/raid1/www/Hosts/bankrupt/TCRAP_Public/221201.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, December 1, 2022, Vol. 25, No. 234
Headlines
A U S T R A L I A
BLUESTONE MORTGAGES: Fitch Affirms 'Bsf' Rating on Class F Notes
BTAP LOGISTICS: First Creditors' Meeting Set for Dec. 7
COSMOS ASSET: First Creditors' Meeting Set for Dec. 6
DIXON ADVISORY: Clients to Receive at Least 3.1 cents Under DOCA
FIRM CONSTRUCTION: First Creditors' Meeting Set for Dec. 6
FIVE STAR 2022-1: Fitch Assigns 'BBsf' Rating on Class E Notes
GRIFFIN COAL: ICICI in AUD1BB Quest to Salvage Calamitous Bet
INVIGOR GROUP: Second Creditors' Meeting Set for Nov. 30
LA TROBE 2021-2: Moody's Upgrades Rating on Class E Notes From Ba1
LIBERTY SERIES 2022-1: Moody's Ups Rating on Class F Notes to Ba3
MELBOURNE COLLEGE: First Creditors' Meeting Set for Dec. 6
PEPPER ASSET 2: Fitch Gives 'B(EXP)sf' Rating on Cl. 5 Notes
TRITON TRUST 9: Fitch Hikes Rating on 2018-1 Cl. E Notes to BB-
C H I N A
SUNAC CHINA: Lowers Profit Forecast for Last Year
H O N G K O N G
EXCHANGE FUND: Posts Third Quarterly Loss, Outlook Challenging
I N D I A
AGARWAL COAL: CARE Keeps C Debt Rating in Not Cooperating
ALVA'S EDUCATION: Ind-Ra Assigns BB- Term Loan Rating
ARORA INDUSTRIES: CARE Lowers Rating on INR79.88cr Loan to D
ARORA KNIT: CARE Lowers Rating on INR57.89cr LT Loan to D
AZAD EDUCATIONAL: CARE Keeps C Debt Rating in Not Cooperating
COLUMBUS OVERSEAS: Insolvency Resolution Process Case Summary
D. D. AGRO: CARE Lowers Rating on INR17.29cr LT Loan to C
DEMBLA VALVES: Ind-Ra Assigns BB+ Term Loan Rating, Outlook Stable
GAMA INFRAPROP: Ind-Ra Assigns BB- Loan Rating, Outlook Stable
GANPATI AGRI: Ind-Ra Affirms & Withdraws BB+ LT Issuer Rating
GARG & COMPANY (PANIPAT): CARE Keeps C Rating in Not Cooperating
GARG & COMPANY: CARE Keeps D Debt Rating in Not Cooperating
GATI KAUSAR: CARE Hikes Rating on INR5.0cr LT Loan from B
GORGEOUS SKIN: Insolvency Resolution Process Case Summary
GOYAL EDUCATIONAL: CARE Keeps D Debt Ratings in Not Cooperating
GTN TEXTILES: CARE Keeps D Debt Ratings in Not Cooperating
HERO WIRETEX: CARE Keeps D Debt Ratings in Not Cooperating
IL&FS FINANCIAL: ICRA Keeps D Debt Rating in Not Cooperating
IL&FS SECURITIES: ICRA Keeps D Ratings in Not Cooperating
INFRASTRUCTURE LEASING: ICRA Keeps D Ratings in Not Cooperating
INKEL LIMITED: CARE Moves C Debt Rating to Not Cooperating
KANDAGIRI SPINNING: CARE Keeps D Debt Ratings in Not Cooperating
KNISS LABORATORIES: CARE Lowers Rating on INR4.50cr LT Loan to D
MAHENDRAKUMAR JAIN: CARE Keeps C Debt Rating in Not Cooperating
MECHATRONICS SYSTEMS: CARE Lowers Rating on INR30cr Loan to D
NUTRIENT MARINE: CARE Keeps D Debt Ratings in Not Cooperating
PRAGATI TRANSMISSION: Ind-Ra Hikes Long-Term Issuer Rating to BB+
RAJIV PETROCHEMICALS: Ind-Ra Assigns BB+ Term Loan Rating
RIO GLASS: CARE Reaffirms B+ Rating on INR3.11cr LT Loan
S. S. OVERSEAS: CARE Keeps D Debt Ratings in Not Cooperating
SAI TRADERS: CARE Keeps C Debt Rating in Not Cooperating Category
SARJAY CHEMICALS: CARE Keeps D Debt Rating in Not Cooperating
SHORAPUR SOLAR: ICRA Lowers Rating on INR36.25cr Term Loan to B+
SINGH TRANSPORTERS: ICRA Keeps B+ Debt Ratings in Not Cooperating
TRANSTEK INFOWAYS: ICRA Keeps B+ Debt Rating in Not Cooperating
VARDHMAN ROLLER: CARE Lowers Rating on INR31.90cr LT Loan to D
WIND WORLD: CARE Hikes Rating on INR160.99cr LT Loan to B
J A P A N
JAPAN AIRLINES: Egan-Jones Retains CCC+ Sr. Unsecured Debt Ratings
KOBE STEEL: Egan-Jones Retains B+ Sr. Unsecured Debt Ratings
MARUI GROUP: Egan-Jones Retains BB Sr. Unsecured Debt Ratings
RICOH CO: Egan-Jones Retains BB+ Sr. Unsecured Debt Ratings
UNITIKA LTD: Egan-Jones Retains CCC+ Sr. Unsecured Ratings
N E W Z E A L A N D
B & M SECURITY: Creditors' Proofs of Debt Due on Jan. 18
DDL HOMES: Owed NZD18MM to 300 Creditors, Liquidators' Report Shows
DJF FOODSTORE: Khov Jones Limited Appointed as Administrators
EPSOM CENTRAL: McGrathNicol Appointed as Receivers and Managers
GRASSLAND FARM: Court to Hear Wind-Up Petition on Dec. 8
PATOLA LIMTED: Creditors' Proofs of Debt Due on Jan. 13
S I N G A P O R E
CAPRICE HOLDINGS: Creditors' Proofs of Debt Due on Dec. 31
CHS ENGINEERING: Members' Final Meeting Set for Dec. 30
DERMA-RX INT'L: Final Meeting Scheduled for Dec. 30
DRUMOND INT'L: Final Meeting Scheduled for Dec. 30
LIPPO MALLS: Fitch Lowers LongTerm IDR to 'B-', Outlook Negative
SINGAPORE AIRLINES: Ega-Jones Retains BB- Unsecured Debt Ratings
TONG TIEN: Creditors' Meetings Set for Dec. 16
VSN TRADING: Court to Hear Wind-Up Petition on Dec. 9
S O U T H K O R E A
ASIANA AIRLINES: UK Antitrust Expected to Approve Korean Air Deal
LOTTE GROUP: Credit Rating Hit by Cash-Strapped Construction Unit
T H A I L A N D
DAOLSEC THAILAND: Fitch Puts 'BB+(tha) National Rating on Watch Neg
V I E T N A M
MB SHINSEI: Fitch Alters Outlook on 'B' LongTerm IDR to Positive
- - - - -
=================
A U S T R A L I A
=================
BLUESTONE MORTGAGES: Fitch Affirms 'Bsf' Rating on Class F Notes
----------------------------------------------------------------
Fitch Ratings has affirmed six note classes from Bluestone
Mortgages Warehouse Trust's mortgage-backed pass-through
floating-rate bonds. Classes B, C, D, E and F were placed Under
Criteria Observation (UCO) on June 6, 2022 following the
publication of the updated APAC Residential Mortgage Rating
Criteria. The warehouse has subsequently been restructured and
Fitch has removed these notes from UCO.
The transaction is backed by a pool of first-ranking Australian
conforming and non-conforming residential full- and
low-documentation mortgage loans. All mortgages were originated by
Bluestone Group Pty Ltd and the notes were issued by Permanent
Custodians Limited in its capacity as trustee of Bluestone
Mortgages Warehouse Trust.
Entity/Debt Rating Prior
----------- ------ -----
Bluestone Mortgages
Warehouse Trust
A LT AAAsf Affirmed AAAsf
B LT AAsf Affirmed AAsf
C LT Asf Affirmed Asf
D LT BBBsf Affirmed BBBsf
E LT BBsf Affirmed BBsf
F LT Bsf Affirmed Bsf
KEY RATING DRIVERS
Resilient Asset Performance: Arrears 30+ and 90+ days at
end-September 2022 were 2.3% and 1.4%, respectively, above Fitch's
2Q22 Dinkum Non-Conforming RMBS Index of 1.2% and 0.4%. The
transaction has a rolling one-year revolving period, therefore, its
analysis is based on a proxy pool that was stressed based on pool
parameters and historical data. This was to reflect its expectation
of the pool's future composition. The proxy pool is shaped by
portfolio characteristics that impact foreclosure frequency within
the APAC Residential Mortgage Rating Criteria, with four proxy
pools based on various conforming parameters.
The 20% conforming proxy pool produced the highest portfolio loss.
The 'AAAsf' weighted-average (WA) foreclosure frequency of 42.3%
for this pool is driven by the WA unindexed loan/value ratio (LVR)
of 70.8%, loans with LVR greater than 80% making up 29.4% of the
portfolio, non-conforming loans of 80%, investment loans of 39.2%,
interest-only loans of 15.5 % and 30+ day arrears of 14.6%. The
'AAAsf' WA recovery rate of 50.0% is driven by the stressed
portfolio's WA indexed scheduled LVR of 70.6%.
Credit Enhancement Supports Ratings: Each tranche of rated notes
benefits from credit enhancement provided by the respective
subordinate notes and will revert to sequential paydown, building
up credit enhancement, if performance significantly deteriorates
triggering an amortisation event or if the revolving period is not
extended. The rated notes pass Fitch's relevant cash flow model
stresses at their respective ratings. The payment of additional
interest on the class A to F notes is not included in the rating
assessment of each note.
Low Operational and Servicing Risk: Bluestone is a non-bank lender
with extensive experience in originating, servicing and managing
its mortgage portfolio. Fitch undertook an operational review and
found that the operations of the originator and servicer were
comparable with market standards and that there were no material
changes that may affect Bluestone's ongoing ability to undertake
administration and collection activities.
Bluestone's collection timelines, policies, procedures and
origination practices are largely in line with those of other
lenders in Australia after considering the mix of conforming and
non-conforming borrowers, as evident from the transaction's
historical performance.
Tight Labour Market to Support Outlook: Transaction performance is
supported by Australia's continued economic growth - 3.6% GDP
growth for the year to June 2022 - and tight labour market, with a
3.4% unemployment for October 2022. This is despite increasing
interest rates. Fitch expects GDP growth to slow to 1.9% in 2023,
with unemployment increasing to 4.1%, reflecting the global
slowdown and the lagged impact of aggressive monetary tightening
from the Reserve Bank of Australia.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Transaction performance may be affected by changes in market
conditions and the 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
- WA foreclosure frequency or WA recovery rates - are modified,
while holding others equal. The modelling process uses the
modification of default and loss assumptions to reflect asset
performance in up and down environments. The results should only be
considered as one potential outcome, as the transaction is exposed
to multiple dynamic risk factors.
Notes: A / B / C / D / E / F
Rating: AAAsf / AAsf / Asf / BBBsf / BBsf / Bsf
Expected impact on note ratings of increased defaults:
Increase defaults by 15%: AA+sf / A+sf / A-sf / BBBsf / BBsf / Bsf
Increase defaults by 30%: AAsf / A+sf / BBB+sf / BBB-sf / BBsf /
Bsf
Expected impact on note ratings of decreased recoveries:
Reduce recoveries by 15%: AA+sf / A+sf / A-sf / BBB-sf / BB-sf /
below Bsf
Reduce recoveries by 30%: AA+sf / Asf / BBBsf / BBsf / Bsf / below
Bsf
Expected impact on note ratings of multiple factors:
Increase defaults by 15% and reduce recoveries by 15%: AAsf / Asf /
BBB+sf / BB+sf / B+sf / below Bsf
Increase defaults by 30% and reduce recoveries by 30%: A+sf /
BBB+sf / BBsf / Bsf / below Bsf / below Bsf
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade could result from economic 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
As the notes are constrained by the revolving period concentration
test and cannot be ungraded, upgrade sensitivity scenarios are not
relevant.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information as part
of its ongoing monitoring.
Prior to the transaction closing, Fitch sought to receive a
third-party assessment conducted on the asset portfolio
information, but none was made available to Fitch for this
transaction.
As part of its ongoing monitoring, Fitch reviewed a small targeted
sample of the originator'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.
BTAP LOGISTICS: First Creditors' Meeting Set for Dec. 7
-------------------------------------------------------
A first meeting of the creditors in the proceedings of BTAP
Logistics International Pty Limited will be held on Dec. 7, 2022,
at 10:00 a.m. via Microsoft Teams.
Atle Crowe-Maxwell of DBA Advisory was appointed as administrator
of the company on Nov. 28, 2022.
COSMOS ASSET: First Creditors' Meeting Set for Dec. 6
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Cosmos Asset
Management Pty Ltd will be held on Dec. 6, 2022, at 3:00 p.m. via
virtual meeting only.
Anthony Miskiewicz and Catherine Conneely of KordaMentha were
appointed as administrators of the company on Nov. 24, 2022.
DIXON ADVISORY: Clients to Receive at Least 3.1 cents Under DOCA
----------------------------------------------------------------
Australian Financial Review reports that Dixon Advisory's
administrators have told the failed group's creditors - all of whom
are current and former clients in its ASX listed US property fund -
to back a deed of company arrangement that would result in them
receiving as little as 3.1 cents on the dollar.
According to AFR, the administrators of Dixon Advisory &
Superannuation Services Pty Ltd, Stephen Longley and Craig Crosbie
of PwC, issued the 268-page report late on Nov. 30 to DASS
creditors before the second meeting due to take place on December
7.
PwC was formally appointed on January 19, after DASS was forced
into voluntary administration by directors, following mounting
penalties, compensation claims and two class actions launched in
late 2021 that were likely to leave the firm insolvent.
AFR relates that the report outlined that under the DOCA, the
average return per investor claim ranges from AUD2466 to AUD3524,
or between 3.1 cents to 4.4 cents on the dollar. Under a
liquidation scenario that would fall to between AUD507 and AUD3084,
or 0.6 cents to 3.9 cents per dollar.
It also raised the possibility that on Christmas Eve 2021, DASS was
insolvent.
PwC said it backed the DOCA because of the higher anticipated
return to creditors and greater perceived certainty, and quicker
process, while also providing a better outcome in terms of
accessing insurance proceeds, AFR relays.
While various claims have been made by investors over alleged
losses suffered as a result of financial advice received from DASS,
by far the majority were associated with the US Masters Residential
Property Fund, or URF.
The ASX-listed fund invested client funds in apartments in the New
York area, charging hefty fees as it took on excessive debts to
purchase more units and undertake renovations.
AFR adds that the report said: "of the four related-party
investment products under the Dixon name, only the URF Equities
significantly underperformed against relevant benchmarks and
therefore only URF Equities investors are being treated as
creditors of the company."
The administrators flagged the total claims of 4606 URF investors
is sitting at more than AUD367.9 million, AFR discloses.
AFR relates that PwC said they would have liked to be able to treat
each claim as individual, but this would have taken two years and
cost AUD37.5 million, so it's using an average claim methodology,
which given the small pool of funds will result in most investors
getting a few thousand dollars.
It has taken 10 months for a DOCA from the ASX-listed parent E&P
Financial Group to be presented to concerned creditors.
According to AFR, E&P chief executive Peter Anderson said the DOCA
was an important step towards closing out the administration of
DASS.
"All former DASS clients have been transitioned to the service
provider of their choice and the proposal ensures the equitable
treatment of all DASS client creditors," he said.
"It also provides a mechanism to accommodate the settlement of the
outstanding representative proceedings in due course. Consistent
with the commitment made at the time of appointment of voluntary
administrators to DASS, the payments contemplated within the DOCA
proposal include a sum equivalent to the AUD8.2 million ASIC
penalty and associated costs."
But not all creditors were satisfied with the report and PwC's
recommendation to back the DOCA, AFR says.
"Do you actually consider that 4¢ is significantly different to 1
cent in the dollar? It will not change anyone's outcome," AFR
quotes Mike Coppins, a Dixon client since 2015 and former
accountant at PwC, as saying.
If creditors vote in favour of the DOCA, E&P Financial expects the
net impact on its first half of 2023 results to be a loss of about
AUD1.1 million as the sum was already substantially recognised in
the company's balance sheet last year.
AFR says PwC also details the findings from investigations into the
company's business, property, affairs and financial circumstances
that prompted the response from EP1 (E&P Financial) in its ASX
disclosure.
PwC said DASS was likely insolvent from December 24, 2021. It was
on that date when an agreement was struck between DASS and its
parent which made the repayment of an intercompany AUD19.5 million
loan highly conditional. This meant, according to the
administrator, E&P Financial could make the loan disappear at any
juncture.
E&P Financial said in statement that it disagreed with the
administrators' interpretation of this intercompany loan, AFR
relates.
Under the accepted DOCA, a AUD17.67 million initial payment will be
made by E&P Financial within five days, which voids claims over the
intercompany loan.
The second payment of AUD4 million will be made, plus any insurance
proceeds recovered by E&P Financial from the insurer as part of the
settlement of the ongoing class action. This payment and class
action must be completed by June 30.
Following a series of investigation by The Australian Financial
Review, Dixon Advisory was sued by the corporate regulator. This
landed Dixon a AUD7.2 million fine for breaching best interest
rules, and the wealth manager also paying the AUD800,000 costs of
the regulator. As part of the ASIC settlement, Dixon Advisory
admitted to not acting in the best interests of clients in
providing financial advice.
AFR notes that the collapse of the once mighty company as one of
the nation's largest wealth managers has been a painful lesson for
its clients and exposed the conflicted model.
Dixon Advisory grew into the fourth-largest superannuation advice
firm in Australia and in late 2016, it merged with Evans &
Partners, the brokerage firm founded in 2007 by David Evans.
Mr. Longley and Mr. Crosbie declined to comment on their report
since it is still being considered by creditors, adds AFR.
About Dixon Advisory
Dixon Advisory & Superannuation Services Ltd operates as an
investment management company. The Company offers wealth
management, estate planning, funds, investment strategies, and
financial planning, services. Dixon Advisory & Superannuation
Services serves customers in the United States and Australia.
As reported in the Troubled Company Reporter-Asia Pacific in
January 2022, E&P Financial Group's wholly owned subsidiary Dixon
Advisory and Superannuation Services (DASS) has appointed PwC
Partners Stephen Longley and Craig Crosbie as voluntary
administrators. According to themarketherald.com.au, E&P said the
appointment was made after the DASS directors determined mounting
actual and potential liabilities were likely to result in DASS
becoming insolvent at some future time.
Actual or potential liabilities include possible damages arising
from the representative proceedings led by Piper Alderman and Shine
Lawyers, claims against DASS being determined by the Australian
Financial Complaints Authority (AFCA) and penalties agreed between
DASS and the Australian Securities and Investments Commission
(ASIC), themarketherald.com.au said.
