/raid1/www/Hosts/bankrupt/TCRAP_Public/221114.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, November 14, 2022, Vol. 25, No. 221
Headlines
A U S T R A L I A
BOSS CIVIL: Second Creditors' Meeting Set for Nov. 18
COLMONT SCHOOL: Second Creditors' Meeting Set for Nov. 17
NEST JOINERY: First Creditors' Meeting Set for Nov. 21
TOTAL VALVE: First Creditors' Meetings Set for Nov. 17
VICTORY OFFICES: First Creditors' Meeting Set for Nov. 18
[*] Fitch Affirms 23 Tranches From 9 Challenger and Interstar Deals
C H I N A
EHI CAR: Fitch Lowers LongTerm IDR to 'B-', Outlook Negative
JWD INFOLOGISTICS: Fitch Puts BB+(tha) LongTerm Rating on Watch Pos
LONGFOR GROUP: Gets CNY20 Billion Bond Lifeline
YUYAO SHUNCAI: Fitch Lowers LongTerm IDRs to 'BB+', Outlook Stable
H O N G K O N G
GALAXY ENTERTAINMENT: Falls to HK$581 Million EBITDA Loss in 3Q22
I N D I A
AZURE POWER: Moody's Ba2 Sr. Unsec. Rating Still on Review
BALPRADA HOTELS: ICRA Keeps D Debt Ratings in Not Cooperating
CARNIVAL SOFT: ICRA Moves D Debt Rating to Not Cooperating
CHINTAMANIS JEWELLERY: ICRA Keeps D Ratings in Not Cooperating
CONSOLIDATED CONSTRUCTION: ICRA Keeps D Ratings in Not Cooperating
FUTURE RETAIL: Reliance Group, Adani Submit Bid to Buy Retailer
GINNI GOLD: ICRA Keeps D Debt Ratings in Not Cooperating Category
GOODLUCK CARBON: ICRA Keeps D Debt Ratings in Not Cooperating
HLL MEDIPARK: ICRA Keeps B+ Debt Ratings in Not Cooperating
IL&FS SOLAR: ICRA Keeps D Debt Ratings in Not Cooperating
INDIA CLEANTECH: Fitch Affirms 'BB-' Rating on $334M Secured Notes
INDIA GREEN: Fitch Affirms BB- Rating on $325MM Sec. Notes Due 2024
JALANNAGAR DEVELOPMENT: ICRA Withdraws C Rating on INR6.46cr Loan
JMD LIMITED: ICRA Keeps D Debt Ratings in Not Cooperating
KSHITIJA INFRASTRUCTURE: ICRA Keeps B Rating in Not Cooperating
LANDMARK VENEERS: ICRA Keeps B+ Debt Rating in Not Cooperating
LEAPFROG ENGINEERING: ICRA Keeps C Ratings in Not Cooperating
OSHIYA STRIPS: ICRA Keeps D Debt Ratings in Not Cooperating
OUR CO: ICRA Keeps D Debt Ratings in Not Cooperating Category
PADMAVATHI COTTON: ICRA Keeps D Debt Ratings in Not Cooperating
PANCHSHEEL SOLVENT: ICRA Keeps D Debt Ratings in Not Cooperating
PRAGATI MARINE: ICRA Keeps D Debt Ratings in Not Cooperating
PRIYHEER INFRASTRUCTURES: ICRA Keeps B Rating in Not Cooperating
RAJEEV PRAKASHAN: ICRA Keeps B+ Debt Rating in Not Cooperating
RENEW POWER: Moody's Affirms Ba2 CFR & Rates USD Bond Ba3
SANJOG SUGARS: ICRA Keeps B+ Debt Ratings in Not Cooperating
SHILPI CABLE: ICRA Keeps D Debt Ratings in Not Cooperating
SKD REALTY: ICRA Keeps B+ Debt Rating in Not Cooperating Category
SREI INFRASTRUCTURE: NCLT Extends Insolvency Process Till Jan. 5
TRT BUILDERS: ICRA Keeps C+ Debt Rating in Not Cooperating
VISHWAKARMA BUILDERS: ICRA Keeps D Debt Rating in Not Cooperating
J A P A N
FURUKAWA ELECTRIC: Egan-Jones Retains 'BB+' Sr. Unsec. Debt Ratings
MITSUI OSK: Egan-Jones Retains 'BB+' Sr. Unsecured Debt Ratings
SAKUMASEIKA CO: Candy Maker to go out of Business in January
SHARP CORP: S&P Alters Outlook to Negative, Affirms 'BB-' LT ICR
TOKYO DOME: Egan-Jones Withdraws 'C' Commercial Paper Ratings
M A C A U
WYNN RESORTS: Macau Unit Posts US$163M Loss in 3Q Ended Sept. 30
N E W Z E A L A N D
GEOFF WILSON: Court to Hear Wind-Up Petition on Nov. 17
GLEN ECHO: Creditors' Proofs of Debt Due on Nov. 25
HOLDEM HOLDINGS: Creditors' Proofs of Debt Due on Dec. 16
P&S HOSPO: Court to Hear Wind-Up Petition on Nov. 21
WHITE INTERNATIONAL: Court to Hear Wind-Up Petition on Dec. 9
P A P U A N E W G U I N E A
PAPUA NEW GUINEA: Moody's Affirms B2 LT Rating, Outlook Now Stable
P H I L I P P I N E S
FOREMOST CAGAYAN: CEZA Cancels License of Online Casino Operator
S I N G A P O R E
CATTLE LINE: Court to Hear Wind-Up Petition on Nov. 25
DES & CO: Court Enters Wind-Up Order
GOLDEN ENERGY: Fitch Puts 'B+' IDR on Rating Watch Negative
GOLDEN ENERGY: Moody's Affirms B1 CFR & Alters Outlook to Negative
GOLDEN MOUNTAIN: Placed in Interim Judicial Management
GUAN CHEE: Court to Hear Wind-Up Petition on Nov. 25
OJETS PTE: Court to Hear Wind-Up Petition on Nov. 18
SOMAP INTERNATIONAL: Court to Hear Wind-Up Petition on Nov. 18
- - - - -
=================
A U S T R A L I A
=================
BOSS CIVIL: Second Creditors' Meeting Set for Nov. 18
-----------------------------------------------------
A second meeting of creditors in the proceedings of Boss Civil Aust
Pty Ltd has been set for Nov. 18, 2022, at 12:00 p.m. at the
offices of O'Brien Palmer at Level 9, 66 Clarence Street in Sydney
and via virtual meeting technology.
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 Nov. 17, 2022, at 5:00 p.m.
Daniel Frisken of O'Brien Palmer was appointed as administrator of
the company on Oct. 14, 2022.
COLMONT SCHOOL: Second Creditors' Meeting Set for Nov. 17
---------------------------------------------------------
A second meeting of creditors in the proceedings of Colmont School
Limited has been set for Nov. 17, 2022, at 11:00 a.m. via virtual
meeting technology using Microsoft Team video conference
facilities.
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 Nov. 15, 2022, at 5:00 p.m.
Rachel Burdett of Cor Cordis were appointed as administrators of
the company on Aug. 5, 2022.
NEST JOINERY: First Creditors' Meeting Set for Nov. 21
------------------------------------------------------
A first meeting of the creditors in the proceedings of Nest Joinery
Pty Ltd will be held on Nov. 21, 2022, at 11:00 a.m. via virtual
meeting technology.
Andrew Blundell and Simon Cathro of Cathro and Partners were
appointed as administrators of the company on Nov. 9, 2022.
TOTAL VALVE: First Creditors' Meetings Set for Nov. 17
------------------------------------------------------
A first meeting of the creditors in the proceedings of Total Valve
Services Pty Ltd and Specialised Welding Australia Pty Ltd will be
held on Nov. 17, 2022, at 10:30 a.m. and 11:30 a.m. respectively,
at the offices of QV1 Boardroom at Level 2, 250 St Georges Terrace
in Perth.
Clifford Rocke and Jimmy Trpcevski of WA Insolvency Solutions were
appointed as administrators of the company on Nov. 7, 2022.
VICTORY OFFICES: First Creditors' Meeting Set for Nov. 18
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Victory
Offices Limited will be held on Nov. 18, 2022, at 11:00 a.m. via
virtual meeting.
Danny Vrkic and Daniel O'Brien of DV Recovery Management were
appointed as administrators of the company on Nov. 8, 2022.
[*] Fitch Affirms 23 Tranches From 9 Challenger and Interstar Deals
-------------------------------------------------------------------
Fitch Ratings has affirmed 23 note classes from nine Challenger
Millennium and Interstar Millennium transactions. These
transactions are securitisations of Australian conforming
residential mortgages originated through a network of mortgage
originators and brokers under the Challenger Millennium and
Interstar Millennium securitisation programmes. The notes were
issued by Perpetual Trustees Victoria Limited in its capacity as
trustee.
Entity/Debt Rating Prior
----------- ------ -----
Interstar Millennium
Series 2004-5 Trust
B AU300INTA040 LT Bsf Affirmed Bsf
Interstar Millennium
Series 2005-2L Trust
Class A1 46071TAA1 LT AAAsf Affirmed AAAsf
Class A2 AU300INTC012 LT AAAsf Affirmed AAAsf
Class AB AU300INTC020 LT Asf Affirmed Asf
Class B AU300INTC038 LT Bsf Affirmed Bsf
Interstar Millennium
Series 2005-3E Trust
Class B AU300INTD028 LT Bsf Affirmed Bsf
Interstar Millennium
Series 2006-1 Trust
Class A AU300INTE018 LT AAsf Affirmed AAsf
Class AB AU300INTE026 LT BBBsf Affirmed BBBsf
Class B AU300INTE034 LT Bsf Affirmed Bsf
Interstar Millennium
Series 2006-2G Trust
Class A1 USQ49677AA73 LT AAsf Affirmed AAsf
Class A2 USQ49677AB56 LT AAsf Affirmed AAsf
Class AB AU0000INBHC6 LT BBBsf Affirmed BBBsf
Class B AU0000INBHD4 LT Bsf Affirmed Bsf
Interstar Millennium
Series 2006-3L Trust
Class A2 AU0000INNHB3 LT AAAsf Affirmed AAAsf
Class AB AU0000INNHC1 LT Asf Affirmed Asf
Class B AU0000INNHD9 LT Bsf Affirmed Bsf
Interstar Millennium
Series 2006-4H Trust
A2 AU3FN0000816 LT Asf Affirmed Asf
AB AU3FN0000824 LT BBsf Affirmed BBsf
B AU3FN0000832 LT Bsf Affirmed Bsf
Challenger Millennium
Series 2007-1E
Class B XS0280788976 LT Bsf Affirmed Bsf
Challenger Millennium
Series 2007-2L
Class A AU0000CHUHA5 LT AAAsf Affirmed AAAsf
Class AB AU0000CHUHB3 LT Asf Affirmed Asf
Class B AU0000CHUHC1 LT Bsf Affirmed Bsf
KEY RATING DRIVERS
Stable Asset Performance: At end-August 2022, 30+ day arrears were
significantly higher than Fitch's 2Q22 Dinkum RMBS Index of 0.82%,
ranging from 1.17% for Interstar 2005-3E to 8.20% for Challenger
2007-2L. Arrears are volatile due to the small size of the pools,
but high arrears have not translated into large losses, which
ranged from 0.52% for Interstar 2006-1 to 2.26% for Interstar
2006-4H. There has been one loss since last analysis across all
transactions. All loans in the underlying portfolios have 100%
lenders' mortgage insurance (LMI). LMI payment ratios have been
strong and losses not covered by LMI have been covered by excess
spread.
The asset model was not run for all transactions for this review,
in line with criteria. All rated notes have sufficient
subordination to maintain current ratings. All notes, other than
class B, are constrained at their current ratings because the
transactions remain exposed to concentration risk and the
performance of individual loans - idiosyncratic risk - as the
portfolios paydown. The class B notes are constrained to 'Bsf'
based on the 'Rating Junior Notes with 100% LMI Cover' section of
the criteria. The transactions continue to deleverage, with more
than 15 years of weighted-average seasoning.
Credit Enhancement Supports Ratings: The rated notes for all
transactions have sufficient subordination to maintain the current
ratings. Interstar 2006-1, Interstar 2006-2G and Interstar 2006-4H
are paying pro rata, as subordination triggers continue to be met.
Challenger 2007-1E, Interstar 2004-5 Trust and Interstar 2005-3E
only have the class B notes outstanding. The remaining transactions
have breached their arrears triggers and are paying sequentially,
building up credit enhancement.
There have been no changes to foreign-exchange swap margins or
applicable foreign-exchange stresses and no significant changes to
transaction structures or asset performance since the last cash
flow assessment. Therefore, a full assessment of transaction cash
flow was not completed for any of the reviewed transactions.
Challenger 2007-1E, Interstar 2005-2L and Interstar 2006-2G are
exposed to foreign-currency risk in the event that the Euribor or
US-dollar Libor turn negative, which would require the trusts to
make additional payments to the currency-swap provider in the
relevant foreign currency. Excess spread is likely to be sufficient
to cover any payments due by these trusts.
Low Operational Risk: Advantedge Financial Services Pty Ltd, the
servicer of the transactions, is part of the National Australia
Bank Limited (A+/Stable) group and has extensive experience in
servicing and managing its mortgage portfolio, mitigating the
transactions' operational risk. Advantedge's collection timelines,
policies and procedures relating to mortgage collection are in line
with those of other Australian conforming mortgage lenders.
Tight Labour Market Supports Outlook: Performance is supported by
Australia's continued economic growth (3.6% GDP growth for the year
to June 2022) and tight labour market (3.5% unemployment in
September 2022), despite increasing interest rates. We expect GDP
growth to slow to 1.9% in 2023, with unemployment increasing to
4.1%, reflecting the global slowdown and the lagged impact of
aggressive monetary tightening from the Reserve Bank of Australia.
ESG Credit Relevance Score: The six transactions listed below have
an ESG Relevance Score of '5' for Transaction & Collateral
Structure due to tail risk from lower credit enhancement build-up
than Fitch expected. This was caused by weak pro rata amortisation
conditions, which has a negative impact on the credit profile, and
is highly relevant to the ratings, resulting in a rating
constraint.
- Interstar 2005-2L
- Interstar 2006-1
- Interstar 2006-2G
- Interstar Millennium Series 2006-3L Trust
- Interstar 2006-4H
- Challenger Millennium Series 2007-2L
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
A deterioration in economic fundamentals and consumers' financial
position in Australia beyond Fitch's expectations, where available
credit enhancement cannot compensate for the higher credit losses
and cash flow stresses, all else being equal. Unanticipated
increases in the frequency of defaults and loss severity on
defaulted receivables could produce loss levels higher than Fitch's
base case and are likely to result in a decline in credit
enhancement and remaining loss-coverage levels available to the
notes. Decreased credit enhancement may make certain note ratings
susceptible to negative rating action, depending on the extent of
the coverage decline. Hence, Fitch conducts sensitivity analysis by
stressing a transaction's initial base-case assumptions.
The rating sensitivity section provides insight into the
model-implied sensitivities the transaction faces when assumptions
- weighted average foreclosure frequency or recovery rates - are
modified, while holding others equal. The modelling process uses
the modification of default and loss assumptions to reflect asset
performance in up and down environments. The results should only be
considered as one potential outcome, as the transaction is exposed
to multiple dynamic risk factors.
The class B notes have no credit enhancement other than LMI and
excess income. These notes may be downgraded if there is a
significant deterioration in performance, a significant reduction
in the payment of LMI claims or substantial decrease in excess
spread.
Fitch's previous rating sensitivities for each respective
transaction were discussed in:
- rating action commentary for Interstar 2005-2L, Interstar 2006-1,
Interstar 2006-2G, Interstar 2006-3L, Interstar 2006-4H and
Challenger 2007-2L, published on 5 March 2019;
- rating action commentary for Interstar 2005-3E, published on 18
December 2018; and
- rating action commentary for Interstar 2004-5 and Challenger
2007-1E, published on 5 April 2018.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The rated notes are either at the highest level on Fitch's scale or
are constrained from being upgraded due to non-model related rating
caps. The ratings cannot be upgraded and, as such, upgrade
sensitivity stresses are not relevant.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. Fitch has not reviewed the results of
any third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.
Fitch did not undertake a review of the information provided about
the underlying asset pools ahead of the transactions' initial
closing. The subsequent performance of the transactions over the
years is consistent with the agency's expectations given the
operating environment and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG CONSIDERATIONS
ESG - Transaction and Collateral Structure: Interstar 2005-2L,
Interstar 2006-1, Interstar 2006-2G, Interstar 2006-3L Trust,
Interstar 2006-4H and Challenger 2007-2L have an ESG Relevance
Score of '5' for Transaction & Collateral Structure due to tail
risk, which has a negative impact on the credit profile, and is
highly relevant to the rating.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. 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.
=========
C H I N A
=========
EHI CAR: Fitch Lowers LongTerm IDR to 'B-', Outlook Negative
------------------------------------------------------------
Fitch Ratings has downgraded eHi Car Services Limited's Long-Term
Issuer Default Rating (IDR) to 'B-' from 'B+' and its senior
unsecured rating to 'B-' from 'B+', with the Recovery Rating
remaining at 'RR4'. The Outlook on the IDR is Negative.
The downgrade reflects eHi's weakened financial flexibility.
