/raid1/www/Hosts/bankrupt/TCRAP_Public/221118.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
Friday, November 18, 2022, Vol. 25, No. 225
Headlines
A U S T R A L I A
ADVANCED HOLDINGS: First Creditors' Meeting Set for Nov. 23
ALTITUDE COWORK: Second Creditors' Meeting Set for Nov. 23
ANAX CO: Second Creditors' Meeting Set for Nov. 23
AUSGROUP LIMITED: In Talks to Formulate Restructuring Plan
COLLECTION HOUSE: Clayton Utz Advises on Recapitalisation and Sale
EARTHTEC HR: Second Creditors' Meeting Set for Nov. 22
FIVE STAR 2022-1: Fitch Assigns 'BB(EXP)sf' Rating on Class E Notes
JUST KITS: Second Creditors' Meeting Set for Nov. 23
VERDIA PTY: In Administration; First Creditors' Meeting Set Nov 10
WHISPIR LTD: Axes 30% of Workforce, Slashes Costs
C A M B O D I A
CAMBODIA: Moody's Alters Outlook on 'B2' Issuer Rating to Negative
C H I N A
CHINA EVERGRANDE: Eyes Onshore Assets to Sweeten Debt Revamp
ENN NATURAL: Moody's Affirms Ba1 CFR & Alters Outlook to Positive
GEMDALE CORP: S&P Lowers LT ICR to 'BB-' & Then Withdraws Rating
GREENLAND HOLDING: S&P Cuts ICR to 'SD' on Missed Repayment
SINO-OCEAN GROUP: Fitch Affirms Foreign Currency IDR at 'BB'
SUNAC CHINA: Seeks to Restructure US$2.1 Billion in Onshore Bonds
I N D I A
BPTP LIMITED: Insolvency Resolution Process Case Summary
COX & KINGS: Liquidation Process Case Summary
EURO MULTIVISION: Insolvency Resolution Process Case Summary
FOREMOST INTERNATIONAL: Insolvency Resolution Process Case Summary
GANGA STEEL: Insolvency Resolution Process Case Summary
JKS THE BANYAAN: Liquidation Process Case Summary
LANDS END: Insolvency Resolution Process Case Summary
NAMAN ISPAT: Insolvency Resolution Process Case Summary
PONDICHERRY EXTRACTION: Liquidation Process Case Summary
PRESSCOM PRODUCTS: Insolvency Resolution Process Case Summary
VIKRAM KAKADE: Insolvency Resolution Process Case Summary
WESTERN HILL: Insolvency Resolution Process Case Summary
I N D O N E S I A
PT BANK PAN: Fitch Affirms LongTerm IDR at 'BB', Outlook Stable
J A P A N
RAKUTEN GROUP: S&P Assigns 'BB+' LT ICR, On CreditWatch Negative
M A L A Y S I A
CHINA AUTO: Seeks White Knight as Part of Regularisation Plan
N E W Z E A L A N D
DIRECT AUTO: Creditors' Proofs of Debt Due on Dec. 5
GRIP RIGS: Court to Hear Wind-Up Petition on Nov. 18
HIKO HEALTH: Court to Hear Wind-Up Petition on Dec. 13
MANA CONCRETE: Court to Hear Wind-Up Petition on Nov. 21
REAL PROPERTY: Creditors' Proofs of Debt Due on Dec. 10
S I N G A P O R E
BMG HOTEL: Court Enters Wind-Up Order
CARR GROUP: Court to Hear Wind-Up Petition on Nov. 25
ES BEAUTY: Creditors' Meetings Set for November 30
HYFLUX LTD: Former CEO, CFO, Independent Directors Charged
LIPPO MALLS: Moody's Lowers CFR to B3, Outlook Remains Negative
ONLINE MARINE: Court to Hear Wind-Up Petition on Nov. 25
SEATEC SERVICES: Creditors' Proofs of Debt Due on Dec. 16
- - - - -
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A U S T R A L I A
=================
ADVANCED HOLDINGS: First Creditors' Meeting Set for Nov. 23
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Advanced
Holdings Pty Ltd will be held on Nov. 23, 2022, at 10:00 a.m. in
110 Harris Street at Harris Park and by zoom video conference.
Suelen McCallum of dVT Group was appointed as administrator of the
company on Nov. 11, 2022.
ALTITUDE COWORK: Second Creditors' Meeting Set for Nov. 23
----------------------------------------------------------
A second meeting of creditors in the proceedings of Altitude Cowork
Pty Ltd has been set for Nov. 23, 2022, at 10:30 p.m. via
videoconference 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. 22, 2022, at 5:00 p.m.
Richard Lawrence and Sule Arnautovic of Hall Chadwick were
appointed as administrators of the company on Oct. 19, 2022.
ANAX CO: Second Creditors' Meeting Set for Nov. 23
--------------------------------------------------
A second meeting of creditors in the proceedings of Anax Co Pty Ltd
has been set for Nov. 23, 2022, at 11:00 a.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. 22, 2022, at 4:00 p.m.
Daniel Frisken of O'Brien Palmer was appointed as administrator of
the company on Oct. 19, 2022.
AUSGROUP LIMITED: In Talks to Formulate Restructuring Plan
----------------------------------------------------------
Ausgroup Limited said on Nov. 17 said that the Board have commenced
discussions with Deloitte & Touche, as financial adviser of the
Company, to formulate and progress with a restructuring plan for
the financial obligations of the Company.
The restructuring plan is progressed with a view to seeking a
consensual reorganisation of financial obligations at the Company
level and does not involve the Company's subsidiaries and business
units. These subsidiaries and business units continue to operate
under the respective management teams.
The Company continues to be in confidential discussions with
several parties for the potential sale of certain assets or
businesses of the Group. While some of these confidential
discussions are at an advanced stage with indicative draft terms,
there is no assurance that the potential transactions will
materialise.
The Company will provide further updates as and when there are
material developments.
Shareholders and Investors of the Company are advised to exercise
caution when dealing in the Shares of the Company. Shareholders and
Investors of the Company should consult their stockbrokers, bank
managers, solicitors, accountants, or other professional advisors
if they have any doubt about the actions they should take.
Headquartered in West Perth, Australia, AusGroup Limited (SGX:5GJ)
-- https://www.ausgroupltd.com/ -- provides construction and
maintenance services. The Company offers mechanical, welding,
surface protection, industrial insulation, and refractory services.
AusGroup serves customers in Asia.
COLLECTION HOUSE: Clayton Utz Advises on Recapitalisation and Sale
------------------------------------------------------------------
A Clayton Utz team has advised on one of the market's most
high-profile restructuring and insolvency deals this year - the
successful recapitalisation and sale of debt collection provider
Collection House Limited (CLH) to Credit Corp Group.
"Restructuring and Insolvency (R&I) National Practice Group Leader
Timothy Sackar led our team advising FTI Consulting partners (John
Park, Ben Campbell and Kelly-Anne Trenfield, who were appointed as
joint and several voluntary administrators of CLH on June 29, 2022)
on all aspects of the administration and sale process, including
the negotiation and entry into a deed of company arrangement (DOCA)
to effect the sale of the business," Clayton Utz said in a
statement.
Timothy was supported by Brisbane-based R&I partner Brett Cook
together with their respective teams, which included notably
special counsel Jillian Robertson, senior associates Madeleine
McCloy and Stephen Hurford, and lawyer Marcus Carlei.
The sale process resulted in the administrators entering into
binding transaction documents, which included the entry into the
DOCA with Credit Corp Group as the successful bidder on Sept. 21,
2022. This was a complex transaction, involving:
* transaction implementation using section 444GA of the
Corporations Act 2001 (Cth) (the Act);
* obtaining relief from ASIC from the operation of the
takeover provisions in Chapter 6 of the Act; and
* ensuring Collection House continued to trade throughout
the administration.
The transaction's successful implementation sees CLH delisted from
the ASX and the business continuing to trade under new ownership.
Collection House is a debt collection provider which purchases and
manages receivables on behalf of its customers.
EARTHTEC HR: Second Creditors' Meeting Set for Nov. 22
------------------------------------------------------
A second meeting of creditors in the proceedings of Earthtec HR Pty
Limited has been set for Nov. 22, 2022, at 4:15 p.m. via virtual
meeting.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Nov. 21, 2022, at 4:00 p.m.
Bruce Gleeson of Jones Partners Insolvency & Restructuring was
appointed as administrator of the company on Oct. 18, 2022.
FIVE STAR 2022-1: Fitch Assigns 'BB(EXP)sf' Rating on Class E Notes
-------------------------------------------------------------------
Fitch Ratings has assigned expected ratings to Five Star 2022-1
Trust's mortgage-backed pass-through floating-rate notes. The
issuance consists of notes backed by a pool of first-ranking
Australian conforming and non-conforming residential
full-documentation mortgage loans originated by Victorian Mortgage
Group (VMG). The notes will be issued by Perpetual Trustee Company
Limited in its capacity as trustee of Five Star 2022-1 Trust. This
is a separate and distinct trust created under a master trust
deed.
Entity/Debt Rating
----------- ------
Five Star 2022-1
Trust
A1 LT AAA(EXP)sf Expected Rating
A2 LT AAA(EXP)sf Expected Rating
B LT AA(EXP)sf Expected Rating
C LT A(EXP)sf Expected Rating
D LT BBB(EXP)sf Expected Rating
E LT BB(EXP)sf Expected Rating
F1 LT NR(EXP)sf Expected Rating
F2 LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
The collateral pool totalled AUD300 million and consisted of 343
obligors, with a weighted-average (WA) unindexed current loan/value
ratio (LVR) of 69.3% and a WA current indexed LVR of 67.3%, as of
the 31 August 2022 cut-off date.
KEY RATING DRIVERS
Credit Enhancement Buffers Expected Losses: The 'AAAsf'
weighted-average foreclosure frequency (WAFF) of 19.1% is driven by
the WA unindexed current LVR of 69.3%, self-employed borrowers of
72.2%, interest-only loans of 39.4% and, under Fitch's methodology,
investment loans of 59.2% and non-conforming loans of 12.3%.
The 'AAAsf' WA recovery rate (WARR) of 52.1% is driven by the
portfolio's WA indexed scheduled LVR of 68.7% and WA market value
decline of 55.6%. The 'AAAsf' portfolio loss has increased to 9.2%,
against 8.0% for the previous transaction, Five Star 2021-1 Trust,
due mainly to higher WA current LVR, higher WA indexed scheduled
LVR and higher exposure to investment loans and self-employed
borrowers. The class A1, A2, B, C, D and E notes benefit from
credit enhancement of 60.0%, 12.0%, 7.5%, 4.9%, 2.9% and 1.2%,
respectively.
Liquidity Risk Mitigated: Structural features include retention and
amortisation amounts that redirect excess income to repay note
principal and a liquidity facility sized at 2.0% of the outstanding
note balance, with a floor of AUD600,000; this is sufficient to
mitigate payment interruption risk. The rated notes can withstand
all relevant Fitch stresses applied in its cash flow analysis.
Low Operational and Servicing Risk: VMG is a non-bank financial
institution headquartered in Melbourne, Victoria, with a history
dating back to 1946. Fitch undertook an operational review and
found that the operations of the originator and servicer were
comparable with market standards.
