/raid1/www/Hosts/bankrupt/TCRAP_Public/230331.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, March 31, 2023, Vol. 26, No. 66
Headlines
A U S T R A L I A
BLAKE BROS: Second Creditors' Meeting Set for April 4
CHEFPREP PTY: First Creditors' Meeting Set for April 6
CLOUGH LTD: M&R Enters Into a Binding DOCA Term Sheet
FARM FRESH: Second Creditors' Meeting Set for April 5
FIRSTMAC MORTGAGE 3PP: S&P Assigns BB(sf) Rating on Cl. E Notes
HEXHAM RAIL: Second Creditors' Meeting Set for April 5
MORTGAGE HOUSE 2021-1P: S&P Affirms B(sf) Rating on Class F Notes
OXFORD TAVERN: Iconic Sydney Pub to Shut Down on April 2
PEPPER I-PRIME 2021-1: S&P Raises Class F Notes Rating to BB
SCOTT'S REFRIGERATED: May Have Traded Insolvent for Months
WILMOT CIVIL: Second Creditors' Meeting Set for April 4
C H I N A
CHINA EVERGRANDE: Chair's HK Mansion Fails to Sell by Target Date
GUANGZHOU CITY TEAM: Cease Operations as CSL Woes Continue
SUNAC CHINA: Founder Says He Will Spare No Effort to Sort Out Debt
I N D I A
ACE ENGINEERING: Insolvency Resolution Process Case Summary
ASHA CONCAST: CRISIL Keeps B+ Debt Ratings in Not Cooperating
ASHA ISPAT: CRISIL Keeps B+ Debt Rating in Not Cooperating
ASHARFI GRAMODHYOG: CRISIL Keeps B Ratings in Not Cooperating
ASHOKA COATING: CRISIL Keeps B Debt Rating in Not Cooperating
B.S.R. CONSTRUCTIONS: CRISIL Keeps B Rating in Not Cooperating
BRIGHT STAR: CRISIL Keeps B Debt Ratings in Not Cooperating
BSL ENGINEERING: CRISIL Keeps B Debt Rating in Not Cooperating
CAR BAZAAR: Insolvency Resolution Process Case Summary
DEEPIKA INFRATECH: Insolvency Resolution Process Case Summary
HIND AGRO: Insolvency Resolution Process Case Summary
JANS COPPER: Insolvency Resolution Process Case Summary
P. VENKATESWARA: CRISIL Keeps B Debt Rating in Not Cooperating
PURANDAR INVESTMENT: CRISIL Cuts Rating on INR0.8cr Loan to B
QUALIT EXPORTS: CRISIL Keeps B Debt Ratings in Not Cooperating
SARADHAMBAL AUTOMOBILES: CRISIL Cuts Rating on INR20cr Loan to B+
SHIVALIK POWER: CRISIL Withdraws B Rating on INR15cr Cash Loan
SRISTI HOSPITALITY: Insolvency Resolution Process Case Summ
YOUNGMAN SYNTHETICS: CRISIL Cuts Rating on INR14.32cr Loan to B
I N D O N E S I A
PT JAPFA COMFEED: Fitch Cuts LongTerm IDR to 'B+', Outlook Stable
N E W Z E A L A N D
AJDA LIMITED: Creditors' Proofs of Debt Due on April 16
ALL ASPECTS: Grant Reynolds Appointed as Liquidator
DKG CONSTRUCTION: Creditors' Proofs of Debt Due on May 8
EUNICE TAYLOR: Creditors' Proofs of Debt Due on April 24
OEC GROUP: Court to Hear Wind-Up Petition on April 4
P A K I S T A N
PAKISTAN: Awaits China's Decision on Rollover of US$2 Billion Loan
P H I L I P P I N E S
SUNTRUST RESORT: Annual Net Loss Widens to PHP557.05MM in 2022
S I N G A P O R E
CONTECH PRECAST: Creditors' Meetings Set for April 14
OMNI CENTRE: Commences Wind-Up Proceedings
SKILLED INTERNATIONAL: Creditors' Proofs of Debt Due on April 29
SMART AUTOMOBILE: Court Enters Wind-Up Order
YANGZIJIANG SHIPPING: Court Enters Wind-Up Order
V I E T N A M
SOUTHERN POWER: Fitch Affirms 'BB' Foreign Currency IDR
VIETNAM ELECTRICITY: Fitch Affirms 'BB' LT Foreign Currency IDR
VIETNAM ELECTRICITY: Fitch Affirms Foreign Currency IDR at 'BB'
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A U S T R A L I A
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BLAKE BROS: Second Creditors' Meeting Set for April 4
-----------------------------------------------------
A second meeting of creditors in the proceedings of Blake Bros.
(Incorporating L. Blake) Proprietary Limited, formerly trading as
"Blake Bros" and "Memorial Art", has been set for April 4, 2023 at
11:30 a.m. via teleconference facilities (Zoom).
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 April 3, 2023 at 4:00 p.m.
Richard Rohrt of Kennedy Ryan Advisory was appointed as
administrator of the company on Feb. 27, 2023.
CHEFPREP PTY: First Creditors' Meeting Set for April 6
------------------------------------------------------
A first meeting of the creditors in the proceedings of ChefPrep Pty
Ltd and Co-Lab Pantry Pty Ltd will be held on April 6, 2023, at
11:00 a.m. at 200 George Street Sydney NSW 2000 and via
teleconference.
Morgan Kelly and David Kennedy of Ernst & Young were appointed as
administrators of the company on March 27, 2023.
CLOUGH LTD: M&R Enters Into a Binding DOCA Term Sheet
-----------------------------------------------------
Creamer Media's Engineering News reports that JSE-listed
engineering and construction company Murray & Roberts (M&R) has
announced developments that could result in it regaining control of
RUC Cementation Mining Contractors (RUC), its Australian mining
subsidiary that was lost to the group when its Australian holding
company, MRPL, and Clough entered administration in December.
In a statement to shareholders, it was reported M&R, MRPL and the
administrators had, on March 24, entered into a binding Deed of
Company Arrangement (DOCA) term sheet that could result in RUC
reverting to M&R's ownership by the end of June, Engineering News
relays.
Engineering News relates that the DOCA is subject to several
conditions precedent, including approval by MRPL creditors and
credit approval. The terms remain confidential, but will be made
available in the administrators' report to creditors ahead of a
meeting that is expected to be held in mid-May, the report says.
"Should the conditions precedent to the DOCA be met, it is expected
that the DOCA will be implemented by June 30, 2023," M&R said in a
statement.
"The execution of the DOCA term sheet reflects an important first
step in the group's efforts to regain control of RUC.
"Should the DOCA complete, RUC will be reinstated within the group
and the full scale and capability of the group's multinational
mining platform would be re-established."
According to Engineering News, the process represented a
significant development for M&R, which had previously described its
loss of control over RUC as having been a "particularly tragic"
consequence of the MRPL administration process.
Engineering News says the loss of RUC meant that the group's mining
platform currently comprised only two regional businesses in Africa
and the Americas, which had combined orders worth R14-billion at
the end of December.
CEO Henry Laas initially expressed pessimism about M&R's prospects
for regaining control in a bidding process, with the DOCA now
representing an alternative to such a process, according to
Engineering News.
He also reported that a startup business had been registered in
Australia with the intention of restarting a mining business in
that territory should it fail to regain control of RUC.
However, he also stressed that regaining RUC was first prize, as it
previously contributed about one-third to its mining platform.
With the loss of Clough, the mining platform formed the core of the
downscaled M&R, which had also retained a unit in sub-Saharan
Africa, which focused on a power, industrial and water projects.
That platform had an order book of ZAR2 billion at the end of
December, arising mainly from renewable energy and transmission
projects in South Africa, Engineering News notes.
About Clough Ltd
Clough Ltd -- http://www.clough.com.au/-- is an engineering and
construction contractor providing full project lifecycle solutions
primarily to the oil and gas industry in Australia and South East
Asia. Its services range from front-end engineering design,
construction, installation and commissioning to long-term
operations and asset management.
On Dec. 5, 2022, Clough Group went into voluntary administration
after a takeover deal with WeBuild fell through, leaving its 1,250
employees uncertain about their future.
Clough's South African owners, Murray & Roberts, appointed Sal
Algeri, Jason Tracy, David Orr and Glen Kanevsky of Deloitte as
voluntary administrators, news.com.au disclosed.
FARM FRESH: Second Creditors' Meeting Set for April 5
-----------------------------------------------------
A second meeting of creditors in the proceedings of Farm Fresh
Foods Pty Ltd has been set for April 5, 2023 at 10:00 a.m. via
Microsoft Teams.
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 April 4, 2023 at 5:00 p.m.
Joshua Philip Taylor of Taylor Insolvency was appointed as
administrator of the company on March 1, 2023.
FIRSTMAC MORTGAGE 3PP: S&P Assigns BB(sf) Rating on Cl. E Notes
---------------------------------------------------------------
S&P Global Ratings assigned ratings to six of the seven classes of
prime residential mortgage-backed securities (RMBS) issued by
Firstmac Fiduciary Services Pty Ltd. as trustee for Firstmac
Mortgage Funding Trust No. 4 Series Eagle No. 3PP.
The ratings reflect the following factors.
The credit risk of the underlying collateral portfolio and the
credit support provided to each class of notes are commensurate
with the ratings assigned. Credit support for the rated notes is
provided by subordination and excess spread. The credit support
provided to the rated notes is sufficient to cover the assumed
losses at the applicable rating stress. S&P's assessment of credit
risk takes into account Firstmac Ltd. (Firstmac)'s underwriting
standards and approval processes, which are consistent with
industry-wide practices, and the strong servicing quality of
Firstmac.
The rated notes can meet timely payment of interest--excluding the
residual interest due on the class B, class C, class D, and class E
notes --and ultimate payment of principal under the rating
stresses. Key rating factors are the level of subordination
provided, the liquidity reserve, the principal draw function, the
interest-rate swap, and the provision of an extraordinary expense
reserve. S&P's analysis is on the basis that the notes are fully
redeemed by their legal final maturity date and it does not assume
the notes are called at or beyond the call date.
S&P said, "Our ratings also take into account the counterparty
exposure to Westpac Banking Corp. (Westpac) as bank account
provider and interest-rate swap provider. Westpac will provide an
interest-rate swap to hedge the interest-rate risk between any
fixed-rate mortgage loans and the floating-rate obligations on the
notes. The transaction documents for the swap and bank account
include downgrade language consistent with S&P Global Ratings'
counterparty criteria.
"We also have factored into our ratings the legal structure of the
trust, which is established as a special-purpose entity and meets
our criteria for insolvency remoteness."
Ratings Assigned
Firstmac Mortgage Funding Trust No.4 Series Eagle No.3PP
Class A-1, A$400.00 million: AAA (sf)
Class A-2, A$60.00 million: AAA (sf)
Class B, A$15.00 million: AA (sf)
Class C, A$10.00 million: A (sf)
Class D, A$6.00 million: BBB (sf)
Class E, A$4.25 million: BB (sf)
Class F, A$4.75 million: Not rated
HEXHAM RAIL: Second Creditors' Meeting Set for April 5
------------------------------------------------------
A second meeting of creditors in the proceedings of Hexham Rail
Pty. Ltd. has been set for April 5, 2023 at 10:00 a.m. at the
offices of Hamilton Murphy Advisory at Level 21, 114 William Street
in Melbourne and via virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by April 4, 2023 at 4:00 p.m.