FIRM CONSTRUCTION: First Creditors' Meeting Set for Dec. 6
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Firm
Construction Pty Ltd, trading as "Firm Construction", "Firm
Construction North West" & "Firm Construction South West", will be
held on Dec. 6, 2022, at 9:30 a.m. at the offices of RSM Australia
Partners at Level 32, Exchange Tower 2, The Esplanade in Perth.
Jerome Hall Mohen and Gregory Bruce Dudley of RSM Australia were
appointed as administrators of the company on Nov. 24, 2022.
FIVE STAR 2022-1: Fitch Assigns 'BBsf' Rating on Class E Notes
--------------------------------------------------------------
Fitch Ratings has assigned final 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 were 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.
The collateral pool is unchanged from the assignment of the
expected rating and 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.
Entity/Debt Rating Prior
----------- ------ -----
Five Star 2022-1
Trust
A1 AU3FN0073383 LT AAAsf New Rating AAA(EXP)sf
A2 AU3FN0073391 LT AAAsf New Rating AAA(EXP)sf
B AU3FN0073409 LT AAsf New Rating AA(EXP)sf
C AU3FN0073417 LT Asf New Rating A(EXP)sf
D AU3FN0073425 LT BBBsf New Rating BBB(EXP)sf
E AU3FN0073433 LT BBsf New Rating BB(EXP)sf
F1 LT NRsf New Rating NR(EXP)sf
F2 LT NRsf New Rating NR(EXP)sf
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 a 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
fiscal year ending June 2022 (FY22)) and tight labour market (3.4%
unemployment in October 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
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: A1 / A2 / B / C / D / E
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 / BB+sf /
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 / 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 / less than 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 'AAAsf', which is the highest
level on Fitch's scale. The ratings cannot be upgraded. As such,
upgrade sensitivity scenarios are not relevant.
Notes: B / C / D / E
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.
GRIFFIN COAL: ICICI in AUD1BB Quest to Salvage Calamitous Bet
-------------------------------------------------------------
ABC News reports that the giant Indian bank behind a failed coal
mine at the centre of Western Australia's growing energy crisis is
seeking almost AUD1 billion to salvage its disastrous position.
ICICI, which is India's biggest private bank, has plunged about
AUD1.1 billion into the Griffin Coal mine, which was put into
receivership in September owing almost AUD1.5 billion.
According to ABC, the debt owed to ICICI has ballooned since the
bank funded the initial AUD750 million takeover of the mine by
Indian conglomerate Lanco Infratech in 2010.
Lanco has since gone bankrupt, handing ICICI effective control of
Griffin, which is near the town of Collie 180 kilometres south of
Perth.
Despite the bank's continued silence on its plans for the
operation, it is understood ICICI is pushing for big increases to
the price Griffin receives for its coal, ABC relates.
ABC says the suggestion has drawn fire from the state opposition,
which said a big price increase for Griffin's coal would amount to
an "incompetence tax" to be paid by WA households and businesses.
"If West Australians have suddenly got to cover their losses, I
think that would be ridiculous," ABC quotes Liberal MP Steve Thomas
as saying. "It's a tax on the people and industries here to cover
the incompetence of the administration of this company."
Under long-term contracts, Griffin has in place with major
customers led by the Bluewaters coal-fired power station, the miner
loses money on its coal sale once interest costs and taxes are
taken into account.
ABC notes that the mine's poor financial health, along with growing
problems at nearby Premier Coal, are fuelling deepening concerns
for the security of WA's main electricity grid heading into
summer.
According to the Australian Energy Market Operator, coal is still
used to generate about a third of the power produced in the
south-west interconnected system, which supplies more than a
million customers in the state's south.
But problems at Griffin and Premier have led to shortages of coal,
which is now being imported into WA from Indonesia and New South
Wales in spite of record global prices for the commodity, ABC
says.
State-owned utility Synergy operates two big coal-fired power
stations at Collie, supplied by Premier Coal, though both plants
are slated for closure by 2029.
Although the terms of Griffin's long-term contracts are
confidential, previous reports have put the price the miner
receives for its coal at AUD40 to AUD50 a tonne.
Figures provided in State Parliament show Griffin produces about
2.5 million tonnes of a coal year, providing the lion's share to
Bluewaters and much of the rest to an alumina refinery owned by
listed company South32, ABC discloses.
In a bid to fix Griffin's problems, it is believed the miner's
ultimate owners led by ICICI are seeking a price increase of about
AUD20 a tonne for the coal it produces for the next 10 to 20
years.
What's more, ICICI's decision to jointly appoint a liquidator
alongside a receiver in September has led to speculation Griffin
could tear up its contracts with Bluewaters and South32 to force a
higher price, according to ABC.
Section 568 of the Corporations Act gives a liquidator the power to
disclaim or renounce a contract deemed unprofitable.
Complicating ICICI's plans is the expiry next July of Griffin's
mining lease with the WA Government, which needs to be satisfied
the miner is financially sound enough to be granted an extension,
ABC states.
So far, the Government has kept tight-lipped about its position on
the lease.
Earlier last month, State Energy Minister Bill Johnston suggested
the State had little appetite to intervene in the Griffin affair or
the problems affecting Chinese-owned Premier coal, ABC recalls.
"We're always very concerned about the operations of the coal
assets in Collie," ABC quotes Mr. Johnston as saying. "But we can
only comply with the laws of Australia.
INVIGOR GROUP: Second Creditors' Meeting Set for Nov. 30
--------------------------------------------------------
A second meeting of creditors in the proceedings of Invigor Group
Limited has been set for Nov. 30, 2022, at 2:00 p.m. via
teleconference only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Nov. 29, 2022, at 5:00 p.m.
Brett Stephen Lord and Marcus William Ayres of Kroll Advisory Co
were appointed as administrators of the company on Aug. 24, 2022.
LA TROBE 2021-2: Moody's Upgrades Rating on Class E Notes From Ba1
------------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on four classes
of notes from La Trobe Financial Capital Markets Trust 2021-2.
Issuer: La Trobe Financial Capital Markets Trust 2021-2
Class B Notes, Upgraded to Aaa (sf); previously on May 5, 2022
Upgraded to Aa1 (sf)
Class C Notes, Upgraded to Aa1 (sf); previously on May 5, 2022
Upgraded to Aa3 (sf)
Class D Notes, Upgraded to A2 (sf); previously on May 5, 2022
Upgraded to A3 (sf)
Class E Notes, Upgraded to Baa3 (sf); previously on Aug 12, 2021
Definitive Rating Assigned Ba1 (sf)
RATINGS RATIONALE
The upgrades were prompted by (1) an increase in credit enhancement
available for the affected notes, and (2) the collateral
performance to date, with a low level of loans in arrears and no
losses.
Following the November 2022 payment date, credit enhancement
available for the Class B, Class C and Class D Notes has increased
to 6.8%, 5.7% and 2.4% respectively, from 5.1%, 4.3% and 1.8% at
the time of the last rating action for these notes in May 2022.
Credit enhancement available for the Class E Notes has increased to
0.9% from 0.6% at closing in August 2021.
As of October 2022, 2.1% of the outstanding pool was 30-plus day
delinquent and 1.0% was 90-plus day delinquent. The deal has not
incurred any losses to date.
Based on the observed performance to date and loan attributes,
Moody's has lowered its expected loss assumption to 1.4% of the
outstanding pool balance (equivalent to 0.8% of the original pool)
from 1.5% of the outstanding pool balance (equivalent to 1.1% of
the original pool) at the last rating action in May 2022.
Moody's has lowered its MILAN CE assumption to 9.1% from 9.7% at
the last rating action, based on the current portfolio
characteristics.
The transaction is an Australian RMBS secured by a portfolio of
residential mortgage loans, originated and serviced by La Trobe
Financial Services Pty Limited. A portion of the portfolio consists
of loans extended to borrowers with impaired credit histories or
made on a limited documentation basis.
The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
July 2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations and (2) an increase in credit enhancement
available for the notes.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in the credit enhancement available
for the notes and (3) a deterioration in the credit quality of the
transaction counterparties.
LIBERTY SERIES 2022-1: Moody's Ups Rating on Class F Notes to Ba3
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on five classes
of notes issued by Liberty Series 2022-1 Auto.
Issuer: Liberty Series 2022-1 Auto
Class B Notes, Upgraded to Aa1 (sf); previously on Feb 10, 2022
Definitive Rating Assigned Aa2 (sf)
Class C Notes, Upgraded to Aa3 (sf); previously on Feb 10, 2022
Definitive Rating Assigned A2 (sf)
Class D Notes, Upgraded to A3 (sf); previously on Feb 10, 2022
Definitive Rating Assigned Baa2 (sf)
Class E Notes, Upgraded to Baa3 (sf); previously on Feb 10, 2022
Definitive Rating Assigned Ba2 (sf)
Class F Notes, Upgraded to Ba3 (sf); previously on Feb 10, 2022
Definitive Rating Assigned B1 (sf)
RATINGS RATIONALE
The upgrades were prompted by an increase in note subordination
available for the affected notes and good performance of the
underlying portfolio to date.
Following the October 2022 payment date, the note subordination
available for the Class B, Class C, Class D, Class E and Class F
Notes has increased to 25.5%, 18.8%, 13.7%, 6.6%, and 0.7%
respectively, from 17.3%, 12.8%, 9.3%, 4.5% and 0.5% at closing.
Since closing, the Guarantee Fee Reserve Account has been fully
funded to its maximum balance of 2% of oustanding note balance.
As of October 2022, 2.0% of the outstanding pool was 30-plus day
delinquent and 0.8% was 90-plus day delinquent. The deal has
incurred 0.1% (as a percentage of the original pool balance) of
loss to date, which have been covered by excess spread.
Based on the observed performance to date and loan attributes,
Moody's expected default assumption is 6.25% as a percentage of the
current pool balance, compared with 6.25% of the closing pool
balance at deal close. Moody's maintained the Aaa portfolio credit
enhancement at 26%.
The transaction is a securitisation of a portfolio of Australian
consumer auto loans, majority secured by motor vehicles, originated
by Liberty Financial Pty Ltd.
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
November 2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations, and (2) an increase in credit enhancement
available for the notes.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in credit enhancement available for
the notes, and (3) a deterioration in the credit quality of the
transaction counterparties.
MELBOURNE COLLEGE: First Creditors' Meeting Set for Dec. 6
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Melbourne
College of Hairdressing Beauty Therapy & Natural Medicine Pty Ltd
will be held on Dec. 6, 2022, at 3:30 p.m. at Suite 2, Level 13, 68
Pitt Street in Sydney and via virtual meeting technology.
Christopher Damien Darin of Worrells Solvency & Forensic
Accountants were appointed as administrators of the company on Nov.
24, 2022.
PEPPER ASSET 2: Fitch Gives 'B(EXP)sf' Rating on Cl. 5 Notes
------------------------------------------------------------
Fitch Ratings has assigned expected ratings to Pepper Asset Finance
Revolver No. 2 Trust's pass-through floating-rate notes. The notes
are backed by a pool of first-ranking Australian automotive and
equipment lease and loan receivables originated by Pepper Asset
Finance Pty Limited, a subsidiary of Pepper Money Limited.
The notes were issued by BNY Trust Company of Australia Limited as
trustee for Pepper Asset Finance Revolver No. 2 Trust.
Entity/Debt Rating
----------- ------
Pepper Asset
Finance Revolver
No. 2 Trust
1a LT NR(EXP)sf Expected Rating
1b LT NR(EXP)sf Expected Rating
2 LT A(EXP)sf Expected Rating
3 LT BBB(EXP)sf Expected Rating
4 LT BB(EXP)sf Expected Rating
5 LT B(EXP)sf Expected Rating
6 LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
This is a warehouse transaction featuring an initial 24-month
revolving period with an extension option.
KEY RATING DRIVERS
Stress Commensurate with Ratings: Fitch has assigned base-case
default expectations and 'AAAsf' default multiples for each risk
tier classification. Its base-case gross-loss expectations are
2.5%, 5.5% and 11.0% for tier A, B and C, respectively. The 'AAAsf'
default multiples are 6.25x, 5.50x and 4.75x. The recovery base
case is 30.0%, with a 'AAAsf' recovery haircut of 50.0% across all
risk grades.
The transaction's eligibility criteria and portfolio parameters
shaped the proxy portfolio used to drive the asset analysis. The
proxy portfolio reflects the assumption that the portfolio's
characteristics may migrate towards the limits during the revolving
period, including limits on risk tiers, asset type and obligor size
and concentration. The pool parameters limit risk for tier C to 11%
of the pool and for tier B to 37%. The weighted-average base-case
default assumption was 4.5% and the 'AAAsf' default multiple was
5.5x.
Transaction performance is supported by Australia's continued
economic growth - 3.6% GDP growth for the year to June 2022 - and
tight labour market, with a 3.4% unemployment rate in October 2022.
This is despite increasing interest rates. Fitch expects GDP growth
to slow to 1.9% in 2023, with unemployment increasing to 4.1%,
reflecting the global slowdown and the lagged impact of aggressive
monetary tightening from the Reserve Bank of Australia.
Structural Risks Addressed: The transaction includes a Senior
Commission Note (SCN) facility to fund the purchase-price component
related to the unamortised commission paid to introducers for the
origination of the receivables. The note will not be
collateralised, but will amortise in line with an amortisation
schedule. The SCN's repayment limits the availability of excess
spread to cover losses, as it ranks senior in the interest
waterfall; above class 1 to 6 notes.
A portion of the class 1 step-up interest and conduit cost of fund
interest is subordinated below losses, and is not included in the
rating assessment of each note. Non-payment of subordinated
interest will not lead to an event of default, as outlined in the
transaction documentation.
The transaction features a two-year revolving period with the
ability to extend. It is bound by amortisation triggers to protect
and mitigate risk to the transaction from potential losses.
Included, among other triggers, is a pool parameter trigger that
ensures sufficient excess spread is available in the transaction.
Counterparty risk is mitigated by documented structural mechanisms
that ensure remedial action takes place should the ratings of the
swap providers or transaction account bank fall below a certain
level.
Low Operational and Servicing Risk: All receivables were originated
by Pepper Asset Finance, which demonstrated adequate capability as
originator, underwriter and servicer. The originator is not rated
by Fitch. Servicer disruption risk is mitigated by back-up
servicing arrangements. The nominated back-up servicer is BNY.
Fitch undertook an operational and file review and found that the
operations of the originator and servicer were comparable with
those of other auto and equipment lenders.
No Residual Value Risk: There is no residual value exposure in this
transaction. However, there is a small exposure to balloon-payment
loans.
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 and loss
severity on defaulted receivables could produce loss levels higher
than Fitch's base case and are likely to result in a decline in
credit enhancement and remaining loss-coverage levels available to
the notes. Decreased credit enhancement may make certain note
ratings susceptible to negative rating action, depending on the
extent of the coverage decline. Hence, Fitch conducts sensitivity
analysis by stressing a transaction's initial base-case
assumptions.
This section provides insight into the model-implied sensitivities
the transaction faces when assumptions - weighted-average
foreclosure frequency, weighted-average recovery rate or net sales
proceeds - are modified, while holding others equal. The modelling
process uses the modification of default, loss and sales proceeds
assumptions to reflect asset performance in up and down
environments. The results below should only be considered as one
potential outcome, as the transaction is exposed to multiple
dynamic risk factors.
Fitch conducted sensitivity analysis by increasing gross default
levels, decreasing recovery rates and decreasing net sales proceeds
over the life of the transaction.
Downgrade Sensitivity
Rating Sensitivity to Increased Default Rates
Note: 2 / 3 / 4 / 5
Rating: Asf / BBBsf / BBsf / Bsf
Defaults increase 10%: A-sf / BBB-sf / BB-sf /
Defaults increase 25%: BBB+sf / BB+sf / Bsf /
Defaults increase 50%: BBBsf / BBsf / B-sf /
Rating Sensitivity to Decreased Recovery Rates
Note: 2 / 3 / 4 / 5
Rating: Asf / BBBsf / BBsf / Bsf
Recoveries decrease 10%: Asf / BBB-sf / BB-sf / B-sf
Recoveries decrease 25%: A-sf / BBB-sf / BB-sf /
Recoveries decrease 50%: A-sf / BB+sf / B+sf /
Rating Sensitivity to Combined Stresses
Note: 2 / 3 / 4 / 5
Rating: Asf / BBBsf / BBsf / Bsf
Defaults increase 10% and recoveries decrease 10%: A-sf / BBB-sf /
B+sf /
Defaults increase 25% and recoveries decrease 25%: BBBsf / BBsf /
Bsf /
Defaults increase 50% and recoveries decrease 50%: BB+sf / B+sf /
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
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 the credit
losses and cash flow stresses commensurate with higher rating
scenarios, all else being equal.
Expected Rating Sensitivity to Reduced Defaults and Increased
Recoveries
Note: 2 / 3 / 4 / 5
Rating: Asf / BBBsf / BBsf / Bsf
Defaults decrease 10%/recoveries increase 10%: A+sf / BBB+sf / BBsf
/ Bsf
DATA ADEQUACY
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available to Fitch
for this transaction.
Fitch reviewed a small targeted sample of the originator'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.
TRITON TRUST 9: Fitch Hikes Rating on 2018-1 Cl. E Notes to BB-
---------------------------------------------------------------
Fitch Ratings has upgraded three note classes and affirmed two from
Triton Trust No.9 NTX Warehouse Series 2018-1. Fitch has also
removed the class A, B, C, D and E notes from Under Criteria
Observation (UCO), on which they were placed on 6 June 2022.
The warehouse transaction consists of notes backed by a pool of
first-ranking Australian residential mortgages originated by
Columbus Capital Pty Limited. The notes were issued by Perpetual
Corporate Trust Limited as trustee for Triton Trust No.9 NTX
Warehouse Series 2018-1.
Entity/Debt Rating Prior
----------- ------ -----
Triton Trust No.9
NTX Warehouse
Series 2018-1
A LT AAsf Affirmed AAsf
B LT Asf Affirmed Asf
C LT BBB+sf Upgrade BBBsf
D LT BB+sf Upgrade BBsf
E LT BB-sf Upgrade B+sf
KEY RATING DRIVERS
Credit Enhancement (CE) Supports Ratings: The actual 30+ day and
90+ day arrears were 0.9% and 0.6%, respectively, at end-September
2022, against 0.82% and 0.45% for Fitch's 2Q22 Dinkum RMBS Index.
Transaction performance has been strong, with only two losses since
closing.
The transaction has an availability period and therefore, Fitch's
analysis is based on a proxy pool stressed to pool parameters
provided by Columbus Capital and further stressed by Fitch. The
stress levels were defined based on originator and historical data
and Fitch's forward-looking view. Stresses were applied to a number
of portfolio characteristics to reflect the historical portfolio
composition and Fitch's expected future portfolio composition of
the pool.
The portfolio's 'AAAsf' weighted-average foreclosure frequency
(WAFF) of 13.3% is driven by the stressed weighted-average (WA)
unindexed loan/value ratio (LVR) of 68.0%, stressed investment
loans of 75.0% and Fitch-adjusted 30+ day arrears of 1.1%. The
'AAAsf' WA recovery rate (WARR) of 51.1% is driven by the stressed
portfolio's WA indexed scheduled LVR of 71.4%.
