/raid1/www/Hosts/bankrupt/TCRAP_Public/230227.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, February 27, 2023, Vol. 26, No. 42
Headlines
A U S T R A L I A
ALLEGIANCE COAL: U.S. Subsidiaries File for Bankruptcy
ALLEGIANCE COAL: Voluntary Chapter 11 Case Summary
CADENCE PLANT: First Creditors' Meeting Set for March 6
EMECO HOLDINGS: Fitch Hikes LongTerm IDR to 'BB-', Outlook Stable
HOUR GROUP: Second Creditors' Meeting Set for March 3
LATITUDE AUSTRALIA 2023-1: Fitch Gives BB(EXP)sf Rating to E Notes
LATITUDEPAY: Will End Services in Australia From April 11
MRS MAC'S: Could Have Traded Insolvent for Months Before Collapse
RURAL INDIGENOUS: First Creditors' Meeting Set for March 3
STOCKMANS PLANT: First Creditors' Meeting Set for March 7
SUNBUSTER CARAVANS: Second Creditors' Meeting Set for March 3
C H I N A
CARREFOUR CHINA: Got State Funding Amid Bankruptcy Speculation
VNET GROUP: S&P Affirms 'B' ICR Despite Some Governance Weakness
I N D I A
AADHI VINAYAGA: ICRA Withdraws B+ Rating on INR8.50cr LT Loan
AGGARWAL FOODS: ICRA Keeps B+ Debt Ratings in Not Cooperating
BADEPALLY MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
BANSAL FOODS: ICRA Keeps B+ Debt Ratings in Not Cooperating
BHAWAR LIFESTYLE: ICRA Keeps B+ Debt Ratings in Not Cooperating
BHIMAVARAM MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
CAPACITE INFRAPROJECTS: Ind-Ra Cuts Long Term Issuer Rating to BB+
CAR AUTOMOTIVE: Ind-Ra Moves BB+ Issuer Rating to Non-Cooperating
COGNOTA HEALTHCARE: Ind-Ra Assigns B- Long Term Issuer Rating
DAMODAR TRADELINKS: ICRA Moves B- Debt Rating to Not Cooperating
DILEEP ESSENTIALS: ICRA Withdraws B+ Rating on INR2cr LT Loan
ELECTRO POLYCHEM: ICRA Moves B- Debt Ratings to Not Cooperating
ENTERPRISING ENTERPRISES: ICRA Keeps B Rating in Not Cooperating
EURO VISTAA: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
FINE FACETS: ICRA Keeps D Ratings in Not Cooperating Category
FRONTLINE BUILDERS: ICRA Keeps B+ Debt Rating in Not Cooperating
GAYATH INDUSTRIES: ICRA Keeps B+ Debt Ratings in Not Cooperating
GDJD INTERNATIONAL: ICRA Moves B+ Rating to Not Cooperating
GEETANJALI AGRO: ICRA Keeps B+ Debt Ratings in Not Cooperating
HARI KRIPA: ICRA Keeps D Debt Ratings in Not Cooperating Category
ISWARYA TEXTILE: Ind-Ra Moves BB- Issuer Rating to NonCooperating
ITSHASTRA PRIVATE: Ind-Ra Assigns B- Long Term Issuer Rating
JORABAT SHILLONG: Ind-Ra Affirms 'D' NonConvertible Debts Rating
LANTECH PHARMACEUTICALS: ICRA Keeps B+ Ratings in Not Cooperating
M/S ANKIT: Ind-Ra Assigns B+ LT Issuer Rating, Outlook Stable
MEDVARSITY ONLINE: Ind-Ra Cuts Long Term Issuer Rating to 'BB+'
MORINGA TECHSOLV: Ind-Ra Assigns B- Long Term Issuer Rating
NIRVANA FASHION: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
P.K.M. PROJECTS: ICRA Lowers Rating on INR28cr Term Loan to D
S.K.R. CONSTRUCTIONS: ICRA Keeps B+ Ratings in Not Cooperating
SADBHAV BHAVNAGAR: Ind-Ra Keeps B Issuer Rating in NonCooperating
SADBHAV RUDRAPUR: Ind-Ra Keeps B- Issuer Rating in Non-Cooperating
SALEM TOLLWAYS: Ind-Ra Withdraws 'D' Long Term Issuer Rating
SIESTA HOSPITALITY: ICRA Keeps B+ Debt Ratings in Not Cooperating
TELELOGIX: Ind-Ra Assigns BB- LT Issuer Rating, Outlook Stable
TRUEVALUE ENGINEERING: ICRA Keeps D Ratings in Not Cooperating
VENKATESHWARA MOTORS: ICRA Keeps B+ Rating in Not Cooperating
ZEE ENTERTAINMENT: NCLAT Bench Stays Insolvency Order
I N D O N E S I A
BUMI SERPONG: Fitch Affirms 'BB-' Foreign Curr. IDR, Outlook Stable
SAWIT SUMBERMAS: Moody's Withdraws 'Caa1' Corporate Family Rating
TITAN INFRA: $20M Bank Debt Trades at 16% Discount
TITAN INFRA: $430M Bank Debt Trades at 16% Discount
J A P A N
TOSHIBA CORP: Orix Weighs Cutting Contribution to JIP's Offer
M A L A Y S I A
PROPEL GLOBAL: Posts MYR24.5 Million Revenue in Q2 Ended Dec. 31
M O N G O L I A
MONGOLIAN MINING: Fitch Affirms 'B' Foreign Curr. IDR, Outlook Neg.
N E W Z E A L A N D
GUARDIAN HOMES: Court to Hear Wind-Up Petition on March 10
MLJ CONSTRUCTION: Court to Hear Wind-Up Petition on March 13
NEW ZEALAND NATURE: Court to Hear Wind-Up Petition on April 21
YOUR HEALTHY: Creditors' Proofs of Debt Due on April 5
P A K I S T A N
PAKISTAN WATER: Fitch Lowers LongTerm Foreign Currency IDR to CCC-
S I N G A P O R E
APPLECART INVESTMENTS: Creditors' Proofs of Debt Due on March 28
CONTECH ENGINEERING: Court to Hear Wind-Up Petition on March 10
PIP VISION: Creditors' Proofs of Debt Due on March 27
RISING ENGINEERING: Commences Wind-Up Proceedings
THIAM SIEW: Commences Wind-Up Proceedings
S O U T H K O R E A
KOREA ELECTRIC: Suffers Record Operating Loss in 2022
- - - - -
=================
A U S T R A L I A
=================
ALLEGIANCE COAL: U.S. Subsidiaries File for Bankruptcy
------------------------------------------------------
WSJ Pro Bankruptcy reports that U.S. subsidiaries of Australian
coal mining company Allegiance Coal Ltd. filed for chapter 11
protection on Feb. 21.
The chapter 11 filing includes the New Elk and Black Warrior coal
mines located in Colorado and Alabama, respectively, WSJ Pro
Bankruptcy discloses citing papers filed in the U.S. Bankruptcy
Court in Wilmington, Del., by Allegiance Coal USA Ltd.
WSJ Pro Bankruptcy relates that the Australian parent company said
in mid-February that it is switching away from the production of
thermal coal because of a decline in prices for thermal coal
delivered to Europe. Instead the company said it is ramping up
production of metallurgical coal.
Allegiance Coal is a listed Australian company focused on seaborne
met coal mine development and operations, with operating mines in
southeast Colorado, central Alabama, as well as a development
project in northwest British Columbia.
ALLEGIANCE COAL: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
Allegiance Coal USA Limited 23-10234
12250 Highway 12
Weston CO 81091
Black Warrior Minerals, Inc. 23-10235
2 Office Park Circle
Suite 205
Mountain Brook, AL 35223
New Elk Coal Holdings LLC 23-10236
12250 Highway 12
Weston CO 81091
New Elk Coal Company LLC 23-10237
Business Description: Allegiance Coal is a listed Australian
company focused on seaborne met coal mine
development and operations, with operating
mines in southeast Colorado, central
Alabama, as well as a development project in
northwest British Columbia.
Chapter 11 Petition Date: February 21, 2023
Court: United States Bankruptcy Court
District of Delaware
Debtors' Counsel: Robert J. Dehney, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market Street, 16th Floor
Wilmington, DE 19899-1347
Tel: (302) 658-9200
Email: rdehney@morrisnichols.com
Allegiance Coal's
Estimated Assets: $50 million to $100 million
Allegiance Coal's
Estimated Liabilities: $10 million to $50 million
Black Warrior's
Estimated Assets: $10 million to $50 million
Black Warrior's
Estimated Liabilities: $10 million to $50 million
New Elk Coal Holdings'
Estimated Assets: $50 million to $100 million
New Elk Coal Holdings'
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Jonathan Romcke as chief executive
officer.
The Debtors failed to include in the petitions lists of their 20
largest unsecured creditors.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/OB3WRAA/Allegiance_Coal_USA_Limited__debke-23-10234__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/KZZEC3Y/Black_Warrior_Minerals_Inc__debke-23-10235__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PMGSFEA/New_Elk_Coal_Holdings_LLC__debke-23-10236__0001.0.pdf?mcid=tGE4TAMA
CADENCE PLANT: First Creditors' Meeting Set for March 6
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Cadence
Plant Hire Pty Ltd will be held on March 6, 2023, at 2:30 p.m. via
virtual meeting only.
David Raj Vasudevan and Timothy James Bradd of Pitcher Partners
were appointed as administrators of the company on Feb. 22, 2023.
EMECO HOLDINGS: Fitch Hikes LongTerm IDR to 'BB-', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has upgraded Australia-based Emeco Holdings Limited's
Long-Term Issuer Default Rating (IDR) to 'BB-' from 'B+'. The
Outlook is Stable.
The upgrade reflects the improvement in Emeco's revenue visibility
and defensibility, through diversifying its service offerings,
increasing contract tenures, and improving its customer and
commodity diversification. The rating also incorporates the
benefits that the reduction in the cost base and more flexible
fleet and cost structure provide - particularly in the more
cyclical mining services industry.
The Stable Outlook reflects its expectation that Emeco will
maintain a conservative financial profile, with EBITDA net leverage
remaining below 1x through the cycle. It also recognises that the
company has addressed underperformance in a few contracts. Further,
Fitch believes that Emeco is well-positioned to benefit from rising
demand for minerals amid the green energy transition, which will
support ongoing demand, particularly as the company increases its
exposure in Western Australia.
KEY RATING DRIVERS
Improved Revenue Visibility: Emeco's revenue visibility has
benefited from rising service revenue, customer and commodity
diversification, and the ability to switch its fleet between
commodities. Service-based revenue has increased as a proportion of
revenues - these contracts are typically longer-term and more
integrated in a miner's operations - meaning they are less volatile
in weaker commodity markets. This complements the diversification
achieved across the customer base and exposure across commodities -
in particular, raising its exposure to gold to around 40% of
revenue.
This improved visibility has also been enhanced by Emeco's strategy
to build a commodity-agnostic fleet, which it is able to move
between projects, regions and commodities to respond to changes in
demand. This was demonstrated recently in replacing some of its
lost rental earnings by moving trucks to fill demand requirements
in Western Australia following weakness in coal markets in
late-2020, which saw demand fall on Australia's east coast as coal
producers reduced mining activity.
Defensive Cost Structure: Fitch believes that the flexibility built
into Emeco's asset base and cost structure will allow the company
to protect its financial profile during commodity downturns. Emeco
has increased the level of integration in its customers' operations
- thereby improving revenue visibility - while its services
continue to revolve mainly around equipment hire and related
services, which make it more vulnerable than peers that provide
integrated or full-service offerings during weak commodity
markets.
Fitch believes Emeco's in-housing of rebuild and maintenance
functions provides an improved ability to manage through the cycle.
The structure allows the company to control its maintenance
schedule and plan actively for any significant capex - while also
increasing the flexibility of the company's costs. In commodity
downturns accompanied by weaker demand, Emeco can reduce
maintenance costs and sustaining capex to a level commensurate with
activity, which would allow it to remain profitable and minimise
cash outflows to protect its balance sheet.
Strong Financial Profile: Emeco employs a conservative financial
profile, with target net debt/EBITDA leverage of below 1x.
Fitch-calculated EBITDA net leverage at 30 June 2022 (FYE22) was
0.8x, well below the negative sensitivity of 1.5x. Fitch expects
Emeco to keep leverage below 1x and maintain a conservative balance
sheet to manage its business through the cycle. In addition,
Emeco's reduction in exposure to thermal coal to 12% of revenues at
FYE22 underscores its commitment towards a sustainable operation,
ensuring access to capital markets with reasonable funding costs.
Margin Challenges in FY23; FY24 Improvement: Fitch expects isolated
underperforming contracts and receivables issues in Pit'N'Portal to
lead to lower EBITDA margins in FY23. Labour challenges will also
continue to affect operations, and time lags in rise and fall
mechanisms to offset inflationary pressures will mean that margins
only begin to recover in FY24. However, the rental business'
operating utilisation and margin are likely to improve, as
disruptions in Western Australia ease, although rental margins in
Western Australia and the overall business are expected to remain
below historical levels.
Supportive Industry Conditions: Fitch expects Australian mining
production volume to remain strong over the next few years,
particularly in hard-rock commodities and as demand rises for
materials crucial to the green energy transition, such as lithium.
Emeco is well-positioned to capitalise on this. It has demonstrated
its ability to win contracts with the significant growth in the
Pit'N'Portal business, and was able to successfully redeploy assets
from the coal-focused east coast to Western Australia to take
advantage of project wins and rising demand across a number of
commodities.
DERIVATION SUMMARY
Emeco's rating could be compared with that of Indonesia's PT Bukit
Makmur Mandiri Utama (BB-/Stable). The upgrade of Emeco's IDR
highlights the improvement in revenue visibility through better
diversification across customers and commodities, and an increase
in service-related revenues with the growth of its Pit'N'Portal
segment. These factors have narrowed the gap to Bukit Makmur's
stronger business profile, which stems from its revenue visibility
and stable operating profile, reflecting long-term contracts with
miners and its diversified service offerings at various production
stages. However, Bukit Makmur has high customer concentration risk,
with around 80% of its volume comes from three counterparties, and
commodity concentration risk to the highly cyclical Indonesian coal
contracting industry, which has previously led to volatility in its
earnings and leverage.
Emeco has a better financial profile than Bukit Makmur, and the
company has demonstrated its commitment to maintaining a
conservative balance sheet. Fitch believes that this offsets Bukit
Makmur's slightly stronger business profile, and supports both
issuers' ratings at the same level.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Operating utilisation rate to remain stable to FY26 to around 60%
due to tight rental-equipment conditions, commodity fungibility of
Emeco's fleet, and strong activity levels in the mining sector, but
reflecting Fitch's expectations of a moderation in commodity
markets.
- Net capex at around 20% of revenue from FY23-FY26;
- 25%-40% of operating net profit after net tax to be returned to
shareholders, in line with management guidance.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade is unlikely while Emeco retains its current level of
exposure to the more cyclical equipment rental and related services
sub-segment of the mining services market and at its relative
smaller scale.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A deterioration in operating performance, including a decline in
the operating utilisation rate and loss of major contracts.
- EBITDA net leverage exceeding 1.5x for a sustained period.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Emeco's next significant debt maturity is in
July 2026, which is the AUD250 million 6.25% senior secured note.
The company had a committed undrawn revolving facility of AUD97
million due September 2023, and cash in hand of AUD60 million at
end-2022. Fitch also expects Emeco to generate positive cash flow
before dividends over the next four years, demonstrating its
ability to fund operations internally.
ISSUER PROFILE
Emeco, founded in 1972, is one of the leading earthmoving equipment
rental companies listed on the Australian Securities Exchange. The
company has operations in all key mining regions of Australia, and
its customers include mining companies and contractors across gold,
coal, copper, bauxite and iron ore.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Emeco Holdings
Limited LT IDR BB- Upgrade B+
HOUR GROUP: Second Creditors' Meeting Set for March 3
-----------------------------------------------------
A second meeting of creditors in the proceedings of The Hour Group
Pty Ltd has been set for March 3, 2023 at 11:00 a.m. via a Zoom
videoconferencing facility.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 2, 2023 at 4:00 p.m.
Grahame Ward and Domenico Calabretta of Mackay Goodwin were
appointed as administrators of the company on Jan. 27, 2023.
LATITUDE AUSTRALIA 2023-1: Fitch Gives BB(EXP)sf Rating to E Notes
------------------------------------------------------------------
Fitch Ratings has assigned expected ratings to Latitude Australia
Credit Card Loan Note Trust Series 2023-1's floating-rate notes.
The issuance consists of notes backed by a pool of Australian
consumer sales finance and credit card receivables originated by
Latitude Finance Australia. The notes will be issued by Perpetual
Corporate Trust Limited in its capacity as trustee of Latitude
Australia Credit Card Master Trust.