Stephen Dixon of Hamilton Murphy Advisory was appointed as
administrator of the company on Feb. 28, 2023.
MORTGAGE HOUSE 2021-1P: S&P Affirms B(sf) Rating on Class F Notes
-----------------------------------------------------------------
S&P Global Ratings raised its ratings on two classes of notes
issued by Perpetual Trustee Co. Ltd. as trustee for Mortgage House
Capital Mortgage Trust No.1 - Mortgage House RMBS Series 2021-1P.
At the same time, S&P affirmed its ratings on five classes of
notes.
The rating actions reflect S&P's view of the credit risk of the
underlying collateral portfolio. The asset pool has continued to
amortize and has a pool factor of around 40.4% as of Feb. 28, 2023.
Loans more than 30 days in arrears make up 1.28% of the current
balance, and there have been no losses to date. Furthermore, the
portfolio has strengthened, with a weighted-average current
loan-to-value ratio of 59.2% and weighted-average seasoning of 35.9
months.
While the transaction is currently paying pro rata, there has been
significant buildup of subordination and the credit support
provided to each class of notes is commensurate with the ratings
assigned. Credit support is provided by subordination and excess
spread.
Under the pro rata payment structure, the class G allocated
principal is paid to the class F notes until the class F notes are
fully repaid, followed by the remaining subordinated notes once the
class F notes have fully repaid. Therefore, the class F notes have
and will continue to benefit from an increase in the percentage of
credit support provided as the pool amortizes under a pro rata
structure, while for the remaining rated notes the percentage of
credit support will remain static. As of Feb. 28, 2023, the
outstanding balance of the class F notes has amortized to
approximately A$1,985,640.
A constraining factor on the degree of upgrades is the high
prepayment rate, which may reduce the level of excess spread
generated and may lead to a deterioration in credit quality in the
remaining pool, and increasing risk of borrower concentration as
the pool continues to amortize. The largest 10 borrowers comprise
6.32% of the pool. S&P views that the lower-rated notes are more
susceptible to this increasing borrower concentration risk.
S&P has also considered in its analysis the effects of the current
increasing interest-rate environment.
These qualitative factors constrain our ratings beyond quantitative
factors alone.
Ratings Raised
Mortgage House Capital Mortgage Trust No.1 - Mortgage House RMBS
Series 2021-1P
Class B: to AAA (sf) from AA (sf)
Class C: to AA (sf) from A (sf)
Ratings Affirmed
Mortgage House Capital Mortgage Trust No.1 - Mortgage House RMBS
Series 2021-1P
Class A: AAA (sf)
Class AB: AAA (sf)
Class D: BBB (sf)
Class E: BB (sf)
Class F: B(sf)
OXFORD TAVERN: Iconic Sydney Pub to Shut Down on April 2
--------------------------------------------------------
News.com.au reports that Sydney's night-life has suffered another
blow with the news that the Oxford Tavern in Petersham will close
down.
According to the report, the popular pub in the inner west, known
for its late-night shenanigans, was relaunched by Odd Culture less
than a year ago, but the group has announced that it will be
closing its doors for good on Sunday, April 2.
The decision comes as the group expands into Victoria, opening a
Melbourne iteration of Newtown's Odd Culture.
In a statement, the group said that the Oxford Tavern had been a
"saving grace" during lockdowns but that the time had come to "end
this chapter". The pub has a rich history and has been an inclusive
Petersham local and queer institution.
"We're proud of everything we've put into the Tav. It's been a wild
ride, but the time has come to end this chapter," the statement
read.
News.com.au relates that Odd Culture Group CEO, James Thorpe, who
relaunched The Oxford Tavern in winter 2022, said that the venue
was one he had gone to when he was younger and declared it to be a
venue he would love to own.
"When we bought the pub, we were never going to do a whitewash
fit-out. That's not our style. We've kept the character because
that's the reason we bought it. It's still the home of the steamy
late night; it's just a little cleaner, and the kitchen is
bigger."
The Oxford Tavern had topless barmaids and exotic strippers before
it underwent a makeover in 2013 under previous owners Drink &
Dine.
News.com.au notes that the closure of the Oxford Tavern is yet
another blow to Sydney's night-life, which has been in decline for
some time. In recent years, the city has lost many of its
late-night hot spots, with many blaming the state government's
strict lockout laws.
PEPPER I-PRIME 2021-1: S&P Raises Class F Notes Rating to BB
------------------------------------------------------------
S&P Global Ratings raised its ratings on five classes of notes
issued by Permanent Custodians Ltd. as trustee for Pepper I-Prime
2021-1 Trust. At the same time, S&P affirmed its ratings on two
classes of notes. The transaction is a securitization of prime
residential mortgages originated by Pepper HomeLoans Pty Ltd.
(Pepper).
S&P Said, "The rating actions reflect our view of the credit risk
of the pool, which has been amortizing in line with our
expectation. Credit support provided in percentage terms has
increased as the pool paid down. This credit support comprises note
subordination for all rated notes and excess spread to the extent
available. Current loan-to-value ratios across the pool have been
declining, lowering our expectation of loss for the pool.
"Our expectation is that the various mechanisms to support
liquidity within the transaction, including an amortizing liquidity
facility, and principal draws, are sufficient under our cash flow
stress assumptions to ensure timely payment of interest.
"We expect the availability of a yield-enhancement reserve,
amortization reserve, and overcollateralization amount, which will
all be funded by excess spread, to cover potential yield shortfalls
and loss reimbursements and to repay principal on the notes at
various stages of the transaction's term."
As of Feb. 28, 2023, the pool has a balance of about A$266.7
million and a pool factor of about 35.56%. The pool's
weighted-average loan-to-value ratio is 66.70% and weighted-average
seasoning is 40.65 months.
S&P has factored the prepayment rates and arrears performance of
the transaction into its analysis. As of Feb. 28, 2023, the
prepayment rate was 35.82%, which is much higher than the S&P
Global Ratings Prepayment Index (SPPI) for prime loans. Over the
last 12 months, the arrears performance generally has also been
higher relative to the S&P Global Ratings Performance Index
(SPIN)for prime loans. As of Feb. 28, 2023, loans greater than 30
days in arrears make up 1.20% of the pool, of which those more than
90 days in arrears represent 0.71%. However, losses to date have
been minimal and all have been covered by excess spread. There have
been no charge-offs to any of the notes.
For the raised ratings, constraining factors on the magnitude of
upgrades include the higher level of delinquency relative to Prime
SPIN, high prepayment rates which may constrain the buildup of
excess spread in the deal, and the various characteristics in the
portfolio. These characteristics include loans to the
self-employed, low documentation loans, investment loans,
relatively higher loan-to-value ratios and a proportion of higher
than average loans sizes that are susceptible to volatility and may
be more sensitive to changes in the economic environment.
Ratings Raised
Pepper I-Prime 2021-1 Trust
Class B: to AA+ (sf) from AA (sf)
Class C: to AA (sf) from A (sf)
Class D: to A (sf) from BBB (sf)
Class E: to BBB (sf) from BB (sf)
Class F: to BB (sf) from B (sf)
Ratings Affirmed
Pepper I-Prime 2021-1 Trust
Class A1: AAA (sf)
Class A2: AAA (sf)
SCOTT'S REFRIGERATED: May Have Traded Insolvent for Months
----------------------------------------------------------
Australian Financial Review reports that Scott's Refrigerated
Logistics may have been insolvent nine months before its collapse,
according to the company's administrators McGrathNicol.
The Anchorage Capital Partners-owned transportation group - one of
the largest in Australia and a key supplier to retailers including
Coles, Aldi and IGA - collapsed in late February.
In a report lodged with the corporate regulator, McGrathNicol said
it was also possible the company had been insolvent, on a cash flow
basis, only a week before they were called in, AFR relays.
Scott's Refrigerated Logistics, which transports frozen foods to
supermarkets, was placed into voluntary administration in late
February. On a "balance sheet basis", the administrator's report
added, "Scott's Group was potentially insolvent . . . from as far
back as May 2022," AFR relays.
About Scott's Refrigerated
Scott's Refrigerated Logistics operates Australia's largest and
most extensive national cold chain road and warehousing network.
The company employs around 1,500 people and its customers include
major grocery retailers, independent supermarkets, food
manufacturers and exporters.
Scott Langdon, Kate Conneely, Michael Korda and John Mouawad of
KordaMentha were appointed receivership of Scott's Refrigerated
Logistics Group on Feb. 27, 2023.
KordaMentha was appointed by a secured creditor as a consequence of
Scott's Refrigerated Logistics entering into voluntary
administration earlier on Feb. 27, 2023.
KordaMentha's Scott Langdon said an orderly sales process for
Scott's Refrigerated Logistics would commence immediately.
WILMOT CIVIL: Second Creditors' Meeting Set for April 4
-------------------------------------------------------
A second meeting of creditors in the proceedings of Wilmot Civil
Pty Ltd has been set for April 4, 2023 at 10:00 a.m. via virtual
meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by April 3, 2023 at 5:00 p.m.
Simon Cathro and Andrew Blundell of Cathro & Partners Pty Limited
were appointed as administrators of the company on Feb. 28, 2023.
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C H I N A
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CHINA EVERGRANDE: Chair's HK Mansion Fails to Sell by Target Date
-----------------------------------------------------------------
Bloomberg News reports that China Evergrande Group Chairman Hui Ka
Yan's mansion in Hong Kong failed to find a buyer by the desired
timeline, as bids fell short of the creditor's targets.
The receiver of the luxury property on the Peak, valued at about
HK$880 million (US$112 million), didn't accept any offers submitted
in the past few weeks, according to Centaline Property Agency,
which is handling the sale. The house will remain on the market,
Bloomberg relays.
The agents previously said that a buyer would be selected by late
March.
Bloomberg relates that the house, on Black's Link road in one of
the city's most upscale neighborhoods, was seized by China
Construction Bank (Asia) in November. The property was one of the
few known assets in Hong Kong affiliated with Hui, who is the
founder of China's most indebted developer.
Bloomberg says the house attracted interest from dozens of
potential buyers, with a majority being local wealthy families and
30% mainland Chinese, Centaline and CBRE Group Inc. said in a
statement in early March.
Other Chinese property tycoons are also facing asset sales in the
city, the report notes.
Chen Hongtian, chairman of Hong Kong-based investment firm Cheung
Kei Group, recently had a $271 million mansion, a luxury apartment
and an office tower in Hong Kong seized by banks. Receivers are
expected to market the properties soon, adds Bloomberg.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
Evergrande had CNY1.97 trillion (US$311 billion) of liabilities at
the end of June 2021. Once China's biggest developer by sales,
Evergrande fell into distress as cash dried up and the group
overstretched itself on borrowings and ventures into car
manufacturing.
