/raid1/www/Hosts/bankrupt/TCRAP_Public/230410.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, April 10, 2023, Vol. 26, No. 72
Headlines
A U S T R A L I A
AERCO MOUNT: First Creditors' Meeting Set for April 14
ALITA RESOURCES: AustroidCorp Backtracks on Firing McGrathNicol
AMAL TRUSTEES 2023-1: Moody's Gives (P)B2 Rating to AUD8MM E Notes
BINANCE AUSTRALIA: ASIC Cancels AFS Licence
HOTSPOTS AUSTRALIA: First Creditors' Meeting Set for April 19
PANORAMA AUTO 2023-1: S&P Assigns Prelim. BB(sf) Rating on E Notes
TRIBE GROUP: Creditors Approve Noteholder's Proposed DOCA
TRY AT HOME: Second Creditors' Meeting Set for April 18
VEYTECH DIAGNOSTIC: First Creditors' Meeting Set for April 18
WARE ELECTRICAL: First Creditors' Meeting Set for April 18
C H I N A
GOME RETAIL: Denies Rumors Asking Staff to Take Out Loans
QINGDAO JIAOZHOU: Fitch Lowers LongTerm IDRs to BB+, Outlook Stable
SINIC HOLDINGS: To Be Delisted From HK Bourse After Defaulting
URUMQI GAOXIN: Fitch Affirms LongTerm IDRs at 'BB+', Outlook Stable
YINCHUAN TONGLIAN: Fitch Cuts IDRs to BB-, On Watch Negative
I N D I A
CEM ELECTROMECH: CRISIL Keeps D Debt Ratings in Not Cooperating
CHAITANYA CASHEW: CRISIL Keeps D Debt Ratings in Not Cooperating
CHEMICAL BROTHERS: CARE Lowers Rating on INR6.24cr LT Loan to D
CONFEDERATION FOR AYURVEDIC: CRISIL Keeps D Ratings in Not Coop.
GURU INFRACON: CRISIL Assigns D Rating to INR14.7cr Bank Loan
GURUKRUPA TRAVEL: CRISIL Assigns D Rating to INR9.00cr Loan
HARSHNA FRUITS: CRISIL Withdraws C Rating on INR7cr Cash Loan
INNOVATIVE VASTUNIRMAN: Ind-Ra Keeps BB+ Rating in Non-Cooperating
IVRCL INDORE: Ind-Ra Keeps 'D' Bank Loan Rating in Non-Cooperating
JAIN IRRIGATION: Ind-Ra Keeps 'D' Issuer Rating in Non-Cooperating
JAY ACE: CARE Withdraws D Rating on Long Term/Short Term Debts
JCBL LIMITED: Ind-Ra Hikes LT Issuer Rating to BB-, Outlook Stable
K.P.R. AGROCHEM: CRISIL Keeps D Debt Ratings in Not Cooperating
LAXMI TIMBERS: CRISIL Keeps D Debt Ratings in Not Cooperating
LUXUS HOSPITALITY: Ind-Ra Assigns BB- Long Term Issuer Rating
MAGTORQ PRIVATE: Ind-Ra Assigns BB+ Long Term Issuer Rating
N. S. ENGINEERING: CRISIL Keeps D Debt Ratings in Not Cooperating
NMC TOOLS: Ind-Ra Affirms BB+ Long Term Issuer Rating
OPTECH ENGINEERING: Ind-Ra Moves BB+ Rating to Non-Cooperating
R D ENGINEERS: CRISIL Keeps D Debt Ratings in Not Cooperating
RAJ INFRASTRUCTURE: Ind-Ra Moves BB+ Rating to Non-Cooperating
RAJA KAIMOOR: CRISIL Lowers Rating on INR22cr Term Loan to D
RARE SS: Ind-Ra Cuts Term Loan Rating to BB, Outlook Stable
REGENCY LINX: CRISIL Keeps D Debt Ratings in Not Cooperating
ROYAL MUDHOL: Ind-Ra Assigns BB+ Long Term Issuer Rating
RRK COTTON: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
SATELLITE CABLES: CRISIL Lowers LT/ST Debt Ratings to D
SENTINI FLOPIPES: CARE Withdraws BB+ Rating on LT Bank Debts
SEW BELLARY: Ind-Ra Affirms BB+ Term Loan Rating, Outlook Stable
SIDDHI VINYAK: Ind-Ra Assigns BB Bank Loan Rating, Outlook Stable
SKL EXPORTS: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
SLB ETHANOL: CARE Assigns BB+ Rating to INR229cr LT Loan
SOLOGRES GRANITO: CARE Reaffirms BB+ Rating INR27.47cr LT Loan
SRIPATHI PAPER: Ind-Ra Keeps B+ Issuer Rating in Non-Cooperating
STEEL AND METAL: Ind-Ra Moves BB+ Issuer Rating to NonCooperating
SUDALAGUNTA SUGARS: CRISIL Keeps D Ratings in Not Cooperating
SWOSTI PREMIUM: Ind-Ra Assigns BB Long Term Issuer Rating
UNIJULES LIFE: CRISIL Keeps D Debt Ratings in Not Cooperating
VAJRATEJA RICE: Ind-Ra Assigns B+ LT Issuer Rating, Outlook Stable
VANILLA CLEAN: Ind-Ra Hikes Bank Loan Rating to 'BB+'
VENKATA LAKSHMI: CRISIL Moves D Debt Ratings to Not Cooperating
I N D O N E S I A
SAKA ENERGI: Fitch Alters Outlook on 'B+' LongTerm IDR to Stable
N E W Z E A L A N D
COASTAL NZ: Court to Hear Wind-Up Petition on May 5
CRANBERRY HOLDINGS: Creditors' Proofs of Debt Due on April 28
EZIBUY OPERATIONS: Olvera Advisors Appointed as Administrators
PRYME NEW ZEALAND: Creditors' Proofs of Debt Due on April 19
RELIANCE CAPITAL: Resolution May Get Delayed Further
RICHMOND PONSONBY: Court to Hear Wind-Up Petition on April 21
SCARBRO CONSTRUCTION: Calls In Liquidators
S I N G A P O R E
ED&F MAN: Creditors' Proofs of Debt Due on May 8
GREENSHIP BULK: Creditors' Proofs of Debt Due on May 6
JIGSAW CAPITAL: Court Enters Wind-Up Order
LIPPO MALLS: Fitch Lowers LongTerm Issuer Default Rating to 'CCC-'
SHC GROUP: Court Enters Wind-Up Order
SINGLIFE FINANCIAL: Creditors' Proofs of Debt Due on May 8
- - - - -
=================
A U S T R A L I A
=================
AERCO MOUNT: First Creditors' Meeting Set for April 14
------------------------------------------------------
A first meeting of the creditors in the proceedings of Aerco Mount
Isa Pty Ltd will be held on April 14, 2023, at 10:30 a.m. at the
offices of Worrells, 160 Brisbane Street at Ipswich and via
Microsoft Teams video conferencing.
Adam Francis Ward and Michael John Griffin of Worrells were
appointed as administrators of the company on April 3, 2023.
ALITA RESOURCES: AustroidCorp Backtracks on Firing McGrathNicol
---------------------------------------------------------------
HotCopper reports that AustroidCorp, the sole debt holder of
lithium miner Alita Resources, has backtracked on its bid to fire
administrator McGrathNicol and replace it with KPMG.
According to the report, Austroid has been frustrated that its
efforts to take ownership of the lithium miner have still not been
realised, some three years after signing a deed of company
arrangement (DOCA) with McGrathNicol, mostly due to the Foreign
Investment Review Board failing to rule on it.
In that time, lithium prices have trebled and the value of Alita
has gone from zero to more than AUD1.4 billion, according to a
report presented to the West Australian Supreme Court by Alita
shareholder Canaccord.
HotCopper says the bizarre court backflip by Austroid is just the
latest in the odd story of Alita - one of only six lithium miners
in production in Australia - which failed in 2019 when commodity
prices slumped and the Chinese company contracted to buy lithium
from its Bald Hill mine halted its purchases.
Lithium is critical for making batteries used to power cars, the
report notes.
When Alita failed in 2019, China Hydrogen Energy (CHEL) stepped in
and purchased the debt that year and made an application to the
FIRB to take control of the company, but withdrew it in April 2020
when then treasurer Josh Frydenberg indicated he may move to block
the deal, HotCopper recalls.
HotCopper relates that CHEL, which is registered in the Cayman
Islands, then sold the same debt to Austroid, which shares the same
registered director - Mike Que. Tenement records held by the WA
mines department show that CHEL retains a mortgage over the Bald
Hill mining and exploration tenements. The mortgage was registered
in early 2020 and remains in place.
Mike Que is also a director of the subsidiary company now running
the Bald Hill mine and selling its lithium to a Hong Kong-based
shell company for some 60% below current market rates in a deal
locked in last year when prices were lower.