Entity/Debt Rating
----------- ------
Latitude Australia
Credit Card Master
Trust
2023-1 Class A1 LT AAA(EXP)sf Expected Rating
2023-1 Class A2 LT AAA(EXP)sf Expected Rating
2023-1 Class B LT AA(EXP)sf Expected Rating
2023-1 Class C LT A(EXP)sf Expected Rating
2023-1 Class D LT BBB(EXP)sf Expected Rating
2023-1 Class E LT BB(EXP)sf Expected Rating
KEY RATING DRIVERS
Stable Receivables Performance: Portfolio performance has been
stable, with gross charge-offs averaging 3.5%, yield - excluding
merchant service fees - averaging 15.9%, and the monthly payment
rate (MPR) averaging 16.6% over the previous year. Fitch has
retained base cases of 5.25% for charge-offs, 13.0% for yield and
12.5% for the MPR based on past performance.
The Stable Outlook is supported by Australia's continued economic
growth, with GDP growth of 5.9% for the year to September 2022, and
tight labour market that recorded an unemployment of 3.7% for
January 2023. This is despite increasing interest rates. Fitch
expects GDP growth to slow to 1.5% in 2023, with unemployment
increasing to 4.2%, reflecting high inflation combined with its
weaker outlook for China and the global economy more generally.
Satisfactory Originator and Servicer Quality: Latitude is a
non-bank lender that started operations in 1995 as GE Capital,
which was subsequently acquired in 2015 by a consortium of
investors. Fitch undertook an operational review and found that the
operations of the originator and servicer were comparable with
those of other Australian credit card issuers.
Added Flexibility: The structure employs an originator variable
funding note purchased and held by Latitude to add funding
flexibility that is typical and necessary for credit-card trusts.
It provides credit enhancement to the rated notes, adds protection
against dilution and is used to meet risk-retention requirements. A
separate variable funding note provides funding flexibility for the
trust.
Mitigated Counterparty Risk: Latitude acts in several capacities,
most prominently as originator, servicer and trust manager. The
degree of reliance is mitigated by the transferability of
operations, a nominated back-up servicer and a series-specific
liquidity reserve.
Mitigated Interest-Rate Risk: Interest-rate risk is mitigated by
available credit enhancement.
A summary of the steady states and rating stresses applied in the
cash flow modelling analysis is shown below:
Steady states:
Charge-offs: 5.25%
MPR: 12.50%
Gross yield: 13.00%
Purchase rate: 100%
Rating Stresses:
Ratings: AAAsf / AAsf / Asf / BBBsf / BBsf
Charge-offs (increase): 4.50x / 3.75x / 3.00x / 2.25x / 1.50x
MPR (% decrease): 40 / 35 / 30 / 25 / 20
Gross yield (% decrease): 35 / 30 / 25 / 20 / 15
Purchase rate (% decrease): 90 / 85 / 75 / 65 / 55
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Unanticipated increases in charge-offs or reductions in purchase
rates or yield could produce loss levels higher than Fitch's base
case and are likely to result in a decline in credit enhancement
and remaining loss coverage levels available to the notes.
Decreased credit enhancement may make certain note ratings
susceptible to negative rating action, depending on the extent of
coverage decline. Hence, Fitch conducts sensitivity analysis by
stressing a transaction's steady-state assumptions.
This section provides insight into the model-implied sensitivities
the transaction faces when one assumption is modified, while
holding others equal. The modelling process uses the modification
of these variables to reflect asset performance in up and down
environments. The results below should only be considered as one
potential outcome, as the transaction is exposed to multiple
dynamic risk factors. It should not be used as an indicator of
possible future performance.
Notes: Class A1 / A2 / B / C / D / E
Expected Rating: AAAsf / AAAsf / AAsf / Asf / BBBsf / BBsf
Increase charge-off steady state by 25%: AAAsf / AA+sf / AA-sf /
A-sf / BBBsf / BBsf
Increase charge-off steady state by 50%: AAAsf / AAsf / A+sf /
BBB+sf / BBB-sf / BB-sf
Increase charge-off steady state by 75%: AAAsf / AA-sf / Asf /
BBBsf / BB+sf / B+sf
Reduce MPR steady state by 15%: AAAsf / AA+sf / AA-sf / A-sf /
BBBsf / BBsf
Reduce MPR steady state by 25%: AAAsf / AAsf / A+sf / BBB+sf /
BBB-sf / BB-sf
Reduce MPR steady state by 35%: AAAsf / AA-sf / A-sf / BBBsf /
BB+sf / BB-sf
Reduced yield steady state by 15%: AAAsf / AAAsf / AAsf / Asf /
BBBsf / BBsf
Reduced yield steady state by 25%: AAAsf / AAAsf / AAsf / Asf /
BBBsf / BB-sf
Reduced yield steady state by 35%: AAAsf / AAAsf / AA-sf / A-sf /
BBB-sf / B+sf
Reduced purchase rate by 50%: AAAsf / AAAsf / AAsf / Asf / BBBsf /
BBsf
Reduced purchase rate by 75%: AAAsf / AA+sf / AA-sf / A-sf / BBBsf
/ BBsf
Reduced purchase rate by 100%: AAAsf / AA+sf / A+sf / BBB+sf /
BBB-sf / BB-sf
Rating sensitivity to increased charge-off rate and reduced MPR:
Increased charge-off rate by 25% and reduced MPR by 15%: AAAsf /
AAsf / A+sf / BBB+sf / BBB-sf / BB-sf
Increased charge-off rate by 50% and reduced MPR by 25%: AA+sf /
A+sf / BBB+sf / BBB-sf / BBsf / Bsf
Increased charge-off rate by 75% and reduced MPR by 35%: AA-sf /
BBB+sf / BBB-sf / BBsf / B+sf / less than Bsf
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Reduce charge-off steady state by 25%: AAAsf / AAAsf / AA+sf /
AA-sf / Asf / BBB-sf
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction.
Prior to the transactions closing, Fitch reviewed the results of a
third-party assessment conducted on the asset portfolio information
and concluded that there were no findings that affected the rating
analysis.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the asset pool information relied upon for
the agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
LATITUDEPAY: Will End Services in Australia From April 11
---------------------------------------------------------
News.com.au reports that buy now, pay later lender LatitudePay is
pulling out of Australia.
The financial services company announced on Feb. 24 it would no
longer be available in Australia from April 11 this year.
Major retailers such as JB Hi-Fi, Kogan and The Good Guys use
LatitudePay as a payment option, allowing customers to spread a
purchase over 10 weekly interest-free payments, news.com.au notes.
"Your account will be accessible until your plan is fully paid and
then we will close the account for you," LatitudePay said on its
website.
Existing customers can still make purchases before April 11 and
payment plans will continue as scheduled until the balance is paid
in full, news.com.au relays.
"Thank you for being a customer, we've loved helping you shop for
life's moments big and small, but we had to make the difficult
decision to stop offering this service," the company said on its
site.
News.com.au relates that the company said that more than 500,000
customers used the service and would be impacted by the closure.
It said the decision was made because of the uncertainty around the
sector.
"We have decided to stop offering LatitudePay services in Australia
as a consequence of the uncertainty surrounding the future
regulatory environment for the BNPL (buy now, pay later) sector,"
it said, notes the report.
It advised merchants at more than 5,000 retailers across Australia
that it should remove its service from advertising.
"Existing customers can continue to use our products. New customer
applications will no longer be accepted from 28 February 2023. We
suggest you remove any advertising as soon as possible," it said in
advice to merchants, the report relays. "Customers still need to
continue to pay. If they don't, they will incur late fees and their
credit file may be impacted."
According to news.com.au, the company made the announcement just
weeks after fellow buy now, pay later service Openpay announced it
would be closing.
Openpay went into receivership after a disastrous three months saw
it land AUD18.2 million in the red.
Customers with Openpay will no longer be able to use the platform
for new purchases but will still need to pay outstanding balances,
the report says.
MRS MAC'S: Could Have Traded Insolvent for Months Before Collapse
-----------------------------------------------------------------
Australian Financial Review reports that KPMG launched a capital
raising for Mrs Mac's Pies while the company was potentially
trading insolvent, and despite one month earlier providing advice
to its directors about whether they would be personally liable if
the business collapsed.
AFR relates that the owners of the popular pie brand, established
in 1954, sold the majority of the business' assets to Pie Face in
October for AUD24.2 million before the remaining shell company was
placed into liquidation in November, leaving creditors out of
pocket.
A creditors' report authored by Grant Thornton, the company's
liquidators, concluded that Mrs Mac's was likely to have been
trading insolvent by May, and potentially earlier. An information
memorandum distributed by KPMG and obtained by The Australian
Financial Review shows it was attempting to raise capital or sell
the business in its entirety in June.
The creditors' report, dated February 9, reads: "We are aware the
company engaged KPMG in May 2022 to provide safe harbour advice to
the directors and Management team."
"Based on our preliminary investigations it is likely the company
was insolvent for at least 6 months prior to our appointment, and
potentially for a longer period," the report reads. "We confirm
that additional investigations are required before we can provide a
more definitive opinion as to the date of insolvency. This will be
provided to creditors in due course."
According to the report, the sale of the company's assets to Pie
Face included the transfer of staff, various liabilities as well as
contracted debts. However, "the company continued to maintain
ownership of all debts owed to them, including trade debtors" which
meant when the sale was complete Mrs Mac's did not have the assets
to pay its debts, leading to the appointment of Grant Thornton.
AFR adds that the liquidators also cited a blow-out in the cost of
the construction of a bakery in Western Australia - the AUD23
million project was more than AUD8 million over budget due to slow
construction and COVID-19 travel restrictions - along with higher
shipping costs and an increase in meat, potato and grain prices
following Russia's invasion of Ukraine.
The company also lost one of its largest clients, Ampol.
According to AFR, Grant Thornton's preliminary investigations have
focused on the sale of Mrs Mac's to Pie Face, although the
liquidator is yet to form a view on whether it was an uncommercial
transaction. Grant Thorton is also investigating potential
preference payments from the proceeds of the sales agreement.
Some AUD925,000 paid to the Australian Tax Office and AUD1.1
million paid to two key suppliers are being investigated and "may
constitute preferential payments", the preliminary investigations
flagged, the report states.
Grant Thornton declined to comment further on their investigation,
but said liquidators had, since the circulation of the creditors'
report, been provided access to additional documents sold as part
of the deal with Pie Face, AFR adds.
"Of the AUD5.3 million recovered since the liquidator's
appointment, AUD4.99 million was paid to Westpac in accordance with
their security interest, and the balance of AUD285,000 is currently
held in an account controlled by the liquidators," AFR quotes a
Grant Thornton spokeswoman as saying.
As first reported by Street Talk in July, KPMG was engaged to
assist Mrs Mac's find emergency capital to pay down debt, or to
find new owners to take control of the group.
"Operating as a national business for over 65 years, the company
generates in excess of AUD105 million in gross sales, employs over
250 staff and holds a strong position in key market channels
including grocery, petrol & convenience and other 'on-the-go'
channels," documents circulated to potential investors by KPMG
reads. "Following a strategic review process, the board and the
newly appointed leadership team have undertaken a series of
initiatives including the development of a new strategic plan
focused on the key drivers to transform the business, to win in its
chosen markets and deliver sustainable profit growth into the
future."
AFR says the sale document noted meat prices doubled since 2020. In
the 12 months to the end of June 2021, net revenue had dipped below
AUD70 million, down from AUD80 million in the 2019 financial year.
The document was only a teaser, with interested parties required to
sign a confidentiality agreement before being granted more
information, AFR says. However, it did not disclose that the
directors Mrs Mac's had requested advice on safe harbour
arrangements. Added to the Corporations Act in 2017, safe harbour
protects directors from personal liability for debts incurred by an
insolvent company if their actions are reasonably likely to lead to
a better outcome for creditors than appointing external
administrators or a liquidator.
AFR adds that Grant Thorton, in its creditors' report, noted it had
only received a draft safe harbour report and was waiting for the
final version to review the advice - and whether it was followed by
directors and management.
RURAL INDIGENOUS: First Creditors' Meeting Set for March 3
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Rural
Indigenous Water Services Pty Ltd will be held on March 3, 2023, at
3:30 p.m. at the offices of Vincents - Brisbane at Level 34, 32
Turbot Street in Brisbane and via virtual meeting technology.
Nick Combis of Vincents Chartered Accountants was appointed as
administrator of the company on Feb. 21, 2023.
STOCKMANS PLANT: First Creditors' Meeting Set for March 7
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Stockmans
Plant Hire Pty Ltd will be held on March 7, 2023, at 11:00 a.m. at
Level 8, Creek Street in Brisbane and via virtual meeting
technology.
Stephen Dixon of Hamilton Murphy Advisory was appointed as
administrator of the company on Feb. 23, 2023.
SUNBUSTER CARAVANS: Second Creditors' Meeting Set for March 3
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Sunbuster
Caravans Pty Ltd has been set for March 3, 2023 at 9:30 a.m. at the
offices of Robson Cotter Insolvency Group.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 2, 2023 at 4:00 p.m.
William Paul Cotter of Robson Cotter Insolvency Group was appointed
as administrator of the company on Jan. 27, 2023.
=========
C H I N A
=========
CARREFOUR CHINA: Got State Funding Amid Bankruptcy Speculation
--------------------------------------------------------------
Pandaily reports that supermarket chain Carrefour China, affected
by the impact of e-commerce and the epidemic, reached a cooperation
agreement with a state-owned facility in East China's Anhui
Province on February 20 to help with its business upgrading.
However, the retailer is already in turmoil, and its future is
uncertain.
Carrefour China's financial report shows that from 2020 to 2021,
its net loss increased from CNY795 million ($114 million) to
CNY3.337 billion, the report discloses. In the first half of 2022,
the net loss was CNY471 million.
Since 2022, Carrefour China has seen many of its stores close up,
including a 22-year-old store in Beijing in addition to a store
known as "Carrefour's largest flagship store in Asia", according to
Pandaily. In the first three quarters of 2022, the company closed
54 stores, leaving only 151 stores in operation. The number was 210
in 2019 when retail corp Suning.com acquired an 80 percent stake in
Carrefour China from the French retailer group.
According to Pandaily, facing China's rapidly growing e-commerce
sector, Carrefour China has actively sought transformation, such as
the convenience store business in 2014, and online e-commerce
business in 2015. After Suning.com became its controlling
shareholder, it launched its first member store in China in 2021
and said that it would upgrade more than half of its domestic
stores to member stores. However, the plan has progressed slowly,
and only two member stores have been opened in Shanghai.
Since January this year, a number of consumers complained that they
were unable to pay with the supermarket's shopping cards and value
cards, with some interpreting it as a sign of problems at the
retail company. The firm denied online speculation about closure,
adding that it was upgrading its supply chains.
According to Tianyancha, a commercial information query platform,
among the litigation cases related to Carrefour China's supply
chain in the recent five years, the cases in 2022 accounted for the
largest proportion, Pandaily relays. Twenty of those cases from
last year involved sales contract disputes, most of which were debt
collection by suppliers.
Media outlet Times Weekly quoted Lai Yang, a member of the Expert
Committee at the China General Chamber of Commerce, as saying, "At
present, the development of Carrefour China is only upgrading to
the existing supermarket format. The introduction of state-owned
assets won't help a lot." Pandaily relates that Lai thought that
Carrefour China should study its own resources and then apply them
to a larger transformation. For example, Sam's Club in China excels
in chilled products, which appeal to many consumers.
Pandaily, citing a report by Jiemian News, relates that in the view
of an investor who has contacted Carrefour China, the core of the
transformation failure lies in the poor management of Suning.com.
Another person in the retail industry revealed that the funds
announced by Carrefour China have not yet been put in place, and
the statement is more likely to be a strategy to stabilize the
situation.
In fact, Carrefour China's current situation is very similar to
Missfresh, a fresh grocery e-commerce company, Pandaily states.
Missfresh's capital chain had been tight due to long-term losses.
In order to boost the company's stock price, a financing
announcement was issued in July last year. However, less than half
a year after the announcement was issued, Missfresh collapsed, the
report notes.
VNET GROUP: S&P Affirms 'B' ICR Despite Some Governance Weakness
----------------------------------------------------------------
On Feb. 23, 2023, S&P Global Ratings affirmed its 'B' long-term
issuer credit rating on VNET Group Inc.
The negative outlook reflects VNET's increasing liquidity needs
amid tough funding conditions over the next 12 months.
A default by a VNET Group Inc. shareholder nearly triggered change
of control clauses embedded in the company's borrowings. S&P
believes this indicates corporate governance risk at the
China-based data center operator.