Evergrande hired outside financial advisers Houlihan Lokey and
Admiralty Harbour Capital in September 2021 to engage with
creditors soon after it ran into a liquidity squeeze. It has since
worked with more advisers in the past two months by turning to
China International Capital Corp, BOCI Asia and Zhong Lun Law Firm
on its debt workout plan.
As reported in the Troubled Company Reporter-Asia Pacific in
October 2022, Moody's Investors Service has withdrawn China
Evergrande Group's (Evergrande) corporate family rating and senior
unsecured ratings, the CFRs of Hengda Real Estate Group Company
Limited and Tianji Holding Limited, and Scenery Journey Limited's
backed senior unsecured ratings.
GUANGZHOU CITY TEAM: Cease Operations as CSL Woes Continue
----------------------------------------------------------
Reuters reports that the Chinese Super League suffered another blow
after Guangzhou City announced they are suspending operations and
will not take part when the new season makes its expected return
next month.
City, who finished 15th last year to retain their place in China's
top flight, are one of eight teams who competed in the country's
professional pyramid last season to be disqualified ahead of the
2023 campaign, Reuters relates.
They were absent from a Chinese Football Association list issued on
March 29 detailing the 48 clubs eligible to play in the country's
three-tier professional set-up in the upcoming season, which is
expected to start on April 15, according to Reuters.
Wuhan Yangtze and Hebei FC, who were both relegated from the CSL
last year, were excluded, as were second-tier outfits Kunshan FC,
Shaanxi Chang'an Athletic, Zibo Cuju, Beijing BSU and Xinjiang
Tianshan Show Leopards, according to Reuters.
Reuters relates that City confirmed on social media that they would
suspend operations, joining a growing list of clubs who have
floundered since the end of the league's boom years, when
high-profile players and coaches were lured by huge salaries.
Jiangsu FC were disbanded just months after winning the 2020 CSL
title while former Asian champions Guangzhou FC are among those who
have laboured to stay afloat, the report notes.
Chinese clubs previously attracted some of the sport's leading
talent including World Cup winning coaches Marcello Lippi and Luiz
Felipe Scolari, while also competing with the world's wealthiest
clubs to acquire elite players.
Reuters says Shanghai SIPG - now known as Shanghai Port - signed
Brazil internationals Oscar and Hulk for a combined outlay of
EUR110 million ($119.13 million) in 2016, the same year Argentine
Ezequiel Lavezzi became one of the world's best paid players when
he signed for Hebei FC.
However, a crackdown by authorities on debt accumulation within the
private sector plus the economic impact of the COVID-19 pandemic
put many clubs under significant financial strain, Reuters states.
SUNAC CHINA: Founder Says He Will Spare No Effort to Sort Out Debt
------------------------------------------------------------------
Yicai Global reports that the founder of Sunac China Holdings has
said he will do everything possible to ensure that the offshore
debt restructuring scheme proposed by the struggling Chinese
property developer earlier this week is put into place as soon as
possible to help the firm get back on its feet quickly.
"There are only two requirements for the offshore debt
restructuring," the report quotes Sun Hongbin, who is also
chairman, as saying at a meeting about the restructuring that was
held on March 29. "The first is speed as this is essential for
Sunac to return to normal operations. It also needs to be
systematic and thorough to help Sunac out of its difficulties and
protect creditors' interests."
Yicai Global says the Tianjin-based firm holds USD10 billion of
offshore debt. Creditors can choose between a number of options,
including swapping old notes with new ones, the partial conversion
of debt to shares of its property management arm Sunac Services or
the issuing of convertible bonds, according to the restructuring
plan published by Sunac on March 28.
After studying all feasible options, Sunac and its financial
consultant Houlihan Lokey firmly believe that this is the best way
forward as it will maximize creditors' value, said Yan Danwen,
co-head of China restructuring department at the US investment
bank, Yicai Global relays.
Those creditors who sign the restructuring deal before April 20
will be paid a cash sum equivalent to 0.1 percent of the mount
owed, according to reports.
Sunac's financial crisis is of its own making, Sun said. According
to the report, the firm was too optimistic and overaggressive in
investments, even buying land use rights in the first half of 2021.
It came under unprecedented pressure when the market started to
sink. And it delegated too much management authorities to units.
Sunac took on board creditors' opinions regarding sustainable
capital structure and the recovery of operations, Chief Executive
Officer and Executive Director Wang Mengde said, Yicai Global
relays. A group of creditors holding over 30 percent of the debts
to be restructured have signed the deal and he hopes that more
creditors will come on board soon.
About Sunac China
Sunac China Holdings Limited (SEHK:1918) --
http://www.sunac.com.cn/-- engages in the sales of properties in
the People's Republic of China. The Company operates its business
through two segments: Property Development and Property Management
and Others. The Company's subsidiaries include Sunac Real Estate
Investment Holdings Ltd., Qiwei Real Estate Investment Holdings
Ltd. and Yingzi Real Estate Investment Holdings Ltd.
As reported in the Troubled Company Reporter-Asia Pacific in
October 2022, Moody's Investors Service has withdrawn Sunac China
Holdings Limited's Ca corporate family rating and its C senior
unsecured ratings. Prior to the withdrawal, the rating outlook was
negative. Moody's has decided to withdraw the ratings because it
believes it has insufficient or otherwise inadequate information to
support the maintenance of the ratings.
=========
I N D I A
=========
ACE ENGINEERING: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Ace Engineering Infratech (India) Private Limited
Lane No. 4, SIDCO Industrial Area,
Bari Brahmana, Jammu JK 181133 India
Insolvency Commencement Date: March 6, 2023
Estimated date of closure of
insolvency resolution process: September 2, 2023
Court: National Company Law Tribunal, Chandigarh Bench
Insolvency
Professional: Yatin Sharma
C 182 DLF Park Place, DLF Phase 5,
Sector 54, Gurgaon, Haryana 122009
Email: sharmayatin@yahoo.com
Email: cirp.aeipl@gmail.com
Last date for
submission of claims: March 21, 2023
ASHA CONCAST: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Asha Concast
Private Limited (ACPL) continue to be 'CRISIL B+/Stable/CRISIL A4
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (Issuer Not
Cooperating)
Letter of Credit 1.1 CRISIL A4 (Issuer Not
Cooperating)
Proposed Long Term 2.85 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with ACPL for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ACPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ACPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ACPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of ACPL and Asha Ispat Pvt Ltd
(AIPL). This is because both the companies, together referred to as
the Asha group, have common management and significant operational
linkages. ACPL manufactures and supplies steel ingots to AIPL to
manufacture thermo-mechanically-treated (TMT) bars.
AIPL was incorporated in 1996 and ACPL in 2009 and are promoted by
Siliguri-based Agarwal family. Mr. Rajesh Agarwal and Mr. Roshan
Agarwal are directors in AIPL, and Ms. Rajani Agarwal and Ms.
Manisha Agarwal are directors in ACPL. AIPL manufactures steel
ingots and TMT bars whereas ACPL manufactures steel ingots
primarily for AIPL. Both the entities also trade in iron and steel
products.
ASHA ISPAT: CRISIL Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Asha Ispat
Private Limited (AIPL; part of the Asha group) continue to be
'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.75 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 4.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Short Term 0.48 CRISIL A4 (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 0.2 CRISIL A4 (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with AIPL for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of AIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AIPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of AIPL and Asha Concast Pvt
Ltd (ACPL). This is because both the companies, together referred
to as the Asha group, have common management and significant
operational linkages. ACPL manufactures and supplies steel ingots
to AIPL to manufacture thermo-mechanically-treated (TMT) bars.
AIPL was incorporated in 1996 and ACPL in 2009 and are promoted by
Siliguri-based Agarwal family. Mr. Rajesh Agarwal and Mr. Roshan
Agarwal are directors in AIPL, and Ms. Rajani Agarwal and Ms.
Manisha Agarwal are directors in ACPL. AIPL manufactures steel
ingots and TMT bars whereas ACPL manufactures steel ingots
primarily for AIPL. Both the entities also trade in iron and steel
products.
ASHARFI GRAMODHYOG: CRISIL Keeps B Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Asharfi
Gramodhyog Sansthan (AGS) continue to be 'CRISIL B/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 0.4 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Fund- 0.6 CRISIL B/Stable (Issuer Not
Based Bank Limits Cooperating)
CRISIL Ratings has been consistently following up with AGS for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of AGS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AGS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AGS continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
AGS is based in Charra town-ship of district Aligarh in Uttar
Pradesh and registered under society act XXI of 1860. It was set up
in 1993 as not-for-profit society and managed by Mr. Hari Kishan as
(President), Mr. Asarfi Lal as (Secretory) and other 5 members. The
society provides free meals under mid-day meal scheme, old-age
welfare programme and various other government mandated schemes.
ASHOKA COATING: CRISIL Keeps B Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Ashoka Coating
Chemicals (ACC) continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 5 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ACC for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ACC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ACC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ACC continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Setup in the year 2012, ACC is a proprietorship firm engaged in
manufacturing of chemical coating additive such as paints or
construction chemicals. It is located in Hyderabad and owned by Mr.
Satish Kumar Amirishetty.
B.S.R. CONSTRUCTIONS: CRISIL Keeps B Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of B.S.R.
Constructions (BSR) continue to be 'CRISIL B/Stable/CRISIL A4
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 4 CRISIL A4 (Issuer Not
Cooperating)
Overdraft Facility 4 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with BSR for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BSR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BSR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BSR continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Established in 2013, Medak (Telangana)-based BSR undertakes civil
construction work (mainly for roads and bridges), canal works,
irrigation works, and electrification works. It is promoted by Mr
Bomma Sanjeeva Reddy.
BRIGHT STAR: CRISIL Keeps B Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Bright Star
Syntex Private Limited (BSSPL) continue to be 'CRISIL B/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B/Stable (Issuer Not
Cooperating)
Term Loan 5 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with BSSPL for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BSSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BSSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BSSPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
BSSPL, incorporated in 2002, undertakes spinning, weaving, and
finishing of textiles (jacquard-woven fabrics/curtains). The
manufacturing unit in Tarapur (Thane) has total installed capacity
of about 5 lakh metres per month. Mr Bijay Agarwal and Ms Saroj
Agarwal are the promoters.
BSL ENGINEERING: CRISIL Keeps B Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of BSL
Engineering Services Limited (BESL) continue to be 'CRISIL
B/Stable/CRISIL A4 Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 1 CRISIL B/Stable (Issuer Not
Cooperating)
Letter of Credit 1 CRISIL A4 (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with BESL for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of BESL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BESL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BESL continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Incorporated in 2009, BEPL is promoted by Mr Hansraj Shiv and is
now managed by his son, Mr Neerav Hans. It specialises in
engineering, procurement, and construction services and fabrication
of steel structures, high-pressure pipes, low pressure pipes, and
supply of power equipment. The company has well laid out workshops
in India at Roorkee and Haridwar in Uttarakhand, and Nasik in
Maharashtra, and overseas (UAE and Ukraine).