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. Fitch expects
GDP to slow to 1.9% in 2023, with unemployment rising to 4.1%,
reflecting the global slowdown and the lagged impact of the Reserve
Bank of Australia's aggressive monetary tightening.
The pool is concentrated geographically in Victoria, reflecting
VMG's history and operational focus in the region, where the state
government reports that gross state product expanded by 5.0% in the
financial year ended June 2022 (FY22) and expects it to rise by a
further 3.0% in FY23.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The transaction's performance may be affected by changes in market
conditions and economic environment. Weakening asset performance is
strongly correlated with increasing levels of delinquencies and
defaults that could reduce credit enhancement available to the
notes.
Downgrade Sensitivity
Unanticipated increases in the frequency of defaults 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 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
- WAFF or WARR - 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.
Notes: Class A1 / A2 / B / C / D / E
Expected Rating: AAAsf / AAAsf / AAsf / Asf / BBBsf / BBsf
Increase defaults by 15%: AAAsf / AA+sf / A+sf / A-sf / BB+sf /
BB-sf
Increase defaults by 30%: AAAsf / AA+sf / A+sf / BBB+sf / BBsf /
B+sf
Reduce recoveries by 15%: AAAsf / AA+sf / A+sf / BBB+sf / BBsf /
B+sf
Reduce recoveries by 30%: AAAsf / AA+sf / Asf / BBBsf / B+sf /
below Bsf
Increase defaults by 15% and reduce recoveries by 15%: AAAsf /
AA+sf / A+sf / BBBsf / BB-sf / Bsf
Increase defaults by 30% and reduce recoveries by 30%: AAAsf /
AA-sf / A-sf / BB+sf / Bsf / below Bsf
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade could result from macroeconomic conditions, loan
performance and credit losses that are better than Fitch's baseline
scenario or sufficient build-up of credit enhancement that would
fully compensate for credit losses and cash flow stresses
commensurate with higher rating scenarios, all else being equal.
Upgrade Sensitivities
The class A1 and A2 notes are at 'AAA(EXP)sf', which is the highest
level on Fitch's scale. The ratings cannot be upgraded. As such,
upgrade sensitivity scenarios are not relevant.
Notes: Class B / C / D / E
Expected rating: AAsf / Asf / BBBsf / BBsf
Reduce defaults by 15% and increase recoveries by 15%: AA+sf /
AA-sf / A-sf / BBBsf
DATA ADEQUACY
Prior to the transaction closing, Fitch sought to receive a
third-party assessment conducted on the asset portfolio
information, but none was made available for this transaction.
As part of its ongoing monitoring, Fitch conducted a review of a
small targeted sample of VMG's origination files and found the
information contained in the reviewed files to be adequately
consistent with the originator's policies and practices and the
other information provided to the agency about the asset
portfolio.
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
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.
JUST KITS: Second Creditors' Meeting Set for Nov. 23
----------------------------------------------------
A second meeting of creditors in the proceedings of Just Kits Pty
Ltd has been set for Nov. 23, 2022, at 11:00 a.m. at the offices of
Worrells at Suite 2, 63 The Esplanade in Maroochydore.
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. 22, 2022, at 5:00 p.m.
Dane Hammond of Worrells was appointed as administrator of the
company on Oct. 19, 2022.
VERDIA PTY: In Administration; First Creditors' Meeting Set Nov 10
------------------------------------------------------------------
The Australian reports that renewables developer and financier
Verdia, which has high profile backers including former Wallabies
captain John Eales, has failed with AUD20 million in debt.
Quentin James Olde and Liam John Healey of Ankura Consulting were
appointed as administrators of Verdia Pty Ltd, trading as Verdia,
Verdia Energy & Verdia Finance, on Nov. 10, 2022.
A first meeting of the creditors will be held on Nov. 22, 2022, at
11:00 a.m. via virtual meeting.
WHISPIR LTD: Axes 30% of Workforce, Slashes Costs
-------------------------------------------------
Sarah Sharples at News.com.au reports that an Australian tech
company has revealed it has let go of 30% of its workforce and is
slashing costs elsewhere in a move designed to deliver AUD14.3
million in savings a year.
Whispir, a cloud-based communications tech company that offers a
platform for everything from crisis management to marketing and is
listed on the ASX, has faced difficulties with its share value
plummeting by 70% this year, news.com.au relays.
The cost cutting measures have seen 80 staff let go as part of a
plan to "establish itself as a profitable growth business", Whispir
CEO Jeromy Wells said, with around 70% of the impacted roles based
in Australia and New Zealand in the product and technology
divisions.
According to news.com.au, the announcement saw its share price
surge by 31.3% on Nov. 15, closing 15c higher at 65c, although by
Wednesday it had dropped by 8% to 60c.
Whispir had seen a boom in demand for its services during the
pandemic as government agencies looked to use its system to
communication with citizens who were close contacts or quarantine,
but since then revenue has dropped, according to the report.
"The company has been through a period of significant growth which
means that there are now areas that can be scaled back to pre-Covid
levels for a period as the company transitions to growing
sustainably and profitably without the need for additional
capital," the report quotes Mr. Wells as saying.
Teams members impacted by the cuts would have access to career
assistance, job placement support and/or employee assistance
programs, he added.
News.com.au says the restructure would cost the company a total of
AUD1.8 million, which represents an average of AUD22,500 per staff
member but would mean the company would see its cashflow break even
in the third quarter of next year – moved up from the 2024
financial year.
Part of the cuts would also include scaling back its investment in
research and development and the company would move to a
self-funded model long term, it said.
"With cash reserves of AUD17.1 million, the business will not need
to raise capital to fund its ongoing operations and positions the
company to maintain a strong balance sheet," Whispir said in a
statement to investors.
Experts had flagged that Whispir's largest customer contributed
AUD12.7 million revenue in the last financial year, with AUD9
million expected to be just a one-off, while the company also
revealed that revenue in Australia had dropped, the report relays.
Based in Melbourne, Australia, Whispir Limited (ASX:WSP) --
https://www.whispir.com/ -- a communications intelligence company,
offers communications-as-a service platform in Australia, New
Zealand, Asia, and North America. Its platform provides always-on
collaboration for businesses, and omnichannel interactions between
organizations, systems, and people through email, SMS, voice,
WhatsApp, social, and other channels. The company serves
government, emergency services, healthcare, insurance, education,
HR and recruitment, transport and logistics, mining and
construction, hospitality and retail, and energy and utility
industries.
===============
C A M B O D I A
===============
CAMBODIA: Moody's Alters Outlook on 'B2' Issuer Rating to Negative
------------------------------------------------------------------
Moody's Investors Service changed Government of Cambodia's outlook
to negative from stable and affirmed the B2 local and foreign
currency issuer ratings. The negative outlook reflects a
deteriorating external position as illustrated by the severe
widening of the current account deficit, which Moody's expects to
remain wide (albeit narrowing) over the next few years, raising
financing concerns. Although Moody's expects concessional funding
to continue and foreign direct investment (FDI) to remain stable,
other sources of financing remain opaque – highlighting the risk
of a quicker erosion of foreign currency reserves than observed
until now. These risks are compounded by the lack of timely and
transparent reporting, which complicates policy setting, indicating
elevated credit risks stemming from weaknesses in governance. At
the same time, a deceleration in activity in the luxury property
sector poses broad risks to growth, which will amplify cyclical
challenges coming from moderating exports growth in light of the
adverse global macroeconomic environment, still low tourism
arrivals, and weaker FDI due to tightening international markets
and lower global growth. The rating affirmation at B2 balances the
government's highly affordable, concessional debt with a weak
institutional framework, and elevated domestic political and
geopolitical risks.
Cambodia's local and foreign currency country ceilings remain
unchanged at Ba3 and B1, respectively. The two-notch gap between
the local currency ceiling and the sovereign rating reflects low
economic diversification, weak institutional strength and a modest
government footprint, and a rising external vulnerability risk. The
one-notch gap between the foreign currency ceiling and the local
currency ceiling incorporates Moody's assessment of Cambodia's weak
policy effectiveness, but relatively open capital account, as well
as transfer and convertibility restrictions in times of stress.
RATINGS RATIONALE
WIDE CURRENT ACCOUNT DEFICITS RAISE FINANCING RISKS AND
TRANSPARENCY CONCERNS
In 2021, a severe deterioration in Cambodia's current account
deficit to 46.2% of GDP from an average of 9.5% for the preceding
10 years occurred due to an increase in construction, fuel imports
(volume and prices) as well as a surge in non-monetary gold imports
(+500%). While the volatility in gold imports since the beginning
of 2020 may be temporary, Cambodia's current account deficit
remains significant (approximately 20% of GDP in 2022) even if
monetary gold imports are disregarded. Although Moody's expects an
easing in goods imports growth as commodity prices soften and
construction slows down, as well as a rebound in export receipts
following the reopening of borders to drive a narrowing of the
current account deficit over the next two years, the deficit will
be above 30% of GDP (gold included). A narrowing of the deficit
will be challenged by continued weakness in exports due to
recession risks in Cambodia's main export markets, and Moody's
expectations that the tourism industry will not fully recover until
at least 2025, compounded by China's continuing zero-covid policy.
In Moody's assessment, the lack of timely and transparent data on
funding sources and foreign exchange reserves will complicate
policymaking, raising risks of unpredictability and volatility with
respect to external buffers. Historically, current account deficits
have been offset by FDI inflows (more than 12% of GDP on average
over 2012-20), however in 2021, FDI was not sufficient to finance
the current account deficit, which was also covered by unspecified
sources of capital flows. The opacity of these flows highlights
transparency concerns, and as a result, the funding of forecasted
current account deficits appears highly uncertain. While Moody's
expects concessional multilateral and bilateral funding to continue
unabated, risks to FDI flows are also tilted to the downside due to
slowing global growth, particularly in China.
While Cambodia's foreign exchange reserves have slowly eroded, to
$16.1 billion in July, they remain relatively high. However the
declining reserves coverage ratio highlights increasing pressure to
Cambodia's external position. Moody's expects Cambodia's foreign
exchange reserves to continue eroding over the next two years, to
$15 billion (or 4.8 months of import cover) in 2022 and $13 billion
(3.8 months) in 2023 from $17 billion (6.2 months) in 2021, as
financing sources for the large current account deficit remain
unclear. As Cambodia has currently no external commercial debt,
there are no additional financing risks in that regard.
Meanwhile, a deceleration in activity in the luxury property sector
poses broad risks to growth, given construction and real estate
have been spurring high levels of activity and investment over the
past decade. While the winding down in luxury real estate and
construction may be positive for Cambodia in the long term given it
could lead to more stable real GDP growth, the risk of disorderly
unwinding to the economy cannot be entirely discounted considering
potential linkages to the domestic banking system. A slowdown could
affect long-term real GDP growth. It could also result in a
decrease in capital flows to Cambodia.