This was all done with the oversight of McGrathNicol as
administrator, the report states.
In court on April 6, Austroid, which had called for the hearing to
fire McGrathNicol, said it would no longer take this step, and
after the hearing claimed it had only been planning to do so
because of undisclosed claims by Canaccord and its legal firm,
Arnold Bloch Leibler.
"ABLand Canaccord have not made any further allegations," the
report quotes an Austroid spokesman as saying.
"That being the case, and given that Austroid considers the
allegations to be baseless and without merit, Austroid saw no
reason to move on the resolution for replacement."
While Austroid did not specify the allegations, Canaccord has
successfully argued in court that equity holders in Alita should
have the right to share in the upside of the company because the
DOCA has not been completed since its 2020 signing, the report
says.
That case, which Austroid tried to have struck out, will be heard
by the court later this month and Canaccord will argue there has
been undue delay in Austroid completing the deal, and that the
administrator should be acting for debtholders and for members –
in this case equity holders.
If Canaccord is successful, the company will be liquidated, the
report notes.
In court on April 6, Austroid asked for and was given another
extension to complete the deal, this time until June 30, 2023.
This would be "to allow the deed administrators enough time to
obtain an independent expert's report as to the value of Alita's
assets and a short period of time to consider that report,"
Austroid's spokesman said.
It is unclear when the FIRB will make its ruling, HotCopper adds.
About Alita Resources
Alita Resources Limited operates as a mineral exploration and
excavation company. The Company explores and produces lithium and
tantalum concentrates. Alita Resources offers its services in
Australia.
Robert Michael Kirman and Robert Conry Brauer of McGrathNicol were
appointed as administrators of Alita Resources Limited, Lithco NO.2
Pty Ltd, and Tawana Resources Pty Ltd on Dec. 4, 2020.
AMAL TRUSTEES 2023-1: Moody's Gives (P)B2 Rating to AUD8MM E Notes
------------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to notes
to be issued by AMAL Trustees Pty Limited, as trustee of Grow ABS
Trust 2023-1.
Issuer: AMAL Trustees Pty Limited as trustee of Grow ABS Trust
2023-1
AUD193.75 million Class A Notes, Assigned (P)Aa2 (sf)
AUD12.25 million Class B Notes, Assigned (P)A2 (sf)
AUD9.50 million Class C Notes, Assigned (P)Baa2 (sf)
AUD13.25 million Class D Notes, Assigned (P)Ba2 (sf)
AUD8.00 million Class E Notes, Assigned (P)B2 (sf)
The AUD8.25 million of Class F Notes and AUD5.00 million of Class G
Notes are not rated by Moody's.
The transaction is a securitisation of a portfolio of commercial
auto and equipment loans and leases originated by Grow Finance
Limited (Grow Finance, unrated) and Grow Funding Pty Ltd (Grow
Funding, unrated) (collectively 'Grow'). Grow Asset Finance Pty Ltd
(Grow Asset Finance, unrated) will act as servicer of the
transaction and AMAL Asset Management Limited will act as the
standby servicer. Both Grow Funding and Grow Asset Finance are
subsidiaries of Grow Finance.
Grow was founded in 2015 with an initial offering that focused on
asset and equipment finance. In 2019 the business gained scale
through the acquisition of Eclipx Commercial (Eclipx's commercial
equipment finance business). Since then, Grow's product range has
expanded to include asset finance for primary assets, business
loans, trade finance, invoice finance and insurance premium
finance. As of February 28, 2023, Grow's portfolio size is AUD460
million.
RATINGS RATIONALE
The provisional ratings take into account, among other factors,
Moody's evaluation of the underlying receivables and their expected
performance, an evaluation of the capital structure and credit
enhancement provided to the notes, the availability of excess
spread over the life of the transaction, the liquidity facility in
the amount of 2.0% of the rated notes' balance, the legal
structure, the experience of Grow Asset Finance as servicer; and
the presence of AMAL Asset Management Limited as the standby
servicer.
According to Moody's, the transaction benefits from the high level
of excess spread available to cover losses arising from the
portfolio. The key challenge in the transaction is the limited
historical data available for the portfolio. Grow was established
in 2015 and started originating primary asset chattel mortgages
with significant volumes in late 2019. The historical default data
for its auto and equipment commercial loan book for primary assets
is only available from 2020. As such, the pool's performance could
be subject to greater variability than the observed data
indicates.
The transaction's key features are as follows:
Initially, the Class A, Class B, Class C, Class D, Class E and
Class F Notes benefit from 22.50%, 17.60%, 13.80%, 8.50%, 5.30% and
2.00% of note subordination, respectively.
Once stepdown conditions are satisfied, all notes, excluding the
Class G Notes, will receive their pro-rata share of principal.
Step-down conditions include, among others, 45% subordination to
the Class A Notes and no unreimbursed charge-offs.
A swap provided by Westpac Banking Corporation (Westpac,
Aa3/P-1/Aa2(cr)/P-1(cr)) will hedge the interest rate mismatch
between the assets bearing a fixed rate of interest, and floating
rate liabilities. The notional balance of the swap will follow the
schedule amortization of the portfolio.
AMAL Asset Management Limited (AMAL) is the back-up servicer. If
Grow Asset Finance is terminated as servicer, AMAL will take over
the servicing role in accordance with the standby servicing deed
and its back-up servicing plan.
Key portfolio features are as follows:
The portfolio is diversified both at an obligor level and a
geographical level. The largest obligor concentration is 0.3%.
The portfolio has a high yield of 9.59% which provides excess
spread to cure portfolio losses.
Trucks and buses are the largest asset component making up 25.5%
of the portfolio, followed by passenger vechicles, trailers, and
manufacturing with 24.9%, 17.3% and 13.3% respectively.
Key model assumptions:
Moody's base case assumptions are a mean default rate of 7.50%, and
a portfolio credit enhancement ("PCE") — representing the loss
that Moody's expects the portfolio to suffer in the event of a
severe recessionary scenario — of 40.00%.
To address the limited historical loss data on Grow's portfolio, we
have benchmarked the performance to data from comparable Australian
commercial auto and equipment ABS originators. We have also
overlaid additional stresses into Moody's default and PCE
assumptions.
Methodology Underlying the Rating Action
The principal methodology used in these ratings was "Equipment
Lease and Loan Securitizations Methodology" published in September
2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the notes include a rapid
build-up of credit enhancement, due to sequential amortization or
better-than-expected collateral performance. The Australian job
market is a primary driver of performance.
A factor that could lead to a downgrade of the notes is
worse-than-expected collateral performance. Other reasons that
could lead to a downgrade include poor servicing, error on the part
of transaction parties, a deterioration in the credit quality of
transaction counterparties, or lack of transactional governance and
fraud.
BINANCE AUSTRALIA: ASIC Cancels AFS Licence
-------------------------------------------
The Australia Securities and Investments Commission (ASIC) on April
6 cancelled the Australian financial services licence held by
Oztures Trading Pty Ltd trading as Binance Australia Derivatives
(Binance). The licence cancellation was effected April 6 in
response to a request to cancel received from Binance on April 5.
Following the cancellation:
* With effect from April 14, 2023, clients will not be able to
increase derivatives positions or open new positions with
Binance;
* Binance will require clients to close any existing derivative
positions before April 21, 2023; and
* On April 21, 2023, Binance will close any remaining open
positions.
The terms of the cancellation include a provision that that the
cancellation has no effect on the requirement for Binance to
continue as a member of Australian Financial Complaints Authority
until the end of April 8, 2024.
ASIC has been conducting a targeted review of Binance financial
services business in Australia, including its classification of
retail and wholesale clients. On March 29, 2023, ASIC issued a
notice of hearing under s915C of the Corporations Act 2001 to
consider whether ASIC should cancel or suspend the AFS licence held
by Oztures Trading Pty Ltd.
ASIC Chair Joe Longo said, "It is critically important that AFS
licensees classify retail and wholesale clients in accordance with
the law. Retail clients trading in crypto derivatives are afforded
important rights and consumer protections under financial services
laws in Australia, including access to external dispute resolution
through the Australian Financial Complaints Authority.
"Our targeted review of these matters is ongoing, including focus
on the extent of consumer harms," said Mr Longo.
Crypto
ASIC has repeatedly warned potential crypto users that crypto is
risky and complex. Crypto derivatives pose additional risks to
consumers through the operation of leverage.
Many crypto products and services are not regulated by ASIC. More
than with other types of investments, crypto users should be
prepared to lose any funds they invest in crypto.
"As we have said before, ASIC supports a regulatory framework for
crypto with a focus on consumer protection and market integrity.
The final decision as to the regulatory settings is one for
Government," said Mr Longo.
To understand how crypto works and the risks involved, see ASIC
Moneysmart.
