name, which is engaged in a
similar/identical line of business, with a common director and
common place of business, was registered barely weeks before that
which is now in liquidation is said to have ceased trading.
TOUCHLINE PTY: Second Creditors' Meeting Set for Oct. 4
-------------------------------------------------------
A second meeting of creditors in the proceedings of Touchline Pty
Ltd has been set for Oct. 4, 2022, at 2:00 p.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 Oct. 4, 2022, at 10:00 a.m.
Jason Tang and Ozem Kassem of Cor Cordis were appointed as
administrators of the company on Sept. 9, 2022.
UNREAL STEEL: First Creditors' Meeting Set for Oct. 5
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Unreal Steel
Pty Ltd will be held on Oct. 5, 2022, at 10:00 a.m. via via
telephone or video.
Alan Walker and Glenn Livingstone of WLP Restructuring were
appointed as administrators of the company on Sept. 24, 2022.
=========
C H I N A
=========
CHINA EVERGRANDE: Shenzhen Govt-Owned Firm to Complete 4 Projects
-----------------------------------------------------------------
Reuters reports that China Evergrande Group is working with a real
estate investment and operations firm owned by the Shenzhen
government to complete four property developments in the tech hub,
the two companies said.
They said in a joint statement posted on the Wechat account of
Evergrande's Shenzhen unit on Sept. 26 that as instructed by the
authorities, Evergrande has introduced Shenzhen Longgang Ancheng
Investment Operation Co Ltd into four developments situated in the
Longgang district, Reuters relates.
The state-owned firm will help with the project construction to
ensure delivery of homes to buyers, they said.
According to Reuters, Evergrande chairman Hui Ka Yan said earlier
this month construction of all projects across the country will
resume by the end of September, updating an earlier timeline that
was not met.
Struggling with more than $300 billion of liabilities, Evergrande
was forced to suspend construction at many projects late last year.
As of mid-September, 38 of 706 projects in China had not resumed
construction, the company said this month.
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.
CHINA HONGQIAO: Moody's Ups CFR to Ba2 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service has upgraded China Hongqiao Group
Limited's (Hongqiao) corporate family rating to Ba2 from Ba3, and
its senior unsecured rating to Ba3 from B1.
At the same time, Moody's has revised the outlook on the ratings to
stable from positive.
"The rating upgrade reflects the company's strengthened capital
structure with debt reduction, which has led to greater financial
flexibility, better funding access and lower funding costs," says
Roy Zhang, a Moody's Vice President and Senior Analyst.
"Such solid capital structure, low leverage and very good liquidity
provide ample buffer to the market volatility inherent in the
aluminium industry," adds Zhang.
Hongqiao's relocation projects enable it to gain secured access to
hydropower, which will partially reduce the company's regulatory
risk exposure associated with China's carbon neutralization plans.
RATINGS RATIONALE
Hongqiao's Ba2 CFR reflects the company's leading position in the
aluminum industry, long operating history and advanced low-cost
production facilities. The rating also reflects Hongqiao's
vertically integrated business model, which has led to strong
profitability and high utilization compared with its domestic
peers.
On the other hand, Hongqiao's rating is constrained by the
cyclicality of the aluminum industry, regulatory risks, its
concentrated ownership and aggressive expansion in the past.
The company's revenue reached RMB130 billion for the last twelve
month period ended June 30, 2022. It produced 2.93 million tons of
aluminum in the first half of 2021, accounting for about 15% of
domestic production or 9% of global production. Its financial
leverage, as measured by total debt to EBITDA, declined to 1.8x as
of the end of June 2022, which provides sufficient headroom in its
current rating level.
Moody's expects aluminium prices to decline from the peak level,
reflecting the slower economic growth and weaker demand outlook.
Nevertheless, the agency expects Hongqiao to remain profitable and
sustain free cash flow generation in the next 12-18 months,
supported by its cost advantage from its integrated operations and
leading market position.
Moody's forecasts the company's leverage will remain below 2.5x
over the next 12-18 months, supported by its efforts to reduce debt
and its decent profitability.
Hongqiao lowered its total debt to RMB61.5 billion as of June 2022,
from RMB75.5 billion as of the end of 2020. Strong operating cash
flow and an equity fundraising helped with the debt reduction.
The company still held RMB49.2 billion in cash on hand as of June
2022. This provides the company with financial flexibility to
further reduce its debt while maintaining good liquidity. Its cash
to short-term debt ratio increased to 1.4x as of June 2022.
Moody's expects funding access to improve for the company. Hongqiao
raised equity and convertible bonds in 2021, and raised onshore
bonds in 2022 at lower costs compared with the previous three
years.
Hongqiao plans to relocate 4 million tons in capacity (out of a
total 6.46 million tons in capacity) to Yunnan province from
Shandong province over the next few years. The strategic move will
enable the company to use hydropower as a primary energy source and
reduce its reliance on coal-fired energy over time. This aligns
with Chinese government's carbon neutralization strategy and
reduces the company's regulatory risk exposure and uncertainties.
Hongqiao's liquidity is very good. The company had cash and
cash-like sources of about RMB49.2 billion as of June 2022. This,
together with its projected strong operating cash flow, is
sufficient to cover its short-term debt and other financial
obligations over the next 12-18 months.
The Ba3 senior unsecured bond rating is one notch lower than it
would otherwise be due to structural subordination risk. This risk
reflects the fact that the majority of Hongqiao's claims are at its
operating subsidiaries and have priority over the senior unsecured
claims at the holding company in a bankruptcy scenario.
Hongqiao's rating also considers the following environmental,
social and governance (ESG) risks.
The company's bauxite mining, power generation, alumina refinery
and aluminum smelting operations are exposed to high environmental
and safety risks. These risks are mitigated by the company's good
operating track record and continued investment in related
processes and facilities to meet higher standards. The company is
migrating its facilities to Yunnan province, where it can use
hydropower to replace coal-fired power for its operations.
On the governance front, the company has a record of expanding
aggressively, and its ownership is concentrated in its key
shareholders, Mr. Zhang Bo and his family, who together held a
66.6% stake in the company as of the end of 2021. These risks are
partially tempered by the strong board oversight exercised through
the presence of a strategic minority shareholder, CITIC Group
Corporation (A3 stable). At the same time, company has demonstrated
prudent financial management with absolute debt reduction, cautious
management and cost control in recent years.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable rating outlook reflects Moody's expectation that
Hongqiao will (1) maintain its strong market position; (2) generate
sufficient cash flow from operations to meet its payment
obligations, and (3) adopt a prudent financial policy in pursuing
its growth over the next 12-18 months.
Moody's could upgrade the rating if Hongqiao (1) continues to
maintain sound corporate governance standards; and (2) demonstrates
a track record or commitment to prudent financial management
through the industry cycle, while maintaining its strong capital
structure, low leverage and solid liquidity.
Moody's could downgrade the rating if (1) Hongqiao's operations
weaken because of an industry downturn or adverse regulatory
change; (2) the company fails to adhere to prudent financial
management and sound corporate governance standards; (3) its cost
competitiveness and market position deteriorate; (4) its credit
metrics weaken materially, with its adjusted debt/EBITDA remaining
above 3.0x; or (5) its liquidity deteriorates.
The principal methodology used in these ratings was Steel published
in November 2021.
Founded in 1994 and headquartered in Zouping, Shandong Province,
China Hongqiao Group Limited is one of the largest aluminum
manufacturers in China and globally by production volume. The
company listed on the Hong Kong Stock Exchange in March 2011.
As of the end of 2021, Hongqiao was 66.6% owned by Mr. Zhang Bo and
his family, and 12.7% owned by CITIC Group Corporation. The company
posted a revenue of RMB114.5 billion in 2021.
CHINA SCE GROUP: Fitch Cuts Foreign Currency IDR to 'B-'
--------------------------------------------------------
Fitch Ratings has downgraded China SCE Group Holdings Limited's
Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B-' from
'B+'. The Outlook is Negative. Fitch has also downgraded China
SCE's senior unsecured rating and the ratings on the outstanding US
dollar senior unsecured notes to 'B-' from 'B+' with the Recovery
Rating remaining at 'RR4'.
The downgrade reflects a reduction in China SCE's financial
flexibility amid the Chinese homebuilding sector's challenging
operating and financing environment. Fitch believes a narrowing in
funding access and a decline in sales coupled with working capital
commitments is putting pressure on the company's cash generation
and liquidity buffer.
The Negative Outlook reflects rising uncertainty on China SCE's
ability to address capital market maturities in 1H23, including
USD500 million senior notes due in April 2023. Fitch believes that
China SCE's plans to raise funds via new secure borrowings and
assets disposals are subject to execution risk, given volatile
market conditions.
KEY RATING DRIVERS
Tight Liquidity: China SCE's available cash decreased to CNY14.5
billion in 1H22 from CNY15.7 billion in 2021. The liquidity ratio -
measured by available cash/short-term debt (including ABS) - was
0.9x at end-1H22. Fitch noted that the consolidated cash balance at
end-1H22 included CNY2.9 billion in available cash at its 60%-owned
property management arm, SCE Intelligent Commercial Management, and
cash balances at various project companies. Fitch believes there
could be uncertainty on whether China SCE can upstream
subsidiaries' cash for the holding company's debt repayments.
Concentrated Short-Term Maturities: China SCE has large capital
market maturities in 2H22 and 1H23, including a CNY2 billion
onshore bond puttable in October 2022, CNY1.28 billion receivable
ABS due in December 2022, USD500 million notes due in April 2023,
and certain offshore bank loans with scheduled amortisations. Fitch
believes that China SCE's capital market access could remain
restricted in the medium term. It will have to rely on internal
cash generation, as well as funding from new onshore secured
borrowings and/or asset disposals to address debt repayment needs
in 1H23.
Improving Operating Cash Flow: China SCE's operating cash flow
should improve in 2H22, as Fitch forecasts a significant reduction
in cash outflows after the repayment of its supply chain ABS and
lower construction expenditure, based on a gradual decline in
construction activities and slower pace of capex on investment
properties. Fitch also expects a reduction in project profit
distribution to minority shareholders, which peaked in 1H22. China
SCE repaid CNY3.4 billion supply chain ABS in 1H22 and the
remaining outstanding balance of CNY490 million was also repaid in
August 2022.
Weak Contracted Sales: China SCE's total contracted sales declined
by 45% yoy in 8M22 to CNY41 billion. Fitch expects its full-year
contracted sales to decline by 43% to around CNY60 billion. Fitch
may consider further negative rating action should the company's
monthly contracted sales decline by more than expected,
jeopardising cash generation.
Stable Onshore Bank Financing: China SCE's onshore bank financing
appears intact in 1H22 with the raising of CNY4.7 billion
additional bank loans during the period, based on Fitch's
estimation. Fitch believes the company has sufficient unencumbered
property assets to help raise additional secured loans, which will
be a key financing source for debt repayments in 1H23 besides
internal cash generation. The company has said it is working with
banks on new secured loans against investment-property assets,
mainly shopping malls opened in the past two years. Still, Fitch
thinks this is subject to execution risk.
Asset Disposals, Execution Risk: China SCE has long-term rental
apartments valued around CNY2 billion in operation that are fully
owned by the company. It is disposing some of these assets to
financial partners to help fund debt repayments, according the
company. However, the timely completion of the disposals is subject
to execution risk.
DERIVATION SUMMARY
China SCE's ratings are constrained by its tight liquidity amid
weak contracted sales and increasing uncertainty on upcoming
capital-market maturities.
China SCE faces a higher amount of capital market debt in the rest
of 2022 than Central China Real Estate Limited (CCRE, B/Negative),
which repaid its offshore notes in August and has no remaining
capital market debt due within the year. Fitch also thinks CCRE may
benefit from improving onshore funding access after a Henan
stare-owned enterprise became one of its major shareholders.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Total contracted sales to decrease by 43% in 2022, on Fitch's
expectation of 37% sales drop in September-December 2022.
Contracted sales to increase by 2% in 2023, given a low base in
2022;
- Consolidated cash collection rate at 90% in 2022 and 2023
(2021: 98%);
- Property development gross profit margin of about 19% in 2022-
2025 (2021: 20%);
- Minimal land acquisitions as the company prioritises debt
repayment.
KEY RECOVERY RATING ASSUMPTIONS
Its recovery analysis assumes that China SCE would be liquidated in
a bankruptcy because it is essentially an asset-trading company.
The nature of homebuilding means the liquidation-value approach
will almost always result in a much higher value than the
going-concern approach.
Fitch has assumed a 10% administrative claim in line with criteria
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance-sheet assets that can be realised in a sale or liquidation
process conducted during bankruptcy or insolvency proceedings and
distributed to creditors.
- Advance rate of 80%, raised from 70%, applied to account
receivables. This treatment is in line with its Recovery Rating
criteria.
- Advance rate of 58% applied to net property inventory. China
SCE's inventory consists mainly of completed properties held
for sale, properties under development (PUD) as well as
deposits and prepayments for land acquisition. Different
advance rates were applied to these different inventory
categories to derive the blended advance rates for net
inventory.
- Advance rate of 70% applied to completed properties held for
sale. Completed commodity housing units are closer to readily
marketable inventory. China SCE has historically a gross margin
of around 20%, which justifies a higher advance rate than
Fitch's criteria.
- Advance rate of 55% applied to PUD, which are more difficult to
sell than completed projects and are at various stages of
completion. The PUD balance - prior to applying the advance
rate - is net of margin-adjusted customer deposits.
- Advance rate of 90% applied to deposits and prepayments for
land acquisition. Similar to completed commodity housing units,
land held for development is closer to readily marketable
inventory. China SCE's land is mostly located in Tier 2 and 3
cities in the Yangtze River Delta and West Taiwan Strait.
- Advance rate of 50%, lowered from 60%, applied to property,
plant and equipment, which consist mainly of buildings with
insignificant value.
- Advance rate of 30% applied to investment properties. China
SCE's investment-property portfolio consists mainly of shopping
malls and long-term rental apartments. The portfolio has an
average rental yield of 1.5%, which is below the industry
average.
- Advance rate of 50% applied to joint venture (JV) net assets.
JV assets typically include a combination of completed units,
PUD and land bank. A 50% advance rate was applied in line with
the baseline advance rate for inventories.
- Advance rate of 0% applied to excess cash, after netting the
amount of note payables and trade payables (construction fee
and retention payables). Fitch does not assume available cash
in excess of outstanding trade payables would be available for
other debt-servicing purposes and therefore the advance rate
for excess cash is 0%.