Moody's expects real GDP growth will not return to pre-pandemic
levels within the next few years due to a weakening of global
growth, including in Cambodia's main export markets (US, EU) and in
China, posing downside risks to the economy's recovery. However
Moody's still expects robust growth in Cambodia of 4.5% in 2022 and
5.5% in 2023, a substantial increase from an estimated 3% growth in
2021. However, this rate of expansion remains well below the 7%
average recorded over 2010-19.
RATIONALE FOR THE AFFIRMATION OF THE B2 RATINGS
Cambodia's debt burden remains moderate, although it increased
during the pandemic. Moody's expects general government debt to
gradually rise beyond 40% of GDP over the next few years as the
government's fiscal deficits remain wide on the back of the
coronavirus stimulus response and an only gradual recovery in trade
and tourism revenues. Nevertheless, Cambodia's higher debt burden
will still remain below the 55% of GDP median of B-rated peers.
Cambodia relies entirely on official multilateral and bilateral
creditor support for deficit and debt financing. Of the external
public debt, more than 60% is bilateral funding, with China the
largest single creditor and Paris Club member countries comprising
most of the remaining. Multilateral lending is almost entirely
sourced from Asian Development Bank (Aaa stable) and World Bank
(International Bank for Reconstruction and Development, IBRD, Aaa
stable). Although all of Cambodia's debt is foreign-currency
denominated and thus subject to currency depreciation, long
maturities and grace periods largely limit debt servicing
pressures, underpinning low government liquidity risks and
insulating Cambodia against abrupt market-driven spike in the cost
of debt. The average time to maturity of government debt is
lengthy, at about 25 years, and Moody's expects interest payments
as a share of general government revenue will remain around 2%,
amongst the lowest of B-rated sovereigns and sovereigns globally.
Meanwhile, shallow local capital markets imply a limited source of
domestic funding. The government has prepared a financial blueprint
to develop the domestic bond market, with plans to issue the
equivalent of US$300 million. On September 7, the government issued
the first tranche of its inaugural domestic bond, amounting to 100
billion riel (approximately $24 million), offering a fixed rate of
2% and one year maturity. The subscription was below their targets,
highlighting a shallow domestic pool of liquidity. This is a first
step to developing domestic markets, although it will take several
years to build a yield curve. The government's accumulated deposits
at the central bank therefore currently provide the main financial
buffers in local currency.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
Cambodia's ESG Credit Impact Score is highly negative (CIS-4),
reflecting its moderately negative exposure to environmental risks,
highly negative exposure to social risks, and overall very weak
governance profile and limited resilience.
Cambodia's exposure to environmental risks is moderately negative
(E-3 issuer profile score), driven by physical climate risks. The
economy has been subject to droughts and floods, which pose
disruptions to agricultural activity and can deter tourist
activity, both major economic drivers. Water scarcity is also a
consideration, since a large proportion of the rural population
lacks access to safe drinking water.
Exposure to social risks is highly negative (S-4 issuer profile
score). Despite a young and growing population, low per capita
incomes and a poor provision of health and education services as
well as weak access to other basic infrastructure have constrained
human capital development.
The influence of governance on Cambodia's credit profile is highly
negative (G-4 issuer profile score), which reflects relatively weak
institutional arrangements, a high incidence of corruption,
generally weak rule of law, and transparency issues, which compound
limited policy effectiveness.
GDP per capita (PPP basis, US$): 5,009 (2021) (also known as Per
Capita Income)
Real GDP growth (% change): 3% (2021) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 3.7% (2021)
Gen. Gov. Financial Balance/GDP: -10.3% (2021) (also known as
Fiscal Balance)
Current Account Balance/GDP: -46.2% (2021) (also known as External
Balance)
External debt/GDP: 67.2% (2021)
Economic resiliency: b2
Default history: No default events (on bonds or loans) have been
recorded since 1983.
On November 10, 2022, a rating committee was called to discuss the
rating of the Cambodia, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have materially decreased. The
issuer's institutions and governance strength, have not materially
changed. The issuer's fiscal or financial strength, including its
debt profile, has not materially changed. The issuer has become
increasingly susceptible to event risks. An analysis of this
issuer, relative to its peers, indicates that a repositioning of
its rating would be appropriate.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, a rating upgrade is unlikely at this
time, but Moody's would likely revise the outlook to stable if
pressures on Cambodia's external position were to ease durably, for
example due to a significant narrowing of the current account
deficit back to levels covered by FDI flows that would allow for a
rebuild of foreign exchange reserves.
Upward pressures on the rating would arise if, over time, reforms
were likely to address the country's institutional weaknesses and
enhance policy effectiveness, such as control of corruption and
rule of law; or if the implementation of structural reforms that
support competitiveness and reduce hurdles to doing business,
contributed to a material increase in economic diversification and
incomes. Such an outcome would bolster the economy's resilience to
shocks.
Moody's would likely consider a downgrade if larger external
imbalances were likely to become structural, with increasing
difficulties financing the wide current account deficit for example
due to a moderation of FDI inflows, and increasing pressure on
foreign exchange reserves. Downward pressures on the rating would
also arise if strains on asset prices were material and likely to
be prolonged, leading to significant liquidity and solvency
concerns in the domestic banking system, and raising
macro-stability risks for the sovereign. A sharp or sustained
slowdown in growth beyond Moody's baseline expectations, either
owing to the impact of external conditions, pronounced
repercussions from the withdrawal of preferential trade access or
an unexpected and sharp unwinding of credit growth, would also
present downward pressures on the rating.
The principal methodology used in these ratings was Sovereign
Ratings Methodology published in November 2019.
=========
C H I N A
=========
CHINA EVERGRANDE: Eyes Onshore Assets to Sweeten Debt Revamp
------------------------------------------------------------
Reuters reports that China Evergrande Group plans to use domestic
assets as sweeteners to win offshore creditor approval for a
long-awaited debt-restructuring proposal, two people with knowledge
of the matter told Reuters.
Reuters relates that Evergrande, engulfed by $300 billion in
liabilities, aims to start negotiating restructuring terms next
month and is combing through onshore assets to offer as additional
credit enhancement to holders of its U.S. dollar-denominated bonds,
the people said.
Once China's top-selling property developer, Evergrande has been at
the centre of a deepening property debt crisis that has seen
multiple developers default on offshore debt obligations over the
past year, leaving many negotiating debt restructuring.
With developers struggling to find funding to finish projects and
pay suppliers, the government last week issued financial
institutions with a number of directives to ease the liquidity
crunch, such as granting loan repayment extensions.
Reuters notes that Evergrande's $22.7 billion worth of offshore
debt, including loans and private bonds, is deemed to be in default
after missed payment obligations late last year. With few fresh
funding options and slowing property sales, Evergrande this year
began one of China's biggest debt-restructuring processes.
Chinese developers including Evergrande - the world's most indebted
- typically have few assets abroad that can be used in offshore
debt restructuring, Reuters states. If the plan to use onshore
assets materialises and is accepted by offshore bondholders,
Evergrande would be the first Chinese developer to use those assets
to raise the investment recovery prospects of such creditors.
Evergrande will sign non-disclosure agreements with bondholders
this month to prepare for negotiation next month, with terms to be
finalised early next year, said one of the people, who declined to
be identified as they were not authorised to talk to the media,
Reuters relays.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
Evergrande had CNY1.97 trillion (US$311 billion) of liabilities at
the end of June 2021. Once China's biggest developer by sales,
Evergrande fell into distress as cash dried up and the group
overstretched itself on borrowings and ventures into car
manufacturing.
Evergrande hired outside financial advisers Houlihan Lokey and
Admiralty Harbour Capital in September 2021 to engage with
creditors soon after it ran into a liquidity squeeze. It has since
worked with more advisers in the past two months by turning to
China International Capital Corp, BOCI Asia and Zhong Lun Law Firm
on its debt workout plan.
As reported in the Troubled Company Reporter-Asia Pacific on Oct.
13, 2022, Moody's Investors Service has withdrawn China Evergrande
Group's (Evergrande) corporate family rating and senior unsecured
ratings, the CFRs of Hengda Real Estate Group Company Limited and
Tianji Holding Limited, and Scenery Journey Limited's backed senior
unsecured ratings.
ENN NATURAL: Moody's Affirms Ba1 CFR & Alters Outlook to Positive
-----------------------------------------------------------------
Moody's Investors Service has affirmed ENN Natural Gas Co., Ltd.'s
(ENN Natural Gas) Ba1 corporate family rating, as well as the Ba1
rating on the senior unsecured notes issued by ENN Clean Energy
International Investment Limited and guaranteed by ENN Natural
Gas.
At the same time, Moody's has changed the outlook to positive from
stable.
"The change in outlook to positive reflects Moody's expectation
that ENN Natural Gas' financial metrics will strengthen above
Moody's rating tolerance over the next two years due to the strong
operating performance of its non-utilities businesses which benefit
from high energy prices, as well as improvement in its city gas
operations as COVID lockdown measures gradually ease," says Boris
Kan, a Moody's Vice President and Senior Credit Officer.
These improvements, along with the expected manageable capital
spending, will also bolster the company's liquidity position,
underpinning the change in outlook to positive.
While ENN Natural Gas' financial profile may moderate over the next
1-2 years after the LNG terminal acquisition this year, Moody's
expects that its financial metrics will remain strongly
positioned.
"Moody's expect the regulated city gas and related businesses will
continue to account for more than half of the company's total
profits on a sustained basis despite the temporary increase in
projected profit contributions from its non-utilities businesses
over the next 12 to 18 months," adds Kan.
RATINGS RATIONALE
ENN Natural Gas' Ba1 CFR, through its 32.65% equity stake in ENN
Energy Holdings Limited (ENN Energy, Baa1 stable), reflects (1) the
latter's established position in the piped gas sector, with
geographically diversified operations; (2) its large market share
that often involves monopolistic positions in gas distribution,
backed by long-term concessionary agreements; and (3) favorable
industry trends and supportive government policies that offer good
growth potential.
The company's previously weak liquidity position, mainly driven by
the cash consideration paid to the company chairman for the
acquisition of a 32.65% equity stake in ENN Energy as well as
capital spending on its majority-owned business segments, has
improved significantly this year. Although the liquidity profile
improvement has been bolstered by the company's non-utilities
businesses benefiting from recent surges in energy and coal prices,
Moody's believes that the company's manageable capital spending on
its majority-owned business segments, along with recurring cashflow
from these business segments and dividend income from ENN Energy,
will support the company's liquidity profile over the next 12-18
months.
In addition, the company's city gas operations will improve over
the next 12 to 18 months as COVID lockdown measures gradually ease.
Moody's expects the improvement will sufficiently counterbalance
the expected slowdown in the non-utilities businesses such as its
coal mining and direct gas sales segments, as energy prices
gradually retreat from the current elevated levels over this
period, supporting the company's credit profile.
Accordingly, Moody's projects that the company's credit metrics
over the next 12-18 months will stay above the upgrade triggers of
adjusted retained cash flows/debt ratio of 20% and adjusted funds
from operations (FFO) interest coverage ratio of 5.0x.