S&P sees some weakness in VNET's risk oversight, yet there is
little noticeable effect on its banking relationships or access to
funding by far. The near triggering of the change of control
clauses embedded in the company's borrowings reflects a lack of
oversight of key risks within the company. This could weigh on
VNET's ability to raise new capital, though there have been no
indications that the company's banking relationships or its
standing in capital markets has materially suffered so far.
GenTao Capital Ltd., fully owned by VNET's founder Mr. Josh Sheng
Chen, recently defaulted on a loan facility backed by his stake in
VNET as collateral. This would have triggered change of control
clauses embedded in the company's US$850 million outstanding
convertible notes, and some of its domestic borrowings. This risk
was mitigated by VNET's proposed issuance of new Class D shares to
the founder, thereby maintaining his voting power in VNET, though
at a much lower economic stake. The new shares carry 500 votes per
Class D share.
VNET's liquidity risks will likely rise over the next 12 months.
S&P estimates the company will need to raise more than Chinese
renminbi (RMB) 3.4 billion of capital to cover the US$600 million
convertible notes that have a put option of Feb. 1, 2024. This
considers VNET's RMB3.5 billion in unrestricted cash as of Sept.
30, 2022, repayment of US$68 million convertible notes in February
2023, and the company's flexibility to scale down annual capital
expenditure (capex) to about RMB1.5 billion, if needed.
Rising interest rates, turbulent capital markets, heightening
awareness of corporate governance risks, and depreciating renminbi
relative to the dollar are adding to VNET's challenges in raising
the capital needed over the next few months.
The negative rating outlook reflects VNET's heightening liquidity
needs over the next 12 months as the put option date for its US$600
million convertible notes approaches.
S&P said, "We could lower the rating if VNET does not make
meaningful progress on refinancing its US$600 million convertible
notes in the next few months. This could reflect the company's
limited access to long-term funding sources, or reduced operating
cash flow.
"We could also lower the rating if VNET's EBITDA interest coverage
falls below 2.0x or its debt-to-EBITDA ratio stays above 7.0x. This
could occur if the company significantly increases its debt-funded
expansion, or if its EBITDA declines materially below our base
case.
"We would revise the outlook to stable if VNET made significant
progress in its refinancing plan such that the company had enough
liquidity to repay the US$600 million convertible notes if they
came due." This is provided VNET can maintain its EBITDA interest
coverage at above 2.0x and debt-to-EBITDA ratio below 7.0x. This
could happen if the company can secure sufficient long-term
financing, grow its operating cash flow, and remain disciplined in
debt-funded expansion.
ESG credit indicators: To E-3, S-2, G-3; From E-3, S-2, G-2
S&P said, "Governance factors are now a moderately negative
consideration in our credit rating analysis. We see lack of
oversight of key risks such as the share pledge by its founder and
key shareholder, and debt covenants." This is reflected by a near
triggering of the change of control clauses embedded in the
company's borrowings due to the default by its shareholder in
February 2023. A change of control event would significantly strain
VNET's liquidity, as it would accelerate the company's US$850
million outstanding convertible notes and some of its domestic
borrowings.
Environmental factors remain a moderately negative consideration in
S&P's credit rating analysis. Relative to peers, VNET sources less
energy from renewable sources and its relatively older data centers
are less energy efficient than newer hyperscale facilities.
Restrictions on data center capacity expansion in Chinese tier-1
cities because of power consumption concerns will likely push the
company's new data centers outside such cities.
=========
I N D I A
=========
AADHI VINAYAGA: ICRA Withdraws B+ Rating on INR8.50cr LT Loan
-------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
Aadhi Vinayaga Spinners at the request of the company and based on
the No Objection Certificates received from the bankers. 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- 8.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Cash Credit
Long Term- 3.02 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Term Loan
Long Term- 0.48 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Withdrawn
Aadhi Vinayaga Spinners was established by Mr. J Rajesh and Mrs. J
Gnanamani as a partnership firm in September 2003. The Firm is
engaged in the manufacture of carded warp yarn in the range of 20's
to 60's counts. It also manufactures slub yarn which contributes to
a small portion of the revenues. The Firm's manufacturing facility
is located in Coimbatore (Tamil Nadu) and operates with a capacity
of 14,672 spindles. The Firm has employee strength of 190 permanent
workers and operates on. a three-shift basis. It sells its produce
majorly in the markets of Ichalkaranji and Bhiwandi (Maharashtra),
Kolkata and Tirupur (Tamil Nadu).
AGGARWAL FOODS: ICRA Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has retained the long-term ratings of Aggarwal Foods in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 15.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 1.80 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Aggarwal Foods (AF) is a proprietorship firm, was set up in 1997 by
Mr. Suresh Kumar. Aggarwal Foods is engaged in processing and
export of basmati rice. It has a plant at Karnal (Haryana) which
has a milling capacity of 3.24 lac quintals per annum and a sortex
machinery with a similar capacity.
BADEPALLY MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
---------------------------------------------------------------
ICRA has retained the Long-Term rating of Badepally Municipality in
the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+ (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Issuer Rating - [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Rating continues to
remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
The BDM, being an ULB, provides civic services to the Badepally
town. The town is located in Mahbubnagar district of Telangana and
is at a distance of around 90 km from the state capital, Hyderabad.
Badepally covers an area of 10.37 sq. km. and has population base
of 32,598, of which, ~37% is accounted by slum dwellers. The major
functions of the BDM involve water.
BANSAL FOODS: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the long-term ratings of Bansal Foods (India) in
the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 4.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
BNF was set up in December, 2013 as a proprietorship firm by Mr
Jodha Ram Bansal in Samana (Punjab). The firm is engaged in the
milling of paddy into rice (basmati), with bran and husk as the
byproducts. The firm's plant, which has a capacity of 4 metric
tonnes per hour, commenced commercial operations from September
29,2014 and caters entirely to the export markets through third
parties. Mr Bansal is assisted by his two sons in this business.
BHAWAR LIFESTYLE: ICRA Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the long term and short-term ratings for the bank
facilities of Bhawar Lifestyle in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]B+ (Stable)/[ICRA]A4;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term- 10.00 [ICRA]A4 ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 9.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term/ 11.00 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain
under issuer not cooperating
category
Short Term- 20.00 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Bhawar Lifestyle (BLS) was founded by Mr. B Sunil Kumar in 2000.
BLS is involved in the distributor and retailer businesses. It is a
distributor for Reliance Jio, Apple products, Amazon, Nano Keratin
and Dyson and is a retailer of several brands which include Puma,
Fabindia, Amante, Amazon, Xiaomi, Oneplus, New Balance, Sketchers
and Miniso. It currently has 52 retail outlets under the retailer
business in Karnataka, Hyderabad, Tamil Nadu and West Bengal.
BHIMAVARAM MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
----------------------------------------------------------------
ICRA has retained the Long-Term rating of Bhimavaram Municipality
in the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+ (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Issuer Rating - [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Rating continues to
remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Bhimavaram Municipality was established in 1948 and was upgraded to
a selection grade municipality in 2011. The municipality is
governed by the Andhra Pradesh Municipalities Act, 1965, which is
administered by the Municipal Administration and Urban Development
Department (DMA), GoAP. BVM provides basic municipal services in
Bhimavaram town, which is located in the Godavari district of
Andhra Pradesh. BVM covers an area of 32 square kilometre (sq. km.)
and serves a population of 1.37 lakh (as per Census 2011). The
major functions of the BVM include water supply, solid waste
management and construction, repair and maintenance of roads and
streetlights in its area. The municipality is divided into 39 wards
and is supervised by an elected body, the council, consisting of
ward councillors, elected for a period of five years.
The council further elects a Mayor, who heads the deliberative wing
of the corporation. The Commissioner, appointed by the State
Government, heads the executive wing of the ULB, and is responsible
for all the activities carried out by the
Corporation.
CAPACITE INFRAPROJECTS: Ind-Ra Cuts Long Term Issuer Rating to BB+
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Capacite
Infraprojects Limited's (CIL) Long-Term Issuer Rating to 'IND BB+'
from 'IND BBB+' and has placed it on Rating Watch with Negative
Implications.
The instrument-wise rating actions are:
-- INR1.0 bil. Non-convertible debenture (NCD)* due on March 2025
downgraded and placed on Rating Watch with Negative
Implications with IND BB+/Rating Watch with Negative
Implications;
-- INR802.16 mil. (reduced from INR892.3 mil.) Term loans Up to
FY27 downgraded and placed on Rating Watch with Negative
Implications with IND BB+/Rating Watch with Negative
Implications;
-- INR850 mil. Proposed term loans downgraded and placed on
Rating Watch with Negative Implications with IND BB+/Rating
Watch with Negative Implications;
-- INR1,647.6 bil. (reduced from INR1.650 bil.) Fund-based
working capital limits downgraded and placed on Rating Watch
with Negative Implications with IND BB+/Rating Watch with
Negative Implications /IND A4+/ Rating Watch with Negative
Implications;
-- INR250 mil. Proposed fund-based working capital limits
downgraded and placed on Rating Watch with Negative
Implications with IND BB+/Rating Watch with Negative
Implications /IND A4+/ Rating Watch with Negative
Implications;
-- INR1.950 bil. Proposed non-fund-based working capital limits
downgraded and placed on Rating Watch with Negative
Implications with IND BB+/Rating Watch with Negative
Implications /IND A4+/ Rating Watch with Negative
Implications; and
-- INR12.820 bil. (reduced from INR15.240 bil.) Non-fund-based
working capital limits downgraded and placed on Rating Watch
with Negative Implications with IND BB+/Rating Watch with
Negative Implications /IND A4+/ Rating Watch with Negative
Implications.
*Unlisted
ANALYTICAL APPROACH: Ind-Ra continues to take a consolidated view
of CIL and its 100% subsidiary CIPL-PPSL-Yongnam Joint Venture
Constructions Private Limited, along with its joint ventures and
associates including a Maharashtra Housing and Area Development
Authority (MHADA) project (together referred to as CIL), owing to
the strong operational and strategic ties among them. The joint
ventures and associates have been included in financials using the
equity method of accounting.
The downgrade reflects CIL's inability to tie up enhanced working
capital limits, continued blockage of working capital and a delay
in recovering its pending receivables, resulting in a further
stretch in its working capital.
Key Rating Drivers
Liquidity Indicator – Stretched; Elongation of Working Capital
Cycle: The liquidity position of CIL remained stretched due to its
inability to tie up enhanced working capital limits commensurate to
the rate of the project execution. Moreover, out of the
assessed/sanctioned limits of INR10,100million, the usable limits
available have over the months reduced to INR7,312.9 million at
end-January 2023 (fund based: INR1,650 million and non-fund based:
INR5,662.9 million). The average maximum utilization of its
fund-based limits and non-fund-based limits was 93% and around 90%
over the 12 months ended January 2023.
CIL's working capital cycle remained elongated with an outflow of
around INR962 million in 1HFY23. CIL's gross working capital cycle,
which had improved to 92% of its revenue in FY22 (FY21: 129%),
again stretched to 109.6% as of 9MFY23, on account of an increase
in unbilled revenue and retention money (9MFYE23: INR1693million,
end-June 2022: INR1,590 million). Ind-Ra notes that the company has
different project specific limits for public projects which gives
buffer for the execution of such projects. At 9MFYE22, CIL had
unencumbered cash balances of around INR112 million (FYE21: INR227
million) as against its scheduled repayment obligation of INR171
million in 4QFY23 and estimated an interest cost of INR250
million-260 million. Ind-Ra expects the net working capital cycle
to remain stretched over the medium term in case of further delays
in securing tie-ups.
Moderate Operational Performance and Credit Metrics: CIL's order
execution pace, which had picked up in FY22 after recovering from
the impact of COVID-19, remained comfortable in 9MFY23, leading to
the company achieving consolidated revenue of INR13.52 billion
(FY22: INR13.34 billion, FY21: INR8.8 billion). The increase in the
revenue was driven by factors such as new launches by large
developers, a healthy sales momentum and large developers shifting
their preference to organized players such as CIL from unorganized
ones to sub-contract building work. The consolidated EBITDA margin
remained at 19.8% for 9MFY23 (FY22: 16%; FY21: 15.5%), partly due
to a reduction expenditure on construction materials as for most of
its private sector clients; CIL is now relying on materials
provided by its clients.
CIL's credit profile remained comfortable in 9MFY23 with its
adjusted net leverage (debt less unrestricted cash/EBITDA) falling
to 1.6x (FY22: 2x; FY21: 2.0x) and its gross interest coverage
(gross interest expense/EBITDA) increasing to 3.9x (1.9x, 3.4x),
due to improvement in EBITDA. CIL's adjusted net debt (including
letter of credit acceptances) increased by INR982 million in 9MFY23
(FY22: INR4,347million).
Strong Revenue Visibility, but Highly Concentrated Order Book: At
end-December 2022, CIL had an unexecuted order book of INR97.6
billion, providing a strong revenue visibility of 7.4x of FY22
revenue. Public sector orders accounted for 67% of the order book,
with the balance coming from private players. In 9MFY23, CIL
secured orders of INR33.13 billion (FY22: INR6.16 billion; FY21:
INR1.48 billion). The company targets to maintain its order book
from the public sector at the similar levels (70%) over the near-
to medium-term. However, the order book is highly concentrated in
terms of geography as most of the projects to be executed are in
the Mumbai Metropolitan Region. Also, the top 10 projects of the
company comprised around 84% of the total order book. City and
Industrial Development Corporation of Maharashtra contributed
around 50% to the overall order book. Ind-Ra expects the order
book to remain strong over the medium term, considering the
government's focus on infrastructure development and the company's
ability to execute projects in a timely manner.
Rating Sensitivities
The Rating Watch with Negative Implications indicates that the
ratings may be either downgraded or affirmed upon resolution. The
Rating Watch with Negative Implications will be resolved upon the
improvement in financial flexibility through the tie-up of
additional working capital limits and an improvement in the working
capital cycle, or within the next six months whichever is earlier.
Company Profile
Incorporated in August 2012, CIL provides engineering, procurement
and construction/turnkey solutions for housing, high rises, super
high rises, specialty buildings and urban infrastructure. The
company has recently forayed into development of projects for the
public sector.
CAR AUTOMOTIVE: Ind-Ra Moves BB+ Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Car Automotive
LLP's Long-Term Issuer Rating to the non-cooperating category. The
issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB+
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR560 mil. Fund-based facilities migrated to non-cooperating
category with IND BB+ (ISSUER NOT COOPERATING)/IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last rated on
December 9, 2021. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
Car Automotive, an authorised dealer of KIA Motors India Pvt Ltd,
was incorporated in January 2018. The company commenced operations
in July 2019 with one outlet and one service center. At end-March
2021, the company had two showrooms and one service center.
COGNOTA HEALTHCARE: Ind-Ra Assigns B- Long Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Cognota Healthcare
Private Limited (CHPL) a Long-Term Issuer Rating of 'IND B-'. The
Outlook is Stable.
Key Rating Drivers
The rating reflects CHPL's small scale of operations as indicated
by revenue of INR4.24 million in FY22 (FY21: INR11.58 million). In
FY22, the company incurred losses as the operations were disrupted
due to COVID-19-led restrictions. This led to an increase in the
cost of product development and delayed revenue associated with
completion of research and development. In 9MFY23, the company
booked revenue of INR6.3 million. Ind-Ra expects the revenue to
remain at a similar level in FY23-FY24, due to the similar nature
of orders.
The company incurred EBITDA losses of INR0.8 million in FY22, as
against a profit of INR0.91 million in FY21. As a result, the
margin was negative 18.87% in FY22 (FY21: 7.86%) with a return on
capital employed of 16% (negative 46.3%). Ind-Ra expects the EBITDA
margin to improve marginally in FY23-FY24 due to improved operating
efficiency.
Liquidity Indicator - Poor: The company had an elongated net
working capital cycle of negative 414 days in FY22 (FY21: negative
216 days). CHPL does not have any capital market exposure. The cash
flow from operations turned negative to INR0.81 million in FY22
(FY21: INR7.23 million) owing to EBITDA losses incurred in FY22.
Consequently, the free cash flow turned negative to INR0.81 million
in FY22 (FY21: INR7.23 million). The cash and cash equivalents
stood low at INR0.75 million at FYE22 (FYE21: INR1.39 million).
The rating also reflects CHPL's modest credit metrics as CHPL
incurred operating losses in FY22. Ind-Ra expects the credit
metrics to remain modest during FY23-FY24 on account of modest
EBITDA.
However, the rating is supported by the promoters' nearly two
decades of experience in information technology consultancy
business. This has facilitated the company to establish strong
relationships with its customers as well as suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations, along
with an improvement in the overall credit metrics with the interest
coverage increasing above 1.2x, along with an improvement in the
liquidity position, all on a sustained basis, could lead to a
positive rating action.
