/raid1/www/Hosts/bankrupt/TCRAP_Public/230105.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, January 5, 2023, Vol. 26, No. 5
Headlines
A U S T R A L I A
AC CIVIL: Commences Wind-Up Proceedings
ECO LOGISTICS: Commences Wind-Up Proceedings
IDERA INC: $410M Bank Debt Trades at 18% Discount
JSS LOGISTICS: Creditors' Proofs of Debt Due on Jan. 25
SANITY: Iconic Music Retailer to Close 50 Stores by End of April
VIRTECH.COM.AU PTY: Commences Wind-Up Proceedings
C H I N A
LESHI INTERNET: Reinstates Salaries, Cuts Work Week
SUNAC CHINA: To Sell Shenzhen Snow Park Project to JV Partner
I N D I A
AJAB SINGH: CARE Lowers Rating on INR27.35cr LT Loan to D
ANJANEYA SEA: CARE Reaffirms B+ Rating on INR33cr LT Loan
AZAM RUBBER: ICRA Keeps D Debt Rating in Not Cooperating Category
C S CREAMERY: CARE Reaffirms D Rating on INR19.77cr LT Loan
CORODEX INFRA: CRISIL Lowers Rating on LT/ST Debt to D
DHRU MOTORS: CARE Reaffirms B Rating on INR2.79cr LT Loan
DIAMOND HOMETEX: CARE Keeps B- Debt Rating in Not Cooperating
GOVERDHAN TRANSFORMER: CARE Keeps D Ratings in Not Cooperating
GVMC PUBLIC: CARE Lowers Rating on INR10cr LT Loan to B-
HARITASA ELECTRONICS: CRISIL Withdraws B Rating on LT/ST Debts
K.P. BLUE: ICRA Withdraws B+ Rating on INR10.97cr Term Loan
M.G. CHARIOTS: CARE Keeps B- Debt Rating in Not Cooperating
MADHYA PRADESH: CARE Lowers Rating on INR100cr NCD to C
MEP NAGPUR: CARE Keeps D Debt Rating in Not Cooperating Category
MRJ STEELS: CRISIL Lowers Rating on Long/Short Term Debts to D
R.S. PROFILLING: CRISIL Assigns B+ Rating to INR21cr Cash Loan
RELIANCE BIG: CARE Keeps D Debt Ratings in Not Cooperating
SAI GLOBAL: ICRA Lowers Rating on INR24.80cr LT Loan to B
SMK PETROCHEMICALS: CARE Keeps B Debt Rating in Not Cooperating
SREI GROUP: NARCL Highest NPV Bidder With INR5,555-Crore Offer
SURABHI AGRICO: CARE Keeps C Debt Rating in Not Cooperating
TABLEZ AND TOYZ: CARE Reaffirms D Rating on INR48.13cr LT Loan
TARANG JEWELS: CARE Keeps D Debt Rating in Not Cooperating
VIKRAM ROLLER: CARE Keeps B-/A4 Debt Rating in Not Cooperating
VISHWAKARMA AUTOMOTIVE: CARE Cuts Rating on INR30.03cr Loan to B
I N D O N E S I A
GARUDA INDONESIA: Cleary Gottlieb Advises Carrier in Restructuring
M A C A U
SANDS CHINA: Fitch Affirms IDR at 'BB+', Outlook Negative
S I N G A P O R E
BIG BANYAN: Creditors' Proofs of Debt Due on Feb. 4
BLOCKFI LENDING: Calif. Regulators Want to Revoke Lending License
CHUDENKO ASIA: Creditors' Proofs of Debt Due on Feb. 4
NEW DREAMS: Court to Hear Wind-Up Petition on Jan. 20
NEW PROGRESS: Court to Hear Wind-Up Petition on Jan. 20
PHILEAP PTE: Creditors' Proofs of Debt Due on Feb. 4
STREETSINE TECHNOLOGY: Court to Hear Wind-Up Petition on Jan. 20
- - - - -
=================
A U S T R A L I A
=================
AC CIVIL: Commences Wind-Up Proceedings
---------------------------------------
Members of AC Civil Build Pty Ltd, on Jan. 4, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Liam William Paul Bellamy
RRI Advisory Pty Ltd
Suite 902
488 Bourke Street
Melbourne, Vic, 3000
ECO LOGISTICS: Commences Wind-Up Proceedings
--------------------------------------------
Members of Eco Logistics Co Pty Ltd, on Jan. 4, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Tim Heesh
TPH Advisory
Suite 5
82-86 Pacific Highway
St Leonards, NSW 2065
IDERA INC: $410M Bank Debt Trades at 18% Discount
-------------------------------------------------
Participations in a syndicated loan under which Idera Inc is a
borrower were trading in the secondary market around 82.4
cents-on-the-dollar during the week ended Friday, December 30,
2022, according to Bloomberg's Evaluated Pricing service data. The
$410 million facility is a Term loan. It is scheduled to mature on
March 2, 2029. The amount is fully drawn and outstanding.
Idera Inc is the parent company of a portfolio of brands that offer
B2B software including database tools, application development
tools, test management tools, and DevOps tools. It is headquartered
in Houston, Texas and has offices in Australia, Austria, and the
United Kingdom.
JSS LOGISTICS: Creditors' Proofs of Debt Due on Jan. 25
-------------------------------------------------------
Creditors of JSS Logistics Pty Ltd are required to file their
proofs of debt by Jan. 25, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on April 12, 2022.
The company's liquidators are:
Gregory Bruce Dudley
Jerome Mohen
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth, WA 6000
SANITY: Iconic Music Retailer to Close 50 Stores by End of April
----------------------------------------------------------------
News.com.au reports that iconic Australian music and entertainment
retailer Sanity is closing its stores.
The company has announced its remaining 50 stores, known for
selling CDs and DVDs, will close by the end of April. However, the
business will continue online.
"With our customers shifting to digital for their visual and music
content consumption, and with diminishing physical content
available to sell to our customer, it has made it impossible to
continue with our physical stores," Ray Itaoui, who purchased the
company 13 years ago, said in a statement.
"Our online business - sanity.com.au - will continue to operate,
and will service the many loyal customers the brand has continued
to be dedicated to over the decades.
"Our priority right now is to ensure each of our team members knows
exactly what this means for their career and employment future."
According to news.com.au, Mr. Itaoui said orders placed at stores,
including pre-orders, would be shipped out through the online
business and gift vouchers would be redeemable online.
When Sanity stores in Far North Queensland closed early last year,
stock was heavily discounted.
The first Sanity-branded store opened in 1992 in Doncaster,
Melbourne but founder Brett Blundy had opened his first music store
in 1980 under a different name at just 20 years old.
"There is so much to be proud of," the report quotes Mr. Itaoui as
saying. "With Brett Blundy building Sanity from the ground up in
1980 - going on to become one of Australia's most respected and
recognisable retailers - the Sanity brand became synonymous with
the go-to place to get anything that mattered in the world of
music: from vinyl, to CDs and DVDs, hardware, accessories, and of
course face-to-face advice on everything musical.
"The business prospered and remained successful for many years,
thanks to the dedication and commitment of our entire team.
"I would like to take the opportunity to acknowledge the Sanity
team, past and present, and express my pride around their
achievements, as well as thank them for their hard-work,
dedication, and relentless commitment to ensuring they exceeded
customer service expectations. Without this, Sanity would not have
lasted as long as it has, and it's this I am most proud of."
VIRTECH.COM.AU PTY: Commences Wind-Up Proceedings
-------------------------------------------------
Members of Virtech.com.au Pty Ltd, trading as Virtech.com.au Pte
Ltd, on Jan. 4, 2023, passed a resolution to voluntarily wind up
the company's operations.
The company's liquidators are:
Mitchell Ball
David Hurst
Mackay Goodwin
Level 10
120 Edward Street
Brisbane, QLD 4000
=========
C H I N A
=========
LESHI INTERNET: Reinstates Salaries, Cuts Work Week
---------------------------------------------------
Yicai Global, citing The Paper, reports that Leshi Internet
Information & Technology Corp., a struggling internet company set
up by controversial Chinese businessman Jia Yueting, has restored
wages that it trimmed two years ago during the early days of the
Covid-19 pandemic and reduced the working week to four and a half
days as business improves.
Yicai Global relates that Leshi, operator of streaming site Le.com
and hardware retailer Lerong Zhixin Electronic Technology, is
implementing a four-and-a-half-day work week from Jan. 1 which
includes a five-hour half day on Wednesdays, the report said,
citing Chief Executive Officer Zhang Wei. Working hours during the
half day are flexible, such as from 10.00 a.m. to 3.00 p.m. or
11.00 a.m. to 4.00 p.m.
And despite the shorter working week, the Beijing-based company has
fully reinstated the salaries to what it was paying two years ago
as the fewer hours will not affect business, Zhang said in a letter
to all employees circulated on Jan. 3.
During the Covid-19 outbreaks, many employees had to work from
home. Leshi discovered that some work does not need to be done in
the office so it decided to introduce a four-and-a-half day work
week, Zhang said, Yicai Global relays.
According to Yicai Global, the news is a sign that Leshi is
beginning to turn itself around after a very difficult last few
years when the previously successful firm, once known as 'China's
Netflix,' found itself mired in debt after Jia borrowed heavily in
Leshi's name to fund diversification into new energy vehicles and
other ventures that did not pay off. Jia fled to the US in 2017 to
escape the mounting debt crisis and to focus on developing his NEV
startup Faraday Future.
The firm, which had liabilities of CNY20.9 billion (USD3 billion)
as of Sept. 30, 2020, was kicked off the Shenzhen bourse in May
2020 due to its failure to regain a positive net worth, Yicai
Global recalls. In September that year, Leshi was found guilty of
cooking the books of every annual report from 2007 to 2016 and was
fined CNY240.6 million (USD37.8 million) by the securities
regulator, equivalent to 5 percent of the amount raised in the
initial public offering, and the country's biggest-ever financial
penalty for stock fraud.
Since then, Jia, who has resigned from all his positions at Leshi,
has put together a debt restructuring plan and pledged his 33
percent stake in California-based Faraday Future to creditors,
Yicai Global relates.
In the first three quarters, Leshi posted a loss of CNY353 million
(USD51 million) on revenue of CNY267 million, a drop of 10 percent
from a year ago, Yicai Global discloses citing latest financial
report. And its liabilities have shrunk to CNY19.8 billion. Last
year the company's losses narrowed 16 percent year on year to
CNY2.1 billion (USD303.7 million), while revenue sank 10.7 percent
to CNY418 million.
About Leshi Internet
Leshi Internet Information & Technology Corp., Beijing engages in
Internet video, and film and television production and distribution
businesses in China.
Leshi Internet has been mired in massive debt woes since its parent
LeEco was hit with a cash crunch after years of aggressive
expansion, according to Caixin Global. Founder Jia Yueting fled
China to the U.S. and has not returned since the summer of 2017,
leaving behind CNY11.9 billion (US$1.7 billion) of debts. Mr. Jia
was blacklisted as a debt defaulter by a Chinese court. In October,
Mr. Jia filed for bankruptcy in the U.S.
SUNAC CHINA: To Sell Shenzhen Snow Park Project to JV Partner
-------------------------------------------------------------
Yicai Global reports that Sunac China plans to sell its stake in a
snow park project under development in Shenzhen to its state-owned
joint venture partner for CNY3.6 billion (USD523 million).
Sunac will transfer its 51 percent equity stake and debt in
Shenzhen Ronghua Land Investment, the JV set up in 2020 to develop
the Ice and Snow Culture & Tourism project, to Zhuhai Huafa
Properties, it said on Jan. 3, Yical Global relays. Sunac will have
the right to buy back the stake before the snow park opens, the
firm added.
The proceeds of the sale will be used to repay the debt Sunac took
on to secure the project with principal and interest of about
CNY2.1 billion, thereby cutting its total debt burden, the
Tianjin-based company said, the report relays.
Expected to start welcoming the public in November 2025, the snow
park covers an area of 436,800 square meters in Shenzhen's Bao'an
district. Once completed, the construction area will reach 1.3 sqm
and include residential and office buildings, entertainment
facilities, business venues, and hotels.
Since falling into a debt crisis last year, Sunac has sold a number
of assets to recoup funds, the report notes. It unloaded 90 percent
of a luxury residential project in downtown Shanghai in November,
securing about CNY8 billion
Sunac reported its 2021 financial results on Dec. 9 after an
eight-month delay. It had a net loss of CNY38.3 billion (USD5.5
billion) and revenue of CNY198.4 billion (USD28.7 billion), down 14
percent from 2021, Yicai Global discloses.
About Sunac China
Sunac China Holdings Limited (SEHK:1918) --
http://www.sunac.com.cn/-- engages 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.