The allocation of value in the liability waterfall results in a
Recovery Rating corresponding to 'RR3' for the senior unsecured
offshore bonds. However, the Recovery Rating for senior unsecured
debt is capped at 'RR4', under Fitch's Country-Specific Treatment
of Recovery Ratings Criteria. China falls into Group D of creditor
friendliness, and Recovery Ratings of instruments from issuers with
assets in this group are subject to a cap of 'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The Outlook will be revised to Stable if the negative
sensitivities are not met.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in liquidity or funding access to address debt
maturities for the rest of 2022 and 1H23;
- Further deterioration in contracted sales or cash collection.
LIQUIDITY AND DEBT STRUCTURE
Squeezed Liquidity: China SCE's unrestricted cash fell to CNY14.5
billion in 1H22 from CNY15.7 billion in 2021, while its liquidity
ratio (available cash/short-term debt including ABS) was largely
unchanged at 0.9x. It has large capital-market debt and trust loan
maturities in the rest of 2022, including a CNY2 billion onshore
bond puttable in October 2022. Fitch believes China SCE will have
to rely on internal cash to cover debt repayment needs for the
remainder of 2022, which is likely to weaken its liquidity buffer.
ISSUER PROFILE
China SCE is one of China's 50 largest property developers. It had
a land bank with total gross floor area of 36.6 million square
metres as of June 2022. The company has operations in major
economic zones, including Fujian province, the Yangtze River Delta,
the Bohai Rim and Central Western China.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
China SCE Group
Holdings Limited
LT IDR B- Downgrade B+
senior unsecured LT B- Downgrade RR4 B+
CIFI HOLDINGS: Fitch Lowers LongTerm IDRs to 'BB-', Outlook Neg.
----------------------------------------------------------------
Fitch Ratings has downgraded China-based property developer CIFI
Holdings (Group) Co. Ltd.'s Long-Term Foreign- and Local-Currency
Issuer Default Ratings to 'BB-', from 'BB'. The Outlook is
Negative. Fitch has also downgraded CIFI's senior unsecured rating
and the ratings on its outstanding notes to 'BB-', from 'BB'.
The downgrade is driven by a reduction in CIFI's liquidity buffer
and higher leverage. Fitch estimates that CIFI's unrestricted cash,
excluding cash in the escrow account/short-term debt dropped to
1.0x in 1H22, from 1.4x in 2021, while leverage exceeded Fitch's
previous forecast and negative rating threshold of 50%, reaching
57%, from 54%. Fitch believes higher than expected cash outflow to
joint-venture (JV) projects and large construction commitments have
weakened CIFI's credit profile.
The Negative Outlook reflects risks to CIFI's sales performance,
additional JV cash commitments and a persistently unfavorable
financing environment pressuring CIFI's liquidity.
CIFI's ratings are supported by relatively stable onshore funding
access.
KEY RATING DRIVERS
High Leverage to Improve: Fitch said, "We expect leverage to remain
at above 50% (our previous negative rating threshold) over the
medium term, as weak sales and ongoing working capital commitments
will affect's CIFI's deleveraging effort. That said, we estimate
leverage should ease somewhat in 2H22, as CIFI has said the 1H22
rise had been caused by major construction expenditure and elevated
JV cash outflow."
CIFI said it has CNY200 billion in saleable resources at end-1H22
and believes it will generate at least CNY15 billion in monthly
sales over coming months, while attributable construction cash
outflow should ease to CNY10 billion in 2H22, from CNY21 billion in
1H21.
JV Cash Flow Uncertainty: There is uncertainty relating to CIFI's
JV-related capital commitments, which may further dampen its
deleveraging efforts. Cash outflow to JV projects was higher than
we expected. The company said JV performance was affected by weak
sales and that it needed to set aside additional liquidity to
service obligations at the JV level. CIFI said attributable JV debt
fell to CNY15.9 billion in 1H22, from CNY20.0 billion at end-2021,
with related guarantees of CNY12.4 billion.
Deteriorating Liquidity Buffer: Liquidity deteriorated in 1H22,
with total cash dropping by 30%, while short-term debt remained
flat. Fitch estimates that CIFI's available cash of CNY20 billion
after deducting regulated pre-sale funds, from a reported CNY31
billion in available cash, was able to cover 1.0x short-term debt
in 1H22, from 1.4x in 2021.
Significant Offshore Debt Exposure: Fitch believes volatile
offshore market conditions may further pressure liquidity due to
CIFI's large offshore debt exposure; short-term debt in 1H22
comprised 40% of offshore loans, 11% offshore bond and 49% onshore
debt.
CIFI has raised CNY3.5 billion so far in 2022 via offshore capital
markets, including a HKD622 million share placement in August.
However, it repaid more than CNY5 billion in offshore bonds and
plans to repay the USD300 million bond due January 2023. Fitch
believes CIFI's plan to refinance part of its USD655 million
offshore loan (including the amortised portion) in 1H23 is still
feasible. CIFI said it has refinanced two offshore loans amounting
to HKD850 million due August and September 2022.
Onshore Funding Access Key: CIFI's rating is dependent on
uninterrupted onshore funding access. Onshore bank borrowing
reached CNY55 billion in 1H22, from CNY54 billion at end-2021, to
account for 47% of CIFI's borrowings, including perpetual notes.
CIFI is among a small list of private developers issuing
medium-term notes that are fully guaranteed by China Bond Insurance
Co., Ltd. The size of CIFI's guaranteed notes will be CNY1.2
billion. The company also issued CNY500 million in corporate bonds
in June 2022 with credit-risk mitigation warrants.
Higher-Tier City Developer: Fitch believes CIFI's quality land bank
will lessen the execution risk of its sales plan in 2H22; 85% of
its saleable resources are in tier one and two cities, while 30%
are in the Yangtze River Delta. Market demand has been stronger in
higher-tier cities thanks to stronger economic foundations.
ESG - Group Structure: CIFI has high exposure in JVs and
associates, which appear to have weaker liquidity or funding
access. This has led to material cash outflow over the past year
and could further weaken CIFI's financial flexibility.
DERIVATION SUMMARY
CIFI's attributable sales of CNY33 billion in 1H22 were similar to
Seazen Group Limited's (SGL, BB/ Negative) CNY40 billion. Available
cash/short-term debt of 1.0x was also comparable. CIFI's land bank
quality is better, as it is concentrated in higher-tier cities,
while SGL's is mainly in lower-tier cities. However, CIFI's
leverage of above 55% in 1H22 was higher than SGL's 34%.
CIFI's financial flexibility is better than that of 'B' category
names, such as Hopson Development Holdings Limited (B+/Stable) and
Radiance Group Co., Ltd. (B+/Stable), whose available
cash/short-term debt ratios were below 1.0x in 1H22. CIFI is also
shortlisted to issue domestic medium-term notes with state-backed
guarantees, while no such arrangements were reported for the 'B'
rated peers.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Attributable contracted sales to drop by 35% in 2022 (2021: 7%
increase)
- Attributable land purchases and construction cash costs at less
than 10% and 45%, respectively, of implied sales cash
collection in 2022 (2021: 46% and 28%)
- Higher property-management fee revenue of CNY5 billion in 2022
(2021: CNY4 billion)
- Higher rental income of CNY1.3 billion in 2022 (2021: CNY1.0
billion)
- Property-development revenue reported gross profit margin at
16.0%-18.0% in 2022 (2021: 17.5%)
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- The Outlook may be revised to Stable if the negative guidelines
are not met.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Deterioration in liquidity or weakening in funding access.
- No stabilisation in contracted sales or cash collection.
- Leverage, measured by net debt/net property assets, sustained
at above 55%.
LIQUIDITY AND DEBT STRUCTURE
Tightening Liquidity: Fitch said, “We believe CIFI's liquidity
coverage against its short-term maturities has tightened. We
estimate that available cash after deducting pre-sale funds in its
escrow account dropped to 1.0x short-term debt, including
asset-backed securities, in 1H22. The tighter liquidity was a
result of weaker sales proceeds and continued capital injections
into its JV projects amid the sector slowdown. CIFI's medium-term
liquidity is dependent on continued onshore funding access.”
ISSUER PROFILE
CIFI is a top-20 property developer based in Shanghai, with a focus
in the Yangtze River Delta, Pan Bohai Rim and central-western and
southern China. CIFI started consolidating its property-management
listed subsidiary, Ever Sunshine Lifestyle, in 2020. It owned a 24%
stake at end-2021.
SUMMARY OF FINANCIAL ADJUSTMENTS
CIFI's CNY20 billion in available cash in 1H22 was calculated by
adding 40% of its CNY117 million liquid stock investment to CNY31.1
billion in reported available cash less CNY11 billion in regulated
pre-sale funds by Fitch's estimate. Fitch includes the regulated
pre-sale funds in the calculation of net assets.
ESG CONSIDERATIONS
CIFI has an ESG Relevance Score of '4' for Group Structure due to
its high exposure to JV and associates, which has a negative impact
on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
CIFI Holdings
(Group) Co. Ltd.
LT IDR BB- Downgrade BB
LC LT IDR BB- Downgrade BB
senior unsecured LT BB- Downgrade BB
GOME HOLDINGS: Fails to Pay Workers, May Lay Off More Staff
-----------------------------------------------------------
Yicai Global reports that Gome Holdings Group did not pay employees
this month and said it may let go more staff as the cash-strapped
electronics retail giant strives to reverse losses by refocusing on
its core offline business.
In the face of unprecedented difficulties, Gome temporarily
adjusted salary payments this month to ensure normal operations,
the Beijing-based firm told Yicai Global on Sept. 26, adding that
high operating costs due to its strategy to refocus on its main
business may lead to more layoffs. Gome will pay full salaries and
severance pay once the business situation improves, it said.
A number of employees said the struggling retailer had not paid
last month's salaries by Aug. 25, the latest date for payment in
August according to their contracts, financial media outlet Caixin
reported earlier.
During the time that founder Huang Guanyu was in jail for insider
trading and graft, Gome stumbled amid stiff online competition from
the likes of Alibaba Group Holding and JD.Com and has lost money
for five consecutive years, according to Yicai Global. Its loss
widened 50 percent to CNY2.96 billion (USD414 million) in the six
months ended June 30 from a year earlier, while revenue sank 53
percent to CNY12.1 billion (USD1.69 billion), Yicai Global
discloses.
As one of the largest bricks-and-mortar retailers in China, Gome's
business was hit hard by coronavirus outbreaks that shuttered
stores and upended deliveries of online orders, the firm said in
its first-half earnings report. Last month, Huang said he would
restore Gome's profitability through asset restructuring and strive
to post the firm's best financial performance by 2025.
But Huang has cut his stake in the retailer he founded in 1987
several times this year, reducing it to 43 percent from 61 percent
at the end of last year, according to information disclosed by the
Hong Kong Stock Exchange, Yicai Global relays.
Huang was granted early release from jail in February last year
after serving part of a 14-year sentence, the report notes.
Gome Holdings Group Co. Ltd. operates in electric appliance retail
businesses. The Company sells air conditioners, refrigerators,
induction cookers, microwave ovens, and other electrical products.
Gome Holdings Group also provides investment, real estate
development, finance, internet development services.
RED STAR: S&P Downgrades Long-Term ICR to 'B-', Outlook Negative
----------------------------------------------------------------
On Sept. 27, 2022, S&P Global Ratings lowered its long-term issuer
credit rating on Red Star Macalline Group Corp. Ltd. to 'B-' from
'B+'.
The negative outlook reflects S&P's view that Red Star's funding
access may deteriorate due to negative intervention or contagion
from its parent Red Star Macalline Holding Group Co. Ltd. (RSH).
S&P believes Red Star will manage its upcoming debt maturities by
refinancing or using internal resources.
The liquidity of Red Star Macalline Group Corp. Ltd.'s parent has
deteriorated due to cash depletion and heightened counterparty risk
related to uncertainty over the amount and timing of profit-sharing
proceeds amid China's property sector downturn.
China-based Red Star, an owner and operator of malls specializing
in home improvement and furnishing products, will also face
operational challenges and margin compression amid weakened demand.
However, S&P believes the risk of a dip in performance more severe
than that in 2020 is relatively low.
S&P said, "We lowered our rating on Red Star because we believe
liquidity risk for its parent RSH has increased with cash depletion
and high potential maturities over the next two years. We continue
to assess Red Star as a core subsidiary of RSH, and thus the rating
on the unit is capped at 'B-' due to the group credit profile for
RSH."
RSH's liquidity is diminishing with higher counterparty risk from
Sino-Ocean Group Holding Ltd. RSH has more than Chinese renminbi
(RMB) 8 billion of domestic bonds puttable in the rest of 2022 and
the first half of 2023. S&P estimates RSH's cash on a consolidated
basis (excluding Red Star) at about RMB2.6 billion, down from about
RMB3.9 billion as of end-2021. RSH also expects some profit-sharing
proceeds in the second half of 2022 following the disposal of its
major development arm, Chongqing Hongxing Macalline Enterprise
Development Co. Ltd., to Sino-Ocean Group.
S&P said, "We believe the timing and amount of the cash inflow are
subject to high uncertainty and counterparty risk, given the
prolonged downturn in the property development sector. In the year
to-date, RSH has received some committed funds from Sino-Ocean.
"We anticipate a moderate drop in rental income and margin
compression for Red Star's furniture mall business in 2022, though
to a lesser extent than in 2020.This is on account of stronger
tenant sales performance compared with 2020. We forecast Red Star's
rental income will drop by 7%-10% during 2022. Although Red Star
achieved 6% rental growth in the first half, the company planned to
grant about RMB500 million in rent concessions in August 2022. We
believe Red Star's short lease terms of one year would subject the
company to higher risk of negative rental reversions in the second
half, given that property sales and new homebuyer sentiment have
weakened mainly in the second half of 2021.
"That said, we do not expect a drop more significant than in 2020,
mainly due to more stable tenant sales performance. For the first
eight months of 2022, national retail sales for furniture and
construction materials declined 8.5% and 4.4%, respectively,
compared with declines of 11.4% and 8.7% for the same period in
2020. Red Star reported an occupancy rate of 92.1% as of end-June
2022, compared with 90.2% at the end of June 2020.
"We project EBITDA margins will continue declining to 33%-34% per
year over 2022-2024, mainly due to higher impairment of receivables
and promotions that we expect during the market downcycle. Red
Star's EBITDA margin fell to 35.4% 2021 from 41.7% in 2019."