Liquidity tightened in 1H22 due to weaker operating cash flow
following Covid-19 control measures and longer receivables
collection, with additional outflows for upcoming VAT and debt
repayments expected in 2H22. While there is some room for
negotiating debt terms, particularly for finance leases used for
vehicle purchases, Fitch expects the tighter liquidity has
increased eHi's refinancing risk for its near-term maturities.
The Negative Outlook reflects the continued uncertainty about the
impact on operations from the length and severity of Covid-19
control measures in China, as well as the prolonged collection of
accounts receivable on used-vehicle sales, which could result in
continued weak operating cash flow. A prolonged impact could
further reduce eHi's liquidity buffer and limit available financing
channels.
KEY RATING DRIVERS
Tightening Liquidity: Fitch believes eHi's liquidity buffer has
weakened in recent months, and uncertainty over the pace of
business recovery and prolonged receivable collections may further
erode the buffer. Although eHi slowed vehicle purchases in 1H22 to
preserve cash, it will need cash to repay a CNY230 million VAT
provision by end-2022, due to which it failed to meet the
requirement of certain financial indicators in one bank loan
contract. Although no bank has yet requested for accelerated
repayment, eHi plans to resolve the covenant issue with an CNY80
million early repayment of the loan by end-2022.
High Refinancing Risk: eHi does not have any immediate
capital-market debt maturity, but weaker operating cash flow and a
smaller liquidity buffer could increase its refinancing risk. Fitch
expects the company's funding from banks and leasing companies to
remain supportive in the near term. In particular, loans from
leasing companies often are secured by vehicles, which can reduce
the cash requirement for vehicle purchases and used-vehicle sales
offer some flexibility in debt reduction.
However, the risk related to negotiations with banks and leasing
companies on extension of debt and provision of additional credit
facilities has increased as eHi's liquidity has deteriorated.
Uncertainty of Covid-19 Impact: The imposition of citywide
lockdowns and control measures in 1H22 affected eHi's operations
significantly. Lower utilisation resulted in weaker profitability,
which reduced its return on the capital (primarily debt-funded)
used to buy vehicles. Although the severity of lockdowns seems to
have eased from the worst in March to May 2022, the recovery in
demand is uncertain as control measures are imposed with every
flare-up of Covid-19, which continue to disrupt travel and
mobility, while consumption remains weak.
Elevated Leverage: Fitch expects eHi's medium-term deleveraging
prospects to hinge on the pace of recovery, which could be hindered
by China's zero Covid policy. Net debt/EBITDA in 1H22 was higher
due to weaker-than-expected demand in 2Q22, which should lead to
higher-than-expected leverage in full year 2022. A slower recovery
would imply a structurally lower return compared to its cost of
capital, which would make it more difficult to deleverage over the
longer term without non-debt financing.
Longer Receivable Collection: Fitch assumes lengthening receivables
will reduce eHi's operating cash flow in the medium term.
Historically, eHi had a degree of flexibility to reduce its fleet
size during periods of uncertainty, which should reduce outflow for
vehicle purchases, but the pace of used-car sales and collection of
proceeds may be affected by market conditions. Weak consumer
sentiment and continued Covid-19 restrictions hinder used-car
sales, especially for bulk fleet sales in cases like eHi.
However, eHi can improve receivable collection by exploring new
measures, such as new platforms to sell used vehicles directly to
customers or applying a discount to the sell-back price to dealers.
The company can sell used vehicles directly on the market rather
than to selling back to dealers, though at a lower-than-contracted
price, which could support its financial flexibility.
DERIVATION SUMMARY
eHi's ratings are supported by its leading market position as
China's second-largest car rental company. However, it has a
smaller operating scale and weaker financial profile than other
Fitch-rated car rental operators, such as Localiza Rent a Car S.A.
(BB/Stable), the leading rental car operator in Brazil. eHi also
has smaller operating scale and higher capex requirement, but
better financial flexibility, than China Grand Automotive Services
Group Co., Ltd. (B-/Negative), one of the largest auto dealers in
China.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Revenue to decline in 2022 and rebound in 2023 and stabilise over
2024-2025 (2021: +7.2%)
- EBITDA margin to decline in 2022 and recover beyond 2023 (2021:
45.2%)
- Net capex to reduce in 2022 and resume in 2023 with average net
spending of CNY1.6 billion per year over 2023-2025 (2021: net capex
of CNY2.7 billion)
Recovery Rating Assumptions:
Its recovery analysis assumes that eHi would be liquidated in a
bankruptcy. 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. Fitch has assumed a 10%
administrative claim, in line with its Recovery Rating criteria.
- Advance rate of 70% to account receivables
- Advance rate of 70% to inventory
- Advance rate of 70% to net property, plant and equipment, which
are essentially eHi's vehicles.
The allocation of value in the liability waterfall results in
recovery corresponding to an 'RR4' Recovery Rating for senior
unsecured debt.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/downgrade:
- Fitch may consider revising the Outlook to Stable if the negative
sensitivities are not met in the next 12- 18 months
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Continued weakening of Fitch-defined operating cash flow (with
payments/proceeds for vehicles reclassified under net capex) and
sustained negative free cash flow generation
- Worsening debt maturity profile
LIQUIDITY AND DEBT STRUCTURE
Tightening Liquidity: eHi had readily available cash of CNY671
million at end-June 2022, against short-term debt of CNY1.7 billion
(or CNY2.12 billion if payables for vehicles purchased are
included). In December 2021, eHi repurchased USD398 million of
senior notes due in 2022, which left the next maturity of US dollar
senior notes to November 2024. According to the company, it has a
CNY230 million cash VAT payment due in 2H22 and an approximately
CNY100 million VAT refund by 2023. Fitch believes eHi's liquidity
is supported by its solid bank relationships and its vehicle fleet,
which can be liquidated to fund any shortfalls.
ISSUER PROFILE
eHi is a leading car rental and chauffeur operator in China. It had
a total fleet of more than 75,000 vehicles and covered more than
500 cities in China by end-June 2022. The company was listed on the
New York Stock Exchange before it was privatised in April 2019.
SUMMARY OF FINANCIAL ADJUSTMENTS
Payables for vehicles purchased are included as debt in Fitch's
leverage calculations as these are interest-bearing in nature.
Capex is calculated as gross capex for car purchases net of
proceeds from used car sales.
ESG CONSIDERATIONS
eHi Car Services Limited has an ESG Relevance Score of '4' for
Financial Transparency due to its status as a private company with
less stringent timing requirements for financial disclosures,
compared with publicly listed companies. This has a negative impact
on the credit profile, and is relevant to the rating 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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
eHi Car Services
Limited LT IDR B- Downgrade B+
senior
unsecured LT B- Downgrade RR4 B+
JWD INFOLOGISTICS: Fitch Puts BB+(tha) LongTerm Rating on Watch Pos
-------------------------------------------------------------------
Fitch Ratings (Thailand) has placed JWD InfoLogistics Public
Company Limited's 'BB+(tha)' National Long-Term Rating and its
'B(tha)' National Short-Term Rating on Rating Watch Positive (RWP).
This follows JWD's announcement of its merger with SCG Logistics
Management Company Limited (SCGL), a subsidiary of The Siam Cement
Public Company Limited's (SCC, A+(tha)/Negative) group, by share
swaps.
The RWP reflects Fitch's view that JWD's credit profile should be
stronger after the merger. The Rating Watch will be resolved once
major conditions precedent to the transaction are met and more
details on post-merger business strategy and financial projections
are available.
After the merger, JWD will be an associate company of SCC with
42.9% indirect shareholding. Its financial statements will be
consolidated with those of SCC, as the flagship company of the
group providing logistics and supply-chain services to the group
and third parties, in light of SCC's influence and control of the
company.
Fitch will also review SCC's incentive to support the company,
which could lead to an uplift on its standalone credit profile
(SCP). This will be assessed under Fitch's Parent and Subsidiary
Linkage Rating Criteria after details are available.
KEY RATING DRIVERS
Stronger Business Profile after Merger: After the merger, JWD will
become the largest integrated logistics service provider in
Southeast Asia, based on total revenues of more than THB25 billion
(2021: THB5.1 billion). All assets and liabilities of SCGL will be
transferred to JWD, which will change its name to SCGJWD Logistics
Public Company Limited (SCGJWD). This should increase JWD's
revenues and EBITDAR by about five times and 2.3 times,
respectively. The merged entity should benefit from potential
synergies and economies of scale and scope of business.
SCGL has expertise in transportation and distribution for the
industrial segment with a large network, customer base and cargo.
JWD specialises in warehouse management of dangerous goods and
automotive as well as the cold chain business. Fitch expects the
merged entity's services to be more varied and integrated, given
that the two companies' businesses do not overlap much and are
complementary. JWD will have footprints in more countries after the
merger, including Laos, Myanmar, southern China and the
Philippines, in addition to its existing presence in Vietnam,
Cambodia and Indonesia.
Improving Financial Profile: SCGL is in a net cash position as it
operates with an asset-light model. Its EBITDAR net leverage should
be 2.0x-3.0x, based on its preliminary estimate. The financial
leverage of JWD (1H22: 6.5x) should therefore decrease
significantly after the merger. Nonetheless, Fitch will assess the
sustainability of the company's financial leverage over the medium
term to reflect the expansion and investment plan of the merged
entity.
DERIVATION SUMMARY
JWD is a major full-service inland logistics provider in Thailand.
Up to 15%-20% of its revenue has high visibility, supported by a
concession and medium- to long-term contracts.
Its closest rating peer is Siam Future Development Public Company
Limited (SF, BBB+(tha)/Stable; SCP: bbb-(tha)), a leading
community-mall developer. SF has higher earnings visibility from
long-term tenant contracts, but was significantly affected by the
pandemic due to large rental rebates for tenants facing
difficulties. SF has recovered quickly, supported by its tenant
mix, more than half of which are restaurants and supermarkets
providing daily essentials.
In comparison, JWD's business integration in logistic services and
well-diversified customer base have cushioned the downturn and
compensated for its lower earnings visibility. Its continued large
capex and investment plan means JWD's financial leverage is likely
to be close to SF's over the medium term, while SF has additional
financing flexibility by virtue of low net debt as a percentage of
investment properties at market value. This resulted in JWD being
rated one notch below SF's SCP.
JWD's operating scale is significantly smaller than that of IRPC
Public Company Limited (A-(tha)/Stable; SCP: bbb(tha)), Thailand's
third-largest oil refiner and petrochemicals producer. IRPC has
higher earnings volatility due to commodity-price risks, but its
financial leverage is lower than that of JWD. IRPC's stronger
business profile from its larger operating scale and lower
financial profile means that JWD is rated two notches lower than
IRPC's SCP.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
(Pre-Merger):
- About 15% revenue growth in 2022 from capacity expansion and
first full-year consolidation of newly acquired subsidiaries in
2021, and about 10% revenue growth in 2023-2024;
- EBITDA margin remaining at about 16% in 2022 before improving to
about 18% in 2023-2024;
- Total capex and investment of about THB1.6 billion in 2022 and
about THB1.3 billion a year in 2023-2024.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The merger completes as planned with sustained EBITDAR net
leverage below 6.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch may remove JWD's ratings from Rating Watch Positive if the
merger does not complete;
- EBITDAR net leverage is above 6.0x for a sustained period, if the
merger fails.
LIQUIDITY AND DEBT STRUCTURE
Manageable Liquidity: JWD's debt was THB6.0 billion at end-June
2022, of which THB2.0 billion is due in the 12 months to end-June
2023, including debentures of THB600 million maturing in February
2023. JWD's liquidity is supported by its cash balance and liquid
investments of THB1 billion as of end-June 2022 as well as cash
flow from operations. JWD also has unencumbered properties - land
and buildings with a book value of about THB1 billion - which Fitch
believes it can use to tap secured funding, if required.
The company has adequate access to domestic banks, with unused but
uncommitted banking facilities of THB544 million at end-June 2022.
It also has satisfactory access to domestic capital markets, as
evident from its THB1.9 billion bond issuance in 2021 and THB500
million in 1Q22.
ISSUER PROFILE
JWD is a Thailand-based integrated logistics operator for general
goods, chemicals, automotive and refrigerated foods. It also
engages in relocation services, document storage and self-storage
services. JWD expanded its business to Cambodia and Indonesia over
the past three to four years.
Entity/Debt Rating Prior
----------- ------ -----
JWD InfoLogistics
Public Company
Limited Natl LT BB+(tha)Rating Watch On BB+(tha)
Natl ST B(tha) Rating Watch On B(tha)
LONGFOR GROUP: Gets CNY20 Billion Bond Lifeline
-----------------------------------------------
Caixin Global reports that China's interbank bond market regulator
has approved Longfor Group Holdings Ltd.'s application to issue
CNY20 billion ($2.8 billion) in debt as part of a central
bank-backed scheme to support struggling private developers by
providing a state guarantor.
Longfor can issue the bonds in phases during a specified period of
time, according to a Nov. 10 statement from the National
Association of Financial Market Institutional Investors (NAFMII),
adding that state-owned China Bond Insurance Co. Ltd. has accepted
the firm's bond issuance guarantee application, Caixin relays.
Longfor Group Holdings Limited operates as a real estate
development company. The Company develops and markets residential
areas, office buildings, hotels, restaurants, and other related
areas. Longfor Group Holdings also provides community management,
landscape greening materials maintenance, real estate agencies, and
other services.
Longfor Group carries S&P Global Ratings' senior unsecured notes
rating of 'BB+'.
YUYAO SHUNCAI: Fitch Lowers LongTerm IDRs to 'BB+', Outlook Stable
------------------------------------------------------------------
Fitch Ratings has downgraded China-based Yuyao Shuncai Investment
Holding Co., Ltd.'s (YSIH) Long-Term Foreign- and Local-Currency
Issuer Default Ratings (IDRs) to 'BB+', from 'BBB-'. The Outlook is
Stable.
Fitch has also downgraded YSIH's guaranteed US-dollar notes to
'BB+', from 'BBB-'. The notes are issued by Yuyao Economic
Development Zone Construction Investment and Development Co., Ltd,
which is wholly owned by YSIH.
The downgrade follows Fitch's revision of its perception of Yuyao
city's ability to provide subsidies, grants and other legitimate
resources allowed under China's policies and regulations. This
reflects a deterioration in the city's fiscal performance and
leverage, stemming from reduced operating and capital revenue,
combined with a sharp increase in expenditure.
The Stable Outlook reflects its expectation of a gradual
improvement in the city's fiscal performance, albeit below that of
the historical level.
YSIH's linkage with the government and hence its overall support
score remains unchanged. Fitch expects YSIH to remain the key
entity in consolidating the city's state-owned assets, while its
operations are closely tied to the city's economic development.
These factors result in a high likelihood of extraordinary
government support for YSIH, if needed.
KEY RATING DRIVERS
Status, Ownership and Control: 'Very Strong'
The Yuyao government's direct 90% ownership and 'Very Strong'
control of YSIH's financials and operation reinforce its
expectation of extraordinary support. The direct control is given
more weight under its assessment, and is in line with urban
developers with similar control levels. The Yuyao State-owned
Assets Supervision and Administrative Commission (SASAC) oversees
YSIH's board and management appointments, strategic planning and
monitors key performance indicators, while the city government
approves all major financing decisions.
Support Track Record: 'Strong'
Fitch believes the government's past financial support indicates a
strong commitment to support the company. The government has
injected most of its state-owned assets into YSIH, turning it into
the city's largest government-related entity (GRE). In 2021, YSIH
received government subsidies of around CNY500 million, exceeding
its net profit before tax, as well as around CNY8 billion in
capital injections, including land and assets. The annual subsidy
in 2022 may drop slightly, but Fitch expects it to stabilise. The
assessment is not higher as the support is insufficient to ensure a
stronger financial profile.
Socio-Political Implications of Default: 'Moderate'
YSIH is an important platform for the city, managing state assets
that cover urban development and certain public services. Fitch
believes the political implications of a default by the company to
be moderate, as it could alter the ownership of the city's major
state assets. However, YSIH conducts certain utility services, such
as water, gas and transportation, via subsidiaries. This means a
financial default may not necessarily impact the provision of such
services, lessening the social impact.
Financial Implications of Default: 'Very Strong'
YSIH accounts for over 70% of assets under Yuyao SASAC's
administrative control. Fitch believes a default by YSIH could have
a significant impact, considering the company's large asset size
and its operational and contractual relationship with the
government sponsor. A failure by the government to provide timely
support to the company could damage the city's credibility and
imply that the government is less willing to support other GREs,
which could hamper the GREs' availability and cost of financing
options.
Standalone Credit Profile
Fitch assesses YSIH's Standalone Credit Profile (SCP) at 'b',
reflecting a combination of a 'Weaker' assessment for revenue
defensibility, 'Midrange' assessment for operating risk and a
'Weaker' assessment for financial profile. The SCP is driven by the
company's high leverage, in line with urban development peers, but
Fitch believes its liquidity should mitigate refinancing risk,
counteracting a lower SCP assessment.
Revenue Defensibility: 'Weaker'
YSIH's overall revenue defensibility factors in a 'Midrange'
assessment for demand characteristics and a 'Weaker' pricing
characteristic. Its policy operations tend to be stable and tied to
the economic development of Yuyao, which has historically
maintained above national average GDP growth. The company's core
policy businesses, including primary land development,
infrastructure and social housing construction, as well as other
utility services, are mainly contracted with the government. This
is likely to limit the company's pricing power.