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit and liquidity profile, all on a
sustained basis, could lead to a negative rating action.
Company Profile
Incorporated in, CHPL provides information technology consultation
services to the healthcare industry. It also executes internet of
things projects and machine programming. The company's registered
office is located in Pune. Sanjeev Diwadkar and Yogini Diwadhar are
the promoters.
DAMODAR TRADELINKS: ICRA Moves B- Debt Rating to Not Cooperating
----------------------------------------------------------------
ICRA Ratings has migrated the rating on bank facilities of Damodar
Tradelinks Private Limited (DTPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B- (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating Moved to
Cash Credit the 'Issuer Not Cooperating’
Category
Short-term 2.00 [ICRA]A4 ISSUER NOT
Non Fund based COOPERATING; Rating Moved to
Limits the 'Issuer Not Cooperating’
category
Rationale
The rating action is based on no updated information on the
entity's performance since the time it was last rated in December
2021. The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using these ratings
as they do not adequately reflect the credit risk profile of the
entity. The entity's credit profile may have changed since the time
it was last reviewed by ICRA; however, in the absence of requisite
information, ICRA is unable to take a definitive rating action.
As part of its process and in accordance with its rating agreement
with Damodar Tradelinks Private Limited (DTPL), ICRA has been
trying to seek information from the entity to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. In the absence of
requisite information, and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
Also, as part of its process and in accordance with its rating
agreement with DTPL, 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.
DTPL was incorporated in 2003 by the Founder and Group Chairman of
Electro Group of Companies, Mr. Brij Khandelwal. DTPL trades in
different types of petrochemicals and polymers including
low-density polyethylene, high-density polyethylene, linear
low-density polyethylene, poly propylene, poly-vinyl chloride,
fillers and master batches, among others. The company procures its
products in bulk from both domestic markets and through imports and
sells the same to its customers spread across southern India with
major sales concentration in Tamil Nadu.
DILEEP ESSENTIALS: ICRA Withdraws B+ Rating on INR2cr LT Loan
-------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the Unallocated Limits
of Dileep Essentials Private Limited at the request of the company.
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- 2.00 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Withdrawn
DEPL was incorporated in 2018 and is a part of the Dileep Group,
which is involved in the manufacturing, trading and export of
wooden handicraft items since 1988. DEPL was formed as joint
venture between DEPL and BCCL with the latter having 50%
shareholding of the company and the remaining being held by
promoters. However, the agreement between DEPL and BCCL was
terminated in FY2020 and BCCL's currently has a 12% stake and the
rest is held by the promoters. DEPL purchases majority of the
products from its group companies and the rest from local market
and sells them in the domestic market. The different types of
products include tableware, kitchenware, serveware, gifting,
furniture & lighting and décor. The company sells these products
through various modes of channel, including its three owned retail
shops in Mumbai, Bangalore and Rajasthan. It sells online through
the Ellementary website, besides having shop-in-shop stores,
franchisee stores and B2B sales.
ELECTRO POLYCHEM: ICRA Moves B- Debt Ratings to Not Cooperating
---------------------------------------------------------------
ICRA Ratings has migrated the rating on bank facilities of Electro
Polychem Limited to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 9.00 [ICRA]B- (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating Moved to
Cash Credit the 'Issuer Not Cooperating'
Category
Long Term- 9.00 [ICRA]B- (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating Moved to
Term Loan the 'Issuer Not Cooperating'
Category
Long Term/ (3.00) [ICRA]B- (Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Interchangeable Rating moved to the 'Issuer
Not Cooperating' category
Rationale
The rating action is based on no updated information on the
entity's performance since the time it was last rated in December
2021. The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using these ratings
as they do not adequately reflect the credit risk profile of the
entity. The entity's credit profile may have changed since the time
it was last reviewed by ICRA; however, in the absence of requisite
information, ICRA is unable to take a definitive rating action.
As part of its process and in accordance with its rating agreement
with Electro Polychem Limited, ICRA has been trying to seek
information from the entity to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information, and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Electro Polychem Limited was incorporated in 1995 by the Founder
and Group Chairman of Electro Group of Companies, Mr. Brij Mohan
Khandelwal. EPL trades in different types of polymers including
poly-vinyl chloride resins, poly propylene, polyethylene, fillers
and master batches, among others. The company procures its products
in bulk from both domestic markets and through imports and sells
the same to its customers spread across Southern India with major
concentration of sales in Tamil Nadu.
ENTERPRISING ENTERPRISES: ICRA Keeps B Rating in Not Cooperating
----------------------------------------------------------------
ICRA has retained the long-term and short-term ratings of
Enterprising Enterprises in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B (Stable)/ [ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 29.50 [ICRA]B (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 0.50 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Enterprising Enterprises (EE) was established as a partnership firm
in 1972 by its founder, Mr. K. Badrinarayanan, the Group chairman
of the Enterprising Group. The Group has an established presence in
the granite quarrying and trading business in India through EE as
well as group entities such as Pooshya Exports Private Limited and
Yak Granite Industries Private Limited.
EURO VISTAA: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Euro Vistaa
(India) Limited (EVL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR385 mil. Fund-based limits assigned with IND BB/Stable/IND
A4+ rating;
-- INR40 mil. Non-fund based limits assigned with IND A4+ rating;
-- INR75 mil. Term loan due on March 31, 2027 assigned with IND
BB/Stable rating; and
-- INR190 mil. Proposed fund-based limits assigned with IND BB/
Stable/IND A4+ rating.
Key Rating Drivers
Liquidity Indicator - Stretched: EVL's average maximum utilization
of the fund-based and non-fund-based limits was 95.43% and 70.09%,
respectively, during the 12 months ended November 2022 and Ind-Ra
expects it to have remained at similar levels for the 12 months
ended December 2022. The cash flow from operations turned negative
to INR70.17 million in FY22 (FY21: INR21.72 million) due to
unfavorable changes in working capital. Consequently, the free cash
flow turned negative to INR70.97 million in FY22 (FY21: INR21.02
million) with a minimal capex of INR0.8 million. The net working
capital cycle elongated to 161 days in FY22 (FY21: 159 days) due to
an increase in the inventory holding period to 17 days (8 days).
The cash and cash equivalents stood at INR3.77 million at FYE22
(FYE21: INR3.35 million). EVL has scheduled debt repayments of
INR16.4 million in FY23. EVL does not have any capital market
exposure and relies on banks to meet its funding requirements.
The ratings reflect EVL's medium scale of operations as indicated
by revenue of INR1,326.83 million in FY22 (FY21: INR1,083.4
million). The growth in revenue was driven by an increase in demand
for yarn. In 8MFY23, EVL booked revenue of INR1,022.2 million.
Ind-Ra expects the revenue to grow further in FY23-FY24 on account
of execution of a higher number of orders.
The ratings also factor in EVL's modest EBITDA margins of 4.74% in
FY22 (FY21: 6.66%) with a return on capital employed of 9.6%
(13.2%). The decline in EBITDA margins was due to an increase in
price of yarn and higher freight expenses. Ind-Ra expects the
EBITDA margins to remain at a similar level in FY23 owing to the
similar nature of operations.
The ratings also reflect EVL's modest credit metrics with gross
interest coverage (operating EBITDA/gross interest expense) of
1.51x in FY22 (FY21: 1.98x) and net financial leverage (adjusted
net debt/operating EBITDA) of 8.9x (6.5x). The credit metrics
deteriorated in FY22 due to a decrease in the absolute EBITDA to
INR62.83 million (FY21: INR72.15 million) coupled with an increase
in the working capital term loan by INR75 million. In FY23, Ind-Ra
expects the credit metrics to remain at a similar level due to the
absence of any major debt-funded capex plans.
However, the ratings are supported by EVL's promoters' experience
of three decades in the trading of yarn, leading to established
relationships with its customers and suppliers.
Rating Sensitivities
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics and/or pressure on the
liquidity position on a sustained basis, could lead to a negative
rating action.
Positive: An increase in the scale of operations, along with an
improvement in the overall credit metrics with the interest
coverage increasing above 2.0x and an improvement in liquidity
profile, all on a sustained basis, could lead to a positive rating
action.
Company Profile
Established in 1987 in Mumbai, EVL is a merchant exporter of a
variety of textile yarn. Punkajj Lath and family are the promoters.
It exports yarn to Argentina, Italy, France and Guatemala.
FINE FACETS: ICRA Keeps D Ratings in Not Cooperating Category
-------------------------------------------------------------
ICRA has retained the Short-Term rating of Fine Facets India
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term– 14.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term (5.00) [ICRA]D; ISSUER NOT COOPERATING;
Interchangeable Continues to remain under the
Others 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 2005, Fine Facets India Pvt. Ltd. (Fine Facets) is
engaged in trading certified and uncertified cut and polished
diamonds primarily for exports. The company has its marketing
office in Opera House, Mumbai.
FRONTLINE BUILDERS: ICRA Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------------
ICRA has retained the rating for the bank facilities of Frontline
Builders in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 50.00 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Frontline Builders was founded in 2016 as a partnership firm and
has its registered office in Hyderabad. The firm develops
residential real-estate properties. FB is constructing a
residential property called Frontline Seven in Kokapet, Hyderabad
on a land parcel of 7 acres (4.50 acres being the firm's share) in
JDA (the firm's share is 89%) with individual land owners.
GAYATH INDUSTRIES: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has retained the Long-Term rating of Gayath Industries in the
'Issuer Not Cooperating' category. The ratings are denoted as
"[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 0.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 8.40 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Long Term- 0.10 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Gayath Industries was established in 2006, with Ms. Latha Muthu as
its proprietor. The firm manufactures precision machined
engineering components such as windmill components, railway coach
couplers, tunnel boring machine components, value components and
manifolds, among others. The day-to-day operations are managed by
Mr. Muthu P, who has an extensive experience of over two decades in
the precision components segment.
GDJD INTERNATIONAL: ICRA Moves B+ Rating to Not Cooperating
-----------------------------------------------------------
ICRA has moved the ratings for the bank facilities of GDJD
International Private Limited in the 'Issuer Not Cooperating'
category due to non-submission of monthly 'No Default Statement'
("NDS") and withdrawn. The rating is denoted as
"[ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT COOPERATING and
withdrawn".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 15.00 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Moved to the
Limits 'Issuer Not Cooperating'
Category and withdrawn
ICRA has been consistently following up with GDJD International
Private Limited for obtaining the monthly 'No Default Statement'.
However, the entity's management has remained non-cooperative and
ICRA has not received NDS for two consecutive months of December
2022 and January 2023.
ICRA is unable to validate whether GDJD International Private
Limited has been able to meet its debt servicing obligations in a
timely manner. Accordingly, the lenders, investors and other market
participants are advised to exercise appropriate caution while
using this rating.
ICRA is also withdrawing the ratings assigned to the bank
facilities of GDJD International Private Limited at the request and
confirmation of the entity in accordance with the policy on
withdrawal of credit ratings. The ratings are not reviewed as the
entity has remain Non-cooperative towards the rating exercise. As
part of its process and in accordance with its rating agreement
with GDJD International Private Limited, ICRA has been trying to
seek information from the entity so as to monitor its performance.
Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, a rating view has
been taken on the entity based on the best available information.
Initially, the GDJD Group established the partnership entity, GDJD
Exports, in 1990 to carry out trading activities. Given the
inherent challenges of the partnership firm, the company
established GDJD International Pvt. Ltd. in 2012. Going forward,
the new bank limits will be available in the private limited entity
and consequently business growth will happen in the same. The
partnership entity will co-exist as of now, but the growth could be
constrained and depend on the available limits.
GEETANJALI AGRO: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the rating for the bank facilities of Geetanjali
Agro Industries in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 10.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 3.03 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 2011, Geetanjali Agro Industries (GAI) has a rice
milling unit at Raichur district of Karnataka. The firm is engaged
in milling, processing, and selling of boiled rice, raw rice, bran,
and husk. Although, the rice mill commenced operations in November
2013, the promoter group has been engaged in similar business for
more than two decades. The firm's plant is spread over an area of
five acres in Raichur district of Karnataka with a capacity to
process 28800 MT of paddy per year.
HARI KRIPA: ICRA Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the Long-Term and Short-Term ratings of Hari
Kripa Business Ventures 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– 20.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 11.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term/ 3.00 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Non Fund Based/ remain under 'Issuer Not
Others Cooperating' Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Hari Kripa Business Venture Private Limited (HKBV) was established
in 2008 at Kaladera in Jaipur. The company started its commercial
production in September 2012. The company is promoted by Mr.
Mahendra Kumar Agarwal, Mr. Raghuveer Agarwal along with the other
members of the family. HKBV manufactures Mild Steel (MS)
ingots/billets, pipes, and flats. In FY2013, the company forward
integrated and commenced the manufacturing of MS flats and other
rolled products, wherein the key raw materials (billets and ingots)
used were captively produced.
ISWARYA TEXTILE: Ind-Ra Moves BB- Issuer Rating to NonCooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sree Iswarya
Textile Private Limited's (SITPL) Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR30.00 mil. Fund-based working capital limits migrated to
non-cooperating category with IND BB- (ISSUER NOT
COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating;
-- INR270 mil. Term loans due on October 2024 migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING)
rating; and
-- INR150 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last rated on
January 18, 2022. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
SITPL, established in 1996, manufactures cotton yarn and generates
electricity. Its day-to-day operations are managed by Sethurama
Murugan.
ITSHASTRA PRIVATE: Ind-Ra Assigns B- Long Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Itshastra (India)
Private Limited (IIPL) a Long-Term Issuer Rating of 'IND B-'. The
Outlook is Stable.
Key Rating Drivers
The rating reflects IIPL's small scale of operations as indicated
by revenue of INR64.94 million in FY22 (FY21: INR57.95 million).
The growth in revenue in FY22 was due to receipt of a higher number
of orders. In 9MFY23, the company booked revenue of INR43.5
million. Ind-Ra expects the revenue to remain at similar levels in
FY23 due to the similar nature of orders.
The rating also factors in IIPL's modest EBITDA margin of 13.86% in
FY22 (FY21: negative 18.49%) with a return on capital employed of
8.3% (negative: 16.3%). The improvement in margin was driven by
receipt of high-margin orders. In FY23, Ind-Ra expects the margin
to remain at a similar level.
Liquidity Indicator - Poor: The company's net working capital cycle
elongated to 100 days in FY22 (FY21: 2 days) because of a stretch
in the receivable period to 106 days (8 days). The cash flow from
operations turned negative to INR4.55 million in FY22 (FY21:
INR3.70 million) due to unfavorable changes in working capital.
Consequently, the free cash flow turned negative to INR7.13 million
in FY22 (FY21: INR3.41 million). The cash and cash equivalents
stood at INR30.27 million at FYE22 (FYE21: INR34.32 million).
The rating also reflects IIPL's modest credit metrics. The company
had a net cash position in FY21 and FY22 . However, Ind-Ra expects
the credit metrics to deteriorate in FY23 and FY24 due to a planned
debt-funded capex plan.
However, the rating is supported by the promoters' nearly two
decades of experience in operating information technology
consultancy business, leading to established relationships with its
customers as well as suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations, along
with an improvement in the overall credit metrics and liquidity
position, all on a sustained basis, could lead to a positive rating
action.
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics with the interest
coverage below 1.2x and a decline in the liquidity position, all on
a sustained basis, could lead to a negative rating action.
Company Profile
Incorporated in 2000, IIPL provides technology development
consultation services to US-based clients. The company's office is
located in Thane, Mumbai. Sanjeev Diwadkar and Yogini Diwadhar are
the promoters.
JORABAT SHILLONG: Ind-Ra Affirms 'D' NonConvertible Debts Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed the ratings of
Jorabat Shillong Expressway Limited's (JSEL) senior and
subordinated non-convertible debentures (NCDs) at 'IND D'.
The detailed rating actions are:
-- INR6.412 bil. Senior NCDs* affirmed with IND D rating; and
-- INR2,421.6 bil. Subordinated NCDs* affirmed with IND D rating.
* Details in annexure
Key Rating Drivers
The affirmation reflects continued non-servicing of debt by JSEL as
confirmed by the debenture trustee.
JSEL has received 14 annuities from National Highway Authority of
India (NHAI, 'IND AAA'/Stable) as of February 15, 2023. The company
received its 13th annuity on September 2, 2022 with some delay
(about 30 days) and minimal deductions. However, the company
received the 14th annuity on January 30, 2023 in a timely manner
but saw some maintenance-related deduction of 5% of gross annuity
amount of INR725 million and a statutory deduction (TDS) of 2%.
The management confirmed the availability of a debt service reserve
balance of INR540 million and free cash of INR41 million as of
January 31, 2023. Furthermore, the project had other reserves and
investment in mutual funds, which included encumbered cash,
totalling INR6,639.2 million as of January 31, 2023.