During the outlook review period, Moody's will consider the extent
to which improvements in ENN Natural Gas' liquidity and credit
profile can be sustained through (1) continued strong operating
performance by its city gas and non-utilities businesses, (2)
prudent control on capital spending and use of cash, as well as (3)
disciplined risk control on its exposure to the non-utilities
businesses.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade ENN Natural Gas' CFR if the company (1)
establishes a track record of business stability by increasing its
cash flow contributions from its stable regulated downstream city
gas operations, potentially through divesting a part of its
non-utilities operations, (2) strengthens its operating performance
such that its financial metrics improve materially on a sustained
basis, or (3) maintains a solid liquidity profile up to the levels
of other rated investment-grade peers, indicated by the company
meeting its short-term debt repayment obligations through its own
internal resources.
Moody's assessment of leverage incorporates a pro rata
consolidation of ENN Energy, which is 32.65%-owned by ENN Natural
Gas.
Key financial metrics that Moody's would consider for an upgrade
include retained cash flow (RCF)/debt (with pro rata consolidation
of ENN Energy) likely exceeding 20% and/or FFO interest coverage
likely exceeding 5.0x on a sustained basis.
A rating downgrade is unlikely, given the positive rating outlook.
However, the outlook could return to stable if (1) unfavorable
regulatory changes significantly reduce the company's ability to
pass through upstream gas costs for its city gas business; (2) the
company encounters liquidity problems or weakening credit metrics
because of failures to undertake deleveraging and prudent control
on capital spending, aggressive debt-funded investments or greater
volatility in its non-utilities businesses than historically
observed; or (3) the company further increases its exposure to
non-utilities operations, resulting in higher business risks.
Financial metrics that Moody's would consider for a revision in the
outlook to stable include RCF/Debt declining to 13%-20% range on a
consistent basis.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
Founded in 1992 and headquartered in Hebei, ENN Natural Gas Co.,
Ltd. is a diversified energy company mainly engaged in (1) city gas
distribution, (2) chemical production and trading, (3) energy
construction services, (4) coal mining and trading, as well as (5)
liquefied natural gas sales and terminal operations.
Its major asset is its 32.65% equity stake in ENN Energy Holdings
Limited, one of the largest city gas distributors in China, with
254 city gas concessions in 21 provinces as of the end of June
2022. ENN Natural Gas is the single-largest shareholder in ENN
Energy.
ENN Natural Gas was listed on the Shanghai Stock Exchange in 1994.
Wang Yusuo, his wife Zhao Baoju and his controlling entities owned
72.40% of the company as of the end of September 2022.
GEMDALE CORP: S&P Lowers LT ICR to 'BB-' & Then Withdraws Rating
----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Gemdale Corp. to 'BB-' from 'BB'. At the same time, S&P lowered
its long-term issuer credit rating on its subsidiary Famous
Commercial Ltd. to 'B+' from 'BB-'. S&P subsequently withdrew its
issuer credit ratings on Gemdale and Famous Commercial at the
companies' request. The rating outlook was negative at the time of
the withdrawal.
S&P said, "We lowered the ratings because we believe Gemdale's risk
exposure on JV projects has increased. The company has been
participating extensively in JV projects to share the financial
burden and to enter new markets. This is mainly due to Gemdale's
high exposure in top-tier cities, where land premium is higher and
competition is fiercer. However, operational and financial risks
have been increasing because distressed or weaker JV partners may
slow construction progress or even draw liquidity resources from
Gemdale, amid a prolonged industry downturn. With more JV partners
facing financial difficulties, the contagion risk has heightened.
Additionally, limited financial transparency on these
unconsolidated JV projects provides low visibility of the
off-balance sheet risk exposure.
"We expect Gemdale's contracted sales to continue to drop in 2023,
given declining saleable resources. In the first three quarters of
2022, Gemdale's attributable land investment fell sharply by 81% to
Chinese renminbi (RMB) 8.9 billion, from RMB46.0 billion in the
same period of 2021. We expect the company to continue its prudent
land investment strategy in the next 12 months. However, due to
consumption of quality land bank and less new acquisitions in 2022,
we expect Gemdale's contracted sales to further weaken by 8%-10% in
2023, after a 20-25% decline in 2022, given the market remains
weak. This will shrink revenue by 8%-13% annually in 2023 and 2024.
Nonetheless, the company should still outperform the industry
average (decline of about 45% year on year for the first 10 months
of 2022). Gemdale's focus is on higher-tier cities, given 67% of
its land bank is in tier-one and tier-two cities. We therefore
expect its sales performance to pick up quicker than the industry
average when the market recovers."
Gemdale's liquidity should remain adequate, supported by its
centralized cash management policy and solid banking relationships.
The company has been effectively adopting a centralized cash
management policy. This is indicated by its abundant cash holdings
at the parent company level, reaching 35%-45% of total consolidated
cash over the past three years.
Gemdale increased its bank borrowings in the first three quarters
of 2022. Its strong banking relationship will be crucial for its
financing, especially when facing a large onshore bond maturity
wall in 2023. As of Sept. 30, 2022, about 60% of its consolidated
total debt was from banks. Gemdale's alternative financing
exposure remained minimal at 2.86% of total debt as of end-June
2022.
S&P said, "In view of Gemdale's sufficient land bank, we believe
the company has the flexibility to maintain its prudent land
investment strategy to reserve its liquidity sources for
maturities.
"The negative outlook prior to the rating withdrawal reflects our
view that contagion risks from Gemdale's distressed joint-venture
partners could increase. The company's contracted sales will also
remain lackluster amid the industry downturn over the next 12
months.
"The negative outlook on Famous Commercial, a wholly owned offshore
operating and financing platform of Gemdale, reflects the outlook
on the parent and our view that Famous will remain a highly
strategic subsidiary of Gemdale over the next 12 months.
"We may lower the rating if Gemdale's liquidity deteriorates,
potentially dragged by its joint-venture projects with distressed
developers.
"We may also lower the rating if Gemdale's leverage substantially
deteriorates, such that the consolidated debt-to-EBITDA ratio
exceeds 5.0x for an extended period. Weaker-than-expected
contracted sales, a significant increase in debt-funded land
investments, or further margin squeeze could lead to a leverage
above 5.0x. The leverage may also increase if Gemdale faces
significant project delays that hurt its project delivery and
revenue booking.
"We will lower the rating on Famous if we downgrade Gemdale.
"We may also lower the rating on Famous if: (1) we believe the
company's strategic importance to Gemdale has diminished because of
a change in the parent's strategy; or (2) Gemdale's control and
supervision of Famous weaken.
"We may revise the outlook back to stable if Gemdale manages its
joint-venture exposure well. This could be evident from a
stabilization in the company's contracted sales, smooth project
delivery, and an adequate cash buffer at the holding company level.
Improvement in consolidation ratio and attributable ratio could
also be an indication. At the same time, Gemdale will also need to
have access to diversified funding channels.
"We could revise the outlook on Famous back to stable if we take
the same action on Gemdale. We could raise the rating on Famous if
the company's contribution to the group becomes more significant,
such that we assess it to be a core subsidiary."
ESG credit indicators: E-3, S-2, G-2
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Gemdale. The company
faces environmental risk comparable to that of its industry peers.
Social and governance factors are an overall neutral consideration
in our rating analysis. The listed company has a diversified
ownership structure with limited influence from any single
shareholder compared with other privately owned peers, and a team
of professional executives with a lengthy track record manage it."
GREENLAND HOLDING: S&P Cuts ICR to 'SD' on Missed Repayment
-----------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Greenland Holding Group Co. Ltd. to 'SD' from 'CC'. S&P affirmed
its 'C' issue rating on the senior unsecured notes due July 3,
2024, that the company guarantees.
S&P said, "We will lower the issue rating on the senior notes to
'D' (Default) upon completion of the proposed maturity extension.
"We lowered the rating on Greenland before the company completes
the extension of the maturity of its U.S. dollar notes because
Greenland did not repay the outstanding principal of US$362 million
on its senior notes that was due Nov. 14, 2022.
"We do not expect Greenland to repay the notes within five business
days. This is because the company is seeking to extend the maturity
of all its U.S. dollar senior notes. Although the bond repayment
does not have any stated grace period, we generally give a payment
flexibility timeframe of five business days to issuers to meet any
payment obligations.
"We are likely to lower the issue rating on the other senior notes
that Greenland guarantees to 'D' once the company completes its
proposed debt maturity extensions. This is because we view the
transaction as distressed. We believe the company is vulnerable to
nonpayment of its notes upon maturity in the absence of the
maturity extension."
Greenland's missed repayment highlights its very weak liquidity due
to a significant slowdown in sales, which dropped 57% year on year
to Chinese renminbi (RMB) 99 billion in the first nine months of
2022. Fragile confidence in China's property sector and continued
COVID-19 related restrictions also hit the company's asset disposal
plan. Lastly, Greenland's prioritization of project completion
limited the company's access to cash to repay debt at the holding
company level.
ESG credit indicators: E-3, S-2, G-4
SINO-OCEAN GROUP: Fitch Affirms Foreign Currency IDR at 'BB'
------------------------------------------------------------
Fitch Ratings has affirmed China-based homebuilder Sino-Ocean Group
Holding Limited's Long-Term Foreign-Currency Issuer Default Rating
(IDR) and senior unsecured ratings at 'BB'. All ratings remain on
Rating Watch Negative (RWN).
The rating affirmation and the RWN reflect its view that
Sino-Ocean's financial flexibility continues to support its
ratings, although liability management at Sino-Ocean Capital
Holding Limited (SOC), Sino-Ocean's 49%-owned associate, may yet
adversely affect its credit profile. Fitch is also monitoring any
potential change in Sino-Ocean's financial access, in particular
its on-shore debt capital and banking access, as well as its sales
performance and impact from a change of auditor.
Sino-Ocean is rated one notch above its Standalone Credit Profile
(SCP) of 'bb-', benefiting from support from its largest
shareholder, China Life Insurance Company Limited (A/Stable), under
the "strong parent, weak subsidiary" approach in its Parent and
Subsidiary Linkage Rating Criteria.
KEY RATING DRIVERS
Credit Enhancement to SOC: Sino-Ocean provided a keepwell deed to
SOC's USD286 million senior notes due Oct 2023, backed by the
acquisition of assets, a standby facility and liquidity support
provisions. It also provided a letter of support to SOC's USD497
million senior notes due in June 2023. Sino-Ocean has confirmed to
Fitch that it has not provided any guarantees to SOC and that there
are no cross-default provisions between the two entities. Fitch
will continue to monitor the likelihood of triggering the keepwell
and letter of support obligations, and potential contagion risk for
funding access.
Sino-Ocean's liquidity ratio, measured by available cash/short-term
debt, including supply-chain asset-backed securities (ABS), was
0.8x at end-1H22. The ratio would deteriorate to 0.6x if Fitch
includes SOC's aforementioned offshore notes as short-term debt
obligations of Sino-Ocean.
Maintaining Funding Access is Key: Fitch estimates that Sino-Ocean
has CNY8 billion of domestic capital-market debt due from now to
end-2023. It has large unencumbered property assets that may be
disposed of or used to raise secured debt for refinancing. Fitch
estimates that it had around CNY43 billion of unencumbered net
property assets, excluding joint venture (JV) net claims, and over
CNY20 billion of unencumbered jointly-owned investment properties
at end-1H22. Only around 20% of Sino-Ocean's debt is currently
secured, which is significantly less than that of lower-rated
peers.