Limited Liquidity Risk: Full cash flow analysis was performed for
the trust using the documented note limits and minimum CE. Class A,
B, C, D and E notes have documented minimum CE percentages of 6.5%,
4.0%, 2.5%, 1.45% and 0.95%, respectively, during the availability
period. The transaction employs a sequential structure after the
availability period, with no pro rata pay down permitted. It also
benefits from a liquidity reserve sized at 1.4% of the outstanding
note balance, subject to a documented floor of AUD375,000. The
rated notes pass all relevant stresses applied in the cash-flow
analysis.
Payment of class A subordinated interest and of class B, C, D and E
residual interest is excluded from its rating analysis. Class A
subordinated interest is subordinated below losses if an
amortisation event is subsisting, while class B, C, D and E
residual interest is subordinated below losses when the outstanding
asset balance is below AUD16.5 million. Non-payment of subordinated
or residual interest will not lead to an event of default, as
outlined in the transaction documentation.
Low Operational Risk: Columbus Capital is a non-bank financial
institution that commenced lending in 2006, with specialisations in
Australian residential mortgage lending and third-party loan
servicing. Fitch undertook an operational review and found that the
operations of the originator and servicer were comparable with
market standards and that there were no material changes that may
affect Columbus Capital's ongoing ability to undertake origination,
administration and collection activities.
Tight Labour Market Supports Outlook: Performance is supported by
Australia's continued economic growth and tight labour market,
despite rising interest rates. GDP growth was 3.6% for the year to
June 2022 and unemployment was 3.4% in October. Fitch expects GDP
to slow to 1.9% in 2023, with unemployment increasing to 4.1%,
reflecting the global slowdown and the lagged impact of the Reserve
Bank of Australia's aggressive monetary tightening.
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 CE available to the notes.
Downgrade Sensitivity
Unanticipated increases in the frequency of defaults and loss
severity on defaulted receivables could produce loss levels higher
than Fitch's base case and are likely to result in a decline in CE
and remaining loss-coverage levels available to the notes.
Decreased CE may make certain note ratings susceptible to negative
rating action, depending on the extent of the coverage decline.
Hence, Fitch conducts sensitivity analysis by stressing a
transaction's initial base-case assumptions.
The rating sensitivity section provides insight into the
model-implied sensitivities the transaction faces when assumptions
- 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 A / B / C / D / E
Current rating: AAsf / Asf / BBB+sf / BB+sf / BB-sf
Increase defaults by 15%: AAsf / Asf / BBB+sf / BB+sf / BB-sf
Increase defaults by 30%: AAsf / BBB+sf / BBBsf / BB+sf / BB-sf
Reduce recoveries by 15%: AAsf / BBB+sf / BBBsf / BB+sf / BB-sf
Reduce recoveries by 30%: AA-sf / BBBsf / BBB-sf / BBsf / BB-sf
Increase defaults by 15% and reduce recoveries by 15%: AA-sf /
BBB+sf / BBBsf / BB+sf / BB-sf
Increase defaults by 30% and reduce recoveries by 30%: Asf / BBB-sf
/ BBsf / BB-sf / BB-sf
The ratings of class A, C, D and E notes are capped by revolving
pool concentration test.
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 CE that would fully compensate
for credit losses and cash flow stresses commensurate with higher
rating scenarios, all else being equal.
Upgrade Sensitivity
Notes: Class A / B / C / D / E
Current rating: AAsf / Asf / BBB+sf / BB+sf / BB-sf
Reduce defaults by 15% and increase recoveries by 15%: AAAsf /
AA-sf / A+sf / Asf / Asf
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.
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.
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.
=========
C H I N A
=========
SUNAC CHINA: Lowers Profit Forecast for Last Year
-------------------------------------------------
Yicai Global reports that troubled developer Sunac China Holdings
has lowered its profit forecast for last year, mainly because of
the impact of Covid-19, sluggish real estate sales, and changes in
the firm's operating environment.
Yicai Global relates that net profit likely fell about 207 percent
in 2021 from the previous year, the Tianjin-based company said in a
statement on Nov. 29. Core net profit is expected to have plunged
around 184 percent.
Sunac earlier predicted that net profit and core net profit had
probably dropped 85 percent and 50 percent, respectively, in the
period.
According to Yicai Global, the company lowered its forecast after
recognizing further provisions for property impairment, expected
credit loss on receivables and external guarantees, and goodwill
and related long-term assets in the Sunac Resort sites and
operation business because of the impact of recurrent Covid-19
outbreaks, the rapid downturn in the real estate sales market, and
significant adjustments in the company's operating environment
since March, Sunac noted.
Sunac is in a liquidity crisis, and it is preparing to restructure
its domestic debts, the report says. Its stock was suspended from
trading on the Hong Kong stock exchange on April 1 after the
developer failed to submit its 2021 annual results on time. It has
also not filed an interim report for 2022 yet.
Yicai Global relates that Sunac said it would release unaudited
results for 2021 by December.
The company achieved contract sales of about CNY153.1 billion
(USD21.4 billion) for about 11.6 million square meters of
properties as of October, with contract sales prices averaging
about CNY13,220 (USD1,852) per sqm, the report discloses.
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 in
October 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.
=================
H O N G K O N G
=================
EXCHANGE FUND: Posts Third Quarterly Loss, Outlook Challenging
--------------------------------------------------------------
The Business Times reports that Hong Kong's Exchange Fund, which is
used to back the Hong Kong dollar, posted an investment loss of
HK$100.1 billion in the third quarter, the Hong Kong Monetary
Authority (HKMA) said on Nov. 30.
The loss, its third consecutive quarterly one, compared with
investment gains of HK$4.0 billion in the same period a year
earlier, and a loss of HK$265.5 billion in January-September period
this year, BT relates.
According to BT, HKMA's chief executive Eddie Yue said the chances
of having a substantial investment loss for the year is still there
while investment environment is set to "remains very uncertain and
challenging" in 2023.
The HKMA is the key manager of the Exchange Fund, which is under
the control of the financial secretary and invests in equities,
bonds, foreign exchange and other securities and assets.
"For the exchange fund, we will be defensive," Yue told reporters
in a press conference. "We will make sure that even with market
volatility, the hit on exchange fund will be capped to as small as
possible."
During the third quarter, Hong Kong equities recorded an HK$27.3
billion investment loss as compared to a HK$0.9 billion gain in
April-June period and a HK$26.3 billion loss a year ago, BT
discloses.
Loss on other equities narrowed to HK$19.2 billion for the third
quarter versus a HK$48.6 billion loss from the previous quarter.
Meanwhile, it saw a loss on bonds of HK$22.8 billion for
July-September period comparing with a loss of HK$21.2 billion from
the second quarter, BT relays.
=========
I N D I A
=========
AGARWAL COAL: CARE Keeps C Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Agarwal
Coal Suppliers (ACS) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated November 25,
2021, placed the rating(s) of ACS under the 'issuer
non-cooperating' category as ACS had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. ACS
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated October 11, 2022, October 21, 2022, October 31,
2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Meerut, Uttar Pradesh based Agarwal Coal Suppliers (ACS) is a
proprietorship firm established in 1986. The firm is being managed
by Mr Sudhir Kumar Garg. ACS is engaged in trading of coal.
ALVA'S EDUCATION: Ind-Ra Assigns BB- Term Loan Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Alva's Education Foundation's (AEF) bank facilities:
-- INR20 mil. Bank loans assigned with IND BB-/Positive rating;
-- INR80 mil. Fund-based working capital limits assigned with
IND BB-/Positive rating; and
-- INR700 mil. Bank loans affirmed with IND BB-/Positive rating.
The Positive Outlook reflects Ind-Ra's expectation of
moderate-to-healthy growth in AEF's overall student headcount,
leading to an improvement in its operating performance and
financial profile over the medium term.
Rating Sensitivities
Positive: A sustained improvement in the cash flow from operations,
leading to an improvement in liquidity and debt service coverage
ratio, all on a sustained basis, could lead to a positive rating
action.
Negative: Inability to maintain the operating profitability which
could lead to deterioration in the leverage and coverage metrics,
and a further stress on the liquidity position, all on a sustained
basis, will lead to a negative rating action.
Company Profile
Established in 1995, AEF is a charitable trust promoted by Dr.
Mohan Alva in Moodbidri, Karnataka. The trust manages 21
educational institutions that offers education from kindergarten to
standard 12 (K-12), pre-university, diploma, graduate and post
graduate degrees in engineering, nursing, allied health science,
ayurvedic, homeopathic, physiotherapy, and arts and science, among
others.
ARORA INDUSTRIES: CARE Lowers Rating on INR79.88cr Loan to D
------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Arora Industries (AI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 79.88 CARE D Revised from CARE BB-;
Facilities Stable
Detailed rationale and key rating drivers
The revision in the ratings of AI takes into consideration delay in
servicing of its debt obligations and overdraws in their working
capital limits.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Improvement in the liquidity position of the firm as reflected
from timely servicing of its debt obligations.
Detailed description of the key rating drivers
Key rating weaknesses
* Delays in debt servicing: There has been delay in the servicing
of its debt obligations due to the fire breakout in their plant. As
per banker feedback, there are ongoing delays in principal and
interest repayments for term loan and there are over-drawal in the
working capital facilities.
Liquidity: Poor
Arora Industries has poor liquidity position as they have suffered
losses because of the fire breakout.
Analytical approach: Combined
While arriving at the rating of Arora Industries (AI), CARE has
taken a combined view of Arora Industries and Arora Knit Fab
Private Limited, as both the entities (together referred to as
'Group' above) are engaged in a similar line of business, have
operational linkages, have the same promoters and are controlled by
a common management team.
Arora Industries is a Partnership Firm registered with Registrar of
firms of Indian Partnership Act,1932. The firm is managed by Shri
Mohinder Singh Arora and Ravinder Pal Singh, both are partners in
this firm. The firm is engaged in manufacturing and exports of
Knitted Fabrics, Home Textiles, Garments, Mink Blankets and other
substitutes.
ARORA KNIT: CARE Lowers Rating on INR57.89cr LT Loan to D
---------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Arora Knit Fab Private Limited (AKFPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 57.89 CARE D Revised from CARE BB-;
Facilities Stable
Detailed rationale and key rating drivers
The revision in the ratings of AKFPL takes into consideration delay
in servicing of its debt obligations and overdraws in their working
capital limits.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Improvement in the liquidity position of the company as reflected
from timely servicing of its debt obligations.
Detailed description of the key rating drivers
Key rating weaknesses
* Delays in debt servicing: There has been delay in the servicing
of its debt obligations due to the fire breakout in their plant.
As per banker feedback, there are ongoing delays in principal and
interest repayments for term loan and there are over-drawal
in the working capital facilities.
Liquidity: Poor
Arora Knit Fab Private Limited has poor liquidity position as they
have suffered losses because of the fire breakout.
Analytical approach: Combined
While arriving at the rating of Arora Knit Fab Private Limited
(AKFPL), CARE has taken a combined view of Arora Industries and
Arora Knit Fab Private Limited, as both the entities (together
referred to as 'Group' above) are engaged in a similar line of
business, have operational linkages, have the same promoters and
are controlled by a common management team.
AKFPL, incorporated in the year 2000, under companies Act 1956 and
the flagship entity of the Arora Group. The company is engaged in
manufacturing and exports of Knitted Fabrics, Home Textiles,
Garments, Mink Blankets and the substitutes. The company is managed
by Shri Mohinder Singh Arora (Chairman, founder CEO) and Shri
Ravinder Pal Singh elder brother of Mohinder Singh Arora.
AZAD EDUCATIONAL: CARE Keeps C Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Azad
Educational Society (AES) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.30 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 18,
2021, placed the rating(s) of AES under the 'issuer
non-cooperating' category as AES had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. AES
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated September 3, 2022, September 13, 2022, September
23, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Azad Educational Society was established in 1998 under the Society
Registration Act, 1992 with an objective to provide education
services by establishing and operating various educational
institutions. The society is presently running 5 colleges under the
name of "Azad Group of Educational Institutions" (AGEI) at its
55-acre campus at Cantt. Road. Non BFSI.
COLUMBUS OVERSEAS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Columbus Overseas LLP
Shivgyan Luxora
P.No. G-2 Rajmahal Scheme
Parivahan Marg, C-Scheme
Jaipur Rajasthan 302001
India
Insolvency Commencement Date: November 18, 2022
Court: National Company Law Tribunal, Jaipur Bench
Estimated date of closure of
insolvency resolution process: May 17, 2023
Insolvency professional: Mr. Deepak Arora
Interim Resolution
Professional: Mr. Deepak Arora
23-Ka-4, Jyoti Nagar
Near Vidhan Sabha
Jaipur 302005
Rajasthan, India
E-mail: aroracs2@gmail.com
cirp.columbus@gmail.com
Last date for
submission of claims: December 1, 2022
D. D. AGRO: CARE Lowers Rating on INR17.29cr LT Loan to C
---------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
D. D. Agro Industries Limited (DDAIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 17.29 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Short Term 1.50 CARE A4; ISSUER NOT
Bank Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 3,
2021, placed the rating(s) of DDAIL under the 'issuer
non-cooperating' category as DDAIL had failed to provide
information for monitoring of the rating and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. DDAIL continues to be noncooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated July 20, 2022, July 30, 2022,
August 10, 2022 and November 15, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the bank facilities of DDAIL have been
revised on account of non-availability of requisite information.
The ratings also factored in delays in debt servicing recognized
from audit report of FY22 available from registrar of the
companies. (The said facilities were not rated by CARE)
D.D. Agro Industries Limited (DDAIL) was incorporated in April,
1999 and is being managed by Mr Amritdeep Singh, Mr Dinesh Kumar
and Mr Kamaljeet Kaur. DDAIL is engaged in the manufacturing of PET
preforms and chemicals like zinc sulfate and zinc oxide. The
company has its two manufacturing facilities located at Ludhiana,
Punjab and Samba, Jammu & Kashmir.
DEMBLA VALVES: Ind-Ra Assigns BB+ Term Loan Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Dembla Valves Limited (DVL):
-- Long-Term Issuer Rating affirmed with IND BB+/ Stable rating;
-- INR495 mil. (Increased from INR200 mil.) Fund-based working
capital limits affirmed with IND BB+/Stable/IND A4+ rating;
-- INR300 mil. Non-fund-based working capital limits assigned
with IND A4+ rating; and
-- INR200 mil. Proposed non-fund-based working capital limits
assigned with IND A4+ rating.
Rating Sensitivities
Positive: A significant increase in the scale of operations along
with an improvement in the credit metrics and the liquidity
position, on a sustained basis, will be positive for the ratings.
Negative: A decline in the scale of operations leading to a
deterioration in the credit metrics and/or a deterioration in the
liquidity position with the net leverage exceeding 4x, on a
sustained basis, will be negative for the ratings.
Company Profile
Incorporated in 1989, DVL provides fabrication of valves, catering
largely to the oil and pharmaceutical industries. It is located in
Thane.
GAMA INFRAPROP: Ind-Ra Assigns BB- Loan Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Gama Infraprop Private Limited's (GIPLs) bank
facilities. The Outlook is Stable.
The detailed rating actions are:
-- INR1,889.50 bil. Term loan due on December 31, 2028 assigned
with IND BB/Stable rating;
-- INR300.00 mil. Cash credit assigned with IND BB/Stable rating;
-- INR40.00 mil. Bank guarantee assigned with IND A4+ rating; and
-- INR350.00 mil. Letter of credit (LC) assigned with IND A4+
rating.
The ratings reflect the presence of a long-term power purchase
agreement (PPA) for 107megawatt (MW) i.e., 47.55% of the total
225MW capacity. However, the rating is constrained by the
non-operational status of the project as on date due to high gas
prices, fluctuating operational performance historically, weak
financial risk profile, modest debt structure and susceptibility to
raw material availability.
Key Rating Drivers
Fluctuating Operational Performance: The project as on date is
non-operational due to no offtake from the counterparty,
Uttarakhand Power Corporation Limited (UPCL), on account of high
gas prices. Its plant load factor for the past three years
(FY20-FY22) has been fluctuating (FY22: 38.61%; FY21: 21.6%; FY20:
66.20%). However, GIPL has maintained the plant availability factor
above 99% since FY20, allowing it to recover the fixed cost from
the counterparty.
Weak Financial Risk Profile and Modest Debt Structure: In FY22,
GIPL reported an operating income of INR2,674.50 million (FY21:
INR2,020.70 million). The company's financial risk profile remained
weak, due to significantly high debt/EBITDA of 9.51x in FY22 (FY21:
9.59x) and a gearing ratio of 14.25x (FY21: 21.24x). It also
significantly relies on the accruals in the form of annual fixed
charges from UPCL on the basis of the Uttarakhand Electricity
Regulatory Commission's latest tariff order.
The debt structure of GIPL consists of sustainable and
unsustainable debt, with sustainable debt being 33.7% of the total
term debt at FY22. The unsustainable portion comprised equity
holding by the lender (30%), optionally convertible debentures
(OCDs; 0.01%), and redeemable cumulative optionally convertible
preference shares (0.01%); the agency expects the repayments for
them to begin from November 2025 until November 2029.
As per the management and the lender, the sustainable debt is
senior to the unsustainable debt. The unsustainable debt, however,
was created after the restructuring of the borrower by the lender.
The debt has a door-to-door tenure of 12 years, the structural
features of the proposed debt include a dedicated trust and
retention account, financial covenants, and a one-month of debt
service reserve account (DSRA). Furthermore, as a part of the
sanction covenants, the project has to maintain a debt service
coverage ratio of (DSCR) of 1.1x during the tenure of the debt, no
instances of the covenants have been witnessed, as per the
management and the lender.
Single Counterparty Risk Continues Despite Low Debtor Days: The PPA
with UPCL provides for a payment security mechanism in the form of
a revolving LC. Accordingly, the LC equivalent to about one month
of revenue was established by UPCL since the date of the agreement
and has been renewed annually since then. The plant has been
receiving payments from UPSL within 30-45 days of raising the
invoice. Although the track record of a timely payment provides
comfort, GIPL remains exposed to counterparty risk to a certain
extent. The debtors stood at INR280 million as on date.
Offtake Agreement for Partial Capacity; Take-or-Pay with Fuel Cost
Pass-through: GIPL has tied up 107MW out of its 225MW of capacity
through a 25-year PPA with UPCL. The project has a tail period of
13 years and derives benefits from the division of the tariff into
fixed capacity charges and energy charges, with a full cost
pass-through in fuel cost at an agreed net heat rate, mitigating
the risk associated with fuel price volatility. The capacity
charges are based on the plant availability factor (PAF). The
project would recover the capacity charges when it achieves the
normative availability of 85%. The plant's ability to maintain the
normative PAF will be a rating monitorable.
Spot Gas Sale Agreement (SGSA) Mitigates Supply Risk: in April
2018, GIPL had signed an SGSA with GAIL India Limited (GAIL; 'IND
AAA'/Stable/'IND A1+') for up to 10 years till March 2028. The
agreement ensures the availability of fuel from GAIL as and when
demand from the offtaker (UPCL) arises. Currently, as the gas
prices are high, GIPL falls below in the merit order position.