CAR BAZAAR: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Car Bazaar Automobiles Private Limited
Office No. 3 & 4, 1st Floor, Building 24,
Shastri Nagar, Vaibhav CHS, Goregaon (West)
Mumbai 400104 India
Insolvency Commencement Date: March 3, 2023
Estimated date of closure of
insolvency resolution process: September 2, 2023 (180 Days)
Court: National Company Law Tribunal, Mumbai Bench
Insolvency
Professional: Mahesh Kumar Gupta
202, New Heera Panna Industrial Estate
Opp Business Park, Near Virwani Industrial Estate,
Goregaon (East) Mumbai-400063 (Maharashtra)
Email: camkg59@gmail.com
Email: cirp.carbazaar@gmail.com
Last date for
submission of claims: March 20, 2023
DEEPIKA INFRATECH: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Deepika Infratech Private Limited
8-2-686/C/D/5, Road No: 12, 2nd Floor,
Banjara Hills, Hyderabad, 500 034,
Telangana, India
Insolvency Commencement Date: March 8, 2023
Estimated date of closure of
insolvency resolution process: September 4, 2023 (180 Days)
Court: National Company Law Tribunal, Hyderabad Bench
Insolvency
Professional: CA. Sri Vamsi Kambhammettu
Plot No. A85, Flat DX4, Sri Varasiddhi Nivas,
Level 2, Road No. 11, Film Nagar, Jubilee Hills,
Hyderabad – 500 033
Email: ip.deepikainfra@gmail.com
Last date for
submission of claims: March 22, 2023
HIND AGRO: Insolvency Resolution Process Case Summary
-----------------------------------------------------
Debtor: Hindi Agro Industries Limited
Central Dairy Farm, Complex Anapshahr Road,
Aligarh, Uttar Pradesh-202122
Insolvency Commencement Date: March 3, 2023
Estimated date of closure of
insolvency resolution process: August 30, 2023
Court: National Company Law Tribunal, Allahabad Bench
Insolvency
Professional: Mr. Paramjeet Singh Bhatia
C-39, Surya Nagar, Ghaziabad,
Uttar Pradesh-201011
Email: bhatiaparam.s@gmail.com
409, 4th Floor, Ansal Bhawan,
16 K G Marg, Connaught Place,
New Delhi-110001
Email: hindagroinsolvency2023@gmail.com
Tel: 011-45101111/40078344
Last date for
submission of claims: March 24, 2023
JANS COPPER: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Jans Copper Private Limited
11/43. Lifescapes Nilay, Shop No. 8,
Thakurwar Road, Opp. Bank of Baroda,
Mumbai-400002, Maharashtra
Insolvency Commencement Date: March 8, 2023
Estimated date of closure of
insolvency resolution process: September 4, 2023 (180 Days)
Court: National Company Law Tribunal, Mumbai Bench
Insolvency
Professional: Mr. Hitesh Kothari
Office No. 208, BSE Building,
Dalal Streeet,
Mumbai Fort - 400001
Email: hiteshkotharics@gmail.com
1A, Satya Apartment,
Opp. Kandivali MTNL Buildings,
S. V, Road, Kandivali (W),
Mumbai- 400 067
Email: cirp.janscopper@gmail.com
Last date for
submission of claims: March 22, 2023
P. VENKATESWARA: CRISIL Keeps B Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of P.
Venkateswara Rao (PVR) continue to be 'CRISIL B/Stable/CRISIL A4
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6.50 CRISIL A4 (Issuer Not
Cooperating)
Overdraft Facility 1.35 CRISIL A4 (Issuer Not
Cooperating)
Proposed Long Term
Bank Loan Facility 4.15 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PVR for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PVR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PVR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PVR continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Set up in 1984 as a proprietorship of Mr P Venkateswara Rao, the
firm got converted into a partnership concern in 1989 when the
proprietor's family members also joined the business. This
Hyderabad (Telangana)-based firm undertakes construction of roads,
roads over bridges, roads under bridges for the railways and other
allied civil construction.
PURANDAR INVESTMENT: CRISIL Cuts Rating on INR0.8cr Loan to B
-------------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of
Purandar Investment Private Limited (PIPL) to 'CRISIL
B/Stable/CRISIL A4 Issuer Not Cooperating' from 'CRISIL
BB/Stable/CRISIL A4+ Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.4 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Cash Credit 0.8 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB/Stable ISSUER NOT
COOPERATING')
Letter of Credit 1.6 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with PIPL for
obtaining information through letters and emails dated December 24,
2022 and February 28, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PIPL revised to 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'
from 'CRISIL BB/Stable/CRISIL A4+ Issuer Not Cooperating'.
Incorporated in 1977, PIPL deals in pigments, polyurethanes,
binders, thickeners and other additives. Mr Avinash Bhalotia and Mr
Anirudh Bhalotia look after the day-to-day operations of the
company.
QUALIT EXPORTS: CRISIL Keeps B Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Qualit
Exports (Qualit) continue to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 3 CRISIL B/Stable (Issuer Not
Credit Cooperating)
Foreign Bill 7 CRISIL B/Stable (Issuer Not
Discounting Cooperating)
Standby Line 2 CRISIL B/Stable (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with Qualit for
obtaining information through letters and emails dated December 24,
2022 and February 17, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of Qualit, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Qualit is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Qualit continues to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Qualit is a proprietorship firm engaged in export and wholesale of
agro commodities. The firm is based in Rajapalayam, Tamil Nadu. Mr
V Theivanai set up the firm in 1993.
SARADHAMBAL AUTOMOBILES: CRISIL Cuts Rating on INR20cr Loan to B+
-----------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Sree Saradhambal automobiles Private Limited (SSASEPL) to 'CRISIL
B+/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Inventory Funding 6 CRISIL B+/Stable (Downgraded
Facility from 'CRISIL BB-/Stable')
Inventory Funding 20 CRISIL B+/Stable (Downgraded
Facility from 'CRISIL BB-/Stable')
Inventory Funding 10 CRISIL B+/Stable (Downgraded
Facility from 'CRISIL BB-/Stable')
Term Loan 6 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 19 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 1 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 11 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade in rating reflects deterioration in the financial
risk profile of the company, specially liquidity. The net cash
accruals of the company were tightly matched against the repayment
at less than 1.2 times over the medium term, owing to weak
profitability and increase in debt level. Despite moderate
improvement in Total outside liabilities/Total Networth (TOL/TNW)
from 6.29 times to 5.33 times as on March 31, 2022. Capital
structure remains leveraged. Improvement in operating performance
resulting in better liquidity and financial profile would remain
key rating monitorable over the medium term.
The rating continues to reflect weak financial risk profile,
Geographic concentration in revenue & exposure to intense
competition and Susceptibility to changes in economic cycles These
weaknesses are partially offset by strength of extensive experience
of partners and moderate scale of operations
Analytical Approach
For arriving at its ratings, CRISIL Ratings has combined the
business and financial risk profiles of Sree Saradhambal
Automobiles Erode Private Limited and Sree Saradhambal Automobiles
Pvt Ltd (SSAPL). The two companies, together referred to as the
Ambal group, are in the same business and operate under the same
brand, have a common management team, and have fungible cash flow.
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak financial risk profile: TOL/TNW was weak at 5.33 times as on
March 31, 2022 and will continue to remain weak over the medium
term. Debt protection metrics are modest with interest coverage of
1.48 times and NCATD of 0.07 times in fiscal 2022. Net worth is
moderate about INR33.92 crores as on March 31,2022
* Geographic concentration in revenue and exposure to intense
competition: Operations are limited to Coimbatore and Erode region
in Tamil Nadu. In addition, dependence on a single supplier
restricts growth. Furthermore, the group faces intense competition
because there are several small and mid-sized players in the
industry.
* Susceptibility to changes in economic cycles: The automobile
dealership business remains highly vulnerable to changes in
economic cycles. Excessive gloom in the economy or monetary
tightening measures such as hike in interest rates can
substantially impact vehicle demand and sales, Revenue profiles is
also linked to ability of the principals to launch new competitive
models and offer a sound value proposition to the buyer in terms of
both functional and aesthetic value
Strengths:
* Extensive experience of the promoters: The promoters have been in
the auto dealership business for over a decade and have an
established relationship with the principal supplier, Maruti Suzuki
India Ltd (MSIL).
* Moderate scale of operation: SSA group's scale of operation is
moderate marked by revenue of around INR414.56 crore in FY 2022.
The same is due to consistent capex made towards year on increase
in showrooms and service centres spread across the Coimbatore-
Erode region in Tamil Nadu.
Liquidity: Poor
Average bank limit utilization for the last 12 months ended in
October 2022 is high at around 97.7%, with instances of overdrawal.
Cash accruals are expected in the range of INR9-10 per annum crore
over the medium term which will be tightly matched against
repayment obligations of INR9.12 crore per annum.
Outlook Stable
CRISIL Ratings believes the SSA group will continue to benefit from
its established position in the auto dealership segment
Rating Sensitivity factors
Upward factors
* Sustained growth in revenues of more than 15% with improvement in
margins to over 5%, leading to higher cash accruals of INR12 crore
* Improvement in financial risk profile with the improvement in
capital structure
Downward factors:
* Decline in net cash accruals to below INR9 crores
* Weakening in liquidity and financial risk profiles
* Further deterioration in the financial risk profile through
increased TOL/TNW
SSAPL was incorporated in 1998, promoted by Mr Asokan Muthuswamy
and Mr K Krishnakumar. Based in Erode, Tamil Nadu, the company is a
dealer for MSIL. SSAPL, based in Coimbatore, is in the same
business. The SSA group operates under the brand name of 'Ambal
Auto'.
SHIVALIK POWER: CRISIL Withdraws B Rating on INR15cr Cash Loan
--------------------------------------------------------------
CRISIL Ratings has withdrawn its ratings on the bank facilities of
Shivalik Power And Steel Private Limited (SPSPL; part of Shivalik
Group) on the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with CRISIL
Ratings' policy on withdrawal of its ratings on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B/Stable/Issuer Not
Cooperating (Withdrawn)
Long Term Loan 3 CRISIL B/Stable/Issuer Not
Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with SPSPL for
obtaining information through letters and emails dated September
16, 2022 and November 15, 2022, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SPSPL. This restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SPSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the rating on bank facilities of
SPSPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Analytical Approach
For arriving at the ratings, CRISIL Ratings has combined the
financial and business risk profiles of SPSPL and Shivalik
Engineering Industries Pvt Ltd (SEIPL), as both entities, together
referred to as the Shivalik group, are under a common management
and have strong operational linkages.
SEIL was incorporated in 2011 by Mr Giriraj Singhania and Mr Vishal
Sharma. It started commercial operations in 2015. The company
manufactures iron casting components majorly for the automobile
industry for OEMs. Its fully automated manufacturing unit, with
installed capacity of 30,000 tonne per annum (TPA) is in Hathkhoj,
Industrial Estate, Bhilai.
SPSPL, incorporated in 2007, by Mr Giriraj Singhania and Mr Vishal
Sharma began operations in 2007. It is engaged in ductile iron and
graded cast iron products with installed capacity of 24,000 TPA in
its unit at Mahasamund, Chhattisgarh. The bulk of its revenue is
derived from sales to OEMs of automobile, railway and engineering
industries.