Red Star's managed mall business is subject to higher execution
uncertainty and earnings volatility.We expect the company's
franchise income to decline by about 25% in 2022, mainly due to
fewer new launches as counterparties slow down construction amid
the property sector downturn. In the first six months of 2022, Red
Star's managed mall revenue declined by about 23%.
S&P said, "The negative rating outlook on Red Star reflects our
view that the company's funding access may deteriorate due to
negative interventions or contagion from its parent RSH. At the
same time, we expect Red Star's business operations to moderately
decline due to operational headwinds. We further believe Red Star
will manage its upcoming debt maturities by refinancing or using
internal resources.
"We could downgrade Red Star if its liquidity weakens further. This
could happen if we see a substantial weakening in the company's
access to funding due to negative interventions or contagion from
its parent RSH, or a significant slippage in the company's rental
income and cash collection."
The rating may also come under pressure if the company's leverage
further deteriorates or capital structure is no longer
sustainable.
S&P's rating on Red Star is capped by the parent's group credit
profile.
S&P could revise the rating outlook on Red Star to stable if RSH
resolves its repayment overhang and restores its liquidity buffer
with significant new funding. At the same time, Red Star would have
to maintain steady leverage with stable business operations.
ESG credit indicators: E-2; S-2; G-3
YANKUANG ENERGY: Fitch Affirms 'BB+' Foreign Currency IDR
---------------------------------------------------------
Fitch Ratings has affirmed Yankuang Energy Group Company Limited's
Long-Term Foreign-Currency Issuer Default Rating at 'BB+' with a
Stable Outlook and the senior unsecured rating at 'BB+'.
Yankuang Energy is rated on a standalone basis based on Fitch's
Parent and Subsidiary Linkage (PSL) Rating Criteria, as we have
raised its Standalone Credit Profile (SCP) to 'bb+', from 'bb',
which is in line with our internal credit assessment of its 55.76%
parent, Shandong Energy Group Co., Ltd.
The higher SCP reflects Yankuang Energy's significant deleveraging
and large and diversified production base, competitive costs and
strong free cash flow (FCF). Fitch expects net debt/EBITDA to
decrease to 1.0x in 2022 and stay at around 1.5x-2.5x over the
medium term.
KEY RATING DRIVERS
Stronger SCP: Fitch said, "We expect positive FCF over the
medium-term and for net debt/EBITDA to stay at around 2.0x,
commensurate with a 'bb+' SCP assessment. FCF turned around to
CNY11.3 billion in 2021, from a net outflow of CNY6.1 billion in
2020, while net debt/EBITDA significantly dropped to 2.1x in 2021,
from 5.0x in 2020. This was helped by strong coal and chemical
prices and supported by Yankuang Energy's competitive cost
position. We estimate EBITDA of around USD50/tonne (t) for the coal
mining segment in 2021, the highest among Fitch-rated Asian coal
miners."
Rating Impact from Parent: Fitch said, "We rate Yankuang Energy on
a standalone basis, as its SCP is in line with our internal credit
assessment of Shandong Energy. Yankuang Energy's rating will remain
aligned with its parent should its SCP weaken. This is based on our
assessment of the parent's 'High' strategic and 'Medium' legal and
operational incentives to support the subsidiary under the "strong
parent, weak subsidiary" path of the PSL Criteria."
Should the SCP become stronger than its parent's credit assessment,
either due to an improvement at the subsidiary or a downward
revision of the parent, Yankuang Energy can be rated up to
one-notch above the parent. This is based on Fitch's assessment of
'Open' legal ringfencing and 'Porous' access and control under a
"strong subsidiary, weak parent" path. There is no legal or
self-imposed ringfencing mechanism, but as a listed company, Fitch
assesses effective control as 'Porous'. Most of the company's
funding is separate from the parent and listing rules prevent open
access to the subsidiary's cash.
Elevated Coal Prices: Fitch said, "We forecast a coal average
selling price (ASP) of CNY1,127/t for Yankuang Energy in 2022,
against CNY1,091/t in 1H22 and CNY717/t in 2021. Tight supply and
geopolitical tension has lifted high-grade thermal coal prices in
the seaborne market to exceptionally high levels. Benchmark
Newcastle 6,000kcal/kg grade coal has averaged at USD350/t,
compared with USD136/t last year. Yankuang Energy's overseas
subsidiary, Yancoal Australia Ltd, has benefited from the tight
market, with its ASP surging by 234% yoy to USD314/t in 1H22."
China's low-grade thermal coal prices have also been supported by
overseas markets and weak hydro generation in the summer.
Production Recovery; Cost Control: Fitch said, "We forecast sales
volume to rebound by 2.5% in 2022 and a further 10.3% in 2023,
after a 4.3% yoy recovery in 1H22. Sales volume dropped by 7.2% in
2021 amid stricter safety standards and inspections, but we
understand some of the production loss is temporary and may recover
after safety measures are put in place. Yankuang Energy has also
demonstrated reasonable cost control, with slight lift in its 1H22
average mining cost to CNY350/t, from CNY339/t in 2021. We forecast
unit costs to peak at CNY360/t this year and then come down with
coal prices."
Positive FCF, Despite Higher Capex: Yankuang Energy has guided
higher capex for 2022, with about two-thirds allocated for
maintenance and safety purposes. Fitch said, "We expect most of the
capex to be spent on mining automation, safety measures and
technological upgrades for mines in Shandong and also for fleet
replacement and a wash plant at Yancoal Australia. We believe much
of the maintenance capex is flexible and can be controlled if coal
prices come down. Therefore, we expect positive FCF in the medium
term, despite lower coal price assumptions in 2023-2025."
DERIVATION SUMMARY
Yankuang Energy is rated at the same level as regional coal mining
peer, PT Adaro Indonesia (AI, BBB-/Stable). Yankuang Energy's
stronger business profile, reflected in larger scale and a stronger
cost position, is partly offset by higher leverage. Its coal
production and EBITDA were equivalent to 1.7x and 2.9x,
respectively, of that of PT Adaro Energy Indonesia Tbk, AI's parent
company. Yankuang Energy's mining profitability, gauged by
EBITDA/t, has also been consistently stronger than that of AI, but
its net debt/EBITDA was 2.1x in 2021, versus nearly zero net debt
at AI.
Yankuang Energy's business profile is similar to that of Zijin
Mining Group Co., Ltd (BBB-/Stable) in terms of size, a second
quartile cost position and reserve life. Net debt/EBITDA was around
2.1x at both companies in 2021 and we forecast similar leverage in
the medium term. Zijin's higher rating is supported by its
diversified portfolio of precious and base metals versus Yankuang
Energy's focus on thermal coal, which faces shrinking demand in the
long-term under China's carbon targets.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- ASP of self-produced coal at CNY1,127/t in 2022, CNY816/t in
2023, CNY562/t in 2024 and CNY535/t in 2025
- Unit coal production cost of CNY366/t in 2022 then trending
down together with coal prices
- Sales volume of self-produced coal of 96 million t in 2022
before rising to 113 million t in 2025
- Capex of CNY14.8 billion in 2022, then gradually declining to
CNY9.6 billion in 2025
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Shandong Energy's net debt/EBITDA sustained below 6.5x
- Stronger likelihood of support from the Shandong government to
Shandong Energy
- Yankuang Energy's FFO net leverage sustained at below 2.2x or
net debt/EBITDA below 1.8x, provided that Shandong Energy's
access to Yankuang Energy's cash remains 'Porous'
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch lowering its internal assessment of Shandong Energy's
credit profile, together with a weakening of Yankuang Energy's
SCP, as evidenced by FFO net leverage at above 3.2x or net
debt/EBITDA at above 2.8x for a sustained period
- Fitch would reassess Shandong Energy's credit profile downward
if its EBITDA interest coverage stays at below 1.5x, if its
funding capability, excluding Yankuang Energy, deteriorates
significantly or if the likelihood of support from Shandong
government to Shandong Energy weakens.
LIQUIDITY AND DEBT STRUCTURE
Abundant Liquidity: Yankuang Energy had readily available cash of
CNY50.0 billion at end-1H22, sufficient to cover debt maturing
within one year of CNY20.0 billion. The company also had total
undrawn bank credit facilities of CNY96.7 billion at end-2021. We
forecast positive FCF of CNY15.8 billion in 2022.
ISSUER PROFILE
Yankuang Energy is a major coal-mining company in China, with coal
production of 105 million t in 2021. It also has other businesses,
such as coal chemical production, transportation and power
generation.
SUMMARY OF FINANCIAL ADJUSTMENTS
Shandong Energy and its subsidiaries, other than Yankuang Energy,
deposited CNY17.2 billion into the finance company owned by
Yankuang Energy in 2021 and borrowed CNY8.2 billion from the
finance company. We deducted the balance of CNY9.0 billion from
Yankuang Energy's cash to derive the readily available cash balance
at end-2021.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Yankuang Energy's SCP is in line with our credit assessment of
Shandong Energy. Yankuang Energy's rating will remain aligned with
its parent should its SCP weaken, based on our assessment of the
parent's 'High' strategic and 'Medium' legal and operational
incentives to support the subsidiary under the "strong parent, weak
subsidiary" path of the PSL Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
Yankuang Energy
Group Company
Limited
LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
=================
H O N G K O N G
=================
MEX GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on MEX Group Worldwide Ltd. The outlook is stable.
The stable outlook reflects S&P's view that, over the next 12-18
months, MEX will maintain sufficient liquidity and at least strong
levels of capitalization.
MEX will continue its business growth in 2022-2023. MEX is
expanding to new geographies, including recent licenses in
Singapore and United Arab Emirates (UAE) and planned licenses in
Cyprus and, farther out, Japan. This will continue to fuel MEX's
business growth. Furthermore the group targets expansion into the
crypto market through MEX Digital, which would act as an exchange
of digital assets. While prospects of the latter business are
uncertain in the current environment, it may deliver an additional
boost to the group's performance.
S&P said, "We consider MEX to be a relatively small player in
global securities markets.Although MEX has made some progress
diversifying and increasing volumes, we believe MEX continues to
face risks specific to its contract for difference (CFD) segment
and almost perfect competition. CFDs are a way of speculating on
financial markets that doesn't require the buying and selling of
any underlying assets. This particular segment provides MEX with a
relatively low average lifetime of clients, which makes the group
reliant on success of its client acquisition. With revenue of about
US$190 million it is still relatively small compared with global
retail peers operating in traditional securities markets.
"Relatively light regulation allows MEX to keep capital low,
despite exemplary earnings. The operating set-up of MEX, whereby
its subsidiaries act as agents on behalf of the parent company,
allows the group to deflate the level of operational risk at the
regulated entities, and by extension, lower their regulatory
capital requirements. This in turn allows MEX to maintain its
aggressive dividend policy. The group distributed 100% of its
profits over the past six years. We have yet to see evidence of a
change in the group's dividend policy, but we note that if it
continues unchanged, it could result in capital adequacy levels we
would no longer consider strong. However, the group's robust
profitability is sufficient to mitigate this risk for the time
being, in our view.
"The stable outlook on MEX reflects our view that it will maintain
sufficient liquidity over the next 12-18 months, along with at
least strong levels of capitalization.
"We consider a positive rating action unlikely in the next 12
months because it would require a significant strengthening of
MEX's corporate governance, and a similar improvement in client
loyalty. Stronger-than-expected capitalization might not
automatically lead to an upgrade in the next 12 months because this
would also be contingent on the group reducing its broad risk
exposure."
S&P may lower the rating if one of the following scenarios occurs:
-- MEX materially shifts its operations to less-regulated
jurisdictions or more volatile asset classes;
-- S&P sees the group operating with considerably lower capital
buffers, with the expected risk-adjusted capital ratio below 10%,
which may come from unexpected losses or higher-than-anticipated
dividend payouts; or
-- MEX loses material market share, and by extension its exemplary
profitability.
=========
I N D I A
=========
BALAJI COTTON: CARE Keeps B- Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Balaji
Cotton Agros (BCA) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated August 18,
2021, placed the rating(s) of BCA under the 'issuer
non-cooperating' category as BCA had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. BCA
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 4, 2022, July 14, 2022, July 24, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Balaji Cotton Agros (BCA) is a Guntur (Andhra Pradesh) based firm,
which was established in 2012 by Mr. B. Venkateswara Rao. The firm
is engaged in trading of cotton kappas, cotton lint and cotton
seeds. The firm purchases cotton kappas from the farmers in Andhra
Pradesh, Telangana, Karnataka and Maharashtra and does the ginning
and pressing activity at Jaya Cotton Mills, Guntur, and Andhra
Pradesh. The firm purchases cotton lint and cotton seeds from local
traders. BCA majorly sells cotton lint to customers in Andhra
Pradesh, Telangana, Maharashtra and Gujarat and sells cotton seeds
to the local oil mills.
BALMUKH GOLDJEWEL: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Balmukh Goldjewel & Multitrading Private Limited
Office No. 1, SN. 57/3
Mayura Vihar, Blg-Q Kothrud
Pune MH 411029
Insolvency Commencement Date: September 22, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: March 19, 2023
Insolvency professional: Sandeep Jawarharlal Singhal
Interim Resolution
Professional: Sandeep Jawarharlal Singhal
313/314, Giri Shikhar CHS
Plot No. 88-91
Opposite Goenka Hall
J B Nagar, Andheri (East)
Mumbai 400059
E-mail: sandeepjsinghal@hotmail.com
- and -
410, 4th Floor
Bluerose Industrial Estate
Near Metro Mall
Western Express Highway
Borivali East, Mumbai 400066
E-mail: balmukh.ibc@gmail.com
Last date for
submission of claims: October 4, 2022
CHD DEVELOPERS LIMITED: Insolvency Resolution Process Case Summary
------------------------------------------------------------------
Debtor: CHD Developers Limited
B-1, Ground Floor, 19-20
G Block Radha Chambers Community Centre
Vikaspuri, New Delhi 110018
Insolvency Commencement Date: September 14, 2022
Court: National Company Law Tribunal, Principal Bench at New Delhi
Estimated date of closure of
insolvency resolution process: March 13, 2023
(180 days from commencement)
Insolvency professional: Rajesh Kumar Parakh
Interim Resolution
Professional: Rajesh Kumar Parakh
5/51, 2nd Floor, W.E.A. Karol Bagh
New Delhi 110005
E-mail: parakh.rajesh@gmail.com
- and -
C-108, 4th Floor, Sector-2
Noida 201301, UP
E-mail: cirp.chd@gmail.com
Classes of creditors: A. Allotees in Real Estate Projects
B. Deposit Holders
Insolvency
Professionals
Representative of
Creditors in a class: A. Allotees in Real Estate Projects
Mr. Alok Chandra Singh
G-12, Express Apartment
Sector 4, Vaishali
Ghaziabad, Uttar Pradesh 201010
E-mail: alok@alokchandra.com
Mr. Arun Chadha
727, Brahmpuri Meerut
Uttar Pradesh 250002
E-mail: chadharun@yahoo.com
Mr. Manbir Singh Chawla
C-5, Humsub Apartments
Plot 14, Sector 4, Dwarka
Opposite Delhi Public School
New Delhi 110078
E-mail: chawlamanbir@yahoo.com
B. Deposit Holders
Mr. Aishwarya Mohan Gahrana
4, Birbal Marg, 2nd Floor
Jangpura Extension
New Delhi 110014
E-mail: aishwaryam_gahrana@yahoo.com
Mr. Mohd Nazim Khan
MNK House, 9A/9-10, Basement
East Patel Nagar
New Delhi 110008
E-mail: nazim@mnkassociates.com
Mr. Deepak Kumar Agarwal
27, Sector-47
Gautam Buddha Nagar
Uttar Pradesh 20130l
E-mail: dkagarwal.ip@gmail.com
Last date for
submission of claims: September 28, 2022
ESES BIO-WEALTH: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of ESES
BIO-Wealth Private Limited (EBPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 8 CRISIL D (Issuer Not
Cooperating)
Proposed Term Loan 4 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with EBPL for
obtaining information through letters and emails dated June 20,
2022 and August 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 EBPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on EBPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
EBPL continues to be 'CRISIL D Issuer Not Cooperating'.