Liquidity Indicator – Adequate: GIPL had cash credit facility for
INR300 million (a drawing power of roughly INR100 million) and
created a DSRA of INR51 million (equivalent to one month of
principal and interest payment), which is sufficient to meet its
debt service obligations for three months. For the unsustainable
debt, in case of cash flow mismatch, the promoter may infuse
additional funds to meet the shortfall, as per the management. If
the promoters face funding shortage, the debt may be converted into
non-convertible debentures / equity at the option of the lender.
Rating Sensitivities
Positive: The following developments could collectively, lead to a
positive rating action:
The tie-up of a PPA for the remaining vacant capacity leading to
the DSCR remaining above the financing covenants of 1.1x
Negative: The following developments could, individually or
collectively, lead to a negative rating action:
A deterioration in the financial profile of counterparty and a
delay in the payments by UPCL leading to cash flow mismatches
Non-availability of gas leading to lower-than-normative
availability for the project.
Company Profile
GIPL owns and operates a 225MW gas-based combined cycle power plant
in Mahuakheraganj, Kashipur in the Udham Singh Nagar district of
Uttarakhand.
GANPATI AGRI: Ind-Ra Affirms & Withdraws BB+ LT Issuer Rating
-------------------------------------------------------------
India Rating and Research (Ind-Ra) has affirmed Ganpati Agri
Business Pvt Ltd.'s (GABPL) Long-Term Issuer Rating at 'IND BB+'
and has simultaneously withdrawn it. The Outlook was Stable.
The instrument-wise rating action are:
-- INR320 mil. Fund-based working capital limits* affirmed and
withdrawn;
-- INR134.54 mil. Term loan* due on March 2028 affirmed and
withdrawn;
-- INR115 mil. Proposed fund-based working capital limit is
withdrawn (the company did not proceed with the instrument
as envisaged); and
-- INR20 mil. Proposed term loan withdrawn (the company did not
proceed with the instrument as envisaged).
*Affirmed at 'IND BB+'/Stable before being withdrawn
Ind-Ra is no longer required to maintain the ratings as the agency
has received a no-objection certificate from the lender. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017 for credit rating agencies.
Key Rating Drivers
The affirmation reflects GABPL's continued weak credit metrics in
FY22 despite an improvement in the interest coverage (operating
EBITDA/gross interest expense) to 2.7x (FY21: 2.1x, FY20: 2.7x) and
net leverage (total adjusted net debt/operating EBITDAR) to 7.7x
(8.7x, 5.0x). The improvement in the credit metrics was driven by
an increase in the absolute EBITDA to INR72.9 million in FY22
(FY21: INR57.9 million). At FYE22, GABPL's interest-free unsecured
loans from directors/shareholders increased to INR110.1 million
(FYE21: INR109.0 million). Management expects the unsecured loans
to increase by INR30 million in FY23 to fund its requirement. GABPL
has no major debt-led capex plans in the next two years. It plans
to install a refinery of vegetable oil at a cost of around INR500
million by FY25, of which INR150 million would be funded from
internal accruals and the balance through external borrowings.
Ind-Ra expects the credit metrics to remain weak in FY23 on account
of an increase in unsecured loans.
The ratings also reflect GABPL's continued modest EBITDA margins of
3.15% in FY22 (FY21: 3.07%, FY20: 4.04%) with a return on capital
employed of 6.4% (5.9%, 8.5%). The increase in margins was due to a
decline in operating expenses on account of cost-control measures
adopted by the company. Ind-Ra expects the margins to marginally
improve further in FY23.
Liquidity Indicator - Stretched: The company's average utilization
of the fund-based limits was 94.8% for the 12 months ended October
2022. Furthermore, GABPL had availed a temporary overdraft
amounting to INR7.5 million for August 2021, November-December 2021
and January 2022, which was repaid timely. At FYE22, the cash and
cash equivalents stood at INR20.7 million (FYE21: INR15.9 million).
In FY22, the cash flow from operations turned positive to INR22.3
million (FY21: negative INR79.6 million), due to favorable changes
in working capital. The net cash conversion cycle also improved to
71 days in FY22 (FY21: 83 days) on account of a reduction in the
inventory holding period to 31 days (58 days), due to the timely
execution of orders in hand.
The ratings continue to factor in GABPL's medium scale of
operations. In FY22, the revenue increased to INR2,315.1 million
(INR1,884.5 million) due to an increase in work orders led by the
addition of new customers, along with continued repeat orders. In
4MFY23, it achieved net revenue of INR745.5 million. Ind-Ra expects
the revenue to rise further in FY23, due to an increase in the
existing capacity utilization (FY22: 81%; FY21: 67%) and revenue
generation from the new menthol plant, which started production in
April 2022.
The ratings remain constrained by GABPL's moderate customers
concentration risk as the top 10 customers accounted for around 66%
of the total sales in FY22, of which the top three customers
contributed around 39% to its total sales. Furthermore, the company
does not have any capital market exposure and relies on a single
bank to meet its funding requirements.
However, the ratings continue to be supported by the promoters'
nearly two decades of experience in the vegetable oil, poultry and
cattle feed industry, leading to established relationships with its
customers and suppliers.
Company Profile
GABPL was incorporated in 2011 by Atul Kumar Singh and Anjali
Singh, who are both directors. The company manufactures rice bran
oil (unfinished cooking oil) and its by-products de-oiled rice bran
cake, along with allied products such as mustard cake, de-oiled
mustard cake, among others, for poultry and cattle feed.
GARG & COMPANY (PANIPAT): CARE Keeps C Rating in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Garg &
Company (Panipat) (GC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.70 CARE C; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term 6.30 CARE A4; ISSUER NOT
Bank Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 12,
2021, placed the rating(s) of GC under the 'issuer non-cooperating'
category as GC had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. GC continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 28, 2022, September 7, 2022, September 17, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Garg & Company (Panipat) (GC) is a proprietorship concern
established in 2011 by Mr. Shashank Garg. The firm is a grade A
contractor which undertakes civil construction contracts primarily
for government of Haryana. The firm receives the orders mainly
through tenders and the tenure of the contracts is up to 24 months.
In the past the firm has executed a number of contracts for
government entities. Firm procures raw materials i.e. grits, stones
etc from private dealers. Additionally, the equipment's and
machines are owned by the firm.
GARG & COMPANY: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Garg &
Company (Ludhiana) (GC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 14.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 11,
2021, placed the rating(s) of GC under the 'issuer non-cooperating'
category as GC had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. GC continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 27, 2022, September 6, 2022, September 16, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Garg & Company (GC) was initially constituted as a proprietorship
firm in 1972 by Mr. Harish Kumar Garg and in 2009, it was converted
into a partnership concern with Mr. Lokesh Jain, Mr. Kailash Jain
and Mr. Harish Kumar Garg as the partners. GC is a family managed
business and the firm is engaged in the trading of steel products,
mainly, CR strips, HR strips, HR coils and HR strips and
manufacturing of Electric Resistance Welded (ERW) pipes.
GATI KAUSAR: CARE Hikes Rating on INR5.0cr LT Loan from B
---------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Gati Kausar India Private Limited (GKIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE BB-; Stable Revised from
Facilities CARE B; Stable
Short Term Bank
Facilities 0.50 CARE A4 Reaffirmed
Detailed rationale and key rating drivers
The revision in the ratings assigned to the proposed bank
facilities of GKIPL take into account the change in shareholding
and management of the company. CARE ratings note that Mandala
Capital AG Limited remains the sole major shareholder after Gati
Limited (GL) which held about 70% has divested its stake in the
then Gati Kausar India Limited (GKIL) completely. The ratings are
constrained by negative retained earnings balance, weak debt
coverage indicators and continuous report of losses leading to poor
liquidity. The ratings, however, derive strength from experience of
promoters, established client relationship and favourable industry
growth prospects. The ratings also derive comfort from healthy cash
and liquid funds available with company.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Improvement in turnover and operating margins on a sustainable
level resulting in positive cash accruals.
Negative factors – Factors that could lead to negative rating
action/downgrade:
* Deterioration in risk profile of the company.
Detailed description of the key rating drivers
Key rating strengths
* Experienced promoters supported by efficient management team:
After GL sold about 70 per cent stake in the then GKIL to existing
minority shareholder Mandala Capital AG Ltd which held 30% stake,
GKIPL has ceased to be Gati's subsidiary. Mandala Capital AG
Limited has been a shareholder in GKIPL since 2014. Therefore, the
management run by Mandala Capital has experience of over one decade
in cold chain business. Currently, GKIPL is managed by Mr. Rakesh
Pachauri, who is the chief operating officer(COO), with over three
decades of experience and has spent one decade in logistics
industry in various leadership positions. Prior to GKIPL, he has
worked with several reputed corporates. Further, he is supported by
qualified professionals from logistics and cold chain industry.
During July 2021, as part of the restructuring in top management,
GKIPL has inducted three directors in the board, one nominee
director who represent Mandala Capital AG Limited and two
independent directors.
* Favourable industry growth prospects: The cold chain logistics
and cold warehousing has been gaining momentum in the current era
realizing the growing potential of consumption of temperature
sensitive perishable goods such as vegetables, fruits,
pharmaceutical drugs etc. Further the change in lifestyle patterns
and mass of people preferring processed foods, fruits and
vegetables which are off season has resulted spurt in the growth of
the cold chain logistics. Considering above, it is expected that
this segment of the logistics industry has a potential to grow at a
rate of about 15% for next half a decade with an estimated target
market size of about INR 45,000 crores.
* Improved capital structure: Capital structure of GKIPL improved
significantly as the net worth turned positive during FY22 and
stood at INR40.78 crore as on March 31, 2022 whereas the net worth
as on March 31, 2021 stood at Rs (62.45) crore. During FY22, the
company received a waiver of INR104.00 crores from debenture
holders by way of deemed equity contribution from existing
shareholders and thus included in other equity. However, the
company is still incurring losses & the balance of retained
earnings till March 31, 2022 stood at INR (122.75) crores.
* Established client relationships albeit customer concentration
GKIPL has an established client relationship base, network
distribution resources and cater to a wide range of industries that
include healthcare, meat & poultry, biopharma, frozen & fresh
produce, dairy products, organized retails and quick service
restaurants, which require specialization in cold chain logistics.
The company has been associated with some renowned clients from all
over the country for more than a decade on an average. Usually,
GKIPL's order book comprises of repeat orders from its
long-standing clients. GKIPL is serving more than 100 major
customers. However, the company is subjected to customer
concentration risk since majority of the revenue is generated from
top 10 customers. The revenue contribution from top 10 customers
were 57% in FY22 vis-à-vis 55% in FY21. However, after the exit of
GL from GKIPL, it remains to be seen how the company is able to
sustain all its customers and deepen its network reach.
Key rating weaknesses
* Weak debt coverage indicators: The total debt of company as on
March 31, 2022 stood at INR 15.63 crores which comprises of Vehicle
loans – INR 4.89 crores and Lease Liabilities – INR10.74
crores. Further, debt coverage indicator indicated by interest
coverage ratio stood weak at 0.26x in FY22 (0.19x in FY21) due to
insufficient operating profit generated by the company vis-àvis
high interest cost incurred. However, as the total debt of the
company has reduced significantly from INR109.23 crores as on March
31, 2021 to INR 15.63 crores as on March 31, 2022, interest cost is
expected to reduce significantly going forward.
* Continuous losses albeit stable total operating income: The total
operating income of the company during FY22 was steady at Rs 33.71
crores as against Rs 31.09 crores in FY21. Due to higher fixed
operating expenses coupled with lower turnover, the company
continued to incur net loss of Rs 13.83 crore in FY22 as against Rs
16.50 crore in FY21. However, as there is significant reduction in
total debt, the interest cost is expected to reduce significantly
going forward thereby resulting in reduction of losses and finally
turn profitable.
Liquidity: Adequate
The company has cash & liquid investments to the tune of INR7.43
crores as on March 31, 2022 that will be used for meeting debt
obligations and operational purposes. The company is also being
supported by Mandala Capital which after taking over entire
management is working out with various strategies for growth of the
business. Further the Mandala Capital in the past has supported
GKIPL by way of infusion of funds as and when required. The company
does not have any long-term debt except few vehicle loans. With no
major debt obligations, the company expects to report positive
gross cash accruals going forward which would be more than adequate
to meet the debt obligations. Nevertheless, the availability of
liquid cash provides additional cushion.
Gati Kausar India Private Ltd (GKIPL), formerly Gati Kausar India
Ltd(GKIL) was incorporated in the year 1984. GKIPL is primarily
engaged in providing refrigerated transportation services. The
company provides customized temperature sensitive services to
various industries/ businesses such as pharmaceuticals, retail,
agri-food (such as meat & poultry, diary, food & food products).
GKIPL owns a fleet of around 100 refrigerated trucks with the
capacity of maintaining temperature below negative 25-degree
Celsius. These vehicles are equipped with advanced climate control
systems, advanced IT solutions and infrastructure. The company also
has own warehouses at Dharuhera with 5460 pallet capacity, Delhi
with 160 pallet capacity and 10 leased warehouses with capacity of
more than 1000 pallets each at all the major cities of India
including Mumbai, Nagpur, Hyderabad, Chennai, Bangalore. GKIPL is
Food Safety and Standards Authority of India (FSSAI) certified and
follows procedures as per Hazard Analysis and Critical control
points (HACCP) for food safety and prevention of contamination.
GKIPL is the first cold chain company in India to be awarded ISO
9001:2008 certification. Initially, GL held 69.89% of the stake in
the then GKIL with Mandala Capital AG Limited holding 30% and the
remaining 0.11% of the stake was held by other individuals as on
March 31, 2021. However, on May 26, 2021, GL announced disposal of
its subsidiary, GKIL and the transaction involved transfer of
entire equity shares held by GL (i.e., 69.79%) in GKIL to Mandala
Capital AG Limited. With this aforementioned transfer, GKIL has
ceased to be the subsidiary of GL, from 14 July 2021. In September
2022, GKIL converted into a private company and changed its name to
GKIPL.
GORGEOUS SKIN: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Gorgeous Skin Private Limited
Amar Deep Jyoti Co-op. Housing Society
Flat No. 1, 1st Floor
Plot No. 537, Linking Road
Bandra West Mumbai
MH 400052
IN
Insolvency Commencement Date: November 11, 2022
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: May 10, 2023
(180 days from commencement)
Insolvency professional: Mr. Rajan Garg
Interim Resolution
Professional: Mr. Rajan Garg
Flat No. 202, Wing B
2nd Floor, Safal Twins
Block Punjabwadi
Sion Trombay Road
Deonar, Mumbai Suburban
Maharashtra 400088
E-mail: fcarajangarg@gmail.com
- and -
Suite No. 05, 8th Floor
207, Embassy Centre
Jamnalal Bajaj Marg
Nariman Point, Mumbai 400021
Maharashtra, India
E-mail: gorgeous.sipl@gmail.com
Last date for
submission of claims: November 25, 2022
GOYAL EDUCATIONAL: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Goyal
Educational & Welfare Society (GEWS) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 1.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 19,
2021, placed the rating(s) of GEWS under the 'issuer
non-cooperating' category as GEWS had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. GEWS
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated September 4, 2022, September 14, 2022, September
24, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Goyal Educational and Welfare Society (GEWS) was established on
July 22, 2008 under the Haryana Registration and Regulation
Societies Act, 2012 with an objective to provide education services
by establishing and operating various educational institutions.
Initially, the society was promoted by Mr. Mahender Goyal who is
the president of the society and carries out the day to day affairs
with required support from other key members. The society is
running three institutions under the brand name "Rawal
Institutions" (RI) which includes Rawal Institute of Engineering
and Technology (RIET), Rawal Institute of Management (RIM) and
Rawal College of Education (RCE) established in 2008 in a single
campus offering varied courses.
GTN TEXTILES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of GTN
Textiles Limited continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.43 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 58.30 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed rationale and key rating drivers
CARE Ratings Ltd. had vide its press release dated November 10,
2021 placed the ratings of GTN under the issuer non cooperating
category as it had failed to provide information for monitoring of
the rating. GTN continues to be non-cooperative despite repeated
requests for submission of information through e-mails and phone
calls dated September 26, 2022, October 6, 2022 and October 16,
2022.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which,
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 10, 2021 the following were
the rating strengths and weaknesses (updated for the information
available from stock exchange):
Key Rating Weaknesses
* Ongoing delays in debt servicing: During FY22, the company
reported net loss of INR14 crore on total income of INR83.5 crore.
On account of continuous losses over the years with inadequate cash
accruals, there have been ongoing delays in servicing of debt
obligations.
GTN Textiles Limited (GTL) is part of Kerala-based GTN-BKP (GTN-BK
Patodia) having its production facilities in the state of Kerala.
The primary business activity of GTL is production and sale of
cotton yarn. GTL had a capacity of 56,848 spindles which includes
34,896 compact spindles and 21,952 ring spinning as on March 31,
2018. The company produces fine and super fine counts of cotton
yarn in the range of 40s to 140s.
HERO WIRETEX: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Hero
Wiretex Limited (HWL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 35.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 15.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 22,
2021, placed the rating(s) of HWL under the 'issuer
non-cooperating' category as HWL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. HWL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 8, 2022, August 18, 2022, August 28,
2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Initially Hero Wiretex Limited (HWL) was incorporated in February
11, 1991 as SVR cables private limited (SVR) which is engaged in
manufacturing of Electrical Conductors, LT Aerial Bunched Cable
(LTAB)/XLPE Cables, Aluminum Conductors Steel Re-inforced (ASCR)
Conductors and Double Paper Covering (DPC) Wire. Later in 2004, the
name of SVR was changed to Hero Wiretex Private Limited. Further in
August 2014, Sri G. Mohan Rao took over the company. The company is
into trading of raw materials necessary for assembly and erection
of Transmission Towers. Apart from trading activity, the company is
manufacturing LTAB/XLPE Cables, Aluminum (AAC, AAAC, and ACSR)
Conductors and DPC Wire. The company is a registered vendor to the
Andhra Pradesh and Telangana Power Distribution companies for
supply of power cables and conductors. The company is having good
presence in Andhra Pradesh (A.P.), Telangana, Tamilnadu and
Orissa.
IL&FS FINANCIAL: ICRA Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
ICRA has retained the rating for the Commercial Paper Programme of
IL&FS Financial Services Limited (IFIN). The rating remains in the
'Issuer Not Cooperating' category and is denoted as '[ICRA]D;
ISSUER NOT COOPERATING'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Commercial 4,000.00 [ICRA]D ISSUER NOT COOPERATING;
paper programme Rating continues to remain
under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity to monitor
its performance. Despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA basis best available/dated/limited
information on the issuer's performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as it may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
http://www.icra.in.
IL&FS Financial Services Limited (IFIN) is a wholly-owned
subsidiary of Infrastructure Leasing and Financial Services Limited
(IL&FS). IFIN is registered as a non-banking financial company
(NBFC) and is the lending arm of the IL&FS Group. IL&FS is the
holding company of the IL&FS Group (302 entities). By way of an
order dated October 1, 2018, the National Company Law Tribunal
(NCLT) granted approval to the Government of India (GoI) to appoint
a new board of directors for the debt resolution of IL&FS and its
Group companies.