JSEL has been classified under the 'Amber' category according to
the National Company Law Appellate Tribunal order dated February
12, 2019, which defines 'Amber Entities as Domestic Group Entities
which are not able to meet all their obligations (financial and
operational), but can meet only operational payment obligations and
payment obligations to senior secured financial creditors'. Ind-Ra
continues to seek clarity on the resolution of Infrastructure
Leasing & Financial Services ('IND D') and its group companies
(including JSEL) in accordance with the National Company Law
Appellate Tribunal orders.
Rating Sensitivities
Positive: Timely debt servicing for three consecutive months will
result in an upgrade.
ESG Issues
ESG Factors Minimally Relevant to Rating: Unless otherwise
disclosed in this section, the ESG issues are credit neutral or
have only a minimal credit impact on JSEL, due to either their
nature or the way in which they are being managed by the entity and
sponsor.
Company Profile
JSEL is a special purpose vehicle that was incorporated to
implement a lane expansion project under the build-operate-transfer
annuity model. JSEL has a 20-year concession (expiring in January
2031) from the National Highways Authority of India to design,
construct, develop, finance, operate and maintain a 61.8km stretch
between Jorabat (Assam) and Barapani (Meghalaya) on National
Highway 40.
LANTECH PHARMACEUTICALS: ICRA Keeps B+ Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Lantech
Pharmaceuticals Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 4.84 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Short Term- 6.25 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Lantech Pharmaceuticals Limited (LPL) was established in August
2008 and is involved in manufacturing of Active Pharma Ingredients
and Intermediates. The manufacturing site is spread over 42 acres
and is located in srikakulam district, Andhra Pradesh. The company
has 80 reactors with working volume of 278KL and capacity of 1200MT
per annum and 2 the distillation capacity of 1800KL per month. The
company is also involved in contract manufacturing for pharma
companies like Sun Pharma, Aurobindo Pharma. The plant is
constructed with WHO-GMP standards and has GMP certificate.
M/S ANKIT: Ind-Ra Assigns B+ LT Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Rating and Research (Ind-Ra) has assigned M/S Ankit
International (AI) a Long-Term Issuer Rating of 'IND B+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR450 mil. Fund-based working capital limits assigned with
IND B+/Stable/IND A4 rating; and
-- INR5 mil. Proposed fund-based working capital limits assigned
with ND B+/Stable/IND A4 rating.
Key Rating Drivers
The ratings reflect AI's small scale of operations as indicated by
revenue of INR622.77 million in FY22 (FY21: INR1,019.64million).
The decline in revenue was on account a decline in sales volume, as
the company reduced trading of low-margin products due to a
correction in steel prices. Till 10MFY23, it booked revenue of
INR776 million. Ind-Ra expects the revenue to remain at similar
levels in the near term owing to fluctuations in steel prices.
The ratings also factor in AI's modest EBITDA margin of 3.07% in
FY22 (FY21: 2.83%) with a return on capital employed of 3.10%
(4.30%). The increase in EBITDA margins was on account of a
decrease in operating expenses. During 9MFY23, AI booked EBITDA
margin of 2%. Ind-Ra expects the margin to remain modest in the
near term owing to the intense competition and correction in steel
prices.
The ratings also reflect AI's modest credit metrics. During FY22,
the interest coverage (operating EBITDA/gross interest expenses)
improved to 2.5x in FY22 (FY21: 1.47x) owing to a reduction in
interest expenses. However, the net leverage (total adjusted net
debt/operating EBITDAR) deteriorated to 13.22x in FY22 (FY21:
8.36x) due to a decrease in the absolute EBITDA to INR19.11 million
(INR28.90 million). However, Ind-Ra expects the credits to improve
in near term due to a reduction in debt as AI repaid unsecured
loans of INR210 million in FY23 by using proceeds from loans and
advances worth INR375 million.
Liquidity Indicator - Stretched: AI's average maximum utilization
of the fund-based limits was 17.98% during the 12 months ended
January 2023. The net working capital cycle elongated to 148 days
in FY22 (FY21: 91 days) due to an increase in the inventory holding
period to 106 days (33 days). The cash flow from operations
declined to INR23.73 million in FY22 (FY21: INR171.30 million) due
to unfavorable changes in working capital. Consequently, the free
cash flow decreased to INR22.84million in FY22 (FY21:
INR170.13million). The cash and cash equivalents stood at INR0.90
million at FYE22 (FYE21: INR 6.58million). Further, AI does not
have any capital market exposure and relies on banks and financial
institutions to meet its funding requirements.
However, the ratings are supported by the proprietor's more than a
decade-long experience in importing and trading of steel pipes,
which has enabled the firm to establish longstanding relationships
with its customers and suppliers.
Rating Sensitivities
Positive: An improvement in the scale of operations, leading to an
improvement in the credit metrics, along with an improvement in the
overall liquidity, all on a sustained basis, would be positive for
the ratings.
Negative: A further decline in the scale of operations, leading to
a deterioration in the credit metrics with the interest coverage
reducing below 1.2x and a further stretch in the overall liquidity,
all on a sustained basis, would be negative for the ratings.
Company Profile
AI was established in 2010 as a proprietorship firm by Pranav Jain.
The firm is engaged in import and trading of ferrous and
non-ferrous scrap including machinery, stainless steel pipes,
carbon pipes, hot-rolled coils, among others. The firm is located
at Taloja, Navi Mumbai.
MEDVARSITY ONLINE: Ind-Ra Cuts Long Term Issuer Rating to 'BB+'
---------------------------------------------------------------
Ind-Ra-Mumbai: India Ratings and Research (Ind-Ra) has downgraded
ratings on Medvarsity Online Limited's bank facilities to 'IND BB+'
from 'IND BBB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR150 mil. (increased from INR75 mil.) Fund-based working
capital limits downgraded with IND BB+/Stable/IND A4+ rating;
and
-- INR50 mil. (increased from INR25 mil.) Fund-based working
capital limits* downgraded with IND BB+/Stable/IND A4+
rating.
*INR50 million is proposed.
ANALYTICAL APPROACH: Ind-Ra continues to take a standalone view of
Medvarsity while factoring in the strong parentage of its
promoters, Apollo Group, with demonstrated track record of support
in the past.
The downgrade reflects a delay in Medvarsity's restructuring
exercise and the continuation of corporate guarantees (CG) extended
by the company to its loss-making subsidiaries, impacting the
credit metrics significantly. Ind-Ra has observed that the company
is continuing its investment and funding support to its
subsidiaries. The completion of the restructuring exercise and its
consequent impact on its financial and credit metrics will remain a
key rating monitorable.
Key Rating Drivers
Delay in Restructuring Exercise: The company is undertaking a
business restructuring exercise and as per the restructuring,
Medvarsity's core business operations would be shifted to a newly
formed wholly owned subsidiary, Medvarsity Technologies Limited
(MTL), through a slump sale. The management had previously informed
that the proposed restructuring would result in MTL having only two
subsidiaries (one each in Bangladesh and the US, with no contingent
liabilities and the cash being taken forward from the existing
level). Although the restructuring exercise was expected to be
completed by March 2022, it has been delayed due to the pending
shareholding approval and finalization of valuation.
Due to the delay in its restructuring exercise, Medvarsity
continues to have significant investment in group entities
totalling INR316 million at FYE22 (FYE21: INR285 million).
Medvarsity has also extended the CGs in favor of lenders of its
subsidiaries (Apollo Med Skills Limited and Apollo Education UK
Limited) along with loans and advances. However, the management has
stated that any support to the group companies would come directly
from the promoters of the Apollo group and not from Medvarsity.
Moderation in Credit Profile: The company's net adjusted leverage
(net adjusted debt/EBITDA) reduced but remained high at 10.63x in
FY22 (FY21: 16.43x), due to high amount of CGs extended by
Medvarsity included in the net adjusted debt. However, the
company's gross interest coverage (EBITDA/gross interest expenses)
remained comfortable at 20.93x in FY22 (FY21: 5.48x), backed by an
increase in its EBITDA to INR55.87 million (INR45.08 million) on
account of higher enrolments. However, the EBITDA margins declined
to 8.87% in FY22 (FY21: 18.82%), mainly on account of investment
expenses written-off by Medvarsity towards its subsidiary, Apollo
Education UK Limited, coupled with an increase in its advertisement
expense and other administrative expenses. The company reported
revenue of INR338 million for 1HFY23 and an EBITDA margin of 14%.
Although, Ind-Ra expects EBITDA margin to moderate in FY23, due to
lower profitability of the courses and services being offered, but
would maintain similar revenue run rate over FY23-FY24.
Modest Scale of Operations: Medvarsity's scale of operations
remained modest with the management expecting its revenue to reach
about INR700 million for FY23. The company would remain focused on
the healthcare domain and expects higher sales growth from its
expansion into other areas of engaging healthcare professionals as
well as expanding its overseas operations.
Competitive Industry: The company is exposed to intense competition
from other established players in the online education space.
However, the differentiating factors such as clinical tie-ups for
contact programmes and association with Apollo Hospitals can help
in expanding its presence in the online healthcare education, while
tapping adjacent lines of business by leveraging its existing
doctor/healthcare worker database.
Liquidity Indicator - Adequate: The company has INR75 million of
fund-based working capital limit which was utilized at an average
of 20% during 12 months ended December 2022. However, the
utilization of the limit stood at 80% for November 2022 and 94% for
December 2022. The company had also been sanctioned additional
fund-based working capital limit of INR75 million in December 2022
to support the increase in working capital requirement. The company
does not have any long-term debt. The cash and cash equivalents
stood at INR20.6 million at end-September 2022 (FYE21: INR109
million). Medvarsity's liquidity is also supported by its moderate
capex requirements every year and negative working capital cycle.
Moreover, the management plans to fund any large capex/acquisitions
through a mix of internal accruals and equity from promoters.
Strong Parentage: Medvarsity is owned by the promoters of Apollo
Hospitals Enterprise Limited (AHEL; 'IND AA+'/Stable/IND A1+).
Apollo Hospitals is the largest hospital chain in India. The
parentage helps the company in tying up with clinical partners,
getting accredited by various reputed universities, and expanding
the scope of the business in the B2B segment. Also, the promoters
and managing director of AHEL have extended personal guarantees
towards Medvarsity's debt facility. On the operational front,
however, linkages with the group are marginal with only a small
portion of revenue being generated from a tie-up for training
AHEL's staff and AHEL being only one of the many clinical partners
of the company's contact programmes. Medvarsity has also entered
into tie-up with AHEL to provide complete offline and online
recruitment services through its healthcare job portal i.e. Health
jobs.
Pandemic-led Online Consumer Preference for Education, Long-term
Sustainability Critical: The company offers professional education
to doctors, nurses, and paramedics through the courses designed by
in-house teams and approved by accredited institutes. An increase
in the number of offerings along with a shift in the consumer
preference for online trainings has resulted in a surge in its
revenue during FY22-1HFY23. A sustained improvement in the revenue
level needs to be seen as the industry is likely to face
competition from the entities offering online upskilling programmes
and those offering conventional ways of learning which would be
back on track post the pandemic. However, the comfort of taking up
online training with timing flexibility, which is key for
practicing doctors and healthcare workers, would drive the revenue
growth.
Ind-Ra expects the company's medium- to long-term revenue growth to
be driven by: (a) a continuous addition of content in specialties
of high demand, (b) effective marketing while expanding the
presence in allied segments through leveraging the existing 500,000
doctor subscriber base, and (c) entry into new geographies
(Bangladesh, Pakistan, and the Middle East).
Self-Sufficient Operations: Medvarsity recorded modest revenue of
INR643 million in FY22 (FY21: INR239 million) but with an EBITDA
margin of 8.7% (18.82%), driven by a healthy 400% yoy increase in
enrolments. The increasing preference towards online upskilling
programmes and the company's differentiating factor of offering
hybrid programmes where the company has tied up with various
hospitals for providing clinical training would continue to drive
business over the medium term. Also, the company's focus on adding
courses in the areas of higher interest such as diabetes and
emergency medicine would enable growth in enrolments.
Rating Sensitivities
Positive: Timely completion of the reorganization exercise and
absence of any significant investments and loans to group companies
leading to the net adjusted leverage falling below 5.0x, on
sustained basis, can lead to a positive rating action.
Negative: A sustained decline in the revenue and EBITDA; or
higher-than-estimated investment in group companies or capex
resulting in the deterioration in the credit metrics, on a
sustained basis, can lead to a negative rating action.
Company Profile
Incorporated in 2000, Medvarsity offers online healthcare training
and had over 500,000 trained and certified medical professionals as
of January 2023. The company has over 25,000 hours of content with
100,000 active learners on its platform. It has a network of over
50 clinical practice locations and has students across 190
countries. The courses are designed by in-house team which
thereafter are certified by its internationally accredited
partners.
MORINGA TECHSOLV: Ind-Ra Assigns B- Long Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Moringa Techsolv
Private Limited (MTPL) a Long-Term Issuer Rating of 'IND B-'. The
Outlook is Stable.
Key Rating Drivers
The ratings reflect MTPL's small scale of operations, with it
booking revenue of INR4.10 million in FY22. The company was
incorporated in July 2020 and FY22 was the first full year of
operations. Over April-December 2022, the company achieved revenue
of INR5.73 million. Ind-Ra expects the company's revenue to improve
in the medium term, due to an increase in its orders and launching
of new products.
Liquidity Indicator - Poor: MTPL's does not have any capital market
exposure, manages the working capital requirement through promotors
funds. The net working capital cycle stood at 5 days in FY22. The
cash flow from operations stood at INR0.62 million and the free
cash flow stood at INR0.62 million in FY22. The cash and cash
equivalents stood at INR0.75 million at FYE22.
MTPL has modest credit metrics. The gross interest coverage
(operating EBITDA/gross interest expense) remained zero in FY22 and
the net leverage (total adjusted net debt/operating EBITDAR)
remained negative 1.66x in FY22. For FY23 and FY24, Ind-Ra expects
the credit metrics to remain at similar level due to no capex
plan.
MTPL has healthy EBITDA margins of 11.03% in FY22 with a return on
capital employed of 245% in FY22. In FY23 and FY24, Ind-Ra expects
the EBITDA margin to remain at similar level.
However, the ratings are supported by the promoters' nearly two
decades of experience in the information technology consultancy,
leading to established relationships with customers as well as
suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations, along
with an improvement in the overall credit metrics with the interest
coverage remaining above 1.2x and an improvement in the liquidity
profile, all on a sustained basis, could lead to a positive rating
action.
Negative: A decline in the scale of operations, leading to a
deterioration in the overall credit and liquidity profile, on a
sustained basis, could lead to a negative rating action.
Company Profile
Incorporated in July 2020, MTPL has a registered office in Thane.
The company offers software products catering to anti-money
laundering, compliance calendar, and incident management, among
others to banks and non-banking finance companies.
NIRVANA FASHION: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Nirvana Fashion
Clothing's Long-Term Issuer Rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB-
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR90 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING)
rating; and
-- INR30 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
December 20, 2021. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
Nirvana Fashion manufactures readymade garments on contract basis
and supplies them to reputed retail chains such as Future Group,
Myntra and First Cry.
P.K.M. PROJECTS: ICRA Lowers Rating on INR28cr Term Loan to D
-------------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of
P.K.M. Projects Private Limited (PKM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 28.00 [ICRA]D; downgraded from
Fund based [ICRA]B- (Stable)
Term Loan
Rationale
The rating downgrade of PKM factors in its poor liquidity position
reflected by delays in servicing its term debt obligations given
the significant delay in commencement of commercial operations of
its hotel property resulting in inadequate cashflows. Although the
promoters have been infusing funds to support its debt servicing,
the same has come in with a significant lag. While the company has
been regularly sharing the monthly no default statement indicating
timely debt servicing, delays of 60 to 90 days have been confirmed
by the lender to ICRA. PKM's financial profile is expected to
remain weak owing to continued cash losses, high leverage and weak
debt coverage metrics. Given the absence of current operational
cash flows, the company will remain dependent on fund infusion from
promoters for timely debt servicing its debt obligations.
ICRA notes the favorable location of PKM's upcoming hotel property
and presence of hotel management agreement (HMA)
with a well-recognised international brand.
Key rating drivers and their description
Credit challenges
* Delays in debt servicing owing to significant delays in project
completion: The company's hotel project has been facing continued
execution delays owing to the onset of Covid-19. In the absence of
adequate operational cashflows, the company was expected to be
dependent on promoters' funding support for timely servicing it
debt obligations. While the promoters have been infusing funds, it
has been with a lag resulting in delays in debt servicing of 60 to
90 days, even after the one-time debt restructuring which got
implemented with effect from June 2021. ICRA notes that the company
has been regularly sharing the monthly no default statement
indicating timely debt servicing, the aforementioned debt servicing
delays have been confirmed by the lender to ICRA. The project is
now expected to start operations by April 2023. PKM's financial
risk profile will be characterised by high financial leverage and
weak credit metrics in the near-to-medium term, pending substantial
ramp up in operating cashflows.