EBPL has set up its manufacturing facility in Morigaon district,
Assam with a capacity of 3600 tonne per annum and started its
commercial operations from April 2017 onwards.
GOVIND ELECTRICA: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Govind Electrica Private Limited
SSI Plot No. 10, Market No. 5
NIT Faridabad, Faridabad
Haryana 121001
Insolvency Commencement Date: September 21, 2022
Court: National Company Law Tribunal, Chandigarh Bench
Estimated date of closure of
insolvency resolution process: March 20, 2023
(180 days from commencement)
Insolvency professional: Pramod Kumar Misra
Interim Resolution
Professional: Pramod Kumar Misra
5203, DLF City Phase-4
Gurgaon, Haryana 122002
E-mail: capkmisra@gmail.com
cirp.govindelectrica@gmail.com
Last date for
submission of claims: October 5, 2022
GR MULTIFLEX PACKAGING: Insolvency Resolution Process Case Summary
------------------------------------------------------------------
Debtor: G R Multiflex Packaging Private Limited
620 Diamond Harbour Road
Industrial Estate
Plot No. BS/1, Behala
Kolkata 700034
Insolvency Commencement Date: September 19, 2022
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: March 18, 2023
(180 days from commencement)
Insolvency professional: Sri Madhur Agarwal
Interim Resolution
Professional: Sri Madhur Agarwal
Flat 24, 8 A Alipore Road
Kolkata 700027
E-mail: madhuragarwal75@gmail.com
cirp.grmultiflex@gmail.com
Last date for
submission of claims: October 3, 2022
HEADWAY LIFE: CARE Assigns B+ Rating to INR19cr LT Loan
-------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Headway Life Sciences Private Limited (HLSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 19.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of HLSPL remains
constrained on account of project implementation risk associated
with nascent stage of on-going debt funded capex. The rating
further remains constrained due to regulatory risk with intense
competition and susceptibility to raw material prices
fluctuations.
The rating, however, derive strength from experienced promoters
along with revenue visibility through sales agreement.
Rating Sensitivities
Positive Factors - Factors that could lead to positive rating
action/upgrade:
* Stabilization of operations with successful completion of the
project within time and cost parameters
Negative Factors- Factors that could lead to negative rating
action/downgrade:
* Delay in project execution and commencement of operations putting
pressure on liquidity
* Changes in government regulations which adversely impacts the
business of the company
Detailed description of the key rating drivers
Key Rating weakness
* Project implementation risk associated with nascent stage of
on-going debt-funded capex: HLSPL is establishing API bulk drugs
and intermediates manufacturing unit in Bhopal (M.P). Project is
expected to be completed by September 2023 and commence commercial
operations from October 2023 onwards. The total cost of project is
envisaged to INR25.91 crore with project gearing of 3 times. Till
July 30, 2022, HLSPL has incurred total costs of INR2.76 crores
funded through promoter's contribution towards land procurement and
other regulatory expense. With majority of costs yet to be incurred
and pending debt tie up, project completion and stabilization risk
persist.
* Regulatory risk with intense competition: The pharmaceutical
industry is highly regulated in India and requires various
approvals, licenses, registrations and permissions for business
activities. The approval process for registration is complex,
lengthy and expensive. The time taken to obtain approval varies but
generally takes from six months to several years from the date of
application. Any delay or failure in getting approval for product
launch could adversely affect the business prospect of the company.
Furthermore, nature of industry is very competitive in nature with
large number of small and medium sized players having established
brands and marketing set ups. Intense competition in manufacturing
of pharmaceutical segment limits pricing flexibility, which
constrains their ability of product development and geographical
diversification in regulated market.
* Susceptibility to raw material prices fluctuations: The company
is susceptible to the fluctuations in raw material prices. Raw
material cost forms major portion of total costs and is expected to
constitute ~70% of the total income in FY24. Fluctuations in raw
material prices and ability to pass on to its customers, which
themselves are operating in a competitive pharma industry will
remain crucial. Thus, the profitability margins of HLSPL remains
exposed to any adverse fluctuation in raw material prices.
Key Rating Strength
* Experienced Promoters: HLSPL is promoted by Mr. Satish Chander
Mathur with more than 4 decades of experience in pharmaceutical
industry, Mr. Mudit shejwar with around 2 decades of industry
experience and Ms. Meenal Rai Shejwar with around decade of
industry experience. Mr. Satish Chander Mathur is certified
approved manufacturing chemist for bulk drug biological and
non-biological from FDA Punjab since 1997 and will look after
overall management of HLSPL, while Mr. Mudit Shejwar will look
after procurement and marketing and Ms. Meenal Rai Shejwar will
look after financial department of HLSPL.
* Revenue visibility through sales agreement: HLSPL has entered
into an agreement with BASIL Drugs and Pharmaceuticals Private
Limited (BASIL) for team identification, manufacturing support,
marketing, sourcing and technology transfer for various ranges of
APIs. BASIL will market pre-defined quantity of its various
products as agreed in the binding leading to revenue visibility and
thus reducing stabilization risk to certain extent.
Bhopal, Madhya Pradesh based Headway Life Sciences Private Limited
(HLSPL) is incorporated on August 05, 2021, by 3 promoters viz. Mr.
Satish Chander Mathur, Mr. Mudit Shejwar and Ms. Meenal Rai
Shejwar. HLSPL is implementing Greenfield project for manufacturing
of Active Pharmaceuticals Ingredients (APIs) bulk drugs and
Intermediates with expected project costs of INR25.91 crore. HLSPL
will operate from its sole manufacturing facility at Raisen, Madhya
Pradesh and expects to commence operations from October 2023.
ILD HOUSING: CARE Lowers Rating on INR33.48cr LT Loan to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of ILD
Housing Projects Private Limited (IHPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 33.48 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE C; Stable
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 05, 2021,
placed the rating(s) of IHPPL under the 'issuer non-cooperating'
category as IHPPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. IHPPL continues to
be noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 21, 2022, May 31, 2022, June 10, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating assigned to the bank facilities of ILD have been revised
on account of delay in debt servicing as recognized from publicly
available information i.e. ROC Filings.
Incorporated in July 2006, ILD Housing Projects Private Limited
(IHPPL) (formerly known as International Land Developers Pvt. Ltd.)
is a Gurgaon based real estate developer promoted by Mr. Alimuddin
Rafi Ahmed. The company is a part of ILD group. The company is
engaged in the real estate sector.
INDIA DAIRY: CARE Keeps B Debt Rating in Not Cooperating
--------------------------------------------------------
CARE Ratings said the rating for the bank facilities of India Dairy
Feeds Private Limited (IDPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 27, 2021,
placed the rating(s) of IDPL under the 'issuer non-cooperating'
category as IDPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. IDPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 12, 2022, June 22, 2022, July 2, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
India Dairy Feeds Private Limited (IDPL), incorporated in the year
2014 was promoted by Shri Anirban Nath, Smt. Susmita Nath and Shri
Surajit Chakravarti of Kolkata. IDPL set up a unit engaged in
manufacturing of cattle feed at Bankura, West Bengal with installed
capacity of 30000 MTPA. IDPL has entered into authorized agreement
with Kaira District Cooperative Milk Producers' Union Ltd, referred
as Amul Dairy in August, 2016 for a period of 5 years, whereby Amul
Dairy will obtain cattle feed of different types produced by IDPL,
packed in HDPE bags or in different pack sizes as decided by Amul
Dairy, with the objective of marketing the cattle feed under 'Amul'
brand in Kolkata and other markets in the eastern region as decided
by Amul dairy. Shri Anirban Nath, the Managing Director, looks
after the day to day operations of the entity along with a team of
experienced personnel.
INTERCON CONTAINER: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Intercon Container Survey & Commodities Private Limited
Office No. 706, Vashi Infotech Park
Plot No. 16, Sector 30A
Vashi Station, Navi Mumbai
Maharashtra 400705
Insolvency Commencement Date: September 20, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: March 19, 2023
Insolvency professional: Devendra Jain
Interim Resolution
Professional: Devendra Jain
B/604, Ratnakar Nine Square
Opp. Keshav Baugh Road
Opp. ITC Narmada Hotel
Bodakdev, Ahmedabad
Gujarat 380015
E-mail: devendradjain@hotmail.com
irpdevendrajain@gmail.com
Last date for
submission of claims: October 3, 2022
J.B. COTTON: CARE Keeps B- Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of J.B. Cotton
(JBC) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.84 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated August 16,
2021, placed the rating(s) of JBC under the 'issuer
non-cooperating' category as JBC had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. JBC
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 2, 2022, July 12, 2022, July 22, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Amreli (Gujarat) based JBC is a partnership firm established in
August, 2013 by its Six partners Mr. Dalsukhbhai Jivrajbhai
Vaghasiya, Mr. Umeshbhai Lakhabhai Kalkani, Mr. Jagdishbhai
Jerambhai Kalkani, Mr. Sanjaybhai Jerambhai Kalkani, Mr.
Bhaveshbhai Jadavbhai Kalkani and Mr. Bhavinbhai Lakhabhai Kalkani.
The firm started its commercial operations from February, 2015. The
firm is engaged into business of cotton ginning, pressing and
cotton seed crushing. The firm has its manufacturing facility
located at Amreli with 24 ginning machines and one pressing machine
with a total input capacity of Metric Tonnes Per Annum 20240 (MTPA)
and two expellers with a crushing capacity of 1980 MTPA as on March
31, 2017.
JAHANGIR BIRI: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Jahangir Biri
Factory Private Limited (JBFPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8.25 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 5.25 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with JBFPL for
obtaining information through letters and emails dated June 20,
2022 and August 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 JBFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JBFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JBFPL continues to be 'CRISIL D Issuer Not Cooperating'.
JBFPL was set up as a proprietorship firm in 1995, by Mr Altab
Hossain. In 1997, Mr Hossain's sons joined the business and the
proprietorship concern was reconstituted as a partnership firm. In
1999, the firm was reconstituted as a private limited company to
facilitate smooth execution of operations. The company manufactures
beedis at its unit in West Bengal. Products are sold under brands
such as Sunday, Deluxe, Ruby, and Howrah Biri, primarily in New
Delhi, Punjab, Haryana, Rajasthan, Uttar Pradesh, and Odisha.
JAIPRAKASH ASSOCIATES: SBI Files Insolvency Plea
------------------------------------------------
The Times of India reports that State Bank of India (SBI) has moved
the National Company Law Tribunal (NCLT) to initiate insolvency
action against Jaiprakash Associates Ltd, the flagship company of
Jaypee group, putting the fate of thousands of homebuyers in Jaypee
Greens, Jaypee Wishtown and Jaypee Greens Sports City, including
the F1 track, in uncertainty. The number of units that will be
impacted was not readily available, the report says.
The group also owns some hotels, golf courses, cement plants and
coal blocks. After Andhra Cement and Jaypee Infratech, the massive
real estate venture, this is the third company of the group that
has been dragged to the insolvency court by lenders, TOI notes.
Homebuyers in Jaypee Infratech are still waiting for an outcome,
five years after the matter reached NCLT.
According to TOI, Jaiprakash Associates' lease for some of the land
under the jurisdiction of Yamuna Expressway Industrial Development
Authority has also been cancelled as the company failed to pay the
dues.
In August 2017, the Centre and RBI had identified Jaiprakash
Associates (JAL) among 26 cases for insolvency action but other
lenders blamed ICICI Bank and SBI for being slow in pursuing the
case although a petition was filed in September 2018, TOI recalls.
The loan had been classified as a non-performing asset in March
2016.
SBI has now cited a default of INR6,893 crore to seek the
initiation of insolvency action and has proposed the appointment of
Bhuvan Madan as the interim resolution professional, TOI says. JAL
had a total debt of around INR27,000 crore.
"We will respond to the petition and it has always been our
intention to clear all the dues of banks. We have sold assets of
INR40,000 crore and we are confident of resolving the matter," a
senior Jaypee group executive told ToI.
For the year-ended March 2022, JAL had reported losses of over
INR1,200 crore, TOI discloses.
TOI says the management led by Manoj Gaur had been arguing that
lenders had agreed to a debt "realignment" plan in 2017, which has
not been executed with the latest default seen to have forced SBI
to take up the issue with ICICI Bank. Several other lenders were in
any case keen on moving against the company as resolution was not
visible.
About Jaiprakash Associates
Jaiprakash Associates Limited is a diversified infrastructure
company. The Company's principal business activities include
engineering, construction and real estate development, and
manufacture of cement. Its segments include Construction, which
includes civil engineering construction/engineering, procurement
and construction (EPC) contracts/expressway; Cement, which includes
manufacture and sale of cement and clinker; Hotel/Hospitality,
which includes hotels, golf course, resorts and spa; Sports Events,
which includes sports-related events; Real Estate, which includes
real estate development; Power, which includes generation and sale
of energy; Investments, which includes investments in subsidiaries
and joint ventures for cement, power, expressway and sports, among
others, and Others, which includes coal, waste treatment plant,
heavy engineering works, hitech castings and man power supply,
among others. It has operations in Haryana, Madhya Pradesh, Gujarat
and Jharkhand, among others.