ASIC continues to take action to disrupt and deter harm and
misconduct within its jurisdiction.
On Dec. 15, 2022, ASIC commenced civil penalty proceedings in the
Federal Court against Finder Wallet Pty Ltd for alleged unlicenced
conduct and inadequate risk disclosure in relation to the Finder
Earn product
On Nov. 23, 2022, ASIC commenced civil penalty proceedings in the
Federal Court against Block Earner for unlicensed conduct in
relation to its crypto-asset based products.
On Oct. 25, 2022, ASIC commenced civil penalty proceedings in the
Federal Court against BPS Financial for alleged misleading
statements and unlicenced conduct in relation to the crypto-asset
"Qoin".
Oztures Trading Pty Ltd holds an AFS licence with authorisations
to:
-- issue and make a market in derivatives and foreign exchange
contracts, deal in specified financial products on behalf of
another person and
-- provide financial product advice in specified financial
products to retail clients and wholesale clients.
Ownership of the licensee changed in January 2022 and it commenced
offering derivatives as Binance Australia Derivatives in around
July 2022.
Retail clients are afforded important rights and consumer
protections under financial services laws in Australia, including:
-- access to the licensee's internal dispute resolution system;
-- access to external dispute resolution through the Australian
Financial Complaints Authority;
-- arrangements to compensate retail clients for loss or damage
suffered because of breaches of the licensee's obligations;
-- general advice warnings and statements of advice where
personal advice is given;
-- product disclosure statements and financial services guides;
-- rights and protections related to a product intervention
order, such as ASIC's product intervention order relating to
contracts for difference; and
-- the design and distribution obligations which assist retail
clients to obtain appropriate financial products by requiring
issuers and distributors to have a customer-centric approach
to designing, marketing and distributing financial products.
On March 27, 2023, the Commodities Futures Trading Commission
announced that it had filed a civil enforcement action in the U.S.
District Court for the Northern District of Illinois charging
Changpeng Zhao, Chief Executive Officer of the Binance Group, and
three entities that operate the Binance platform with numerous
violations of the Commodity Exchange Act (CEA) and CFTC
regulations. The complaint also charges Samuel Lim, Binance's
former chief compliance officer, with aiding and abetting Binance's
violations.
Binance group entities have been the subject of regulatory warnings
and action from a number of overseas regulators. In addition to the
CFTC, these include:
- UK Financial Conduct Authority
- Japan Financial Services Agency
- Italy Commissione Nazionale per le Societa e la Borsa
(CONSOB)
- Monetary Authority of Singapore
- Netherlands Central Bank (DNB)
- Ontario Securities Commission
- Thailand Securities Exchange Commission
HOTSPOTS AUSTRALIA: First Creditors' Meeting Set for April 19
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Hotspots
Australia Pty Ltd will be held on April 19, 2023, at 10:00 a.m. at
Level 19, 144 Edward Street in Brisbane.
Travis Pullen of B&T ADVISORY was appointed as administrator of the
company on April 5, 2023.
PANORAMA AUTO 2023-1: S&P Assigns Prelim. BB(sf) Rating on E Notes
------------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to six classes
of asset-backed securities (ABS) to be issued by Perpetual
Corporate Trust Ltd. as trustee of Panorama Auto Trust 2023-1. The
notes are backed by a pool of consumer loan, commercial loan, and
novated lease contracts backed predominately by motor vehicles that
were originated by Angle Auto Finance Pty Ltd. (AAF).
This is the first securitization of auto assets originated by AAF.
The preliminary ratings reflect the following factors:
-- The credit risk of the underlying collateral portfolio and the
credit support available are commensurate with the preliminary
ratings assigned. Credit support for the class A, class B, class C,
class D, and class E notes is provided in the form of
subordination.
-- All contract payments, including balloon payments, are an
obligation of the borrower. As a result, the trust is not exposed
to any market-value risk associated with the sale of the motor
vehicles (on performing receivables), which is a risk that can be
associated with other products, such as operating leases.
-- The issuer has the capacity to meet timely payment of interest
and ultimate payment of principal under the rating stresses
commensurate with the preliminary ratings assigned. All rating
stresses are made on the basis that the issuer does not call the
notes on or beyond the call-option date, and that the notes must be
fully redeemed via the mechanisms under the transaction documents.
Timely payment of senior expenses and note interest is supported by
the use of principal collections and a liquidity facility. The
liquidity facility is sized at 1.3% of the current balance of the
Commission notes, class A, class B, class C, class D, class E, and
class F notes, subject to a floor of A$500,000.
-- The legal structure of the issuer, which is established as a
special-purpose entity, meets S&P's criteria for insolvency
remoteness.
-- S&P said, "Our preliminary ratings also take into account the
counterparty support provided by Commonwealth Bank of Australia as
bank account provider, Bank of America, N.A., Australian Branch
(BANA) as liquidity facility provider, and Merrill Lynch
International as interest-rate swap provider. We have derived our
rating on BANA from our 'A+/Stable/A-1' ratings on the parent
entity. Fixed- to floating-rate interest-rate swaps will be
provided to hedge the mismatch between the fixed-rate payments on
the receivables and the floating-rate interest payable on the
notes. The transaction documents for the bank account, liquidity
facility, and swaps include downgrade language consistent with our
"Counterparty Risk Framework Methodology And Assumptions" criteria,
published on March 8, 2019, that requires the replacement of the
counterparty or other remedy, should its rating fall below the
applicable rating."
Preliminary Ratings Assigned
Panorama Auto Trust 2023-1
Commission Note, A$17.50 million: AAA (sf)
Class A, A$435.00 million: AAA (sf)
Class B, A$13.50 million: AA (sf)
Class C, A$14.50 million: A (sf)
Class D, A$11.50 million: BBB (sf)
Class E, A$8.50 million: BB (sf)
Class F, A$6.50 million: Not rated
Class G1, A$4.00 million: Not rated
Class G2, A$6.50 million: Not rated
TRIBE GROUP: Creditors Approve Noteholder's Proposed DOCA
---------------------------------------------------------
Brews News reports that creditors of The Tribe Group have voted to
approve the Deed of Company Arrangement proposed by a group of
convertible noteholders that is expected to see a return to
unsecured creditors of 4.97 cents in the dollar.
The deed was proposed at a creditor's meeting on April 4, and
supported by the voluntary administrator, Brews News says.
According to the report, administrator Christopher Hill from FTI
Consulting said it was a good result.
"This outcome means the Tribe will continue as a going concern,
which is a great outcome for Tribe's employees and customers," he
said in a statement.
"I want to thank Tribe's employees, suppliers and customers who
worked with us through the administration period."
The Tribe Group went into administration in February with debts
totalling more than AUD72 million, including AUD15 million to
unsecured trade creditors and AUD7.9 million to the Australian Tax
Office, Brews News notes.
Under the DOCA, the Tribe noteholders, including the Elsie Cameron
Foundation and VBS Investments will retain ownership of the Tribe
Group following the payment of AUD1 million, in addition to the
Administrator's unpaid remuneration and payment of priority
creditors.
Brews News relates that the DOCA will see employees paid in full.
The parties have 15 days to execute the Deed of Company
Arrangement. If the Deed is not executed, the companies will be
placed into liquidation.
Brews News says the administrators noted that since production
commenced at the AUD35 million Goulburn Brewery, Tribe had been
unable to generate significant production volume on a consistent
basis to reach cash flow breakeven. The ongoing trading losses had
essentially been funded via debt in the form of convertible notes
in shareholder loans.
Tribe had been exploring a number of exit strategies, including a
sale. A sale to RGT Capital, the largest investor in Sydney's
Young Henry's, collapsed last year resulting in legal action with
other debt holders.
The administration has seen administrators close its Stockade
Barrelroom in Marrickville, the report says.
Tribe is the latest and largest in a recent spate of voluntary
administrations and will have a significant impact on the industry,
the report states. Brewers are reporting a tightening of trade
terms with suppliers, and suppliers urging brewers to maintain
communication to work through any difficulties.
TRY AT HOME: Second Creditors' Meeting Set for April 18
-------------------------------------------------------
A second meeting of creditors in the proceedings of Try At Home
Holdings Pty Ltd has been set for April 18, 2023 at 10:00 a.m. at
the offices of Mcleods Accounting at Level 9, 300 Adelaide Street
in Brisbane 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 17, 2023 at 5:00 p.m.
Jonathan McLeod and Bill Karageozis of Mcleods Accounting were
appointed as administrators of the company on March 3, 2023.
VEYTECH DIAGNOSTIC: First Creditors' Meeting Set for April 18
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Veytech
Diagnostic Services Pty Ltd will be held on April 18, 2023, at
10:30 a.m. at the offices of Ticcidew Pty Ltd at 463 Scarborough
Beach Road in Osborne Park and via virtual meeting technology.