Credit strengths
* Favourable location of the project: The property is strategically
located within 200 metres of the beachfront in the prime
entertainment hub in North Goa. The location is near to Candolim,
Calangute and Sinquerim beaches and is in vicinity of some of the
leading hotel chains such as Taj Fort Aguada Heritage, Taj Holiday
Village etc.
* HMA agreement with the Hyatt Group: In January 2021, PKM signed a
hotel management agreement (HMA) with the Hyatt Group for its hotel
property. Post commencement of operations, the strong brand value
of Hyatt is likely to benefit the company. Currently 10 rooms of
the hotel are operational.
Liquidity position: Poor
PKM's liquidity remains poor, characterised by both past and
present delays in the term loan repayment obligations and high
dependence on promoter funding in absence of revenue generation
through operations. The same has arisen owing to delays in project
implementation and delayed receipt of promoter funding support.
Rating sensitivities
Positive factors – ICRA could upgrade PKM's rating if the company
demonstrates a sustainable track record of timely debt servicing
with improvement in its liquidity profile through improvement in
earnings and cashflows.
Negative factors – Not applicable
Incorporated in 2006, PKM is a part of Mahesh Mehta Group, founded
by Mr. Mahesh Mehta. The promoters have more than two decades of
experience in real estate and hotel industry. The Group has
presence in industries like Katha production, real estate and
hospitality business through its group entities. In 2015, PKM
acquired a three-star hotel property constructed on the freehold
land admeasuring approximately 6,850 sq. metres, in Candolim, Goa.
The company has tied-up O&M agreement with Hyatt Group for 97 rooms
spread across area of 6,650 sq. ft and is expected to achieve full
COD in April 2023.
S.K.R. CONSTRUCTIONS: ICRA Keeps B+ Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the long term and short term ratings for the bank
facilities of S.K.R. Constructions in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]B+ (Stable)/[ICRA]A4;
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 4.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term/ 23.00 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Non-Fund Based Rating Continues to remain
Others under issuer not cooperating
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
SKRC is a partnership firm formed in December 2003 by Mr. Sankineni
Krishna Rao and his family members. The firm is
registered as a special class contractor for executing civil
construction works for Roads and Buildings, Irrigation and
Panchayat Raj departments of Telangana. The firm primarily
undertakes construction and maintenance of roads, bridges, canals,
irrigation contracts and other excavation works including
electrical, civil and engineering projects mainly in Telangana.
SADBHAV BHAVNAGAR: Ind-Ra Keeps B Issuer Rating in NonCooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Sadbhav
Bhavnagar Highway Private Limited's (SBHPL) bank loans at 'IND B'/
Rating Watch with Negative Implications and has simultaneously
migrated to the non-cooperating category. The issuer did not
participate in the rating exercise despite continuous requests and
follow-ups by the agency. Therefore, investors and other users are
advised to take appropriate caution while using these ratings. The
rating now appears as 'IND B (ISSUER NOT COOPERATING)/ Rating Watch
with Negative Implications' on the agency's website. The ratings
watch will be resolved upon receipt of necessary information.
The detailed rating action is:
-- INR3.931 bil. Rupee term loan-I due on April 2034* maintained
Rating Watch with Negative Implications and migrated to non-
cooperating category with IND B (ISSUER NOT COOPERATING)/
Rating Watch with Negative Implications.
*Based on the actual scheduled commercial operations date (COD)
Note: ISSUER NOT COOPERATING; the ratings were last reviewed on
October 10, 2022. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
SBHPL, a special purpose vehicle sponsored by Sadbhav
Infrastructure Project Limited (SIPL; 'IND C (ISSUER NOT
COOPERATING)'), has been granted a 15-year concession (post COD) by
the National Highways Authority of India ('IND AAA'/Stable). The
project involves the expansion of two lanes to four lanes of an
existing road on the Bhavnagar-Taleja section of National Highway
(NH)-8 E in Gujarat on design, build, operate and transfer basis.
The total length of the road to be developed is 48.045km (7.090km
to 54.585km). The concession agreement was signed on 19 July 2016
and the appointed date was achieved on February 7, 2017. The
project achieved the provisional COD on February 24, 2020. The
lenders have approved the bid project cost of INR8,190 million, to
be funded with promoter's contribution, RTL and NHAI contribution
debt and construction grant of INR982.8 million, INR3,931.20
million and INR3,276 million, respectively.
SADBHAV RUDRAPUR: Ind-Ra Keeps B- Issuer Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Sadbhav Rudrapur
Highway Private Limited's (SRHPL) bank loans' at 'IND B-'/Rating
Watch with Negative Implications and has simultaneously migrated to
the non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating now
appears as 'IND B- (ISSUER NOT COOPERATING)'/Rating Watch with
Negative Implications on the agency's website. The ratings watch
will be resolved upon receipt of necessary information.
The detailed rating action is:
-- INR3,542.4 bil. Rupee term loan due on November 2033*
maintained Rating Watch with Negative Implications and
migrated to non-cooperating category with IND B- (ISSUER NOT
COOPERATING)/ Rating Watch with Negative Implications.
*Based on the actual scheduled commercial operations date (COD)
Note: ISSUER NOT COOPERATING; the ratings were last reviewed on
October 10, 2022. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
SRHPL, a special purpose vehicle sponsored by Sadbhav
Infrastructure Project Limited (SIPL; 'IND C (ISSUER NOT
COOPERATING)'), has been granted ah 17-year concession (including
construction period of 730 days) by National Highways Authority of
India ('IND AAA'/Stable) for the four-laning of 43.446km of the
Rampur-Kathgodam section package-1 of National Highway-87 (New
National Highway-9) in Uttar Pradesh under National Highways
Development Programme Phase III on a design, build, operate and
transfer hybrid annuity basis. The total length of the road to be
developed is 43.45km. The concession agreement was signed in June
2016 and the appointed date was achieved on March 31, 2017. The
project achieved provisional COD on October 31, 2019 for a length
of 31.4km. The total bid project cost is INR7,380 million. The
appraised project cost is INR7,380 million, funded by an NHAI grant
of INR2,952 million, equity/subordinated debt of INR885.6 million
and a term loan of INR3,542.5 million.
SALEM TOLLWAYS: Ind-Ra Withdraws 'D' Long Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn the ratings of
Salem Tollways Ltd.'s (STL) bank loans.
The detailed rating actions are:
-- The IND D rating on the INR667.03 mil. (INR57.04 mil.
outstanding as of March 31, 2022) Long-term senior project
bank loan is withdrawn (paid in full); and
-- The IND D rating on the INR99.83 mil. (INR25.03 mil.
outstanding as of March 31, 2022) Subordinated loan (long-
term)is withdrawn (paid in full).
Key Rating Drivers
Ind-Ra is no longer required to maintain the ratings, as the agency
has received no dues certificate from the lenders. This is
consistent with Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra
will no longer provide analytical and rating coverage for STL.
Company Profile
STL, which is wholly owned by IVRCL, is a special purpose vehicle
set up to widen, operate and maintain a 53km stretch on the
National Highway-47 between Kumarapalayam and Salem in Tamil Nadu.
SIESTA HOSPITALITY: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has retained the Long term ratings of Siesta Hospitality
Services Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 22.85 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 6.74 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Siesta is involved in providing corporate residences at various
locations across the country, with amenities as preferred by the
corporate. The company's operations are divided across four
segments- i) composite (classified as dedicated rooms), ii) stay
(non-dedicated rooms), iii) men and maintenance, iv) food and
beverages. It enters into a contract with its customers across all
the segments, which accounts for around 50-60% of the revenues. The
company follows a cost-plus model, passing the cost involved to its
customers. It enjoys pan-India presence offering more than 2,400
rooms across 40 plus cities, with reputed multi-national companies
in its customer portfolio.
TELELOGIX: Ind-Ra Assigns BB- LT Issuer Rating, Outlook Stable
--------------------------------------------------------------
India Rating and Research (Ind-Ra) has assigned Telelogix a
Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR570 mil. Fund-based limits assigned with IND BB-/Stable/IND
A4+ rating; and
-- INR30 mil. Term loan due on July 2027 assigned with IND BB-/
Stable rating.
Key Rating Drivers
The ratings reflect Telelogix's medium scale of operations, as
indicated by revenue of INR2,056.90 million in FY22 (FY21:
INR2,107.94million). In FY22, the revenue declined due to a fall in
in demand. In 9MFY23, Telelogix booked revenue of INR1,364 million.
Ind-Ra expects the revenue to be stable in FY23 and over the near
term.
The ratings also factor in Telelogix's modest EBITDA margins due to
the intense competition in the market. The margin was almost
stable at 2.69% in FY22 (FY21: 2.60%). The ROCE was 8.40% in FY22
(FY21: 9.5%). During 9MFY23, Telelogix recorded an EBITDA margin of
3%. The management expects the EBITDA margin to remain stable in
FY23, given that the margins are fixed in Telelogix's agreement
with its only client, Xiaomi Technology India Private Limited.
The ratings also reflect Telelogix's moderate credit metrics. The
interest coverage (operating EBITDA/gross interest expenses)
improved slightly to 1.27x in FY22 (FY21: 1.20) due to a decline in
interest expenses. The net leverage (total adjusted net
debt/operating EBITDAR) deteriorated to 8.89x in FY22 (FY21:
7.62x) owing to an increase in debt levels (FY22:
INR493.97million; FY21: INR425.08 million). Ind-Ra expects the
credit metrics to remain moderate in the near future due to an
increase in working capital limits.
Liquidity Indicator - Poor: Telelogix's average maximum utilization
of the fund-based limits was 100.52% during the 12 months ended
December 2022. The average utilization of the channel finance limit
was 53.22% over the same period. Telelogix was sanctioned
additional working capital limits of INR60 million in September
2022, to meet its working capital requirements. The cash flow from
operations remained negative at INR110.96 million in FY22 (FY21:
negative INR41.40million) due to increased working capital
requirement. The free cash flow remained negative at INR161.04
million in FY22 (FY21: negative INR70.50 million). The net working
capital cycle stretched to 92 days in FY22 (FY21: 62 days) owing to
an increase in debtor days to 75 days (FY21:66 days). The cash and
cash equivalents stood at INR2.37 million at FYE22 (FYE21: INR7.30
million). Telelogix has repayment obligations of INR4 million and
INR2.40 million in FY23 and FY24, respectively. Telelogix does not
have any capital market exposure and relies on banks and financial
institutions to meet its funding requirements.
The ratings, however, are supported by the promoters' experience of
nearly two decades in the retail industry, which has helped the
company establish strong relationships with customers as well as
suppliers.
Rating Sensitivities
Positive: An improvement in the operating profitability and
revenue, leading to the interest coverage exceeding 2x, along with
an improvement in the overall liquidity, all on a sustained basis,
will be positive for the ratings.
Negative: A further decline in the revenue and operating
profitability, leading to deterioration in the overall credit
metrics and overall liquidity, all on a sustained basis, would be
negative for the ratings.
Company Profile
Telelogix was incorporated in 2008 by Siraj Fulara and Mohsin
Fulara, as a partnership firm. It is the sole distribution partner
for Xiaomi products (smartphones, smart televisions, laptops,
accessories and eco system products) in Bangalore city, except
south Bangalore, and caters to 250 retailers in Bangalore.
TRUEVALUE ENGINEERING: ICRA Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the Long-Term and Short-Term ratings of Truevalue
Engineering 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– 12.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 28.05 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
Others 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 1999, Truevalue Engineering Private Limited was
promoted by Mr. Rajendrakumar Choudhary. TEPL is engaged in trading
of flat steel products like hot rolled and cold rolled coils,
galvanised steel, colour coated steel, mild steel etc. The trading
operations of the company gained momentum only upon the sanction of
its working capital facilities in 2010. The firm has its registered
office in Mumbai.
VENKATESHWARA MOTORS: ICRA Keeps B+ Rating in Not Cooperating
-------------------------------------------------------------
ICRA has retained the Long Term and Short term ratings of Sree
Venkateshwara Motors (India) Private Limited in the 'Issuer Not
Cooperating' category. The rating is denoted as
"[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 3.15 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 5.00 [ICRA]A4 ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term/ 2.85 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain
under issuer not cooperating
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Sree Venkateswara Motors (India) Pvt. Ltd. (SVMPL) was incorporated
in April 2008 by Mr. N. Mahipal Reddy and Ms. N. Jayaprada Reddy.
SVMPL is the sole authorised dealer of Tata Motors Limited (TML) in
Nizambad, Kamareddy and Adilabad region. The commercial operations
of TML dealership began in September 2008. The company currently
operates through a single Sales-Spares-Service (3S) facility with
five sale points in Nizamabad, Kamareddy and Adilabad districts.
ZEE ENTERTAINMENT: NCLAT Bench Stays Insolvency Order
-----------------------------------------------------
Financial Express reports that in a relief to Zee Entertainment
Enterprises (ZEEL), the National Company Law Appellate Tribunal
(NCLAT) has stayed an order for initiation of insolvency
proceedings against the media firm. The move came after the
tribunal heard a petition filed by ZEEL MD & CEO Punit Goenka,
seeking relief against the National Company Law Tribunal's (NCLT's)
Feb. 22's order.
FE relates that the bench of NCLAT chairperson Justice Ashok
Bhushan and member (technical) Barun Mitra, which stayed the NCLT's
Mumbai bench order, has sought reply from respondents in two weeks.
The case is now listed for final disposal on March 29. Till then,
the NCLT's order is stayed.
"We respect the decision taken by NCLAT and remain committed
towards protecting the interests of all stakeholders. Our focus
continues to be on the timely completion of the proposed merger,"
the report quotes Goenka as saying.
On Feb. 22, NCLT's Mumbai bench permitted insolvency proceedings
against ZEEL, an Essel Group company, allowing a petition filed by
private lender IndusInd Bank, and appointed Sanjay Kumar Jhalani as
interim resolution professional, the report notes.
FE says the petition was filed in February 2020 by IndusInd Bank,
which had sought a payment of more than INR83 crore from ZEEL,
after the media firm failed to fulfil obligations under a Debt
Service Reserve (DSR) account agreement.
Under the agreement, which was signed between the lender and Siti
Networks (another Essel Group firm), ZEEL had guaranteed to
maintain an amount equal to one quarter's interest as well as
principal in the account for servicing the debts. However, this was
not maintained, IndusInd Bank said in its filing before the NCLT,
FE relays.
FE adds that the bankruptcy court also admitted IndusInd's
insolvency petition against Siti Networks, a multi-system operator
promoted by Essel Group, and appointed Mohit Mehra as the
resolution professional.
On Feb. 23, in an attempt to save the earlier proposed merger with
Culver Max Entertainment (CME), Goenka had moved NCLAT and sought a
stay on initiating insolvency proceedings, FE relates.
In September 2021, ZEEL, promoted by media baron Subhash Chandra,
had entered into agreement with CME (then Sony Pictures Networks
India, a subsidiary of Japan's Sony Corp) to create the country's
largest media and entertainment company with standalone revenues of
$2 billion, FE recalls. The completion of the merger is pending as
the companies await certain regulatory approvals.
Section 14 of the Insolvency and Bankruptcy Code (IBC) bars the
continuance of various proceedings, and does not permit
transactions or deals for companies undergoing insolvency till such
cases reach a conclusion.
Based in Mumbai, India, Zee Entertainment Enterprises Limited,
together with its subsidiaries, engages in broadcasting satellite
television channels.
=================
I N D O N E S I A
=================
BUMI SERPONG: Fitch Affirms 'BB-' Foreign Curr. IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Indonesia-based homebuilder PT Bumi
Serpong Damai Tbk's (BSD) Long-Term Foreign-Currency Issuer Default
Rating (IDR) at 'BB-'. The Outlook is Stable.
The rating is driven by BSD's position as one of Indonesia's
leading homebuilders by contracted sales and land bank. The
company's scalable township development model and focus on landed
homes across diverse price points allows for mostly steady
operating cash flow for BSD across economic cycles, keeping
leverage low. BSD's rating is moderated by its relative scale to
higher-rated global peers.
KEY RATING DRIVERS
Steady Contracted Sales: Fitch expects BSD's attributable
contracted sales - which excludes the share of minority interests
and land plot sales to joint ventures (JVs) - to remain steady at
around IDR5.5 trillion in the next two years, despite rising
inflation and interest rates as well as slower economic growth that
will moderate housing demand, especially for investments. The
expiry of the value-added tax rebate on completed properties in
2022, and a modest outlook for prices of key export commodities
such as palm oil and coal, which impact wealth creation
domestically, will weigh on demand.