=========
I N D I A
=========
AJAB SINGH: CARE Lowers Rating on INR27.35cr LT Loan to D
---------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Ajab Singh and Company (ASC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 27.35 CARE D Revised from CARE BB-;
Facilities Stable
Long Term/ 22.65 CARE D/CARE D Revised from
Short Term CARE BB-; Stable/CARE A4
Bank Facilities
Detailed Rationale & Key Rating Drivers
The revision in the ratings of Ajab Singh and Company takes into
consideration instance of delay in servicing of its debt
obligations.
Rating Sensitivities
Positive Factors
* 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 stressed liquidity position of
the firm. Further, delayed clearance of payment from the
departments leading to delay in debt servicing.
Liquidity: Poor
Ajab Singh and Company has poor liquidity position marked by fully
utilised working capital limits for the past twelve months ending
December 31, 2022. Further, the firm has low free cash & bank
balance which stood at INR0.39 crore as on March 31, 2022.
New Delhi, Delhi based Ajab Singh and Company (ASC) was
incorporated in 2009 as a partnership firm. The firm is currently
being managed by Mr. Ajab Singh, Mr. Deepak Choudhary and Mr.
Harish Choudhary. The firm undertakes the work of large magnitude
residential accommodation administrative and public health i.e.
water & sewerage projects, sewer line and other civil engineering
projects in the National Capital region. The firm has already
executed works of reputed concern like Delhi Development Authority
(DDA) and Delhi Jal Board (DJB) and has successfully completed
works of building construction, development works, sewerage drains,
commercial complex, etc.
ANJANEYA SEA: CARE Reaffirms B+ Rating on INR33cr LT Loan
---------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of
Anjaneya Sea Foods (ASF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 33.00 CARE B+; Stable Reaffirmed
Short Term Bank
Facilities 2.00 CARE A4 Reaffirmed
Detailed rationale and key rating drivers
The ratings assigned to the bank facilities of ASF are constrained
by decline in profitability margins albeit increase in scale of
operations during the review period, leveraged capital structure
and weak debt coverage indicators due to constitution of the entity
as a partnership firm with inherent risk of withdrawal of capital,
elongated operating cycle and working capital-intensive nature of
operations, volatility in the availability of raw material, disease
prone industry with high dependence on climatic condition and
government regulation. However, the ratings derive comfort from
vast experience of the promoters in the sea food business,
favourable location of unit with presence in the aquaculture region
in Andhra Pradesh, along with Government support to Aquaculture
industry.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Improvement in operating cycle to less than 90 days.
* Improvement in total operating income by 20% Y-o-Y while
maintaining PBILDT margin of 5% or above
Negative factors – Factors that could lead to negative rating
action/downgrade:
* Decline in profitability or TOI by more than 30% y-o-y
* Further deterioration in capital structure represented by
weakening of overall gearing.
Detailed description of the key rating drivers
Key rating weaknesses
* Decline in profitability margins albeit increase in scale of
operations: The Total operating income (TOI) of ASF witnessed
significant improvement in FY22 by 67.20% from INR51.80 crore in
FY21 to 86.61 crore in FY22 post subdued demand in FY21 on account
of pandemic. Despite increase in TOI, due to higher RM costs which
stood at 82% as a percentage of TOI in FY22 (as against 74% in
FY21), PBILDT reduced by 17% to INR3.72 crore (FY21: INR4.46
crore). In FY21, higher availability of raw material resulted in
lower raw material prices leading to better margins. With normalcy
in business operations, raw material prices corrected which
resulted in lower margins in FY22. Further, interest cost remained
at almost similar level leading PAT to deteriorate by 51% bps to
INR0.38 crore (FY21: INR0.44 crore). In H1FY23, ASF reported Total
operating income (TOI) of INR42.64 crore which is approximately 50%
of revenue achieved in FY22. Further, with festive season in
Q3FY23, sales are likely to be on a higher side than that of
H1FY23
* Leveraged capital structure and weak debt coverage indicators:
Capital structure of the firm marked by debt equity and overall
gearing ratio stood leveraged. The debt equity ratio of the firm
improved to 1.66x as on March 31, 2022, from 2.06x as of March 31,
2021. However, the overall gearing ratio remain on same level as of
March 31,2022(same as March 31,2021) at 6.94%. The debt coverage
indicators marked by Total debt/Gross Cash Accruals (TD/GCA) and
interest coverage ratio stood weak and deteriorating Y-o-Y. The
PBILDT/interest deteriorated from 1.75x in FY21 to 1.54x in FY22 on
account of lower PBILDT and similar interest expense Owing to lower
GCA in FY22, TD/GCA deteriorated to 26.75x and remained high.
* Elongated operating cycle and working capital-intensive nature of
operation: The operating cycle improved considerably from 225 days
in FY21 to 136 days in FY22 mainly due to sale of piled up
inventory stocked during FY21 due to subdued demand and logistical
issues led by shortage of container availability. Further, with
faster recovery of debtors, collection period also improved to 50
days in FY22 from 78 days in FY21. Despite improvement in operating
cycle, the same continues to remain on a higher side and the firm's
dependence on working capital borrowings remained high with almost
full utilization for last 12 months ended November 2022.
* Constitution of entity as a partnership firm with inherent risk
of withdrawal of capital: ASF being a partnership firm, there is an
inherent risk of instances of capital withdrawals by partners
resulting in diminishing of entity's net worth. Further, the
partnership firms are attributed to limited access to funding.
Though partners keep infusing funds as and when required but at the
same time there has been a history of withdrawal of capital by
partners in past years.
* Volatility in the availability of raw material and disease prone
nature of seafood: Shrimp farming is highly disease prone as there
are a variety of lethal viral and bacterial diseases that affect
shrimp. The fact that the shrimps are kept in clusters, acts as an
exponential factor in multiplying the disease caught by a single
shrimp and wipe out almost 90% of the total shrimp population in a
particular farm. A major transfer vector of many of these viruses
is the water itself; and thus, any virus outbreak also carries the
danger of decimating shrimp living in the wild. However, after
repeated tests, Vannamei shrimps have been observed to be more
resistant than Black Tiger shrimps to various diseases.
* High exposure to government regulations coupled with many
unorganized players in the industry: Government policies keep
varying depending upon other macro-economic factors like
Anti-dumping duties and inflation etc., which increase the expenses
for companies operating in the seafood industry. The anti-dumping
duty (ADD) rates are revised every year by destination countries'
authorities. Due to high volume of exports to middle east, the firm
is exposed to fluctuation in foreign currency exchange which may
affect the firm's profitability margins.
Key rating strengths
* Vast experience of the partners in the sea food business:
Anjaneya Sea Foods (ASF) was established in 2007 as a partnership
firm by Mr. D.V. Krishna Rao (Managing Partner), Mr. D. Janardhana
Rao (Partner), Mr. D. Mallikarjuna Rao (Partner) and Mr.
Purnachandra Rao (Partner). All the promoters of the firm are
qualified graduates and has more than two decades of experience in
marine business, with established clientele base in foreign
countries.
* Location advantage due to presence in the aquaculture zone in
Andhra Pradesh: ASF's processing plant is located in the prime
aquaculture zone in Ongole, by the coastline of Andhra Pradesh,
which enables the firm to procure raw materials and process them
immediately after harvest. This results in better quality product
as well as lower transportation cost. ASF procures raw materials
from local farmers from all across the country though major
procurement is from Andhra Pradesh.
* Government support to Aqua industry: During the last financial
year (2021-22), India exported 13,69,264 MT of Seafood worth US$
7.76 Billion which is all time high exports by value. The increase
is mostly on the back of increase in export of Frozen Shrimps
accounting for a share of 53.18% in quantity and 75.11% of the
total USD earnings. To support the fisheries sector Hon'ble Prime
Minister of India launched the Pradhan Mantri Matsya Sampada Yojana
(PMMSY) on 10th September 2020 to "transform" the fisheries sector
and add strength to the efforts of building an 'Aatmanirbhar
Bharat'. The PMMSY is a flagship scheme for focused and sustainable
development of the fisheries sector in the country with an
estimated investment of INR20,050 crore comprising Central share of
INR9,407 crore, State share of INR4,880 crore and Beneficiaries
contribution of INR5,763 crore. The scheme is aiming to support
farmers with various assistance and hence it is envisaged that the
scheme will help in doubling the income of farmers.
* Industry outlook: In India, fisheries are a significant economic
sector and offer vast development opportunities. This is attributed
to the diverse resources and potential of the country. "Andhra
Pradesh is the leading shrimp producer, accounting for more than
50% of the total output." ("India Shrimp Market Size, Share,
Analysis, Report 2022-2027") Anjaneya Sea Foods is taking the
support given by the Government for sustainable shrimp farming in
form of Interest rates and other subsidies. Rising exports of the
product are expected to be the major trends driving the growth of
the industry. By 2026, the market is estimated to reach a volume of
almost 1.23 million tons. In the forecast period of 2022-2027, the
market is projected to grow at a CAGR of 9.5%.The major drivers of
the industry such as rising disposable incomes, increasing
population, increasing health consciousness, growing demand for
convenient and ready-to-eat food, rapid urbanization, changing
lifestyles, and easy availability of the product are expected to
aid the market growth.
Liquidity: Stretched
The current ratio of the firm stood at 1.22x with cash and bank
balances of INR0.15 crore as on March 31, 2022. The firm has
available GCA of INR1.11 crore with repayment obligations of
INR2.20 crore for FY23 which makes liquidity position of the firm
stretched. However, to support the liquidity position of the firm,
partners have brought capital of INR3.00 crore in H1FY23 along with
infusion of unsecured loans of INR4.30 crore. The working capital
limits are highly utilized for the last twelve months ended
November 30, 2022.
Andhra Pradesh based Anjaneya Sea Foods (ASF) was established in
the year 2007 by Mr. Krishna Rao, Mr. D. Janardhana Rao, Mr.D.
Mallikarjuna Rao and Mr. Purnachandra Rao. ASF is engaged in the
processing and export of Vannamei and a variety of shrimp to Middle
east countries. ASF is 100% Export Oriented Unit (EOU) located in
Ongole. The firm has processing capacity of 80 tons per day (PY:40
tons) and cold storage capacity of 2500 tons per annum.
AZAM RUBBER: ICRA Keeps D Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Azam
Rubber Products Private Limited in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 26.62 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 43.23 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Short-term 5.80 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
'Issuer Not Cooperating'
Category
Long Term/ 4.35 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term- COOPERATING; Rating continues
Unallocated to remain under the 'Issuer Not
Cooperating' Category
As part of its process and in accordance with its rating agreement
with Azam Rubber Products Private Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due. Despite multiple
requests by ICRA, the entity's management has remained
non-cooperative. The current rating action has been taken by ICRA
basis best available information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 1994, ARPPL is promoted by Mr. Azam Khan. The
company manufactures footwear, including hawai slippers, sandals
and sports shoes, among others. It has two manufacturing units in
Gorakhpur Industrial Development Authority (GIDA), Gorakhpur, Uttar
Pradesh with a total installed capacity of 4.5 crore pairs of
footwear annually (assuming 300 days of production). ARPPL produces
hawai footwear and ethylene vinyl acetate/polyvinyl chloride
(EVA/PVC) footwear. The main raw material used by the company is
rubber, EVA and PVC, which is procured domestically. Its products
are marketed in UP, Bihar, Jharkhand, Chhattisgarh and Madhya
Pradesh, under the brand name ARP, through a network of around 250
dealers.
C S CREAMERY: CARE Reaffirms D Rating on INR19.77cr LT Loan
-----------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of C
S Creamery Private Limited (CS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 19.77 CARE D; Reaffirmed
Facilities
Detailed rationale and key rating drivers
The rating assigned to the bank facilities of CS factors in the
continuation of delays in debt servicing by company. The company
had been receiving funding support from parent on monthly basis to
fund operational losses as well for debt servicing. Due to delay in
receipt of such support, delays are reported in debt servicing.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Delay free track record of operations for a continuous period of
more than three months.
Negative factors – Factors that could lead to negative rating
action/downgrade: Not Applicable
Detailed description of the key rating drivers
Key Rating Weakness
* Continuing Delays in debt Servicing: Company have shared the bank
statements from June 2022 to August 2022 in which CARE has observed
the continuation of delays in interest and term loan repayments in
the month of June 2022 and July 2022. While the company has not
shared bank statements of subsequent months, however, as per lender
interaction, the delays are continuing in servicing the interest
and debt repayments obligation of the company.
Key Rating Strengths
* Resourceful Promoters: The parent company Tablez Food
Company(TFC) is a multi-brand retail arm of Lulu Group
International. The shares of TFC are held by Mr. Adeeb Ahamed and
Ms. Shafeena Yusuff Ali. The promoters have experience in the
similar line of business and draw on the expertise of the larger
Lulu group as well. The promoters have been infusing equity
consistently in the past and are expected continue to support the
operations of the companies.