JAL featured in Reserve Bank of India's second list of at least 26
defaulters with which it wants creditors to start the process of
debt resolution before initiating bankruptcy proceedings.
JALARAM GINNING: CARE Keeps B- Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Jalaram
Ginning and Pressing (JGP) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.41 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 16, 2021,
placed the rating(s) of JGP under the 'issuer non-cooperating'
category as JGP had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. JGP continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 1, 2022, June 11, 2022, June 21, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Wardha (Maharashtra) based, JGP, started with its commercial
production in November 2011 as a partnership firm. The firm is
engaged in the business of cotton ginning and cotton oil
extraction.
JEPH BEV PRIVATE: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Jeph Bev Privvate Limited
Plot No. 36-37
Tagore Nagar
Jaipur 302024
Insolvency Commencement Date: September 20, 2022
Court: National Company Law Tribunal, Jaipur Bench
Estimated date of closure of
insolvency resolution process: March 15, 2023
(180 days from commencement)
Insolvency professional: Anoop Bhatia
Interim Resolution
Professional: Anoop Bhatia
C-44, Model Town
Malviya Nagar, Jaipur
Rajasthan 302017
E-mail: ip.anoopbhatia@gmail.com
cirp.jbpl@gmail.com
Last date for
submission of claims: October 4, 2022
KARVY RENEWABLE: CRISIL Keeps C Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Karvy
Renewable Energy Projects Limited (KREPL, a part of the Karvy Data
Management Services Ltd (KDMSL) group) continues to be 'CRISIL C
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 12.15 CRISIL C (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with KREPL for
obtaining information through letters and emails dated June 20,
2022 and August 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 KREPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KREPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
KREPL continues to be 'CRISIL C Issuer Not Cooperating'.
Incorporated in 2016, Hyderabad-based KREPL provides EPC solutions
for solar projects.
Incorporated in 2008, KDMSL, headquartered in Hyderabad, is a
step-down subsidiary of Karvy Stock Broking Ltd (KSBL). It provides
business and knowledge process services. The company started off as
a pure-play back office service provider and added other verticals,
such as e-governance, banking, telecom, and e-commerce. The company
is a strong player in government mandates, such as UIDAI's Aadhaar,
PAN card, NPR Biometric, and E-TDS. It has established healthy
working relationships with several key government departments and
enjoys strong support from the Karvy group.
MOGALS EDUCATIONAL: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Mogals
Educational and Charitable Trust (MECT) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 16 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 1 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 1 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with MECT for
obtaining information through letters and emails dated June 20,
2022 and August 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 MECT, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MECT
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MECT continues to be 'CRISIL D Issuer Not Cooperating'.
MECT, based in Nagercoil (Tamil Nadu), was established in 2004 by
Mr Mohamed Eakieem. The trust offers undergraduate, graduate, and
post-graduate courses in engineering, and teacher training courses
through MET College of Education, MET Engineering College, and MET
Teacher Training College.
N. C. FOODS: CARE Keeps B- Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of N. C. Foods
(NCF) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.51 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 13,
2021, placed the rating(s) of NCF under the 'issuer
non-cooperating' category as NCF had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. NCF
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 30, 2022, August 9, 2022, August 19, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
N. C. Foods (NCF) was established as a proprietorship firm in 2003
by Mr Ghanshyam Das Mittal. The firm is engaged in processing of
basmati and non-basmati rice. The processing unit of the firm is
located in Rudrapur, Uttarakhand.
NALANDA BUILDERS: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Nalanda
Builders and Developers India Limited (NBDIL) continue to be
'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 2 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 23 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 20 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with NBDIL for
obtaining information through letters and emails dated June 20,
2022 and August 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 NBDIL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NBDIL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NBDIL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in September 2005, NBDIL undertakes residential real
estate development in Agra, Jhansi, and Vrindavan (all in Uttar
Pradesh). The company is promoted by Mr Santosh Katara, Dr Sharad
Bhaduria, and Mr Radhey Shyam Sharma, and their families. The
promoters are first-generation entrepreneurs, who set up the
business in 2003 as a partnership firm, which was reconstituted as
a private limited company in 2005.
OM MOTORS: CARE Keeps B-/A4 Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of OM Motors
(OM) continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/Short 12.00 CARE B-; Stable/CARE A4;
Term Bank ISSUER NOT COOPERATING;
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 16, 2021,
placed the rating(s) of OM under the 'issuer non-cooperating'
category as OM had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. OM continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 1, 2022, June 11, 2022, June 21, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Mr. Om Prakash Choudhary has experience of around two decades in
the automobile dealership and auto ancillaries trading business
which has enabled him to establish a wide network of operations in
diverse areas. OM started the business of trading of auto parts
business in 2000 with other companies, it got license of authorised
dealer of MTIPL in 2008. Further, assisted by educated and
experienced employees for smooth running of day to day business.
OM SHARDA: CARE Keeps B+ Debt Rating in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Om Sharda
Logistics Solutions Private Limited (OSLSPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 13, 2021,
placed the rating(s) of OSLSPL under the 'issuer non-cooperating'
category as OSLSPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. OSLSPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 29, 2022, June 8, 2022, June 18, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Incorporated in March 2011, Om Sharda Logistics Solutions Private
Limited (OSLSPL) was promoted by the Kabra family of Jamshedpur
(Jharkhand). It has commenced operations from January 2016. The
company has been engaged in goods transportation services.
OPAL ASIA: Insolvency Resolution Process Case Summary
-----------------------------------------------------
Debtor: Opal Asia (India) Private Limited
603, Sabari Samridhi
Opp. Union Park
Sion-Trombay Road
Chembur, Mumbai
MH 400071
Insolvency Commencement Date: August 27, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: February 20, 2023
(180 days from commencement)
Insolvency professional: Mr. Vinod Radhakrishnan Nair
Interim Resolution
Professional: Mr. Vinod Radhakrishnan Nair
A-108, Om Rachana CHS
Sector-17, Vashi
Navi Mumbai 400705
E-mail: vinod@nairca.com
Last date for
submission of claims: September 10, 2022
PIPE & METAL: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pipe & Metal
(India) (PMI) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.75 CRISIL D (Issuer Not
Cooperating)
Proposed Fund- 4.25 CRISIL D (Issuer Not
Based Bank Limits Cooperating)
CRISIL Ratings has been consistently following up with PMI for
obtaining information through letters and emails dated June 20,
2022 and August 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 PMI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PMI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PMI continues to be 'CRISIL D Issuer Not Cooperating'.
Set up in 1986, PMI is a Ghaziabad (Uttar Pradesh)-based
proprietorship firm of Mr. Narendra Gupta. It trades in iron and
steel tubes and pipes in Uttar Pradesh, Haryana, Delhi, and
Rajasthan.
PMR INFRASTRUCTURES: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of PMR
Infrastructures Private Limited (PMR) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Overdraft 4 CRISIL D (Issuer Not
Facility Cooperating)
Secured Overdraft 1 CRISIL D (Issuer Not
Facility Cooperating)
CRISIL Ratings has been consistently following up with PMR for
obtaining information through letters and emails dated June 20,
2022 and August 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 PMR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PMR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PMR continues to be 'CRISIL D Issuer Not Cooperating'.
Set up in 2004, PMR undertakes civil construction works, mainly
related to irrigation projects. Daily operations of the
Hyderabad-based company are managed by Mr P Mohan Reddy and his
family members.
PUSHPA BUILDERS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Pushpa Builders Limited
6, D.B. Gupta Road
Paharganj, New Delhi
Insolvency Commencement Date: September 20, 2022
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: March 19, 2023
Insolvency professional: Sanjay Mehra
Interim Resolution
Professional: Sanjay Mehra
B11, Third Floor, Geetanjali Enclave
Opp Aurbindo College
New Delhi 110017
E-mail: sanjay.mehra64@gmail.com
cirp.pushpa@gmail.com
Classes of creditors: Advance from Customers
Allotees
Homebuyers
Insolvency
Professionals
Representative of
Creditors in a class: Devvart Rana
Last date for
submission of claims: October 4, 2022
R. R. PIPES: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shree R. R.
Pipes (SRRP) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 22,
2021, placed the rating(s) of SRRP under the 'issuer
non-cooperating' category as SRRP had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. SRRP
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 8, 2022, August 18, 2022, August 28,
2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Shree R.R. Pipes, a unit of RKD Pipes Private Limited (RKD)
established as a firm in 2012 by Mr. Sharad Gupta. The firm was
taken over by RKD pipes Private Limited (incorporated in 2012). RRP
is operating under RKD which has no other business activity. Mr.
Sharad Gupta and Ms. Ritu Agarwal are managing the operations of
RRP who are also director in RKD. The firm is primarily engaged in
trading of PVC tubes, GI pipes, Mild steel tubes etc.
ROHINI METALS: CRISIL Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Rohini Metals
Industries (RMI) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RMI for
obtaining information through letters and emails dated June 20,
2022 and August 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 RMI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RMI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RMI continues to be 'CRISIL D Issuer Not Cooperating'.
RMI was established in 2016, it is located in Nagpur, Maharashtra.
RMI is owned and managed by Shri Prakash Waghdhare and Smt. Sindhu
Waghdhare. RMI is engaged in recycling lead acid batteries to
manufacture lead ingots, with installed capacity of 18000
tons/month.
SARADHAMBIKA PAPER: CARE Lowers Rating on INR6cr LT Loan to B
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Saradhambika Paper and Board Mills Private Limited (SPBMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 21, 2021,
placed the rating(s) of SPBMPL under the 'issuer non-cooperating'
category as SPBMPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SPBMPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 6, 2022, June 16, 2022, June 26, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the bank facilities of SPBMPL have been
revised on account of non-availability of requisite information.
The ratings further consider decline in operating income, overall
profitability and increased debt levels during FY21 over FY20.
Incorporated in March 1994, Saradhambika Paper and Board Mills
Private Limited (SPBMPL) commenced operations in June 1996 and is
engaged in the manufacturing of Kraft paperboards in the range of
250-450 GSM (grams per square metre) and burst factor of 6-10.
SAVITRI SWADESHI: CARE Keeps B- Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Savitri
Swadeshi Bikri Kendra (SSBK) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 22,
2021, placed the rating(s) of SSBK under the 'issuer
non-cooperating' category as SSBK had failed to provide information
for monitoring of the rating and had not paid the surveillance
fees for the rating exercise as agreed to in its Rating Agreement.
SSBK continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 8, 2022, August 18, 2022, August 28,
2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Gurgaon-based (Haryana) SSBK was established as a proprietorship
firm in 2012 by Mrs Nutan Sharma. The firm is currently being
managed by Mr Trilok Sharma and Mr Shyam Sunder Sharma. SSBK has
distributorship of Patanjali Ayurvedic Limited (PAL) and Divya
Pharmacy (DP).
SHIVOM COTSPIN: CARE Lowers Rating on INR24.17cr LT Loan to B
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shivom Cotspin Limited (SCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 24.17 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 2, 2021,
placed the rating(s) of SCL under the 'issuer non-cooperating'
category as SCL had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SCL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 18, 2022, May 28, 2022, June 7, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of non-availability of
requisite information. The ratings also consider a decline in scale
of operations and increase in net loss in FY21 compared to FY20.
Incorporated in 2003, SCL is engaged in the manufacturing of cotton
yarn since the commencement of its commercial operations in 2007.
The company operates from a single manufacturing unit in Kala Amb,
Himachal Pradesh.
SIMRAN FOOD: CARE Keeps B Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Simran Food
Private Limited (SFPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 5, 2021,
placed the rating(s) of SFPL under the 'issuer non-cooperating'
category as SFPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SFPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 21, 2022, May 31, 2022, June 10, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
SFPL was incorporated in 1998 and is promoted by Mr Vijay Kumar
Gupta. The company has an installed capacity of 60,000 TPA and the
manufacturing facility is located in UP. There are two other group
companies named as Akshat Agro Milling Company Pvt. Ltd. and Akshat
Roller Flour Mills Pvt. Ltd. The company has an active
participation in UP, Bihar and West Bengal whereas the whole group
is present in various other states such as Madhya Pradesh,
Jharkhand, Andhra Pradesh and Tamil Nadu. The company has a
distribution network of more than 60 distributors and association
with local brokers for the sale of the products.
SINNAR THERMAL: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Sinnar Thermal Power Limited
Basement, A-103
Road No. 4
Mahipalpur Extension
New Delhi 110037
Insolvency Commencement Date: September 19, 2022
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: March 17, 2023
(180 days from commencement)
Insolvency professional: Adarsh Sharma
Interim Resolution
Professional: Adarsh Sharma
J 6A, Kailash Colony
New Delhi 110048
E-mail: adarsh@adarshca.com
ip.sinnar@gmail.com
Last date for
submission of claims: October 3, 2022
SPICEJET LTD: Continues at 50% Capacity, 80 Pilots on Unpaid Leave
------------------------------------------------------------------
ch-aviation reports that India's Directorate General of Civil
Aviation (DGCA) said on September 21 that it had extended
restrictions on SpiceJet (SG, Delhi Int'l) to operate only half of
its approved departures until October 29, although it noted there
had been a reduction in the number of safety incidents plaguing the
carrier.
As previously reported by ch-aviation, the authority ordered
SpiceJet on July 27 to cut its scheduled flights by 50% for the
ensuing eight weeks due to concerns over safety, but the airline
insisted at the time that there would be no impact on its
operations as it had already reset its operations "due to the
current lean travel season."
In its update, the DGCA wrote to the troubled low-cost carrier in a
letter - as released in a tweet by the news agency Asian News
International - that its latest review "has indicated that there is
an appreciable reduction in number of safety incidents, ch-aviation
relates. However, as a matter of abundant caution the competent
authority has decided that the restriction [. . .] shall continue
to be in force til the end of the summer schedule, ie,
29.10.2022."
The letter, signed by Maneesh Kumar, the authority's joint director
general of civil aviation, added: "Any increase in the number of
departures beyond 50% of the total number of departures approved
under the summer schedule 2022, during this period, shall be
subject to the airline demonstrating to the satisfaction of the
DGCA that it has sufficient technical support and financial
resources to safely and efficiently undertake such enhanced
capacity," ch-aviation relays.