Operating Risk: 'Midrange'
YSIH's overall operating risk factors in its 'Midrange' assessment
for operating costs and resource management and 'Neutral'
assessment for capital planning and management. Fitch expects the
company to maintain its capex plan, although there is some
flexibility tied to the city's development plan. YSIH has a
flexible cost structure, as the cost of goods sold account for the
bulk of operating expenses before interest costs. Fitch does not
expect the company to incur a high level of fixed costs in the
event of a downturn.
Financial Profile: 'Weaker'
YSIH's high leverage is a key factor in its SCP assessment,
although in line with other urban developers with a similar SCP.
Fitch expects YSIH's net debt/EBITDA to remain elevated, averaging
at over 40x through to 2026. This is similar to the level in 2021.
Consequently, the company's financial flexibility against stresses
is limited, although this is mitigated by adequate liquidity.
Derivation Summary
Fitch assesses YSIH under its GRE Rating Criteria, with an overall
support score of 40. The rating approach factors in the Yuyao
government's direct ownership and control, the government's support
record as well as the socio-political and financial impact on the
government from a default by YSIH.
Its assessment of YSIH's SCP is based on its Public Sector,
Revenue-Supported Entities Rating Criteria.
Debt Ratings
YSIH has two outstanding US-dollar bonds, including a USD100
million 2.5% bond due December 2024 and a USD100 million 3.9% bond
due April 2025. Both bonds were issued by YSIH's wholly owned
subsidiary, Yuyao Economic Development Zone Construction
Investment, and are unconditionally and irrevocably guaranteed by
YSIH. Hence, the bonds are rated at the same level as YSIH's IDR.
Liquidity and Debt Structure
YSIH has adequate liquidity, with a liquidity ratio that Fitch
expects to remain above 0.33x. The company has diverse sources of
traditional funding, including bonds and loans from major policy
and state-owned banks. These account for the bulk of its financing.
The company's short-term debt of around 30% of total debt as of
end-2021 was similar to previous years.
Issuer Profile
YSIH was established in 2015 as a state-owned investment holding
platform to consolidate key municipal assets controlled by Yuyao
SASAC. The company's subsidiary operations are mainly in urban
infrastructure development, social housing, primary land
development, water and gas, as well as public transportation.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in Fitch's credit view on Yuyao government's
ability to provide subsidies, grants or other legitimate financing
sources allowed under China's policies and regulations.
- A weakening of the government's linkages, including a dilution in
shareholding or support, or weakening incentive to support,
including a reduced functional role.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A change in Fitch's credit view on Yuyao government's ability to
provide subsidies, grants or other legitimate financing sources
allowed under China's policies and regulations.
- An expansion of the company's policy role that strengthens the
sponsor's incentive to provide support.
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.
Entity/Debt Rating Prior
----------- ------ -----
Yuyao Shuncai
Investment Holding
Co., Ltd. LT IDR BB+ Downgrade BBB-
LC LT IDR BB+ Downgrade BBB-
Yuyao Economic
Development Zone
Construction Investment
and Development Co.,
Ltd
senior unsecured LT BB+ Downgrade BBB-
=================
H O N G K O N G
=================
GALAXY ENTERTAINMENT: Falls to HK$581 Million EBITDA Loss in 3Q22
-----------------------------------------------------------------
The Standard reports that Galaxy Entertainment reported an adjusted
earnings before interest, taxation, depreciation and amortization
loss of HK$581 million in the third quarter of this year from
HK$503 million a year ago.
Net revenue of HK$2 billion in the same period was also down 52
percent year-on-year and 16 percent quarter-on-quarter.
According to The Standard, the company said elevated Covid travel
restrictions imposed since the second quarter resulted in a 12-day
closure of operations, dragging down visitations, revenue and
profitability.
Galaxy Macau, the primary contributor to the Galaxy Entertainment's
revenue and earnings, saw net revenue slump 62 percent year-on-year
and 25 percent quarter-on-quarter to HK$1.1 billion, while its
EBITDA loss narrowed by 166 percent to HK$299 million from last
year's HK$454 million, the report discloses.
Based in Hong Kong, Galaxy Entertainment Group Limited --
http://www.galaxyentertainment.com/-- is a hospitality and gaming
company. The Company develops and operates hotels, gaming and
integrated resort facilities in Macau. The principal activity of
the Company is investment holding. The Company, through its
subsidiaries, is engaged in operation in casino games of chance or
games of other forms, provision of hospitality and related services
in Macau, and the manufacture, sale and distribution of
construction materials. Its segments are Gaming and entertainment,
Construction materials, and Corporate and treasury management. The
Company's Galaxy Macau includes approximately 3,600 rooms, suites
and villas across five hotels, including The Ritz-Carlton, Macau;
Banyan Tree Macau; JW Marriott Hotel Macau; Hotel Okura Macau, and
Galaxy Hotel. The Company's Broadway Hotel features approximately
320 rooms and suites, a porte-cochere, valet parking and decor. GEG
operates three City Club casinos: Waldo Casino, President Casino
and Rio Casino.
=========
I N D I A
=========
AZURE POWER: Moody's Ba2 Sr. Unsec. Rating Still on Review
----------------------------------------------------------
Moody's Investors Service continues the review for downgrade of
Azure Power Energy Ltd's (APE) Ba2 senior unsecured rating and
Azure Power Solar Energy Private Limited's (APSEP) Ba1 backed
senior unsecured rating.
APE is a special purpose vehicle that used the USD note proceeds to
subscribe to senior secured Indian rupee-denominated bonds and
loans, as external commercial borrowings issued by 16 restricted
subsidiaries in the restricted group (RG-1). APE is also part of
RG-1.
APSEP is a special purpose vehicle that has used the USD note
proceeds to subscribe to senior secured INR-denominated bonds and
loans, as external commercial borrowings issued by 10 restricted
subsidiaries in the restricted group (RG-2). APSEP is also a part
of RG-2.
Moody's had placed APE's and APSEP's ratings on review for
downgrade on August 23, 2022 (https://bit.ly/3EnJswn) after the
announcement by the companies' parent, Azure Power Global Limited
(APGL), on August 12, 2022 that it was conducting an internal
review of internal controls and compliance with certain financial
reporting requirements. The company also announced that it would be
unable to file its Form 20-F financial reports for the fiscal year
ended March 2022 (fiscal 2022) with the Securities and Exchange
Commission on time because of this review, and that it was making
efforts to file it as soon as practicable. Due to APGL's delay in
declaring its audited results, APE's and APSEP's fiscal 2022
financial results have also been delayed.
Moody's review of APE's and APSEP's ratings will focus governance
aspects related to the progress and conclusion of APGL's review of
its internal controls and compliance; the filing of audited
financials and impact of any revisions to its historical and
forward-looking financial metrics; RG-1's and RG-2's operational
and financial performance; and Caisse de depot et placement du
Quebec's (CDPQ, Aaa stable) commitment to APGL. CDPQ is a 53.4%
shareholder of APGL and as such, Moody's expects it to support the
company when needed.
BALPRADA HOTELS: ICRA Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Balprada
Hotels And Hospitality Services Private Limited in the 'Issuer Not
Cooperating' category. The ratings are denoted as "[ICRA]D/[ICRA]D;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 91.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Short-term 6.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Balprada Hotels and Hospitality Private Limited (BHHS) is a
subsidiary of BHHS Limited. The company has developed a 185 room
4-star hotel at Golf Course Road in Gurgaon at a cost of Rs. 178
crores. The hotel has been funded by debt of Rs. 100 crore and
promoters' contribution of Rs. 78 crores. The hotel project (to be
operated under the DoubleTree by Hilton brand) started commercial
operations in March 2012.
CARNIVAL SOFT: ICRA Moves D Debt Rating to Not Cooperating
----------------------------------------------------------
ICRA has moved the ratings for the Bank Facilities of Carnival Soft
Private Limited to the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 200.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating moved to the 'Issuer Not
Term Loan Cooperating' Category
As part of its process and in accordance with its rating agreement
with Carnival Soft Private Limited, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. However, despite multiple requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite cooperation and in line with SEBI's Circular
No.SEBI/HO/MIRSD4/CIR/2016/119, dated November 01, 2016, the
company's rating has been moved to the "Issuer Not Cooperating"
category. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
CSPL is involved in the business of leasing out commercial office
space. The company owns and operates a commercial office space
property, named Carnival Infopark, in Kochi, Kerala. The space is
located on a plot of 6.35 acres and comprises four buildings, with
an aggregate leasable area of 6.28 lakh sq ft. CSPL is a part of
the Carnival Group, which comprises a consortium of companies. The
Group has a diversified portfolio with presence in businesses such
as hospitality, media and entertainment, agricultural commodities
trading and multiplex. Asian Business Connection Pvt. Limited
(ABCPL), the holding company of the group, holds ~100% equity stake
in CSPL. The entire shareholding was purchased by the Carnival
Group from the Leela Group in July 2014 for an enterprise value of
INR271 crore.
CHINTAMANIS JEWELLERY: ICRA Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the Long-Term and Short-Term ratings of
Chintamanis Jewellery Arcade Pvt. Ltd. in the 'Issuer Not
Cooperating' category. The ratings are denoted as [ICRA]D/[ICRA]D;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 18.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term (10.00) [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
Interchangeable 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Chintamanis Jewellery Arcade Pvt. Ltd. ('CJAPL') is involved in the
retailing of gold, silver and diamond ornaments. It was established
in 1972 as a proprietorship concern by Mr. Arun Kaigaonkar. In the
year 2003, it was converted into a private limited company and the
name was changed to its current name. CJAPL is a family run
business and primarily deals in gold based jewellery which
contributes more than 95% of the total sales. The company sources
gold, silver and diamond from the local market in Mumbai. CJAPL has
five retail outlets in Mumbai and one retail outlet in Goa.
CONSOLIDATED CONSTRUCTION: ICRA Keeps D Ratings in Not Cooperating
------------------------------------------------------------------
ICRA has retained the ratings for the bank facilities and
Non-Convertible Debentures of Consolidated Construction Consortium
Limited in the 'Issuer Not Cooperating' category. The ratings are
denoted as [ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 72.05 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 380.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term
Unallocated 45.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating Continues to remain under
the 'Issuer Not Cooperating'
category
Short-term– 5.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 1275.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
Non-Convertible 50.00 [ICRA]D; ISSUER NOT COOPERATING;
Debenture Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Consolidated Construction Consortium Limited was incorporated in
1997 as a public limited company by four former employees of L&T:
Mr. R. Sarabeswar, Mr. S. Sivaramakrishnan, Mr. V. Janarthanam, and
Mr. T.R. Seetharaman. Since inception, the company has concentrated
on construction and related activities in the commercial,
infrastructure, industrial and residential sectors. To provide
turnkey construction solution to clients, CCCL has set up
subsidiaries including Consolidated Interiors Limited (for interior
contracting and fit-out services); Noble Consolidated Glazings
Limited (for glazing services); and CCCL Power Infrastructure
Limited (for undertaking BOP orders for power projects).
FUTURE RETAIL: Reliance Group, Adani Submit Bid to Buy Retailer
---------------------------------------------------------------
Reuters reports that companies led by Asia's richest man, Gautam
Adani, and billionaire Mukesh Ambani, the owner of Reliance
Industries have entered the fray to acquire India's debt-laden
Future Retail Ltd, a document seen by Reuters shows.
According to Reuters, April Moon Retail Private Ltd, a joint
venture between Adani Airport holdings and Flemingo group, Reliance
Retail ventures as well as 13 other firms have submitted
expressions of interest (EOIs) for Future Retail.
Future Retail's court-appointed resolution professional (RP),
Reliance Industries and Adani group did not immediately respond to
emails seeking comment.
Reuters says the deadline for submission of EOIs ended earlier this
month for Future Group's flagship retail unit, Future Retail, which
was once the country's second-largest retailer.
It was dragged into bankruptcy proceedings by banks after it
defaulted on loans and its lenders rejected a $3.4 billion sale of
its assets to market leader Reliance Industries amid a legal
challenge by Amazon.com Inc, the report notes.
The U.S. e-commerce giant has accused Future of violating certain
contracts by dealing with Reliance.
Other entities that have submitted EOIs include Shalimar
Corporation Ltd, Nalwa Steel & Power, United Biotech, WHSmith
Travel, Capri Global Holdings, Reuters discloses.
A total of 33 lenders had submitted loan claims of about INR210.6
billion ($2.59 billion) in August under the ongoing insolvency
process, Reuters says. The lead lenders include Bank of India and
State Bank of India.
Future Retail's RP had set a deadline of Oct. 20 for submission of
EOIs which had to be extended due to lack of interest, Reuters
discloses.
Reuters adds that the final list of entities who have submitted the
EOIs will be issued on Nov. 20, following which they will be asked
to submit a resolution plan by December 15.
About Future Group
Future Group operates multi-branded retail outlets. The company's
retail chains include department stores, outlet stores, sportswear,
home improvement and consumer durables, supermarket, and
convenience stores as well as food parks.
As reported in the Troubled Company Reporter-Asia Pacific in late
July 2022, an Indian court agreed to send Future Retail Ltd. into
bankruptcy, allowing the creditors to find a new owner for the
beleaguered retailer. According to Bloomberg News, the National
Company Law Tribunal on July 20 gave its verdict on a petition by
Bank of India to start the bankruptcy-resolution process for the
cash-strapped retailer. It dismissed allegations from the local
unit of Amazon.com Inc. that Future Retail's lenders were colluding
with its founders to push the firm into insolvency. The court also
appointed an administrator to take over the management at Future
Retail.
GINNI GOLD: ICRA Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Ginni Gold
Limited in the 'Issuer Not Cooperating' category. The ratings are
denoted as "[ICRA]D/[ICRA]D: ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 75.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Continues to remain under the
Cash Credit 'Issuer Not Cooperating'
category
Long-term/ 15.00 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Fund Based/ remain under 'Issuer Not
Non Fund Based Cooperating' Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
GGL is a manufacturer, wholesaler and trader of gold, diamonds and
silver ornaments/jewellery. GGL has presence largely in gold
jewellery, which contributes more than 90% of revenues. The company
was incorporated in the year 2007. The company procures gold under
the Metal Loan Scheme from Bank of Nova Scotia. It gets the
jewellery manufactured on a job-work basis from the vendors based
in Mumbai and sells it to its customers after charging a margin
over cost. GGL's customers primarily consist of wholesalers and
retailers based in New Delhi area.
GOODLUCK CARBON: ICRA Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Goodluck
Carbon Private Limited in the 'Issuer Not Cooperating' category.
The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 72.74 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 30.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 4.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
GCPL is engaged in the manufacturing of carbon black which is used
as reinforcing agent in rubber and other industries. The company
was initially engaged in trading of carbon black and diversified
into carbon black production in February 2011 after it took on
lease the production plant (located in Jitwal Kalan. Distt:
Sangrur, Punjab) of Ralson India Limited (RIL). This unit was
subsequently acquired in Mar/April 2012.
HLL MEDIPARK: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Hll
Medipark Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 75.00 [ICRA]B+(Stable);ISSUER NOT
Proposed bank COOPERATING; Rating continues
Facilities to remain under the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
HML was incorporated in December 2016 as a wholly owned subsidiary
of HLL for developing an integrated manufacturing facility for
healthcare. The Ministry of Health and Family Welfare, the
Government of India had mandated HML to develop a state-of-the-art
integrated industrial park for the medical technology sector. HLL
is the main promoter with a 90% equity share in the project. The
Government of Tamil Nadu, through Tamil Nadu Industrial Development
Corporation Ltd (TIDCO), holds the remaining (10%) equity share.
The estimated cost of the project is Rs. 125.56 crore. The project
is being financed through INR51.28-crore equity and Rs. 74.28-crore
debt. However, the project cost and scope can undergo a revision as
a revised plan is currently being prepared. HML will comprise a
medical device and equipment zone, a knowledge management zone with
an incubation facility, and a research and development zone. These
zones will facilitate medical diagnostics, medical equipment,
disposables, and medical device manufacturing industries, knowledge
and healthcare business outsourcing services, etc. The development
mix will comprise developed plots, built-to-suit units, common
industrial facilities, and common pooled infrastructure, which will
depend on the investors' demand.
IL&FS SOLAR: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA has retained the bank facilities and Non-Convertible
Debentures of IL&FS Solar Power Limited in the 'Issuer Not
Cooperating' category. The ratings are denoted as [ICRA]D; ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 45.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating Continues to remain under
the 'Issuer Not Cooperating'
category
Non-Convertible 360.00 [ICRA]D; ISSUER NOT COOPERATING;
Debenture Rating Continues to remain under
the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
IL&FS Solar Power Limited, a 100% subsidiary of IL&FS Energy
Development Private Limited, has been set up to install a 100- MW
(AC)/ 130-MW (DC) ground mounted solar PV power project at Ittigi
(40 MW), Nellukudure (28 MW) and Mooregeri (32 MW) villages of the
Bellary district of Karnataka. The project capital cost stood at
about Rs. 685 crore. The project was developed under build, finance
and transfer arrangement by ISPL. ISPL signed a DPA with EEPL as
per which the latter, post commissioning, will be paying monthly
payments to ISPL for the duration of 15 years. The solar power
generated by the project is being supplied to the various office
parks/commercial properties operated by the Embassy Group.
INDIA CLEANTECH: Fitch Affirms 'BB-' Rating on $334M Secured Notes
------------------------------------------------------------------
Fitch Ratings has affirmed India Cleantech Energy's (ICEL) USD334
million senior secured notes due 2026 at 'BB-'. The Outlook is
Stable. ICEL's underlying credit profile remains unchanged at
'bb'.