Liquidity: Poor
Liquidity of the company was largely driven from its resourceful
promoters. The operations of the company were severely impacted
during the first and second wave of pandemic and the liquidity from
the core operations is poor.
Analytical approach: Combined
Business and financial risk factors of the Tablez Retail Private
Limited(TR), Tablez and Toyz Private Limited(TT) and C S Creamery
Private Limited(CS) have been combined as the companies are owned
and managed by common promoters, engaged
in retail business, and the collateral securities extended to the
bank facilities are common to all the three companies as per the
sanction letter of lender.
Kochi (Kerala) based, C S Creamery Private Limited was incorporated
in 2016 and full owned subsidiary of Tablez Food Company Private
Limited (TFC). TFC is promoted by Mr. Adeeb Ahamed and Ms. Shafeena
Yusuff Ali. The company holds the master franchise agreement with
the renowned American ice cream brand Cold Stone to operate ice
cream parlours under Franchise license from MTY Food Group Inc.
(Kahala Group).
CORODEX INFRA: CRISIL Lowers Rating on LT/ST Debt to D
------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Corodex Infrastructure Private Limited (CIPL) to 'CRISIL D/CRISIL D
Issuer Not Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating' as there have been delays in servicing of debt, as per
publicly available information.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
Short Term Rating - CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with CIPL through
letters and emails dated November 13, 2021, January 12, 2022 and
24-Dec-22 among others, apart from telephonic communication, for
obtaining information. However, the issuer has remained
noncooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed rationale
Despite repeated attempts to engage with the company's management,
CRISIL Ratings has not received any information on the financial
performance or strategic intent of CIPL, which restricts the
ability of CRISIL Ratings to take a forward-looking view on the
company's credit quality. The rating action on SGIL is consistent
with the criteria detailed in 'Assessing information adequacy
risk'.
CIPL was incorporated in June 2013 by Mr Prakash Arun. It is
engaged in electrical infrastructure supply, erection,
commissioning of transmission line, grid substation, power
substation and mechanical work on turnkey basis. The company is
active in various fields such as airport development, metro rail
project, and construction of tunnels, industrial plants, five star
hotels, residences and hospitals.
DHRU MOTORS: CARE Reaffirms B Rating on INR2.79cr LT Loan
---------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of
Dhru Motors (DM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 2.79 CARE B; Stable Reaffirmed
Long Term/ 32.37 CARE B; Stable/CARE A4
Short Term Reaffirmed
Bank Facilities
Detailed rationale and key rating drivers
The rating assigned to the bank facilities of DM continues to
remain constrained on account of moderate scale of operations
during FY22 and H1FY23, thin profitability in a highly competitive
and cyclical automobile dealership industry, its high reliance on
bank borrowings to fund working capital requirements, leveraged
capital structure and weak debt coverage indicators, stretched
liquidity and risk associated with the partnership nature of its
constitution. The ratings, however, continue to favourably factor
in experience of its partners in automobile dealership industry and
authorized dealership of a reputed automobile brand.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Volume driven growth in scale of operations along with
improvement in operating profitability (PBILDT margin) beyond
3% on a sustained basis
* Improvement in overall gearing to below 2.00x on a long-term
basis with reduced reliance on external borrowings to fund working
capital requirements
Negative factors – Factors that could lead to negative rating
action/downgrade:
* Continuation of weak demand scenario for passenger vehicles
leading to sizeable decline in operating profitability (PBILDT
margin) below 1.50% on a sustained basis
* Deterioration in liquidity with continued reliance on bank
borrowings to fund working capital requirements
* Further increase in inventory holding or any major write-off of
outstanding inventory
* Any major withdrawal or nontimely infusion of requisite unsecured
loans by promoters, impacting the liquidity.
Detailed description of the key rating drivers
Key rating weaknesses
* Moderate scale of operations and thin profitability: During FY22,
DM's TOI increased by 17.32% y-o-y to INR130.66 crore, largely on
account of increase in sales volumes of its products and income
from stores and spares, reflecting the revival of demand for
passenger vehicles (PVs) in the domestic market. DM's PBILDT margin
improved to 1.26% in FY22 as compared to 0.50% in FY21, with
increase in scale of operations, however continues to remain thin
primarily on account of intense competition and trading nature of
automobile dealership business. Increase in TOI along with better
but thin operating margins resulted into net profit of INR0.64
crore in FY22 as compared to loss of INR0.77 cr in FY21. Further,
company reported TOI of INR68.59 cr. during H1FY23.
* Auditor's remarks regarding non-availability of cash on hand for
verification: DM had an outstanding balance of INR5.58 crore
towards cash on hand as on March 31, 2022 as against INR6.28 crore
as on March 31, 2021. The auditor, in its remarks as a part of the
FY22 financials, has stated that the management has certified the
outstanding balance of cash on hand as on March 31, 2022, however,
the same has not been made available to the auditor for
verification. However, as per feedback provided by Auditor dated
December 12, 2022, Dhru Motors has fully deposited cash in the bank
accounts.
* Leveraged capital structure and weak debt coverage indicators:
DM's capital structure remained leveraged marked by an overall
gearing ratio of 3.89x as on March 31, 2022 (6.70x as on March 31,
2021). The debt profile of the firm majorly comprised working
capital borrowings (in form of cash credit, inventory funding and
trade advance) which stood at INR23.29 crore as on March 31, 2022.
DM's debt coverage indicators remained weak, marked by an interest
coverage ratio of 1.18x during FY22 (0.28x during FY20) and total
debt/GCA of 16.56x as on March 31, 2020 (91.70x as on March 31,
2020). It improved largely on account of better cash accruals
following increase in TOI as well as profitability.
* Presence in a highly competitive auto dealership business: DM
faces aggressive competition in a fragmented automobile industry on
account of established presence of other automobile manufacturers.
Further, the profitability of the dealerships is limited as the
prices are set at a particular level by the principal and dealers
are not allowed pricing flexibility beyond a marginal extent (which
also takes care of inter-dealer competition in the market,
sometimes in the same city). Also, the fortunes of an automobile
dealer rest on the performance of the principal and the
acceptability of its products in the market.
* Close linkages to cyclical automobile industry: The automobile
industry is inherently vulnerable to the economic cycles and is
highly sensitive to the interest rates as well as availability of
credit.
* Partnership nature of its constitution: DM's constitution as a
partnership firm restricts its overall financial flexibility in
terms of limited access to external funds for business
requirements. Further, there is inherent risk of possibility of
withdrawal of capital and dissolution of the firm in case of
death/insolvency of partner. However, we have seen partners have
infused funds of around INR2 cr in FY22 and as per undertaking
submitted by partners, they have infused funds of INR0.92 cr in
current year and will infuse additional INR1.50 cr by March 2023.
Key rating strengths
* Experienced partners: The partners of DM, Mr. Nayan Intwala and
Mrs. Nisha Intwala possesses around two decades of experience in
the automobile dealership business. They collectively look after
the overall operations of the firm. The partners are assisted by
experienced professionals in managing daily operations of the
firm.
* Authorized dealer of reputed automobile brand, Maruti Suzuki
India Limited: DM is an authorized dealer of Maruti Suzuki India
Limited (MSIL). MSIL is the market leader in the India's passenger
car industry with around 50% market share in overall passenger car
sales. MSIL currently has 17 models with over 150 variants across
segments. These include (i) the mini segment: Alto and S-Presso;
(ii) the B (compact) segment: Wagon R, Swift, Celerio, Ignis,
Dzire, and Baleno; (iii) C (super compact) segment: Tour S; (iv)
the D (mid-sized) segment: Ciaz; (v) the vans segment: Eeco; (vi)
the SUV segment: Gypsy, Ertiga, S-Cross, Brezza & XL6; and (vii)
the LCV segment: Super Carry.
Liquidity: Stretched
DM's liquidity remains stretched marked by almost full utilization
of its fund based working capital limits at around 90% for the
trailing 12 months ended November 2022, largely on account of its
sizeable inventory holding which it needs to keep to readily serve
its customers as well as to avail quantity discount from the
principal and low free cash and bank balance of INR0.06 crore as on
March 31, 2022 (Rs.0.46 crore in FY21) During FY22, DM's operating
cycle remained moderate at 36 days in FY22 (42 days in FY21), with
some improvement on account of low inventory holding as at FY22
end. Further, firm's scheduled debt repayments over the next years
are sizeable against its cash accrual generation, making the firm
dependent upon additional fund infusion by promoters to meet the
requirements.
Surat based Dhru Motors (DM) is a partnership firm established by
Mr. Nayan Intwala and Mrs. Nisha Intwala in 1996. The firm is an
authorised dealer for the passenger as well as commercial vehicles
of Maruti Suzuki India Limited. The firm operates six showrooms
(two under Maruti Arena; one under Truevalue, one under Nexa, one
for commercial vehicle and one Maruti Driving School) in an around
Surat in Gujarat along with three authorized service centres.
DIAMOND HOMETEX: CARE Keeps B- Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Diamond
Hometex India Private Limited (DHIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.30 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Short Term Bank 0.75 CARE A4; 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 18,
2021, placed the rating(s) of DHIPL under the 'issuer
non-cooperating' category as DHIPL 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. DHIPL 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).
Panipat-based, (Haryana) Diamond Hometex India Private Limited
(DHIPL) was incorporated in 2013. The company is currently promoted
by Mr. Nitin Singhal, Mr. Vikas Garg and Mr. Rohit Bansal. DHIPL
was incorporated with an objective to manufacture mink and polar
blankets. The company has set up a manufacturing plant for
manufacturing blankets at Panipat and DHIPL commenced its
operations from August, 2014.
GOVERDHAN TRANSFORMER: CARE Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Goverdhan
Transformer Udyog Private Limited (GTPL) continues to remain in the
'Issuer Not Cooperating' category.
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
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 GTPL under the 'issuer
non-cooperating' category as GTPL 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. GTPL
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).
Uttar Pradesh based Goverdhan Transformer Udyog Private limited
(GTPL) is a private limited company incorporated in January, 1985
and is being managed by Mr. Rajesh Kapoor; Ms. Seema Kapoor and Mr.
Naman Kapoor. The company is engaged in manufacturing of
transformers for state owned electricity boards and other
government departments at its manufacturing facility located at
Shikohabad (Uttar Pradesh).
GVMC PUBLIC: CARE Lowers Rating on INR10cr LT Loan to B-
--------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
The G V M C Public Health Employees Mutually Aided Thrift and
Cooperative Credit Society, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed rationale and key rating drivers
CARE Ratings Ltd. had, vide its press release dated February 20,
2018, placed the ratings of The G V M C Public Health Employees
Mutually Aided Thrift and Cooperative Credit Society under the
'issuer non-cooperating' category as the cooperative society had
failed to provide information for monitoring of the rating. The
cooperative society continues to be non-cooperative despite
repeated requests for submission of information through phone calls
and emails dated August 23, 2022, September 2, 2022, and 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.
The rating for the bank facilities of The G V M C Public Health
Employees Mutually Aided Thrift and Cooperative Credit Society has
been revised on account of absence of adequate information required
for reviewing the rating.
Detailed description of the key rating drivers
At the time of last rating on October 7, 2021, the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Relatively small scale of operation despite long track record:
GVMC being established in 1941, has long-term presence of more than
seven decades in the money lending business. Despite the long
existence, the society remains relatively small in size with an
outstanding loan portfolio of INR10.04 crore as on March 31, 2016
(Provisional). The society has been entirely funding to the
employees of GVMC. However, the society is raising funds from banks
and deposits from members to meet the regular credit requirement of
GVMC employees.
* Concentrated loan portfolio: The product and customer profile of
GVMC is concentrated having 100% credit exposure to GVMC employees
resulting in small scale businesses. There is no collateral
requirement for the loans extended to employees except approval
from the surety (employees of GVMC). The borrowing rate of the
society at present is 17% p.a. Apart from concentrated loan
portfolio, the society also has regional concentration with single
branch operating in Visakhapatnam, Andhra Pradesh. This in turn
limits the scale of operation.
* Limited resource profile: The major source of external funding
for GVMC has been term loans from Bank and deposits from members
and employees. The total term loan accounted for 67% of the total
debt as on March 31, 2016 (Provisional). The society depends
heavily on bank funding.
* Highly geared financial risk profile: The overall gearing of the
society [4.37x as on March 31, 2016 (Provisional)] has been on the
higher side as on last three account closing dates mainly due to
high dependency on external funding to support the loan portfolio.
The interest coverage of the society despite improving y-o-y
remained weak at 1.23x during FY16 (Provisional) (refers to the
period April 1 to March 31).