Simon Roger Coad of Ticcidew was appointed as administrator of the
company on April 4, 2023.
WARE ELECTRICAL: First Creditors' Meeting Set for April 18
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Ware
Electrical Solutions Pty Ltd will be held on April 18, 2023, at
11:00 a.m. at the offices of SV Partners at Level 17, 200 Queen
Street in Melbourne and via telephone.
Fabian Kane Micheletto and Timothy James Brace of SV Partners were
appointed as administrators of the company on April 4, 2023.
=========
C H I N A
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GOME RETAIL: Denies Rumors Asking Staff to Take Out Loans
---------------------------------------------------------
Yicai Global, citing Shanghai Securities News, reports that it is
not true that Gome Retail has told employees to take out loans to
ease life pressure as the cash-strapped Chinese retailer does not
have enough money to pay their salaries.
Yicai Global relates that Chief Technology Officer Li Yibing has
confirmed that the rumor is false, the report said, citing a
statement from the Beijing-based firm's public relations
department.
Li is said to have told employees to take out a loan from China
Minsheng Bank at an annual interest rate of 3.48 percent as the
company cannot meet its payroll, Yicai Global says citing a
screenshot posted on social media late last month by a person
claiming to be a Gome staff member.
Gome will pay the interest on loans to a maximum of CNY30,000
(USD4,362) a month, the equivalent of monthly repayments of CNY87
(USD12), and employees should pay the rest, according to the
screenshot, Yicai Global relays. To employees, the low interest
rate is more important that the company helping to pay the
interest.
Over 100 members of staff marched on the firm's headquarters in
Pengrun Tower in Beijing last December to ask for their salaries,
China Newsweek reported earlier, Yicai Global recalls. It is not
known how much in wages the firm owes.
Gome had racked up CNY6.9 billion (USD1 billion) in overdue loans
as of Feb. 3, the firm said on Feb. 28, saying it is negotiating
with lenders about refinancing or extending the repayment date,
Yicai Global discloses.
About GOME Retail
Headquartered in Hong Kong, GOME Retail Holdings Limited (HK:0493)
-- https://www.gome.com.hk/-- together with its subsidiaries,
engages in the retail of electrical appliances, consumer electronic
products, and general merchandise in the People's Republic of
China. The company also sells its products online through
self-operated and platform models. In addition, it is involved in
the provision of logistics and procurement, storage and delivery,
IT development, and business management services; retailing of
mobile phones and accessories; and property holding activities. As
of Dec. 31, 2021, it operated 4,195 stores in 1,439 cities. The
company was formerly known as GOME Electrical Appliances Holding
Limited and changed its name to GOME Retail Holdings Limited in
2017.
QINGDAO JIAOZHOU: Fitch Lowers LongTerm IDRs to BB+, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has downgraded Qingdao Jiaozhou Bay Development Group
Co., LTD's (JZBD) Long-Term Foreign-Currency and Local-Currency
Issuer Default Ratings (IDRs) to 'BB+', from 'BBB-'. The Outlook is
Stable. JZBD's senior unsecured note rating was also downgraded to
'BB+' from 'BBB-'. All ratings have been removed from Rating Watch
Negative (RWN).
KEY RATING DRIVERS
Rating Downgrade: The rating action follows Fitch's reassessment of
the sponsoring Jiaozhou municipal government under the agency's
International Local and Regional Government Rating Criteria. This
is based on its perception that municipality will have a slightly
lowered ability to provide legitimate support to JZBD. This is due
to the city's material investment efforts, which in its opinion may
not be fully covered by the additional resources provided by the
expected economic recovery.
'Very Strong' Status, Ownership and Control: JZBD is wholly owned
by the municipal government via the Jiaozhou Municipal State-owned
Assets Service Centre, which has direct control and oversight of
the company's management and monitors its strategic planning and
finances. All major corporate events, including annual budgets,
investments and M&A, require government approval.
'Strong' Support Record: The municipal government has a history of
providing financial and policy support to JZBD. All the company's
capital has been seeded by the government, which also continues to
provide financial subsidies. There are also no restrictions in the
current regulatory or policy framework that prevent the government
from continuing to provide support to JZBD.
'Moderate' Socio-Political Implications of Default: JZBD is the
main entity responsible for infrastructure development, primary
land development, and other businesses in the Jiaozhou municipality
and China-Shanghai Cooperation Organization Economic and Trade
Cooperation Demonstration Zone. There are three other
government-related entities (GREs) in Jiaozhou that are urban
developers, although they specialise in certain areas. Hence, Fitch
believes that while JZBD can be substituted by these other GREs,
there would be some disruption to its services.
'Very Strong' Financial Implications of Default: JZBD was the
largest GRE in Jiaozhou by total assets at end-2020 and maintains
ample bank facilities. It has also regularly tapped onshore and
offshore bond markets. Fitch believes a default by the company
would greatly constrain the borrowing capacity of the local
government and other GREs.
DERIVATION SUMMARY
JZBD's IDRs are assessed under Fitch's Government-Related Entities
Rating Criteria, reflecting Jiaozhou municipality's 'Very Strong'
ownership and control over the company as well as the 'Strong'
support it provides. Fitch also factors in the 'Moderate'
socio-political and 'Very Strong' financial implications for the
government if JZBD were to default.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Stronger support record as well as higher social-political
implications of default;
- If Fitch perceives that the Jiaozhou municipality's ability to
provide subsidies, grants and other legitimate resources allowed
under China's policies and regulations has strengthened;
- A significant improvement in JZBD's Standalone Credit Profile;
- Positive rating action on JZBD's Long-Term IDR would lead to a
similar rating action on the US dollar bonds.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in Fitch's internal assessment of the Jiaozhou
municipality's ability to provide subsidies, grants or other
legitimate resources allowed under China's policies and
regulations; or
- Significant weakening in the financial implications of default, a
weaker support record or looser government control;
- A downgrade of JZBD's Long-Term IDR would lead to a similar
rating action on the US dollar bonds.
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
----------- ------ -----
Qingdao Jiaozhou
Bay Development
Group Co., LTD LT IDR BB+ Downgrade BBB-
LC LT IDR BB+ Downgrade BBB-
senior
unsecured LT BB+ Downgrade BBB-
SINIC HOLDINGS: To Be Delisted From HK Bourse After Defaulting
--------------------------------------------------------------
Yicai Global reports that Sinic Holdings will become the first real
estate developer in the Chinese mainland to be removed from the
stock exchange after it defaulted on debt and failed to publish an
annual earnings report.
Shares of Sinic failed to resume trading before March 19, so it
will be delisted on April 13, according to the relevant rules, the
Hong Kong Stock Exchange announced on April 6, the report relates.
The Shanghai-based builder went public in November 2019.
Yicai Global says Sinic failed to pay CNY38.7 million (USD5.6
million) interest on two domestic financing arrangements on Sept.
18, leading to its stock being suspended on Sept. 20 after it
tumbled 87 percent.
Yicai Global relates that the firm subsequently said it had no
funds to repay the principal and interest of a USD250 million debt
due on Oct. 18 and did not have any specific plan for remedial
measures. It has not released any earnings report in the past 18
months.
The stocks of many other real estate companies based in the Chinese
mainland are also halted from trading, the report notes. About 10
of them, including Shimao Group and Sunac China, are expected to
face delisting in the upcoming six months.
Sinic's market capitalization was CNY1.8 billion (USD262 million)
on its last day of trading, down over 81 percent from its debut,
Yicai Global discloses. As of June 2021, its total liabilities had
reached CNY91.8 billion (USD13.4 billion).
If a company that suspended trading in Hong Kong wants to resume
trading, it needs to publish its financial results in accordance
with HKEX guidelines, prove it has sufficient business operations
and assets of considerable value to support its operations, and
provide all relevant information so that shareholders and investors
can assess its position, the report notes.
Sinic was founded in Nanchang, Jiangxi province, in 2010. It is
controlled by tycoon Zhang Yuanlin, who moved its headquarters to
Shanghai in 2017.
URUMQI GAOXIN: Fitch Affirms LongTerm IDRs at 'BB+', Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed China-based Urumqi Gaoxin Investment and
Development Group Co., Ltd.'s (UGID) Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDRs) at 'BB+'. The Outlook
is Stable. Fitch has also affirmed UGID's USD300 million 4.75%
senior unsecured notes due 2023 at 'BB+'.
Fitch has revised the Standalone Credit Profile (SCP) to 'b-', from
'b', as UGID's liquidity to meet its debt obligation due 2023 has
weakened.
UGID's ratings are credit-linked to, but not equalised with,
Fitch's internal assessment of the creditworthiness of the Urumqi
High-tech Industrial Development Zone (New City) government. The
link is based on the 'Very Strong' status, ownership and control,
'Strong' support record, 'Moderate' socio-political impact of
default, and 'Very Strong' financial implications of default. These
factors mean there is a high likelihood UGID will receive
extraordinary support from regional authorities, if needed. UGID is
classified as a government-related entity (GRE) under Fitch's
criteria.