At least until October 29, it concluded, it will continue to
subject SpiceJet to "enhanced surveillance".
According to the ch-aviation fleets advanced module, out of
SpiceJet's total fleet of 79 aircraft, 30 are currently inactive.
According to ch-aviation, the latest order came one day after the
airline told staff it was sending 80 pilots on leave without pay
for three months to cut costs, assuring it would later have enough
capacity to operate a full schedule once the DGCA restriction is
lifted. Sources told local media that the carrier had expected the
directorate to extend its curtailment. They also said that of the
80 employees affected, 40 are B737 pilots and the other 40 operate
the carrier's fleet of DHC-8-Q400s.
"In a temporary measure to rationalise costs, SpiceJet has decided
to place certain pilots on leave without pay for a period of three
months. This measure, which is in line with SpiceJet's policy of
not retrenching any employee, which the airline steadfastly
followed even during the peak of the Covid pandemic, will help
rationalise pilot strength vis-a-vis the aircraft fleet," the
airline said in its internal memo.
It explained that while it had continued with its planned pilot
induction programme in the expectation that the B737 MAX would be
back in service soon, the prolonged grounding had resulted in a
large number of excess pilots at SpiceJet, says ch-aviation.
"We will be inducting MAX aircraft shortly and these pilots will be
back in service as the induction begins. During the LWP [leave
without pay] period, pilots will remain eligible for all other
employee benefits as applicable, that is all opted insurance
benefits and employee leave travel," it said.
SpiceJet operates thirteen B737-8s, eleven of which are currently
active, and it has an additional 129 of the type on order, the
report adds.
About SpiceJet
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights between
major cities in India. The carrier is India's second-biggest budget
airline, after IndiGo.
As reported in the Troubled Company Reporter-Asia Pacific on Jan.
4, 2022, auditors have cast a doubt on the ability of debt-laden
SpiceJet, to remain a going concern as its net worth has eroded.
In the annual report for FY21, the independent auditors pointed out
that SpiceJet has defaulted on tax payments, GST payments and
employee provident fund dues in FY21 totalling INR90 crore,
according to The Hindu BusinessLine.
STANDARD PAPER: CRISIL Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Standard Paper
And Board India Private Limited (SPBIPL) continues to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SPBIPL for
obtaining information through letters and emails dated June 20,
2022 and August 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 SPBIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
SPBIPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of SPBIPL continues to be 'CRISIL D Issuer Not
Cooperating'.
SPBIPL was established in 2010 and commenced operations in 2016; it
is promoted by Mr Yennarkey R Chiranjeevi Rathnam and his wife, Ms
Vijayalakshmi Chiranjeevi Rathnam, who also manage operations. The
company, based in Sivakasi, Tamil Nadu, is part of the Standard
group and trades in printer and copier paper.
STARLITE BUILDERS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Starlite Builders Private Limited
H.No. 4-B, Office No. 25
1st Floor, Ashirwad Complex
Behind Shiva Market
Vill. Pitampura
New Delhi North West
DL 110034
IN
Insolvency Commencement Date: September 20, 2022
Court: National Company Law Tribunal, Faridabad Bench
Estimated date of closure of
insolvency resolution process: March 18, 2023
Insolvency professional: Ajay Kumar Siwach
Interim Resolution
Professional: Ajay Kumar Siwach
Flat no. 504
Rama Krishna Society
Sector-2
Faridabad 121004
E-mail: siwachajay@gmail.com
- and -
F-58, Lower Ground Floor
Front 2nd Half B, Kalkaji
New Delhi 110019
E-mail: irpstarlite2022@gmail.com
Last date for
submission of claims: October 4, 2022
ULTRA ALLUMINIUM: CARE Keeps C Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Ultra
Alluminium Private Limited (UAPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.30 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated July 14, 2021,
placed the rating(s) of UAPL under the 'issuer non-cooperating'
category as UAPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. UAPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 30, 2022, June 9, 2022, June 19, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Ultra Alluminium Private Limited (UAPL) was incorporated in
September, 2009 and currently it is managed by Mr. Jaya Dayal Kedia
and Mr. Prem Dayal Kedia. Since its incorporation the company has
been engaged in the business of manufacturing of aluminium products
like angles, channels, shafts, extrusions etc. The manufacturing
plant of the company is located at Raipur, Chhattisgarh with an
installed capacity of 4,000 metric ton per annum.
VARDHMAN ENTERPRISE: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Vardhman
Enterprise - Ahmedabad (VE) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.8 CRISIL D (Issuer Not
Cooperating)
Drop Line 4.45 CRISIL D (Issuer Not
Overdraft Cooperating)
Facility
CRISIL Ratings has been consistently following up with VE for
obtaining information through letters and emails dated June 20,
2022 and August 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 VE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on VE is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of VE
continues to be 'CRISIL D Issuer Not Cooperating'.
Established in 2008, VE is an Ahmedabad-based partnership firm
promoted by Mr Pannalal Jain and his family. It trades in sugar in
the domestic market. Operations aremanaged by Mr Mahavirprasad
Jain, who has an industry experience of more than three decades.
===============
M A L A Y S I A
===============
KHEE SAN: Gets Court Nod to Proceed with Scheme of Arrangement
--------------------------------------------------------------
theedgemarkets.com reports that Practice Note 17 (PN17) company
Khee San Bhd obtained leave from the High Court on Sept. 23 to
proceed with a scheme of arrangement with its creditors.
According to the report, the candy manufacturer said the court
ordered the company to convene a meeting with the creditors to
consider approving, with or without any alteration or modification,
a scheme of arrangement and compromise.
theedgemarkets.com relates that the court also granted Khee San a
restraining order on proceedings against the company, its
subsidiaries or their assets for a period of three months, the
group said in a bourse filing.
"The order shall restrain all further proceedings in any action or
proceeding against the company, including winding up, execution and
arbitration proceedings as well as any intended or future
proceedings, for a period of 90 days from the date of the order
being granted," it added.
In November last year, Khee San slipped into PN17 status after its
wholly owned subsidiary Khee San Food Industries Sdn Bhd was placed
under judicial management following an application by Maybank
Islamic Bhd to put the unit under court-supervised restructuring.
Earlier this month, Khee San regained the management and operations
of the unit after the High Court ordered interim judicial manager
Datuk Adam Primus Varghese Abdullah to return them to the company,
theedgemarkets.com notes.
This came on the heels of Maybank Islamic informing the court that
it withdrew its originating summons to place the unit under
judicial management.
According to Khee San, KSFI's assets account for over half of the
total assets employed of the company on a consolidated basis.
About Khee San
Khee San Berhad is a Malaysia-based investment holding company. The
Company, through its subsidiaries, manufactures sweets and
confectionery products.
As reported in the Troubled Company Reporter-Asia Pacific on Nov.
24, 2021, Khee San Bhd was classified a Practice Note 17 (PN17)
company after its wholly-owned subsidiary was placed under judicial
management.
In a bourse filing on Nov. 19, Khee San said Maybank Islamic Bhd,
via its solicitor Messrs Shook Lin & Bok, had filed an application
to place its unit Khee San Food Industries Sdn Bhd under the
court-supervised restructuring, theedgemarkets.com said.
KONSORTIUM TRANSNASIONAL: To Exit Express Bus Business
------------------------------------------------------
theedgemarkets.com reports that Konsortium Transnasional Bhd (KTB)
has proposed to dispose of its express bus business as part of the
group's plan to regularise its financial condition to address its
Practice Note 17 (PN17) status.
According to the report, the group said it is disposing of
wholly-owned Park May Bhd to Nadicorp Holdings Sdn Bhd, a company
with interests in transportation, manufacturing, agro-business and
property, for a nominal sum of MYR1 as prospects of the express bus
business remains uncertain.
KTB added that the parties have also agreed that a sum of MYR51.46
million owed by KTB and its unit Citiliner Sdn Bhd to Nadicorp and
Park May be waived as part of the deal, the report says.
The major shareholder of Nadicorp is Tan Sri Mohd Nadzmi Mohd
Salleh, who, together with a related firm, Lengkap Suci Sdn Bhd,
were previously the major shareholders of KTB, with a total stake
of over 10%.
They ceased to be major shareholders of KTB on Aug. 17, with their
collective shareholding decreasing to 9.57%, said KTB in a bourse
filing.
theedgemarkets.com says KTB's regularisation plan also includes a
private placement of 125 million new shares, representing 26.61% of
its existing shares to independent third parties at an issue price
of 16 sen per share.
theedgemarkets.com relates that the third parties are SWC Capital
Sdn Bhd, AJK Hartanah Sdn Bhd, Supreme Home Appliances Sdn Bhd, Ho
Teik Suan, Shin Kam Sun, Foong Kah Heng, Loy Chee Jin, Ong Tong
Pheng @ Eng Ah Toon, Mohd Afizan Mohd Ariff, Lim Chin Kean, Andy
Woo Weng Kok, Rondy Yunanda Yong, Datuk Chan Wah Kiang and Darren
Cheong Hao Yuan.
Based on the issue price of 16 sen per placement share, KTB is
expected to raise gross proceeds of MYR20 million, which will be
used for working capital of the group's construction business.
Currently, KTB said it has seven construction projects comprising
six projects amounting to MYR375.83 million, and another one
amounting to MYR109.61 million.
Another measure proposed by KTB is a share capital reduction,
entailing a reduction of the share capital from MYR54.49 million to
MYR5.45 million, theedgemarkets.com notes.
According to theedgemarkets.com, KTB said the MYR49.04 million
credit arising from the cancellation of the share capital will be
applied to eliminate the group's accumulated losses.
Through the regularisation plan, the group would be able to exit
from its loss-making business, hence stemming any further potential
losses to the group, KTB said.
At the same time, this can reduce its liabilities and strengthen
the group's financial position, as well as obtaining additional
funds to undertake its ongoing projects, in order to return to
profitability, theedgemarkets.com relays.
This will assist in addressing KTB's PN17 status by reducing
accumulated losses and improving the shareholder's fund position.
The group is expected to record a proforma gain of MYR43.03 million
from this exercise, theedgemarkets.com adds.
About KTB
Konsortium Transnasional Berhad is a Malaysia-based company engaged
in investment holding and the provision of public bus
transportation comprising stage and express bus operations.
Konsortium Transnasional Berhad slipped into PN17 (Practice Note
17) status in April 2020 as it has triggered the Prescribed
Criteria under Paragraph 2.1 (a) of PN17. The auditors of
Konsortium Transnasional have highlighted a material uncertainty
related to going concern on the Company's ability to continue as a
going concern in the Company's audited financial statements for the
year ended Dec. 31, 2018 and based on the Company's quarterly
report for the financial period ended Dec. 31, 2019 ("Q4 2019"),
the shareholders' equity of the Company on a consolidated basis is
approximately 34.8% of the share capital of the Company as at Dec.
31, 2019.
=====================
N E W Z E A L A N D
=====================
APFT LIMITED: Court to Hear Wind-Up Petition on Oct. 4
------------------------------------------------------
A petition to wind up the operations of APFT Limited will be heard
before the High Court at Rotorua on Oct. 4, 2022, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on July 29, 2022.
The Petitioner's solicitor is:
T. Saunders
Inland Revenue, Legal Services
21 Home Straight
PO Box 432
Hamilton
ICE WORLD: Creditors' Proofs of Debt Due on Oct. 20
---------------------------------------------------
Creditors of Ice World NZ Limited are required to file their proofs
of debt by Oct. 20, 2022, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Sept. 21, 2022.
The company's liquidators are:
Steven Khov
Kieran Jones
Khov Jones Limited
PO Box 302261
North Harbour
Auckland 0751
NEW ZEALAND LIVESTOCK: Creditors' Proofs of Debt Due on Nov. 3
--------------------------------------------------------------
Creditors of New Zealand Livestock Holdings Limited are required to
file their proofs of debt by Nov. 3, 2022, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Sept. 19, 2022.
The company's liquidators are:
Wendy Somerville
Malcolm Hollis
PwC Christchurch
PO Box 13244
City East
Christchurch 8141
RESIMAC VERSAILLES 2020-1: S&P Affirms BB(sf) Rating on Cl. E Notes
-------------------------------------------------------------------
S&P Global Ratings affirmed its ratings on six classes of notes
issued by New Zealand Guardian Trust Co. Ltd. as trustee of RESIMAC
Versailles Trust - RESIMAC Versailles Trust Series 2020-1.
The rating actions reflect S&P's view of the credit support
available, which is sufficient to withstand the stresses it
applies. Credit support comprises note subordination for all rated
notes, lenders' mortgage insurance covering 0.2% of the loans in
the pool, and excess spread, if any.
The overall credit quality of the underlying collateral pool, which
as of July 31, 2022, has a pool factor of 41.6%, continues to
improve, with weighted-average seasoning of 32.4 months and a
current weighted-average loan-to-value ratio of 67.6%. These
positive factors lower our expectation of loss.
The pool displays good asset performance relative to the Standard &
Poor's Performance Index. As of July 31, 2022, there are no loans
greater than 90 days in arrears. There have been no losses to
date.
The rated classes of notes are currently paying on a sequential
basis and will transition to pro-rata basis once conditions are
met. These include meeting performance triggers and a call-option
trigger.
S&P said, "While there is more than sufficient note subordination
for all rated notes, our ratings on the class B, class C, and class
D notes are lower than our model outcomes because our cash flow
analysis indicates potential yield strain. The strain is due to the
observed reduction in weighted-average interest rates of the pool
as of July 31, 2022, relative to that on closing. Another factor is
the decline in fixed-rate loans in the pool, which, because of the
documented minimum margin and requirement for interest-rate swap,
as of July 31, 2022, attracts a higher margin to the trust than the
variable-rate loans in the pool. Partly mitigating this are the
transaction's structural features, including the reduction of
senior interest payable on certain classes of notes after the
call-option date and the trapping of excess spread if certain
conditions are met. The weighted-average interest rates of the pool
were lower as of July 31, 2022, than they were on closing. However,
as of Sept. 26, 2022, they are higher.
"Our expectation is that the various mechanisms to support
liquidity within the transactions, including principal draws, and
amortizing liquidity facility are sufficient to ensure timely
payment of interest. Such features support the rated notes' receipt
of timely interest and ultimate principal repayment under stresses
commensurate with the ratings on the respective classes of notes.