SRISTI HOSPITALITY: Insolvency Resolution Process Case Summ
-----------------------------------------------------------
Debtor: Sristi Hospitality Private Limited
Liberty Lodge, D.J. Road, Vile Parle West,
Mumbai - 40056 India
Insolvency Commencement Date: February 27, 2023
Estimated date of closure of
insolvency resolution process: August 26, 2023
Court: National Company Law Tribunal, Mumbai Bench
Insolvency
Professional: Rajan Deshraj Agarwal
Office No. 404, Laxmi Mall,
Lamxi Industrial Estate, New Link Road,
Andheri (W), Mumbai-400053
Email: iprajanagarwal@gmail.com
Email: cirp.sristi@gmail.com
Last date for
submission of claims: March 13, 2023
YOUNGMAN SYNTHETICS: CRISIL Cuts Rating on INR14.32cr Loan to B
---------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Youngman Synthetics (YS; part of the Youngman group) to 'CRISIL
B/Stable' from 'CRISIL BB+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.68 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Cash Credit 9.50 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER
NOT COOPERATING')
Letter of Credit 3.50 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Long Term Loan 14.32 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER
NOT COOPERATING')
CRISIL Ratings has been consistently following up with YS for
obtaining information through letters and emails dated December 24,
2022 and February 28, 2023 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of YS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on YS is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of YS
revised to 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating' from
'CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of YS and Youngman Woollen
Mills Pvt Ltd (YWM). That's because the two entities, together
referred to as the Youngman group, are in the same line of
business, and have a common management and strong business and
financial linkages. Furthermore, YS sells its entire output to
YWM.
About the Group
The Youngman group is promoted by members of the Jagota family.
Incorporated in 1981, YWM manufactures polyester and acrylic
blankets, and artificial fur fabric. The plant in Ludhiana, Punjab,
can manufacture 20,000 double-bed blankets and 54,000 kilogram of
artificial fur fabric per day.
YS was set up in 2009, mainly as a backward-integration measure for
YWM's operations. It manufactures grey fabric at its facility in
Una, Himachal Pradesh.
=================
I N D O N E S I A
=================
PT JAPFA COMFEED: Fitch Cuts LongTerm IDR to 'B+', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has downgraded PT Japfa Comfeed Indonesia Tbk's
Long-Term Issuer Default Rating (IDR) to 'B+' from 'BB-'. The
Outlook is Stable. Fitch has also downgraded Japfa's senior
unsecured rating and the rating on its USD350 million senior
unsecured notes due 2026 to 'B+' with a Recovery Rating of 'RR4',
from 'BB-'. At the same time, Fitch Ratings Indonesia has
downgraded Japfa's National Long-Term Rating to 'A(idn)' from
'A+(idn)'. The Outlook is Stable.
The downgrade reflects its estimate that Japfa's EBITDA net
leverage would remain above 2.5x until at least 2024, its previous
negative sensitivity for the 'BB-' rating. Fitch does not expect
material improvement in the average prices of day-old chicks (DOC)
and live birds in 2023 from the lows in 4Q22 due to the current
oversupply. This will dampen Japfa's EBITDA generation and ability
to deleverage as Fitch expects free cash flow (FCF) to remain
negative in 2023.
'A' National Ratings denote expectations of a low level of default
risk relative to other issuers or obligations in the same country
or monetary union.
KEY RATING DRIVERS
Continuing High Leverage: Fitch estimates Japfa's EBITDA net
leverage, after proportionately consolidating a number of
subsidiaries, to remain elevated in 2023 at around 3.2x before
falling to 2.8x in 2024 and below 2.5x by 2025. Fitch expects
prices of DOC and live birds to recover in 2Q23 and 3Q23 from the
lows in 1Q23 after the mandatory culling ordered by the government
in February 2023. Nonetheless, average prices of these products
should be lower than those in 2022, as Fitch believes the
oversupply will persist.
Find has assumed stable poultry feed prices for 2023 due to Japfa's
ability to pass on some of the cost increase. The increase in
raw-material costs prompted the company to raise its feed selling
price by 10%-20% from 2020's level. Fitch believes this will
continue but Japfa's flexibility to pass on the increase in
raw-material prices will diminish as industry prices of DOC and
live birds remain low. This is because third-party breeders and
farmers could reduce their output and production to save cost,
lowering feed demand.
Margin Sustained: Japfa's EBITDA margin in 2023 should remain at
around 8% from 2022 on rising sales volume. However, the absence of
a material price increase would delay profitability improvement
until 2024. Fitch has also assumed largely stable prices of corn
and soybean meal in 2023 that could partially support
profitability. Japfa's corn procurement in 2023 will benefit from
declining corn prices since 2H22. Soybean meal prices however have
remained high due to a drought in South America, affecting output
from one of the largest soybean-producing regions.
Moderating Capex: Fitch estimates capex of around IDR2 trillion
from 2023 onwards, little changed from 2022's IDR2.1 trillion. Part
of the capex will be allocated to expansion and modernisation of
its existing farms and facilities, as well as building new corn
drying facilities. This should include maintenance capex of around
IDR500 billion-700 billion per year. Expansionary capex can be
scaled back if current market conditions are not favourable.
However, higher capex than its expectation will limit Japfa's
ability to deleverage amid cash flow margin pressure.
Neutral-to-Negative FCF: Fitch believes Japfa's FCF margin would
remain negative in 2023 as Fitch expects no material improvement in
profitability. However, rising EBITDA and moderating cash outflows
for working capital could turn its FCF neutral by 2024. Fitch has
assumed a steady dividend payout ratio of 35% from 2023. However,
Fitch understands that dividend payments and shareholder returns
can be adjusted if the company's financial performance continues to
be weak.
Share Buyback Programme: Japfa is seeking shareholder approval on a
share buyback programme of up to IDR350 billion in its next general
meeting in early April 2023. The company also announced a similar
programme with the same amount in 2022 but it did not utilise the
approved limit. Fitch has not assumed the programme will be carried
out in 2023 given the unfavourable industry conditions and
unsupportive financial performance.
Private Placement: Japfa is also seeking shareholder approval for a
private placement of up to 10% from its paid capital, which could
raise fresh capital of up to IDR230 billion. If accepted in full,
the transaction would dilute parent Japfa Ltd.'s (JL) stake in the
company to 50.39% from 55.43% currently. Fitch has not assumed the
transaction will materialise in its forecast in light of the
execution uncertainty.
Vertically Integrated Operations: Japfa's upstream operations
should provide stability to its profitability amid weaker midstream
operations in 2023, supported by its ability to partially pass on
cost increases. The operating profit margin of Japfa's poultry feed
segment rose in 2022 to 8.2% (2021: 6.7%) while those of breeding
and commercial farms dropped due to the oversupply. Downstream
product prices are also likely to be more stable than those in the
midstream segment although the contribution to total profitability
is still small relative to that of upstream operations.
Notched Up from Weaker Parent: Japfa can be rated above its weaker
parent, JL, due to 'Porous' access and control and 'Porous'
ring-fencing, in line with Fitch's Parent and Subsidiary Linkage
Rating Criteria. Japfa's US dollar debt, which accounted for around
42% of total debt at end-2022, has some restrictions on dividend
payment and affiliate transactions. This, coupled with Japfa's
listing on the Jakarta stock exchange, provides a degree of
ring-fencing, in Fitch's view.
Japfa also raises its non-equity funding independently of JL. The
parent's management has also shown its intention to keep JL's other
animal protein operations separate from its Indonesian business in
public presentations. This, together with a significant
non-controlling presence, results in the 'Porous' access and
control assessment.
DERIVATION SUMMARY
Japfa's IDR is well positioned relative to that of Minerva S.A.
(BB/Stable) and Frigorifico Concepcion S.A. (B+/Stable).
Minerva is one of the largest beef exporters in South America with
export sales accounting for about 70% of revenue. Its profitability
has been resilient despite high input costs, helped by its export
orientation. Japfa's operations, on the other hand, are
concentrated in Indonesia, which makes it vulnerable to policy
changes and the supply-demand balance in the Indonesian domestic
poultry industry. Minerva is also larger than Japfa, as Fitch
expects EBITDA of around USD620 million in 2023 and lower EBITDA
net leverage of around 2.0x. These factors support Fitch's
assessment of a higher rating for Minerva.
Japfa is rated the same as Frigorifico, which is smaller with an
EBITDA of around USD120 million-150 million by 2024. Frigorifico is
also less vertically integrated than Japfa and dependent on cattle
supply from a third party. However, Frigorifico has better
geographical diversification with more than 75% of revenue
originating from exports to various markets in South America and
Asia. Japfa has better vertical integration, but its financial
profile is slightly weaker than that of Frigorifico. Fitch expects
Frigorifico's EBITDA net leverage to moderate to around 2.3x by
2024, compared with Japfa's 2.8x.
Japfa's National Long-term Rating is comparable with that of PT
Samator Indo Gas Tbk (A(idn)/Stable), PT Bali Towerindo Sentra Tbk
(A-(idn)/Stable) and PT Ivo Mas Tunggal/PT Sawit Mas Sejahtera
(A+(idn)/Stable), whose ratings are aligned with the consolidated
credit profile of their parent company, Golden Agri-Resources Ltd.
(GAR).
Samator is much smaller than Japfa with EBITDA of less than USD100
million but is the industry market leader, commanding 45% and
75%-80% of the industrial and medical gas markets, respectively.
This enables Samator to have a much stronger customer bargaining
position than Japfa. Samator's contracted sales account for a large
proportion of revenue, providing medium-term visibility. This is in
contrast with Japfa, which is highly exposed to volatile
supply-demand dynamics in the domestic poultry market and raw
material prices. These factors drive its assessment of the same
rating for both entities.
Japfa's rating is higher than that of Bali Tower, reflecting the
former's stronger market position in the domestic poultry market
and its larger business scale. Bali Tower is a small tower company
relative to its local telecommunication tower peers, with an EBITDA
of less than USD100 million in 2023. Japfa, on the other hand, has
an EBITDA of more than USD250 million and is the second-largest
poultry company in the country.
GAR's subsidiaries are rated one notch higher than Japfa,
reflecting their stronger market position, much better geographical
diversification and larger business scale with Fitch-forecast
EBITDA of more than USD500 million in 2024. GAR is the world's
second-largest palm oil company based on planted area, which
contributes a large proportion of its export revenue. GAR also has
extensive trading and production operations in China and India
compared with Japfa's domestically focused operations. These
factors counterbalance GAR's weaker financial profile with EBITDA
net leverage of over 3.5x by 2024.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenue growth of about 3%-6% in 2023-2026;
- Stable EBITDA margin of 8% in 2023 before gradually improving
to 10% by 2026;
- Total capex of IDR2 trillion per annum from 2023;
- Dividend payout ratio of 35% from 2023.
Key Recovery Rating Assumptions
The recovery analysis assumes that Japfa would be reorganised as a
going concern in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
Its going-concern EBITDA assumption of IDR4 trillion reflects the
volatility of the poultry industry in Indonesia due to the current
DOC oversupply situation. This is slightly lower than the
three-year average EBITDA from 2021 to 2023 under its estimate that
Japfa's EBITDA margin in 2023 would be largely be in line with that
of 2022.