Key Rating Strengths
* Established track record and experienced management: GVMC was
established in the year 1941. Mr Satyanaryana (President) has ten
years of experience in credit co-operative society. Mr Anand
(Secretary) is also actively involved in the day to day operations
of the society. The society is well supported by the other
management team Mr Byragi Raju and Mr Sridhar among others for
smooth functioning of the society. GVMC is registered under
Mutually Aided Co-operative Society Act of Andhra Pradesh, 1995
where the each society is governed by its own set of bye-laws.
There is no intervention from any government regulatory bodies.
* Growth in scale of operation and improving return on total assets
(ROTA) during review period: Due to small scale of operation and
narrow interest spread, the revenue (interest income) of the
society remained small during O C T Credit Analysis & Research
Limited 2 last three year. However, the total operating income of
the society increased at Compounded Annual Growth Rate of 18.96%
from INR1.06 crore in FY14 to INR1.50 crore in FY16 (Provisional)
albeit fluctuation in loan portfolio. The PAT of the society
increasing y-o-y i.e., from INR0.09 crore in FY14 to INR0.23 crore
in FY16 (Provisional). Furthermore, ROTA of the society improving
year on year i.e., from 1.92% in FY15 to 2.13% in FY16
(Provisional) due to growth in interest income as well as growth in
the asset portfolio
* Satisfactory asset quality: As on March 31, 2016, the society has
reported zero Non-performing Assets (NPA) accounts. The loans
extended by GVMC are based upon the salaries of employees and the
amount of loan goes up to maximum of INR3 lakhs/member with loan
tenure of 5 years. The society will not have any NPAs as the
society undertakes surety from two members. In case of death of the
employee, the society provides grace period of six month for
payment of the loan. Apart, the job will be provided to the
concerned employee family member. Due to the above said factors,
the recovery of payment is 100% for the society.
* Moderate outlook on industry: The operations of the society are
similar to that of Non-Banking Financial Companies (NBFC) which
have rapidly emerged as an important segment of the Indian
financial system. Moreover, NBFCs assume significance in the small
business segment as they primarily cater to the credit requirements
of the unorganized sector such as wholesale & retail traders,
small-scale industries and small borrowers at the local level. NBFC
is a heterogeneous group of financial institutions, performing a
wide range of activities like hire-purchase finance, vehicle
financing, equipment lease finance, personal loans, working capital
loans, consumer loans, housing loans, loans against shares and
investment, etc. The segment has witnessed considerable growth in
the last few years and is now being recognized as complementary to
the banking sector due to implementation of innovative marketing
strategies, introduction of tailor-made products, customer-oriented
services, and attractive rates of return on deposits and simplified
procedures, etc.
The GVMC Public Health Employees Mutually Aided Thrift and Credit
Co-operative Society Limited (GVMC) was established in the year
1941. The society is engaged in lending loans to employees of GVMC
@ 17% interest with a maximum loan limit of INR3 lakh per member
with loan tenure of 5 years. GVMC has 4000 employees, however, the
society has given loans to 1200 employees only as on August 31,
2016.
HARITASA ELECTRONICS: CRISIL Withdraws B Rating on LT/ST Debts
--------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Haritasa Electronics
Solutions Private Limited (HESPL) to 'CRISIL B/Stable/CRISIL A4
Issuer Not cooperating'. CRISIL Ratings has withdrawn its rating on
bank facility of HESPL following a request from the company and on
receipt of a 'no dues certificate' from the banker. Consequently,
CRISIL Ratings is migrating the ratings on the bank facilities of
HESPL from 'CRISIL B/Stable/CRISIL A4 Issuer Not cooperating' to
'CRISIL B/Stable/CRISIL A4' and has withdrawn the same. The rating
action is in-line with CRISIL Ratings' policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL B/Stable (Migrated
from 'CRISIL B/Stable ISSUER
NOT COOPERATING'; Rating
withdrawn)
Short Term Rating - CRISIL A4 (Migrated from
'CRISIL A4 ISSUER NOT
COOPERATING'; Rating
Withdrawn)
Incorporated in 2011, Haritasa Electronics Solutions Private
Limited name changed from Haritasa Checkmate Electronics Private
Limited dated April 13, 2017 is a manufacturer, agent, trader,
dealer and service provider of all Electronic and electrical goods,
Data and Voice Communication systems, security systems, Building
Management systems , Automation and Security, etc. The company
provides exclusive, standard as well as tailored technical
solutions for industrial projects, Cyber Parks, IT industries,
Hospitals, Hotels, educational institutions, Government
institutions and other sectors.
K.P. BLUE: ICRA Withdraws B+ Rating on INR10.97cr Term Loan
-----------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
K.P. Blue Metal at the request of the company and based on the No
Due Certificate and No Objection Certificate/Closure Certificate
received from the banker. However, ICRA does not have information
to suggest that the credit risk has changed since the time the
rating was last reviewed. The Key Rating Drivers, Liquidity
Position, Rating Sensitivities, Key Financial indicators have not
been captured as the rated instruments are being withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Cash Credit
Long Term- 0.03 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Withdrawn
Long Term- 10.97 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Term Loan
Established in 2007, KPBM is a part of the Geekay Group of
companies, which is a well-established leading stone crusher based
in Vellore. The company was initially set up as a partnership
entity with 10 partners. Subsequently, it was reconstituted in 2010
with four partners consisting of the promoter Mr. Gandhi and his
immediate family. KPBM has industrial equipment and machineries
with VSI technology that helps in mining construction aggregates.
At present, it is mining stone from the quarry located in Vellore,
leased out from the Government of Tamil Nadu.
M.G. CHARIOTS: CARE Keeps B- Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of M.G.
Chariots Private Limited (MCPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.90 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Short Term Bank 0.10 CARE A4; 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 26,
2021, placed the rating(s) of MCPL under the 'issuer
non-cooperating' category as MCPL 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. MCPL
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated September 11, 2022, September 21, 2022, October
1, 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).
Lucknow-based (Uttar Pradesh) M.G Chariots Private Limited (MGCPL)
was incorporated in 2012 by Agarwal family. The company is
currently promoted by Mr. Abhishek Agarwal, Mr. Ashish Agarwal, Ms.
Vani Agarwal and Ms. Vandita Agarwal. Company is an authorized
dealer of Renault India Private Limited (Renault) for its passenger
vehicles.
MADHYA PRADESH: CARE Lowers Rating on INR100cr NCD to C
-------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Madhya Pradesh Financial Corporation (MPFC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term bank 13.19 CARE C; Stable Revised from
Facilities CARE C (CE); Stable
Long-term bank
facilities 64.82 CARE D Reaffirmed
Redeemable 100.00 CARE C; Stable Revised from
Non-convertible CARE C (CE); Stable
unsecured
taxable bonds
Detailed rationale and key rating drivers
CARE Ratings Limited (CARE Ratings) has reaffirmed the rating
assigned to the long-term bank facility – Cash Credit (CC) and
long-term redeemable non-convertible unsecured taxable bonds of
Madhya Pradesh Financial Corporation (MPFC) to 'CARE C; Stable'.
CareEdge Ratings has removed the 'CE' suffix pursuant to a change
in the analytical approach by CARE Ratings. The bank facilities and
non-convertible debentures of MPFC have unconditional and
irrevocable guarantees extended by the Government of Madhya Pradesh
(GoMP) for ensuring the timely debt servicing of these facilities.
However, the aforementioned structure is weak and not being adhered
to, with the guarantees not getting invoked.
As there are ongoing delays in servicing its term loan bank
obligations, the ratings for the term loan bank facilities continue
to remain at 'CARE D'.
The rating of MPFC is based on its standalone credit assessment and
considers the ongoing delays in debt servicing of term loan
principal and interest by MPFC, as informed by the company. CARE
Ratings notes that the company has been regular in its debt
repayments on the non-convertible debenture (NCD).
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
Improvement in liquidity profile of the company
Improvement in asset quality
Sustained growth in AUM
Negative factors – Factors that could lead to negative rating
action/downgrade:
Delay in servicing of its debt obligation
Detailed description of the key rating drivers
Key rating strengths
* Backed by Government of Madhya Pradesh: The bond issues and bank
facilities of MPFC are backed by unconditional & irrevocable
guarantee by GoMP supported by Structured payment mechanism.
However, the guarantee given by GoMP has not been invoked by the
lenders.
Key rating weaknesses
* Decline in loan book: The corporation could not sanction fresh
loans during FY22 due to the curtailed resources and line of credit
has been discontinued. The bond market has also discontinued its
support to the state-level institutions as a result, MPFC could not
raise funds through fresh bond issue. During FY22, GoMP did not
extend its support to the corporation. Consequently, the loan book
shrunk from INR421.78 crore in FY21 to INR281.41 crore in FY22.
* Accumulated Losses: MPFC has accumulated losses in its balance
sheet to the tune of INR421.97 crore as on March 31, 2022, due to
heavy provisioning in the past years as well as in the current year
and low interest spread. During FY22, the total income of MPFC
reduced by 5% over the previous financial year largely on account
of de-growth in loan portfolio by 33% and heightened NPAs on which
income is recognized on receipt basis. MPFC's net loss also
increased during the year primarily on account of increased
provision and write off of bad loans during the year coupled with
dip in income. As a result, the profitability ratios continued to
remain in negative with ROTA at -8.19% in FY22 as against -5.20% in
FY21.
* Weak asset quality: There has been significant deterioration in
asset quality as implied by the rising trend in Gross NPA and Net
NPA which rose to 85% and 73% respectively as on March 31, 2022
from 65% and 70% respectively.
Liquidity: Poor
MPFC has liquidity of INR21.42 crore in form of cash of INR0.004
crore, bank balance of INR12.14 crore and FDR of INR 9.28 crore as
on September 30, 2022. Against this, the company has debt
obligations of INR457 crore on its balance sheet.
MPFC was incorporated in 1955 under the State Financial
Corporations Act, 1951. It is a state-level financial corporation
providing long-term and medium-term, fund-based and non-fund-based
financial assistance to industrial, infrastructural and social
sector organisations in Madhya Pradesh with focus on small and
medium-sized industries. It has its headquarters at Indore – the
industrial hub of the state and has a network of nine branches and
seven business development centres. MPFC is headed by the board of
directors, which includes senior bureaucrats, nominees of the Small
Industries Development Bank of India (SIDBI), the Housing and Urban
Development Corporation (HUDCO), and the Life Insurance Corporation
(LIC), financial experts and banking professionals. The performance
of MPFC has gradually weakened, with sustained deterioration in the
asset quality of its loan portfolio, resulting in delay in
recoveries, adversely impacting the liquidity of the corporation
along with worsening negative returns on total assets (ROTA).
Furthermore, the units financed by MPFC are also facing
difficulties due to the pandemic and MPFC had allowed a moratorium
of six months to standard accounts, which had severely affected its
collection efficiency.
MEP NAGPUR: CARE Keeps D Debt Rating in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of MEP Nagpur
Ring Road 1 Private Limited (MNRR1PL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 250.95 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 8,
2021, placed the rating(s) of MNRR1PL under the 'issuer
non-cooperating' category as MNRR1PL 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. MNRR1PL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated August 24, 2022, September 03,
2022, September 13, 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: Consolidated - CARE has adopted consolidated
approach by considering the financial metrics of MEP Infrastructure
Developers Limited (MEPIDL) as the operations of MEPIDL and its
subsidiaries are closely linked and same is underpinned by the
centralized management and common treasury functions among various
entities through which it operates in toll collection business.
MEP Infrastructure Developers Limited (MEPIDL)
Incorporated in 2002, MEP Infrastructure Developers Limited
(MEPIDL) started out with road project contracts for toll
collection and OMT (Operate, Maintain & Transfer). However, it has
now evolved into an integrated road infrastructure developer. The
company at standalone level executes toll collection projects with
tenure of upto one to three years. In case of projects beyond one
to three years are executed through Special Purpose Vehicles
(SPVs). The financing of these SPVs is actively managed by MEPIDL,
which has substantial exposure in the form of investments as well
as advances.
MEP Nagpur Ring Road 1 Private Limited
MNRRPL is a Special Purpose Vehicle (SPV) promoted by MEP
Infrastructure Developers Limited in Joint Venture with M/s Sanjose
India Infrastructure and Construction Private Limited (74:26) for
execution of project envisaging four laning of standalone Ring
road/bypasses for Nagpur City, Package-I from km 0+500 to km 34+000
(Total Length - 33+500 km) in the State of Maharashtra on DBFOT
(Hybrid Annuity) basis.
MRJ STEELS: CRISIL Lowers Rating on Long/Short Term Debts to D
--------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on bank facilities of MRJ
Steels Private Limited (MRJPL) to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (Downgraded from
'CRISIL B+/Stable')
Short Term Rating - CRISIL D (Downgraded from
'CRISIL A4')
The downgrade reflects the delay in servicing of debt and
devolvement in the letter of credit facility by the company over
the past few months, owing to weak liquidity.