RATING RATIONALE
The affirmation reflects the credit profile of a restricted group
of 12 entities (Acme RG1), which are fully owned by Acme Solar
Holdings Private Limited. Acme RG1 operates solar generation assets
with combined capacity of 450MW (or 605MWp) in eight Indian states.
ICEL is an orphan financing vehicle incorporated in Mauritius that
will be held by a trust and its ownership is not linked to Acme
Solar Holdings.
The rating benefits from the fully contracted revenues of the
operating assets, whose counterparties include sovereign-owned
entities and distribution companies owned by various Indian states.
The rating is also supported by the adequate financial profile of
the restricted group. All of Acme RG1's capacity is under long-term
power purchase agreements (PPAs) with the majority (93% of
capacity) with tariffs fixed through the PPA terms, which extend
beyond the tenor of the US dollar notes.
Fitch considers the revenue from sovereign-owned utilities as fully
contracted revenue and apply the fully contracted project
threshold. The credit quality of sovereign-owned utilities does not
constrain the rating as Fitch treats the revenue exposure to these
utilities as the systemic risk of the sector.
While Fitch does not rate the state-owned utilities, Fitch believes
that delay in payments by one of them would not necessarily lead to
a default of the transaction given diversification across multiple
counterparties. However, Fitch considers it prudent to treat the
revenue from these state utilities as merchant revenue and apply
the merchant project threshold. Therefore, Fitch applies a
revenue-based weighted average threshold in determining the
rating.
Fitch rates issuances by orphan SPV issuers one notch below the
underlying credit profile of a transaction to account for risks
related to orphan issuance structures.
KEY RATING DRIVERS
Experienced Contractors; Proven Technology: Operation Risk -
Midrange
Acme RG1 comprises polycrystalline solar projects, which is a
proven technology with long-established history. Fitch regards the
operation of this type of solar projects as straightforward and the
solar modules are provided by internationally known suppliers.
Operation and maintenance works are carried out by Acme Cleantech
Solutions Private Limited and its affiliate under 25-year
fixed-price contracts with 4% annual price escalation. Replacement
operators are readily available in the market.
The operation risk assessment is constrained to 'Midrange' as the
operating cost forecast is not validated by an independent
technical advisor and the operating record shows modest
variability.
Reasonable Forecast Spread, Adequate Operating Performance -
Revenue Risk (Volume) - Midrange
The energy yield forecast produced by third-party experts indicates
an overall P50/1-Year P90 spread of 7% leading to a 'Midrange'
assessment for revenue risk (volume). The portfolio has
capacity-weighted average life of about four years with all assets
operating for more than three years. Historical load factors
recorded by Acme RG1's portfolio exhibit low volatility from the
1-year P90 projections (about 2%). The curtailment risk is limited
in India given the "must-run" status of renewable energy projects.
Fixed Long-Term Prices for Almost all Contracts, Low Renewal Risk -
Revenue Risk (Price): Midrange
All of Acme RG1's capacity is under long-term PPAs, with 93% of
capacity under fixed-price contracts that extend beyond the tenor
of the US dollar notes, protecting the portfolio from merchant
price volatility. The revenue risk (price) is constrained to
'Midrange' because 7% of Acme RG1's capacity is exposed to the
national average power purchase cost (APPC), which is set annually.
However, the variable tariff will apply only in the financial year
ending March 2028 (FY28), which is after the maturity of the US
dollar notes.
The PPAs of Acme RG1's portfolio have capacity-weighted residual
life of about 21 years. Contracts with sovereign-owned utilities
account for 55% of alternative current (AC) capacity (or about 61%
of direct current (DC) capacity) of the restricted group's total
capacity while the remaining capacity is contracted with state
distribution companies.
Partially Amortised Bond, Manageable Refinancing Risk - Debt
Structure: Weaker
About 7% of the principal of the US dollar notes will be amortised
over the note life. The refinancing risk exposure is mitigated by a
mandatory cash sweep of about 19% of principal and a cash trap in
the final year. The refinancing risk of the remaining 68% of
principal is mitigated by the remaining tenor of PPAs, which extend
beyond the notes' maturity, and the group's access to domestic
markets. The non-convertible debentures (NCDs) that entities in
Acme RG1 issued will be cross guaranteed by each of the entities.
ICEL used the proceeds from the US dollar notes to subscribe to the
rupee-denominated NCDs.
The NCDs benefit from the usual protective structural features,
including a standard cash distribution waterfall, distribution
lock-up at 1.3x 12-month backward-looking debt service coverage
ratio (DSCR) and cash lock-up in the final year of the bond tenor.
The restricted group will maintain a debt service reserve account
but not a major maintenance reserve account.
The US dollar noteholders benefit from a 100% share pledge by ICEL
and charge over all assets of ICEL excluding its rupee-denominated
NCDs. ICEL, which is the holder of the rupee NCDs issued by
operating entities within the restricted group, benefits from a
standard security package, including charge over movable and
immovable assets, and a pledge over a 51% stake in the restricted
group entities. This provides the noteholders with only indirect
access to the NCDs' security package, but this is a common issuance
structure adopted by several other Fitch-rated transactions.
The transaction is partially exposed to rupee depreciation up to a
contracted strike price in relation to the 40% remaining principal
hedged using options. However, holders of the NCDs will provide a
redemption premium to cover any funding shortfall between the forex
spot at inception and strike price, which will mitigate the risk to
bondholders.
A Notch Down on Orphan SPV Issuance Structure
Fitch believes that the orphan SPV issuer provides lesser
protection to the offshore US dollar noteholders in the case of a
failure of a hedge counterparty and termination of hedge agreements
before the notes mature. The sponsor is not legally obligated to
replace hedge counterparties or allowed to cover all of the
additional costs associated with these events, including early
termination amount payable to defaulting hedge counterparties.
Fitch believes that clearer demarcation of these aspects in credit
assessment through a notch of rating difference is warranted to
reflect the lesser protection to US dollar noteholders on account
of the issuance structure.
PEER GROUP
Fitch views Acme RG1 as comparable with Azure Power Solar Energy
Private Limited (Azure RG2, senior secured notes: BB/Rating Watch
Negative). Both are pure solar portfolios with moderate gaps in
P50/1-year P90 projections despite short operating periods.
Operating-cost forecasts for both are not validated by independent
technical advisors. Both Acme RG1 and Azure RG2 have large bullet
payments at maturity.
Acme RG1 benefits from exposure to stronger counterparties, with
55% of capacity contracted with sovereign-owned utilities and the
remaining with state distribution companies. In comparison, the
majority of Azure RG2's capacity is contracted with state
distribution companies. Nevertheless, Acme RG1's weaker financial
profile counteracts its stronger counterparty exposure, justifying
similar credit profiles for both Acme RG1and Azure RG2.
Adani Green Energy Limited Restricted Group 1 (AGEL RG1, senior
secured notes: BB+/Stable) is also a pure solar portfolio with 100%
capacity contracted under fixed-price PPAs for the full bond tenor
with either sovereign or state-owned utilities. Both restricted
groups have large bullet payments at maturity.
AGEL RG 1 benefits from higher revenue exposure to stronger
counterparties, i.e. sovereign-owned utilities, and a stronger
financial profile. These factors justify Acme RG1's weaker
underlying credit profile.
India Green Power Holdings (ReNew RG1, BB-/Stable, underlying
profile: bb/stable) has a debt structure similar to that of Acme
RG1, with large bullet repayments at maturity. ReNew RG1 has a
stronger financial profile than Acme RG1, but the latter has a
stronger portfolio configuration (100% pure solar portfolio) as
Renew RG1 comprises a mix of wind and solar projects. Acme RG1 also
has stronger counterparties, while close to 80% of Renew RG1's
capacity is contracted with state distribution companies. Combined,
their similar underlying credit profiles are justified, in its
view.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Average annual DSCR across refinance period drops below 1.30x
persistently.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Average annual DSCR across refinance period increases above 1.35x
persistently.
TRANSACTION SUMMARY
ICEL, an orphan financing vehicle, issued five-year senior-secured
US dollar notes due 2026 to subscribe to rupee-denominated NCDs
issued by the entities in the restricted group. The entities in the
restricted group used the proceeds from the NCDs and their existing
cash and cash equivalents to prepay existing debt of the restricted
group, on-lend to the parent company for repayment of its
indebtedness and for growth capex.
CREDIT UPDATE
Overall energy output is slightly lower than in the prior year and
the one-year-P90 post-annual degradation forecast by about 2.7% and
about 0.7%, respectively due to lower irradiation in FY22.
Particularly, for the 15MW solar asset in Gujarat, generation was
about 10% lower than FY21 and one-year-P90 forecast due to cyclone
in May 21 affecting the transmission line. Restoration work was
completed by June 2021 and grid availability is back to above 99%.
The portfolio EBITDA margin remains above 90%, consistent with the
prior year. EBITDA margins of individual assets are also well above
90% in FY22. The EBITDA margins for two 100MW solar assets in
Rajasthan have also improved since commissioning in FY19 from about
86%-88% in prior years to 92%-93% in FY21 and FY22.
Overall portfolio receivable days have deteriorated to 94 days in
FY22 from 70 days in FY21. Delays in payments from the Southern
Power Distribution Company Telangana (SPDCT) state utility, which
contributes about 13% of portfolio's EBITDA, have worsened in
FY22.
SPDCT is one of the beneficiaries of liquidity infusion initiatives
by the Indian government to state power utilities. The receivables
position for SPDCT has thus demonstrated improvement in 1HFY23.
The central government of India introduced Electricity (late
payment surcharge (LPS) and related matters) Rules, 2022 in June
this year. Under the rules, participating state utilities can clear
their overdues as of 3 June 2022 in equated instalments ranging
from 12 to 48 months. However, failing to clear current bills
within a couple of months or so will result in state utilities
prohibited to buy short-term power from exchanges, which is
critical to avoid blackouts.
Fitch conservatively assumes gradual improvement in portfolio's
receivable days. That said, Fitch expects diligent implementation
of these rules will improve a developer's receivable profile
quicker than Fitch assumes.
FINANCIAL ANALYSIS
Fitch assumes that the US dollar bond will be refinanced upon
maturity by another debt that will amortise across the remaining
PPA terms. Fitch focuses on the average annual DSCR over the
refinancing period given the largely bullet structure of the bond.
Fitch's base case assumes P50 generation, a 5% production haircut,
0.5% of annual degradation and a 11.4% refinancing interest rate,
which results in an average annual DSCR of 1.48x during the
refinancing period.
Fitch's rating case further assumes one-year P90 generation, a 5%
production haircut, 0.7% of annual degradation, a 10% stress on
management's operating expense forecast and a 11.4% refinancing
interest rate. Its rating case results in an average annual DSCR of
1.32x.
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.
Entity/Debt Rating Prior
----------- ------ -----
India Cleantech Energy
India Cleantech
Energy/Senior
Secured Debt/1 LT LT BB- Affirmed BB-
INDIA GREEN: Fitch Affirms BB- Rating on $325MM Sec. Notes Due 2024
-------------------------------------------------------------------
Fitch Ratings has affirmed India Green Energy Holdings' (IGEH)
USD325 million senior secured notes due 2024 at 'BB-'. The Outlook
is Stable.
RATING RATIONALE
The rating on the notes is capped by ReNew Power Private Limited's
(ReNew Power, BB-/Stable) credit assessment. Prior to the US dollar
bond maturity, ReNew Power will repay the initial parent guarantor
loan, which IGEH will use to partially redeem the US dollar bond
while refinancing the outstanding amount. IGEH will not be able to
fully amortise its refinanced debt over the refinancing period if
ReNew Power does not repay the initial parent guarantor loan under
Fitch's rating case. A failure by ReNew Power to repay the initial
parent guarantor loan would result in an event of default. Fitch
assesses IGEH's underlying credit profile with orphan issuance risk
at 'bb'; however, the headroom has reduced significantly because of
the transaction's exposure to Indian rupee depreciation.
IGEH is a financing vehicle that is held by a trust and its
ownership is not linked to ReNew Power. IGEH used the proceeds of
the notes largely to subscribe to non-convertible debentures (NCDs)
issued by the entities in the restricted group. The entities used
the proceeds to repay their then-existing debt and upstream a
portion to ReNew Power. The NCDs benefit from a full-tenor
guarantee from ReNew Power.
The underlying credit profile is supported by IGEH's contracted
revenue with state distribution companies (discoms) under long-term
fixed-price power-purchase agreements (PPA) for 324MW of its
capacity out of a total of 382MW. IGEH uses commercially proven
wind and solar technology and all projects are commissioned with a
three- to eight-year operating record. The restricted group has
moderate variability between its P50 and one-year P90 forecasts.
KEY RATING DRIVERS
Short-Term O&M Contracts; Proven Technology: Operation Risk −
Midrange
IGEH consists of 282MW wind projects and 100MW solar projects with
an operating history of four years on a capacity weighted-average
basis. We consider the technologies deployed in this project as
proven. Solar modules are sourced from internationally known
suppliers, while wind turbines are procured from some of the
world's largest manufacturers. Operation and maintenance (O&M) for
the utility-scale solar projects is carried out by an affiliate
company, ReNew Power Services Private Limited, under five-year
fixed-price contracts with a 4% annual price escalation.
O&M for most of the wind projects is carried out by the original
equipment manufacturers under long-term contracts while the company
is in the process of taking over O&M from Suzlon Energy Limited.
The operation risk assessment is constrained to 'Midrange', as the
restricted group's operating-cost forecast is not validated by an
independent technical advisor and there is no maintenance reserve
account.
Operating Record Shows Moderate Variability: Revenue Risk (Volume)
− Midrange
The energy yield forecast produced by third-party consultants
indicates an overall P50/one-year P90 spread of between 6% and 16%,
leading to a 'Midrange' assessment for volume risk. All projects
have an operating history of more than three years. Generation for
most projects has been in line with P90 forecasts since
commissioning. Curtailment risk is limited in light of the must-run
status of Indian renewable energy plants.
Contract Renewal Risk Mitigated: Revenue Risk (Price) − Midrange
IGEH contracts 85% of its total capacity with state discoms under
long-term fixed-price PPAs, which protect the portfolio from
merchant price volatility. PPAs with private customers have
contract terms that generally range from 10 to 25 years. The
restricted group has a capacity weighted-average remaining tenor of
18 years. Tariffs are fixed for most projects, except for captive
or third-party wind projects, whose tariffs are adjusted for
changes in grid tariffs.
PPAs for a few captive or third-party projects are close to expiry
and are subject to contract renewal risk. However, contract renewal
and price risk is mitigated by rising grid tariffs and strong
energy demand in India, and equity ownership of projects in a few
cases. In addition, captive or third-party projects account for
only 15% of total capacity. Fitch assesses price risk as
'Midrange'.
Significant Refinancing Risk; Reliance on Parent's Repayment: Debt
Structure - Weaker
IGEH used the proceeds from the US dollar bond to subscribe to the
Indian rupee NCDs issued by the operating entities in the
restricted group. The NCDs are guaranteed by ReNew Power and each
co-issuer, and benefit from the usual protective structural
features, including distribution lockup at 1.30x of the 12-month
backward-looking interest service coverage ratio.
Management has hedged part of the principal using options, lowering
the all-in cost but leaving the exposure to rupee depreciation
until the contracted price, resulting in 'Weaker' debt structure
assessment. Fitch has raised its foreign-exchange assumption to
reflect year-to-date rupee depreciation, resulting in higher rupee
debt to be refinanced on maturity and a lower rating-case
debt-service coverage ratio (DSCR) ratio.
IGEH does not maintain debt service or major maintenance reserve
accounts. However, refinancing risk is mitigated by the cash-trap
requirement in the last six months of the notes and leftover
economic life of the assets. The US dollar bond benefits from
IGEH's 100% share pledge and a charge over all of IGEH's assets.
Meanwhile, the NCDs include a standard security package, such as a
charge over movable and immovable assets, and a share pledge of the
restricted entities. This provides US dollar noteholders with
indirect access to the NCDs' security package.
A Notch Down Due to Orphan SPV issuance Structure
Fitch believes that the orphan SPV issuer provides lower protection
to the offshore US dollar noteholders in the case of a failure of a
hedge counterparty and termination of hedge agreements before the
notes mature. The sponsor is not legally obligated to replace hedge
counterparties or allowed to cover for all of the additional costs
associated with these events, including early termination amounts
payable to defaulting hedge counterparties.
Fitch believes that clearer demarcation of these aspects in credit
assessment through a notch of rating difference is warranted to
reflect the lower protection to US dollar noteholders on account of
the issuance structure.
PEER GROUP
IGEH can be compared with Azure Power Solar Energy Private Limited
(APSEPL, senior secured: BB/Rating Watch Negative). APSEPL's credit
profile benefits from its pure solar portfolio and part of capacity
contracted with sovereign-owned off-takers. Unlike IGEH, APSEPL
does not have orphan issuance risk. However, IGEH's rating case
DSCR is higher than that of APSEL (1.42x). These factors combined
justify a similar underlying credit profile assessment, in its
view.