Sino-Ocean has reportedly been shortlisted by the authorities to
issue domestic medium-term notes with state-backed guarantees.
However, it has not issued any due to strategic and economic
considerations, despite having adequate investment properties to
pledge for such issuances. Fitch will continue to monitor
Sino-Ocean's progress in securing onshore capital-market financing,
as sustained limited access may reduce its financial flexibility
over time. Fitch believes the company's access to bank financing
remains intact.
Change of Auditor: Sino-Ocean announced on 11 November that it has
appointed BDO Limited as its new auditor following the resignation
of PricewaterhouseCoopers (PwC). Management said the company has
been arranging for the change for some time. Fitch will monitor if
the change causes any delay in Sino-Ocean's publication of
full-year results and the impact on its funding access, especially
access to syndicated loans.
Auditor Requested Information: PwC, in its resignation letter,
requested further information from Sino-Ocean on any potential
defaults or cross-defaults of borrowings that would be triggered
should the company not comply with certain financial covenants or
terms of bank loan agreements. Management said Sino-Ocean has
already obtained the consent of most of the lending banks regarding
amendments of relevant financial covenants and bank loan agreement
terms, and no defaults or cross-defaults of borrowings are
expected.
Capital Requirements of JVs: Sino-Ocean's JV net claims, measured
by investment and net receivables from JVs, rose by CNY18.5 billion
in 2H21 and another CNY2.0 billion in 1H22. The company's exposure
to property-development JVs, measured by JV net claims (excluding
investment property assets)/ net property assets, of over 35% in
1H22, is high among peers. Sino-Ocean expects future JV-related
cash outflow will diminish as these JV projects are entering into
the pre-sale phase. Management confirmed there has been no material
cash outflow to JVs since mid-2022.
Leverage to Remain High: Fitch expects leverage, measured by net
debt/net property assets, to remain above 50% over the next two
years (end-1H22: 60%, end-2021: 57%). The company's deleveraging
plan has been affected by weaker sales proceeds, continued capital
injections into its JV projects, and lower accounts payable amid
the ongoing downturn in China's property sector.
Flat Sales in 2023: Total contracted sales fell by 26% to CNY78.6
billion in 10M22, which was better than the 30%-40% drops at most
other developers. Sino-Ocean saw a larger yoy decline in September
(-50%) and October (-42%), due to a high base last year when
several of its large new projects started pre-sales. Fitch expects
a decrease of around 30% in 2022, assuming that November and
December sales stabilise at the level of average monthly sales from
July to October. Fitch forecasts flat sales in 2023; sales that are
weaker than expected could lead to a deterioration in operating
cash flow and liquidity.
One-Notch Uplift: Fitch believes China Life has 'Weak' legal,
'Weak' strategic and 'Medium' operational incentives to support
Sino-Ocean, based on its Parent and Subsidiary Linkage Rating
Criteria. The one-notch uplift to Sino-Ocean's rating from its SCP
is driven by its moderate operational linkage with China Life, as
reflected in China Life having representatives on its board and
management. The two companies also cooperate in investment
properties and senior living. The uplift is limited to one notch as
their legal ties are limited and real-estate constitutes only a
small part of China Life's investment portfolio.
Parent's Support to Continue: Fitch expects Sino-Ocean to continue
to benefit from China Life's support. The insurer and its related
entities have supported the homebuilder by subscribing to its
onshore and offshore bonds, contributing to asset acquisitions and
providing secured loans. Fitch believes China Life's ability and
incentive to support Sino-Ocean remain intact.
ESG - Group Structure: Sino-Ocean has high exposure to JVs and
associates, which appear to have much weaker liquidity and funding
access. This has led to material cash outflow over the past year
and could further weaken Sino-Ocean's financial flexibility if
these projects continue to require its support.
DERIVATION SUMMARY
Sino-Ocean's IDR benefits from a one-notch uplift from its SCP.
Sino-Ocean's market position and geographical diversification are
better than that of Hopson Development Holdings Limited (B+/Stable)
and Radiance Group Co., Ltd. (B+/Negative). Its attributable sales
scale is also much larger.
Sino-Ocean's available cash/short-term debt ratio - including
supply-chain ABS - of 0.8x at end-1H22 was better than the
approximately 0.6x for Hopson Development Holdings Limited
(B+/Stable) and Radiance Group Co., Ltd. (B+/Negative). However,
its available cash/short-term capital market debt ratio (including
supply-chain ABS and syndicated loans), of 1.0x at end-1H22 was
weaker than Hopson's above 6.0x and Radiance's 2.5x, as the latter
two have smaller capital market maturities in the short term.
That said, Fitch believes Sino-Ocean's funding access is better
than that of the two B+ peers. Both Hopson and Radiance seem to
have intact access to banks, but Fitch thinks Sino-Ocean's access
to bank financing may be more stable with the support from China
Life.
Sino-Ocean issued CNY2 billion of private-placement notes in March
2022, and tapped on USD200 million in senior notes in January 2022
and USD200 million of senior unsecured notes in April 2022, while
Hopson issued USD250 million of senior notes in January 2022 and
Radiance issued none. In addition, around 20% of Sino-Ocean's debt
at end-1H22 was secured, compared with over 80% for the peers,
indicating that Sino-Ocean may have more room to raise secured
debt.
KEY ASSUMPTIONS
- Total contracted sales to decrease by 30% in 2022 on its
expectation of CNY9 billion sales in November and December 2022.
Contracted sales to stay flat in 2023, given a low base in 2022.
- Cash collection rate at 75% in 2022 and 2023 (2021: 77%).
- Attributable land premium outflow to attributable sales of around
10% in 2022 and 15% in 2023 (2021: 28%), based on the company's
latest land-acquisition strategy.
- Average attributable construction outflow/attributable sales
collection of around 55% in 2022-2023 (2021: 53%).
- Average EBITDA margin after land appreciation tax of 9% in
2022-2023 (2021: 9%).
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The RWN will be removed if the negative triggers are not met.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in funding access, including no meaningful new
issuance of domestic capital-market debt and/or ability to raise
secured loans
- Further adverse impact on Sino-Ocean's credit profile from
liquidity or refinancing risk at SOC, and/or cash outflow to JVs
- Sustained weakening in sales and cash collection
- A perceived weakening in China Life's incentives or ability to
support Sino-Ocean
LIQUIDITY AND DEBT STRUCTURE
Tight Liquidity: Sino-Ocean reported unrestricted cash of CNY14.6
billion at end-1H22 against short-term debt obligations of CNY18.2
billion. The tighter liquidity was a result of weaker sales
proceeds, continued capital injections into its JV projects and the
paydown of supply-chain ABS amid the sector slowdown. Fitch
believes Sino-Ocean's access to bank financing remains intact and
it has adequate assets to raise secured loans and/or domestic
capital-market debts. Fitch also expects its access to offshore
capital markets to remain shut in 2023.
ISSUER PROFILE
Sino-Ocean is a multi-regional property developer headquartered in
Beijing, with a focus on Tier 1 and 2 cities. The company is listed
on the Hong Kong Stock Exchange and its major shareholders include
China Life and Dajia Life Insurance Co., Ltd.
ESG CONSIDERATIONS
Sino-Ocean has an ESG Relevance Score of '5' for Group Structure,
as some of its JVs and associates have an aggressive approach to
financial management, which could lead to cash flow pressure. This
has a negative impact on Sino-Ocean's 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'. 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
----------- ------ -------- -----
Sino-Ocean
Group Holding
Limited LT IDR BB Rating Watch Maintained BB
senior
unsecured LT BB Rating Watch Maintained BB
Sino-Ocean Land
Treasure Finance
I Limited
senior
unsecured LT BB Rating Watch Maintained BB
Sino-Ocean
Land Treasure
III Limited
subordinated LT B+ Rating Watch Maintained RR6 B+
Sino-Ocean
Land Treasure
IV Limited
senior
unsecured LT BB Rating Watch Maintained BB
Sino-Ocean Land
Treasure Finance
II Limited
senior
unsecured LT BB Rating Watch Maintained BB
SUNAC CHINA: Seeks to Restructure US$2.1 Billion in Onshore Bonds
-----------------------------------------------------------------
Reuters reports that Sunac China is in talks with creditors to
restructure all of its CNY14.6 billion ($2.07 billion) onshore
bonds, according to three sources with knowledge of the matter.
Reuters relates that the bond restructuring will include both
corporate bonds and asset-backed securities, the sources said,
although no concrete proposals had yet been put forward.
According to Reuters, the Beijing-based developer has extended
repayment for a CNY4 billion bond due earlier this year, and is
restructuring its offshore debt after missing some payments.
Other cash-strapped developers that have extended the repayment of
individual onshore bond obligations are also expected to engage in
debt restructuring, one of the sources said.
Shenzhen-based developer Logan Group has proposed restructuring all
of its onshore bonds due to mature in May 2027. Guangzhou-based R&F
Properties said last week it had finished extending all of its
bonds, worth CNY13.5 billion, Reuters reports.
About Sunac China
Sunac China Holdings Limited (SEHK:1918) --
http://www.sunac.com.cn/-- is principally engaged in the sales of
properties in the People's Republic of China. The Company operates
its business through two segments: Property Development and
Property Management and Others. The Company's subsidiaries include
Sunac Real Estate Investment Holdings Ltd., Qiwei Real Estate
Investment Holdings Ltd. and Yingzi Real Estate Investment Holdings
Ltd.
As reported in the Troubled Company Reporter-Asia Pacific on Oct.
13, 2022, Moody's Investors Service has withdrawn Sunac China
Holdings Limited's Ca corporate family rating and its C senior
unsecured ratings. Prior to the withdrawal, the rating outlook was
negative.
Moody's has decided to withdraw the ratings because it believes it
has insufficient or otherwise inadequate information to support the
maintenance of the ratings.