KEY RATING DRIVERS
Status, Ownership and Control:
'Very Strong'
Fitch's assessment of this rating factor is based on the high level
of control and full ownership by the government despite UGID's
legal status under ordinary commercial law. UGID remains 100%
directly owned and supervised by the Urumqi High-tech Industrial
Development Zone State-owned Assets Supervision and Administration
Commission (New City SASAC). Company directors and senior
management are mainly appointed or nominated by the district
government, and UGID's major decisions, financial plans and debt
need government approval.
UGID's business development has been highly consistent with the
development strategies of New City and the Urumqi municipality.
Support Track Record:
'Strong'
UGID is the major GRE in New City, in light of its strategic role
in developing the city. The company has received regular financial
support from the government since its establishment, to sustain its
operating flexibility and financial viability.
It received special government bond proceeds and capital injections
totaling CNY1.1 billion in 2020 for urban infrastructure projects.
The subsidies received averaged CNY15 million in the past three
years. Around 35% of UGID's revenue in 2022 was from the
government, which is the main customer of the company's
infrastructure development and maintenance, and property rental
businesses. The government's cash payment for projects totaled
CNY1.2 billion during 2020-2022.
Socio-Political Implications of Default:
'Moderate'
UGID has a key role in New City's urban development and in
supporting local industrial investment. A default by UGID would
affect the long-term economic development of New City. However,
other GREs in the municipality could take over its function, if
needed. Fitch therefore rates the socio-political implications of a
default by UGID as 'Moderate', factoring in the potential temporary
disruption of the local economy.
Financial Implications of Default:
'Very Strong'
Fitch believes a default by UGID is likely to have a significant
impact on Urumqi's other GREs, considering the company's policy
intensity and funding history, as well as its linkage with the
local government. UGID is the only GRE in New City that has issued
various onshore and offshore debt instruments, and bonds accounted
for 72% of its total debt by end-2022. A failure by the government
to provide timely support could damage the city's credibility, and
hamper the availability and cost of financing options for other key
GREs.
Standalone Credit Profile
Fitch assesses UGID's SCP at 'b-' based on its 'Midrange' revenue
defensibility, 'Weaker' operating risk and 'Weaker' financial
profile. High leverage and a weak liquidity profile are the main
standalone drivers.
Revenue Defensibility 'Midrange'
UGID has relatively high business concentration in urban
development with low geographic diversification. However, this is
partly offset by the positive growth prospects of its construction
business as New City develops. UGID's pricing ability remains at a
moderate level, indicated by its positive gross margin.
Operating Risk 'Weaker'
Operating risk is assessed at 'Weaker' due to the potential
volatility of operating costs in UGID's market-based segments such
as trading and construction, where the cost of business tends to be
more volatile. UGID's large capex plan driven by infrastructure
development also has less flexibility, resulting in an overall
'Weaker' assessment for this factor.
Financial Profile 'Weaker'
Fitch views UGID's financial profile as 'Weaker', taking into
consideration its higher leverage and weak liquidity coverage.
Fitch projects UGID's net leverage to be 23x by end-2027, mainly
reflecting its growing debt from an ongoing need to fund
infrastructure projects and slow payback expectations. The
assessment is consistent with that of other Chinese urban
developers under Fitch's portfolio. Most of these companies are
capital intensive and largely rely on refinancing and government
support.
Derivation Summary
UGID's ratings are assessed under Fitch's Government-Related
Entities Rating Criteria, reflecting New City's strong control over
UGID as well as the solid support it provides to the company. Fitch
also factors in the socio-political and financial implications for
the government if UGID were to default.
UGID's 'b-' SCP is derived from Fitch's assessment of its revenue
defensibility, operating risk and financial profile under its
Public Sector, Revenue-Supported Entities Rating Criteria.
Debt Ratings
UGID's USD300 million 4.75% senior unsecured notes are rated at the
same level as UGID's Long-Term Foreign-Currency IDR, as they are
issued by UGID and constitute its unsecured and unsubordinated
obligations, ranking pari passu with all its other present and
future obligations.
Liquidity and Debt Structure
UGID had CNY18.4 billion of interest-bearing debts as of end-2022,
of which 26% are bank loans and 74% various bond instruments.
Fitch assesses UGID's liquidity profile as 'Weaker'. Its bond
instruments have a high concentration of maturities in 2023 and
short-term refinancing pressure is high. Debt due in one year
totalled CNY9.8 billion, accounting for 54% of total debt. Fitch
estimates that available liquidity, including unrestricted cash and
unused bank facilities, only cover around 76% of its maturing
short-term debt. Overall asymmetric risk is assessed as negative
due to the 'Weaker' liquidity profile.
However, Fitch believes the refinancing pressure could be eased by
UGID's solid capital market access and long-standing relationship
with large financial institutions.
Issuer Profile
UGID is a district-level urban-infrastructure developer located in
New City in the Xinjiang Uyghur Autonomous Region in north-west
China. UGID is the largest functional GRE under the New City
government, and is commissioned to engage in infrastructure
construction and attract investment to boost New City's economic
expansion.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downward revision in Fitch's assessment of the creditworthiness
of New City to provide subsidies, grants or other legitimate
resources allowed under China's policies and regulations.
- Weakening in funding access, or government support that is below
its expectations, could lead to a lower assessment of the support
track record and financial implications of a default factors, or a
lower assessment of the company's SCP to 'ccc'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An improvement in Fitch's assessment of the creditworthiness of
New City to provide subsidies, grants or other legitimate resources
allowed under China's policies and regulations.
- Reassessment of the support factor to 'Very Strong' from
'Strong', driven by higher support visibility or increased
support.
- Revision of the socio-political implications of a default to
'Strong' from 'Moderate', due to an increase in the government's
incentive to extend support.
- A material improvement in the SCP by at least three notches may
also lead to an upgrade, but Fitch believes this is less probable
in the near term.
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
----------- ------ -----
Urumqi Gaoxin
Investment and
Development
Group Co., Ltd. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior
unsecured LT BB+ Affirmed BB+
YINCHUAN TONGLIAN: Fitch Cuts IDRs to BB-, On Watch Negative
------------------------------------------------------------
Fitch Ratings has downgraded China-based Yinchuan Tonglian Capital
Investment Operation Group Co., Ltd.'s (YCTL) Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDRs) to 'BB-' from
'BB'. Fitch has also downgraded YCTL's USD300 million 4.45% senior
unsecured bonds due 2023 to 'BB-' from 'BB'. All ratings have been
placed on Rating Watch Negative (RWN).
The downgrade follows a revision in its assessment of YCTL's
financial implications of default to 'Moderate' from 'Strong',
leading to a rating approach change, according to its
Government-Related Entities (GRE) Rating Criteria. Fitch now rates
the company from the bottom up three notches above the Standalone
Credit Profile (SCP), instead of top down from its internal
assessment of the sponsoring government. The downgrade reflects
YCTL's decreasing flexibility in refinancing debt as the largest
operational platform for state-owned capital in Yinchuan
municipality.
Fitch did not adopt a narrower notching from the SCP as the
government may continue to have a high incentive to provide
extraordinary support in the event of distress, considering YCTL's
policy role as the largest integrated city operator in Yinchuan and
the contagion risk for the refinancing of similar policy-driven
GREs. Fitch believes YCTL, which faces significant pressure from
debt due 2023, will continue to operate in a tightened funding
environment.
KEY RATING DRIVERS
'Moderate' Financial Implications of Default: Its assessment of
this attribute was lowered to 'Moderate' from 'Strong' due to
YCTL's decreasing flexibility in refinancing debt as the key
municipal GRE tasked with raising funds and implementing government
policies and mandates. Its debt repayment will peak in 2023, with
over CNY9.0 billion in debt maturing in April to December.
The tighter funding environment in China's less-developed regions,
notably the north-west where YCTL is based, may cause the company
to turn to government-arranged funding to repay part of its debt
maturing this year. The attribute assessment is not lower as Fitch
thinks the government still has strong incentive to support YCTL,
including its urban renewal projects.
'Strong' Status, Ownership and Control: YCTL is wholly owned by the
Yinchuan State-owned Assets Supervision and Administration
Commission. The municipality appoints its directors and maintains
control and oversight of management appointments and operations.
Major events, including M&A, disposals, strategic developments and
capex, require approval. The disciplinary warning from China's
National Association of Financial Market Institutional Investors
for regulatory disclosure breaches reveals weaknesses in YCTL's
corporate governance and the government's supervision.