Nevertheless, demand from first-time homebuyers and owner-occupiers
should remain healthy, driven by landed homes priced at or below
IDR2 billion, which are BSD's mainstay. Fitch forecasts Indonesia's
GDP growth to remain healthy at 4.8% in 2023, before rising to 5.6%
in 2024. Domestic banks have remained supportive of consumer home
loans, holding loan interest rates largely steady since January
2022, despite benchmark interest rates rising by 225bp. Around 70%
of BSD's sales are funded by mortgages, with 20% paid in cash, and
the remainder via cash instalments.
Foreign JVs Boost Appeal: Contracted sales from BSD's key JVs with
foreign partners should remain healthy at around 20% of the mix,
supported by the appeal of BSD's mature township BSD City, its
improving connectivity, and the limited supply of similar premium
offerings ranging from IDR7 billion to IDR30 billion per home
(around USD0.5 million-2 million). The JVs include tie-ups with
Hongkong Land and Mitsubishi Corporation, among others, and are
debt-free. BSD sold IDR1.6 trillion of land plots in 2022 to its
JVs to support their medium-term growth.
Moderating Cash Flow, Low Leverage: Fitch expects BSD's cash
collections from property sales to moderate in the next 12-18
months from multi-year highs seen in the last two years. This is
because the surge in collections, which followed the relaxation of
mortgage loan disbursement rules at end-2020, will normalise.
Construction cost inflation and capex of around IDR1.2 trillion,
mostly on completing the Serpong-Balarajah toll road between BSD
City and Jakarta in 2023, will also pressure cash flow. Fitch
forecasts leverage - net debt/net property assets - to rise
modestly to around 10% (9M22: 4%).
Modest Non-Development Income: Fitch expects BSD's non-development
revenue to rise to around 15% in the next two years, from an
estimated 10% in 2022. The rise is underpinned by a gradual
improvement in rental income from its portfolio of offices, as
workers return amid an apparent tapering off of pandemic-era
telecommuting. Non-development revenue will also stem from rising
toll-road income, as BSD owns the toll-road concession. Up to 10km
of the toll road will be completed in the project's second phase in
2023, and should boost usage. The first 5km was operational in
October 2022.
Large, Low-Cost Land Bank: BSD owns more than 4,600ha of landbank,
most of it situated in Tangerang province, in and around BSD City.
It is sufficient for over 20 years of contracted sales and provides
the company with the ability to tailor its landed homes to suit
varying consumer demand and price points through diverse projects.
The large land bank also provides financial flexibility to scale
back land acquisitions when home sales are weak. Fitch expects BSD
to spend a modest IDR800 billion-900 billion per year on land
purchases to form contiguous plots in support of medium-term
projects.
Notched up from Weaker Parent: BSD's rating is notched up from that
of its weaker parent Sinarmas Land Limited (SML), given the
parent's 'Porous' access and control and 'Porous' ring-fencing, in
line with Fitch's Parent and Subsidiary Rating Linkage Criteria.
Fitch views the restrictions imposed on dividend payments and
affiliate transactions via the company's US dollar debt, which make
up nearly half of its borrowings, and its listing on the Jakarta
stock exchange as providing a degree of ringfencing.
Furthermore, BSD raises its non-equity funding independently of
SML, which allows for 'Porous' access and control along with the
presence of significant minority shareholders, regional partners
via its joint ventures and functional board separation.
DERIVATION SUMMARY
BSD's 'BB-' rating may be compared with that of Indonesia-based PT
Pakuwon Jati Tbk (BB/Stable), PT Ciputra Development Tbk (CTRA,
BB-/Stable), and Vietnam-based BIM Land Joint Stock Company
(B/Stable).
Pakuwon is one of Indonesia's leading shopping-mall owners and a
mixed-use property developer. The majority of its operating cash
flow stems from its portfolio of shopping malls, hotels and
offices. Pakuwon is rated one notch higher than BSD because of its
large non-development cash flow that has proven more resilient to
economic downturns than homebuilding. This offsets Pakuwon's
smaller property-development business, although the company
prudently manages its development risk, funding most of its
construction activities with customer presales rather than debt.
BSD is rated at the same level as CTRA to reflect their similar
homebuilding scale in terms of annual attributable presales, record
of maintaining low leverage and solid liquidity. CTRA's property
business is more geographically diversified than BSD's, given the
latter's focus within its BSD City township. However, BSD City is
more established than its peers' townships, with a stronger record
of sustained sales.
BSD also has a larger land bank than CTRA, which has given it the
flexibility to sell land to regional property developers for
collaboration, raising the appeal of its township and boosting
financial flexibility. Both issuers have portfolios of mostly small
commercial properties, mainly in office and retail, that provide a
degree of cash flow diversification.
BSD is rated two notches higher than BIM Land on account of BSD's
stronger business profile with exposure mainly to residential
development cash flow, which is more defensive than BIM Land's
significant exposure to hospitality-led property development.
BSD also has larger non-development cash flow from its portfolio of
mostly offices, for which there is healthy tenant demand. In
contrast, BIM Land's non-development income stems from a smaller
portfolio of hospitality properties such as condotels and villas in
several coastal townships, which have more cyclical demand. BSD
also has a stronger financial profile with low leverage and solid
liquidity.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer:
- Contracted sales to remain steady at around IDR5.5 trillion in
2023-2024
- Cash collections from contracted sales to moderate to IDR5.5
trillion in 2023-2024 (2021: IDR9.2 trillion) on normalising
collections from bank mortgages
- Cash collections from non-development sources of IDR1.6 trillion
in 2023 and IDR1.9 trillion in 2024
- Construction costs on development properties of around IDR2
trillion annually in 2023-2024 (2021: IDR2.2 trillion)
- Capex of IDR1.2 trillion in 2023, mainly on completing the toll
road
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch does not expect positive rating action in the next 24
months, as Fitch expects BSD's attributable contracted sales to
remain steady;
- Over the longer term, a significant and sustained increase in
attributable contracted sales while maintaining a conservative
financial profile could lead to a rating upgrade.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Attributable pre-sales of less than IDR5 trillion on a sustained
basis;
- Leverage sustained above 40%
LIQUIDITY AND DEBT STRUCTURE
Comfortable Liquidity, Balanced Funding Mix: BSD has a track record
of maintaining strong liquidity. Its cash balance stood at IDR10.5
trillion at end-September 2022, compared with current debt
maturities of IDR1.6 trillion comprising of mostly loans from
domestic banks.
It prepaid its USD270 million unsecured 5.5% bond in October 2022,
around a year ahead of its maturity, using mostly cash on hand.
Following the prepayment, Fitch views BSD as having achieved a more
balanced funding structure with around 52% of debt comprising of US
dollar-denominated unsecured cross-border bonds, 12% of
rupiah-denominated domestic bonds, and 37% of rupiah-denominated
domestic bank debt.
BSD has over IDR4 trillion of committed undrawn bank facilities
which it can use for general corporate purposes and working capital
across the company and its subsidiaries, as well as a further
IDR2.2 trillion undrawn term-loan facility for the construction of
its toll road, although the company has mostly used its own cash
for this purpose.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
PT Bumi Serpong
Damai Tbk LT IDR BB- Affirmed BB-
senior
unsecured LT BB- Affirmed BB-
Global Prime
Capital Pte.
Ltd
senior
unsecured LT BB- Affirmed BB-
SAWIT SUMBERMAS: Moody's Withdraws 'Caa1' Corporate Family Rating
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the Caa1 corporate family
rating of Sawit Sumbermas Sarana Tbk (P.T.).
The outlook at the time of the withdrawal was stable. The company
currently has no rated debt.
RATINGS RATIONALE
Moody's has decided to withdraw the rating for its own business
reasons.
Based in Central Kalimantan, Indonesia, Sawit Sumbermas Sarana Tbk
(P.T.) (SSMS) is an upstream palm oil producer listed on the
Indonesian Stock Exchange since December 2013. The company had
total mature oil palm planted area of around 69,167 hectares as of
September 30, 2022. Pak Abdul Rasyid and his family owned 68% of
SSMS, held via Citra Borneo Indah (P.T.) (CBI, 55%), with a further
13% stake held via PT Putra Borneo Agro Lestari as of September 30,
2022.
TITAN INFRA: $20M Bank Debt Trades at 16% Discount
--------------------------------------------------
Participations in a syndicated loan under which Titan Infra Energy
PT is a borrower were trading in the secondary market around 84.3
cents-on-the-dollar during the week ended Friday, February 24,
2023, according to Bloomberg's Evaluated Pricing service data.
The $20 million facility is a Term loan that is scheduled to mature
on February 26, 2034. The amount is fully drawn and outstanding.
PT Titan Infra Energy operates as an energy infrastructure and
logistic company. The Company offers exploration, construction,
production, hauling, barging, and transshipment services. Titan
Infra Energy serves customers worldwide. The Company's country of
domicile is Indonesia.
TITAN INFRA: $430M Bank Debt Trades at 16% Discount
---------------------------------------------------
Participations in a syndicated loan under which Titan Infra Energy
PT is a borrower were trading in the secondary market around 84.3
cents-on-the-dollar during the week ended Friday, February 24,
2023, according to Bloomberg's Evaluated Pricing service data.
The $430 million facility is a Term loan that is scheduled to
mature on February 26, 2034. The amount is fully drawn and
outstanding.
PT Titan Infra Energy operates as an energy infrastructure and
logistic company. The Company offers exploration, construction,
production, hauling, barging, and transshipment services. Titan
Infra Energy serves customers worldwide. The Company's country of
domicile is Indonesia.
=========
J A P A N
=========
TOSHIBA CORP: Orix Weighs Cutting Contribution to JIP's Offer
-------------------------------------------------------------
The Japan Times reports that one of the biggest members of the
Japan Industrial Partners-led group pursuing a takeover of Toshiba
intends to reduce its financial contribution, according to people
familiar with the matter, adding another potential hurdle to the
buyout of one of the country's most iconic companies.
Orix is seeking to acquire JPY200 billion ($1.5 billion) of common
and preferred Toshiba stock, down from the original JPY300 billion,
the people said, The Japan Times relays. Other co-investors with
smaller stakes are also requesting to cut the size of their
respective portions, the people said.
According to the report, the financial services firm's move could
revive concerns about funding issues for the preferred bidder
group's multibillion-dollar offer to take control of the Japanese
conglomerate. Orix and chipmaker Rohm, which also planned to invest
JPY300 billion, are the largest stakeholders in the JIP-led
consortium, the people said.
JIP secured about JPY1 trillion in financing from around 20
potential co-investors including Suzuki Motor Corp. and Iwatani
Corp., Bloomberg News has reported.
Another potential hurdle for the JIP-led group lies in the Japanese
banks putting up the loan for the bid, the report notes. While the
lenders agreed to issue commitment letters for a JPY1.4 trillion
loan, one of the requirements for releasing the funds is setting up
a special purpose company for the deal. Co-investors in the
consortium haven't signed legally binding agreements with JIP,
however, which means the special purpose company cannot be set up
yet, the people, as cited by The Japan Times, said.
Deliberations are ongoing and details of the co-investors'
contributions could still change, they said. A representative for
JIP declined to comment, while a representative for Orix said the
company is looking into investing in Toshiba, while no final
decision has been made.
Toshiba last week cut its full-year profit forecast and said its
chief operating officer resigned after an investigation into his
expenses, a pair of setbacks as the troubled electronics giant
tries to extract favorable terms in privatization talks, the report
recalls.
The Japan Times says the conglomerate has lurched from scandal to
fiasco since at least 2015, when it had to pay the country's
largest penalty ever for falsifying financial statements. It then
suffered an ill-fated foray into the nuclear business that forced
it to take a $6.3 billion writedown and sell off its crown jewel
memory-chip business, Kioxia Holdings Corp.
About Toshiba
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/--
manufactures and markets electrical and electronic products. The
Company's products include digital products such as PCs and
televisions, NAND flash memories, and system LSIs (large-scale
integrated), as well as social infrastructures such as power
generators, medical equipment, and home appliances.
As reported in the Troubled Company Reporter-Asia Pacific, S&P
Global Ratings, in March 2022, affirmed its 'BB+' long-term issuer
credit rating and 'B' short-term issuer and issue credit ratings on
Toshiba Corp. S&P removed the long-term issuer credit rating from
CreditWatch with negative implications, on which S&P placed it on
Nov. 16, 2021. The outlook is negative.
===============
M A L A Y S I A
===============
PROPEL GLOBAL: Posts MYR24.5 Million Revenue in Q2 Ended Dec. 31
----------------------------------------------------------------
Propel Global Berhad, a provider of oil and gas (O&G) services as
well as downstream specialty chemicals to the O&G industry, on Feb.
22 announced that the Group recorded a 3.81% gain in revenue to
MYR24.5 million for the second quarter ended 31 December 2022 (2Q
FY2023) compared with MYR23.6 million for the corresponding quarter
in 2Q FY2022 from continuing operations.
For the quarter under review, the Group registered MYR2.59 million
in profit before tax (PBT) compared with PBT of MYR0.6 million from
continuing operations. For the first-half period ended 31 December
2022 (1H FY2023), the Group registered 15.45% increase in revenue
to MYR42.6 million compared with MYR36.9 million in 1H FY2022 while
PBT increased to MYR5.9 million compared with MYR0.7 million.
On a segmental basis, the Group's O&G operations recorded a 35.29%
increase in revenue to MYR11.5 million in 2Q FY2023 compared with
MYR8.5 million in the corresponding quarter of the previous
financial year while PBT increased to MYR2.3 million from MYR0.1
million. Under technical services, the Group registered 13.91%
decrease in revenue to MYR13.0 million from MYR15.1 million while
PBT for the quarter increased to MYR2.8 million compared with
MYR0.7 million.
The increased sales for the O&G segment are mainly attributable to
higher offtake of production chemicals and fulfilment of work
orders for well services. The segment's increase in PBT is mainly
due to higher margin contributed from radial cutting torch
services. For the technical services segment, the lower revenue
reported is mainly due to project completions of higher contract
sum in preceding year corresponding quarter while PBT improved due
to reversal of liquidated ascertained damages on a construction
project of commercial buildings and margin contributed from access
road construction project.
Ms. Angeline Lee, Group Chief Executive Officer of Propel Global
said, "The latest quarter's financial performance is good news for
the Group as this is the second quarter of profitability and
enables us to exit PN17 status soon. The focus on our strategies
seeking opportunities to achieve better financial performance has
paid off. The Group will continue to implement initiatives that
will enhance our financial performance further."
"The outlook for the O&G industry is expected to be stable
supported by crude oil price's decent recovery as this directly
benefits businesses involved in exploration with positive spillover
effect for others involved in O&G services."
About Propel Global
Propel Global Berhad (formerly known as Daya Materials Berhad) --
www.propelglobal.com.my/ -- provides oil and gas services. The
Company offers services such as pipe recovery for drilling
operations, down hole data logging, processing, and chemical
blending and supply for downstream and upstream operations, as well
as designing, engineering, construction, project management, and
maintenance of commercial and industrial buildings and facilities.
Daya Materials Bhd fell into Practice Note 17 (PN17) status in
February last year after its shareholder equity retreated to under
25% of its issued capital as at Dec. 31, 2017.
===============
M O N G O L I A
===============
MONGOLIAN MINING: Fitch Affirms 'B' Foreign Curr. IDR, Outlook Neg.
-------------------------------------------------------------------
Fitch Ratings has affirmed coal producer Mongolian Mining
Corporation's (MMC) Long-Term Foreign-Currency Issuer Default
Rating (IDR) at 'B'. The Outlook is Negative. Fitch has also
affirmed MMC's senior unsecured notes due 2024 at 'B' with a
Recovery Rating of 'RR4'. The notes are co-issued by MMC and its
wholly owned subsidiary, Energy Resources LLC, and guaranteed by
most of MMC's operating subsidiaries.
The Negative Outlook reflects uncertainties related to sustained
price realisation following China's rapid recovery due to its
reopening and regulatory risks related to effective royalty rates,
which could lead to a potential shortfall in repayment of the 2024
notes.
MMC's rating is constrained by its small scale, single-product
focus on hard coking coal and limited cost competitiveness outside
of northern China, its main market.
KEY RATING DRIVERS
Improved Operations After Reopening: MMC's core coking-coal
operation has normalised amid stabilisation in the border
situation. Prolonged Covid-related disruptions at the border with
China have eased, raising MMC's average daily throughput to over
800 trucks in December 2022, in line with the pre-Covid-19 level,
from around 120 trucks in 1Q22. Daily throughput was sustained at
over 900 trucks in first half of February 2023.