=========
I N D I A
=========
BPTP LIMITED: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: M/s BPTP Limited
OT-14, 3rd Floor
Next Door Parklands
Sector-76, Faridabad
Haryana 121004
Insolvency Commencement Date: November 14, 2022
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: May 13, 2023
Insolvency professional: Rakesh Kumar Gupta
Interim Resolution
Professional: Rakesh Kumar Gupta
C/o PARM & SMRN
C/o Parm & Associates LLP
701, Vikrant Tower 4
Rajendra Place
New Delhi 110008
E-mail: rkg.delhi.ca@gmail.com
cirp.bptp@gmail.com
Classes of creditors: Real Estate Investors
Insolvency
Professionals
Representative of
Creditors in a class: Ms. Maya Gupta
3685/7, Narang Colony
Tri Nagar, Delhi 110035
Mr. Tarun Jain
1001, Vikrant Tower
Rajendra Place
New Delhi 110008
Mukesh Chand Jain
F-703, Munirka Apartments
Sector-9, Plot-11
Dwarka, New Delhi 110075
Last date for
submission of claims: November 27, 2022
COX & KINGS: Liquidation Process Case Summary
---------------------------------------------
Debtor: Cox & Kings Financial Service Limited
1st Floor, Turner Morrison Building
16 Bank Street
Fort, Mumbai 400001
Liquidation Commencement Date: October 11, 2022
Court: National Company Law Tribunal, Mumbai Bench
Date of closure of
insolvency resolution process: October 11, 2022
Insolvency professional: Mr. Pardeep Kumar Sethi
Interim Resolution
Professional: Mr. Pardeep Kumar Sethi
RBSA Restructuring Advisors LLP
1121, Building No. 11
Solitaire Corporate Park
Andheri Kurla Road
Andheri East, Mumbai
Maharashtra 400093
E-Mail: peekay.sethi@gmail.com
ip.ckfsl@rbsa.in
Last date for
submission of claims: December 7, 2022
EURO MULTIVISION: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Euro Multivision Limited
F 12, Ground Floor
Sangam Arcade Vallabhbhai Road
Vile Parle (West)
Mumbai City MH 400056
Insolvency Commencement Date: November 11, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: May 10, 2023
Insolvency professional: CA Naren Sheth
Interim Resolution
Professional: CA Naren Sheth
1014-1015, Prasad Chamber
Tata Road No. 1
Opera House
Charni Road (East)
Mumbai 400004
Mobile: 09821133426
Tel: 02266322870
E-mail: mkindia58@gmail.com
cirp.euromulti@gmail.com
Last date for
submission of claims: November 25, 2022
FOREMOST INTERNATIONAL: Insolvency Resolution Process Case Summary
------------------------------------------------------------------
Debtor: Foremost International Private Limited
Registered office:
Plot No. 71, Udyog Vihar
Phase-I, Gurgaon
HR 122001
Also at:
342, Udyog Vihar
Phase 6, Sector 37 Khandsa
Gurugram, Haryana 122002
Insolvency Commencement Date: November 10, 2022
Court: National Company Law Tribunal, Chandigarh Bench
Estimated date of closure of
insolvency resolution process: May 9, 2023
(180 days from commencement)
Insolvency professional: Ms. Gunjan Arora
Interim Resolution
Professional: Ms. Gunjan Arora
House No. 82, Block-H
Sector-10, DLF
Faridabad, Haryana 121006
E-mail: gunjanaroraip@gmail.com
cirp.foremostinternational@
gmail.com
Last date for
submission of claims: November 24, 2022
GANGA STEEL: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Sri Ganga Steel Enterprises Private Limited
H.No. 8-2-248/1/7/18 Plot no. 18
Nagarjuna Hills, Punjagutta
Hyderabad TG 500082
IN
Insolvency Commencement Date: November 10, 2022
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: May 9, 2023
Insolvency professional: Maruti Venkata Subbarao Poluri
Interim Resolution
Professional: Maruti Venkata Subbarao Poluri
1-7-12, Flat no. 408
Chippendale Apartments
Golkonda C Roads
Musheerabad
Back Side N BK Estate
Hyderabad, Telangana 500020
E-mail: cssubbarao@gmail.com
- and -
1-10-17, 301 Chapas Prashanthi Niketan
St.No. 4, Ashok Nagar
Hyderabad 500020
E-mail: ip.srigangasteel@gmail.com
Last date for
submission of claims: November 24, 2022
JKS THE BANYAAN: Liquidation Process Case Summary
-------------------------------------------------
Debtor: JKS The Banyaan Private Limited
No. 50, 4th Cross Street
Anna Nagar, Pondicherry 605005
Liquidation Commencement Date: November 9, 2022
Court: National Company Law Tribunal, Chennai Bench
Date of closure of
insolvency resolution process: November 9, 2022
Insolvency professional: Rajalakshmi Vardarajan
Interim Resolution
Professional: Rajalakshmi Vardarajan
3/6, Venkateswara Colony
10th Street, Kodungaiyur
Chennai 600118
E-mail: cma.rajalakshmi@gmail.com
liq.jksb@gmail.com
Last date for
submission of claims: December 9, 2022
LANDS END: Insolvency Resolution Process Case Summary
-----------------------------------------------------
Debtor: Lands End Trucking Private Limited
2nd Floor, Ansari Complex
Sonwar, Srinagar
Union Territory of Jammu & Kashmir
190001
Insolvency Commencement Date: November 11, 2022
Court: National Company Law Tribunal, Amritsar Bench
Estimated date of closure of
insolvency resolution process: May 10, 2023
Insolvency professional: Parminder Singh Bhullar
Interim Resolution
Professional: Parminder Singh Bhullar
E-10/313, Mangal Puri Gali
Ghanupur Road, Khandwala
Near Water Tank
Amritsar 143104
Punjab
E-mail: advocate.psb@gmail.com
- and -
SCO 88, 4th Floor
Chamber No. 10
District Shopping Complex
Block-B, Ranjit Avenue
Amritsar 143104
Punjab
E-mail: irplandsendtrucking@gmail.com
Last date for
submission of claims: November 25, 2022
NAMAN ISPAT: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Naman Ispat Private Limited
235/2A, A J C Bose Road
3rd Floor
Kolkata 700020
West Bengal
Insolvency Commencement Date: November 11, 2023
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: May 9, 2023
(180 days from commencement)
Insolvency professional: Sudipta Ghosh
Interim Resolution
Professional: Sudipta Ghosh
8, N.N. Mukherjee 3rd Lane
Uttarpara, Hooghly 712258
E-mail: sudipta_ghosh08@yahoo.com
- and -
29C, Bentinck Street, 2nd Floor
Kolkata 700001
E-mail: cirp.naman@gmail.com
Last date for
submission of claims: November 25, 2022
PONDICHERRY EXTRACTION: Liquidation Process Case Summary
--------------------------------------------------------
Debtor: Pondicherry Extraction Industries Private Limited
J.K. Towers, First Floor
100 Feet Road
Pondicherry PY 605013
IN
Liquidation Commencement Date: November 9, 2022
Court: National Company Law Tribunal, Chennai Bench
Date of closure of
insolvency resolution process: November 9, 2022
Insolvency professional: Rajalakshmi Vardarajan
Interim Resolution
Professional: Rajalakshmi Vardarajan
3/6, Venkateswara Colony
10th Street, Kodungaiyur
Chennai 600118
E-mail: cma.rajalakshmi@gmail.com
liq.Pondy@gmail.com
Last date for
submission of claims: December 9, 2022
PRESSCOM PRODUCTS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Presscom Products Private Limited
Plot no. 69 BSIPCOT Industrial Complex
Phase II, Hosur
TN 635109
Insolvency Commencement Date: November 15, 2022
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: May 3, 2023
Insolvency professional: Sanjay Mehra
Interim Resolution
Professional: Sanjay Mehra
B-11, Third Floor
Geetanjali Enclave
Opp. Aurbindo College
New Delhi
National Capital Territory of Delhi
110017
E-mail: sanjay.mehra64@gmail.com
cirppresscom@gmail.com
Last date for
submission of claims: November 29, 2022
VIKRAM KAKADE: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Vikram Kakade Constructions Private Limited
Kakade Capital, 1205
Shirole Road, Near P. Jog Class
Opp. Sambhaji Park
JM Road, Shivajinagar
Pune 411005
Maharashtra, India
Insolvency Commencement Date: November 10, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: May 9, 2023
Insolvency professional: Mr. Srinivas Vaidyanath Subramaniam
Interim Resolution
Professional: Mr. Srinivas Vaidyanath Subramaniam
Villa 14, Chaithanya Ananya
Whitefield Kadugodi Road
Belthur, Whitefield
Near Raheja Sai Gardens
Bangalore 560067
Karnataka
E-mail: ip.vikramkakade@sankalp-ipe.com
- and -
401, 4th Floor, The Central Building
Shell Colony Road
Chembur, Mumbai
Maharashtra 400071
Last date for
submission of claims: November 24, 2022
WESTERN HILL: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Western Hill Foods Limited
Registered office:
Office No. 11, Basement, EMCA House
289 Shahid Bagat Singh Road
Mumbai, Maharashtra 400001
Principal office:
Gat No. 480, Thorandale (Manchar)
Tal. Ambegaon, District Pune 410503
Maharashtra, India
Insolvency Commencement Date: November 10, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: May 9, 2023
Insolvency professional: Vijay Nirmalkumar Jain
Interim Resolution
Professional: Vijay Nirmalkumar Jain
A/1004, Oberoi Park View CHS Ltd
Thakur Village, Kandivali (East)
Mumbai, Maharashtra 400101
E-mail: vijay_jainca@yahoo.com
- and -
Pranjal International Resolutions Private
Limited
712-A, Kanakia Wall Street
7th floor, Andheri Kurla Road
Chakala, Andheri East
Mumbai 400093
E-mail: cirp.westernhillfoods@gmail.com
Last date for
submission of claims: November 24, 2022
=================
I N D O N E S I A
=================
PT BANK PAN: Fitch Affirms LongTerm IDR at 'BB', Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Indonesia-based P.T. Bank Pan Indonesia Tbk (Panin) at
'BB'. The Outlook is Stable. At the same time, Fitch has affirmed
Panin's Viability Rating (VR) and Government Support Rating (GSR)
at 'bb'.
KEY RATING DRIVERS
IDR Same as VR, GSR: The Long-Term IDR of Panin is at the same
level as its VR and GSR. The VR is in line with its implied VR at
'bb' and reflects its view of Panin's standalone credit profile,
including its moderate franchise, higher risk appetite than peers,
and weaker asset quality and profitability, which are balanced by
its strong capital buffers. The GSR reflects its expectation of a
moderate likelihood of Panin receiving government support, in case
of need.
Stable Operating Environment: Fitch expects a steady economic
recovery in Indonesia through 2024, which should continue to
support the banking sector's growth and profitability and improve
sector asset quality. Fitch maintains its operating environment
(OE) score at 'bb+' with stable outlook, above its implied score of
'b' due to a positive adjustment to reflect Indonesia's sovereign
rating (BBB/Stable), which indicates greater market and
macroeconomic stability than is captured by the implied OE score.
Moderate Domestic Franchise: Panin is the ninth-largest bank in
Indonesia, with a share of around 2% of the system's assets, loans
and deposits at end-6M22. The bank's traditional banking business
relies on lending to corporates, as well as commercial and consumer
businesses, with commercial lending as its strength. The business
profile score of 'bb' captured Panin's moderate domestic franchise
and is in-line with the implied score in the 'bb' category range
for banks with total operating income of USD300 million-USD3
billion.
Higher Risk Appetite: Fitch believes Panin has weaker underwriting
standards and risks control than its larger bank peers. That said,
the bank deliberately halted lending during the Covid-19 pandemic
to focus on managing its asset quality. The bank has started to
expand its lending capacity again, but overall loan growth
continued to lag the industry's up to end-6M22. Fitch maintained
Panin's risk profile score at 'bb'.
Asset Quality to Deteriorate: Panin Bank's asset quality score of
'bb-' is in line with its implied 'bb' category score, and reflects
its view that impaired loans, measured by the non-performing loan
(NPL) ratio, will remain high until end-2023. Panin's NPL ratio
declined to 3.3% by end-6M22 from 3.6% at end-2021, but this was
higher than the industry average of 2.9%. Meanwhile, Panin's
restructured loans of 24.3% was considerably higher than the
average of the 12-largest Indonesian banks of 14.9% at end-6M22.