'Moderate' Support Record: YCTL received CNY2.1 billion in fiscal
subsidies and a capital injection of CNY5.0 billion in 2022 to
support its policy business. The Yinchuan government indicated it
has strong incentive to ensure the timely repayment of YCTL's debt
as it is a core policy GRE. The municipality plans to set up a
bailout fund of up to CNY5 billion to provide liquidity support to
its GREs. Fitch believes the government's move shows strong support
incentive, but it faces execution risk in mobilizing fiscal and
financial resources.
The local government is planning further asset injections,
including land use rights, and concession rights for public-utility
and infrastructure development. Fitch thinks these measures may
enhance YCTL's asset quality and cash-generating ability in the
long term, but the extent to which they may improve its refinancing
ability in the short term remains unclear. Fitch did not assess the
support record as higher than 'Moderate' because the size of the
support is insufficient relative to its weakened liquidity
profile.
'Moderate' Socio-Political Implications of Default: YCTL
consolidates and manages policy businesses essential to public
welfare, including utilities, public transportation and urban
development. Its businesses are of high political priority for the
local government and part of an established service infrastructure,
which means it is likely to be mandated to continue offering the
services even after a default. The government can appoint other
public or private companies in the region to provide some of the
services if necessary. Therefore, any disruption may be temporary
and have only a moderate effect.
'b-' SCP: YCTL's SCP is predominantly driven by its 'Weaker'
assessment of the financial profile, as Fitch forecasts its net
debt/EBITDA will stay at around 20x-30x in 2022-2026, in line with
that of 'b+' peers. However, the SCP is lower due to its negative
assessment of its management, governance and information quality.
It also has a negative liquidity cushion due to the weakened market
access and limited liquidity sources for its short-term debt
repayment. Fitch may considers a lower SCP assessment if the
company does not have cash flow and liquidity margins and a
favourable adjustment of the business or financial profile is
unlikely.
Revenue Defensibility, Operating Risk: Revenue defensibility is
assessed as 'Weaker' to reflect YCTL's limited pricing autonomy on
its public-welfare businesses and geographical concentration risk,
despite steady user demand because of Yinchuan's urbanization and
stable population base. Its operating risk is assessed as
'Midrange' due to well-identified cost drivers, and an adequate
supply of resources and labor.
DERIVATION SUMMARY
YCTL's total GRE score declined to 17.5 from 22.5 under its GRE
criteria, based on 'Strong' status, ownership and control,
'Moderate' support record, 'Moderate' socio-political implications
of default and a revision in the financial implications of default
from 'Strong' to 'Moderate'. The downgrade results in a change from
a top-down approach to a bottom-up approach.
YCTL's ratings also take into consideration the SCP, with revenue
defensibility assessed at 'Weaker', operating risk assessed at
'Midrange' and the financial profile assessed at 'Weaker'. Its
negative assessment of the company's management, governance and
information quality is a factor in the asymmetric risk
consideration, which, together with its negative liquidity cushion,
result in the 'b-' SCP.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The RWN will be resolved if the negative sensitivities are not
met.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in Fitch's perception of the Yinchuan government's
ability to control, provide subsidies, grants or other legitimate
resources allowed under China's policies and regulations;
- Deterioration in timeliness and amount of government support,
resulting in lower assessment of the support record and a narrower
notching from the SCP;
- Deterioration in liquidity or funding access to address debt
obligations for the rest of 2023, leading to a lower assessment of
the support record and the financial implications of a default, or
a lower assessment of the company's SCP to 'ccc'.
Any change in YCTL's IDRs will result in a similar change in the
rating of the bond.
ISSUER PROFILE
YCTL is mandated to carry out urban development and capital
operations in Yinchuan. Its core policy business is in
infrastructure construction, liquefied natural gas sales and public
transportation. YCTL, as a capital operator, also has property
developments, and book and commodity sales.
ESG CONSIDERATIONS
YCTL has an ESG Relevance Score of '4' for Financial Transparency
due to weakness in its disclosure process, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
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
----------- ------ -----
Yinchuan Tonglian
Capital Investment
Operation Group
Co., Ltd. LT IDR BB- Downgrade BB
LC LT IDR BB- Downgrade BB
senior unsecured LT BB- Downgrade BB
=========
I N D I A
=========
CEM ELECTROMECH: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of CEM
Electromech Private Limited (CEM) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.88 CRISIL D (Issuer Not
Cooperating)
Term Loan 1.36 CRISIL D (Issuer Not
Cooperating)
Term Loan 0.11 CRISIL D (Issuer Not
Cooperating)
Term Loan 3.65 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CEM 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 CEM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CEM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CEM continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2012, CEM manufactures electrical components.
CHAITANYA CASHEW: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Chaitanya
Cashew Company (CCC) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Packing Credit 2.25 CRISIL D (Issuer Not
Cooperating)
Packing Credit 5.75 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CCC 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 CCC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on CCC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
CCC continues to be 'CRISIL D Issuer Not Cooperating'.
CCC was set up as a proprietorship firm in 2011 by Ms Veena
Prabhakumar, who also manages operations. The firm, based in
Kollam, Kerala, trades in cashew kernels.
CHEMICAL BROTHERS: CARE Lowers Rating on INR6.24cr LT Loan to D
---------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Chemical Brothers Enterprises Private Limited (CBEPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.24 CARE D Revised from CARE B-;
Facilities Stable
Long Term/ 8.50 CARE D/CARE D Revised from
Short Term CARE B-; Stable/CARE A4
Bank Facilities
Rationale and key rating drivers
The revision in rating assigned to the bank facilities of CBEPL is
primary due to delays in debt servicing obligation of term loan.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Delay free track record of 90 days in servicing of debt
obligations backed by efficient management of receivables.
Chemical Brothers Enterprises Private Limited (CBEPL) was
incorporated as a private limited company in 2014 by key director
Mr. Yash Tikekar who has more than a decade of experience in
industry. Company is engaged in the trading of variety of chemicals
to domestic as well as overseas clients. Company has portfolio of
more than 200 types of chemicals catering different industries such
as personal care, pharmaceuticals, food, industrial cleaning,
lubricants, etc. Company has its registered office in Mumbai and
warehouse in Panvel.
CONFEDERATION FOR AYURVEDIC: CRISIL Keeps D Ratings in Not Coop.
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Confederation
For Ayurvedic Renaissance-Keralam Limited (CARe-K) continue to be
'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL D (Issuer Not
Cooperating)
Term Loan 7.14 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with CARe-K 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 CARe-K, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
CARe-K is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of CARe-K continues to be 'CRISIL D Issuer Not
Cooperating'.
Set up as a private limited company in 2004 and reconstituted as a
public limited company in 2008, CARe-K is a joint venture between
various ayurvedic enterprises and the Kerala Industrial
Infrastructure Development Corporation (KINFRA) of the Government
of Kerala. The company was formed to create infrastructure
facilities for the standardisation of ayurvedic medicines and
services, and is also supported by the AYUSH Department of
Government of India.
GURU INFRACON: CRISIL Assigns D Rating to INR14.7cr Bank Loan
-------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D/CRISIL D' ratings to the
bank facilities of Shree Guru Infracon Pvt Ltd (SGIPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 14.7 CRISIL D (Assigned)
Cash Credit 10 CRISIL D (Assigned)
The ratings reflect the delay by SGIPL in servicing the equated
monthly installments (towards the term loan) due in December 2022
and January 2023, owing to weak liquidity. The cash credit limit
has been over-utilised on a regular basis, though supported by an
ad-hoc limit. The ratings also factor in the highly leveraged
capital structure, susceptibility to the tender-based nature of
business and the working capital-intensive operations. These
weaknesses are partly offset by the extensive experience of the
promoters in the civil construction business and healthy debt
protection metrics.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to tender-based operations: Revenue and
profitability entirely depend on the ability to win tenders.
Further, intense competition in the civil construction business
prompts entities to bid aggressively to get contracts, and thus,
restricts the operating margin to a moderate level. Also, amidst
cyclicality inherent in the construction industry, ability to
maintain profitability via operating efficiency, becomes critical.
* Working capital intensive operations: Operations are highly
working capital intensive, as reflected in the gross current assets
of 173 days as on March 31, 2022, mainly driven by large inventory
required to be held in the civil construction business.
* Highly leveraged capital structure: Financial profile is average,
marked by a high total outside liabilities to adjusted networth
ratio of 4.8 times for the two fiscals ending March 31, 2022.
Strengths:
* Extensive experience of the promoters: The decade-long experience
of the promoters in the civil construction industry, their strong
understanding of market dynamics and healthy relationships with
suppliers and customers, will continue to support the business risk
profile.
* Healthy debt protection metrics: Debt protection metrics are
comfortable despite leverage, aided by moderately healthy
profitability. Interest coverage and net cash accrual to total debt
ratios stood at 2.52 times and 0.18 time, respectively, for fiscal
2022.