The rating also factors in the susceptibility of the operating
margin to volatility in steel prices, working capital-intensive
operations and the weak financial risk profile. These weaknesses
are partially offset by the extensive experience of the promoters
in the steel industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Delay in servicing of term debt obligation: Weak liquidity has
led to a delay in repayment of the principal amount towards the
term debt and devolvement in the letter of credit facility in
October 2022.
* Vulnerability to cyclicality in the end-user segment: Revenue and
profitability are linked to fortunes of the inherently cyclical
steel industry, which in turn is strongly correlated with overall
growth in gross domestic product. Operating performance will remain
susceptible to volatility in commodity prices and offtake by the
key end-user sector. Operating margin has dropped to 3.35% in
fiscal 2022 (from 4.86% in fiscal 2021) amidst rising steel prices
and limited scope for passage of the hike in cost to customers. The
margin may remain steady at 3.35-3.75% over the medium term.
* Below-average financial risk profile: Financial risk profile is
marked by a high gearing of 4.54 times and total outside
liabilities to adjusted networth ratio of 6.12 times as on March
31, 2022. These ratios are projected to be around 3.5 times and 4.9
times, respectively, as on March 31, 2023. Debt protection metrics
have also been weak in the past due to high gearing and low accrual
from operations. Interest coverage and net cash accrual to total
debt ratios stood at 1.2 times and 0.01 time, respectively, for
fiscal 2022 and are likely to be around 1.1 time and 0.01 time,
respectively, in fiscal 2023.
Strength:
* Extensive experience of the promoters: The three-decade-long
experience of the promoters in the steel industry, their strong
understanding of market dynamics and healthy relationships with
suppliers and customers will continue to support the business risk
profile.
Liquidity: Poor
Bank limit utilisation was extremely high averaging 108% over the
12 months through November 2022. Expected cash accrual of INR0.5-1
crore may not suffice to cover the term debt obligation of INR1.5
crore over the medium term. Current ratio was healthy at 1.5 times
as on March 31, 2022.
Rating Sensitivity factors
Upward factors:
* Track record of timely debt servicing and absence of any
irregularity for at least 90 days.
* Improvement in liquidity with drop in bank limit utilisation
below 100%.
Incorporated in 1990, MRJ trades in sponge iron, billets, ingots
and thermo mechanically treated (TMT) bars, among others. The
company has four offices, one each in Delhi; Ludhiana (Punjab); and
Ghaziabad and Muzaffarnagar (Uttar Pradesh). Mr. Ravindra Juneja
and his son, Mr Saurabh Juneja are the promoters.
R.S. PROFILLING: CRISIL Assigns B+ Rating to INR21cr Cash Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
bank facilities of R.S. Profilling Private Limited (RSPPL, part of
R.S. group).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 21 CRISIL B+/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 0.01 CRISIL B+/Stable (Assigned)
Working Capital
Term Loan 4.19 CRISIL B+/Stable (Assigned)
Working Capital
Term Loan 2.10 CRISIL B+/Stable (Assigned)
The rating reflects R.S. group's exposure of risks related to
modest scale of operation and Sizable capex plan weakening
financial profile. These weaknesses are partially offset by its
extensive industry experience of the promoters and moderate working
capital cycle
Analytical Approach:
CRISIL Ratings has combined business and financial risk profile of
RSPPL and its wholly owned subsidiaries Norplex Oak India Ltd
(NOIL), Maple Circuits Ltd (MCL) referred as R.S. group.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operation: Groups business profile is constrained
by its scale of operations in the intensely competitive Building
Products industry. Group has reported operating income of INR48.5
Crores in fiscal 2022. Revenue is expected to remain modest over
the medium term from existing segment however consolidated revenue
is expected to improve from fiscal 2025 with the commencement of
commercial production of newly acquired subsidiaries. Groups scale
of operations will continue limit its operating flexibility.
* Sizable capex plan weakening financial risk profile: Group has
average financial profile marked by gearing of 3.05 times and total
outside liabilities to adj tangible networth (TOL/ANW) of 3.34
times for year ending on 31st March 2022. RSPPL's debt protection
measures have also been at weak level in past due to high gearing
and low accruals from the operations. The interest coverage and net
cash accrual to total debt (NCATD) ratio are at 1.44 times and 0.03
times for fiscal 2022. Group's debt protection measures are
expected to weaken further with the sizable capex plan of Rs. 10
Crores in wholly owned subsidiaries.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an experience of over 10 years in Building Products industry.
This has given them an understanding of the dynamics of the market
and enabled them to establish relationships with suppliers and
customers.
* Moderate working capital cycle: Gross current assets were at
156-269 days over the three fiscals ended March 31, 2022. Its
moderate working capital management is reflected in its gross
current assets (GCA) of 156 days as on March 31, 2022 driven by
debtors of 60 days and inventory 103 days. The group is required to
extend long credit period of 30-60 days as, the customers are small
and medium size player who require credit. Furthermore, due to
order lead time of less than 1 week company maintains the domestic
inventory of the period of 1-2 months however meet its business
requirement it hold the imported material for the period of 4-5
months.
Liquidity: Stretched
Bank limit utilization is moderate at around 88 percent for the
past twelve months ended Sept 22. Cash accrual are expected to be
over INR1 Cr which are insufficient against term debt obligation of
INR1.25-1.50 crores over the medium term. However, promoters will
provide funding support to meet the repayment in timely manner.
Current ratio is low at 1.02 times on March31, 2022.
Outlook: Stable
CRISIL Ratings believe group will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity factors
Upward factors
* Sustained improvement in revenue by 25%with sustenance of margins
leading to higher cash accruals above Rs. 2 Crores
* Improvement in financial risk profile
Downward factors
* Decline in scale of operations leading to fall in revenue by 20
percent and profitability margin below 5 %, hence leading to net
cash accrual lower than INR1 Crores and the stretched liquidity.
* Large debt-funded capital expenditure weakens capital structure
About the Group
RSPPL was incorporated in July 2013. RSPPL is engaged in
manufacturing of wide range of pre-engineered building products
such as color coated coils & sheets, panel profile sheets, roofing
sheets colored, steel roof trusses and steel girder bridges. RSPPL
manufacturing facility is located in Srinagar, Jammu & Kashmir.
RSPPL is owned & managed by Mr. Dawood Ahmad, Ms. Jameela Ahmad
and Mr. Najam who have a rich industrial experience.
Norplex Oak India Ltd: Acquired in current financial year from PCBL
Ltd. as wholly owned subsidiary of RSPPL to carry on business of
manufacturing of Copper Clad sheets. Current company doesn't have
any operations.
Maple Circuits Ltd: Acquired in current financial year from PCBL
Ltd. as wholly owned subsidiary of RSPPL to carry on business of
manufacturing of circuit board. Current company doesn't have any
operations.
RELIANCE BIG: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Reliance
Big Entertainment Private Limited (RBEPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 430.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 150.00 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 October 18,
2021, placed the rating(s) of RBEPL under the 'issuer
non-cooperating' category as RBEPL had failed to provide
information for monitoring of the rating exercise as agreed to in
its Rating Agreement. RBEPL continues to be non-cooperative despite
repeated requests for submission of information vide e-mail
communications dated December 7, 2022, December 15, 2022, and
December 28, 2022, and numerous phone calls.
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).
Detailed description of the key rating drivers
At the time of last rating on October 18, 2021, the following were
the rating weaknesses:
Key rating weaknesses
* Weakening of the credit profile of the credit enhancement
provider: RBEPL's credit profile had weakened on account of delays
in debt servicing.
Reliance Big Entertainment Private Limited (RBEPL), incorporated in
2006, is one of the media and entertainment companies of the
Reliance Anil Dhirubhai Ambani Group (R-ADAG). R-ADAG has interests
in telecommunications, energy, financial services, infrastructure
and media and entertainment. In media and entertainment industry,
the R-ADAG has presence in various verticals majorly through
companies such as Reliance Mediaworks, Reliance Broadcast Networks
Limited etc. and their subsidiaries/ joint ventures (JVs).
SAI GLOBAL: ICRA Lowers Rating on INR24.80cr LT Loan to B
---------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of Sai
Global Yarntex (India) Private Limited (SGYIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 24.80 [ICRA]B (Stable) downgraded
Fund Based/CC from [ICRA]B+(Stable)
Long Term- 6.29 [ICRA]B+ (Stable) downgraded
Fund Based/TL from [ICRA]B+(Stable)
Long-term/ 8.64 [ICRA]B (Stable); downgraded
Short-term- From [ICRA]B+(Stable);
Unallocated [ICRA]A4 reaffirmed
Rationale
The revision in the long-term rating of SGYIPL considers the
continued stretched liquidity position of the company, as reflected
in full utilisation of its working capital limits in the past few
months and low cash and bank balances of around INR0.1 crore as of
March 2022 on account of working capital intensive nature of
operations. The company is likely to report a decline in its
revenues on the back of unfavourable contributions for spinners in
the current fiscal.
SGYIPL has witnessed pressure on its margins as well. The debt
coverage metrics of the entity continue to be elevated with
Debt/OPBDITA of 7.8 times and an interest coverage of 1.4 times in
FY2022 on the back of thin earnings and high inventory
requirements. The ratings also factor in the small scale of
operations and susceptibility of its margins to fluctuations in raw
material prices. However, the ratings favourably consider the
company's long track record in the spinning industry, resulting in
an established customer and supplier base and proximity of the
plant to the cotton growing areas of Ongole in Andhra Pradesh,
providing logistical advantages.
The Stable outlook on the long-term rating reflects ICRA's
expectation that the company will continue to benefit from the
experience of its promoters and easy availability of raw
materials.
Key rating drivers and their description
Credit strengths
* Long track record and location-specific advantages: SGYIPL has a
track record of more than 15 years in the cotton spinning industry,
leading to established relationships with customers and suppliers.
Further, the management's long experience in the industry supports
operational efficiency and helps in procuring cotton at favorable
rates. SGYIPL's plant is in the cotton growing areas of Ongole in
Andhra Pradesh, resulting in easy availability of quality raw
materials and savings in transportation costs, which supports its
margins.
Credit challenges
* Stretched financial profile: SGYIPL's financial risk profile is
characterised by modest leverage indicators and coverage metrics,
primarily constrained by the high working capital requirements and
thin earnings, resulting in a relatively higher dependence on
external debt. The key metrics, including total debt to operating
profits and interest coverage ratio, stood at a modest level of
around 7.8 times and 1.4 times, respectively, in FY2022. The credit
metrics are likely to remain stretched given the continued high
working capital requirements. The liquidity position continues to
remain stretched with almost full utilisation of the working
capital limits.
* Moderate scale of operations and limited pricing flexibility:
SGYIPL's scale of operations remains modest, with an installed
capacity of 26,000 spindles, limiting economies of scale and
financial flexibility. Further, its profitability is susceptible to
adverse movement in raw material prices, given the intense
competition, which limits its pricing flexibility, as seen in the
past.
Liquidity position: Stretched
SGYIPL's liquidity position remains stretched given the high
working capital requirements in the business, and modest earnings
from operations. The average utilisation of the working capital
limits for the 12-month period that ended in October 2022 stood at
around 99%. Moderate repayment obligations are expected to result
in the cash flows remaining tight in the coming quarters.
Rating sensitivities
Positive factors – The ratings may be upgraded if there is a
sustained growth in revenues and earnings coupled with an
improvement in the working capital intensity, which would support
SGYIPL's debt protection metrics and liquidity position.
Negative factors – Pressure on the ratings could arise if there
is a sustained pressure on its operating performance or a
deterioration in the working capital intensity, adversely impacting
the company's coverage metrics and liquidity profile.
Incorporated in December 2005, SGYIPL is involved in cotton
spinning at its unit at Ongole, Prakasam district, Andhra Pradesh.
The installed capacity of the unit is 26,000 spindles. The company
is promoted by Mr. Koti Reddy, Mr. Veeraprakasa Rao, Mr. G. B.
Narayana, Mr. Srinivasa Rao, Mr. Gopala Reddy and Mr. Desu
Subrahmanyam. SGYIPL primarily produces cotton yarn of medium
counts, ranging from 26's to 40's of carded and combed variety.
SMK PETROCHEMICALS: CARE Keeps B Debt Rating in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of SMK
Petrochemicals India Private Limited (SPIPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.75 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Short Term Bank 0.75 CARE A4; 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 26,
2021, placed the rating(s) of SPIPL under the 'issuer
non-cooperating' category as SPIPL 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. SPIPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated September 11, 2022, September
21, 2022, October 01, 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).