Profitability Under Pressure: Fitch expects high credit costs and
lower net interest margin to weigh on Panin's profitability in the
medium term. Declining industry liquidity and rising interest rates
are likely to raise Panin's funding costs. Meanwhile, Panin's loans
at risk (LAR), which is higher than that of peers, and lower LAR
coverage than peers' make it susceptible to future earnings
volatility. Its earnings and profitability score of 'bb-' is
aligned with the 'bb' category score.
Adequate Capital Buffer: Panin's capitalisation and leverage score
of 'bbb-' is in line with the implied category scoring range of
'bbb'. Fitch expects the pick-up in loan growth, the bank's higher
density of risk-weighted assets (RWA) and its maintenance of its
dividend pay-out ratio to result in a decline of its common equity
Tier 1 (CET1) ratio from the high 26% reported at end-6M22.
Liquidity to Tighten Slightly: Fitch expects the bank's funding and
liquidity profile to remain satisfactory in the medium term,
although the loan/deposit ratio (LDR) is likely to rise as system
liquidity reduces. Panin's LDR increased to 96% by end-6M22
(end-2021: 93%, end-6M21: 90%), much higher than industry average
of 81%. Fitch have maintained Panin's funding and liquidity score
at 'bb' with stable outlook.
Moderate Probability of Government Support: Panin's GSR of 'bb'
reflects its view of a moderate probability of extraordinary
government support, if needed. Fitch believes Panin has moderate
systemic importance to Indonesia, considering its position as the
ninth-largest bank with a share of around 1.2% of system assets.
Its view of support also considers the dominance of customer
deposits in Panin's funding profile and its majority ownership by
domestic shareholders.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
A downgrade of the VR could stem from significant deterioration in
Panin's financial position, but Fitch believes this would only
occur if there were downward revisions to multiple key rating
drivers. This would likely result from a larger downgrade of
restructured loans that are classified as "current" than Fitch
expects under the base case scenario, operating profit/RWA
consistently below 1.25% (end-2021: 1.6%), and much weaker funding
and liquidity profile, as likely reflected in an LDR sustained
above 140% or an increase in the proportion of expensive funding.
However, as Panin's IDR is at the same level as its GSR, the IDR
would not be affected by a downgrade of its VR unless it is
accompanied by a downgrade of its GSR.
A downgrade of Indonesia's sovereign rating or a perceived
weakening of the government's propensity to support the bank could
lead to a downgrade of Panin's GSR.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade of the VR and, in turn, the IDR would depend on
sustained improvements in multiple key rating drivers, for example
if its core ratios in funding and liquidity, asset quality, and
earnings and profitability were more in line with those of
higher-rated peers. This would involve the bank's proportion of
current and savings accounts rising above the industry average,
while maintaining its impaired-loan ratio more in line with those
of higher-rated peers, and its four-year average operating
profit/RWA ratio at the higher end of the 1.25% to 4.75% range.
However, Fitch believes such a prospect is unlikely without a
strengthening of the bank's business and risk profiles.
An upgrade of the VR may also happen if the OE score is raised,
although it will need to be followed by sustained improvement in
multiple metrics.
An upgrade of Panin's GSR could result from an upgrade of
Indonesia's sovereign rating or its view of the government's
propensity to support the bank. This would also lead to an upgrade
of its Long-Term IDR, which would then become support-driven.
VR ADJUSTMENTS
The OE score has been assigned above the implied score due to the
following adjustment reason: sovereign rating (positive).
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
----------- ------ -----
P.T. Bank Pan
Indonesia Tbk LT IDR BB Affirmed BB
ST IDR B Affirmed B
Viability bb Affirmed bb
Government Support bb Affirmed bb
=========
J A P A N
=========
RAKUTEN GROUP: S&P Assigns 'BB+' LT ICR, On CreditWatch Negative
----------------------------------------------------------------
S&P Global Ratings has assigned its 'BB+' issue credit rating to
Japan-based internet services company Rakuten Group Inc.'s
(BB+/Watch Neg/--) proposed U.S. dollar-denominated senior
unsecured bonds and placed the rating on CreditWatch with negative
implications. S&P placed it on CreditWatch because its 'BB+'
long-term issuer credit rating on the company is on CreditWatch
negative.
S&P said, "We equalize the issue rating on Rakuten's U.S.
dollar-denominated senior unsecured bonds with our long-term issuer
credit rating on the company. This reflects our view that more
senior debt (secured debt and subsidiaries' debt) accounts for a
very small portion of the nonfinancial unit's debt and does not
significantly subordinate the bonds to other debt.
"We base our rating on Rakuten mainly on three factors. One, it has
a leading position in Japan's e-commerce market thanks to a strong
brand and solid ecosystem that includes financial services. Two,
there is strong profitability in the financial unit, which invests
funds, mainly from retail deposits, in relatively high-yield,
small-lot assets. And three, Rakuten's ability to repay debt with
cash flow from its nonfinancial unit is likely to remain very weak
for the rating for the coming two years or so because of continued
negative EBITDA and large investments in its mobile business.
"We placed Rakuten on CreditWatch because we expect that free
operating cash flow (FOCF; cash flow from operations minus capital
expenditures) from its nonfinancial unit will remain deeply
negative for the next 12 to 18 months. This is due to further
delayed improvement in the operating performance of the mobile
business. The company has sought to expand the business'
operations. The nonfinancial unit's financial standing will
deteriorate further if the company cannot make up for the shortfall
by raising funds in the coming few months without taking on debt.
"We intend to resolve the CreditWatch placement by the end of 2022
or shortly thereafter, having examined how long the nonfinancial
unit will take for the EBITDA to turn positive; the scale of the
unit's negative FOCF; the additional progress and amount of nondebt
financing; and the effect on its financial standing.
"We may lower our ratings on Rakuten, including the proposed U.S.
dollar bonds, by one notch if we come to believe the company cannot
execute a considerable amount of nondebt financing within 2022.
Even if it does so, we may consider a downgrade if we think the
nonfinancial unit's EBITDA and FOCF will deteriorate more than we
currently assume, or pressure on liquidity increases."
===============
M A L A Y S I A
===============
CHINA AUTO: Seeks White Knight as Part of Regularisation Plan
-------------------------------------------------------------
theedgemarkets.com reports that China Automobile Parts Holdings Ltd
(CAP), whose external auditors had recently expressed a disclaimer
of opinion in relation to its financial statements for the
financial year ended June 30, 2022 (FY2022), said it is working on
several measures to mitigate the existence of material uncertainty
on going concern within the next 12 months.
In a filing with Bursa Malaysia on Nov. 16, the automobile parts
manufacturer said the management is actively trying to secure a new
white knight and the company will submit an appeal on Nov. 16 for
further extension of time until June 30, 2023 for the company to
submit a regularisation plan to the regulatory authorities,
theedgemarkets.com relays.
"The management is proposing to dispose of CAP to an external party
as part of the proposed regularisation plan," it added.
Barring any unforeseen circumstances, the company expects to
resolve the issues relating to the qualified opinion in the coming
financial year, it added.
On Nov. 11, CAP announced that its external auditor Russell Bedford
LC PLT had cast doubt on the ability of the company to continue as
a going concern as it was unable to obtain sufficient and
appropriate audit evidence to ascertain the appropriateness of the
preparation of the financial statements for FY2022, according to
theedgemarkets.com.
It had incurred a net loss of RMB3.42 million for FY2022. As at
end-June, it has net current liabilities and capital deficiency of
RMB7.03 million, theedgemarkets.com discloses.
In January 2018, CAP was classified as a Practice Note 17 (PN17)
company after its former external auditor Messrs PFK expressed an
audit disclaimer of opinion in the company's audited financial
statements for FY2015 on undisclosed material liabilities.
CAP shares have been suspended from trading since June 8, 2017,
after it failed to release its financial reports within the
stipulated time.
About China Automobile
China Automobile Parts Holdings Limited is a Malaysia-based
investment holding company. The Company, through its subsidiaries,
is principally engaged in the manufacturing of chassis components
used in automobiles for transporting goods. Its product portfolio
consists of five categories: wheel-hub bolts, wheel axles, steel
pins, u-bolts and torque-rod bushings. The Company's products are
supplied for aftermarket repair, maintenance and modification
segment, with an emphasis towards catering for replacement
components in heavy commercial vehicles. The Company's subsidiaries
include CAP-HK, an investment holding company, and FenSun, a
manufacturer, marketer and trader of automobile chassis
components.
China Automobile Parts Holdings Ltd slipped into Practice Note 17
(PN17) in January 2018 after its external auditor Messrs PFK
expressed an audit disclaimer of opinion in the company's latest
audited financial statements for financial year ended Dec. 31, 2015
(FY15) on undisclosed material liabilities.
=====================
N E W Z E A L A N D
=====================
DIRECT AUTO: Creditors' Proofs of Debt Due on Dec. 5
----------------------------------------------------
Creditors of Direct Auto Importers (NZ) Limited are required to
file their proofs of debt by Dec. 5, 2022, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Oct. 28, 2022.
The company's liquidator is Kelera Nayacakalou.
GRIP RIGS: Court to Hear Wind-Up Petition on Nov. 18
----------------------------------------------------
A petition to wind up the operations of Grip Rigs NZ Limited will
be heard before the High Court at Auckland on Nov. 18, 2022, at
10:45 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Sept. 29, 2022.
The Petitioner's solicitor is:
Cloete Van Der Merwe
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
HIKO HEALTH: Court to Hear Wind-Up Petition on Dec. 13
------------------------------------------------------
A petition to wind up the operations of Hiko Health And Fitness
Limited will be heard before the High Court at Wellington on Dec.
13, 2022, at 10:00 a.m.
Standard 754 Limited filed the petition against the company on Oct.
18, 2022.
The Petitioner's solicitor is:
Ernest William Gartrell
15 Edward Street
Wellington 6011
MANA CONCRETE: Court to Hear Wind-Up Petition on Nov. 21
--------------------------------------------------------
A petition to wind up the operations of Mana Concrete Limited will
be heard before the High Court at Hamilton on Nov. 21, 2022, at
10:45 a.m..
The Commissioner of Inland Revenue filed the petition against the
company on Nov. 21, 2022.
The Petitioner's solicitor is:
Charles David Walmsley
Inland Revenue, Legal Services
21 Home Straight
PO Box 432
Hamilton
REAL PROPERTY: Creditors' Proofs of Debt Due on Dec. 10
-------------------------------------------------------
Creditors of Real Property Homes Limited are required to file their
proofs of debt by Dec. 10, 2022, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Nov. 8, 2022.
The company's liquidator is Brenton Hunt.
=================
S I N G A P O R E
=================
BMG HOTEL: Court Enters Wind-Up Order
-------------------------------------
The High Court of Singapore entered an order on Nov. 11, 2022, to
wind up the operations of BMG Hotel 1887 Private Ltd.
DBS Bank Ltd filed the petition against the company.
The company's liquidators are:
Mr. Leow Quek Shiong
Mr. Gary Loh Weng Fatt
c/o BDO Advisory Pte. Ltd.