Liquidity: Poor
Liquidity should remain constrained by the large working capital
requirement and weak capital structure. Bank limit utilisation was
extremely high, averaging around 123.2% for the 12 months ended
December 2022. Expected cash accrual of Rs 4.04-5.32 crore should
more than suffice to cover the term debt obligation of Rs 1.5 crore
over the medium term. Current ratio was moderate at 1.14 times as
on March 31, 2022.
Rating Sensitivity factors
Upward factors:
* Track record of timely servicing of debt and absence of any
irregularity, for at least three months
* Significant improvement in liquidity and working capital
management
SGIPL was incorporated in 2020, at Mehsana, Gujarat. On January 1,
2021, the company took over the business of Guru Infracon Co, a
sole proprietorship firm and converted it into a private limited
company. Mr Pareshkumar R Patel and Mr Chetankumar D Patel are the
promoters. The company undertakes civil construction work, related
to buildings, roads and bridges.
GURUKRUPA TRAVEL: CRISIL Assigns D Rating to INR9.00cr Loan
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D/CRISIL D' ratings to the
bank facilities of Gurukrupa Travel Agency (GTA).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.7 CRISIL D (Assigned)
Cash Credit 0.45 CRISIL D (Assigned)
Proposed Fund-
Based Bank Limits 9.00 CRISIL D (Assigned)
Term Loan 8.51 CRISIL D (Assigned)
The rating reflects delay of 15-30 days by the trust in servicing
its term debt obligation.
The rating also factors in the stretched working capital cycle and
a highly leveraged capital structure of GTA. These weaknesses are
partially offset by the extensive experience of the promoters in
travel undustry
Key Rating Drivers & Detailed Description
Weaknesses:
* Stretched working capital cycle: Gross current assets (GCAs) have
been 244-316 days over the three fiscals ended March 31, 2022 (244
days as on March 31, 2022), because of the need to extend long
credit to customers, as per industry standards.
* Highly leveraged capital structure: Total outside liabilities to
adjusted networth ratio has remained weak for the three fiscals
ended March 31, 2022.
Strength:
* Extensive experience of the partners: Longstanding presence in
the travel agent and tour operator segment has enabled the partners
to develop a strong understanding of market dynamics and establish
healthy relationships with suppliers and customers.
Liquidity: Poor
Bank limit was fully utilised in the 12 months through November
2022. Expected annual cash accrual of over Rs 2.30 crore will be
insufficient to meet yearly term debt obligation of Rs 2.25-3
crore, over the medium term. Current ratio was 6.11 times as on
March 31, 2022.
Rating Sensitivity factors
Upward factors:
* Timely servicing of debt obligations continuously for at least 90
days.
* Improvement in business risk profile augments liquidity.
GTA was established in November 2020 in Mehsana, Gujarat, as a
partnership firm of Mr Brijesh Indrajit Barot and Mr Girish
Bhailalbhai Brahmbhatt. The firm offers cabs on rent for tours and
other allied services.
HARSHNA FRUITS: CRISIL Withdraws C Rating on INR7cr Cash Loan
-------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facilities of
Harshna Fruits (HF; part of the Harshna group) on the request of
the company and after receiving no objection certificate from the
bank. The rating action is in-line with CRISIL Rating's policy on
withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL C/Issuer Not
Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with HF 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 HF. This restricts CRISIL
Ratings' ability to take a forward looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on HF is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, CRISIL Ratings has
continued the ratings on the bank facilities of HF to 'CRISIL C
Issuer not cooperating'.
For arriving at the rating, CRISIL Ratings has combined the
business and financial risk profiles of HF, Bhola Nath Naresh Kumar
(BNNK), Harshna Ice & Cold Storage Pvt Ltd (HICS) and Bhola Nath
Rakesh Kumar (BNRK). This is because all these entities,
collectively referred to as the Harshna group, are in the same
business, have operational and financial linkages, including
fungible cash flows, and are under common management.
The Harshna group was established in 1993 by Mr Rakesh Bhola Nath
Kohli and Mr Naresh Bhola Nath Kohli through BNRK and BNNK. The
firms are commission agents for trading in apples in Delhi's
Azadpur mandi. In 1999, the group decided to start its own cold
storage facility in Sonipat, Haryana, for which it set up HICS. The
company, HICS, has a multi-product cold storage facility, with
capacity of 11,500 tonne, along with ripening chambers. In 2004,
the group set up HF, which supplies fruits to retail stores.
INNOVATIVE VASTUNIRMAN: Ind-Ra Keeps BB+ Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Innovative
Vastunirman Private Limited's Long-Term Issuer Rating of 'IND BB+
(ISSUER NOT COOPERATING)' in the non-cooperating category and has
simultaneously withdrawn it.
The instrument-wise rating actions are:
-- INR20 mil. Fund-based limits* maintained in non-cooperating
category and withdrawn; and
-- INR50 mil. Non-fund-based limits** maintained in non-
cooperating category and withdrawn.
*Maintained at 'IND BB+ (ISSUER NOT COOPERATING)/ IND A4+ (ISSUER
NOT COOPERATING)' before being withdrawn.
** Maintained at 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn.
Key Rating Drivers
Ind-Ra has maintained the ratings in the non-cooperating category
because the issuer did not participate in the rating exercise
despite requests by the agency and has not provided information
pertaining to full-year financial performance for FY22, sanctioned
bank facilities and utilization, business plan and projections for
the next three years and information on corporate governance.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificate from the lender. This is
consistent with Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra
will no longer provide analytical and rating coverage for IVPL.
Company Profile
Pune-based IVPL was incorporated in 2011 by Prashant Zawar. The
company provides construction solutions and services to various
industries.
IVRCL INDORE: Ind-Ra Keeps 'D' Bank Loan Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained IVRCL Indore
Gujarat Tollways Limited's long-term bank loans in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The ratings will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The detailed rating actions are:
-- INR11,785.65 bil. Long-term senior project bank loan (long-
term) maintained in non-cooperating category with IND D
(ISSUER NOT COOPERATING) rating; and
-- INR70 mil. Bank guarantee (long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 6, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
IVRCL Indore Gujarat Tollways is a special-purpose company that was
incorporated to undertake a 155.15 kilometer expansion of a stretch
between Indore and Gujarat to four lanes from two lanes, and a
capacity augmentation project on a design, build, finance, operate
and transfer basis, both under a 25-year concession from the
National Highways Authority of India ('IND AAA'/Stable). The
project achieved provisional commercial operation date on 6
November 2018.
JAIN IRRIGATION: Ind-Ra Keeps 'D' Issuer Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Jain Irrigation
Systems Limited's (JISL) Long-Term Issuer Rating of 'IND D (ISSUER
NOT COOPERATING)' in the non-cooperating category and has
simultaneously withdrawn it.
The instrument-wise rating actions are:
-- INR15.5 mil. Fund-based working capital limits (Long-
term/Short-term)* maintained in non-cooperating category and
withdrawn;
-- INR17.35 mil. Non-fund-based working capital limits (Long-
term/Short-term)* maintained in non-cooperating category and
withdrawn; and
-- INR3.46 mil. Term loan (Long-term)* due on November 1, 2024
maintained in non-cooperating category and withdrawn.
*Maintained at 'IND D (ISSUER NOT COOPERATING)' before being
withdrawn.
Key Rating Drivers
Ind-Ra has maintained the ratings in the non-cooperating category
because the issuer did not participate in the rating exercise
despite requests by the agency and has not provided information
pertaining to 9MFY23's financial and operation performance,
restructuring plan, sanctioned bank facilities and utilization,
business plan and projections for the next three years and
information on corporate governance.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificate from the lender. This is
consistent with Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra
will no longer provide analytical and rating coverage for JISL.
Company Profile
JISL is an agri-business company, operating in diverse segments of
the agribusiness value chain.
JAY ACE: CARE Withdraws D Rating on Long Term/Short Term Debts
--------------------------------------------------------------
CARE Ratings has withdrawn the ratings on certain bank facilities
of Jay Ace Technologies Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank - CARE D Withdrawn
Facilities
(Term Loan)
Short Term Bank - CARE D Withdrawn
Facilities (BG/LC)
Long Term Bank - Reaffirmed at CARE D and
Facilities Withdrawn
(Cash Credit)
CARE Ratings Ltd. has withdrawn the rating(s) assigned to the Bank
facilities (i) and (ii) of Jay Ace Technologies Limited with
immediate effect, as the company has repaid the aforementioned
facilities in full and there is no amount outstanding under the
facility as on date.
Further, CARE Ratings Ltd. has reaffirmed & subsequently withdrawn
the outstanding ratings of 'CARE D' assigned to the fund based Cash
credit facility (iii) of Jay Ace Technologies Limited with
immediate effect. The above action has been taken at the request of
company and 'No Objection Certificate' received from the bank(s)
that have extended the facilities rated by CARE
Ratings Ltd.