Fitch uses a multiple of 5x that reflects the sector dynamics and
the company's strong business profile as the second-biggest poultry
company in Indonesia. Fitch believes Japfa has strong growth
prospects because chicken is the main protein source for the
majority of Indonesians, and the country has a growing middle-class
population.
The going-concern enterprise value corresponds to an 'RR1' Recovery
Rating for the senior unsecured notes after adjusting for
administrative claims. Nevertheless, Fitch rates the senior
unsecured bonds at 'B+' and 'RR4' because Japfa's operating assets
are located in Indonesia. Under its Country-Specific Treatment of
Recovery Ratings Criteria, Indonesia is classified under Group D in
terms of creditor friendliness, and its Recovery Ratings are
subject to a cap at 'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Leverage, measured by net debt/EBITDA that is proportionately
consolidated by minority stakes in a number of subsidiaries,
of below 2.5x on a sustained basis;
- No significant weakening in industry fundamentals or Japfa's
market position.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage above 3.5x for a sustained period;
- EBITDA/interest paid below 3.0x for a sustained period.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Japfa's liquidity is supported by a cash
balance at end-2022 of around IDR1.8 trillion and committed undrawn
bank lines of around IDR3.1 trillion. This is against a much higher
short-term outstanding loan balance of IDR3.9 trillion (2021:
IDR1.3 trillion), which Fitch expects will be rolled over, and
current portion of long-term bank loans of IDR555 billion.
Japfa has around IDR800 billion-1 trillion in debt maturing in 2024
and 2025, which Fitch expects will be paid by a combination of
refinancing and internally generated cash. The next major maturity
is in 2026 when its USD350 million notes are due. Fitch regards
Japfa's refinancing risk as manageable, supported by strong
business growth prospects in the medium term, a moderate financial
profile and flexibility, and proven access to diverse funding
sources.
ISSUER PROFILE
Japfa is the second-largest poultry company in Indonesia, according
to the company's estimate, with market share of around 21% in the
poultry-feed business and around 25% in the DOC market in 2021. Its
operations include aquaculture. Japfa acquired PT So Good Food, a
processed-meat manufacturer, from JL in 2020, enhancing its
vertical integration in the poultry value chain.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch calculated the ratio for rating sensitivities by
proportionately consolidating Japfa's subsidiaries - PT Bumiasri
Lestari, PT Iroha Sidat Indonesia and PT Sentra Satwatama Indonesia
- to reflect their significant minority interests.
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
----------- ------ -------- -----
PT Japfa Comfeed
Indonesia Tbk LT IDR B+ Downgrade BB-
Natl LT A(idn) Downgrade A+(idn)
senior
unsecured LT B+ Downgrade RR4 BB-
=====================
N E W Z E A L A N D
=====================
AJDA LIMITED: Creditors' Proofs of Debt Due on April 16
-------------------------------------------------------
Creditors of Ajda Limited are required to file their proofs of debt
by April 16, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on March 27, 2023.
The company's liquidator is:
Pritesh Patel
Patel & Co
344 Great South Road
Papatoetoe
Auckland 221
ALL ASPECTS: Grant Reynolds Appointed as Liquidator
---------------------------------------------------
Grant Reynolds of Reynolds & Associates Limited on March 27, 2023,
was appointed as liquidator of All Aspects Asphalt Limited.
The liquidator may be reached at:
Reynolds & Associates Limited
PO Box 259059
Botany
Auckland 2163
DKG CONSTRUCTION: Creditors' Proofs of Debt Due on May 8
--------------------------------------------------------
Creditors of DKG Construction Limited are required to file their
proofs of debt by May 8, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on March 24, 2023.
The company's liquidator is:
Bryan Edward Williams
c/o BWA Insolvency Limited
PO Box 609
Kumeu 0841
EUNICE TAYLOR: Creditors' Proofs of Debt Due on April 24
--------------------------------------------------------
Creditors of Eunice Taylor Limited are required to file their
proofs of debt by April 24, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on March 21, 2023.
The company's liquidators are:
Adam Botterill
Damien Grant
Waterstone Insolvency
PO Box 352
Auckland 1140
OEC GROUP: Court to Hear Wind-Up Petition on April 4
----------------------------------------------------
A petition to wind up the operations of OEC Group Limited will be
heard before the High Court at Auckland on April 4, 2023, at 10:45
a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Jan. 18, 2023.
The Petitioner's solicitor is:
Cloete Van Der Merwe
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
===============
P A K I S T A N
===============
PAKISTAN: Awaits China's Decision on Rollover of US$2 Billion Loan
------------------------------------------------------------------
Reuters reports that China is working on a request from
cash-strapped Pakistan to roll over a $2-billion loan that matured
last week, a top finance ministry official told Reuters, amid a
stalemate in bailout talks with the International Monetary Fund
(IMF).
Such a rollover is critical for Pakistan, where foreign exchange
reserves have dipped to just four weeks' worth of imports, at a
time when it is seeking an IMF bailout tranche of $1.1 billion,
Reuters says.
"It is a work in progress," the official said in a text message on
March 29, referring to the rollover of the Chinese loan, which
matured on March 23. "Formal documentation is underway."
A formal announcement will be made, added the source, who spoke on
condition of anonymity, without giving further details, Reuters
relays.
As Pakistan struggles to avoid defaulting on its obligations, the
only help so far has come from longtime ally Beijing, through a
refinancing of $1.8 billion already credited to Pakistan's central
bank, Reuters notes.
Reuters says the IMF funding is critical for Pakistan to unlock
other external financing avenues, and the two have been negotiating
since early February to resume $1.1 billion in funding held since
November, part of a $6.5 billion bailout agreed in 2019.
One of the lender's last remaining conditions for release of the
tranche is securing an assurance on external financing to fund
Pakistan's balance of payments, adds Reuters.
About Pakistan
Pakistan is a country located in South Asia. It has a coastline
along the Arabia Sea and the Gulf of Oman and is bordered by
Afghanistan, China, India, and Iran. Pakistan's capital is
Islamabad.
As recently reported in the Troubled Company Reporter-Asia Pacific,
Moody's Investors Service has downgraded the Government of
Pakistan's local and foreign currency issuer and senior unsecured
debt ratings to Caa3 from Caa1. Moody's has also downgraded the
rating for the senior unsecured MTN programme to (P)Caa3 from
(P)Caa1. Concurrently, Moody's has also changed the outlook to
stable from negative. The decision to downgrade the ratings is
driven by Moody's assessment that Pakistan's increasingly fragile
liquidity and external position significantly raises default risks
to a level consistent with a Caa3 rating.
=====================
P H I L I P P I N E S
=====================
SUNTRUST RESORT: Annual Net Loss Widens to PHP557.05MM in 2022
--------------------------------------------------------------
Bilyonaryo.com reports that Suntrust Resort Holdings, a
Philippine-listed subsidiary of Suncity Group, reported wider net
losses in 2022 as revenues plunged and expenses rose.
The company incurred a net loss of PHP557.05 million, up from
PHP504.88 million in the previous year, due to a sharp decline in
revenues, which fell by 99.72% to just PHP0.01 million,
Bilyonaryo.com discloses.
Meanwhile, costs and expenses surged by 10% to PHP557.07 million.
Bilyonaryo.com adds that Suntrust is currently working on a casino
hotel project in Pagcor's Entertainment City called Westside City,
which is estimated to cost $1 billion and is targeted to be
operational by 2024.
=================
S I N G A P O R E
=================
CONTECH PRECAST: Creditors' Meetings Set for April 14
-----------------------------------------------------
Contech Precast Pte Ltd, which is in liquidation, will hold a
meeting for its creditors on April 14, 2023, at 10:30 a.m., via
electronic means.
Agenda of the meeting includes:
a. to update on the status of liquidation;
b. to approve the costs of liquidation, including the
Liquidators’ fees & disbursements, the winding up applicant
costs, and legal costs; and
c. discuss other business.
The company's liquidators are:
Lin Yueh Hung
Ng Kian Kiat
c/o RSM Corporate Advisory
8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
OMNI CENTRE: Commences Wind-Up Proceedings
------------------------------------------
Members of Omni Centre Pte Ltd, on March 27, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Abuthahir Abdul Gafoor
Yessica Budiman
144 Robinson Road
#14-02 Robinson Square
Singapore 068908
SKILLED INTERNATIONAL: Creditors' Proofs of Debt Due on April 29
----------------------------------------------------------------
Creditors of Skilled International Pte. Ltd. are required to file
their proofs of debt by April 29, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on March 23, 2023.
The company's liquidators are:
Chan Kwang Cheng
Tee Lian Choy
105 Cecil Street
#15-02 The Octagon
Singapore 069534
SMART AUTOMOBILE: Court Enters Wind-Up Order
--------------------------------------------
The High Court of Singapore entered an order on March 17, 2023, to
wind up the operations of Smart Automobile Pte. Ltd.
MS First Capital Insurance Limited filed the petition against the
company.
The company's liquidators are:
David DongWon Kim
Cameron Lindsay Duncan
c/o Kordamentha Pte. Ltd.
16 Collyer Quay
Income at Raffles, #30-01
Singapore 049318
YANGZIJIANG SHIPPING: Court Enters Wind-Up Order
------------------------------------------------
The High Court of Singapore entered an order on March 17, 2023, to
wind up the operations of Yangzijiang Shipping Pte. Ltd.
Trinity Seatrading S.A. filed the petition against the company.
The company's liquidators are:
Leow Quek Shiong
Gary Loh Weng Fatt
Seah Roh Lin
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
=============
V I E T N A M
=============
SOUTHERN POWER: Fitch Affirms 'BB' Foreign Currency IDR
-------------------------------------------------------
Fitch Ratings has affirmed Southern Power Corporation's (EVNSPC)
Long-Term Foreign-Currency Issuer Default Rating at 'BB' with a
Positive Outlook.
The rating reflects EVNSPC's 'bb' Standalone Credit Profile (SCP),
which is assessed at the same level as that on the parent, Vietnam
Electricity (EVN, BB/Positive), because EVN exerts significant
control over EVNSPC's financial profile, including determining its
profitability. This is despite EVNSPC's financial profile being
much stronger relative to its SCP. The SCP also reflects EVNSPC's
stable operating profile as a pure distribution utility with
monopoly position in its area of operation.
The Positive Outlook on EVNSPC is in line with that on EVN.
EVNSPC's ratings will be equalised with EVN's should its SCP
weaken, based on its assessment that EVN has 'Strong' incentive to
support the subsidiary under Fitch's Parent and Subsidiary Linkage
Rating Criteria.
KEY RATING DRIVERS
Strong Market Position: EVNSPC benefits from its monopoly position
in electricity distribution in the southern region of Vietnam
(excluding Ho Chi Minh City). Fitch expects Vietnam's strong growth
prospects to continue to drive power demand and revenue growth for
EVNPSC. EVNSPC's diversified counterparties and low receivable days
also support its credit profile. However, the regulatory
framework's short history, the short six-month period set for
tariffs under the framework and political risks limit its business
profile, as they do for its parent.