MMC has ramped up processing volume to 2.7 million tonnes in 3Q22
and 3.1 million tonnes in 4Q22 from 0.9 million tonnes in 1H22. In
addition, Fitch expects the company's realised average selling
prices (ASP) for hard coking coal have increased to over
USD160/tonne in 2023 from the 2022 average of over USD140/tonne. As
a result, Fitch has revised our previous free cash flow (FCF)
forecast of over USD100 million to USD200 million to reflect higher
volumes and stronger pricing assumptions.
Financial Profile to Improve: Fitch expects the EBITDA margin to
improve to over 40% in 2023, from around 24% in 2022, with greater
FCF as a result of higher volumes, stronger pricing assumptions and
normalising costs. Fitch forecasts leverage to drop below 1.0x in
2023, supported by strong ASP and margin expansion due to
decreasing costs, from a high level of 3.5x at end-2022 resulting
from controlled border throughput and weak ASP resulting from long
delivery times.
Potential Shortfall for 2024 Repayment: MMC reduced the principal
of its 2024 senior notes to USD376 million from USD440 million,
through the open market and a tender offer in 2022 when the bond
price was trading at a deep discount. It expects to generate enough
operating cash flow by 1Q24 to repay the outstanding principal.
However, Fitch believes the lack of sustained improvements in
realised ASP and other regulatory risks associated with royalty
charges can affect margins, thereby creating a potential shortfall
for the 2024 repayment, which MMC does not have sufficient
committed facilities to cover.
Small Scale, Single Product: MMC is small compared with Fitch-rated
coal miners globally in terms of revenue. Hard coking coal
accounted for over 95% of MMC's total revenue in 2021. Its latest
coal reserve statements show total marketable coal reserves of just
under 400 million tonnes, giving MMC a reserve life of around 35
years. MMC's small scale and product concentration constrain its
business profile to the 'B' rating category. MMC is looking to
diversify away from coking coal, but Fitch believes it will remain
the dominant revenue contributor in the short to medium term.
Regional Cost Advantage: MMC's cash cost including royalties is in
the second quartile of the global coking-coal cost curve, but its
cost advantage is only in the northern part of China due to the
proximity of its mines to steel mills in that area. Fitch estimates
transportation by land to its Chinese customers cost around USD30
per tonne on average in 2022, limiting MMC's cost competitiveness
and putting it in the higher quartiles of the global coking-coal
cost curve. Delivery beyond northern China would raise costs,
leaving MMC with customers that are mainly in northern China.
DERIVATION SUMMARY
MMC is much smaller in scale in terms of revenue compared with
rated coal producers such as Yankuang Energy Group Company Limited
(BB+/Stable), PT Indika Energy Tbk (BB-/Stable) and PT Golden
Energy Mines Tbk (GEMS, B+/Positive). Yankuang Energy's revenue was
over USD17 billion in 2021 compared with MMC's USD184 million,
while Indika's is over four times that of MMC and GEMS's is over
two times larger. However, MMC has a similar EBITDA margin as
Yankuang Energy and a higher margin than Indika and GEM.
MMC is a single-product coal miner, similar to its peers. Its
operational profile in terms of mine life is similar to that of
GEMS, whose mine life is over 25 years. Indika's mine life is
shorter at around 16 years.
MMC's leverage and financial flexibility profile is weaker than
that of GEMS. GEMS has more stable FCF generation ability, much
lower leverage and well-distributed amortising debt. Both MMC and
Indika had choppy FCF generation in the past few years and have
concentrated debt maturity. Nevertheless, Indika has much better
interest coverage and much lower leverage.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Hard coking coal average ASP of USD160/tonne in 2023 and
USD154/tonne in 2024
- Revenue to increase to around USD550 million in 2022 due to
border throughput recovery, then to over USD800 million in 2023 as
operations continue to normalise, increasing top-line earning
- EBITDA margin at around 24% in 2022, then improve to an average
of below 40% in 2023-2025, supported by volume improvement, strong
ASP and normalised costs
- Capex of around USD80 million in 2022 and under 10% of revenue on
average in 2023-2025
- No dividend payments in 2022-2025
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The Outlook may be revised to Stable if MMC demonstrates an
ability to accumulate sufficient cash flow to repay the 2024 senior
notes without the need to obtain a large amount of funding.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Poor cash accumulation, indicating a large shortfall for the
repayment of the 2024 notes.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch estimates MMC had USD65 million of cash
on hand and no short-term debt at end-2022. It also has unused
committed bank facilities totalling USD39 million. However, there
is potentially a shortfall for the repayment of notes due in April
2024 (face value of USD376 million at end-2022) as Fitch expects
the company to generate over USD200 million of FCF by end-1Q24
ISSUER PROFILE
MMC is the largest producer and exporter of high-quality hard
coking coal in Mongolia. It owns and operates the Ukhaa Khudag and
the Baruun Naran open-pit coking coal mines in South Gobi
province.
In 2021, MMC mined and processed around 4 million tonnes of
run-of-mine coal, which yielded a total product of around 2 million
tonnes of hard coking coal and 0.6 million tonnes of semi-soft
coking coal.
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
----------- ------ -------- -----
Mongolian Mining
Corporation LT IDR B Affirmed B
senior
unsecured LT B Affirmed RR4 B
=====================
N E W Z E A L A N D
=====================
GUARDIAN HOMES: Court to Hear Wind-Up Petition on March 10
----------------------------------------------------------
A petition to wind up the operations of Guardian Homes Limited will
be heard before the High Court at Auckland on March 10, 2023, at
10:45 a.m.
Metra Systems Limited filed the petition against the company on
Nov. 28, 2022.
The Petitioner's solicitor is:
Jesse Savage
Norris Ward McKinnon
711 Victoria Street
Hamilton 3204
MLJ CONSTRUCTION: Court to Hear Wind-Up Petition on March 13
------------------------------------------------------------
A petition to wind up the operations of MLJ Construction Limited
will be heard before the High Court at Hamilton on March 13, 2023,
at 10:45 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Nov. 14, 2022.
The Petitioner's solicitor is:
Charles David Walmsley
Inland Revenue, Legal Services
21 Home Straight
PO Box 432
Hamilton
NEW ZEALAND NATURE: Court to Hear Wind-Up Petition on April 21
--------------------------------------------------------------
A petition to wind up the operations of New Zealand Nature Pro
Limited will be heard before the High Court at Auckland on April
21, 2023, at 10:45 a.m.
Carters Building Supplies Limited filed the petition against the
company on Feb. 2, 2023.
The Petitioner's solicitor is:
Philip John Morris
Stace Hammond Lawyers
KPMG Building
Level 7, 85 Alexandra Street
Hamilton 3240
YOUR HEALTHY: Creditors' Proofs of Debt Due on April 5
------------------------------------------------------
Creditors of Your Healthy Gourmet Limited are required to file
their proofs of debt by April 5, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Feb. 22, 2023.
The company's liquidators are:
Thomas Lee Rodewald
Rodewald Consulting Limited
Level 1, The Hub
525 Cameron Road
PO Box 15543
Tauranga 3144
===============
P A K I S T A N
===============
PAKISTAN WATER: Fitch Lowers LongTerm Foreign Currency IDR to CCC-
------------------------------------------------------------------
Fitch Ratings has downgraded Pakistan Water and Power Development
Authority's (WAPDA) Long-Term Foreign-Currency Issuer Default
Rating (IDR) to 'CCC-' from 'CCC+'. Fitch typically does not assign
Outlooks to issuers with a rating of 'CCC+' or below due to the
high volatility of these ratings.
The downgrade follows the downgrade of Pakistan on 14 February 2023
as WAPDA's ratings are equalised with that of the sovereign and
sensitive to any rating action on the sovereign. For details on the
sovereign rating, see Fitch Downgrades Pakistan to 'CCC-'.
KEY RATING DRIVERS
Status, Ownership and Control: 'Very Strong'
Its assessment of the factor is unchanged, based on the
government's stable ownership and strong control under the WAPDA
Act. The Act also allows the government to take on WAPDA's
liabilities on its loans. WAPDA's policy-driven business serves the
public interest and the government maintains strong influence over
its corporate governance, covering budgets, accounts, financing
activity and new investment plans, as the entity is mandated to
carry out the government's responsibility of utilising the
country's water and power resources.
Support Track Record: 'Very Strong'
WAPDA relies on government funding in the form of grants and loans
for most of its completed and ongoing projects. Government loans
accounted for 61% of adjusted debt as of the financial year ended
June 2022 (FY22). The government also guaranteed 20% of WAPDA's
debt. The government sets WAPDA's tariffs at a favourable level
that allows the entity to meet its operating cost with a reasonable
return on investment. The tariff is mainly based on capacity, which
ensures a stable revenue inflow, mitigating hydrological risk.
Socio-Political Implications of Default: 'Strong'
WAPDA is responsible for the country's hydropower generation, flood
control and water supply. It is the nation's largest hydropower
supplier, accounting for 21% of electricity generation and 92% of
hydro-electricity generation as of FY22. Hydropower capacity
expansion and stable electricity output with lower costs are of
national importance in boosting the nation's productivity amid
higher energy prices and supply disruptions. Pakistan is striving
to meet its rising electricity demand, making hydroelectricity a
more important source, with an increasing share of the power mix.
Financial Implications of Default: 'Very Strong'
Its assessment reflects the high likelihood of receiving
extraordinary government support and funding from multilateral
agencies due to its significant asset size relative to other
government-related entities in the power sector. The funds it
receives from various multilateral agencies are used for hydropower
development projects. A WAPDA default may hurt the government's
market access to future financing, which would hinder its ability
to raise capital for investment in critical power sources.
Operating Performance
Revenue rose 48% yoy in FY22 due to fixed charges increasing by
50%. The capacity-based fixed charge accounts for 98% of the
entity's revenue, providing a buffer to revenue fluctuation on
seasonal precipitation variations. The government's supportive
tariff scheme allows the entity to secure a sufficient revenue
stream that reflects return on assets, with a weighted-average cost
of capital of roughly 13%, according to the entity, which led to an
average gross profit margin of 64% in the last three years. Stable
operating expenditure, which gained only 4% yoy, helped operating
profit to rise 78% in FY22.
Capex, a key revenue determinant, will rise significantly from FY24
to 1.2x-2.5x of revenue. WAPDA's extensive capex plan is driven by
government policy to increase the share of renewable power in the
mix and gradually decrease the exposure to imported fuel sources.
One of the key priorities in the IMF's recent ninth review is the
enhancement of energy provision by preventing a further
accumulation of Pakistan's circular debt. The circular debt fell by
1.2% yoy to PKR2.3 trillion in FY22, but remained high due to
continued transmission and distribution losses as well as a
recovery shortage.
Derivation Summary
WAPDA's ratings reflect its assessment of government linkage and
support incentive, resulting in a weighted score of 50, based on
our Government-Related Entities Rating Criteria. Fitch equalises
WAPDA's ratings with those of Pakistan, regardless of WAPDA's
Standalone Credit Profile.
Debt Ratings
The senior unsecured bond rating is equalised with the entity's
IDR. The bonds were issued at 7.5% per year for 10 years and are
due June 2031.
Liquidity and Debt Structure
Total debt rose 23% yoy to PKR577 billion in FY22. Loans from the
government accounted for 37% of total debt, and those payable to
the government accounted for 24%, which is on demand and to be
settled on instructions from the Economic Affairs Division. Most of
the debt consists of loans ultimately incurred with the government,
and 20% of the total debt is guaranteed by the government. WAPDA
has a direct issuance of USD500 million (unsecured), which can be
passed to the government and can be considered the government's
liabilities under Section 24 of the WAPDA Act.
A USD350 million secured term loan for the Dasu Hydropower project
starts its first instalment of USD35 million (PKR9.2 billion) in
2023. WAPDA had PKR151 billion in bank balances, including a US
dollar account of around USD190 million and term deposits of PKR25
billion as of FY22, against PKR222 billion in current portion of
long-term debt, of which 80% consisted of loans from the
government. The recent currency depreciation weighed on its
foreign-currency debt burden, but we expect the entity to utilise
the US dollar account if the exchange rate is not favourable at the
time.
Issuer Profile
WAPDA is a hydroelectric power generation company that is wholly
owned by the state. It was set up to integrate the development of
the country's water and power resources. It made up 89% of the
nation's hydroelectric power capacity and 22% of installed capacity
in FY22.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
A sovereign rating downgrade, weaker government links or lower
socio-political and financial implications of a default may lead to
negative rating action.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade of Fitch's credit view on the sovereign may trigger
positive rating action on WAPDA.
ESG Considerations
Fitch does not provide ESG relevance scores for WAPDA as its
ratings and ESG profile are derived from its parent.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
WAPDA's ratings are linked to those of the Pakistan sovereign.
Entity/Debt Rating Prior
----------- ------ -----
Pakistan Water
and Power
Development
Authority LT IDR CCC- Downgrade CCC+
LC LT IDR CCC- Downgrade CCC+
senior
unsecured LT CCC- Downgrade CCC+
=================
S I N G A P O R E
=================
APPLECART INVESTMENTS: Creditors' Proofs of Debt Due on March 28
----------------------------------------------------------------
Creditors of Applecart Investments Pte. Ltd. are required to file
their proofs of debt by March 28, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Feb. 22, 2023.
The company's liquidator is:
Oon Su Sun
c/o 182 Cecil Street
#30-01 Frasers Tower
Singapore 069547
CONTECH ENGINEERING: Court to Hear Wind-Up Petition on March 10
---------------------------------------------------------------
A petition to wind up the operations of Contech Engineering Private
Limited will be heard before the High Court of Singapore on March
10, 2023, at 10:00 a.m.
DBS Bank Ltd filed the petition against the company on Feb. 17,
2023.
The Petitioner's solicitors are:
Rajah & Tann Singapore LLP
9 Straits View
#06-07 Marina One West Tower
Singapore 018937
PIP VISION: Creditors' Proofs of Debt Due on March 27
-----------------------------------------------------
Creditors of Pip Vision Exchange One Pte. Ltd. and Pip Vision
Exchange Two Pte. Ltd. are required to file their proofs of debt by
March 27, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Feb. 17, 2023.
The company's liquidators are:
Don M Ho
David Ho Chjuen Meng
c/o DHA+ pac
63 Market Street
#05-01A Bank of Singapore Centre
Singapore 048942
RISING ENGINEERING: Commences Wind-Up Proceedings
-------------------------------------------------
Members of Rising Engineering Pte Ltd, on Feb. 20, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Ms. Oon Su Sun
Finova Advisory Pte Ltd
182 Cecil Street
#30-01 Frasers Tower
Singapore 069547
THIAM SIEW: Commences Wind-Up Proceedings
-----------------------------------------
Members of Thiam Siew Aveune Investments Pte Ltd, on Feb. 17, 2023,
passed a resolution to voluntarily wind up the company's
operations.
The company's liquidator is:
Ms. Chin Moy Yin
101 Upper Cross Street
#05-24 People's Park Centre
Singapore 058357
=====================
S O U T H K O R E A
=====================
KOREA ELECTRIC: Suffers Record Operating Loss in 2022
-----------------------------------------------------
Yonhap News Agency reports that the state-run utility Korea
Electric Power Corp. (KEPCO) said on Feb. 24 its operating loss
more than quintupled on-year to hit a record high last year due to
higher fuel costs and limited electricity rate hikes.
Its operating loss came to KRW32.63 trillion (US$25.02 billion) in
2022, compared with KRW5.85 trillion a year earlier, the company
said in a regulatory filing.
It is the largest ever yearly figure the company has logged so far,
and the previous record was set in 2021, Yonhap says.
Sales grew 17.5 percent on-year to KRW71.27 trillion on larger
demand. KEPCO also hiked electricity rates three times last year.
But global liquefied natural gas prices more than doubled on-year
to KRW1,564.8 per ton last year, and the price of soft coal spiked
to $359 per ton in 2022 from $139.1 a year earlier, according to
government data.
In the fourth quarter alone, operating loss stood at KRW10.77
trillion, also an all-time high, the company said, Yonhap relays.
In the wake of snowballing losses, KEPCO has been implementing a
series of self-rescue measures, including the restructuring of
overseas businesses, property sales and other cost-cutting moves
worth a combined KRW14.3 trillion over the next five years,
according to Yonhap.
Yonhap relates that the company also raised the electricity rates
by KRW13.1 per kilowatt hour for the first quarter of this year. In
a report submitted to the National Assembly, KEPCO called for
KRW51.6 of rate increases this year.
But the government has sought to freeze public utility fees in the
first half of this year amid mounting economic burdens on the
people amid high interest rates, rising inflation and an economic
slowdown.
Korea Electric Power Corporation (KEPCO) is an integrated electric
utility company, transmitting and distributing substantially all of
the electricity in South Korea. Korea Electric Power Corporation
was founded in 1961 and is headquartered in Naju, South Korea.
*********
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 ***