IL&FS SECURITIES: ICRA Keeps D Ratings in Not Cooperating
---------------------------------------------------------
ICRA has retained the rating for the short-term bank facilities of
IL&FS Securities Services Limited (ISSL). The rating remains in the
'Issuer Not Cooperating' category and is denoted as '[ICRA]D;
ISSUER NOT COOPERATING'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term 100.00 [ICRA]D; ISSUER NOT COOPERATING;
fund based- Continues to remain under the
bank lines 'Issuer Not Cooperating'
Category
Short-term 250.00 [ICRA]D; ISSUER NOT COOPERATING;
Non fund based- Continues to remain under the
bank lines 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity to monitor
its performance. Despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA basis best available/dated/limited
information on the issuer's performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as it may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
http://www.icra.in.
ISSL is engaged in a range of capital market related activities
such as depository, custodial, and professional clearing services.
Small brokerage houses avail its services to maintain a demat
account for their broking clients and to act as a professional
clearing member on their behalf. As a professional clearing member,
ISSL serves as an intermediary between the brokerage houses and the
exchange houses for maintaining adequate margin cover with the
exchange houses on behalf of the trading members.
INFRASTRUCTURE LEASING: ICRA Keeps D Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the rating for the long term Non-convertible
debenture programme, short term Commercial Paper Programme and
Long-term bank lines- term loans of Infrastructure Leasing &
Financial Services Limited (IL&FS). The ratings are denoted as
[ICRA]D; ISSUER NOT COOPERATING/[ICRA]D; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-convertible 5,225.00 [ICRA]D ISSUER NOT COOPERATING;
Debenture Rating continues to remain
Programme under 'Issuer Not Cooperating'
category
Commercial 2,500.00 [ICRA]D ISSUER NOT COOPERATING;
paper programme Rating continues to remain
under 'Issuer Not Cooperating'
category
Long-term 350.00 [ICRA]D ISSUER NOT COOPERATING;
bank lines– Rating continues to remain
Term loans under 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity to monitor
its performance. Despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA basis best available/dated/limited
information on the issuer's performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as it may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
http://www.icra.in.
IL&FS was incorporated in 1987 with the objective of promoting
infrastructure projects in the country. It was promoted by Central
Bank of India (CBI), Housing Development Finance Corporation
Limited (HDFC) and Unit Trust of India (now known as Specified
Undertaking of Unit Trust of India– SUUTI). While SUUTI has
largely exited (stake of 0.82% as on March 31, 2019), the
shareholding has broadened over the years with the participation of
many institutional shareholders. As on March 31, 2019, Life
Insurance Corporation of India (LIC) and ORIX Corporation Japan
were the largest shareholders in IL&FS with stakes of 25.34% and
23.54%, respectively, while Abu Dhabi Investment Authority (ADIA),
HDFC, CBI and State Bank of India (SBI) held a stake of 12.56%,
9.02%, 7.67% and 6.42%, respectively. Over the years, IL&FS' focus
has shifted steadily from project sponsorship to the role of
project advisory and project facilitator for the development and
implementation of projects. It acts as the main holding company of
the IL&FS Group with most business operations domiciled in separate
companies. The IL&FS Group companies are currently involved in
infrastructurerelated project sponsorship, development & advisory,
investment banking, corporate advisory, asset management and
advisory services in the environmental and social management
segment, with a presence across sectors like surface
transportation, urban infrastructure, energy (thermal and
renewable), education, maritime & ports, etc.
INKEL LIMITED: CARE Moves C Debt Rating to Not Cooperating
----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Inkel
Limited (Inkel) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating moved to
ISSUER NOT COOPERATING category
Short Term 85.00 CARE A4; ISSUER NOT
Bank Facilities COOPERATING; Rating moved to
ISSUER NOT COOPERATING category
Fixed Deposit 40.00 CARE C; Stable; ISSUER NOT
COOPERATING; Rating moved to
ISSUER NOT COOPERATING category
Detailed rationale and key rating drivers
CARE Ratings Ltd. has been seeking information from Inkel Limited
to monitor the rating(s) vide e-mail communications dated August 4,
2022, August 30, 2022, September 2, 2022 & November 4, 2022, among
others and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating. The rating on Inkel Limited bank
facilities and instruments will now be denoted as CARE C;
Stable/CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating continues to be tempered by volatility in revenues due
to project-based nature of its business, exposure to Joint
ventures/subsidiaries generating lower return on investments, weak
credit risk profile of subsidiaries with instances of delays in
debt servicing and risk associated with large sized HAM based road
project. The ratings of Inkel Ltd continue to factor in the
nonpayment of dues/guaranteed amount by Inkel ltd to the lenders on
invocation of Corporate Guarantee extended by it to the bank
facilities of Seguro-Inkel Consortium LLP (SICL).
The ratings continue to draw strength from Inkel's business
association with Government of Kerala (GOK) entities, diverse board
of directors supported by an experienced senior management,
potential for development of infrastructure facilities in the state
of Kerala and comfortable capital structure.
Detailed description of the key rating drivers
At the time of last rating on August 23, 2021, the following were
the rating strengths and weaknesses. (updated with FY22 financials
obtained from public sources).
Detailed description of the key rating drivers
Key rating weaknesses
* Volatility in revenue due to project-based nature of its
business: Since inception, Inkel was primarily engaged in
construction of Inkel Tower and Mallappuram Community Centre.
During FY15- FY16, Inkel towers contributed to major portion of
income. With Inkel forming new ventures and these ventures securing
new orders, Inkel's revenue stream witnessed a diversification.
Inkel has significant presence in project management consultancy
(PMC), facility management and solar division. However, it is to be
noted that income level is likely to remain volatile unless the
projects developed in PMC division are completed periodically and
new projects are being taken in PMC division. Also, regular inflow
of orders in solar division is also key to improve the revenue.
* Exposure to joint venture and associates which are generating
lower return on investments: Total investments and loans & advances
in JV/partnerships stood at INR118 crore translating to 60% of
networth as on March 31, 2022. However, these investments are
generating lower return on investments (ROI). During FY22, Inkel
reported interest income of INR1.49 crore, of which major portion
corresponds to interest income from advances extended to group
entities. However, Inkel is yet to reap any significant benefits
from these investments. In the medium term, investment in INKEL-EKK
Roads Private Limited alone is expected generate notable returns.
* Weak credit profile of subsidiaries and delays in debt servicing
by its subsidiaries: Inkel has four main subsidiaries for which
corporate guarantee has been provided which includes i) MIV
Logistics Pvt Ltd (MIV) ii) Inkel-EKK Roads Pvt ltd (Inkel-EKK)
iii) INKEL-KSIDC (INKID) and iv) Seguro Inkel Consortium LLP
(SICL). During FY20, SeguroInkel defaulted in their repayment
obligations. Lenders of Seguro-Inkel have invoked corporate
guarantee extended by Inkel Ltd to its bank facilities.
* Risk associated with large sized HAM based road project: National
Highway Authority of India (NHAI) on February 26, 2018 has awarded
the contract for six laning of 28.4 km stretch between Vengalam to
Ramanattukara By-pass road to KMC Constructions Ltd (KMC) based on
Hybrid Annuity Model (HAM). KMC has entered into a JV with Inkel
wherein 51% of the total shares is held by KMC and the remaining
49% of the total shares is held by Inkel for executing the project.
Investment by KMC in this project would be limited to INR5.1 crore
and rest of promoter contribution (Rs.264 crore) for the project
would be made by Inkel. However, there has been delay in
achievement of financial closure. Consequently, Inkel has planned
to exit the project. It is to be noted that Inkel has submitted a
performance guarantee amounting to INR85 crore to NHAI which
exposes the company to risk of BG invocation in case of any
unfavorable outcome.
Key rating strengths
* Association with Government of Kerala entities: Inkel was formed
as a PPP initiative for setting up infrastructure facilities to
address the requirements of industrialists and entrepreneurs in the
state of Kerala. Inkel has received support from GoK by way of
funding (in the form of share capital), director board membership,
tie-ups with government undertakings such as KINFRA and KSIDC and
also by way of allotment of land on long term lease basis through
these entities for developing the infrastructure. Further, Inkel
had been selected as nodal agency by GoK for conducting feasibility
studies on certain projects and implementation of certain projects
in the state. As on March 31, 2022, GoK holds 22.78% equity stake
in Inkel and its public sector undertakings, viz. Kerala Industrial
Infrastructure Development Corporation (KINFRA) & Kerala State
Industrial Development Corporation Limited (KSIDC) hold equity
stake of 3.37% each.
* Diverse board of directors: There are twelve directors on the
board of Inkel, of which three are representatives of GoK and the
rest of the members are from the business fraternity in the state
of Kerala. The government-nominated directors include Managing
Director, Chairman and a nominee director.
* Comfortable capital structure: Total debt outstanding as on March
31, 2022 increased to INR4.04 crore. The proceeds were used to
provide loan to Inkel Infrastructure Development Projects for
Calicut Expressway Road Project. Overall gearing stood comfortable
at 0.13x as on March 31, 2022 as against 0.12x as on March 31,
2021.
* Potential for infrastructure facilities in Kerala: The state of
Kerala holds significant potential for development of
infrastructure facilities especially for small-scale export-based
units, educational institutions, warehouses, service-based
industries. Most of the businesses are small-scale units which
require processing capacity, warehousing facility and office space.
With the initial cost of purchasing land/building cut down
significantly, the projects by Inkel may find interest among the
buyers in the small/medium scale businesses.
Liquidity: Stretched
The cash and bank balances as on 31st March 2022 INR7.71 crores.
The current ratios stood at 1.29x as on March 2022. Inkel does not
have any fund-based working capital borrowings/limit. Given weak
credit risk profile of its subsidiaries, any further increase in
support is likely to moderate the liquidity position of Inkel in
the medium term. Furthermore, development on the HAM project is
critical as any unfavorable outcome is likely to further stretch
the cashflow position of the company.
Incorporated in the year 2007, Inkel Limited (Inkel) is a public
private partnership initiative by Government of Kerala (GoK)
established with the objective of channelizing private capital and
professional expertise into large scale infrastructure projects
which includes setting up of industrial parks, special economic
zone, trade centers and construction of roads and bridges required
for various manufacturing and service-based industries in the
state. Inkel achieves its objectives by forming joint ventures with
various companies which has expertise in their respective fields
since the company does not have the technical expertise to bid for
certain Infrastructure projects. Apart from this, other major
divisions which contribute to Inkel's revenue are the project
management consultancy division (26% of income in FY20) and solar
division (10% of income in FY20).
KANDAGIRI SPINNING: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Kandagiri
Spinning Mills Limited (KSM) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 30.85 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 1.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Fixed Deposit 14.01 CARE D; ISSUER NOT COOPERATING
Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed rationale and key rating drivers
CARE Ratings Ltd. had vide its press release dated November 3, 2021
placed the ratings of KSM under the issuer non cooperating category
as the company has not paid the surveillance fees for the rating
exercise as agreed in its rating agreement. KSM continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated October
12, 2022.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which,
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 3, 2021 the following were
the rating strength and weakness (updated for the information
available from stock exchange).
Key Rating Weaknesses
* Weak financial performance: The operating income continues to be
weak at INR3.19 crore in FY22 as against INR2.54 crore in FY21. The
company reported operating income of INR0.47 crores till H1FY23.
Kandagiri Spinning Mills Ltd (KSML) is part of Salem (Tamil Nadu)
based "Sambandam Group" and was engaged in textile spinning with an
aggregate capacity of 27,296 spindles till March 31, 2019 spread
among two units which could produce around 25 Tons of Yarn per day.
However, during FY20, the company has sold the spinning plant and
machinery and ceased the yarn production activity and has let out
the immovable property for lease and the company receives the lease
rent receivables as its income.
KNISS LABORATORIES: CARE Lowers Rating on INR4.50cr LT Loan to D
----------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Kniss Laboratories Private Limited (KLPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B-; Stable
Long Term/ 3.50 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating moved to
Bank Facilities ISSUER NOT COOPERATING category
and Revised from CARE B-;
Stable/CARE A4
Short Term Bank 2.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 21,
2022, placed the rating(s) of KLPL under the 'issuer
non-cooperating' category as KLPL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. KLPL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated November 16, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the bank facilities of KLPL have been
revised on account of delays in debt servicing recognized from
publicly available information.
Kniss Laboratories Private Limited (KLPL) was established in 1989
and it was converted into a Private Limited Company on November 17,
1998. KLPL is engaged in manufacturing and marketing of allopathic
and ayurvedic formulations. The company procures its major raw
materials like Paracetamol and vitamins from local suppliers and
exports the same to various countries in Asia and Africa apart from
selling it domestically within India. The company markets its drugs
in the name of Kniss Laboratories Private Limited. The registered
office of the company is located at Ashok Nagar, Chennai and the
manufacturing unit is located at Gerugambakkam, Chennai.
MAHENDRAKUMAR JAIN: CARE Keeps C Debt Rating in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of
Mahendrakumar Jain And Others (MJO) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.80 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 9,
2021, placed the rating(s) of MJO under the 'issuer
non-cooperating' category as MJO had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. MJO
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 26, 2022, August 5, 2022, August 15, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Nelamangala Taluk (Karnataka) based Mahendrakumar Jain and Others
(MJO) is promoted by Mr. Mahendra Kumar Jain along with Mr. Mr.
Krishabh Gala, Mr. Kamal U and Mr. Manoj V Shah as joint owners for
the project of setting up two rural godown facilities with the
storage capacity of 55671 Metric Ton in area of 158702 sq. feet at
Bavikere Village, Nelamangala Taluk.
MECHATRONICS SYSTEMS: CARE Lowers Rating on INR30cr Loan to D
-------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Mechatronics Systems Private Limited (MSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 30.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B+; Stable
Short Term Bank 30.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 7,
2021, placed the rating(s) of MSPL under the 'issuer
non-cooperating' category as MSPL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. MSPL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 24, 2022, August 3, 2022, August 13, 2022,
November 16, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the bank facilities of MSPL have been
revised on account of delays in debt servicing recognized from
publicly available information i.e. FY21 audit reported available
from ROC Filings.
MSPL a Pune based ISO 9001:2008 Certified Company was incorporated
in 1991 as a partnership concern in the name and style of
Mechatronics. The firm was converted to Private Limited in 1996 and
its nomenclature changed to MSPL. The company is engaged in
comprehensive Turnkey, Technology driven, cost-effective, Real-time
Automation and Management solutions for Water Resources, Dams,
Canals, Water Treatment Plant, Pumping Stations, Lift Irrigation
Schemes and Water Supply Schemes has successfully completed various
projects in India and abroad. The company is spearheaded by Mr.
Ashok Karva a first generation entrepreneur.
NUTRIENT MARINE: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Nutrient
Marine Foods Limited (NMFL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 40.00 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 23,
2021, placed the rating(s) of NMFL under the 'issuer
non-cooperating' category as NMFL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. NMFL
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 10, 2022, August 19, 2022, August 29,
2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Nutrient Marine Foods Limited (NMFL) was incorporated in the year
2011, promoted by Shri G Rama Reddy, Shri G Rama Krishan Reddy and
Shri G Venkat Reddy. NMFL is a part of Reddy & Reddy group and also
has five other associate companies. NMFL started its business
operations from April, 2012 with FY13 being first full year of
operations. NMFL is engaged in the processing and exporting of
shrimps (Black Tiger and Vannamei) of different varieties like
Head-On, Head-less, Tail-on, Tail-off, De-veined etc. mainly to
China, Vietnam, Malaysia, Germany and UK. It has a
processing-cum-storage facility with a processing capacity of
30MTPD (metric tonnes per day) of shrimp, four plate freezers with
a freezing capacity of 15 MTPD and Individual Quick Freezer with a
freezing capacity of 10 MTPD and two flake ice machines with a
capacity of 30 tonnes per day and cold storage facilities with a
capacity of 600 MT for preserving processed sea food. The
processing facility has been taken on lease, close to aquaculture
zone in Bhimavaram.
PRAGATI TRANSMISSION: Ind-Ra Hikes Long-Term Issuer Rating to BB+
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Pragati
Transmission Private Limited's Long-Term Issuer Rating to 'IND BB+'
from 'IND BB (ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR85 mil. (increased from INR84 mil.) Fund-based facilities
Long-term rating upgraded; short-term rating affirmed with
IND BB+/Stable/ IND A4+ rating; and
-- INR179 mil. (reduced from INR180.58 mil.) Term loan due on
December 2031 upgraded with IND BB+/Stable rating.
The upgrade reflects the improvement in PTPL's scale of operations
and credit metrics in FY22.
Key Rating Drivers
PTPL's revenue increased by 47% yoy to INR448.48 million in FY22,
led by greater sales in the aerospace and industrial manufacturing
segments. The scale of operations continued to be small. The
company booked a revenue of INR269 million in 7MFY23. As on 8
November, 2022, PTPL had an orderbook of INR280 million, scheduled
to be executed in the next five months. Consequently, Ind-Ra
expects the revenue to rise further in FY23.
Furthermore, PTPL's credit metrics improved in FY22 owing to an
increase in the absolute EBITDA to INR111.72 million (FY21:
INR63.85 million). The gross interest coverage (operating
EBITDA/gross interest expense) improved to 8.33x in FY22 (FY21:
5.13x) and the net leverage (total adjusted net debt/operating
EBITDAR) improved to 2.88x (3.58x). PTPL plans to incur capex of
approximately INR62 million over FY23-FY24, which will be funded by
bank loans of INR34 million in FY23 and INR16 million in FY24.
However, Ind-Ra expects the credit metrics to improve in FY23 on
the back of scheduled debt repayments.
The ratings reflect LDPL's average EBITDA margins. The margin rose
to 24.91% in FY22 (FY21: 20.93%) owing to an increase in the number
of high-margin job work projects executed by the company during the
year. The ROCE was 16.4% in FY22 (FY21: 10.5%). Ind-Ra expects the
margins to remain stable in FY23.
Liquidity Indicator -Stretched: The average maximum utilization of
the fund-based limits was 87.26% in the 12 months ended September
2022. The net working capital cycle remained elongated but
improved to 238 days in FY22 (FY21: 293 days) due to a decrease in
the inventory days to 163 days (192 days) and a fall in the debtor
days to 124 days (182 days). The unencumbered cash and cash
equivalents stood at INR44.5 million at FYE22 (FYE21: INR24
million). The company has scheduled debt repayments of INR47.4
million in FY22 and INR52 million in FY24. PTPL does not have any
capital market exposure and relies on banks and financial
institutions to meet its funding requirements. It has bank limits
with a single bank. The cash flow from operations increased to
IN67.19 million in FY22 (FY21: INR41.4 million) due to increase in
the fund flow from operations to INR82.01 million (INR 44.14
Million).
The ratings are also constrained by customer concentration risk, as
the top eight customers accounted for 70.7% of PTPL’s revenue in
FY22.
The ratings are supported by the promoters' experience of nearly
two decades in the gears industry, leading to established
relationships with customers and suppliers. In FY22, PTPL derived
about 61% of its revenue from customers with which it has had
relationships for four-to-12 years.