Continuum Energy Levanter Pte. Ltd.'s (CELP, senior secured notes:
BB+/Stable) portfolio configuration is similar to that of IGEH in
terms of resource exposure, with 90% of CELP's capacity from wind
versus 74% for IGEH. However, CELP benefits from a lower gap of 12%
in its P50/one-year P90 projections compared with IGEH's 15%. CELP
also has a larger 49% share of capacity contracted directly with
commercial and industrial customers, compared with IGEH's 15%,
resulting in a better receivable profile. At the same time, CELP's
debt structure is stronger than IGEH's with covenanted amortisation
of 48% of the bond value over the bond tenor against IGEH's bullet
maturity along with orphan SPV risk. CELP also benefits from
stronger rating-case DSCR of 1.69x. Hence, Fitch thinks a one-notch
difference in underlying credit profiles is justified.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade of ReNew Power's Issuer Default Rating (IDR)
- Synthetic DSCR consistently below 1.45x
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Synthetic DSCR consistently above 1.56x along with an upgrade of
ReNew Power's IDR
TRANSACTION SUMMARY
IGEH is a restricted group consisting of 11 SPVs (co-issuers) owned
by ReNew Power with a total capacity of 382MW, mainly in Karnataka
and Andhra Pradesh (AP). IGEH is a Mauritius-based SPV, which
issued the US dollar bullet bond and used the bond proceeds to
subscribe the rupee NCDs issued by operating entities in the
restricted group.
The NCD proceeds were used for repaying the then existing debt of
the restricted group, for capex and for other permitted purposes in
line with ECB guidelines (including the initial parent guarantor
loan). The bond is guaranteed by the parent, ReNew Power.
CREDIT UPDATE
Load factors rose marginally in the year ended March 2022 (FY22)
from FY21. The performance was uniform across all assets within the
restricted group, and in line with that of other wind assets in its
portfolio.
Receivable days deteriorated at the portfolio level mainly on
payment delays from AP's and Madhya Pradesh's state-owned
distribution companies, and Karnataka's discom for one of the
assets. The AP state discom has started clearing payments from
August 2022, according to management. The discom has committed to
clear all overdue payments within one year, according to various
press releases. Fitch expects material improvement in receivable
days by FYE23. However, our rating case conservatively assumes only
gradual improvement. Receivable days at the 26MW Lahori power
project also increased. This was driven by a delay in the state
government's subsidy release to the associated state-owned
distribution company.
ReNew Power sold its 117MW roof-top solar portfolio in FY22. One
38MW roof-top solar asset was also indirectly a part of IGEH. The
asset itself was not restricted but its free cash flows were made
available for IGEH's debt servicing. The parent will inject USD2
million annually after the asset sale into the restricted group in
line with the bond documentation. Fitch does not see any material
impact on the rating-case financial metrics because of the asset
sale.
FINANCIAL ANALYSIS
Fitch assumes ReNew Power will repay the initial parent guarantor
loan and IGEH will use the repayment to partially redeem the US
dollar bond at the end of the bond maturity. Fitch further assumes
that the outstanding US dollar bond at maturity will be refinanced
by another debt that will amortise across the remaining PPA terms
or the projects' useful life, whichever is longer. Fitch focuses on
the average annual DSCR over the refinancing period until the end
of the PPA terms for projects contracted with state discoms and the
end of the asset useful life for projects contracted with captive
or third-party off-takers, given the bond's bullet structure.
Fitch's base case assumes P50 generation, a 7% production haircut
and a 12% refinancing interest rate, which results in an average
annual DSCR of 2.28x during the refinancing period.
Fitch's rating case assumes one-year P90 generation and a 7%
production haircut. For wind projects contracted with captive or
third-party customers, Fitch assumes a tariff of INR5.5/kWh, which
is equal to the lowest price in the India Energy Exchange in the
past 10 years plus additional surcharges, after the expiry of the
existing PPAs. Fitch also applies a 15% stress on management's
operating expense forecast and a 12% refinancing interest rate. Its
rating case results in an average annual DSCR of 1.55x, down from
1.60x earlier, because of exposure of the transaction to rupee
depreciation.
The Indian central government introduced rules for electricity late
payment surcharges and related matters in June this year. The rules
allow participating state utilities to clear their overdue payments
as of 3 June 2022 in equal instalments in 12-48 months. However,
failure to clear current bills within a couple of months will
result in state utilities being prohibited from buying short-term
power from exchanges, which is critical to avoid blackouts.
Fitch conservatively assumes gradual improvement in the IGEH
portfolio's receivable days. That said, Fitch believes diligent and
ongoing implementation of these rules will improve the developer's
receivable profile much faster than assumed.
SECURITY
The US dollar bond is secured by a share pledge over IGEH's shares
and assets. However, Indian assets (including the rupee NCDs) are
not included in the security package because of regulatory
constraints.
The rupee NCDs are secured by shares, immovable assets, moveable
assets, current assets and project documents of the issuers.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
IGEH's dollar bond rating is linked to the rating of ReNew Power.
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.
Entity/Debt Rating Prior
----------- ------ -----
India Green Energy
Holdings (IGEH)
India Green Energy
Holdings (IGEH)
/bond/note/1 LT LT BB- Affirmed BB-
JALANNAGAR DEVELOPMENT: ICRA Withdraws C Rating on INR6.46cr Loan
-----------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Jalannagar Development Pvt. Ltd. at the request of the company and
based on the No Objection Certificate (NOC) received from its
banker. However, ICRA does not have information to suggest that the
credit risk has changed since the time the rating was last
reviewed. The Key Rating Drivers, Liquidity Position, Rating
Sensitivities, Key financial indicators have not been captured as
the rated instruments are being withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 1.55 [ICRA]C; ISSUER NOT
COOPERATING;
Fund based Withdrawn
Term Loan
Long-term– 6.46 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Withdrawn
Cash Credit
Long Term-
Unallocated
Limits 1.99 [ICRA]C; ISSUER NOT COOPERATING;
Withdrawn
Jalannagar Development Private Limited (JDPL), incorporated in
April 1950, has two tea estates – Chota Tingrai Tea Estate and
Tingamira Tea Estate – located in Tinsukia and Doomdooma
districts of Assam, respectively. The tea estates cover an area of
around 421 hectares under cultivation. JDPL primarily produces CTC
variety of black tea, which accounted for 94% of the company's
total tea production of 5.85 lakh kg in FY2020. In July 2016, JDPL
commenced production of green tea. The production of green tea
stood at around 0.34 lakh kg in FY2020 (0.36 lakh kg in FY2019) and
the same contributed only 6% to the company's total tea production
in the said year.
JMD LIMITED: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA has retained the ratings for the bank facilities of JMD
Limited in the 'Issuer Not Cooperating' category. The ratings are
denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 55.39 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 2.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 9.61 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
JMD Limited (JMD) is a public limited company engaged in commercial
and residential real estate development in Delhi, Gurgaon, Noida,
Verna and Ludhiana. JMD was promoted in 1989 by Mr. Sunil Bedi. Its
business focuses on residential and www.icra commercial
developments. JMD's first project was JMD Regent Square, MG Road
Gurgaon which was completed in 2001. As on date, the company has
completed a total of 11 projects, aggregating to more than 1.7
million square feet of sold/leased area. The Group has also
completed its first hotel project, DoubleTree by Hilton, in Gurgaon
(Haryana) in FY2012.
KSHITIJA INFRASTRUCTURE: ICRA Keeps B Rating in Not Cooperating
---------------------------------------------------------------
ICRA has retained the Long-Term rating of Kshitija Infrastructure
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as [ICRA]B(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 25.00 [ICRA]B (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in December 2000, Kshitija Infrastructure Private
Limited is a closely held private limited company, based out of
Mumbai, Maharashtra. The company is managed by Mr. Kamlesh G. Mehta
who has an experience of more than a decade in the real estate
industry. KIPL is engaged in the development of a residential
project under the name 'Laxmi Building' in Byculla, Mumbai.
LANDMARK VENEERS: ICRA Keeps B+ Debt Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the Long-Term and Short Term ratings of Landmark
Veneers Private Limited in the 'Issuer Not Cooperating' category.
The ratings are denoted as [ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 1.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 15.00 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Landmark Veneers Private Limited (LVPL) was incorporated in the
year 1997 by Mr. Rakesh Agarwal and other family members.
The promoters have long standing experience in manufacturing of
timber products, plywood and veneers through their association with
other group companies. LVPL operates from its plant located at
Gandhidham, with an installed capacity of manufacturing 10,000
cubic metres of veneers annually. LVPL is also engaged in trading
of imported timber. LVPL is a part of Purbanchal group.
LEAPFROG ENGINEERING: ICRA Keeps C Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has retained the Long-Term rating of Leapfrog Engineering
Services Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as [ICRA]C; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 6.00 [ICRA]C; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 4.00 [ICRA]C; ISSUER NOT
COOPERATING;
Non Fund based Rating Continues to remain under
Others 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Leapfrog Engineering Services Pvt (LESPL) Limited was incorporated
by Mr Prabhav N Rao in 2005, in Bangalore, Karnataka. It currently
has four Directors and is an integrated Engineering Services
Company based out of Bangalore. The vision of the company is to
provide 'Design Build' solutions to its clients and to become a
reputed integrated engineering services company.
OSHIYA STRIPS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Shree
Oshiya Strips Impex Private Limited in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]D/[ICRA]D: ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 6.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 21.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in April, 2010, SOSIPL is primarily involved in the
trading of various iron and steel products such as hot rolled (HR)
coils, mild steel (MS) sheets, steel plates/rods, cold rolled (CR)
coils, sheets, bars, galvanised pipes, beams and ferrous metal
scrap. The company started its trading operations in February 2011.
The company is a part of the Shree Oshiya Group of industries which
refers to a consortium of companies promoted and managed by the
Ranka family.
OUR CO: ICRA Keeps D Debt Ratings in Not Cooperating Category
-------------------------------------------------------------
ICRA has retained the Long-Term rating of Our Co. Infrastructure
Developers Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as [ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 84.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
OCIDPL is a private limited company established on September 13,
2007 with an aim of taking up construction projects for Mother's
Pride Group across Delhi – NCR region. The company was inactive
in the initial years and was looking at land in Delhi where it
could set up the building and infrastructure for a Mother's Pride
school. Land of 4.5 acre was purchased in 2013 in sector 57,
Gurgaon where it was proposed to set up 'Presidium' brand of
school.
PADMAVATHI COTTON: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the rating for the bank facilities of Padmavathi
Cotton Industries in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 4.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 6.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Padmavathi Cotton Industries, located at Chintapally Mandal in
Nalgonda district of Telangana, is a partnership firm established
in March 2015 and started its operations on 28th January 2016. The
firm is engaged in cotton ginning. The ginning facility includes 48
double roller gins, auto pressing and an auto feeder. The installed
capacity of the ginning and pressing unit is 351000 Quintals of
kappas per annum.
PANCHSHEEL SOLVENT: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has retained the Long-Term rating of Panchsheel Solvent
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as [ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 12.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 12.25 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 2008, PSPL was promoted by the Lalani family. Prior
to this, the management was engaged in the manufacturing of poultry
feed and PET bottles through its group entities. PSPL is currently
engaged in extracting edible refined bran oil with an installed
capacity of 1,50,000 tonnes per annum (TPA) and 30,000 TPA of
refining unit. Besides, PSPL has flexibility to refine other crude
oils in the same plant and therefore, started refining cottonseed
crude oil since February 2015. The manufacturing facility of the
company is located at Rajnandgaon, Chhattisgarh.
PRAGATI MARINE: ICRA Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Pragati
Marine Services Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 11.30 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Short-term 2.65 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
Bank Guarantee 'Issuer Not Cooperating'
Category
Short-term 21.05 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
Unallocated 'Issuer Not Cooperating'
Category
As part of its process and in accordance with its rating agreement
with Pragati Marine Services Private Limited, ICRA has been trying
to seek information from the entity to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, the rating has been moved
to the "Issuer Not Cooperating" category. The rating is based on
the best available information.
PMSPL is an ISO 9001-2008 certified company, situated in Navi
Mumbai. Established in 2009, it has been providing ship management
services to ship owners and helps in ensuring smooth and
cost-effective operation of vessels under its management. PMSPL is
also a registered manning agency in D G Shipping of Government of
India (RPSL No.: MUM 173). The company's services are of three
types, namely manning service, charter hire service and dredging
service. It has recently acquired new vessels to increase its
profitability and revenues.
PRIYHEER INFRASTRUCTURES: ICRA Keeps B Rating in Not Cooperating
----------------------------------------------------------------
ICRA has retained the Long-Term rating of Priyheer Infrastructures
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as [ICRA]B(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 15.00 [ICRA]B (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Priyheer Infrastructures Private Limited develops and leases out
property to corporate clients. The company which was incorporated
in 2006 is managed by Mr. Ajit Patel, who is a Civil Engineer
having an experience of over a decade in the real estate industry.
RAJEEV PRAKASHAN: ICRA Keeps B+ Debt Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the Long-term and Short-term ratings of Rajeev
Prakashan in the 'Issuer Not Cooperating' category. The rating are
denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.45 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 3.52 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Established on April 1, 2001, Rajeev Prakashan was set up with the
objective of printing and publishing educational books for students
from class I to class XII. The proprietor of the firm has vast
experience in printing and publication of educational books as the
family has been involved in the business for a period of more than
50 years. Mr. Agarwal's father, the Late Satish Chandra Agarwal,
established a firm named Naveen Prakashan Mandir in 1968 for the
publication of high school books and intermediate books. In 2000,
Mr. Agarwal's elder brother, Mr. Piyush Agarwal, started a company
named Green World Publication (I) Private Limited to publish three
books for nursery level students to class XII, as well as guides
for UP MSP, BA, B.Sc. of the Poorvanchal/Kashi Vidya Pith
University. At present, the firm prints UP basic class I to class
VII books, for which it receives orders through e-tender. It
supplies these books to Basic Shiksha Adhikari all over UP, besides
receiving allotment from Madhyamik Shiksha Parishad, UP for
printing NCERT books for classes IX, X, XI and XII. The firm has a
printing and binding facility available for the same.
RENEW POWER: Moody's Affirms Ba2 CFR & Rates USD Bond Ba3
---------------------------------------------------------
Moody's Investors Service has affirmed ReNew Power Private
Limited's (RPPL) Ba2 corporate family rating and the Ba3 rating
assigned to a USD400 million 4.5% senior secured bond issued by
India Clean Energy Holdings (ICEH), an affiliated issuer of RPPL.
At the same time, Moody's has assigned a Ba3 rating to RPPL's
USD450 million 5.875% senior secured partially amortizing bonds due
2027 issued in January 2020.
The outlook on the ratings is stable.
"RPPL's Ba2 CFR reflects the group's predictable cash flow backed
by its large and diversified portfolio of renewable generation
projects, and the group's high financial leverage driven by its
sizable pipeline of debt-funded capital works," says Spencer Ng, a
Moody's Vice President and Senior Credit Officer.
The CFR is assigned to the corporate family as if it had a single
class of debt and a single consolidated legal entity structure.
RATINGS RATIONALE
RPPL's operating cash flows are stable, benefiting from its
long-term power purchase agreements (PPAs) with central
government-owned or state government-owned utilities, with
predefined tariffs for the duration of the contract. These
contracts represent around 90% of the group's generation revenue,
with the remaining 10% mostly coming from bilateral contracts with
industrial and commercial customers with different tenors.
RPPL's revenue under the long-term PPAs is predominantly "take and
pay" in nature, which exposes the group's revenue to fluctuations
in the availability of solar and wind resources. Power generation
from RPPL's wind portfolio have underperformed the management's
expectations in fiscal 2021, which ended March 2021, and fiscal
2022 primarily due to slow wind speeds. Moody's considers the
potential credit impact of a sustained underperformance of RPPL's
generation assets currently manageable, given the company's growing
solar operations and the conversative assumptions in Moody's
forward-looking projections that is based on P-90 generation with
further downward adjustments to reflect actual performance where
appropriate.
"The group's credit profile is constrained, however, by the group's
high financial leverage, the result of its additional debt taken to
fund its greenfield projects, solar manufacturing facility
development and, to a lesser extent, rising equipment and funding
costs," adds Ng.
Under Moody's base case scenario, RPPL's consolidated cash flow
from operations pre-working capital (CFO pre-WC)/debt will remain
within the 4%-5% range over the next 2-3 years, which is just above
the minimum tolerance level set for its Ba2 CFR. Moody's
projections have factored in RPPL's renewable generation projects
beyond the committed pipeline but excluded spending on its green
hydrogen investments, given the limited information available on
the timing and capital requirements for these investments.
At the same time, Moody's financial projections have also factored
in the impact of a depreciation of the Indian rupee, given the
group's use of call options to hedge some of its USD debt-servicing
obligations, which will become effective only if the rupee
depreciates against the US dollar from the prevailing level at the
lower 80 range. The foreign currency exposure of the RPPL 5.875%
bond is hedged using a combination of swap and the abovementioned
call options.
RPPL's earnings will improve as its projects under construction are
commissioned and start to contribute to operating cash flow, but
any corresponding improvement in its CFO pre-WC/debt will also
depend on RPPL's growth appetite and the incremental debt that will
be needed to deliver the group's growth initiatives.
Moody's expects RPPL's substantial shareholders, including the
Canada Pension Plan Investment Board (CPPIB, Aaa, -37%), Abu Dhabi
Investment Authority (-13%) and Goldman Sachs (-12.6%), to continue
providing support to the group's growth and liquidity funding
requirements, should they arise.
Support from its shareholders, along with the available cash and
deposits on hand, give RPPL some flexibility to manage its
operating and refinancing requirements over the next 12-18 months,
although additional debt facilities will likely be required for its
planned capital expenditure.
Further payments of overdue receivables from financially weak
state-owned distribution companies, in addition to payments
received in the recent months, or additional proceeds raised from
asset monetization transaction would help boost the group's
liquidity and funding position.