SMK Petrochemicals India Private Limited (SPL) is a private limited
company incorporated in February 2005 and is currently being
managed by Mr. Naveen Kumar and Mrs. Payal (W/O Mr. Naveen Kumar)
as its directors. SMK is engaged in the manufacturing and trading
of automotive lubricating oil, industrial lubricating oil and
special lubricating oil at its manufacturing facility located at
Sonipat, Haryana.
SREI GROUP: NARCL Highest NPV Bidder With INR5,555-Crore Offer
--------------------------------------------------------------
BQ Prime reports that the government-backed National Asset
Reconstruction Company Ltd. has taken lead in taking over two
stressed entities of the Srei group as it submitted the "highest
net present value bid of INR5,555 crore" among bidders, an official
said on Jan. 4.
NARCL's net present value bid, submitted in the 10-hour-long
"challenge mechanism" conducted by the committee of creditors on
Jan. 3, constitutes INR3,200 crore in cash, a INR1,000-crore jump
from the previous plans offered, he said, BQ Prime relays.
Although NARCL has a "clear advantage" for taking control of Srei
Infrastructure Finance and Srei Equipment Finance, Authum
Investment and Infrastructure, another bidder in the insolvency
resolution process for the two stressed assets, "is not out of the
game even though it was behind marginally in the final and fifth
financial challenge bidding round due to terms and conditions and
legal compliance", the official said.
As a result of failing to raise bids above INR4,800 crore, a
consortium of Varde Partners and Arena Investors, another bidder in
the resolution process, was "out of the race during the third
round", he said, according to the report.
"The challenge mechanism was successfully conducted and completed
at midnight," Srei administrator Rajneesh Sharma told PTI without
divulging details of the outcome of the process, BQ Prime relays.
In the challenge mechanism process, two parameters - an upfront
cash component and the net present value of the committed amount
under the financial proposals - are the key factors.
"There is INR2,200 crore in cash on Srei's balance sheet. The
successful bidder has to infuse INR1,000 crore in cash to take over
the Srei assets. Apart from cash, a short-term recovery worth
INR3,450 crore is expected in the next 2-3 years, while optionally
convertible bonds worth INR8,000 crore will be issued by the
successful bidder for a period of up to seven years," the report
quotes a source aware of the development as saying.
The total comprehensive resolution plan will be worth
INR13,000-14,000 crore, he said.
"In the worst case, recovery for the lenders from the Srei
resolution process is expected to be INR9,500-10,000 crore, out of
around INR32,000 crore exposure," the source said.
Technical bids have already been received and after the financial
bids, the two bidders - NARCL and Authum - will submit their
comprehensive plans and these will be placed before CoC on Jan. 8-9
for final voting to announce the winner, BQ Prime notes.
Now, lenders will look into the final resolution plans and
"conditions" therein in compliance with the Insolvency and
Bankruptcy Code.
CoC will meet on Jan. 7 to decide timelines before their planned
voting on either Jan. 8 or 9, adds BQ Prime.
"The entire process may continue till January end and we expect to
get an extension today from the adjudicating authority. A lot of
time got wasted due to several court cases filed by an individual
shareholder of Srei," the source, as cited by the report, said.
NARCL made it clear that it would not be able to offer
government-backed guarantees as the asset acquisition is not on a
nomination basis.
About SREI
SREI Infrastructure Finance Ltd. is a non-banking financial
institution. The company has three principal lines of business in
financing: infrastructure equipment finance, infrastructure
projects finance and renewable energy product finance.
Infrastructure equipment finance is the largest business division
of the Company.
On Oct. 4, 2021, the Reserve Bank of India superseded the board of
directors of Kolkata-based Srei Infrastructure and said that it
will initiate insolvency proceedings with the National Company Law
Tribunal (NCLT), according to The Economic Times. The RBI cited
governance concerns and defaults by the company and appointed
Rajneesh Sharma, former chief general manager, Bank of Baroda as an
administrator of the company.
The insolvency resolution process against the company started on
Oct. 8, 2021.
The RBI-appointed administrator has admitted claims of around
INR31,868 crore of the total claims received of around INR34, 223
crore from financial creditors to Srei Equipment Finance Ltd
(SEFL), the Hindu BusinessLine disclosed. He had also admitted
claims to the tune of INR257 crore from financial creditors to Srei
Infrastructure Finance.
SURABHI AGRICO: CARE Keeps C Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Surabhi
Agrico Private Limited (SAPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 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 14,
2021, placed the rating(s) of SAPL under the 'issuer
non-cooperating' category as SAPL 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. SAPL
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 30, 2022, September 9, 2022, September
19, 2022.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Uttar Pradesh based Surabhi Agrico Private Limited (SAPL) was
incorporated in 2011 by Mr. Anil Kumar Maurya and Mr. Munna Lal and
commenced its operations in September, 2013. SAP is engaged in
manufacturing of engaged in manufacturing of beverages such as
Frooti, Appy fizz, Bailley Soda etc. Prior to this, the company was
known as "RNG Hotels and Resorts Private Limited" with the
objective to carry hospitality business.
TABLEZ AND TOYZ: CARE Reaffirms D Rating on INR48.13cr LT Loan
--------------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of
Tablez And Toyz Private Limited (TT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 48.13 CARE D Reaffirmed
Detailed rationale and key rating drivers
The rating assigned to the bank facilities of TT factors in the
continuation of delays in debt servicing by company. The company
had been receiving funding support from parent on monthly basis to
fund operational losses as well for debt servicing. Due to delay in
receipt of such support, delays are reported in debt servicing.
Rating sensitivities
Positive factors – Factors that could lead to positive rating
action/upgrade:
* Delay free track record of operations for a continuous period of
more than three months.
Negative factors – Factors that could lead to negative rating
action/downgrade: Not Applicable
Detailed description of the key rating drivers
Key Rating Weakness
* Continuing Delays in debt Servicing: Company have shared the bank
statements from June 2022 to August 2022 in which CARE has observed
the continuation of delays in interest and term loan repayments in
the month of June 2022 and July 2022. While the company has not
shared bank statements of subsequent months, however, as per lender
interaction, the delays are continuing in servicing the interest
and debt repayments obligation of the company.
Key Rating Strengths
* Resourceful Promoters: The parent company Tablez Food
Company(TFC) is a multi-brand retail arm of Lulu Group
International. The shares of TFC are held by Mr. Adeeb Ahamed and
Ms. Shafeena Yusuff Ali. The promoters have experience in the
similar line of business and draw on the expertise of the larger
Lulu group as well. The promoters have been infusing equity
consistently in the past and are expected continue to support the
operations of the companies.
Liquidity: Poor
Liquidity of the company was largely driven from its resourceful
promoters. The operations of the company were severely impacted
during the first and second wave of pandemic and the liquidity from
the core operations is poor.
Analytical approach: Combined
Business and financial risk factors of the Tablez Retail Private
Limited(TR), Tablez and Toyz Private Limited(TT) and C S Creamery
Private Limited(CS) have been combined as the companies are owned
and managed by common promoters, engaged in retail business, and
the collateral securities extended to the bank facilities are
common to all the three companies as per the sanction letter of
lender.
Kochi (Kerala) based, Tablez and Toys Private Limited (TT) was
incorporated in 2016 and full owned subsidiary of Tablez Food
Company Private Limited (TFC). TFC is promoted Mr. Adeeb Ahamed and
Ms. Shafeena Yusuffali. The company had signed master franchisee
agreement with Toys 'R'Us during 2017, as a strategic decision the
company is exiting the franchisee of Toys"R"Us with an objective to
establish in house brand called House of toys and the company has
rebranded its existing stores.
TARANG JEWELS: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Tarang
Jewels Private Limited (TJPL) 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 November 2,
2021, placed the rating(s) of TJPL under the 'issuer
non-cooperating' category as TJPL 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. TJPL
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated September 18, 2022, September 28, 2022, October
8, 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).
Tarang Jewels Private Limited (TJPL) was incorporated in February,
2007 under the name "Omang Constructions Private Limited" Later in
August, 2014, the name of the company changed to present one and
its operations started from October, 2014. The company is engaged
in the retail trading of gold jewellery, diamond studded gold
jewellery, pearls and precious stones studded gold jewellery
(necklaces, earrings, rings, pendants and bangles) and silver
jewellery. TPL has a showroom located at Faridabad, Haryana.
VIKRAM ROLLER: CARE Keeps B-/A4 Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Vikram
Roller Flour Mills Limited (VRFML) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 47.50 CARE B-; Stable/CARE A4;
Short Term ISSUER NOT COOPERATING;
Bank 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 28,
2021, placed the rating(s) of VRFML under the 'issuer
non-cooperating' category as VRFML 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. VRFML continues to be noncooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated September 13, 2022, September
23, 2022, October 3, 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).
Vikram Roller Flour Mills Limited (VRFML) was established in 1973.
The company is engaged in processing of wheat into wheat flour
(atta), refined wheat flour (maida), rawa, bran and semolina (suji)
at its manufacturing facility in New Delhi. VRFML also carries out
trading of pulses, paddy and other agro commodities.
VISHWAKARMA AUTOMOTIVE: CARE Cuts Rating on INR30.03cr Loan to B
----------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Vishwakarma Automotive Private Limited (VAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 30.03 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Positive
and moved to ISSUER NOT
COOPERATING category
Detailed rationale and key rating drivers
CARE Ratings Ltd. has been seeking information from VAPL to monitor
the ratings vide e-mail communications dated November 1, 2022,
November 8, 2022, November 22,2022, November 25,2022 and December
22,2022 among others and numerous phone calls. However, despite
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 VAPL's bank facilities will
now be denoted as CARE B; Stable; 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 ratings.
The revision in ratings is on account of non-availability of
requisite information and no due-diligence conducted due to
noncooperation by VAPL and CARE Ratings Ltd.'s efforts to undertake
a review of the rating outstanding. CARE views information
availability risk as a key factor in its assessment of credit risk.
Further, the rating takes into account small scale of operations,
leveraged capital structure, weak debt coverage indicators,
elongated operating cycle, and highly competitive and fragmented
industry. However, the rating continues to draw comfort from
experienced management with long track record of operations,
association with established customer, and moderate profitability
margins.
Detailed description of the key rating drivers
Key rating weaknesses
* Small scale of operations: VAP's scale of operations stood small
as marked by total operating income of INR70.67 crore and gross
cash accruals of INR3.38 crore respectively, during FY22 as against
INR44.64 crore and INR2.46 crore respectively, during FY21. The
improvement in total operating income in FY22 is on account of new
customers added. Further, the company's net worth base was
relatively small at INR11.89 crore as on March 31, 2022. The small
scale limits the company's financial flexibility in times of stress
and deprives it from scale benefits.
* Leveraged capital structure: Total Debt of the company comprises
of term loans to the tune of INR19.17 crores, unsecured loan from
promoters to the tune of INR4.31 crores and cash credit limits
utilized to the tune of INR8.80 crores. The capital structure of
the company stood leveraged as on the past three balance sheet
dates ending March 31, 20-22 on account of company's high reliance
on external borrowings and higher utilization of working capital
bank borrowings as on balance sheet date as against low net worth
base. Overall gearing ratio stood at 2.71x as on March 31, 2022.
* Weak debt coverage indicators: The debt coverage indicators of
the company stood weak as marked by interest coverage ratio and
total debt to GCA of 2.04x and 9.54x respectively for FY22 as
compared to 1.80x and 15.49x for FY21. The interest coverage ratio
improved marginally on account of improvement in profitability
levels in absolute terms. Improvement in total debt to GCA is on
account of reduced debt levels on balance sheet date.
* Working capital intensive nature of operations: The operations of
the company are working capital intensive in nature marked by
operating cycle of 74 days. The company is required to maintain
adequate inventory of raw material and work-inprogress for smooth
running of its production processes and in form of finished goods
to meet its customers' demand resulting in average inventory
holding period of around 91days in FY22 as against 125 days in
FY21. The company extends credit period of around 2-3 months to its
customers resultant into average collection period of 44 days in
FY22 as against 74 days in FY21. The company receives credit period
of up to 3 months from its suppliers due to long standing
relationship resultant into average creditor days at 61days in FY22
as against 91 days in FY21.
* Highly competitive and fragmented industry: The spectrum of the
automotive industry in which the company operates is highly
fragmented and competitive marked by the presence of numerous
players. Apart from players in unorganized sector, the company also
faces competition from large and mid-sized players in the organized
sector with established brands. Given the fact that the entry
barriers to the industry are low, the players in the industry do
not have pricing power and are exposed to competition
induced pressures on profitability
Key rating strengths
* Experienced management coupled with long track record of
operations: The overall operations of Vishwakarma Automotive
Private Limited (VAPL) are being managed by Mr. Ashwani Kumar, Mr.