Rating Sensitivities
Negative: A decline in the scale of operations, leading to a
deterioration in liquidity and credit metrics, with the net
leverage exceeding 3.5x, on a sustained basis, would lead to a
negative rating action.
Positive: Improvement in the scale of operations, leading to an
improvement in the liquidity position, while maintaining the credit
metrics, would lead to a positive rating action.
Company Profile
Established in 2006 by P.D. Kadam and Atul S Bhirangi, PTPL
manufactures and exports precision gears that are used in the
aerospace business, industrial gear boxes, power tools, and machine
tools and automobiles. The company also undertakes job work orders
for computerized numerical control gear grinder, hob sharpener, and
computerized numerical control gear tester.
RAJIV PETROCHEMICALS: Ind-Ra Assigns BB+ Term Loan Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Rajiv Petrochemicals Private Limited (RPPL):
-- INR390.00 mil. (increased from INR320.00 mil.) Fund-based
working capital limit affirmed with IND BB+/Stable rating;
-- INR300.00 mil. (increased from INR230.00 mil.) Non-fund-based
working capital limit affirmed with IND A4+ rating; and
-- INR60.00 mil. Term loan due on December 2026 assigned with IND
BB+/Stable rating.
Key Rating Drivers
RPPL's EBITDA margin remained modest at 4.18% in FY22 (FY21:
2.13%), due to a decline in the cost of traded materials to 90.94%
of its revenue (93.89%) and the trading nature of the business. The
return on capital employed stood at 11.7% in FY22 (FY21: 4.9%).
Ind-Ra expects its EBITDA margin to remain at similar level in
FY23. RPPL is engaged in the trading of poly vinyl chloride resins,
low-density polyethylene and high-density polyethylene polymers and
polyester films, whose prices are linked to the price of crude oil,
hence they are always prone to price volatility risk.
The ratings also factor in RPPL's modest credit metrics with the
gross interest coverage (operating EBITDA/gross interest expense)
improving to 2.38x in FY22 (FY21: 1.78x), as its EBITDA increased
to INR69.74 million (FY21: INR33.63 million), on account of higher
order execution. Its net leverage (adjusted net debt/operating
EBITDA) reduced to 2.29x in FY22 (FY21: 9.04x), due to a decline in
total debt to INR259.82 million (INR449.87 million). Ind-Ra expects
the credit metrics to improve in FY23, due to a likely rise in its
EBITDA coupled with a further reduction in its total debt.
RPPL's has a small scale of operations, with its revenue increasing
to INR1,666.83 million in FY22 (FY21: INR1,581.7 million), due to
an increase in the order execution. Ind-Ra expects the revenue to
remain at the similar level in FY23, due to sustained demand of
polymers.
Liquidity Indicator – Stretched: The net working capital cycle,
although remained elongated, reduced to 74 days in FY22 (FY21: 100
days), due to a reduction in the inventory holding period to 10
days (26 days) and receivable period to 66 days (111 days). RPPL's
average maximum utilization of the fund-based and the
non-fund-based limits was 32.64% and 69.32%, respectively, during
the 12 months ended October 2022. The cash flow from operations
deteriorated to negative INR43.15 million in FY22 (FY21: positive
INR89.24 million), due to an unfavorable change in working capital.
The company has repayment obligations of INR11.9 million for FY23.
The cash and cash equivalents stood at INR9.98 million at FYE22
(FYE21: INR145.88 million). The company does not have any capital
market exposure and relies on banks and financial institutions to
meet its funding requirements.
However, the ratings are supported by the promoter's decade-long
experience in the petrochemical trading business.
Rating Sensitivities
Negative: A decline in the scale of operations, along with a
deterioration in the credit metrics and the liquidity position
could be negative for the ratings.
Positive: A significant increase in the scale of operations along
with an improvement in the credit metrics with the interest
coverage remaining above 2.5x, on a sustained basis, could be
positive for the ratings.
Company Profile
Incorporated in October 1993 by Rajiv Vastupal Mehta, RPPL is part
of Gujarat-based Rajiv group. It is engaged in the trading of poly
vinyl chloride resins, low-density polyethylene and high-density
polyethylene polymers and polyester films.
RIO GLASS: CARE Reaffirms B+ Rating on INR3.11cr LT Loan
--------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of Rio
Glass Private Limited (RGPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 3.11 CARE B+; Stable Reaffirmed
Short Term Bank
Facilities 0.10 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of RGPL continues to
remain constrained on account of small scale of operations with low
profit margins, moderately leveraged capital structure and debt
coverage indicators during FY22 (Audited; refers to the period
April 1 to March 31). The ratings, further, remain constrained on
account of susceptibility of profit margins to volatility in raw
material prices and RGPL's stretched liquidity position. The
ratings, however, continue to derive strength from experienced
promoters.
Rating Sensitivities
Positive Factors - Factors that could lead to positive rating
action/upgrade:
* Increase in TOI by more than 25% with reporting PBILDT margin
above 12% on sustained basis
* Improvement in capital structure marked by overall gearing of 1.5
times or below along with improved debt coverage indicators marked
by TDGCA of 5 years or below
* Improved liquidity with reduction in operating cycle below 90
days on sustained basis
Negative Factors- Factors that could lead to negative rating
action/downgrade:
* De-growth in TOI by more than 20% with decline in PBILDT margin
to 7 % or below
* Any major debt funded capex putting pressure on profitability,
liquidity and solvency position of the company
Detailed description of the key rating drivers
Key Rating Weakness
* Small scale of operations with low profits margins: Scale of
operations marked by total operating income (TOI) of RGPL increased
by 28.50% however remained small at INR18.62 crore during FY22 as
against INR14.49 crore during FY21 due to higher demand of its
products. However, profitability margins deteriorated marked by
PBILDT margin of 9.03 % in FY22 as against 11.11 % during FY21 due
to increase in raw material cost along with increased employee cost
during FY22. However, PAT margin increased marginally and remained
low at 1.46% during FY22 as against 1.30% during FY21.
* Moderately leveraged capital structure and debt coverage
indicators: RGPL's capital structure continued to remain moderately
leveraged marked by an overall gearing of 2.25 times as on March
31, 2022 as against 2.28 times as on March 31, 2021. Debt coverage
indicators remained moderate as marked by total debt to GCA of 7.28
years as on March 31, 2022 as against 7.96 years as on March 31,
2021. Further, the interest coverage ratio also remained moderate
and in similar lines at 2.99 times during FY22 as against 2.81
times during FY21.
* Susceptibility of profit margins to volatility in raw material
price: Main raw material for RGPL is silica and price of silica is
changing with supply and demand. Because of it being main raw
material, changes in price of silica can have direct effect on
profitability of RGPL.
Key Rating Strength
* Experienced Promoters: RGPL is promoted by four directors namely
Mr. Dineshkumar Premjibhai Patel, Mr. Ketan Kishorbhai Nakrani, Mr.
Vijaykumar Sudhirbhai Patel and Mr. Dharmendra Danabhai Patel. All
the promoters hold on an average healthy experience of more than a
decade in same line of business. The directors jointly look after
overall operations of the company.
Liquidity: Stretched
Liquidity position remained stretched during FY22 as marked by
tight cash accruals against its repayment obligations, low cash and
bank balance on hand, elongated operating cycle and high
utilization of its working capital limit. Gross cash accruals
remained low at INR0.94 crore in FY22 against its repayment
obligation of INR0.79 crore for FY23. Further, its cash and bank
balance remained low at INR0.10 crore as on March 31, 2022 against
INR0.26 crore as on March 31, 2021. Average utilization of its
working capital limit remained almost full for past 12 months ended
October 31, 2022. The operating cycle also remained elongated
during FY22 at 124 days as against 136 days in FY21. RGPL had also
availed ad hoc facility of INR0.30 crore for a period of 30 days
starting from September 24, 2022 in the form of working capital
demand loan.
Rajkot (Gujarat)-based, Rio Glass Private Limited (RGPL) was
incorporated by Mr. Hardik Patel, Managing Director and other
directors in 2012. The company is engaged into processing of glass.
The product portfolio of the company includes toughened/tempered
safety glass, insulated glass units, heat strengthened glass,
laminated glass etc. The company has its processing unit at Rajkot.
The company sells its products under the brand name of 'RIO'.
S. S. OVERSEAS: CARE Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of S. S.
Overseas (SSO) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 20.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 5.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 11,
2021, placed the rating(s) of SSO under the 'issuer
non-cooperating' category as SSO had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. SSO
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 27, 2022, September 6, 2022, September
16, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Combined. The financial and business risk
profiles of S.S. Agro and S. S. Overseas have been combined as both
the entities (together referred to as 'S.S. Group') operate in the
same line of business, are promoted by the same promoter group,
have common management team and operational linkages.
S. S. Overseas (SSO) belongs to the S.S. Group, founded in 1990.
The group primarily comprises of three entities - SSO, S. S. Agro
and S. S. Timber Traders. Both SSO and SSA are engaged in the
processing of paddy and rice and also sell its by-products like
bardana, bran, husk, etc. Both SSO and SSA have their manufacturing
units located in Jalalabad, Punjab.
SAI TRADERS: CARE Keeps C Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sai Traders
(ST) continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 7,
2021, placed the rating(s) of ST under the 'issuer non-cooperating'
category as ST had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. ST continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
August 23, 2022, September 2, 2022, September 12, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Sai Traders (STR) was established in July 2012, as a partnership
firm and is currently being managed by Mr Satpal Garg and Mr Vinod
Kumar Garg, as its partners, sharing profit and loss equally. STR
is engaged in the business of trading of cotton bales, cotton
seeds, cottonseed cake at its facility located in Muktsar, Punjab.
SARJAY CHEMICALS: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sarjay
Chemicals Private Limited (SCPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 27,
2021, placed the rating(s) of SCPL under the 'issuer
non-cooperating' category as SCPL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. SCPL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 13, 2022, August 23, 2022, September 2,
2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Ahmedabad-based SCPL was established in December 2010 by its key
promoters; Mr. Harish Patel and Mr. Jay Patel to start
manufacturing activity of micro nutrients in a category of
inorganic chemicals mainly zinc sulphate and manganese sulphate at
Dahej in Bharuch district of Gujarat State. The unit is spread over
the area of 5,200 sq. meters with total capacity of 10,800 metric
tonnes per annum (MTPA) for both the products. SCPL completed a
Greenfield project during January 2016 at a total cost of INR11.10
crore which was funded through term loan of INR6.50 crore, equity
share capital of INR3 crore and unsecured loan of INR1.60 crore.
SCPL has commenced trial runs from end of January 2016. The
promoter of SCPL is also running another proprietorship firm namely
M/s Universal Chemicals (UC) in Ahmedabad since 1990. UC is engaged
in trading of inorganic chemicals, dyes and dyes chemicals and
agricultural commodities like grain, seeds, oil seeds and spices
etc. in domestic market and in international market in Pakistan,
Middle and Far East countries, Canada, USA etc.
SHORAPUR SOLAR: ICRA Lowers Rating on INR36.25cr Term Loan to B+
----------------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of
Shorapur Solar Power Limited (SSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 36.25 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating downgraded
Term Loan from [ICRA]BB (Stable) and
moved to the 'Issuer Not
Cooperating' category
Long Term- 8.75 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating downgraded
from [ICRA]BB (Stable) and
moved to the 'Issuer Not
Cooperating' category
Rationale
The rating downgrade is because of lack of adequate information
regarding SSPL performance and hence the uncertainty around its
credit risk. ICRA assesses whether the information available about
the entity is commensurate with its rating and reviews the same as
per its "Policy in respect of non-cooperation by a rated entity"
available at www.icra.in.
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
As part of its process and in accordance with its rating agreement
with Indian Shorapur Solar Power Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance,
but despite repeated requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, a rating view has
been taken on the entity based on the best available information.
SSPL was incorporated in May 2016 with the objective of setting up
a 10-MW solar power plant at Yalgi village, Shorapur taluk, Yadgir
district, Karnataka. The COD was achieved on February 23, 2018. The
company is promoted by the Karvy Group with Karvy Consultants Ltd
(KCL) holding 99.91% of the shareholding, while the rest is held by
KCL's promoters in their individual capacity. The total project
cost was INR64.66 crore which was funded by a debt of INR38.36
crore from Tata Cleantech and INR26.30 crore of promoter equity.
The total project cost increased to INR64.66 crore from the
estimated cost of INR56.27 crore. The EPC contract was executed by
Karvy Renewable Energy Projects Limited (KREPL) and included civil
works, module, inverter supply and other BOP materials and erection
and commissioning of the solar power plant.
SINGH TRANSPORTERS: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the Long-Term and Short-Term of Singh
Transporters in the 'Issuer Not Cooperating' category. The ratings
are denoted as [ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 8.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 7.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Short Term- 7.00 [ICRA]A4 ISSUER NOT
Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity to monitor
its performance. Despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA basis best available/dated/limited
information on the issuer's performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as it may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
http://www.icra.in.
Incorporated in 1980, Singh Transporters was initially promoted as
a proprietorship firm by Mr. Kartar Singh Kalra. In 1999, however,
the entity was converted into a partnership firm. The five
promoters/partners equally share the profits of the concern. Singh
Transporters is primarily involved in contract mining and handling
of materials for public-sector units. The entity also has a
lubricant-dealership business and petrol-pump operations to support
its primary business. The firm is headquartered in Bilaspur, with
branch offices within Chhattisgarh. As on March 31, 2017, Singh
Transporters had a fleet of 256 vehicles and 154 equipment
comprising loaders and fork lifters, excavators, drill machines,
and crushing units etc.
TRANSTEK INFOWAYS: ICRA Keeps B+ Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA has retained the Long-Term rating of Transtek Infoways Private
Limited in the 'Issuer Not Cooperating' category. The rating is
denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity to monitor
its performance. Despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA basis best available/dated/limited
information on the issuer's performance. Accordingly, the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as it may not
adequately reflect the credit risk profile of the entity. The
rating action has been taken in accordance with ICRA's policy in
respect of non-cooperation by a rated entity available at
http://www.icra.in.
ATC Logistics Private Limited (ATC) was promoted in 2009 by Mr.
Tutul Chowdhury, with the objective of providing thirdparty
logistics solutions. Prior to ATC Logistics Private Limited, Mr.
Tutul Chowdhury was operating through ATC India, a proprietorship
firm engaged in material handling and transportation for other
large logistics solutions providers. Currently, the company
operates out of a logistics facility located at Barasat, Kolkata
and has branches in Sikkim, Jharkhand, Bihar, Orissa, Assam,
Meghalaya, Mizoram, Tripura and Arunachal Pradesh to cater to the
requirements of the entire eastern and north eastern regions of the
country.
VARDHMAN ROLLER: CARE Lowers Rating on INR31.90cr LT Loan to D
--------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Vardhman Roller Flour Mills Private Limited (VRFMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 31.90 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and revised from
CARE C; Stable
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated August 3, 2022,
placed the rating(s) of VRFMPL under the 'issuer non-cooperating'
category as VRFMPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. VRFMPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
November 17, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of ongoing delays in debt
servicing as recognized from publicly available information i.e.
CIBIL filings as well as banker's feedback.
Vardhman Roller Flour Mills Private Limited (VRFMPL), originally
promoted by Mr. Ashok Kumar Jain was incorporated on Feb. 27, 1997.
Later on Mr. Rajesh Kumar Jain on March 03, 1997 & Mr. Manoj Kumar
Gupta on March 16, 2010 respectively were appointed as other
Directors of company. The company is engaged in manufacturing of
maida, suji, atta & bran and sells with branded name "Double
Kalash". It has two manufacturing facilities with one located at
Mohkampur Industrial Area and other at Faridpur, Bareilly.
WIND WORLD: CARE Hikes Rating on INR160.99cr LT Loan to B
---------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Wind World Wind Farms (Hindustan) Private Limited (WFHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 160.99 CARE B; Stable; Downgraded to
Facilities CARE D from CARE B; Stable and
simultaneously upgraded to
CARE B; Stable
Detailed Rationale & Key Rating Drivers
The ratings assigned to long term bank facilities of WFHPL are
downgraded to 'CARE D' and simultaneously upgraded to CARE B;
Stable. The rating downgrade factors in the delays in debt
servicing by WFHPL earlier during FY 2022, which has come to CARE's
notice recently from auditor's comments in the audited financial
statement of FY22. These delays, as mentioned in the auditor's
report, were due to the delay in receivables from the state
Discoms. The no-default-statements submitted by the company during
that time, however, did not indicate any irregularity in debt
servicing. The simultaneous upgrade of the ratings to 'CARE B;
Stable' factor in the regularisation of debt servicing by the
company during the current year i.e. from April 1, 2022 to November
11, 2022 along with maintenance of DSRA for 2 quarters of interest
and principal payment obligations. The ratings are constrained with
high counter party risk coupled with delay in receivables. The
ratings also factor in experienced promoters in wind power
generation projects, firm off-take arrangement for entire
operational capacity through long term PPAs and satisfactory
operational performance during FY22 and 5MFY23.
Rating Sensitivities
Positive Factors
* Decrease in receivable days below 30 days on sustained manner and
increase in plant load factor above 15% on sustained basis.
Negative Factors
* Delay in collection of receivables from counter party more than
150 days.
Detailed description of the key rating drivers
Key Rating Weaknesses
* High counter party risk resulting in weak financial risk profile
of the company: WFHPL continues to expose to high counter party
risk as entire installed capacity is sold to state Discoms having
relatively weak financial risk profile. The company witnesses delay
in realization of receivables from Rajasthan and Karnataka Discoms
leading to weakening of financial risk profile of the company. In
FY22 and 5MFY23, for Karnataka Discom, payments from Discom were
with delay of around 3-5 months after the due date. For Rajasthan
Discom, the company has PPA with Jaipur Vidyut Vitran Nigam Limited
and Ajmer Vidyut Vitran Nigam Limited for the power generated from
Rajasthan wind power plant. Payments from both the DISCOMs are
usually received with a delay of around 3-4 months after the due
date. However, for H2FY22 and 5MFY23, the gap between due date and
payment from both DISCOMs decreased to 1-3 months.
* Dependence on seasonal wind patterns: Wind farms are exposed to
inherent risk of weather fluctuations leading to variations in the
wind patterns and velocity which affects the Plant Load Factor
(PLF). Generally, the wind farms enjoy higher PLF during May –
October (monsoon period) and lower PLFs in the remaining months of
the year. TN as a state has witnessed unprecedented cyclones and
floods in nearby state over past two years which shortened the wind
season in the last 2 years thereby affecting the PLF and the power
generation levels across all wind firms over the last 2 years.
Key Rating Strengths
* Experienced Promoters in wind power generation projects: Wind
World Wind Farms Hindustan Private Limited (WFHPL) is a Wind World
India Limited (WWIL) group company. As on March 31, 2022, WWIL
holds 51% shares in WWFHL and balance shares are held by Enercon
GmbH (ultimate holding company). Mr. Yogesh Mehra and Mr. Ajay
Mehra are also the founders of WWIL (formerly known as Enercon
India Limited), one of the largest players in the wind power
industry. WWIL has expertise in wind power, has 5 plants in Daman
for manufacturing of blades and wind turbine generator with
manufacturing capacity of 1000 WECs equivalent to 800 MW p.a. and
three concrete tower manufacturing plants in Gujarat, Karnataka and
Tamil Nadu, having annual installed capacity of 1200 towers p.a.