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
CARR GROUP: Court to Hear Wind-Up Petition on Nov. 25
-----------------------------------------------------
A petition to wind up the operations of Carr Group Pte Ltd will be
heard before the High Court of Singapore on Nov. 25, 2022, at 10:00
a.m.
Tristar Shipping Co SA filed the petition against the company on
Nov. 2, 2022.
The Petitioner's solicitors are:
M/S Oon & Bazul LLP
36 Robinson Rd
#08-01/06 City House
Singapore 068877
ES BEAUTY: Creditors' Meetings Set for November 30
--------------------------------------------------
ES Beauty Tokyo Pte Ltd will hold a meeting for its creditors on
Nov. 30, 2022, at 11:00 a.m., via Zoom.
Agenda of the meeting includes:
a. to receive a full statement of the Company’s affairs
together with a list of creditors and the estimated amounts
of their claims;;
b. to nominate liquidator(s) or to confirm members’ nomination
of liquidator(s);
c. to consider and if thought fit, appoint a Committee of
Inspection consisting of not more than 5 members, for the
purpose of winding up the Company; and
d. Any other business.
HYFLUX LTD: Former CEO, CFO, Independent Directors Charged
----------------------------------------------------------
The Business Times reports that former Hyflux chief executive
officer (CEO) Olivia Lum Ooi Lin was charged in court on Nov. 17
with disclosure-related offences under the Securities and Futures
Act (SFA), along with former chief financial officer (CFO) Cho Wee
Peng and four independent directors.
According to BT, Ms. Lum was charged with two counts for failing to
disclose information pertaining to Tuaspring Integrated Water and
Power Project, when such disclosures were required under the
Singapore Exchange Listing Rules.
Aside from the two SFA offences, she was also charged with one
count under the Companies Act for failing to ensure the water
treatment company's compliance with accounting standards, which
entails a fine not exceeding SGD50,000.
Ms. Lum was offered a bail amount of SGD100,000.
Cho was charged with one count under the SFA for conniving in
Hyflux's intentional failure to disclose the key details related to
Tuaspring, BT discloses.
BT relates that the four independent directors face two counts each
for their negligence in the matter. One count pertains to Hyflux's
failure to disclose required information on Tuaspring, while the
other is connected to the omission of those details from a 2011
offer information statement.
The independent directors are: Teo Kiang Kok, Gay Chee Chong,
Murugasu Christopher and Rajskar Kuppuswami Mitta, BT discloses.
If convicted, they will face imprisonment of up to seven years, a
fine not exceeding SGD250,000, or both, on each SFA charge.
BT says the charges form the latest chapter in the Hyflux saga. The
company filed for bankruptcy protection in 2018, and after a series
of failed rescue deals and restructuring attempts, it went into
liquidation in July 2021.
Hyflux, 35 of its subsidiaries, and two of its liquidators from
Borrelli Walsh were the ones who filed the lawsuit against Ms. Lum,
BT notes. The probe stemmed from a review into Hyflux's disclosure,
accounting and auditing issues concerning Tuaspring.
Tuaspring was Hyflux's wholly-owned subsidiary until June 2022,
when it was acquired by Malaysia-based YTL Power International for
SGD270 million in cash. The power station also has a beleaguered
past: in 2017 it failed to turn a profit, and in 2019 it was served
a default notice by the Public Utilities Board.
According to the report, the investigations leading to the charges
were jointly carried out by the Commercial Affairs Department of
the Singapore Police Force, the Monetary Authority of Singapore,
and the Accounting and Corporate Regulatory Authority (ACRA).
DBS was also investigated for its role as issue manager in the 2011
offer information statement. No action will be taken against the
bank.
KPMG, one of Hyflux's auditors, is still currently under
investigation by ACRA, the report notes.
About Hyflux Ltd
Singapore-based Hyflux Ltd provided various solutions in water and
energy areas worldwide. The company operated through two segments,
Municipal and Industrial. The Municipal segment supplied a range of
infrastructure solutions, including water, power, and
waste-to-energy to municipalities and governments. The Industrial
segment supplied infrastructure solutions for water to industrial
customers. It has business operations across Asia, Middle East and
Africa.
In May 2018, Hyflux filed for bankruptcy protection and got an
automatic 30-day moratorium. Trading in all its shares and
securities was suspended.
In March 2019, Hyflux said that Maybank, its biggest secured
creditor, had appointed receivers and managers from insolvency firm
Ferrier Hodgson to take over the Tuaspring Integrated Water and
Power Plant. In May 2019, National water agency PUB takes over
Tuaspring desalination plant.
In June 2020, the Singapore authorities said they are investigating
Hyflux over corporate governance breaches. Among the directors
under probe is Hyflux executive chairman Olivia Lum.
In November 2020, the High Court of Singapore appointed Hamish
Alexander Christie and Patrick Bance of Borrelli Walsh Pte. Limited
as joint and several judicial managers of Hyflux Ltd.
On June 2021, Hyflux's judicial managers filed an application to
wind up the company. On July 21, 2021, the High Court of Singapore
approved the winding up application.
LIPPO MALLS: Moody's Lowers CFR to B3, Outlook Remains Negative
---------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Lippo Malls Indonesia Retail Trust (LMIRT) to B3 from
B2.
Moody's has also downgraded the backed senior unsecured rating on
the bonds issued by LMIRT Capital Pte. Ltd., a wholly-owned
subsidiary of LMIRT, to B3 from B2. The bonds are guaranteed by the
trustee of LMIRT.
The outlook on all ratings remains negative.
"The downgrade reflects LMIRT's rising refinancing pressure on the
back of its SGD135 million of bank loan maturities in November
2023, the SGD82.5 million of bank loans due in January 2024 and the
$250 million US dollar bond that will mature in June 2024 amid a
tight funding environment," says Rachel Chua, a Moody's Vice
President and Senior Analyst.
"The downgrade also reflects a further weakening of the company's
interest cover ratio as interest rate hikes continue, as well as
Moody's expectations that the weakening Indonesian rupiah relative
to the Singapore dollar will likely drive its regulatory leverage
ratio beyond the 45% threshold over the next few quarters," says
Chua, who is also Moody's lead analyst for LMIRT.
RATINGS RATIONALE
LMIRT's weak liquidity and high refinancing needs with looming debt
maturities are a pertinent credit risk, especially amid rising
inflation and higher interest rates weighing on global economic
growth.
The company has a debt maturity wall of around $400 million -
SGD217.5 million of bank loans and $250 million of US dollar bonds
coming due over the next two years, with no concrete refinancing
plans in place. Its sponsor, Lippo Karawaci Tbk (P.T.) (B3
positive), has publicly stated that it does not expect to provide
any specific support to LMIRT.
The company's access to banking lines is limited, despite the
recent SGD67.5 million bank loan it obtained. The bank loan was a
bridge loan through to November 2023 ahead of the US dollar bond
maturity.
LMIRT's interest coverage will likely stay weak at around 1.5x-1.6x
through 2023-24 and will worsen if interest rates spike further. As
of September 30, 2022, only 42.2% of the trust's debt are fixed
rate.
Moody's also estimates LMIRT's adjusted leverage, as measured by
adjusted net debt/EBITDA, will improve but remain weak at around
8.0x over 2023-24 as its occupancy rate increases towards 82% in
2023 and 84% in 2024. As of September 30, 2022, its portfolio
occupancy was 80.4%.
LMIRT's debt/deposited asset ratio of 43.7% as of September 30,
2022 was almost at the regulatory limit of 45%. Moody's expects
LMIRT will likely breach the regulatory limit over the next few
quarters as the Indonesian rupiah continues to weaken against the
Singapore dollar, leading to a decline in its Singapore
dollar-denominated asset value.
The rupiah weakened by around 6% against the Singapore dollar this
year as of November 10.
LMIRT's B3 ratings reflect the trust's established presence in
Indonesia, with its portfolio spread across 12 Indonesian cities
that have large catchment populations, targeting the country's
growing middle- to upper middle-income consumers. The rating also
incorporates the trust's degree of independence as a publicly
listed and regulated trust in Singapore, despite the linkages
between LMIRT and its sponsor, Lippo Karawaci Tbk (P.T.).
The negative outlook reflects LMIRT's heightened refinancing risk
in a tight funding market, given its SGD217.5 million term loan
maturities through 2023-24 and its $250 million US dollar bond
maturing in June 2024. It also reflects the continued uncertainty
surrounding the pace of recovery from the pandemic in an
environment of inflation and slower growth.
LMIRT's liquidity is weak. The trust had cash and cash equivalents
of SGD107 million as of September 30, 2022, an undrawn and
committed credit line of SGD23 million, and annual operating cash
flows of around SGD50 million, which are insufficient to address
its capital requirements and the SGD135 million bank loans maturing
in November 2022, SGD82.5 million due in January 2024 and the $250
million US dollar bond due June 2024. The trust will also have to
rely on external funding to address these maturities.
In terms of environmental, social and governance (ESG) factors,
Moody's has considered the company's very weak financial management
resulting in its high leverage position, very weak interest
coverage and a weak liquidity profile with limited access to
capital.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade is unlikely over the next
12-18 months. Nonetheless, Moody's could return the outlook to
stable if (1) LMIRT's credit metrics strengthen on the back of an
improvement in the operating environment or a reduction in debt;
(2) it does not breach the regulatory leverage limit or its
financial covenants; and (3) it addresses it refinancing needs
through 2024 well ahead of time.
On the other hand, Moody's could downgrade LMIRT's ratings if (1)
the operating environment further deteriorates, leading to higher
vacancy levels and declining operating cash flows or falling asset
valuations; (2) it fails to secure financing for its debt maturing
through 2024; (3) the trust increases its exposure to the Lippo
group of companies; or (4) the credit quality of the Lippo group of
companies, including Lippo Karawaci, weakens.
A breach of the regulatory leverage limit or its financial
covenants would also likely result in a downgrade.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
Lippo Malls Indonesia Retail Trust (LMIRT) is a real estate
investment trust that has been listed on the Singapore Stock
Exchange since November 2007. As of September 30, 2022, it had a
portfolio of 22 retail malls and seven retail spaces across major
cities in Indonesia, with a total appraised value of around SGD1.78
billion.
ONLINE MARINE: Court to Hear Wind-Up Petition on Nov. 25
--------------------------------------------------------
A petition to wind up the operations of Online Marine Services Pte
Ltd will be heard before the High Court of Singapore on Nov. 25,
2022, at 10:00 a.m.
Tristar Shipping Co SA filed the petition against the company on
Nov. 2, 2022.
The Petitioner's solicitors are:
M/S Oon & Bazul LLP
36 Robinson Rd
#08-01/06 City House
Singapore 068877
SEATEC SERVICES: Creditors' Proofs of Debt Due on Dec. 16
---------------------------------------------------------
Creditors of Seatec Services Pte. Ltd. are required to file their
proofs of debt by Dec. 16, 2022, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Nov. 10, 2022.
The company's liquidators are:
Kon Yin Tong
Aw Eng Hai
c/o 1 Raffles Place
#04-61 One Raffles Place Tower 2
Singapore 048616
*********
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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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