Keshav Dhamija, Mr. Parveen Kumar and Mr. Rajinder Kumar who
possess experience of more than three decades in the automotive
industry through their association with this entity. The company
has more than 3 decades of existence in automotive industry and
over the years it has expanded capacities. On account of its long
track record and experience of the directors in the industry the
company has been able to maintain healthy relationships with its
customers and suppliers for long.
* Association with established customers: Vishwakarma Automotive
Private Limited (VAPL) provides 35% of their final product i.e.
casting to its group concern namely VAPPL which manufactures auto
components for the established customers like Tractors & Farm
Equipment Limited (TAFE), New Holland Fiat (India) Pvt. Ltd, JCB
India Limited (UK based company), Indo Farm Equipment's Limited,
TATA Auto comp Systems Limited, and Scooter India Limited. The
association with reputed customer results in higher revenue
visibility and increased presence in the market for the Vishwakarma
Group.
* Moderate profitability margins: The profitability margins of the
company stood moderate for the last three financial years
(FY20-FY22). The PBILDT margin of the company, stood at 9.75% in
FY22 as against 13.09% in FY21 on account of increase in raw
material costs which the company is unable to pass on completely to
its customers. However, PAT margin improved to 1.82% in FY22 from
0.91% in FY21.
Liquidity: Stretched The liquidity remained stretched as company
has low current ratio and quick ratio of 1.14x and 0.40x as on
March 31, 2022 respectively. The unencumbered cash and bank balance
stood low at INR0.06 crore as on March 31, 2022.
Analytical approach- Standalone
Faridabad-Haryana based, Vishwakarma Automotive Private Limited
(VAPL) was incorporated in 1999 by Mr. Ashwani Kumar, Mr. Parveen
Kumar and Mr. Rajinder Kumar. The company has succeeded an
erstwhile proprietorship firm, Vishwakarma Automotive (VA) (casting
division) established in 1985 by Mr. Ashwani Kumar. It is currently
being managed by Mr. Parveen Kumar and Mr. Keshav Dhamija as its
directors. The company is engaged in manufacturing of casting like
Grey Cast Iron and Ductile Iron Machined Casting. The manufacturing
facility of the company is located at Ballabhgarh, Faridabad in
Haryana with combined installed capacity of ~1000 tons per month as
on September 30, 2021. The processes of the company are ISO 140001
and TS 16949 certified. The company sells its 35% of products to
its group concern namely Vishwakarma Auto Parts Private Limited and
remaining in other auto ancillary manufacturing companies in
Delhi/NCR. The company also supplies to Ashok Leyland contributing
around 25-30% of total income. The main raw material for the
manufacturing of Grey Cast Iron and Ductile Iron Machined Casting
are iron scraps which they procure from manufacturing companies
based in Delhi/NCR. Vishwakarma Auto Parts Private Limited (VAPPL);
incorporated in 2011 is a part of Vishwakarma Group, the company is
engaged in manufacturing of auto components with wide variety of
product portfolio i.e. ~500 products.
=================
I N D O N E S I A
=================
GARUDA INDONESIA: Cleary Gottlieb Advises Carrier in Restructuring
------------------------------------------------------------------
Cleary Gottlieb has been advising PT Garuda Indonesia (Persero)
Tbk, Indonesia's flag carrier, in its restructuring of
approximately US$9.58 billion of bank, bond, lease and other
indebtedness to address the ongoing challenges presented by the
COVID-19 pandemic. Cleary Gottlieb has assisted Garuda, in
conjunction with its local law legal advisors and financial
advisors, in implementing an in-court restructuring of its
financial and contractual debt and in advising on its US and
English law governed aircraft lease and other obligations,
including US$500 million Sukuk certificates, and assisting in
negotiations with the airline's other creditors for workable
solutions to its outstanding debt.
The restructuring plan was ratified by the Indonesian court
overseeing Garuda's proceeding on June 27, 2022. The ratification
followed a successful vote by creditors with more than 95%
approving the plan on June 17, 2022. The reorganization plan went
effective on December 29, 2022. As a result of the plan, Garuda
has significantly reduced its liabilities by restructuring
outstanding debts, exchanged its remaining liabilities with US$825
million in nine-year bonds and US$330 million in new equity, and
raised new financing. Pursuant to the plan, Garuda was also able
to substantially reconstitute its fleet and enter into new lease
terms for its post-restructuring fleet of planes. Cleary Gottlieb
is also advising with respect to the recognition of Garuda's
Indonesian proceeding in various jurisdictions, including through
an ongoing Chapter 15 filing in U.S. Bankruptcy Court.
In addition to representing Garuda, Cleary Gottlieb has represented
a number of airlines and stakeholders in the aviation sector,
including as counsel to LATAM Airlines in its Chapter 11
proceeding, as counsel to Apollo as DIP lender to Aeromexico, as
antitrust counsel to Korean Air, as well as work involving Ryan
Air, Copa and others.
The Cleary team representing Garuda includes partners Richard
Cooper, Polina Lyadnova, and Tom Kessler, counsel Robert Williams
and Carina Wallance, associates Jonathan Griggs, Sarah Haddad, and
Nicholas Koeppen, and international lawyer Victor Brum.
About Garuda Indonesia
Headquartered in Jakarta, Indonesia, government-owned airline PT
Garuda Indonesia -- http://www.garuda-indonesia.com/-- currently
has a fleet of about 77 aircraft offering service to some 27
domestic and 33 international destinations. Under its Citilink
brand, it serves 10 other domestic routes. Garuda also ships about
200,000 tons of cargo a month and operates a computerized tracking
system.
As reported in the Troubled Company Reporter-Asia Pacific on Dec.
14, 2021, Bloomberg News said the airline entered a
court-supervised debt restructuring process after a Jakarta court
on Dec. 9, 2021, accepted a debt petition filed against it. Garuda
and its creditors have 45 days to complete negotiations, which can
be extended to 270 days.
Garuda finalized a restructuring proposal in November 2021 and is
in discussion with creditors and lessors to reduce its liabilities
to US$3.7 billion, from US$9.8 billion, Kartika Wirjoatmodjo, a
deputy at Indonesia's state-owned enterprises ministry, told a
parliamentary hearing.
=========
M A C A U
=========
SANDS CHINA: Fitch Affirms IDR at 'BB+', Outlook Negative
---------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' Issuer Default Ratings (IDRs)
of Las Vegas Sands Corp. (LVSC), Sands China, Ltd. (SCL), and
Marina Bay Sands Pte. Ltd (MBS, collectively LVS). In addition,
Fitch has affirmed LVSC's and SCL's unsecured debt at 'BB+'/'RR4
'and MBS's secured debt at 'BBB-'/'RR2'. Fitch has removed the
Rating Watch Negative for all of LVS and its subsidiaries' ratings.
The Rating Outlook is Negative.
The removal of the Rating Watch reflects SCL's signing of a new,
10-year gaming concession in Macau on December 16, with reasonable
terms and commitments, in Fitch's opinion. Visitation recovery
remains a key risk and supports the Negative Outlook, given LVS'
still high leverage metrics that are balanced by strong excess
liquidity. Fitch's forecast continues to result in LVS regaining
'BB+' gross leverage metrics by 2024, but net leverage metrics are
stronger and consistent with a 'BB+' rating beginning in 2023.
KEY RATING DRIVERS
Recovery Trajectory Driving Outlook: The removal of the concession
overhang eliminates a material credit risk; however, the recovery
of gross gaming revenues (GGR) and visitation into Macau remain a
key credit concern, despite positive recent developments. Fitch's
Base Case contemplates Macau GGR performance in 2023-2025 at 50%,
70%, and 90% of 2019 levels, respectively.
Fitch believes pent-up demand is possible for gaming and
leisure-oriented activities following nearly three years of
pandemic restrictions for Mainland gamblers in China. Other global
gaming jurisdictions experienced fast recoveries to pre-pandemic
levels of demand once travel restrictions were lifted, often less
than one year (e.g. Las Vegas in 2021, Singapore expected in
2023).
Visitation remains significantly depressed and monthly visitation
and GGR figures will influence Fitch's degree of confidence in
whether a recovery begins to take hold.
The recent easing of travel restrictions and COVID-19 protocols by
the Chinese, Macau and Hong Kong governments is a positive, but its
impact to Macau's operating performance will be more meaningful by
mid-2023 given the rapidly increasing number of COVID-19 cases in
China. China and Macau's exit from "Zero COVID" is also still in a
nascent stage, and it remains to be seen how macro and other
policies will respond during this critical transition period.
As the virus circulates more widely, a temporary period of economic
volatility may be unavoidable, given China's limited levels of
naturally acquired immunity, comparatively low vaccine booster
coverage for the elderly, and the experience of other economies
that have pursued a similar path.
Delayed De-levering Trajectory: Fitch expects LVS' gross leverage
to remain elevated and inconsistent with investment grade until at
least 2025. Gross leverage is forecasted to be 6.9x, and 4.4x in
2023 and 2024, respectively. Net leverage is stronger but still
inconsistent with investment grade until 2024. LVS' net leverage
will be back in the 2x range beginning 2024 under Fitch's
assumption that shareholder returns do not resume until 2024, and
their payout relative to cash flow is consistent with pre-pandemic
levels.
Longer term, Fitch believes LVS is willing to manage its balance
sheet consistent with investment grade and that the pandemic has
not altered its long held conservative financial policies. LVS has
a solid track record of publicly articulating its leverage policy
and adhering to prudent balance sheet management. This includes
reducing shareholder returns and debt in 2015 amid deterioration in
Macau operations, halting shareholder returns during the pandemic,
and maintaining its Las Vegas asset sale proceeds as excess
liquidity.
Meaningful Upcoming Maturities: LVS has a number of maturities
approaching that should be manageable in the context of its strong
liquidity and Fitch's expectation of a recovery in SCL cash flows.
This includes $6.1 billion in cash (including cage cash), of which
$1.4 billion is at SCL, $745 million is at MBS, and $3.9 billion is
at LVSC. However, persistent operating weakness in Macau may
require LVSC to further support SCL, which in turn would reduce its
own financial flexibility. Positively, LVSC has open access to MBS'
strong underlying cash flows (subject to a 4.25x MBS leverage test
for unlimited access, Fitch estimate: 2.6x for YE2022) and MBS has
$2.6 billion in borrowing capacity related to its ongoing
construction projects.
SCL's $1.45 billion unsecured revolver matures in July 2023 and
$1.8 billion in unsecured notes maturing August 2025. Of note,
SCL's revolving credit facility relationship banks have been
supportive throughout the pandemic and provided covenant relief as
recently as November 2022. LVSC has $1.75 billion in unsecured
notes maturing August 2024.
Concession Overhang Removed: All six incumbents were awarded new
10-year gaming concessions that were signed on December 16, 2022.
The potential for losing a concession previously drove LVS'
Negative Rating Watch, combined with the potential for more onerous
operating terms and capital commitments, none of which transpired.
Fitch views the completion of the concession process positively for
Macau's gaming regulatory environment relative to other global
gaming jurisdictions, given the government's pragmatic approach.
The new gaming law and capex commitments under the new concessions
are reasonable and the concession re-bidding process was executed
efficiently. In addition, all US-based operators received new
concessions despite previous investment community concerns of
US-Sino relations and speculation of their potential impact on the
concession process.
Manageable Development Pipeline: LVS is spending an aggregate $4.3
billion in Singapore (including a $1.1 billion one-time payment
already made in second-quarter 2019) to expand Marina Bay Sands
with a new hotel tower, incremental gaming and MICE space, and a
15,000-seat entertainment venue. This also includes a $1 billion
refresh of the existing hotel tower to introduce improved suite
product. The MBS expansion project spending will not ramp up until
2024 due to pandemic-related delays, while the $750 million left to
spend on Towers One and Two will be spent from 2022-2023. There are
minimal funding concerns and the Singapore projects are viewed
positively from a return perspective and will increase residual
equity for LVSC.
In Macau, the company committed to spending a minimum of MOP 30.2
billion (~$3.8 billion) over the 10-year concession term through
2033. This will skew primary toward non-gaming amenities to further
enhance SCL's footprint in Macau, though no additional hotel rooms
were included in SCL's commitments. The magnitude will be
manageable from a cash flow perspective as operations normalize and
are reasonable in the context of SCL's historical capex spending.
As of YE2022, the company has completed the $2.2 billion conversion
of Sands Cotai Central into the Londoner in Macau, as well as the
Grand Suites at Four Seasons Macau and Londoner Court.
Strong Ratings Linkage: Fitch mainly analyzes LVS on a consolidated
basis because the rating linkage between the parent and
subsidiaries is strong. Currently Fitch deems MBS, which is almost
fully recovered post-pandemic, to be the stronger subsidiary and
there are few restrictions inhibiting LVSC's access to MBS' cash.