Enercon GmbH is one of the leading manufacturers for WECs globally.
WWIL's wind farms today straddle seven high wind potential states
Karnataka, Maharashtra, Tamil Nadu, Rajasthan, Gujarat, Madhya
Pradesh and Andhra Pradesh, spread across 3,000 kms of India. WWIL
is currently undergoing an insolvency resolution process.
* Firm off-take arrangement for entire operational capacity through
long term PPAs: WFHPL has long term Power Purchase Agreements for
entire operational capacity for period of 20 years (i.e. till
FY2026) with DISCOMs in state of Karnataka and Rajasthan. In
Karnataka, PPA is with Bangalore Electricity Supply Company Limited
[BESCL] at tariff of INR 3.40 per unit for installed capacity of
68.80 MW located at Tumkur district. In Rajasthan, PPA is with
Jaipur Vidyut Vitran Nigam Limited [JVVN] at tariff of INR 3.79 per
unit for 28.80 MW and Ajmer Vidyut Vitran Nigam Limited [AVVN] at
tariff of INR 3.79 per unit for 31.20 MW installed capacity located
at Jaisalmer District. As per the terms of the PPA, the payments
are made on monthly basis.
* Satisfactory operational performance during FY22 and 5MFY23: On
the operational front all wind farms i.e. 68.8 MW plant consisting
of 86 WEC at Karnataka and 60 MW power plant consisting of 75 WEC
at Rajasthan have a reasonable operational track record of more
than 10 years. Grid Availability of the plants has been above 95%
for both the plants indicating the reliability of the wind turbine
which means the times the machines and the grids were available for
most part of the year to generate electricity. The annualized unit
generation (units) for FY22 is 91.29 million units with average PLF
of 15.32% from 86 WEC in Karnataka and 82.78 million units with
average PLF of 15.93% from 75 WEC in Rajasthan.
WFHPL has been benefitting from favourable climate conditions and
wind patterns during FY22 and H1FY23. However, WFHPL's PLF
moderated and stood at 20.26% for H1FY23 as against PLF of 22.86%
in H1FY22. The total unit generation for H1FY23 is 118.94 units
(H1FY22: 126.94 units) corresponding to total billed amount of
INR42.67 crore (H1FY22: INR45.53 crore).
Liquidity: Stretched
The company maintains DSRA of INR27.83 crore in form of Fixed
Deposits with the lender as well as cash balance of INR3.14 crore
as on November 16, 2022. The company has repaid INR16.98 crore till
September 30, 2022 out of its scheduled repayments of INR35.99
crore for FY23. However, the company faces challenges in
realization of payment from off-takers, leading to cash-flow
mismatch and stretched liquidity position
Wind World Wind Farms Hindustan Private Limited (WFHPL) is a Wind
World (India) Limited (WWIL) group company. As on March 31, 2022,
WWIL holds 51% shares in WWFHL, and balance shares are held by
Enercon GmbH (ultimate holding company). Mr. Yogesh Mehra and Mr.
Ajay Mehra are also the founders of WWIL (formerly known as Enercon
India Limited), one of the largest players in the wind power
industry. WWIL has expertise in wind power, has 5 plants in Daman
for manufacturing of blades and wind turbine generator with
manufacturing capacity of 1000 Wind Energy Converters (WECs)
equivalent to 800 MW p.a. and three concrete tower manufacturing
plants in Gujarat, Karnataka and Tamil Nadu, having annual
installed capacity of 1200 towers p.a. WFHPL is an Independent
Power Producer (IPP) having wind farms in Karnataka and Rajasthan
with total installed capacity of 128.8 MW, consisting of 161 WECs.
WECs are manufactured, installed and maintained by WWIL.
=========
J A P A N
=========
JAPAN AIRLINES: Egan-Jones Retains CCC+ Sr. Unsecured Debt Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on November 17, 2022, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Japan Airlines Co. EJR also maintained its 'B'
rating on commercial paper issued by the Company.
Headquartered in Shinagawa City, Tokyo, Japan, Japan Airlines Co.
Ltd. provides air transportation services.
KOBE STEEL: Egan-Jones Retains B+ Sr. Unsecured Debt Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on November 16, 2022, retained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Kobe Steel, Ltd.
Headquartered in Kobe, Hyogo, Japan, Kobe Steel, Ltd. is a supplier
of aluminum and copper product including core products.
MARUI GROUP: Egan-Jones Retains BB Sr. Unsecured Debt Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company on November 18, 2022, retained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Marui Group Co.,Ltd.
Headquartered in Tokyo, Japan, Marui Group Co.,Ltd. provides
retailing and credit card services.
RICOH CO: Egan-Jones Retains BB+ Sr. Unsecured Debt Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on November 16, 2022, retained its BB+
foreign currency and local currency senior unsecured ratings on
debt issued Ricoh Co Ltd.
Headquartered in Ota City, Tokyo, Japan, Ricoh Company, Ltd.
manufactures and markets office automation equipment, electronic
devices, and photographic instruments.
UNITIKA LTD: Egan-Jones Retains CCC+ Sr. Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on November 16, 2022, retained its
'CCC+' foreign currency senior unsecured ratings on debt issued by
UNITIKA LTD. EJR also retained its 'C' rating on commercial paper
issued by the Company.
Headquartered in Osaka, Osaka, Japan, UNITIKA LTD manufactures and
sells synthetic fibers and textile products used as apparel and
industrial materials.
=====================
N E W Z E A L A N D
=====================
B & M SECURITY: Creditors' Proofs of Debt Due on Jan. 18
--------------------------------------------------------
Creditors of B & M Security Limited and Digital Cloud 2017 Limited
are required to file their proofs of debt by Jan. 18, 2023, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on Nov. 24, 2022.
The company's liquidators are:
Paul Manning
Jessica Jane Kellow
BDO Wellington
Level 1, 50 Customhouse Quay
Wellington 6011
DDL HOMES: Owed NZD18MM to 300 Creditors, Liquidators' Report Shows
-------------------------------------------------------------------
Nick Krause at Times Online reports that the company behind a
massive development on Ormiston Road called in liquidators citing
related party companies and their debt of NZD18 million and their
failure.
In the first report to creditors and shareholders released
recently, insolvency practitioners Reynolds & Associates DDL Homes
Central Limited said the company was incorporated in October 2018.
It was a civil contracting company undertaking civil contracting
work for related parties, in particular, development companies DDL
Homes Ormiston Limited and DDL Homes Ormiston 2020 Limited, both of
which are in receivership and liquidation.
According to Times Online, director Baljit Kaur Dheil, whose
address is recorded as Flat Bush according to the NZ Companies
office, explained to the liquidators that the causes of the company
becoming insolvent included the DDL Homes Ormiston Limited and DDL
Homes Ormiston 2020 Limited (the related parties) being placed in
receivership and liquidation.
"The company is not able to continue to trade as a result of the
failure of the related parties," the report said.
"The related parties are indebted to the company in the amount of
approximately NZD18 million for construction work undertaken by the
company and the contractors engaged by the company on the
respective development sites."
In a statement of affairs in the report, as at Sept. 30, 2022,
creditors - both preferential and unsecured non-preferential
creditors - are owed NZD1.06 million and NZD4.06 million
respectively, Times Online relays.
There are 300 creditors in total named in the report.
Times Online relates that the breakdown showed that preferential
creditors include employee claims of NZD161,000 and Inland Revenue
GST of NZD900,000.
Joint liquidators Grant Reynolds and Pritesh Patel said it is not
practical at this stage to estimate the time of completion for this
liquidation, Times Online relays.
They also called for any unsecured creditors who had not yet
completed the unsecured creditors claim form to file it with
supporting documentation with the liquidators as soon as possible,
Times Online adds.
DJF FOODSTORE: Khov Jones Limited Appointed as Administrators
-------------------------------------------------------------
Steven Khov and Kieran Jones on Nov. 23, 2022, were appointed as
administrators of DJF Foodstore Limited and DJF Foodstore 2
Limited.
The administrators may be reached at:
Khov Jones Limited
PO Box 302261
North Harbour
Auckland 0751
EPSOM CENTRAL: McGrathNicol Appointed as Receivers and Managers
---------------------------------------------------------------
Andrew Grenfell and Conor McElhinney on Nov. 28, 2022, were
appointed as receivers and managers of Epsom Central Apartments
LP.
The administrators may be reached at:
McGrathNicol
Level 17, 41 Shortland Street
Auckland
GRASSLAND FARM: Court to Hear Wind-Up Petition on Dec. 8
--------------------------------------------------------
A petition to wind up the operations of Grassland Farm Limited will
be heard before the High Court at Christchurch on Dec. 8, 2022, at
10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Sept. 23, 2022.
The Petitioner's solicitor is:
Gabrielle McGillivray
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
PATOLA LIMTED: Creditors' Proofs of Debt Due on Jan. 13
-------------------------------------------------------
Creditors of Patola Limted are required to file their proofs of
debt by Jan. 13, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Nov. 23, 2022.
The company's liquidators are:
Garry Whimp
Blacklock Rose Limited
PO Box 6709
Victoria Street West
Auckland 1142
=================
S I N G A P O R E
=================
CAPRICE HOLDINGS: Creditors' Proofs of Debt Due on Dec. 31
----------------------------------------------------------
Creditors of Caprice Holdings Pte Ltd are required to file their
proofs of debt by Dec. 31, 2022, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Nov. 22, 2022.
The company's liquidators are:
Najeeb Assan
Zalinah Samade
M/s IP Consultants Pte. Ltd.
80 Robinson Road #15-02
Singapore 068898
CHS ENGINEERING: Members' Final Meeting Set for Dec. 30
-------------------------------------------------------
Members of CHS Engineering Services Pte Ltd will hold their final
general meeting on Dec. 30, 2022, at 10:00 a.m., at 133 Cecil
Street #15-02 Keck Seng Tower in Singapore.
At the meeting, Colin Harold Smith, the company's liquidators, will
give a report on the company's wind-up proceedings and property
disposal.
DERMA-RX INT'L: Final Meeting Scheduled for Dec. 30
---------------------------------------------------
Members and creditors of Derma-Rx International Aesthetics Pte Ltd
will hold their final meeting on Dec. 30, 2022, at 11:00 a.m., via
Zoom meeting.
At the meeting, Seah Chee Wei, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
DRUMOND INT'L: Final Meeting Scheduled for Dec. 30
--------------------------------------------------
Members and creditors of Drumond International Pte. Ltd. will hold
their final meeting on Dec. 30, 2022, at 3:00 p.m., via video
conferencing via Zoom.
At the meeting, Farooq Ahmad Mann, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
LIPPO MALLS: Fitch Lowers LongTerm IDR to 'B-', Outlook Negative
----------------------------------------------------------------
Fitch Ratings has downgraded Lippo Malls Indonesia Retail Trust's
(LMIRT) Long-Term Issuer Default Rating (IDR) to 'B-', from 'B'.
The Outlook is Negative. The agency has also downgraded the rating
on LMIRT's senior unsecured notes due 2024 and 2026 to 'B-', from
'B'; with the Recovery Rating remaining at 'RR4'. The notes are
issued by its wholly owned subsidiary, LMIRT Capital Pte. Ltd, and
are guaranteed by Perpetual (Asia) Limited, in its capacity as
trustee of LMIRT.
The downgrade and Negative Outlook reflect rising refinancing risk.
Two-thirds of LMIRT's debt, including USD250 million of senior
unsecured notes, will mature in the next 18-20 months, for which
the trust will need external financing. LMIRT has demonstrated its
ability to tap banks and capital markets even during the height of
Covid-19 pandemic, but execution risks have increased significantly
as capital-market conditions have turned unfavourable.
Fitch also expects LMIRT's funds from operation (FFO) fixed-charge
cover, which includes the coupons on its perpetual securities, to
fall to 1.0x in the next 12-18 months, as a result of the trust's
high exposure to rising interest rates, while the recovery in the
REIT's operating cashflows may be pressured further if the
Indonesian rupiah continues to depreciate.
KEY RATING DRIVERS
Upcoming Refinancing Hurdle: LMIRT has a SGD135 million bank loan
due in November 2023, SGD82.5 million of bank loans due in January
2024, and a USD250 million medium-term note due in June 2024. Fitch
expects the trust to be able to refinance its USD135 million bank
loan in the next six months, as Fitch believes its access to bank
markets is sufficient. Refinancing risk for the 2024 notes,
however, has increased, as slowing global growth, rising inflation
and higher interest rates have weakened investor sentiment for
emerging-market debt.
Thin Fixed-Charge Coverage: Fitch expects rising interest rates to
increase LMIRT's interest payments to SGD60 million in 2022 and
SGD72 million in 2023, from SGD55million in 2021. 57.8% of LMIRT's
outstanding borrowings are on floating rates. Fitch has factored in
a benchmark interest rate of around 400bp in 2023, which is in line
with its expectations for US interest rates.
Fitch also forecasts LMIRT's annual perpetual securities' coupon to
rise to nearly SGD21 million in 2023 from SGD17 million in 2022
once the coupon rate on the SGD120 million perpetual securities is
reset to the current floating-rate benchmark plus the fixed initial
spread on its first call date of 19 December 2022. LMIRT can opt
not to pay the coupon on a non-cumulative basis under the terms of
the securities, but this will provide it with only limited
additional headroom to manage its cash flows.
High Foreign-Exchange Risk: Currency risk is high as LMIRT's debt
is denominated in US dollars or Singapore dollars, while revenues
are generated solely in rupiah, which has depreciated by nearly 10%
in the last two months. The rupiah's depreciation will reduce the
value of cash flows and assets in Singapore dollar terms,
pressuring interest coverage and the loan-to-value ratio (LTV).
LMIRT has hedged around 60% of the notional value of its rupiah
cash flows for 2023 using option contracts, but this only provides
partial protection against a further decline in the exchange rate.
Slow Operational Recovery: Fitch forecasts net property income
(NPI) to reach SGD131 million in 2022 and SGD137 million in 2023,
supported by gradual improvement in the occupancy rate to 81% in
2022 and 84% in 2023. Fitch expects occupancy to stabilise, but
remain below pre-pandemic levels of over 90% for the next two
years. This is mainly due to structural weakening in occupancy
post-pandemic in several malls and redevelopment activities in two
malls. Fitch has also assumed that stronger rents from the
reduction of rent rebates to tenants will be partly offset by
rupiah depreciation.
Limited Regulatory Leverage Headroom: LMIRT's regulatory leverage
ratio, or debt/total assets, rose to 43.7% by 30 September 2022
from 42.5% at end-2021, leaving little room under the regulatory
ceiling of 45%. Fitch expects debt/total assets to rise above 45%
in the next 12 months as the portfolio's value may be pressured by
further weakening of the rupiah, or a decline in the value of malls
with land titles under the Build, Operate, Transfer scheme. While
it will not be considered a breach of the regulator's guidelines,
LMIRT would be unable to draw additional debt to support its
operations.
Limited Sponsor Influence: Fitch rates LMIRT on a standalone basis
due to robust regulatory ringfencing from PT Lippo Karawaci TBK
(LPKR, B-/Stable). LPKR owns 100% of the REIT's manager, although
the Singapore Securities and Future Act prevents LPKR from holding
a majority representation on the REIT manager's board. In addition,
the sponsor does not control LMIRT as it holds only a 47% interest.
As a Singapore REIT, LMIRT is also subject to restrictions on
gearing ratios and development activities, and requires minority
shareholders to approve related-party transactions.
Perpetual Securities Treated as Equity: Fitch treats LMIRT's SGD260
million in perpetual securities, issued in 2016 and 2017, as 100%
equity due to strong going-concern and gone-concern loss-absorption
features. This also factors in LMIRT's intention to maintain the
securities as a permanent part of its capital structure. The trust
did not call the SGD140 million securities callable in September
2021 amid weak market sentiment, and they will also not call the
SGD120 million securities callable in December 2022.
DERIVATION SUMMARY
PT Pakuwon Jati Tbk (PWON, BB/Stable) is rated multiple notches
higher than LMIRT due to its stronger investment-property
portfolio, which has larger and better-quality shopping malls
located in mixed developments, supporting stronger occupancy. This,
together with PWON's stronger financial profile, which stems from
its conservative approach to expansion and property development,
more than offsets the risks stemming from its development-property
portfolio. PWON's debt profile is mostly fixed-rate and is
therefore resilient in the current rising interest-rate
environment.
LMIRT is rated one notch below Ronesans Gayrimenkul Yatirim A.S.
(RGY; B/Negative), a Turkish property company with 12 destination
shopping centres across seven of Turkey's largest cities. RGY has a
smaller and less-diversified portfolio than LMIRT, but stronger
profitability with a higher EBITDA margin. RGY's operation has
recovered faster than LMIRT's after the pandemic, with much higher
occupancy of 97% in 1H22. While RGY's Negative Outlook reflects
high refinancing risk for its USD300 million bond maturing in April
2023, it has positioned itself to manage the refinancing by
purchasing 30% of the bonds, while related parties hold another 50%
and the company has sufficient cash to repay the remaining 20%. In
comparison, LMIRT has about SGD580 million debt that it has to
refinance in the next 18-20 months.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Gradual recovery of the occupancy rate resulting in 2022 NPI
(including Puri) of SGD131 million and 2023 NPI (including Puri) of
SGD137 million
- Dividend payout of SGD24 million a year in 2022 and 2023
- Annual capex of SGD15 million-18 million
- Large scale, nation-wide lockdown does not recur
KEY RECOVERY RATING ASSUMPTIONS
- Fitch assumes LMIRT will be liquidated in a bankruptcy than
continue as a going concern, as Fitch believes creditors are likely
to maximise recoveries by selling the investment properties.
- Fitch calculates a liquidation value under a distressed scenario
of SGD1.35 billion as of end-September 2022.
- Fitch uses stressed capitalisation values to arrive at the
distressed valuation for LMIRT's investment properties. Fitch uses
a 10% capitalisation rate as a reference, being the average of
capitalisation rates from recent divestments and acquisitions, and
apply this to its 2022 NPI estimate.
- The estimate also reflects its assessment of the value of trade
receivables under a liquidation scenario, with a 75% advance rate.
Fitch believes a 25% discount is sufficient to cover potential bad
debt on account of the pandemic. Although LMIRT's provision for bad
debt has increased significantly during the pandemic, Fitch
believes its collection is improving with easing movement
restrictions.
- These assumptions result in a 'RR1' Recovery Rate for the
outstanding senior unsecured bonds. Nevertheless, Fitch rates the
senior unsecured bonds at 'B-' with a Recovery Rating of 'RR4',
because, although LMIRT is incorporated in Singapore, it derives
its entire economic value from assets located in Indonesia. Under
its Country-Specific Treatment of Recovery Ratings Criteria,
Indonesia falls into Group D of creditor friendliness, and
instrument ratings of issuers with assets in this group are subject
to a soft cap at the issuer's IDR and Recovery Rating of 'RR4'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- The Outlook may be revised to Stable if LMIRT successfully
refinances its bank loans due in the next 18 months and the US
dollar notes due in June 2024.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Weakening liquidity, evident from an inability to make meaningful
progress in refinancing the bank loans and US dollar notes in a
timely manner.