Ratings Affirmed
RESIMAC Versailles Trust –
RESIMAC Versailles Trust Series 2020-1
Class A1: AAA (sf)
Class A2: AAA (sf)
Class B: AA (sf)
Class C: A (sf)
Class D: BBB (sf)
Class E: BB (sf)
SHANE MOORE: Court to Hear Wind-Up Petition on Oct. 4
-----------------------------------------------------
A petition to wind up the operations of Shane Moore Services
Limited will be heard before the High Court at Rotorua on Oct. 4,
2022, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on June 30, 2022.
The Petitioner's solicitor is:
T. Saunders
Inland Revenue, Legal Services
21 Home Straight
PO Box 432
Hamilton
WOODGROWTH INVESTMENTS: Creditors' Proofs of Debt Due on Oct. 18
----------------------------------------------------------------
Creditors of Woodgrowth Investments Limited are required to file
their proofs of debt by Oct. 18, 2022, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Sept. 20, 2022.
The company's liquidators are:
Iain Bruce Shephard
Jessica Jane Kellow
BDO Wellington
Level 1, 50 Customhouse Quay
Wellington 6011
=================
S I N G A P O R E
=================
GLOBAL ADVENTURE: Commences Wind-Up Proceedings
-----------------------------------------------
Members of Global Adventure Pte Ltd and Global Bravery Pte Ltd on
Sept. 21, 2022, passed a resolution to voluntarily wind up the
companies' operations.
The companies' liquidators are Messrs Mick Aw and Bernard Juay.
GLOBAL CONQUEST: Commences Wind-Up Proceedings
----------------------------------------------
Members of Global Conquest Pte. Ltd and Global Car Carriers
Holdings Pte Ltd, on Sept. 22, 2022, passed a resolution to
voluntarily wind up the companies' operations.
The companies' liquidators are Messrs Mick Aw and Bernard Juay.
GOQUO PTE: Creditors' Proofs of Debt Due on Oct. 26
---------------------------------------------------
Creditors of Goquo Pte. Ltd are required to file their proofs of
debt by Oct. 26, 2022, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Sept. 15, 2022.
The company's liquidator is:
David Chew Hock Lin
80 Raffles Place
#43-01 UOB Plaza 1
Singapore 048624
S.A.M. MARKETING: Court Enters Wind-Up Order
--------------------------------------------
The High Court of Singapore entered an order on Sept. 16, 2022, to
wind up the operations of S.A.M. Marketing Private Limited, S.A.M.
Fintech Pte. Ltd and S.A.M. Trade (V) Limited.
The Companies' liquidators are:
Mr. Goh Thien Phong
c/o GTP Advisory PAC
7 Straits View
Level 12 Marina One East Tower
Singapore 018936
Mr. Chan Kheng Tek
c/o PricewaterhouseCoopers
7 Straits View
Level 12 Marina One East Tower
Singapore 018936
SAMTRADE CUSTODIAN: Court Enters Wind-Up Order
----------------------------------------------
The High Court of Singapore entered an order on Sept. 16, 2022, to
wind up the operations of Samtrade Custodian Pte. Ltd., Samtrade
Custodian Limited and Samtrade FX Ltd.
The Companies' liquidators are:
Mr. Goh Thien Phong
c/o GTP Advisory PAC
7 Straits View
Level 12 Marina One East Tower
Singapore 018936
Mr. Chan Kheng Tek
c/o PricewaterhouseCoopers
7 Straits View
Level 12 Marina One East Tower
Singapore 018936
=============
V I E T N A M
=============
HANOI POWER: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
-------------------------------------------------------------
Fitch Ratings has affirmed Vietnam-based Hanoi Power Corporation's
(EVNHANOI) Long-Term Foreign-Currency Issuer Default Rating of
'BB'. The Outlook is Positive.
The rating reflects EVNHANOI's 'bb' Standalone Credit Profile
(SCP), which is assessed at the same level of the parent, Vietnam
Electricity (EVN, BB/Positive), because EVN exerts significant
control over EVNHANOI's financial profile, including determining
its profitability. This is despite EVNHANOI's financial profile
being much stronger relative to its SCP. The SCP also reflects
EVNHANOI's stable operating profile as a pure distribution utility
with monopoly position in its area of operation.
The Positive Outlook on EVNHANOI is in line with EVN's rating.
EVNHANOI's ratings will be equalised with EVN should its SCP
weaken, based on our assessment of a 'High' incentive to support
from EVN under Fitch's Parent and Subsidiary Linkage Rating
Criteria.
KEY RATING DRIVERS
Strong Market Position: EVNHANOI benefits from a monopoly position
for electricity distribution in Vietnam's capital city of Hanoi. We
expect Vietnam's strong economic growth to support revenue over the
medium term. EVNHANOI's diversified counterparties and low
receivable days also support its credit profile. However, the
regulatory framework's short history, the short six-month period
set for tariffs under the framework and political risks limit its
business profile, in a similar way to its parent.
Rebound in Demand Growth: Fitch expects EVNHANOI's electricity
sales volume to increase by 3.7% in 2022 (2021: 3.2%), led by
recovery in economic activity. Although sales volume growth was
slower in 1H22 at 1.8%, Fitch expects demand to pick up in 2H22,
led by growth in the commercial and industrial segments. EVNHANOI's
electricity demand is more stable than that of other Vietnamese
distribution companies as it has higher exposure to the residential
segment.
Diversified Counterparties, Low Receivables Risk: EVNHANOI benefits
from its stable and diversified customer base. More stable
residential customers account for 57% of EVNHANOI's revenue and its
top 20 customers account for around 6% of total revenue. Lower
counterparty risk is also reflected in EVNHANOI's high collection
rates of well above 99% and low receivable days of around six days,
which support its operating cash flow.
Delayed Tariff Increases: Fitch said, "We expect tariff increases
to be delayed to support post-pandemic economic growth. We expect
tariffs to rise by an average of 1.8% in 2022, as discounts are
removed (2021: VND2,047/kWh). EVNHANOI charged a higher tariff in
1H22, mainly due to removal of tariff discounts during the period
compared with 2021. The average retail tariff increased by 1.2% in
2021 due to a reduction in pandemic-related tariff discounts
compared with 2020."
The tariff framework, which was introduced in August 2017, allows
increases in electricity tariffs every six months, subject to
certain conditions. Tariff adjustments of up to 5% may be
implemented at the distribution utilities' discretion, but anything
above that requires government approval.
Lower ROE: EVN sets the major cost of electricity purchase - the
bulk-supply tariff - for distribution companies, including for
EVNHANOI, and aims to provide the companies with a modest level of
profit. EVNHANOI expects to maintain its pretax return on equity
(ROE) in line with EVN's target of 1%-3% (based on Vietnamese
GAAP). Historical ROE for EVNHANOI has been around 1%.
High Capex Forecast: Fitch expects EVNHANOI's capex to remain high,
as the company plans around VND5.7 trillion of investments in 2022
(2021: VND4.4 trillion), and average annual outlays of above VND7
trillion-7.5 trillion over the medium term. Capex is mainly for
enhancement of the distribution grid and building substations and
transmission lines to improve the power supply capacity. Fitch
estimates EVNHANOI's net debt to EBITDA to rise gradually, to
around 2.6x by 2024 (2021: 2.2x).
EVN's 'High' Incentive to Support: Fitch assesses EVN's overall
incentive to support EVNHANOI as 'High' based on 'Low' legal
incentives and 'High' operation and strategic incentives. EVNHANOI
is one of the five distribution companies under the EVN group, and
is the only distribution company in Hanoi. EVN fully owns EVNHANOI
and has extensive influence over EVNHANOI's business plans,
profitability and financial profile. EVN also approves EVNHANOI's
budget and capex plan and appoints key executives.
EVN's Credit Profile: EVN's ratings will be equalised to that of
the Vietnamese sovereign (BB/Positive) under Fitch's
Government-Related Entities Rating Criteria, if the SCP is weaker
than the sovereign's rating. EVN's 'bb' SCP reflects its position
as the owner and operator of Vietnam's electricity transmission and
distribution network, and its 38% share of Vietnam's power
generation capacity as of end-2021. EVN's financial profile is much
stronger than its SCP assessment. However, its credit profile is
constrained by the regulatory framework's short history and tariffs
being set for only a short period.
DERIVATION SUMMARY
EVNHANOI's rating reflects its SCP, which benefits from the strong
business and financial profile. The company benefits from its
monopoly distribution business in Hanoi, diversified counterparties
and low receivables. That said, parent EVN exerts significant
influence on the subsidiary's business and financial profile,
including profitability, resulting in EVNHANOI's SCP being at the
same level as the parent.
EVN's distribution businesses are highly strategic, operating
through EVNHANOI and four other wholly owned subsidiaries. The
ratings on Vietnam Electricity Northern Power Corporation
(BB/Positive) and Ho Chi Minh City Power Corporation (BB/Positive),
Vietnam Electricity Central Power Corporation (BB/Positive) and
Southern Power Corporation (BB/Positive) - four other EVN
distribution subsidiaries - also reflect their SCPs and EVN's
extensive influence on their business and financial profiles,
similar to EVNHANOI.
The ratings on National Power Transmission Corporation (EVNNPT,
BB/Positive, SCP: bb+) - a power transmission company within the
EVN group - are at the same level as those of parent EVN. EVNNPT
has lower operating risk as a pure transmission player with better
geographical diversification compared with EVNHANOI. Furthermore,
EVNNPT's ROE is determined by the regulator, albeit in consultation
with EVN. This is compared to EVN's more significant influence on
EVNHANOI, including determining the profitability, which is why the
latter's SCP is a notch lower than that of EVNNPT.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Hanoi's electricity demand to grow by 3.7% in 2022 (2021: 3.2%)
and around 6% from 2023 to 2025.
- Average retail tariffs to increase by 1.8% and bulk-supply
tariffs to fall by 13% in 2022; tariff to remain flat and bulk-
supply tariff increase by 2% in 2023.
- Distribution losses of around 3.5% per year (2020: 3.67%, 2021:
3.55%).
- Average annual capex of around VND5.7 trillion in 2022 and VND7
trillion -7.5 trillion from 2023 to 2025.
- Average interest rate of around 7.5% - 8% over 2022-2025.
- No dividend pay-outs
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on EVN
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on EVN
For EVN's rating, the following sensitivities were outlined by
Fitch in a rating action commentary on 6 September 2022:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on the sovereign, provided the
likelihood of state support does not deteriorate significantly.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on the sovereign;
- Deterioration in EVN's SCP, along with significant weakening in
the likelihood of state support. Fitch sees this as a remote
prospect in the medium term.
LIQUIDITY AND DEBT STRUCTURE
Sound Liquidity: EVNHANOI had readily available cash of around
VND5.8 trillion at end-2021, against current debt maturities of
VND2.2 trillion. Fitch expects the company to generate VND4
trillion-6 trillion of operational cash flow over the next three to
four years. This will be sufficient to manage annual debt
maturities but will require external funds to manage annual capex
targets. EVNHANOI's liquidity benefits from its strong access to
domestic markets and overseas development assistance due to its
linkages with EVN and hence the state.
ISSUER PROFILE
EVNHANOI is one of five electricity distribution companies in
Vietnam with a monopoly position in Hanoi. EVNHANOI is responsible
for the development, operation, and maintenance of facilities for
the distribution of electricity in Hanoi. It is fully owned by EVN,
the country's state-owned fully integrated power utility.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
EVNHANOI's rating is directly linked to the credit quality of its
parent, EVN. A change in Fitch's assessment of the credit quality
of EVN would automatically result in a change in the rating on
EVNHANOI.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
Hanoi Power Corporation LT IDR BB Affirmed BB
HO CHI MINH CITY POWER: Fitch Affirms 'BB' Foreign Currency IDR
---------------------------------------------------------------
Fitch Ratings has affirmed Vietnam-based Ho Chi Minh City Power
Corporation's (EVNHCMC) Long-Term Foreign-Currency Issuer Default
Rating at 'BB'. The Outlook is Positive.
EVNHCMC's rating reflects its 'bb' Standalone Credit Profile (SCP),
which is at the same level as that of its parent, state-owned
Vietnam Electricity (EVN, BB/Positive), which owns 100% of EVNHCMC.
The SCP reflects EVN's significant control over EVNHCMC's financial
profile, including determining its profitability. This is despite
EVNHCMC's financial profile being much stronger relative to its
SCP. The SCP also reflects EVNHCMC's stable operating profile as a
pure distribution utility with a monopoly position in its area of
operation.
The Positive Outlook on EVNHCMC is in line with the Outlook on
EVN's rating. EVNHCMC's ratings will be equalised with EVN's should
its SCP weaken, based on our assessment of a 'High' incentive to
support from EVN under Fitch's Parent and Subsidiary Linkage Rating
Criteria.
KEY RATING DRIVERS
Strong Market Position: EVNHCMC benefits from a monopoly position
for electricity distribution in Vietnam's Ho Chi Minh City. We
expect Vietnam's strong economic growth to support electricity
demand and revenue over the medium term. EVNHCMC's diversified
counterparties and low receivable days also support its credit
profile. However, the regulatory framework's short track record,
the short six-month period for which the tariff is set, and
political risks limit its business profile, similar to its parent.
Rebound in Demand Growth: Fitch expects electricity demand in Ho
Chi Minh City to increase by 8.7% in 2022 for EVNHCMC due to the
low base effect and rebound in economic activity. EVNHCMC's
electricity sales volume slipped by 5.4% in 2021 during the
coronavirus pandemic compared with average growth of around 7% a
year before the pandemic. Fitch forecasts that electricity demand
will increase by an average of 5% from 2023.
Diversified Counterparties, Low Receivables Risk: EVNHCMC's credit
profile benefits from its stable and diversified customer base.
More stable residential customers account for 47% of EVNHCMC's
revenue, while its top 20 customers account for around 12% of its
total revenue. Lower counterparty risk is also reflected in
EVNHCMC's high collection rates of between 99% to 100% and low
receivable days of around five days.
Delayed Tariff Increases: Fitch said, "We expect tariff increases
to be delayed to support post-pandemic economic growth. We expect
tariffs to rise by an average of 1.7% in 2022 with the removal of
discounts (2021: VND2,076/kWh). EVNHCMC charged a higher tariff in
1H22, mainly due to removal of tariff discounts during the period
compared with 2021. The average retail tariff also increased by
1.2% in 2021 due to a reduction in pandemic-related tariff
discounts compared with 2020."
The tariff framework, which was introduced in August 2017, allows
increases in electricity tariffs every six months, subject to
certain conditions. Tariff adjustments of up to 5% may be
implemented at the distribution utilities' discretion, but anything
above that requires government approval.