Softer Growth after Strong 2022: Fitch estimates EVNSPC's
electricity volumes to grow by around 5.1% in 2023 compared with
8.6% in 2022 (2021: 3.1%). The post-pandemic recovery in Vietnam's
economy led to strong growth in 2022, but growth in 2023 is likely
to be softer as the manufacturing sector - one of the main economic
activities in southern Vietnam - faces risks from a global economic
slowdown amid rising interest rates and geopolitical strains. Fitch
expects electricity volume growth to recover to 6%-6.5% during 2024
to 2026.
Diversified Counterparties, Low Receivables Risk: EVNSPC's credit
profile benefits from its stable and diversified customer base with
the top 20 customers accounting for around 10% of total revenue.
Lower counterparty risk is also reflected in EVNSPC's high
collection rates of well above 99% and low receivable days of less
than five days.
Controlled Tariff Increases: EVN can raise retail electricity
tariffs every six months, in line with rising production costs,
under the regulatory framework introduced in August 2017. Automatic
adjustments are limited to 5%. Price increases of 5%-10% require
approval from the Ministry of Industry and Trade, and larger
increases need the prime minister's approval. The government
maintained the overall tariffs during 2022 to support the
post-pandemic economic recovery, despite increasing fuel prices.
Fitch expects tariffs to increase only modestly during 2023 amid
softening commodity prices.
Low ROE: Fitch expects EVNSPC's return on equity (ROE) to have been
pressured by higher fuel prices and relatively stable tariffs in
2022. EVN sets the bulk-supply tariff, the major cost component for
distribution companies, including EVNSPC, with the aim of providing
them a modest level of profit. EVNSPC's ROE averaged around 2% and
Fitch expects ROE to return to around historical levels from 2023,
given its expectations of some tariff increases and lower commodity
price assumptions.
High Capex Forecast: Fitch expects EVNSPC's capex to remain high at
around VND8.5 trillion-10.3 trillion a year in 2023-2025 after
spending was constrained by the pandemic in the last two years
(2021: VND6.0 trillion, 2022E: VND7.3 trillion). EVNSPC's capex is
mainly for enhancing the distribution grid and building substations
and transmission lines to improve the power-supply capacity. Fitch
estimates EVNSPC's EBITDA net leverage dropped slightly to 0.8x in
2022 (2021: 1.0x) and will stay at 1.0x-1.3x in 2023-2025.
Integral Position in EVN: Fitch assesses EVN's incentive to support
EVNSPC as 'High' should EVNSPC's SCP weaken below EVN's rating,
resulting in their ratings being equalised. This is based on its
assessment of 'High' operational and strategic ties between the two
given EVNSPC's integral position within the group. EVNSPC is one of
five distribution companies under the EVN group with a monopoly
position in its area of operation. EVN appoints EVNSPC's key
management, approves its business and investment plan, oversees the
subsidiary's financial management, and approves key executives'
compensation packages.
DERIVATION SUMMARY
EVNSPC's rating reflects its 'bb' SCP, which is at the same level
as that of state-owned EVN, which owns 100% of EVNSPC. EVNSPC
benefits from its monopoly distribution business in southern
Vietnam, diversified counterparties and low receivables. The SCP
also reflects EVN's significant control over EVNSPC's financial
profile, including determining its profitability despite EVNSPC's
financial profile being much stronger relative to its SCP.
EVN has a monopoly over electricity transmission and distribution
in Vietnam. It also owns and operates the majority of the country's
installed power-generation capacity. EVN's distribution businesses
are highly strategic and are operated through EVNSPC and four other
wholly owned subsidiaries.
The ratings on Vietnam Electricity Central Power Corporation
(EVNNPC, BB/Positive), Vietnam Electricity Northern Power
Corporation (EVNNPC, BB/Positive), Hanoi Power Corporation
(EVNHANOI, BB/Positive) and Ho Chi Minh City Power Corporation
(EVNHCMC, BB/Positive) also reflect their SCPs, in accordance with
Fitch's Parent and Subsidiary Linkage Rating Criteria. EVN has
strong linkages and extensive influence over the business and
financial profiles of EVNCPC, EVNNPC, EVNHANOI and EVNHCMC via its
100% ownership of the four companies.
The ratings on National Power Transmission Corporation (EVNNPT,
BB/Positive, SCP: bb+) - a power transmission company within the
EVN group - are capped at those on parent EVN. EVNNPT has lower
operating risk as a pure transmission player with better
geographical diversification compared with EVNSPC. Furthermore,
EVNNPT's ROE is determined by the regulator, albeit in consultation
with EVN. This compares with EVN's more significant influence on
EVNSPC, including determining the profitability, which explains why
EVNSPC's SCP is a notch lower than that of EVNNPT.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Electricity demand to have increased by 8.6% in 2022 and by
5.1%-6.5% in 2023-2025
- Weighted average retail tariffs to have increased by 1.6% in 2022
before easing to between 0.2% and 0.4% in 2023-2025.
- Bulk-supply tariffs to have increased by 5.6% in 2022; followed
by a 1.9% decline in 2023, in line with management's assumptions.
- Distribution losses to remain stable at around 3.85% over
2022-2025 (2021: 3.86%)
- Capex of around VND7.3 trillion in 2022, and around VND8.5
trillion-10.3 trillion per annum in 2023-2025
- Average interest rate to have increased to 5.2% in 2022, and to
rise further to 5.9% in 2023 before stabilising at 5.1% thereafter,
in line with the APAC Corporates Interest Rate Assumption
Guidance.
- No dividend pay-outs.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on EVN
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on EVN
For EVN's rating, the following sensitivities were outlined by
Fitch in a Rating Action Commentary on 6 September 2022.:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on the Vietnam sovereign (BB/Positive),
provided the likelihood of state support does not deteriorate
significantly
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on the sovereign
- Deterioration in EVN's SCP, along with significant weakening in
linkages with the state. Fitch sees this as a remote prospect in
the medium term.
LIQUIDITY AND DEBT STRUCTURE
Sound Liquidity: EVNSPC had VND10.6 trillion of cash and cash
equivalents at end-2022, against current debt maturities of VND1.9
trillion. Fitch expects the company to generate negative free cash
flow in the near to medium term due to high planned capex. Also,
Fitch does not expect liquidity to be a concern for the company as
it has direct and indirect linkages to EVN and the state,
respectively.
ISSUER PROFILE
EVNSPC is one of five electricity distribution companies in Vietnam
and has a monopoly position in 21 southern provinces. EVNSPC is
responsible for the development, operation, and maintenance of
facilities for the distribution of electricity in southern Vietnam,
excluding Ho Chi Minh City. It is the second-largest electricity
distribution company in southern Vietnam with around 30% market
share in terms of customer base.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
EVNSPC's rating is directly linked to the credit quality of the
parent, EVN. A change in Fitch's assessment of the credit quality
of the parent would automatically result in a change in EVNSPC's
rating.
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
----------- ------ -----
Southern Power
Corporation LT IDR BB Affirmed BB
VIETNAM ELECTRICITY: Fitch Affirms 'BB' LT Foreign Currency IDR
---------------------------------------------------------------
Fitch Ratings has affirmed Vietnam Electricity Northern Power
Corporation's (EVNNPC) Long-Term Foreign-Currency Issuer Default
Rating at 'BB' with a Positive Outlook.
The rating reflects EVNNPC's 'bb' Standalone Credit Profile (SCP),
which is assessed at the same level as that on the parent, Vietnam
Electricity (EVN, BB/Positive), because EVN exerts significant
control over EVNNPC's financial profile, including determining its
profitability. This is despite EVNNPC's financial profile being
much stronger relative to its SCP. The SCP also reflects EVNNPC's
stable operating profile as a pure distribution utility with
monopoly position in its area of operation.
The Positive Outlook on EVNNPC is in line with that on EVN.
EVNNPC's ratings will be equalised with EVN's should its SCP
weaken, based on its assessment that EVN has 'Strong' incentive to
support the subsidiary under Fitch's Parent and Subsidiary Linkage
Rating Criteria
KEY RATING DRIVERS
Strong Market Position: EVNNPC benefits from its monopoly position
in electricity distribution in the northern region of Vietnam
(excluding Hanoi). Fitch expects Vietnam's strong growth prospect
to continue to drive power demand and revenue growth for EVNNPC.
EVNNPC's diversified counterparties and low receivable days also
support its credit profile. However, the regulatory framework's
short history, the short six-month period set for tariffs under the
framework and political risks limit its business profile, as they
do for its parent.
Diversified Counterparties, Low Receivables Risk: EVNNPC's credit
profile benefits from its stable and diversified customer base with
its top-20 customers accounting for only around 9% of total
revenue. Lower counterparty risk is also reflected in EVNNPC's high
collection rates of almost 100% and low receivable days of around
two days.
Controlled Tariff Increases: EVN can raise retail electricity
tariffs every six months, in line with rising production costs,
under the regulatory framework introduced in August 2017. Automatic
adjustments are limited to 5%. Price increases of 5%-10% require
approval from the Ministry of Industry and Trade, and larger
increases need the prime minister's approval. The government
maintained the overall tariffs during 2022 to support the
post-pandemic economic recovery, despite increasing fuel prices.
Fitch expects tariffs to increase only modestly during 2023 amid
softening commodity prices.
Low ROE: Fitch expects EVNNPC's return on equity (ROE) to have been
pressured by higher fuel prices and relatively stable tariffs in
2022. EVN sets the bulk-supply tariff, the major cost component for
distribution companies, including EVNNPC, with the aim of providing
a modest level of profit. EVNNPC's ROE averaged around 1.2% and
Fitch expects ROE to return to around historical levels from 2023
given its expectations of some tariff increases and lower commodity
price assumptions.
High Capex Forecast: Fitch expects EVNNPC's capex to remain high at
around VN12.3 trillion-13.1 trillion a year in 2023-2025 after
spending was constrained by the pandemic in the last two years
(2021: VND12.1 trillion, 2022E: VND11.3 trillion). EVNNPC's capex
is mainly for enhancing the distribution grid and building
substations and transmission lines to improve the power-supply
capacity. Fitch estimates EVNNPC's EBITDA net leverage remained at
2.3x in 2022 (2021: 2.3x) and will stay at around 2.5x for
2023-2025.
Integral Position in EVN: Fitch assesses EVN's incentive to support
EVNNPC as 'High' should EVNNPC's SCP weaken below EVN's rating,
resulting in their ratings being equalised. This is based on its
assessment of 'High' operational and strategic ties between the two
given EVNNPC's integral position within the group. EVNNPC is one of
five distribution companies under the EVN group with monopoly
position in its area of operation. EVN appoints EVNNPC's key
management, approves its business and investment plan, oversees the
subsidiary's financial management, and approves key executives'
compensation packages.
DERIVATION SUMMARY
EVNNPC's rating reflects its 'bb' SCP, which is at the same level
as that of its parent, state-owned EVN, which owns 100% of EVNNPC.
The SCP reflects EVN's significant control over EVNNPC's financial
profile, including determining its profitability despite EVNNPC's
financial profile being much stronger relative to its SCP.