LIQUIDITY AND DEBT STRUCTURE
High Refinancing Risk: LMIRT had SGD106.7 million of cash balance
at 30 September 2022, which will be sufficient to cover negative
free cashflows of SGD50 million in the 12 months to 30 September
2023 and a SGD7 million revolver due in August 2023. Fitch expects
the company to tap external financing to repay its SGD217.5 million
of aggregate term loans maturing in November 2023 and January 2024
and the USD250 million of notes due in June 2024, as Fitch does not
expect the company to have sufficient internal liquidity. LMIRT's
has a track record of accessing banks and capital markets even
during the pandemic, and a pool of unencumbered assets. However,
capital-market sentiment for emerging-market high-yield issuances
has deteriorated and the trust may therefore face challenges in
repaying its debt.
LMIRT breached the interest coverage covenant of 2.5x on its term
loans at end-December 2021, and has obtained waivers up to
end-2022. Fitch expects the trust to comply with the banks'
requirement of minimum interest coverage of 1.5x during the waiver
period. Fitch does not forecast LMIRT's interest coverage covenant
to improve to more than 2.5x in the next two years and therefore
believe trust will need to seek rolling waivers from lenders.
ISSUER PROFILE
LMIRT is a Singapore-listed REIT, with a portfolio of 22 shopping
malls and seven retail spaces in Indonesia, valued at SGD1.8
billion as of end-September 2022.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Lippo Malls
Indonesia Retail
Trust LT IDR B- Downgrade B
LMIRT Capital
Pte. Ltd.
senior
unsecured LT B- Downgrade RR4 B
SINGAPORE AIRLINES: Ega-Jones Retains BB- Unsecured Debt Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on November 16, 2022, maintained its
'BB-' foreign currency and local currency senior unsecured ratings
on debt issued by Singapore Airlines Limited.
Headquartered in Singapore, Singapore Airlines Limited provides air
transportation, engineering, pilot training, air charter, and tour
wholesaling services.
TONG TIEN: Creditors' Meetings Set for Dec. 16
----------------------------------------------
Tong Tien See Construction Pte Ltd, which is in liquidation, will
hold a meeting for its creditors on Dec. 16, 2022, at 3:00 p.m.,
via electronic means.
Agenda of the meeting includes:
a. to seek approval for the sum of SGD92,692.34 to be paid to
the Liquidator for the Provision and Usage of Storage
Charges, and accordingly, for the creditors to agree for
payment to unsecured creditors a lower dividend rate of
SGD0.05525 per dollar of admitted amount of claim; and
b. to consider any other matter.
The liquidator can be reached at:
Yin Kum Choy
c/o MIRAI Consulting SG Pte. Ltd.
120 Lower Delta Road
#09-12 Cendex Centre
Singapore 169208
VSN TRADING: Court to Hear Wind-Up Petition on Dec. 9
-----------------------------------------------------
A petition to wind up the operations of VSN Trading Pte Ltd will be
heard before the High Court of Singapore on Dec. 9, 2022, at 10:00
a.m.
Incomlend Pte. Ltd. filed the petition against the company on Nov.
14, 2022.
The Petitioner's solicitors are:
Drew & Napier LLC
10 Collyer Quay
#10-01 Ocean Financial Centre
Singapore 049315
=====================
S O U T H K O R E A
=====================
ASIANA AIRLINES: UK Antitrust Expected to Approve Korean Air Deal
-----------------------------------------------------------------
The Korea Times reports that the U.K antitrust authority is
expected to accept Korean Air's proposed corrections concerning the
acquisition of its domestic rival Asiana Airlines, moving the
high-profile takeover one step closer to reality, according to
industry officials on Nov. 29.
The Korea Times relates that the U.K. Competition and Markets
Authority (CMA) said Nov. 28 that it is considering the
undertakings regarding competition concerns over the buyout of
Asiana Airlines by Korean Air.
"Undertakings offered by Korean Air on Nov. 21 might be accepted to
remedy the substantial lessening of competition," the CMA said.
It had previously decided to postpone the decision, saying that
Korean Air and Asiana Airlines are the only two airlines operating
between Korea and London. At the same time, Korean Air was notified
to submit corrective measures by Nov. 21.
"The CMA announced on Nov. 28 (local time) that it accepted in
principle the voluntary correction proposal submitted by the
company. Accordingly, the competition authorities will go through
the process of deciding whether to approve or not after taking into
consideration the market's opinion on the voluntary correction,"
the report quotes a Korean Air official as saying.
"We are optimistic about their decision, and plan to faithfully
cooperate for the remaining period to ensure that the British
competition authority's business combination review is completed as
soon as possible."
The Korea Times says the CMA will make a final decision on the deal
after collecting market opinions.
"Approval of the acquisition is more possible now as the British
competition authority said it will accept Korean Air's corrective
measures and could have a positive impact on the remaining
countries' decisions," an industry official familiar with the
matter said.
According to the report, the U.K.'s judgment is expected to
positively impact the screening results of other countries,
including the U.S. On Nov. 15, the U.S. Department of Justice
announced its position that it would "take more time to review"
Korean Air's acquisition of Asiana Airlines.
At that time, the U.S. competition authorities also judged that the
deal still has a high possibility of monopoly concerns.
Korean Air can only complete its takeover of Asiana Airlines after
obtaining approval from 14 major countries and blocs. Currently,
the deal has been approved by nine, the report notes.
The five undecided entities include the U.K. (a voluntary reporting
country), the U.S., the European Union, Japan and China, which are
required to review the proposed acquisition. If the competition
authority of any one country disapproves of the deal, it may be
halted, The Korea Times adds.
About Asiana Airlines
Headquartered in Osoe-Dong Kangseo-Gu, South Korea, Asiana Airlines
Incorporated is engaged in air transportation, engineering,
construction, facilities, electricity, ground handling, catering,
communication, logo products and e-business. Asiana Airlines is a
unit of the Kumho Asiana Group, a South Korean conglomerate whose
business portfolio includes tire manufacturing and chemical
production.
State lenders Korea Development Bank and the Export-Import Bank of
Korea planned to inject a combined KRW1.7 trillion into Asiana to
help the airline stay afloat. In self-help measures, Asiana has
had all of its 10,500 employees take unpaid leave for 15 days a
month since April 2020 until business circumstances normalize,
Yonhap noted. Asiana's executives have also agreed to forgo 60% of
their wages, though no specific time frame was given for how long
the pay cuts will remain in effect.
In November 2020, Korean Air said it will acquire Asiana Airlines
in a deal valued at KRW1.8 trillion that could create the world's
10th-biggest airline by fleets, Yonhap said.
LOTTE GROUP: Credit Rating Hit by Cash-Strapped Construction Unit
-----------------------------------------------------------------
The Korea Times reports that a persistent liquidity crunch at Lotte
Group's construction unit prompted Korea's fifth-largest
conglomerate to pour over KRW1 trillion (US$750 million) into Lotte
E&C over the past month, despite a worsening credit outlook for
other affiliates.
In addition to fundraising from the group's affiliates and loans
from banks, Lotte Group Chairman Shin Dong-bin's personal assets
were even used to rescue the cash-strapped builder, the report
says.
According to The Korea Times, builders and other businesses in
Korea are having a tough time raising money by issuing debt after
investor sentiment in the local bond market deteriorated recently
due to a default in project financing to construct the Legoland
Korea Resort in Gangwon Province. But the widespread dilemma has
not shielded Lotte Group from being criticized for its poor risk
management.
In November, Korea's three rating agencies lowered their credit
outlooks for Lotte Chemical, Lotte Corp. and the group's other
major affiliates to "negative" from "stable," The Korea Times
says.
The Korea Times relates that their unusual moves came after
concerns emerged over Lotte E&C's financial soundness amid Lotte
Chemical's plan to acquire Iljin Materials for KRW2.7 trillion.
Lotte Chemical is the largest shareholder of Lotte E&C with a 43.8
percent stake.
Before Lotte E&C was rumored to be facing a setback in repaying its
debts for project financing, Lotte Chemical was expected to endure
financial difficulties caused by the large-size acquisition deal.
According to the report, the chemical firm's credit outlook
worsened due to the unexpected funding for the construction
subsidiary.
"Lotte Chemical's funding for Lotte E&C will weigh on its financial
stability," the report quotes NICE Investors Service analyst Kim
Sung-jin as saying. "Considering financial difficulties caused by
its decision to acquire Iljin Materials, it is expected to continue
suffering a capital shortage in the short- to medium-term."
Within the past month, Lotte E&C raised at least KRW1.1 trillion
from its affiliates, including Lotte Chemical, Lotte Fine Chemical,
Lotte Home Shopping and Hotel Lotte, by borrowing money from them
or selling its newly issued shares.
The Lotte Group chairman also bought some of Lotte E&C's newly
issued shares for KRW1.1 billion, the report notes.
In addition, the builder decided to borrow KRW200 billion from Hana
Bank and KRW150 billion from Standard Chartered Bank Korea. Lotte
Property & Development promised to offer up to KRW420 billion in
financial support if Lotte E&C fails to repay its debts, the report
relays.
"Despite Lotte E&C's issuance of new shares and borrowing money
from its affiliates and banks, there remain risks regarding its
project financing," the report quotes Samsung Securities analyst
Cho Hyun-ryul as saying. "Considering the recent market conditions,
it will take time for Lotte E&C to resolve uncertainties over its
financial soundness."
Lotte E&C's contingent liability caused by project financing is
much larger than those of its rivals, due to the company's
aggressive attempts to win construction orders, the report states.
"Lotte E&C is facing the largest contingent liability caused by
project financing, and it especially promised to refinance KRW4.3
trillion, which is much larger than the size of refinancing
promised by other builders," Korea Ratings analyst Kim Hyun said in
September, warning about the risk, The Korea Times relays.
According to Korea Investors Service, Lotte E&C has to repay KRW3.1
trillion by the end of this year. However, the builder had only
KRW700 billion in cash or saleable assets as of September.
===============
T H A I L A N D
===============
DAOLSEC THAILAND: Fitch Puts 'BB+(tha) National Rating on Watch Neg
-------------------------------------------------------------------
Fitch Ratings (Thailand) has placed DAOL SECURITIES (THAILAND)
PUBLIC COMPANY LIMITED 's (DAOLSEC) ratings of 'BB+(tha)' on Rating
Watch Negative (RWN), as the company faces potential losses and
reputational risk resulting from abnormal client trading activities
on a single stock that led to failed settlements on November 14,
2022.
DAOLSEC is one of 11 brokerage firms that have filed complaints
with the police relating to irregular trading in the shares of More
Return Public Company Limited earlier this month. Thailand's
Anti-Money Laundering Office has ordered brokers to freeze the
proceeds of share transactions for 90 days, as part of further
investigation.
KEY RATING DRIVERS
The RWN reflects Fitch's view that there could be a negative effect
on DAOLSEC's profitability, capital and funding, depending on the
final accounting treatment of the transactions. DAOLSEC's exposures
could be recognised as losses and materially affect the company's
key financial ratios. However, there is still limited visibility on
the ultimate impact, as the transaction remains under investigation
by authorities.
Fitch expects to resolve the RWN when there is a clearer indication
of the effect on DAOLSEC's financial statements, as well as any
plans by the company to remedy the situation.
DAOLSEC's National Ratings reflect its small domestic franchise,
with a market share in securities trading volume at slightly above
1% as end-1H22. The ratings also incorporate the company's smaller
capital base and higher leverage compared with Fitch-rated peers.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
DAOLSEC's National Ratings could be downgraded, potentially by
multiple notches, if the impact from the transaction causes a
material deterioration in the company's financial profile (such as
its asset quality and capital), as well as long-lasting damage to
the company's franchise, earnings generation capacity and creditor
confidence. A sustained delay in the investigation of the
transaction, resulting in an uncertain direct financial impact on
the company, could also have a negative impact on the ratings if
there appears to be material damages to DAOLSEC's refinancing
ability and liquidity position
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
DAOLSEC's ratings may be removed from RWN and affirmed at the
current level if the outcome of the investigation leads to no
significant impact on the company's financial profile. Clear and
effective remediation plans by the company that could ensure client
and creditor confidence, such as material capital injections that
maintain DAOLSEC's leverage levels, might also support the rating
at current levels.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
DAOLSEC's subordinated debentures, which are also placed on RWN,
are rated one notch below its National Long-Term Rating to reflect
the subordinated debentures' higher loss-severity risk relative to
senior unsecured instruments.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
Factors that could, individually, or collectively, lead to negative
rating action/downgrade:
A downgrade of DAOLSEC 's National Long-Term Rating would result in
a downgrade of the subordinated debenture rating.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Removal of the RWN on DAOLSEC's National Long-Term Rating is likely
to lead to similar action on the rating of the subordinated
debentures.
Entity/Debt Rating Prior
----------- ------ -----
DAOL SECURITIES
(THAILAND) PUBLIC
COMPANY LIMITED Natl LT BB+(tha) Rating Watch On BB+(tha)
Natl ST B(tha) Rating Watch On B(tha)
subordinated Natl LT BB(tha) Rating Watch On BB(tha)
=============
V I E T N A M
=============
MB SHINSEI: Fitch Alters Outlook on 'B' LongTerm IDR to Positive
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on MB Shinsei Finance Limited
Liability Company's (Mcredit) Long-Term Issuer Default Rating (IDR)
of 'B' to Positive, from Stable.
The Outlook revision reflects the improving Standalone Credit
Profile of Mcredit's dominant shareholder, Military Commercial
Joint Stock Bank (MB, BB-/Positive/b+), as reflected in its
Viability Rating of 'b+', which serves as the anchor for Mcredit's
rating. MB holds 50% of Mcredit, while Shinsei Bank, Limited owns
49%. Fitch expects a supportive economic environment to benefit
banks' near-term earnings and asset quality and also project MB's
core capitalisation to improve.
Its view is reflected in the positive outlook on Vietnam's
banking-sector operating-environment score of 'bb-' and MB's
capitalisation and leverage score of 'b+', which Fitch revised from
stable on 17 November 2022. Fitch also upgraded MB's Long-Term IDR
to 'BB-', from 'B+', with a Positive Outlook, based on its view of
a strong government propensity to support the banking system, MB's
shareholding structure and its ties with state-linked companies, as
reflected in its Government Support Rating of 'bb-'. However,
Mcredit's ratings do not incorporate any benefit from potential
state support for MB, as it is uncertain if government support
would extend to Mcredit, a much smaller entity.
KEY RATING DRIVERS
Ratings Underpinned by Shareholder Support: Mcredit's IDR and
Shareholder Support Rating (SSR) are one notch below MB's Viability
Rating, reflecting its expectation of extraordinary support in
times of need from MB. Fitch regards Mcredit as a strategically
important subsidiary, given its complementary role in MB's retail
banking strategy and the parent's record of equity and funding
support to Mcredit. The ratings also consider the reputational risk
to MB if Mcredit were to default, and MB's adequate capacity to
support.
Parent's Strengthened Ability to Support: Its view on MB's
improving standalone creditworthiness takes into consideration its
belief that capitalisation is likely to improve, and that economic
conditions should remain favourable for asset quality and earnings
prospects over the next 12-18 months. This is notwithstanding
downside risks from external uncertainties and tighter funding
conditions.
Fitch believes this will benefit MB's ability to support its
financing subsidiary. Mcredit's assets and equity account for a
modest 3%-4% of MB's assets and equity, and Fitch does not expect
this proportion to rise beyond 10% in the next few years. Its
stress test indicates that MB would be able to recapitalise Mcredit
in a stress scenario without falling below its minimum regulatory
capital requirements, albeit with a narrower buffer.
Strong Synergies, Support Record: Fitch sees Mcredit as an
important part of MB, as the subsidiary complements MB's overall
retail franchise in Vietnam. The consumer financier provides
coverage to lower-income individuals who may eventually become MB's
loan customers as their incomes rise. Non-equity funding from MB
remains significant, at around 10% of MB's equity or 36% of
Mcredit's total debt at end-June 2022 (end-December 2021: 9% and
34%, respectively).
High Reputational Risk: Mcredit's management and operations are
closely integrated with MB through representation in top
management, including the CEO and several deputy CEOs, and the
sharing of MB's infrastructure, technology and customer base. Fitch
believes MB has significant influence over Mcredit's governance and
operations, and a default by Mcredit would entail high reputational
costs for MB.
Further Resources from Shinsei: Mcredit also benefits from the
technical expertise and financial resources of Shinsei. Financial
aid from Shinsei is possible in times of need, but Fitch does not
ascribe any additional rating uplift, as Fitch believes Mcredit
remains more closely integrated and synergistic with MB.
Modest Standalone Profile: Mcredit's Standalone Credit Profile does
not drive its ratings, but reflects its assessment of its niche
business model, higher-risk loan portfolio and growth appetite,
narrower funding base and high leverage relative to its risk
profile. Mitigating factors are Mcredit's franchise as the
third-largest consumer financier by assets and its access to
low-cost and stable shareholder funds.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Mcredit's Long-Term IDR is sensitive to any deterioration in MB's
ability to provide extraordinary support, if needed. Negative
action on MB's Viability Rating will translate into negative rating
pressure.
A decline in MB's propensity to support Mcredit could also lead to
negative rating action. This could arise from reduced management
and operational integration, most likely in combination with weaker
non-equity funding support to Mcredit, or a reduction in Mcredit's
strategic value to MB. Any ownership dilution to below 50% would
also lead to negative rating action, and may result in Mcredit's
rating being based solely on its standalone strength rather than
its expectation of shareholder support.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Mcredit's Long-Term IDR may be upgraded if there is an upgrade of
MB's Viability Rating or if the company becomes a more meaningful
contributor to MB's operations and strategy. This may be evident
through increased referrals between the entities or a greater
profit contribution by Mcredit. A longer record of sustainable
operations by Mcredit, combined with an increase in MB's influence
and control relative to Shinsei, could also lead to positive rating
action. This is assuming other factors underpinning shareholder
support remain intact.
ESG CONSIDERATIONS
Mcredit's ESG Relevance Scores for Governance Structure and
Financial Transparency have been revised to '3', from '4', in line
with Fitch's revision on MB's ESG Relevance Scores.
Fitch has revised Mcredit's ESG Relevance Score for Governance
Structure to the sector default of '3', from '4', as Fitch believes
some of the corporate governance weaknesses at MB group, such as
low independent director representation at the bank level, have not
materially impacted business performance and have only a minimal
effect on the rating.
Fitch has revised Mcredit's ESG Relevance Score for Financial
Transparency to the sector default score of '3', from '4'.
Mcredit's financial statements under Vietnamese Accounting
Standards may continue to differ from International Financial
Reporting Standards, but Fitch does not believe this weighs
materially on the company's credit rating, even after factoring
these differences into its rating assessment.
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 minimal credit impact on the entities,
either due to their nature or to the way in which they are being
managed by the entities.
Entity/Debt Rating Prior
----------- ------ -----
MB Shinsei Finance
Limited Liability
Company LT IDR B Affirmed B
ST IDR B Affirmed B
Shareholder Support b Affirmed b
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***