In relation to SCL, which has been struggling post-pandemic to
date, LVSC is the stronger parent as it has $4 billion of cash,
receives royalty fees from MBS and SCL, and has access to MBS' cash
flows and equity value.
Fitch believes that SCL has strong operational and strategic value
to LVSC, which supports equalization of IDRs. Per Fitch's base case
assumptions, by 2025, when Macau GGR will recover to 90% of 2019
levels supported by more relaxed COVID policies, Fitch expects all
three entities to have similar standalone credit profiles, which
was the case prior to COVID. To the extent, the Macau gaming market
recovery meaningfully underperforms Fitch's expectations for the
recovery trajectory (50% by 2023 and 70% by 2024), Fitch could
consider negatively differentiating SCL's IDR from LVSC and MBS to
account for LVSC's limited resources to indefinitely support SCL.
The long-term ability to support SCL should Macau's recovery remain
prolonged is becoming an increasingly forefront concern in light of
upcoming major maturities at both LVS and SCL, large capex program
at MBS, and the recent volatile state of the capital markets.
DERIVATION SUMMARY
LVS historically has maintained an investment-grade credit profile
due to its high-quality assets in attractive regulatory regimes,
strong financial profile and commitment to a conservative financial
policy. Long term, Fitch expects the company to manage its credit
profile in a consistent manner, but the operating environment in
Macau has led to an extended period of time of weak consolidated
financial metrics.
Positively, the company took prudent steps to manage its balance
sheet during the ongoing operating stresses caused by the
pandemic.
This includes halting shareholder returns as operating cash flows
declined and its public commitment not to resume them until cash
flows have stabilized and at a level commensurate with their
growth.
LVS' peers include Seminole Tribe of Florida (BBB/Stable), which
maintains lower leverage, enjoys a degree of exclusivity in a deep
Florida market, and is not facing similar operating headwinds in
the U.S. relative to LVS' jurisdictions that rely more on
international visitation. Conversely, Seminole has less
discretionary distributions that partially fund tribal government
operations and is less diversified. Genting Berhad (BBB/Stable) and
its subsidiaries have international diversification similar to LVS,
which includes some degree of economic exclusivity (Malaysia,
Singapore) and some subject to more competition (Las Vegas, New
York). Its leverage is lower than LVS' and its end markets have
enjoyed a faster recovery relative to Macau's.
KEY ASSUMPTIONS
- Macau revenues are down 50%, 30%, and 10% from 2023, 2024, and
2025, respectively, compared with 2019 levels. SCL property EBITDA
margins of 22%, 33%, and 39% forecasted for 2023, 2024, and 2025;
- In Singapore, revenues approach pre-pandemic levels in 2023. The
faster recovery in Singapore is supported by the updated premium
suite product and the nation's continued recovery in international
visitation. This assumption does not yet include material inbound
Chinese visitation, which could further increase MBS' performance.
Property margins in the low 50% range;
- Annual capex spending in $1.0 billion-$1.4 billion range through
2025, which includes remaining development capex in Macau and
Singapore, as well as some of the $3.8 billion committed to be
spent in Macau during the new concession's 10-year term. No share
repurchases are assumed. Fitch assumes the resumption of dividends
coincides with the stability and growth of operating cash flow,
which is during 2024 per the agency's assumptions. Fitch forecasts
a payout ratio relative to total EBITDA that is consistent with
pre-pandemic levels;
- LVS maintains a material amount of excess cash, including its Las
Vegas asset sale proceeds, given its conservative financial policy
and the low likelihood of material capex in any new jurisdiction in
the medium-term (should LVS pursue any new gaming licenses);
- MBS capex is funded through property cash flows and Fitch does
not expect its delayed draw term loan to be utilized in the near
term;
- Maturities at SCL and LVSC in 2023-2025 are refinanced/amended &
extended.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A track record of improved visitation into Macau, coupled with a
commensurate improvement in underlying cash flow generation at SCL
could result in the Outlook being revised to Stable;
- The company maintains its existing financial policies and
leverage (debt/EBITDA) sustains below 4.0x and 3.5x on a gross and
net basis, respectively, with some flexibility to go outside these
thresholds temporarily during development cycles or periods of
operating pressure
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Macau operations fail to meet expectations of improvement,
leading to worsening credit metrics and reduced confidence in the
company's ability to refinance upcoming maturities at SCL and LVSC.
This could lead to SCL's IDR and instrument ratings being
downgraded should Fitch reconsider the application of its PSL
criteria;
- The company deviates from its existing financial policies and
leverage (debt/EBITDA) sustains above 5.0x and 4.5x on a gross and
net basis, respectively, with some flexibility to go outside these
thresholds temporarily during development cycles or periods of
operating pressure. Fitch expects gross leverage to return within
the negative rating sensitivities by YE 2024. A material deviation
from this timeframe due to an earlier restart of shareholder
friendly activity or worse than anticipated recovery trajectory
could lead to negative rating action.
LIQUIDITY AND DEBT STRUCTURE
LVS' liquidity is strong, with $5.8 billion excess cash net of $400
million in estimated cage and system cash as of Sept. 30, 2022. LVS
received meaningful cash proceeds from the Venetian sale during
1Q22, the total consideration of which was $6.25 billion (includes
a $1.2 billion sellers note). In addition, LVS has roughly $2.9
billion of aggregate revolver availability. The nearest maturities
include the $1.4 billion outstanding under the revolver at SCL in
2023 and $1.75 billion LVSC senior unsecured note coming due 2024.
Fitch expects consolidated discretionary FCF (cash flow from
operations minus maintenance capex) to turn positive in 2023 and
accelerate meaningfully in 2024, thanks to Singapore's strong
performance and Macau's expected recovery. However, LVS has
development capex in Singapore and may look to resume its dividends
as operations normalize. Therefore, Fitch-defined FCF could
potentially remain negative through Fitch's forecast horizon
depending on the company's pace of dividend resumption.
ISSUER PROFILE
LVS owns and operates six casino resorts, including five in Macau
and one in Singapore. LVS's Macau subsidiary, Sands China, is 70%
owned with the balance being publicly traded on the Hong Kong Stock
Exchange.
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
----------- ------ -------- -----
Las Vegas Sands Corp. LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
Marina Bay Sands
Pte. Ltd. LT IDR BB+ Affirmed BB+
senior secured LT BBB- Affirmed RR2 BBB-
Sands China Ltd. LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
=================
S I N G A P O R E
=================
BIG BANYAN: Creditors' Proofs of Debt Due on Feb. 4
---------------------------------------------------
Creditors of Big Banyan Investments Pte. Ltd. are required to file
their proofs of debt by Feb. 4, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Dec. 30, 2022.
The company's liquidator is:
Lum Keng Chee
AiGO Pte Ltd
c/o 49 Strathmore Ave
#02-217, Singapore 140049
BLOCKFI LENDING: Calif. Regulators Want to Revoke Lending License
-----------------------------------------------------------------
California's Department of Financial Protection and Innovation on
Dec. 19, 2022, announced that Commissioner Clothilde V. Hewlett has
moved to revoke BlockFi Lending LLC's (BlockFi) California
Financing Law (CFL) license.
The move to revoke is the result of the department's examination,
which found that the New Jersey-based finance lender failed to
perform adequate underwriting when making loans and failed to
consider borrowers' ability to repay these loans, in violation of
California's financing laws and regulations.
The Commissioner may issue an order revoking BlockFi's license if
the company does not request a hearing by Dec. 30, 2022. BlockFi
reports to the DFPI that it has ceased offering loans in California
and asks clients not deposit to the BlockFi Wallet or its interest
accounts.
On Nov. 11, one day after BlockFi paused all withdrawals from its
crypto asset platform citing "significant exposure to FTX" and
affiliated entities, the department issued a notice of intent to
suspend BlockFi's CFL license. BlockFi did not request a hearing,
and the department suspended the license through Dec. 18, 2022.
BlockFi filed a petition for Chapter 11 bankruptcy in New Jersey on
Nov. 28, 2022.
In February 2022, the Commissioner entered into a settlement with
BlockFi resolving BlockFi's alleged violations of California's
securities laws. Under this settlement, BlockFi agreed to desist
and refrain from offering or selling unqualified, non-exempt
securities in the form of BlockFi interest accounts in California.
The DFPI expects any person offering securities, lender, or other
financial services provider that operates in California to comply
with our financial laws. If you have been impacted by these events,
please contact the DFPI online (dfpi.ca.gov/file-a-complaint) or
call toll-free at (866) 275-2677.
The DFPI administers the state's lending and banking laws, the
recent California Consumer Financial Protection Law, and the
state's securities laws, which govern broker-dealers, investment
advisers, and commodities. Learn more at dfpi.ca.gov.
About BlockFi
BlockFi is building a bridge between digital assets and traditional
financial and wealth management products to advance the overall
digital asset ecosystem for individual and institutional
investors.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in
its early days had backing from influential Wall Street investors
like Mike Novogratz and, later on, Valar Ventures, a Peter
Thiel-backed venture fund as well as Winklevoss Capital, among
others. BlockFi made waves in 2019 when it began providing
interest-bearing accounts with returns paid in Bitcoin and Ether,
with its program attracting millions of dollars in deposits right
away.
BlockFi grew during the pandemic years and had offices in New York,
New Jersey, Singapore, Poland and Argentina.
BlockFi worked with FTX US after it took an $80 million hit from
the bad debt of crypto hedge fund Three Arrows Capital, which
imploded after the TerraUSD stablecoin wipeout in May 2022.
BlockFi had significant exposure to the companies founded by former
FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a
$400 million credit line from FTX US in an agreement that also gave
FTX the option to acquire BlockFi through a bailout orchestrated by
Bankman-Fried over the summer. BlockFi also had collateralized
loans to Alameda Research, the trading firm co-founded by
Bankman-Fried.
BlockFi is the latest crypto firm to seek bankruptcy amid a
prolonged slump in digital asset prices. Lenders Celsius Network
LLC and Voyager Digital Holdings Inc. also filed for court
protection this year. Kirkland & Ellis is also advising Celsius and
Voyager in their separate Chapter 11 cases.
BlockFi Inc. and eight affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on
Nov. 28, 2022. In the petitions signed by their chief executive
officer, Zachary Prince, the Debtors reported $1 billion to $10
billion in both assets and liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as
general bankruptcy counsels; Walkers (Bermuda) Limited as special
Bermuda counsel; Cole Schotz, P.C. as local counsel; Berkeley
Research Group, LLC as financial advisor; Moelis & Company as
investment banker; and Street Advisory Group, LLC as strategic and
communications advisor. Kroll Restructuring Administration, LLC is
the notice and claims agent.
CHUDENKO ASIA: Creditors' Proofs of Debt Due on Feb. 4
------------------------------------------------------
Creditors of Chudenko Asia Pte. Ltd. are required to file their
proofs of debt by Feb. 4, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Dec. 28, 2022.
The company's liquidator is:
Mitani Masatoshi
c/o 10 Anson Road
#14-06 International Plaza
Singapore 079903
NEW DREAMS: Court to Hear Wind-Up Petition on Jan. 20
-----------------------------------------------------
A petition to wind up the operations of New Dreams Pte Ltd will be
heard before the High Court of Singapore on Jan. 20, 2023, at 10:00
a.m.
RHB Bank Berhad filed the petition against the company on Dec. 28,
2022.
The Petitioner's solicitors are:
Shook Lin & Bok LLP
1 Robinson Road
#18-00, AIA Tower
Singapore 048542
NEW PROGRESS: Court to Hear Wind-Up Petition on Jan. 20
-------------------------------------------------------
A petition to wind up the operations of New Progress Pte Ltd will
be heard before the High Court of Singapore on Jan. 20, 2023, at
10:00 a.m.
RHB Bank Berhad filed the petition against the company on Dec. 28,
2022.
The Petitioner's solicitors are:
Shook Lin & Bok LLP
1 Robinson Road
#18-00, AIA Tower
Singapore 048542
PHILEAP PTE: Creditors' Proofs of Debt Due on Feb. 4
----------------------------------------------------
Creditors of Phileap Pte. Ltd. are required to file their proofs of
debt by Feb. 4, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Dec. 30, 2022.
The company's liquidator is Tan Chin Ren of Chan & Partners.
STREETSINE TECHNOLOGY: Court to Hear Wind-Up Petition on Jan. 20
----------------------------------------------------------------
A petition to wind up the operations of Streetsine Technology Group
Pte Ltd will be heard before the High Court of Singapore on Jan.
20, 2023, at 10:00 a.m.
CP Interactive Pte Ltd (formerly known as SPH Interactive Pte Ltd)
filed the petition against the company on Dec. 23, 2022.
The Petitioner's solicitors are:
Allen & Gledhill LLP
One Marina Boulevard
#28-00, Singapore 018989
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***