The Ba3 rating assigned to RPPL's 5.875% bond further considers its
subordinated claim to cash flow generated and assets held by RPPL's
operating subsidiaries, behind the secured lenders to these
subsidiaries. Although holders of the 5.875% bond will have an
unsubordinated claim to two renewable projects held directly by
RPPL with combined generation capacity of 250MW, the cash flow and
earnings from these projects on their own are unlikely to be
sufficient in meeting the full bond servicing obligations.
The Ba3 rating of the ICEH 4.5% bond reflects similar subordination
considerations given that proceeds from the bond was on-lent to
RPPL on a senior unsecured basis.
RATIONALE FOR STABLE OUTLOOK
The stable rating outlook reflects RPPL's solid liquidity position,
Moody's expectation of stable cash flows underpinned by long-term
PPAs, and RPPL's successful completion of committed projects over
the next 12-18 months without significant delays or cost overruns.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward rating momentum is unlikely over the next 12-18 months,
based on RPPL's business profile, financial position and growth
strategy.
Nonetheless, Moody's could upgrade the ratings over time if RPPL's
consolidated (CFO pre-WC)/debt stays above 10%, and there is no
material change in its business risk profile.
On the other hand, the ratings could come under downward pressure
if (1) RPPL's consolidated (CFO pre-WC)/debt remains below 4%,
which could result from weaker than expected operating performance
or an increase in capital expenditure above and beyond the level
assumed in Moody's base case, (2) support from RPPL's foundational
shareholders weakens, or (3) the credit quality of its off-takers
materially deteriorates.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
ReNew Power Private Limited (RPPL) is a leading renewable energy
company based in India. It has an operating capacity of close to
7.6GW and is developing another 5.6GW of capacity. Around 93% of
the company's equity interest is held by its listed parent, ReNew
Energy Global PLC (RNW). The remaining equity are held by its
management and the Canada Pension Plan Investment Board (CPPIB).
ICEH is a wholly-owned subsidiary of ReNew Energy Global Plc (RNW),
RPPL's listed parent company. ICEH was established to facilitate
the issuance of the rated USD bond and the on-lending of the
proceeds to RPPL on a senior unsecured basis.
SANJOG SUGARS: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the Long-term rating of Sanjog Sugars & Eco Power
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.49 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 26.70 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Long Term- 0.81 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
SSEPL was incorporated in 2004 by J.K. Sagar and Prahlad Singh and
their associates with the objective of setting up a 10 MW bio-mass
power plant at Sangaria Tehsil in Hanumangarh District Rajasthan.
Later in August, 2009, Orient Green Power Company Ltd. (OGPL)
acquired 78.94% stake in the company. At present, OGPL holds 58% of
the total stake in the company and 26% is being held by Soorya Eco
Power Pvt. Ltd. OGPL plans to further divest off its complete stake
to Soorya Eco Power Pvt. Ltd. The power plant was commissioned in
November 2011 and was funded by a term loan of Rs. 44.36 crore from
Punjab National Bank. However, the operations were suspended in
March 2013 as the company decided to sell power through power
exchange and the net tariff realised was un-remunerative. The
company then signed a PPA with the Rajasthan state discoms on July
08, 2014, and the operations at the plant resumed on December 15,
2015.
SHILPI CABLE: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has retained the Long term rating of Shilpi Cable Technologies
Limited in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible
Debenture 27.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating Continues to remain under
issuer not cooperating category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
SCTL was established in July 2006 as Rosenberger Shilpi Cable
Technologies Limited, a 50:50 joint venture (JV) between Shilpi
Communications Private Limited and Rosenberger Hochfrequenztechnik
GmbH & Co. KG, Germany. The JV was formed to manufacture and sell
radio frequency (RF) feeder cables in the domestic market. The JV
set up a manufacturing facility at Chopanki, Rajasthan. The
facility commenced commercial production in early 2008, and during
the same year the stake of the German partner was bought by the
Indian promoters. Though initially SCTL was only into RF feeder
cables manufacturing, it has, over the years, added products such
as wiring harnesses and battery cables for automobiles, wiring
harness sets and power cords for white goods, and copper conductors
(magnet copper wires and bunched copper wires) to expand and
diversify its offerings. SCTL thus caters to automotive, telecom,
and consumer durables segments, among others. In addition, it sells
house wires, circuit breakers (MCCB and RCCB), and switches through
distributors under the 'SAFE' brand name. SCTL, headquartered in
Delhi, has five manufacturing units in Bhiwadi. Chopanki,
Bahadurgarh (owned by an associate – AGH Wires), Hosur, and Pune
(Bhiwadi and Chopanki plants are owned by the company, while the
remaining have been taken on lease), and has 13 sales offices
across India. SCTL also has subsidiaries and joint ventures in
Singapore and UAE, which trade in copper cables and other products.
The company is listed on Bombay Stock Exchange (BSE) and National
Stock Exchange (NSE) since 2011.
SKD REALTY: ICRA Keeps B+ Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the Long-Term rating of SKD Realty LLP in the
'Issuer Not Cooperating' category. The rating is denoted as
[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 25.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
SKD Realty LLP was incorporated in 2011 as a partnership firm and
was later converted into a limited liability partnership (LLP) firm
in 2014. It is engaged in construction of residential project in
Mira Road (Thane). The firm is promoted by partners having
extensive experience in the field of real estate construction in
Mumbai and adjoining areas. The group has experience of more than
20 years in the real estate construction business in the Mumbai
region.
SREI INFRASTRUCTURE: NCLT Extends Insolvency Process Till Jan. 5
----------------------------------------------------------------
The Economic Times reports that the National Company Law Tribunal
has extended the time till January 5 next year for completion of
insolvency resolution process for Srei Infrastructure Finance.
Total three participants have shown interest in the buyout
process.
"National Company Law Tribunal, Kolkata bench has extended the time
of completion of Corporate Insolvency Resolution Process till 5th
January, 2023 with respect to the ongoing CIRP of the company,"
Srei said in a BSE filing, ET relays.
In October 2021, the RBI took the management of the Kolkata-based
non-banking housing finance company due to its deteriorating
financial conditions and governance issues.
Following this, the company came under CIRP. The RBI and Srei are
the litigant parties in the matter.
As per an NCLT order dated October 31, 2022, the Srei administrator
had sought more time till January 2023 for completion of CIRP, the
report notes.
About SREI
Based in India, SREI Infrastructure Finance Ltd. (NSE: SREINFRA) --
https://www.srei.com/ -- is a non-banking financial institution.
The company has three principal lines of business in financing:
infrastructure equipment finance, infrastructure projects finance
and renewable energy product finance. Infrastructure equipment
finance is the largest business division of the Company.
On Oct. 4, 2021, the Reserve Bank of India superseded the board of
directors of Kolkata-based Srei Infrastructure and said that it
will initiate insolvency proceedings with the National Company Law
Tribunal (NCLT), according to The Economic Times. The RBI cited
governance concerns and defaults by the company and appointed
Rajneesh Sharma, former chief general manager, Bank of Baroda as an
administrator of the company.
The insolvency resolution process against the company started on
Oct. 8, 2021.
The RBI-appointed administrator has admitted claims of around
INR31,868 crore of the total claims received of around INR34, 223
crore from financial creditors to Srei Equipment Finance Ltd
(SEFL), the Hindu BusinessLine disclosed. He had also admitted
claims to the tune of INR257 crore from financial creditors to Srei
Infrastructure Finance.
TRT BUILDERS: ICRA Keeps C+ Debt Rating in Not Cooperating
----------------------------------------------------------
ICRA has retained the Long-Term and Short-Term ratings of TRT
Builders & Constructions (India) Private Limited in the 'Issuer Not
Cooperating' category. The ratings are denoted as
[ICRA]C+/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 6.50 [ICRA]C+; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 4.00 [ICRA]A4; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
TRT Builders & Constructions (India) Private Limited was
incorporated in the year 2011 as a private limited company promoted
by Mr. Sundareshan, Mr Nizamudeen and Mr Robin P Alex. The day to
day activities of the company are managed by Mr. Sundareshan who
has more than 35 years of experience in the construction industry.
All three promoters of the firm are registered class A contractors
in Kerala with more than two decades of experience in the
construction industry each under their personal capacities. Mr.
Sundareshan, Mr. Nizamudeen and Mr Robin P Alex own under their
personal capacities firms M/s Trio Builders, M/s Thoppil Builders
and M/s Sreyas Builders respectively, with all three firms
operating in the construction segment in different regions of
Kerala.
VISHWAKARMA BUILDERS: ICRA Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the Long-Term rating of Shree Vishwakarma
Builders in the 'Issuer Not Cooperating' category. The rating is
denoted as [ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 34.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/ limited information on
the issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity. The rating action
has been taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
SVB is a partnership firm incorporated in October, 2012 with
fourteen partners registered at Kanker Khera, Meerut, Uttar
Pardesh. The firm is promoted by Mr. Parminder Tewatia, Ms.
Ravindri Devi and Mr. Arjun Singh. SVB launched a project "Green
Paradise" in Modipuram, Meerut. The project comprises a saleable
area of 3.11 mn sq. ft. and consists of 63 plots, 130 duplex and 26
G+2 floor. The project cost for INR80.0 crore is funded by INR34.50
crore of bank debt, INR25.52 crore of promoter's contribution and
INR19.98 crore of customer advances.
=========
J A P A N
=========
FURUKAWA ELECTRIC: Egan-Jones Retains 'BB+' Sr. Unsec. Debt Ratings
-------------------------------------------------------------------
Egan-Jones Ratings Company, on October 13, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Furukawa Electric Co Ltd.
Headquartered in Chiyoda City, Tokyo, Japan, Furukawa Electric Co.,
Ltd. manufactures wires, cables, and metal products.
MITSUI OSK: Egan-Jones Retains 'BB+' Sr. Unsecured Debt Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company, on October 13, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Mitsui OSK Lines Ltd.
Headquartered in Minato City, Tokyo, Japan, Mitsui O.S.K. Lines,
Ltd. provides marine transportation, warehousing, and cargo
handling services.
SAKUMASEIKA CO: Candy Maker to go out of Business in January
------------------------------------------------------------
Japan Today reports that a beloved Japanese candy eaten by
generations, so iconic it even appeared in a hit anime film, has
come to the end of the line, a victim of surging raw material and
energy prices.
Japan Today relates that Tokyo-based Sakumaseika Co said on Nov. 9
that it would go out of business in January due to rising
production costs, a labor shortage and a drop in sales of its main
product "Sakuma's Drops."
The discontinuation of its trademark candy - hard, colorful fruit
drops sold in a red steel can - threw Japan into mourning, the
report says.
"We always had a can at home when I was in grade school," said
53-year-old sweets-shop owner Naoe Watanabe, remembering how he
used to use a 10-yen coin to pop open the lid of the treat - a
staple in corner candy shops for 114 years.
"It feels like a sign of the times. There are so many choices now,
compared to when I was a kid," he said.
According to Japan Today, Sakumaseika said it hadn't raised the
price of the product, which consists of eight flavors such as
strawberry and lemon, for years. Many Japanese firms remain
hesitant to raise prices at all or fully pass on surging input
costs out of fear of losing customers.
The future of Sakumaseika's 100 or so employees remained uncertain,
a company representative said.
Established in 1908 by confectioner Sojiro Sakuma, Sakumaseika
produced the candy through the air raids of World War Two,
inspiring anime giant Studio Ghibli to immortalize it in its 1988
film "Grave of the Fireflies".
Sakumaseika suffered a net loss of more than JPY150 million in the
2021 financial year, according to credit survey firm Tokyo Shoko
Research, which first reported the company's closure on Nov. 9.
SHARP CORP: S&P Alters Outlook to Negative, Affirms 'BB-' LT ICR
----------------------------------------------------------------
S&P Global Ratings has revised to negative from stable the outlook
on its 'BB-' long-term issuer credit rating on Sharp Corp. S&P also
affirmed its 'BB-' long-term issuer credit rating and 'B'
short-term issuer credit and commercial paper program ratings on
the Japan-based electronics maker. At the same time, S&P revised to
negative from stable the outlook and affirmed the ratings on an
overseas Sharp subsidiary.
S&P said, "We base the outlook revision on our view of a heightened
likelihood that Sharp will post lower profits than we previously
assumed. This is owing to weaker profitability of its LCD business
due to a fall in prices of large LCD panels, together with a
decline in the value of the yen. The outlook revision also reflects
our view that key cash flow ratios for Sharp will weaken materially
in fiscal 2022 (ending March 31, 2023) and will take a long time to
recover to commensurate with the ratings.
"We believe Sharp's profits are likely to decrease materially in
fiscal 2022 and recover only slowly afterward. This is because the
company's business structure remains sensitive to its external
environment. In the LCD business, reconsolidation of Sakai Display
Products Corp., a maker of large liquid-crystal displays (LCDs),
has weakened stability of Sharp's earnings because it is largely
susceptible to fluctuations in the market. Given falling prices of
large LCD panels, we expect Sharp's LCD business to make about a
¥25 billion operating loss in fiscal 2022. In addition, rapid
depreciation of the yen has substantially cut profits from company
businesses that manufacture products overseas and sell them in the
domestic market, such as home appliances. Such businesses account
for a large proportion of Sharp's entire business. The company has
taken steps in response, including adjusting its use of LCD panel
factories and increasing overseas sales of home appliances, in
addition to raising prices and cutting costs. Still, it will not be
easy for the company to transform its business structure in the
short term and recover profits materially, in our view.
"We think Sharp's key cash flow ratios are unlikely to recover to
commensurate with the ratings in the next six to 12 months. In the
first half of fiscal 2022 (April to September 2022), the company's
operating cash flow was negative due to the worsened performance.
We expect Sharp's ratio of debt to EBITDA to rise to about 9x as of
the end of fiscal 2022, even if we incorporate an expected recovery
in profit (the ratio was 3.8x as of the end of fiscal 2021). We
expect the company to curb a rise in working capital and make
selective investments. However, we foresee a slow recovery of
profits and consistently weak cash flow throughout the next fiscal
year. Accordingly, debt to EBITDA will likely recover to only about
5.5x in fiscal 2023, in our view.
"We incorporate into our long-term issuer credit rating on Sharp a
notch of uplift from the company's stand-alone credit profile
(SACP) for support from parent Hon Hai Precision Industry Co. Ltd.
(A-/Stable/--). Hon Hai has higher creditworthiness than Sharp. We
believe the Taiwan-based company would support Sharp if the
subsidiary's finances weakened substantially.
"The negative outlook reflects our view of a more than one-in-three
chance that key cash flow ratios for Sharp will not recover to
commensurate with the ratings within the next six to 12 months.
This is because it will take a long time for profits to recover,
due to structural issues in the company's business in addition to
its difficult business environment.
"We may consider downgrading Sharp if we see a heightened
likelihood of its debt-to-EBITDA ratio exceeding 5.5x consistently
because profits and cash flow do not recover much.
"Conversely, we may consider revising our outlook on Sharp upward
to stable if its profits recover thanks to cost cuts and other
efforts and we believe its debt-to-EBITDA ratio will be stable
below 5.5x as debt decreases thanks to tighter control of working
capital and investments."
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit analysis of Sharp. We assess its risk
management standards and operational effectiveness as somewhat
weaker than those of regional peers because its record shows
financial performance has been vulnerable to market changes."
Ratings List
AFFIRMED; CREDITWATCH/OUTLOOK ACTION
TO FROM
SHARP CORP.
Issuer Credit Rating BB-/Negative/B BB-/Stable/B
SHARP INTERNATIONAL FINANCE (U.K.) PLC
Issuer Credit Rating BB-/Negative/B BB-/Stable/B
AFFIRMED
SHARP CORP.
Commercial Paper B
SHARP INTERNATIONAL FINANCE (U.K.) PLC
Commercial Paper B
TOKYO DOME: Egan-Jones Withdraws 'C' Commercial Paper Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on October 17, 2022, withdrew the 'C'
foreign currency and local currency ratings on commercial paper
issued by Tokyo Dome Corp.
EJR also withdrew the 'CCC+' local currency senior unsecured rating
on debt issued by the Company.
Headquartered in Japan, Tokyo Dome Corporation operates an air
dome-type baseball stadium and an urban amusement center.
=========
M A C A U
=========
WYNN RESORTS: Macau Unit Posts US$163M Loss in 3Q Ended Sept. 30
----------------------------------------------------------------
Ben Blaschke at Inside Asian Gaming reports that Wynn Resorts
reported a US$162.7 million loss from its Macau integrated resorts,
Wynn Macau and Wynn Palace, in the three months to Sept. 30, 2022,
widened from the US$95.4 million loss recorded in the same period
last year.
It was, however, narrowed from the US$185.3 million loss reported
in 2Q22.
IAG relates that Wynn's Macau subsidiary, Wynn Macau Ltd, continues
to be impacted by mainland China's COVID-zero policy, with various
lockdowns and border restrictions making travel difficult.
According to Wynn Resorts' 3Q22 financial results, released on Nov.
10, revenue from Macau operations fell 62.9% year-on-year and 1.4%
sequentially to US$115.6 million. GGR was just 8% of 2019 levels.
Adjusted Property EBITDA was a loss of US$65.6 million, reversing
an EBITDA gain of US$10.2 million in 3Q21 although narrowing the
US$90.3 million EBITDA loss from 2Q22.
At Wynn Palace, operating revenues fell 58.5% year-on-year to
US$75.2 million, with an Adjusted Property EBITDA loss of US$21.8
million, the report discloses.