EVN has a monopoly over electricity transmission and distribution
in Vietnam. It also owns and operates the majority of the country's
installed power-generation capacity. EVN's distribution businesses
are highly strategic and are operated through EVNNPC and four other
wholly owned subsidiaries.
The ratings on Vietnam Electricity Central Power Corporation
(EVNCPC, BB/Positive), Southern Power Corporation (EVNSPC,
BB/Positive), Hanoi Power Corporation (EVNHANOI, BB/Positive) and
Ho Chi Minh City Power Corporation (EVNHCMC, BB/Positive) also
reflect their SCPs, in accordance with Fitch's Parent and
Subsidiary Linkage Rating Criteria. EVN has strong linkages and
extensive influence over the business and financial profiles of
EVNCPC, EVNSPC, EVNHANOI and EVNHCMC via its 100% ownership of the
four companies
The ratings on National Power Transmission Corporation (EVNNPT,
BB/Positive, SCP: bb+) - a power transmission company within the
EVN group - are capped at those on parent EVN. EVNNPT has lower
operating risk as a pure transmission player with better
geographical diversification compared with EVNNPC. Furthermore,
EVNNPT's ROE is determined by the regulator, albeit in consultation
with EVN. This compares with EVN's more significant influence on
EVNNPC, including determining the profitability, which explains why
EVNNPC's SCP is a notch lower than that of EVNNPT.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Electricity demand to have increased by 5.8% in 2022 and by
5.4%-7%from 2023-2025
- Fitch adopted management's more conservative weighted tariff
increase assumptions (2021: VND1,776/kWh)
- Bulk-supply tariffs to have increased by 2.8% in 2022; followed
by a 2.3% rise in 2023 and flat thereafter.
- Distribution losses to improve to around 4% in 2022-2024 (2021:
4.54%)
- Capex of around VND11 trillion-13 trillion per year over
2022-2025
- Average interest rate to increase to 7.8% in the 2022-2024 (2021:
5.5%), in line with the APAC Corporates Interest Rate Assumption
Guidance.
- No dividend pay-outs.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on EVN
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on EVN
For EVN's rating, the following sensitivities were outlined by
Fitch in a Rating Action Commentary on 6 September 2022.:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on the Vietnam sovereign (BB/Positive),
provided the likelihood of state support does not deteriorate
significantly
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on the sovereign
- Deterioration in EVN's SCP, along with significant weakening in
linkages with the state. Fitch sees this as a remote prospect in
the medium term.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: EVNNPC had VND7.7 trillion of cash and cash
equivalents at end-2022, against current debt maturities of VN6.2
trillion. Fitch expects the company to generate negative free cash
flow over the near to medium term due to high planned capex.
However, Fitch does not expect liquidity to be a concern for the
company as it has direct and indirect linkages to EVN and the
state, respectively.
ISSUER PROFILE
EVNNPC is one of five electricity distribution companies in Vietnam
with monopoly position in electricity distribution in northern
Vietnam (except Hanoi). It has the longest history of operation and
experience in operating in the difficult terrain of the north,
adding to its importance to EVN.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The ratings of EVNNPC are directly linked to the credit quality of
its parent, EVN. A change in Fitch's assessment of the credit
quality of the parent would automatically result in a change in the
ratings of EVNNPC.
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
----------- ------ -----
Vietnam Electricity
Northern Power
Corporation LT IDR BB Affirmed BB
VIETNAM ELECTRICITY: Fitch Affirms Foreign Currency IDR at 'BB'
---------------------------------------------------------------
Fitch Ratings has affirmed Vietnam Electricity Central Power
Corporation's (EVNCPC) Long-Term Foreign-Currency Issuer Default
Rating at 'BB' with a Positive Outlook.
The rating reflects EVNCPC's 'bb' Standalone Credit Profile (SCP),
which is assessed at the same level as that on the parent, Vietnam
Electricity (EVN, BB/Positive), because EVN exerts significant
control over EVNCPC's financial profile, including determining its
profitability. This is despite EVNCPC's financial profile being
much stronger relative to its SCP. The SCP also reflects EVNCPC's
stable operating profile as a pure distribution utility with
monopoly position in its area of operation.
The Positive Outlook on EVNCPC is in line with that on EVN.
EVNCPC's ratings will be equalised with EVN's should its SCP
weaken, based on its assessment that EVN has 'Strong' incentive to
support the subsidiary under Fitch's Parent and Subsidiary Linkage
Rating Criteria.
KEY RATING DRIVERS
Strong Market Position: EVNCPC benefits from its monopoly position
in electricity distribution in the central region of Vietnam. Fitch
expects Vietnam's strong growth prospects expectations to continue
to drive power demand and revenue growth for EVNCPC. EVNCPC's
diversified counterparties and low receivable days also support its
credit profile. However, the regulatory framework's short history,
the short six-month period set for tariffs under the framework and
political risks limit its business profile, as they do for its
parent.
Diversified Counterparties, Low Receivable Risks: EVNCPC's credit
profile benefits from its stable and diversified customer base with
the top-20 customers accounting for only 8.56% of total revenue.
Lower counterparty risk is also reflected in EVNCPC's high
collection rates of almost 100% and low receivable days of around
four days.
Controlled Tariff Increases: EVN can raise retail electricity
tariffs every six months, in line with rising production costs,
under the regulatory framework introduced in August 2017. Automatic
adjustments are limited to 5%. Price increases of 5%-10% require
approval from the Ministry of Industry and Trade, and larger
increases need the prime minister's approval. The government
maintained the overall tariffs during 2022 to support the
post-pandemic economic recovery, despite increasing fuel prices.
Fitch expects tariffs to increase only modestly during 2023 amid
softening commodity prices.
Low ROE: Fitch expects EVNCPC's return on equity (ROE) to be
pressured by higher fuel prices and relatively stable tariffs in
2022. EVN sets bulk-supply tariff, the major cost component for
distribution companies, including for EVNCPC, with the aim of
providing a modest level of profit. EVNCPC's ROE has averaged
around 2% and Fitch expects it to return to around historical
levels from 2023, given its expectations of some tariff increases
and lower commodity price assumptions.
High Capex Forecast: Fitch expects EVNCPC's capex to remain high at
around VND4.1 trillion a year in 2023-2025 after spending was
constrained by the pandemic in the last two years (2021: VND5.1
trillion, 2022E: VND4.3 trillion). EVNCPC's capex is mainly for
enhancing the distribution grid and building substations and
transmission lines to improve the power-supply capacity. Fitch
estimates EVNCPC's EBITDA net leverage will stay at around 2.9x in
2023 (2021: 2.5x, 2022E: 2.9x) and 2.3x-2.6x in 2024-2025.
Integral Position in EVN: Fitch assesses EVN's incentive to support
EVNCPC as 'High' should EVNCPC's SCP weaken below EVN's, resulting
in their ratings being equalised. This is based on its assessment
of 'High' operational and strategic ties between the two given
EVNCPC's integral position within the group. EVNCPC is one of the
five distribution companies under the EVN group with monopoly
position in its area of operation. EVN appoints EVNCPC's key
management, approves its business and investment plan, oversees the
subsidiary's financial management, and approves key executives'
compensation packages.
DERIVATION SUMMARY
EVNCPC's rating reflects its 'bb' SCP, which is at the same level
as that of state-owned EVN, which owns 100% of EVNCPC. The SCP
reflects EVN's significant control over EVNCPC's financial profile,
including determining its profitability despite EVNCPC's financial
profile being much stronger relative to its SCP.
EVN has a monopoly over electricity transmission and distribution
in Vietnam. It also owns and operates the majority of the country's
installed power-generation capacity. EVN's distribution businesses
are highly strategic and are operated through EVNCPC and four other
wholly owned subsidiaries.
The ratings on Vietnam Electricity Northern Power Corporation
(EVNNPC, BB/Positive), Southern Power Corporation (EVNSPC,
BB/Positive), Hanoi Power Corporation (EVNHANOI, BB/ Positive) and
Ho Chi Minh City Power Corporation (EVNHCMC, BB/ Positive) also
reflect their SCPs, in accordance with Fitch's Parent and
Subsidiary Linkage Rating Criteria. EVN has strong linkages and
extensive influence over the business and financial profiles of
EVNNPC, EVNSPC, EVNHANOI and EVNHCMC via its 100% ownership of the
four companies.
The ratings on National Power Transmission Corporation (EVNNPT,
BB/Positive, SCP: bb+) - a power transmission company within the
EVN group - are capped at those on parent EVN. EVNNPT has lower
operating risk as a pure transmission player with better
geographical diversification compared with EVNCPC. Furthermore,
EVNNPT's ROE is determined by the regulator, albeit in consultation
with EVN. This compares with EVN's more significant influence on
EVNCPC, including determining the profitability, which explains why
EVNCPC's SCP is a notch lower than that of EVNNPT.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- EVNCPC's electricity demand to increase by 6.3% in 2022, 2.7% in
2023 and 6.5%-7.2% for 2024-2025
- Weighted average retail tariffs to increase by 2.1% in 2022, and
by 0.2%-0.3% in 2023 and beyond
- EVNCPC's customer base differs from that of EVNNPC and EVNSPC,
resulting in a higher weighted average tariff of around
VND1,887/kWh in 2021. Its base case in 2022 is for the VND1,926/kWh
Bulk Supply Tariff (BST) to have increased by 9.9% in 2022, and
then to fall by 11.9% in 2023 and increase by 1%-2.7% in 2024-2025
- Distribution losses to improve to average of 4.1% in 2022-2025
(2021: 4.4%).
- Average annual capex of VND4.1 trillion in 2022-2025 (2021:
VND5.1 trillion).
- Average interest rate to increase to 8.8% in 2023 (2021: 5.6%,
2022E: 5.7%), in line with the APAC Corporates Interest Rate
Assumption Guidance.
- No dividend pay-outs
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on EVN
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on EVN
For EVN's rating, the following sensitivities were outlined by
Fitch in a Rating Action Commentary on 6 September 2022.:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action on the Vietnam sovereign (BB/Positive),
provided the likelihood of state support does not deteriorate
significantly
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Negative rating action on the sovereign
- Deterioration in EVN's SCP, along with significant weakening in
linkages with the state. Fitch sees this as a remote prospect in
the medium term.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch estimates EVNCPC's cash of around VND4.1
trillion at end-2022 can cover debt maturities of VND2.5 trillion
in the next 12 months. Fitch expects the company to generate
negative free cash flow over the near to medium term due to the
high planned capex. However, Fitch does not expect liquidity to be
a risk for the company as it has direct and indirect linkages to
EVN and the state, respectively.
ISSUER PROFILE
EVNCPC is one of five electricity distribution companies in Vietnam
with a monopoly position in electricity distribution in central
Vietnam. EVNCPC is responsible for the development, operation, and
maintenance of facilities for the distribution of electricity.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
EVNCPC's rating is directly linked to the credit quality of the
parent, EVN. A change in Fitch's assessment of the credit quality
of the parent would automatically result in a change in EVNCPC's
rating.
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
----------- ------ -----
Vietnam Electricity
Central Power
Corporation LT IDR BB Affirmed BB
*********
S U B S C R I P T I O N I N F O R M A T I O N
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Editors.
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