Low ROE: EVN sets the major cost of electricity purchases - the
bulk-supply tariff - for distribution companies, including for
EVNHCMC, and aims to provide the companies with a modest level of
profit. EVNHCMC expects to maintain its pretax return on equity
(ROE) in line with EVN's target of 1%-3% (based on Vietnamese
GAAP). The historical ROE for EVNHCMC has been 1%-1.5% but improved
to around 2.7% in 2021 due to better profitability.
High Capex Forecast: Fitch expects EVNHCMC's capex to remain high.
EVNHCMC plans annual outlays of VND4 trillion-4.5 trillion over the
next three to four years (2021: VND2.5 trillion). EVNHCMC's capex
is mainly for enhancement of the distribution grid and building
substations and transmission lines to improve the power supply
capacity. Fitch estimates EVNHCMC's net debt to EBITDA will rise
gradually to around 1.5x by 2024 (2021: 1.4x).
EVN's 'High' Incentive to Support: Fitch assesses EVN's incentive
to support EVNHCMC as 'High' based on 'Low' legal incentives and
'High' operation and strategic incentives. EVNHCMC is one of the
five distribution companies under the EVN group, and is the only
distribution company in Ho Chi Minh City. EVN fully owns EVNHCMC
and has extensive influence over EVNHCMC's business plans,
profitability and financial profile. EVN also approves EVNHCMC's
budget and capex plan and appoints key executives.
EVN's Credit Profile: EVN's ratings will be equalised to that of
the Vietnamese sovereign (BB/Positive) under Fitch's
Government-Related Entities Rating Criteria, if the SCP is weaker
than the sovereign's rating. EVN's 'bb' SCP reflects its position
as the owner and operator of Vietnam's electricity transmission and
distribution network, and its 38% share of Vietnam's power
generation capacity as of end-2021.
EVN's financial profile is much stronger than its SCP assessment.
However, its credit profile is constrained by the regulatory
framework's short history and tariffs being set for only a short
period.
DERIVATION SUMMARY
EVNHCMC's rating reflects its SCP and strong linkages with parent
EVN. EVN's distribution businesses are highly strategic, operating
through EVNHCMC and four other wholly owned subsidiaries. The
ratings of Vietnam Electricity Northern Power Corporation
(BB/Positive), Southern Power Corporation (BB/Positive), Vietnam
Electricity Central Power Corporation (BB/Positive) and Hanoi Power
Corporation (BB/Positive) - four other distribution subsidiaries of
EVN - also reflect their SCP and the extensive influence of EVN on
their business and financial profiles, in a similar way to
EVNHCMC.
National Power Transmission Corporation (EVNNPT, BB/Positive, SCP:
bb+) - which is the sole power transmission company within the EVN
group - is capped at the same level of its parent EVN. EVNNPT has
lower operating risk as a pure transmission player with better
geographical diversification compared to EVNHCMC. Further, EVNNPT's
ROE is determined by the regulator, albeit in consultation with
EVN. This is compared to EVN's more significant influence on
EVNHCMC, including determining the profitability, which is why the
latter's SCP is a notch lower than that of EVNNPT.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Ho Chi Minh City's electricity demand to increase by 8.7% in
2022 (2021: decline by 5.4%). Demand to increase by around 5%
from 2023 to 2025.
- Average retail tariffs to increase by 1.7% and bulk-supply
tariffs to decrease by 1.3% in 2022. Average retail tariffs and
bulk-supply tariff to remain flat from 2023.
- Distribution losses of around 3.3% per year (2021: 3.38%).
- Capex of VND4 trillion-4.5 trillion per year from 2022 to 2025.
- Average interest rate of around 5.5% per year (2021: 3.8%).
- No dividend pay-outs.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on EVN
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on EVN
For EVN's rating, the following sensitivities were outlined by
Fitch in a rating action commentary on 6 September 2022:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on the sovereign, provided the
likelihood of state support does not deteriorate significantly.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on the sovereign;
- Deterioration in EVN's SCP, along with significant weakening in
the likelihood of state support. We see this as a remote
prospect in the medium term.
LIQUIDITY AND DEBT STRUCTURE
Sound Liquidity: EVNHCMC had VND3.5 trillion of cash and cash
equivalents at end-2021, exceeding current debt maturities of
VND1.5 trillion. Fitch expects the company to generate VND3.5
trillion-4 trillion of operational cash flow over the next three to
four years. This will be sufficient to manage annual debt
maturities but will require external funds to manage annual capex
targets. However, Fitch expects funding access to be strong for the
company given its direct and indirect linkages to EVN and the
state, respectively.
ISSUER PROFILE
EVNHCMC is one of the five electricity distribution companies in
Vietnam, and it has a monopoly in electricity distribution in Ho
Chi Minh City. EVNHCMC is responsible for the development,
operation, and maintenance of facilities for the distribution of
electricity in Ho Chi Minh City. It is fully owned by EVN, the
country's state-owned fully integrated power utility.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
EVNHCMC's rating is directly linked to the credit quality of its
parent, EVN. A change in Fitch's assessment of the credit quality
of EVN would automatically result in a change in the rating on
EVNHCMC.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
Ho Chi Minh City
Power Corporation LT IDR BB Affirmed BB
VIETNAM OIL: Fitch Affirms 'BB' Foreign Currency IDR, Outlook Pos.
------------------------------------------------------------------
Fitch Ratings has affirmed Vietnam Oil and Gas Group's (PVN)
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with
a Positive Outlook. The agency has also affirmed PVN's senior
unsecured rating at 'BB'.
PVN's IDR is capped by that of its parent, the Vietnam sovereign
(BB/Positive), under Fitch's Government-Related Entities (GRE)
Rating Criteria. The company is wholly owned by the state, which
exerts significant influence over its operating and financial
policies. Fitch assesses PVN's Standalone Credit Profile (SCP) at
'bb+', reflecting the company's conservative financial profile,
diversification and integration across business segments.
Fitch expects PVN's EBITDA to remain strong in 2022, growing by 24%
to over VND56 trillion from VND45 trillion in 2021, supported by
strong crude oil prices, refining margins and distribution spreads.
Fitch expects EBITDA to return to historical levels in 2023-2025
after factoring in the lower oil prices in our oil price deck.
Nevertheless, Fitch expects PVN's financial profile to stay strong,
with net cash until 2024.
KEY RATING DRIVERS
Strong State Linkages: Fitch assesses the status, ownership and
control factor as 'Very Strong'. PVN's targets are set and approved
by the government. Its management is state-appointed, with the
prime minister appointing its chairperson. PVN is the national oil
company with exclusive rights to Vietnam's oil and gas reserves by
regulation. Fitch regards the support record as 'Strong'. PVN has
not required tangible financial support in at least five years due
to its robust financial profile, although we expect support to be
forthcoming if required.
'Very Strong' State Support Incentive: Fitch assesses the
socio-political implications of a PVN default as 'Very Strong' as
operational disruptions would materially affect Vietnam's energy
value chain. PVN accounts for about a third of the country's
refined product consumption, the majority of gas distribution, and
80% of fertiliser production. Fitch assesses the financial
implications as 'Very Strong' because a default by PVN could
significantly affect the availability and cost of domestic and
foreign financing options for the state and other GREs.
Prices Improve Upstream Earnings: Fitch said, "We expect PVN's
upstream EBITDA to almost double in 2022 on historically high
commodity prices, despite a moderate decline in production.
However, we expect earnings to normalise in the next three years on
declining oil prices. PVN's SCP continues to be weighed down by its
high production cost and declining upstream volume."
Fitch expects PVN's production to continue to decline by about
2%-11% per annum until 2024 (2021: -13%) as its oil and gas assets
mature, in line with management guidance. PVN's investment plans
can support an increase in its gas production volume over the
medium term if well executed. Upstream gas sales in Vietnam are
generally based on long-term volume contracts with low price
volatility.
Robust Downstream Operations: Fitch expects EBITDA at PVN's
refinery, fertiliser and oil distribution divisions to rise to
VND28 trillion in 2022 (2021: VND20.4 trillion) on record-high
product spreads, as demand for refined products recovers to
pre-pandemic levels. Prices of refined petroleum products in
Vietnam are usually market-driven with the state utilising an oil
fund to manage short-term volatility. PVN is upgrading its refinery
operations to improve its complexity and increase capacity to 8-8.5
million tonnes per annum (MMTPA) from 6.5MMTPA currently.
Gas, Power Operations Provide Diversification: Fitch expects stable
gas-distribution and power EBITDA of VND18.5 trillion-20.5 trillion
through 2022-2025. PVN's power generation earnings are based on
long-term agreements with state power utility Vietnam Electricity
(EVN, BB/Positive), including cost pass-through mechanisms. Its gas
distribution is less volatile than its upstream and refining
segments. The gas is sold mostly to EVN's and PVN's power plants at
oil-linked prices with some volume sold on fixed prices. The two
segments contribute to earnings stability.
Strong Financial Profile: Fitch said, "We expect PVN to keep its
net cash position, excluding Vietnam Public Joint Stock Commercial
Bank (PVCombank), in the next four years. This is despite our
expectation PVN's free cash flow (FCF) will turn negative from 2022
as we factor in some of its planned upstream and downstream
investments. PVN expects meaningful cash inflows from a planned
sale of partial stakes in some subsidiaries, but the timing and
amount are uncertain. Therefore, these are not in our forecasts,
driving our negative FCF expectation over the medium term."
Large Medium-Term Investment Plans: PVN's investment pipeline is
driven by two key upstream projects. Upstream capex makes up about
40% of its investments over the next four years, with the rest from
refinery expansion, gas infrastructure and power plants. Fitch
forecasts capex of around VND32 trillion in 2022 (2021: VND22
trillion) before rising to VND64 trillion-69 trillion over
2022-2025. This is lower than the company's capex estimates. PVN
has generally spent less than its targets due to delays in the two
key upstream projects.
PVCombank Restructuring: Fitch excludes PVCombank in calculating
PVN's credit metrics as PVN plans to dispose of its 52% stake after
the bank's restructuring. PVCombank accounted for about 74% of
PVN's consolidated debt in 2021, but Fitch does not anticipate
major financial support from PVN to PVCombank during the
restructuring. PVCombank's earnings contribution to PVN is also
immaterial.
Standalone Credit Profile of 'bb+': The assessment is supported by
PVN's position as Vietnam's largest upstream oil and gas producer,
vertical integration across midstream and downstream segments, and
stable gas distribution and power earnings. It is weighed down by
high-cost upstream operations. The SCP also reflects Fitch's
expectations of PVN's strong financial profile despite negative FCF
over the medium term due to high capex and investments.
DERIVATION SUMMARY
PVN's IDR will remain equalised with that of Vietnam even if its
SCP deteriorates below the sovereign rating. The assessment is
comparable with that of both EVN and PT Pertamina (Persero)
(BBB/Stable), which are also linked to their sovereigns. PVN's
status, ownership and control by the state is assessed as 'Very
Strong', similar to our assessment of EVN and Pertamina in light of
their complete state ownership.
The support record factor is assessed as 'Strong' for both PVN and
EVN, compared with 'Very Strong' for Pertamina. PVN and EVN's
assessment reflects our view that the Vietnamese government is
likely to reduce support through debt guarantees progressively,
although we expect support to be forthcoming, if required. On the
other hand, Pertamina's stronger state support mechanism, such as
subsidy reimbursements, state debt guarantees for specific
projects, and first right of refusal for a majority stake in all
expiring upstream production-sharing contracts, including producing
fields, is likely to continue.
Fitch assesses the financial implications of a default on the
sovereigns and other GREs to be 'Very Strong' for PVN, EVN and
Pertamina. Fitch regards the socio-political implications of a
default as 'Very Strong' for PVN - higher than that of EVN - as any
disruptions to PVN's operations will affect the entire energy value
chain in Vietnam. The 'Strong' assessment for EVN reflects the
presence of other state-owned entities that can step in to produce
power if EVN is in financial distress, and feedstock for power
generation is procured mostly from other state-owned enterprises.
Pertamina's socio-political implications of a default, like PVN's,
are also assessed as 'Very Strong' for similar reasons.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Crude prices in line with Fitch's Brent price deck assumptions;
USD100/barrel (bbl) in 2022, USD85/bbl in 2023, USD65/bbl in
2024 and USD53/bbl thereafter
- Oil production to decline gradually to 2.9 million tonnes in
2022 and 2023, and thereafter to 2.4 million tonnes.
- Gas production to decline gradually to 1.1 billion cubic metres
(bnm3) by 2023 and marginally increase to 1.3bnm3 in 2024 and
2025
- Refining volume to remain constant in 2022 and 2023 and
increase to 7.4MMT in 2024
- Refining EBITDA to rebound to USD5.5/bbl in 2021 and stay
around USD4.5/bbl up to 2023.
- Gas distribution volume of 9.1bnm3 in 2022, 6.4bnm3 by 2023 and
recover to 8bnm3 by 2024.
- Power sales volume to improve to 18.6 million kWh in 2023, 19.8
million kWh in 2024 and 24.9 million kWh in 2025.
- Capex of around VND32 trillion in 2022 and VND63 trillion-69
trillion per annum thereafter
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on the sovereign
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on the sovereign
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: PVN had a readily available cash balance of
VND204 trillion as of end-2021, excluding PVCombank, compared with
total debt of VND60 trillion, supporting its net cash position.
Fitch does not expect PVN to have difficulties raising funds for
its investment plans, if required, in light of its status as one of
Vietnam's most important state-owned enterprises. PVN could,
however, require access to offshore capital markets over the long
term if it is to execute some of its larger expansion plans.
ISSUER PROFILE
PVN, Vietnam's national oil company, is fully owned by the state
and operates across the entire oil and gas value chain through its
subsidiaries, including upstream, midstream, refining and retail,
with further diversification into fertilisers and power generation.
PVN has undergone several reorganisations since its establishment
in 1977, becoming one of Vietnam's largest economic groups that
contributes substantially to the country's budget and GDP.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The ratings of PVN are directly linked to the credit quality of its
parent, the sovereign. A change in Fitch's assessment of the credit
quality of the parent will result in a change in the rating on
PVN.
ESG CONSIDERATIONS
Fitch has revised PVN's ESG relevance score for financial
transparency to '3' from '4' as the company has significantly
improved on its financial disclosure timeliness, which is now
comparable with that of other rated corporates.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
Vietnam Oil and Gas Group LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed BB
*********
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-
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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.
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