Wynn Macau, located on the Macau peninsula, saw operating revenues
decline by 69.1% to US$40.4 million with an Adjusted Property
EBITDA loss of US$43.8 million.
"In Macau, while COVID-related travel restrictions continued to
negatively impact our results, we were pleased to experience
encouraging pockets of demand during the recent October holiday
period," IAG quotes Wynn Resorts CEO Craig Billings as saying. "We
remain confident that the market will benefit from the return of
visitation over time."
Group-wide, the Macau performance dragged Wynn Resorts to a
US$142.9 million loss for the quarter – despite the company
reporting record 3Q22 Adjusted Property EBITDA at Wynn Las Vegas
and Encore Boston Harbor, according to IAG.
Operating revenues for Wynn Resorts declined by 10.5% to US$889.7
million.
About Wynn Resorts
Headquartered in Las Vegas, Nevada, Wynn Resorts, Limited owns and
operates luxury hotels and destination casino resorts in Las Vegas,
Nevada, Macau, and China.
Egan-Jones Ratings Company, on July 19, 2022, retained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Wynn Resorts, Limited. EJR also retained its 'B'
rating on commercial paper issued by the Company.
=====================
N E W Z E A L A N D
=====================
GEOFF WILSON: Court to Hear Wind-Up Petition on Nov. 17
-------------------------------------------------------
A petition to wind up the operations of Geoff Wilson Limited will
be heard before the High Court at Invercargill on Nov. 17, 2022, at
11:45 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Sept. 2, 2022.
The Petitioner's solicitor is:
Gabrielle McGillivray
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
GLEN ECHO: Creditors' Proofs of Debt Due on Nov. 25
---------------------------------------------------
Creditors of Glen Echo Limited are required to file their proofs of
debt by Nov. 25, 2022, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Oct. 28, 2022.
The company's liquidators are:
Peri Micaela Finnigan
Keaton Pronk
McDonald Vague Limited
PO Box 6092
Victoria Street West
Auckland 1142
HOLDEM HOLDINGS: Creditors' Proofs of Debt Due on Dec. 16
---------------------------------------------------------
Creditors of Holdem Holdings Limited are required to file their
proofs of debt by Dec. 16, 2022, to be included in the company's
dividend distribution.
The High Court at Christchurch appointed Elizabeth Helen Keene and
Luke Norman of KPMG as liquidators of the company on Oct. 27,
2022.
P&S HOSPO: Court to Hear Wind-Up Petition on Nov. 21
----------------------------------------------------
A petition to wind up the operations of P&S Hospo Limited and
Waikato Hospo 2020 Limited will be heard before the High Court at
Hamilton on Nov. 21, 2022, at 10:45 a.m.
APRA New Zealand Limited filed the petition against the company on
Sept. 23, 2022.
The Petitioner's solicitor is:
Tim Mullins
LeeSalmonLong
Level 16, Vero Centre
48 Shortland Street
Auckland 1010
WHITE INTERNATIONAL: Court to Hear Wind-Up Petition on Dec. 9
-------------------------------------------------------------
A petition to wind up the operations of White International
Forwarding Limited will be heard before the High Court at Auckland
on Dec. 9, 2022, at 10:00 a.m.
Super Freight Limited filed the petition against the company on
Sept. 23, 2022.
The Petitioner's solicitor is:
Philip Andrew Sheat
Akarana Legal Limited
486 New North Road
Kingsland, Auckland
===============================
P A P U A N E W G U I N E A
===============================
PAPUA NEW GUINEA: Moody's Affirms B2 LT Rating, Outlook Now Stable
------------------------------------------------------------------
Moody's Investors Service has changed the outlook on the Government
of Papua New Guinea's (PNG) ratings to stable from negative.
Concurrently, the B2 long-term issuer and senior unsecured ratings
have been affirmed.
The change of the outlook to stable is driven by a stabilization in
the government's debt burden arising in part from the positive
terms of trade shock from higher global prices for PNG's commodity
exports, as well as a renewed commitment to long-term fiscal
sustainability that has been reinforced by its re-engagement with
development partners. Moody's now expects a stable debt burden and
debt affordability in the next few years. In addition, government
liquidity and external vulnerability risks have ebbed given
improvements in domestic funding conditions and the balance of
payments, leading to lower domestic interest rates and higher
foreign exchange reserves, respectively, which Moody's expects to
continue.
The affirmation of the B2 rating reflects the confluence of
relatively weak economic strength, institutions and governance
strength, and susceptibility to event risk. Nonetheless, progress
on large resource projects, particularly for liquefied natural gas
(LNG), improve the outlook for medium-term growth and fiscal
repair, while the re-election of the government of Prime Minister
James Marape allows for policy continuity and no meaningful
deviation from the negotiations already conducted with regards to
the large resource projects or with development partners and the
International Monetary Fund.
PNG's local currency (LC) and foreign currency (FC) country
ceilings remain unchanged at Ba2 and B1, respectively. The LC
ceiling, three notches above the B2 rating, reflects the low
predictability and reliability of government institutions, as well
as domestic political risks; moreover, while the government does
not possess a major footprint in the economy — its ownership in
large resource ventures is in most cases a minority share — its
revenue base is exposed to the resources sector. The FC ceiling,
two notches below the LC ceiling, takes into account relatively
high external indebtedness, weak macro policy effectiveness, and
capital account restrictions, as continued foreign exchange
restrictions constrain kina convertibility and periodically delay
offshore payments.
RATINGS RATIONALE
RATIONALE FOR THE CHANGE OF OUTLOOK TO STABLE FROM NEGATIVE
FISCAL STABILIZATION GUIDED BY HIGHER COMMODITY PRICES
PNG's fiscal and debt metrics have stabilized on the back of higher
global prices for PNG's commodity exports, including LNG and
petroleum, mineral products such as gold, copper and nickel, as
well as agricultural goods such as coffee, palm oil and copra.
Moody's expects growth momentum to continue to support
stabilization, especially as large resource projects like Papua LNG
are expected to progress in the coming years.
PNG's government debt likely peaked at 51.6% of GDP in 2021 and
will stabilize around 50% over the next two to three years;
previously, the rating agency projected government debt to climb
towards 55% of GDP by 2022. Debt affordability as measured by the
government's interest payments as a share of its revenue is
expected to decline to around 13.5% from a peak of around 18% in
2020, at the time that the negative outlook was assigned in early
2021, Moody's forecasted the interest payments-to-revenue ratio to
remain around 20% through 2022.
The stabilization of PNG's fiscal metrics since last year has been
driven by higher mineral and petroleum receipts — including
royalties, taxes and dividends — higher grant support from
development partners and healthier indirect taxes that reflect the
recovery in economic activity from the COVID trough. At the same
time, fiscal consolidation has not been disrupted by targeted
fiscal measures to help households and businesses cope with higher
inflation.
Fiscal performance has been augmented by traction on reforms,
including the introduction of a medium-term fiscal framework with
revised fiscal rules, a medium-term revenue strategy, proposed
improvements in tax administration, SOE restructuring, arrears
resolution and expenditure restraint, among others.
RE-ENGAGEMENT WITH DEVELOPMENT PARTNERS EASES GOVERNMENT LIQUIDITY
RISKS
PNG's demonstrated progress on reforms, including its performance
under successive IMF Staff Monitored Programs (SMPs) over the past
two years, reflects a renewed emphasis on engagement with the
international community as compared with previous governments.
Although the SMPs did not entail financial support, they were
designed specifically to support the reform agenda which did help
to unlock financing from other official development partners,
particularly from Australia (Aaa stable).
The government is negotiating another program through the IMF's
Extended Credit Facility that is expected to commence in 2023,
underpinning Moody's expectation of continued progress on reform
given the conditionalities attached to multilateral and bilateral
financing. The shift towards more concessional funding sources and
away from the PNG government's traditional reliance on domestic
market-based financing will help to lower debt servicing costs and
debt affordability, as well as bolster external stability.
STRENGTHENING EXTERNAL POSITION AIDS IN MACRO STABILITY
The positive terms of trade shock resulting from higher commodity
prices over the past year has also strengthened PNG's external
position, augmented by higher production on the back of the easing
of supply disruptions from COVID restrictions. Going forward, a
moderation in commodity prices and the expected reopening of one of
the country's largest gold mines will lead to lower, but still
elevated current account surpluses that will contribute to an
ongoing build-up in foreign currency reserves.
Despite a wider deficit in the financial account given distortions
related to resident mineral companies' preference to retain export
receipts offshore, higher commodity prices and production volumes
helped to lift PNG's foreign currency reserves to a record high of
$3.4 billion in August 2022 from $2.4 billion at the end of 2019.
As such, import cover has improved to over 11 months from around 7
months over the same period.
Moody's projects that forthcoming cross-border debt repayments as a
share of foreign currency reserves will fall to around 77% of
foreign currency reserves for 2023 from over 90% in 2022 and around
150% in 2021.
In contrast to other developing economies that have been negatively
affected by tightening global liquidity conditions, PNG has been
shielded from capital flow volatility in part due to ongoing
capital account restrictions. While the exchange rate has been
stable against the US dollar, the kina's appreciation versus the
Australian dollar has helped to temper imported inflation as
compared to other countries with headline CPI rising to 5.9%
year-on-year in the Q1 2022 from a recent trough of 3.3% in Q2
2021, before moderating to 5.5% in Q2 2022. Excess liquidity in the
financial system has also helped to lower domestic interest rates
and supports funding conditions for the government.
RATIONALE FOR THE AFFIRMATION OF THE B2 RATINGS
PNG's B2 rating reflects the confluence of relatively weak economic
strength, institutions and governance strength, and susceptibility
to event risk.
Economic strength remains constrained by its small size, low per
capita income and narrow diversification given the large reliance
on extractive industries, such as hydrocarbon production and
mining, as well as a large exposure to agriculture. However, the
medium-term outlook is bolstered by improved prospects for further
large resource projects, particularly for LNG.
The commercial viability of the pipeline of large LNG projects has
improved in the context of the prevailing risks to global energy
security following the Russian invasion of Ukraine (Caa3 negative),
as well as global commitments to reduce carbon emissions. PNG's
geographical proximity to key importing countries, such as China
(A1 stable) and Japan (A1 stable), are also seen as a key
competitive advantage relative to other potential suppliers in the
Middle East or sub-Saharan Africa. LNG is also seen as an important
transition fuel as countries in Asia-Pacific seek to lower their
reliance on coal, thus supporting the demand for the additions to
global supply posed by these new projects.
Given the lack of diversification and limited prospects of
development of the non-resource sector relative to extractive
industries — including agriculture, mining and hydrocarbon
production — PNG's exposure to carbon transition risk and
physical climate change, such as climate-related natural disasters,
will remain elevated and drive a very highly negative exposure to
environmental risk.
Notwithstanding the recent progress on reform that has helped to
stabilize PNG's credit profile, Moody's overall assessment of
institutions and governance strength has remained unchanged,
reflecting the high risks with regards to the execution of the
proposed path towards medium-term fiscal consolidation.
In the near-term, downside risks from the pandemic also persist.
While COVID infection rates have been very low for much of 2022,
only about 3% of the population has been fully vaccinated, one of
the lowest rates in the world.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
PNG's very highly negative (CIS-5) ESG Credit Impact Score reflects
very high exposure to environmental and social risks, further
weakened by institutional challenges related to government policy
effectiveness, control of corruption and overall legal structures,
notwithstanding ongoing support from development partners.
PNG has a very highly negative exposure to environmental risks (E-5
IPS). It is both exposed to ongoing climate change, particularly
extreme rainfall and heat stress, as well as longer-term carbon
transition risks, given the sovereign's exposure to hydrocarbons as
a source of revenue and export receipts. Economic growth is
inextricably tied to the potential impact from both gradual and
sudden climate events. Moreover, PNG's resources sector, which
includes oil, gas, gold and copper, among others, contributes
greater than one-fourth of the economy's total value-added and
around 90% of export revenue, while the government's revenue
performance fluctuates with prevailing commodity prices and the tax
take on resource agreements. Separately, given large areas of land
that are underdeveloped, access to water remains a constraint on
economic development, yet provides for high levels of natural
capital, in both strong forestation and large untapped deposits of
natural resources.
PNG exposure to social risks is very highly negative (S-5). Access
to basic services continues to constrain economic development,
while other societal issues, including gender-based violence,
political unrest, and widespread poverty, particularly in the
country's most rural areas, remain present, although these issues
are not significantly more severe than for similarly-rated
developing economies. The government continues to direct resources
towards its long-term development plan, which prioritizes raising
living standards and increasing formal job opportunities.
PNG's weak institutions and governance profile constrain its
rating, as captured by a highly negative G issuer profile score
(G-4). Weaknesses in government effectiveness, control of
corruption and rule of law, while the credibility of legal
structures is also limited. While ongoing support from development
partners provides technical capacity in some areas, overall
structural reforms remain limited.
GDP per capita (PPP basis, US$): 3,921 (2021) (also known as Per
Capita Income)
Real GDP growth (% change): 1.5% (2021) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 5.7% (2021)
Gen. Gov. Financial Balance/GDP: -6.7% (2021) (also known as Fiscal
Balance)
Current Account Balance/GDP: 21.2% (2021) (also known as External
Balance)
External debt/GDP: 71.9% (2021)
Economic resiliency: b2
Default history: No default events (on bonds or loans) have been
recorded since 1983.
On November 07, 2022, a rating committee was called to discuss the
rating of the Papua New Guinea, Government of. The main points
raised during the discussion were: The issuer's economic
fundamentals, including its economic strength, have not materially
changed. The issuer's institutions and governance strength, have
not materially changed. The issuer's fiscal or financial strength,
including its debt profile, has materially increased. The issuer's
susceptibility to event risks has not materially changed.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An acceleration in fiscal deficit and debt reduction along with a
significant reduction in gross borrowing requirements than Moody's
currently expects would lead to upward pressure on the rating.
Improvements in the management of the exchange rate that
facilitates the development of the non-resource sector and enhances
economic diversification, while simultaneously maintaining
macroeconomic and external stability, would be credit positive.
Over the longer term, the implementation of key resource sector
investments that generates positive economic spillovers and boosts
growth potential would also contribute to upward rating pressure.
The rating could be downgraded if the prospects for fiscal
consolidation and associated stabilization of the government's
debt, as well as the implementation of large investments in PNG's
natural resources wealth, is significantly weaker than currently
assumed. In addition, lackluster implementation of the government's
reform agenda that contributes to higher liquidity
stress--including more constrained access to external concessional
financing and a sustained decline in the stock of foreign-exchange
reserves--would also prompt a downgrade.
The principal methodology used in these ratings was Sovereign
Ratings Methodology published in November 2019.
=====================
P H I L I P P I N E S
=====================
FOREMOST CAGAYAN: CEZA Cancels License of Online Casino Operator
----------------------------------------------------------------
The Philippine Star reports that the Cagayan Economic Zone
Authority (CEZA) has cancelled the 25-year license agreement with
Foremost Cagayan Development and Leisure Corp. (FCDLC) after an
evaluation showed it is "grossly disadvantageous" to the government
and it failed to deliver on its investment commitments.
CEZA administrator and CEO Jaime Escano terminated the FCDLC
license after three years, the report says.
"We are constrained to terminate the license agreement effective
immediately on the ground that the same is grossly disadvantageous
to CEZA," the Star quotes Mr. Escano as saying in a letter to FCDLC
president Chan Wa Fai.
"Upon the conclusion of the audit and evaluation that was conducted
on all licensees and registered enterprises engaged in interactive
gaming activities, we found that Foremost Cagayan Development and
Leisure Corp. did not comply with its obligations under its license
agreement."
According to the Star, CEZA authorized FCDLC to establish and
develop a smart city and industrial park, an international airport,
generation and distribution facilities for power, water or other
public utilities and residential complexes or township within the
Cagayan ecozone, all in connection with the development, operation
and conduct of interactive gaming facilities and land-based casino
enterprises and facilities.
FCDLC was granted a 25-year license in 2019 to operate an online
casino inside the Freeport. As part of the agreement, FCDLC has
committed to invest $500 million or $33.333 million over the next
15 years to develop the various complexes.
The Star relates that Mr. Escano said FCDLC did not make a similar
investment commitment and only warranted that "it has the financial
capability to undertake the required investment commitment."
FCDLC has not proven to be financially capable to undertake the
required investment commitment, he said.
CEZA said the FCDLC did not fulfill its commitment to invest $500
million or $33.333 million over the next 15 years.
It noted that FCDLC only invested nearly PHP250 million in the last
three years while incurring losses during the same period, the Star
adds.
=================
S I N G A P O R E
=================
CATTLE LINE: Court to Hear Wind-Up Petition on Nov. 25
------------------------------------------------------
A petition to wind up the operations of Cattle Line Two Pte Ltd
will be heard before the High Court of Singapore on Nov. 25, 2022,
at 10:00 a.m.
KPI Oceanconnect Pte Ltd filed the petition against the company on
Nov. 1, 2022.
The Petitioner's solicitors are:
Resource Law LLC
10 Collyer Quay
#23-01, Ocean Financial Centre
Singapore 049315
DES & CO: Court Enters Wind-Up Order
------------------------------------
The High Court of Singapore entered an order on Nov. 4, 2022, to
wind up the operations of DES & Co Automobile Pte. Ltd.
Maybank Singapore Limited filed the petition against the company.
The company's liquidator is:
Gary Loh Weng Fatt
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
GOLDEN ENERGY: Fitch Puts 'B+' IDR on Rating Watch Negative
-----------------------------------------------------------
Fitch Ratings has placed the 'B+' Issuer Default Rating of Golden
Energy and Resources Limited on Rating Watch Negative (RWN),
following announcement of a bond exchange with an intention to
loosen certain covenants and permit potential segregation of GEAR's
thermal coal business (represented by its 62.5% stake in PT Golden
Energy Mines Tbk (GEMS, B+/Positive)) via transfer, disposal or
dividend in specie. Fitch has also placed the 'B+' rating and 'RR4'
Recovery Rating on GEAR's USD375 million notes due 2026 on RWN.
Fitch has also assigned a 'B+' rating with a Recovery Rating of
'RR4' to GEAR's proposed new bonds which are offered to the
existing bondholders under the bond exchange and placed all the
ratings on RWN. The new bonds would not include a share pledge over
GEMS' shares.
The RWN reflects a diminished likelihood for GEAR to be upgraded
above 'B+', as reflected in its previous Positive Outlook, if the
bond exchange is successful, resulting in a reduced operational
scale due to the potential segregation of GEMS.
Fitch expects to affirm GEAR's rating and assign a Stable Outlook
following completion of the bond exchange and potential segregation
of GEMS. GEAR's business profile will be driven primarily by the
metallurgical coal business held through its 64%-owned subsidiary
Stanmore Resources (Stanmore). GEAR's rating also reflects
structural subordination risk at the holding company level, though
dividend income and a large cash balance should provide adequate
liquidity for holdco debt service over the rating horizon.
Fitch views any future investments and acquisitions by GEAR - which
could potentially reduce the holding company's liquidity buffer -
as an event risk.
KEY RATING DRIVERS
Bond Exchange Announcement: GEAR has offered 1:1 exchange for its
existing US dollar notes with a new dollar note at the same coupon
of 8.5% and maturity in 2027. The exchange offer requires
acceptance by 75% of its existing USD375 million noteholders. GEAR
plans to redeem the remaining portion of around USD100 million of
its existing notes using its internal cashflows.
Stanmore's Improving Business Profile: Fitch expects GEAR to
benefit from Stanmore's improved business profile post the BMC (now
Stanmore SMC) acquisition, with a significantly enhanced
operational scale. Fitch believes Stanmore's business profile to be
comparable with that of 'BB-' rated peers. Stanmore's metallurgical
coal sales volumes would now be amongst the top 10 in Australia at
about 12.6 million tonnes per annum (mtpa) (2021 pre-acquisition:
2.3mtpa) and proved reserve base will increase significantly to 228
million tonnes (2021 pre-acquisition: 33.8 million tonnes).
Strong Prices Accelerate Stanmore Deleveraging: Fitch expects
Stanmore's consolidated EBITDA to be around USD830 million in 2023,
the first full year of consolidating the acquired SMC mines,
benefitting from the high commodity prices. Fitch estimates EBIDTA
to decline thereafter to range between USD280 million-370 million,
based on its price assumptions. Stanmore's strong cash flows in
2022 and 2023 should enable it to deleverage significantly while
still paying a strong dividend to GEAR.
Fitch expects Stanmore SMC to repay an additional USD160 million of
acquisition debt via the cash sweep feature along with the total
scheduled repayment of USD55 million in 2022 and 2023. Fitch
expects Stanmore SMC to deleverage further in 2024-2026, leaving
only USD50 million as outstanding from the acquisition debt by
end-2026.
Structural Subordination Risk: Fitch assesses Stanmore's operating
cash flows, which includes dividend income from Stanmore SMC and
EBITDA from its own standalone operations, to cover its interest
service comfortably by at least 5x through the rating horizon, thus
mitigating structural subordination risk at Stanmore. However,
structural subordination risk at GEAR is higher, with holdco
interest cover declining from about 7x in 2023 to below 1x in
2023-2026 based on Fitch's coal-price assumptions. This results in
GEAR's rating being notched down.
Large Dividends from GEMS: Fitch expects GEAR to benefit from large
dividends from GEMS during 2022 prior to potential segregation of
GEMS, if any. Elevated thermal coal prices should support dividends
from GEMS rising to over USD300 million during 2022 (2021: USD270
million), augmenting GEAR's cash balance to around USD330 million
by end-2023 even in a case of potential segregation of GEMS.
GEAR's Cash Supplements Liquidity: Fitch expects GEAR's strong cash
balance to support its comfortable liquidity buffer over the rating
horizon, offsetting lower dividends from Stanmore beyond 2023.
Fitch expects dividend income to decline for about three years
starting 2024, driven by lower coal-price assumptions and debt
repayments at Stanmore SMC in line with the acquisition debt
repayment structure and its cash sweep mechanism. However, any
substantial acquisitions without adequate cash income could tighten
GEAR's standalone liquidity.
Adequate Reserve Life: GEAR's reserve life remains adequate for its
key mines, even in case of potential segregation of GEMS from the
group structure. The average marketable proved reserve life for
Stanmore, including the acquired mines, is about 14 years. Fitch
does monitor Stanmore's plan towards substituting production from
Poitrel mine, which has a proved reserve life of close to five
years.
DERIVATION SUMMARY
Fitch expects GEMS' (B+/Positive) credit profile to be on a par
with 'BB-' peers in the next 12 months, driven by continuous
operational scale growth, which supported the Positive Outlook on
GEAR's rating prior to the bond exchange announcement. The rating
watch negative reflects a potential reduction in GEAR's operating
scale, which constrains its likelihood for a rating upgrade above
'B+' upon successful completion of proposed bond exchange and
potential segregation of GEMS.
KEY ASSUMPTIONS
Stanmore Standalone
- Annual sales volume at 2.2-2.7mtpa until 2025, declining to 1.8mt
in 2026.
- Coal prices in line with the hard coking coal price deck at
USD370/t in 2022, USD 200/t in 2023 and USD 140/t thereafter.
- Total free on board (FOB) cost (ex-royalties) at about USD70 per
tonne in 2022 and 2023, and thereafter increasing to USD82-89 per
tonne in 2024-2026.
- Capex of USD39 million in 2022, USD16 million in 2023 and USD9
million-13 million with no major expansionary capex requirements.
Stanmore SMC:
- Annual sales volume for Poitrel mine at 4.3mt in 2022, 4.7mt in
2023, 4.3mt in 2024 and 2025 and 4.1mt in 2026.
- Annual sales volume for South Water Creek at 5.8mt in 2022 and
6.2-6.4mt in 2023-2026
- Coal prices in line with the hard coking coal price deck at
USD370/t in 2022, USD200/t in 2023 and USD140/t thereafter.
- Poitrel's total FOB cost (excluding royalty) at USD80-90 per
tonne. South Creek's FOB Cost at USD63-73 per tonne.
- Total capex of USD40 million in 2022, USD138 million in 2023,
USD50 million-70 million in 2024-26 and USD37 million in 2027.
- Payment of the acquisition loan in line with the terms of
repayment provided including payment of principal based on the cash
sweep feature.
GEAR Standalone:
- No dividend payments as the company would prioritise deleveraging
and cash conservation in the next three to four years
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that Stanmore would be reorganized
as a going-concern in bankruptcy rather than liquidated.
- Fitch has assumed a 10% administrative claim at both levels, i.e
Stanmore and GEAR.
Going Concern Approach
Recovery of Stanmore:
- Fitch has used the same multiple of 4x for Stanmore in line with
other metallurgical coal producers in Australia. The choice of
multiple is also in line with the M&A precedents in the developed
market, including transaction of Rio Met Coal Mines at around
4.0x-5.5x. The acquisition was made for USD2.25 billion,
representing a multiple of 5.5x of 2019 actual EBITDA. GEAR paid an
approximately 3x multiple for Stanmore on FY20 EBITDA guidance of
USD56 million, but Fitch consider that this multiple is lower than
market prices - as Stanmore was acquired during a series of small
stake purchases, and most of them were done opportunistically in
the open market.
- GEAR acquired Dampier Coal at a multiple of 4.6x based on the
expected EBITDA level from BMC of about USD300 million at the time
of acquisition in October 2021
- Fitch views a 0.5x higher multiple than Indonesian thermal coal
peers, which uses a 3x multiple, as justified based on the
different geographies, where Australia has a more predictable
regulatory environment and the different grades of coal. Due to ESG
concerns, thermal coal might face a slow and structural decline
with more countries switching away from using coal for power
production. Furthermore, more companies are looking for
opportunities to diversify their portfolios away from thermal coal.
Metallurgical coal, which is used primarily for steel
manufacturing, is not facing any similar structural decline.
- Fitch has used sustainable EBITDA of USD300 million, which is
90% of Stanmore's average sustained EBITDA in 2024-2026 based on
Fitch's estimates.
- This results in a Recovery Rating of 'RR4' for the proposed new
bonds.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch will affirm GEAR's rating at 'B+' and maintain a Positive
Outlook in case of the proposed bond exchange and potential
segregation of GEMS' stake being unsuccessful.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch will affirm GEAR's rating at 'B+' and assign a Stable
Outlook in the case of the proposed bond exchange and potential
segregation of GEMS's stake being completed, while GEAR's holdco
standalone (cash + EBITDA)/interest cover remains above 2.0x on a
sustained basis and net debt/EBITDA of less than 3x, based on a
proportionate consolidation of Stanmore Resources.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: If the bond exchange and potential GEMS'
segregation is successful, Fitch expects GEAR's holdco liquidity to
remain adequate over the next 12-18 months, given an extended debt
maturity profile and strong dividend from Stanmore Resources in
2023 due to high commodity prices. Post 2023, Fitch expects
dividends from Stanmore to decline substantially with Fitch's lower
coal price expectations and the amortising payments for the
acquisition debt increase.
Fitch expects Stanmore's consolidated profile to have robust
liquidity in the next 12-24 months to comfortably service its debt.
Stanmore's substantial debt is at its subsidiary, Stanmore SMC
level, in form of the acquisition debt which is amortizing in
nature, with principal repayments increasing every year. The
acquisition debt also has a cash sweep feature to use part of
excess cash to repay the principal. With strong cash flows from the
underlying asset, Fitch expects Stanmore SMC to be able to repay
most of the acquisition debt by 2026, without requiring any
refinancing.
ISSUER PROFILE
GEAR is a Singapore listed holding company. It owns 62.5% stake in
its Indonesian-based thermal coal mining subsidiary GEMS and 64%
stake in Australia-based metallurgical coal mining subsidiary
Stanmore. GEAR acquired an 80% stake in SMC (previously called BHP
Mitsui Corp, BMC) in May 2022 through Stanmore, and the remaining
20% stake in SMC from Mitsui, in October 2022.
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Golden Energy and
Resources Limited LT IDR B+ Rating Watch On B+
senior unsecured LT B+ New Rating RR4
senior unsecured LT B+ Rating Watch On RR4 B+
GOLDEN ENERGY: Moody's Affirms B1 CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service has affirmed the B1 corporate family
rating of Golden Energy And Resources Ltd (GEAR), the B1 ratings on
GEAR's $375 million senior secured notes due 2026, and proposed
senior secured notes due 2027.
Moody's has also revised the outlook to negative from stable.
"The outlook revision to negative reflects uncertainty over
potential changes in GEAR's governance practices, including
financial policies and board structure, if its proposed delisting
and conditional exit offer were accepted," says Maisam Hasnain, a
Moody's Vice President and Senior Analyst.
"The affirmation reflects Moody's expectation that GEAR will
maintain sufficient liquidity despite the potential cash outflow
associated with the cash consideration portion of its proposed
distribution in specie of all of its shares in its Indonesian coal
mining subsidiary, PT Golden Energy Mines Tbk (GEMS)," adds
Hasnain, who is also Moody's Lead Analyst for GEAR.
RATINGS RATIONALE
On November 9, GEAR announced that it intends to seek voluntary
delisting of its shares on the Official List of the Singapore
Exchange Securities Trading Limited (SGX). GEAR also announced a
conditional exit offer to GEAR's shareholders from Duchess Avenue
Pte Ltd (Duchess), an investment holding company wholly-owned by
Star Success Pte Ltd (Star Success), which in turn is wholly-owned
by the spouse of Mr. Indra Widjaja, a controlling shareholder of
GEAR's parent company. The long-stop date for these transactions is
April 2023.
Once complete, these transactions, which are subject to conditions
including but not limited to, approval from independent
shareholders and regulators, will significantly increase
concentrated ownership risk at GEAR. In addition, GEAR will have an
untested track record in terms of its financial policies and risk
tolerance under the sole ownership of Duchess.
The semi-annual and annual financial reporting requirement under
the indenture governing GEAR's US dollar notes will ensure
transparency over its financial performance. Also, its key
subsidiary, Stanmore Resources Limited is listed on the Australia
Stock Exchange. However, the reporting and disclosure requirements
for GEAR if it is a private company, will be less stringent than
that for listed public companies.
Nonetheless, GEAR's B1 CFR remains supported by its 64% ownership
of Stanmore Resources Limited, an Australian metallurgical coal
producer with low-cost operations, stable production volumes and a
long reserve life.
GEAR's B1 CFR is also premised on Moody's expectation that, if the
conditional exit offer is accepted, Duchess will not seek to
extract incremental cash from GEAR to provide additional liquidity
for itself.
The maintenance of a large cash balance at the holding company
level is increasingly critical for GEAR if the potential dividend
in specie of GEMS takes place. GEMS has historically been a very
reliable dividend contributor, even during commodity price
downturns.
Moody's expects GEAR to maintain good liquidity over the next 18-24
months. GEAR's standalone cash balance of $94 million as of June
30, 2022 and Moody's expectation for GEAR to receive $240-$270
million in dividends from GEMS between June 2022 and March 2023
will be sufficient to meet GEAR's cash needs. These include the
redemption of up to $94 million of its residual 2026 notes after
the exchange offer, and up to a $146 million payment to GEAR's
minority shareholders assuming all of them elect to receive cash
instead of GEMS shares as part of the dividend in specie, as per
Moody's estimates.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely over the next 12-18 months given the
negative outlook.
Nevertheless, Moody's could revise the outlook to stable if there
is (1) no substantial change to GEAR's business performance or
governance practices if the delisting and acceptance of the
conditional exit offer occur, (2) clarity over GEAR's business
strategy if its pending transactions, including its planned
distribution of its GEMS stake, do not proceed, and (3) if GEAR
continues to maintain good liquidity at the holding company level.
Conversely, Moody's could downgrade GEAR's ratings as a result of
(1) aggressive financial policies, including large debt-funded
investments, high shareholder returns, or the company operating
with a substantially lower holding company cash balance than
historical levels; (2) weakening industry fundamentals or a higher
cash usage at Stanmore, which reduces the cash flow available for
paying dividends to GEAR; (3) additional funding support rendered
to its subsidiary and joint venture investments; or (4) debt at
Stanmore and its subsidiaries not declining.
Specific indicators that Moody's would consider for a downgrade
include interest coverage at GEAR on a standalone basis falling
below 1.5x or consolidated adjusted debt/EBITDA rising above 3.0x.
The principal methodology used in these ratings was Mining
published in October 2021.
Listed on the Singapore Stock Exchange, Golden Energy And Resources
Ltd (GEAR) is an energy and resources company with investments in
coal and gold. Following the potential distribution of PT Golden
Energy Mines Tbk, an Indonesian thermal coal producer, GEAR's
primary investments are a 64% effective stake in Australian
metallurgical coal producer Stanmore Resources Limited, and a 50%
joint venture stake in Australian gold producer Ravenswood Gold
Mine.
GOLDEN MOUNTAIN: Placed in Interim Judicial Management
------------------------------------------------------
Mr. Farooq Ahmad Mann of Mann & Associates PAC on Nov. 3, 2022, was
appointed as interim judicial manager of Golden Mountain Textile
and Trading Pte Ltd.
The interim judicial manager may be reached at:
Mr. Farooq Ahmad Mann
Mann & Associates PAC
3 Shenton Way
#03-06C Shenton House
Singapore 068805
GUAN CHEE: Court to Hear Wind-Up Petition on Nov. 25
----------------------------------------------------
A petition to wind up the operations of Guan Chee Hong Kong Roasted
Duck Pte Ltd will be heard before the High Court of Singapore on
Nov. 25, 2022, at 10:00 a.m.
United Overseas Bank Limited filed the petition against the company
on Oct. 31, 2022.
The Petitioner's solicitors are:
Rajah & Tann Singapore LLP
9 Straits View
#06-07 Marina One West Tower
Singapore 018937
OJETS PTE: Court to Hear Wind-Up Petition on Nov. 18
----------------------------------------------------
A petition to wind up the operations of Ojets Pte Ltd will be heard
before the High Court of Singapore on Nov. 18, 2022, at 10:00 a.m.
Jacquin Gerard Rene of Morgan Lewis Stamford LLC filed the petition
against the company on Oct. 26, 2022.
The Petitioner's solicitors are:
Morgan Lewis Stamford LLC
10 Collyer Quay
#27-00 Ocean Financial Centre
Singapore 049315
SOMAP INTERNATIONAL: Court to Hear Wind-Up Petition on Nov. 18
--------------------------------------------------------------
A petition to wind up the operations of Somap International Pte Ltd
will be heard before the High Court of Singapore on Nov. 18, 2022,
at 10:00 a.m.
Ys Gm Mf Vi LLC filed the petition against the company on Dec. 22,
2020.
The Petitioner's solicitors are:
Allen & Gledhill LLP
One Marina Boulevard
#28-00
Singapore 018989
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
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Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9482.
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*** End of Transmission ***