Analytical approach: Standalone
Outlook: Not applicable
Detailed description of the key rating drivers:
Key rating weakness:
* Delay in servicing of term loan instalment: The term loan from
Hero Fincorp Ltd has been repaid in full with delay of 5 days in
the month of October, 2022.
* Elongation of operating cycle: The operating cycle of the cycle
of the company elongated to 419 days in FY22 (refers to the period
from April 1 to March 31) from 246 days the previous year. The
elongation was mainly on account of increased average inventory
holding and collection period. The average inventory holding period
increased from 233 days in FY21 to 355 days in FY22. The average
collection period also deteriorated from 140 days in FY21 to 243
days in FY22. The average creditor period increased from 127 days
in FY21 to 179 days in FY22.
* Claims raised against the company: An overseas customer has
raised claims amounting to ~Rs.30 Cr against the company pertaining
to products supplied by JATL. The company has submitted its reply
and legal proceedings are underway.
* Exposure to volatility in the raw material prices: The major raw
material i.e. lead is procured from various local suppliers. Price
of lead procured from the suppliers move in line with the global
price movements. Absence of any long-term contracts exposes the
company to volatilities in the commodity price cycle. While the
company is able to pass on moderate hike in prices to end
customers, any sharp volatility in the raw material prices can
adversely impact its profitability.
* Decline in total operating income & profitability margins: The
total operating income of the company declined by ~21% to INR50.29
crore in FY22 (PY: INR63.46 crore). The PBILDT margin of the
company improved substantially from 20.70% in FY21 to 24.99% in
FY22 on account of efficient manufacturing processes. However,
despite of increase in the PBILDT margin, the company reported net
loss of 2.65% in FY22 (PY: 1.56%) on account of high interest cost
as a percentage of total operating income due to substantial
decline in scale of operations in FY22. During the current fiscal
till February 2023, the company has reported total operating income
of INR46.72 crore.
Key rating strengths:
* Experience of promoter: Jay Ace Technologies Ltd is a part of the
JPM Group, which has extensive presence in automobile components
and is supplier to automobile OEMs. In 1959, Mr. J.P. Minda started
with manufacturing of locksets and switches unit for automobiles.
Mr. Jaideo Prasad Minda, is B.E. (Electrical) from BITS, Pilani. He
has more than five decades of experience in manufacturing and
marketing of automobile components. Mr. Ashwani Minda, is the
younger son of Mr. J.P. Minda. He is B.Tech from IIT Delhi and has
more than 30 years of experience in the manufacturing and marketing
of automotive components.
Jay Ace Technologies Ltd. is promoted by the JPM group and was
incorporated on July 29, 2009, to carry on the business of power,
energy, power batteries etc. The company is in the manufacturing of
various kinds of automotive batteries, Inverter Batteries and UPS
batteries. The company is distributing its lead acid batteries
through dealer network and through institutional sales under brand
name "ACE". JATL has its manufacturing plant at Bhagwanpur
Industrial area, Roorkee.
JCBL LIMITED: Ind-Ra Hikes LT Issuer Rating to BB-, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded JCBL Limited's
Long-Term Issuer Rating to 'IND BB-' from 'IND B-'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR240 mil. (reduced from INR290 mil.) Fund-based working
capital limit upgraded with IND BB-/Stable/IND A4+ rating;
-- INR170 mil. (reduced fromINR270 mil.) Non-fund-based working
capital limit upgraded with IND A4+ rating; and
-- INR187 mil. Term loan due on February 2027 upgraded with IND
BB-/Stable rating.
The upgrade reflects Ind-Ra's expectation of an improvement in
JCBL's EBITDA, credit metrics and scale of operations over
FY23-FY24. The rating action also reflects the continued support
received by JCBL from its promoters and group companies during
FY22-FY23.
Key Rating Drivers
After having reported an EBITDA loss during FY22, JCBL's EBITDA
margin is likely to improve over FY23-FY24 on account of a decline
in raw material costs, higher absorption of fixed costs, led by
revenue growth, and controlled operating expenses. During 9MFY23,
JCBL reported a margin of 5%-7%. In FY22, JCBL had incurred an
EBITDA loss of INR140.37 million (FY21: profit of INR67.60 million)
due to an increase in input costs and high fixed costs. The
company's ROCE remained negative in FY22 (FY21: negative ROCE).
In addition, Ind-Ra expects JCBL's scale of operations to improve
over FY23-FY24 due to diversification of its product portfolio,
which will help the company mitigate the impact of seasonality on
its performance. During 9MFY23, JCBL booked a revenue of INR1,032
million. The management expects to record a revenue of INR1,600
million by end-FY23. In FY22, the revenue had grown to INR975.07
million (FY21: INR480.52 million) on account of resumption of
public and tourist transport services and reopening of schools post
the pandemic. During FY22, JCBL added two new segments – defense
and cargo - to diversify its customer profile. However, the
buses/special purpose vehicles and containers segments, which are
high-margin segments, continue to be the main source of revenue for
the company and accounted for 80%-85% of the customer concentration
in FY23.
Furthermore, JCBL's credit metrics are likely to improve during
FY23 and FY24 on account of the improvement in the absolute EBITDA.
In FY22, JCBL's credit metrics had deteriorated since the company
had reported EBITDA losses. The interest coverage (operating
EBITDA/interest expense) was positive and more than 1x in 9MFY23.
Moreover, JCBL has been receiving continued support from its
promoters and group companies. JCBL's promoter group had infused
INR498.8 million in the company in FY22, and it infused INR120
million as non-convertible preference share capital in FY23.
Liquidity Indicator – Stretched: JCBL's average maximum
utilization of the fund-based limits was 73.46% and that of the
non-fund-based limits was 91.98% during the 12 months ended
December 2022. The cash flow from operations remained negative and
deteriorated to IINR310.01 million in FY22 (FY21: negative
INR167.51 million). Consequently, the free cash flow deteriorated
to negative INR404.48 million in FY22 (FY20: negative INR184.24
million). The net working capital cycle improved but remained
elongated at 219 days in FY22 (FY21: 491 days) due to a decrease in
the inventory holding period to 185 days (491 days) and receivable
period to 116 days (167 days). The company had cash and cash
equivalents of INR68.19 million at FYE22 (FYE21: INR5.75 million).
JCBL has debt repayments of INR126.3 million in FY23, INR93.5
million in FY24 and INR90.5 million in FY25. JCBL does not have any
capital market exposure and relies on banks and financial
institutions to meet its funding requirements.
The ratings are supported by the company's strong client base,
which includes reputed companies such as Ashok Leyland Limited,
Tata Motors Limited, SML Isuzu Limited. The company sells its
products under its own brand name of JCBL.
The ratings also benefit from JCBL's promoters' experience of over
three decades in the bus manufacturing segment, which has helped
the company establish strong relationships with its customers as
well as suppliers.
Rating Sensitivities
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics or a further pressure
on the liquidity position, all on a sustained basis, could lead to
a negative rating action.
Positive: An increase in the scale of operations, along with an
improvement in the liquidity position and the overall credit
metrics, with the net leverage being 4x or lower, all on a
sustained basis, could lead to a positive rating action.
Company Profile
Incorporated in 1989, JCBL is engaged in body building and
fabrication of buses and containers for original equipment
manufacturers , providing transport solutions to prime fleet
operators, schools, and institutions in the country. The company's
client base includes Ashok Leyland, Tata Motors, Daimler India, SML
Isuzu and various state transport undertakings. The company has the
total production capacity to manufacture 5,269 buses, 10,000 cargo
boxes and 5,000 containers at its manufacturing plant in Lalru,
Mohali, Punjab.
K.P.R. AGROCHEM: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of K.P.R.
Agrochem Limited (KPR) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 224 CRISIL D (Issuer Not
Cooperating)
Corporate Loan 75 CRISIL D (Issuer Not
Cooperating)
Inland/Import 150 CRISIL D (Issuer Not
Letter of Credit Cooperating)
Long Term Loan 17.05 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 3.73 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 4.03 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 4.34 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 11.54 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 3.16 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 5.65 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with KPR 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 KPR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KPR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
KPR continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
KPR (formerly, KPR Fertilisers Ltd) was set up as a private limited
company on January 2, 2007, in Rayavaram, Andhra Pradesh. KPR is
the flagship entity of KPR Group, which is promoted by Mr Kovvuri
Papa Reddy. The company manufactures fertilisers, pesticides, micro
nutrients, and seeds. Its wholly owned subsidiary, SSPL, processes
seeds.
LAXMI TIMBERS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri Laxmi
Timbers Private Limited (SLTPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Letter of Credit 35 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 2.7 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term
Bank Loan Facility 0.3 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SLTPL 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 SLTPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SLTPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SLTPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
SLTPL was incorporated in 2010 by Mr. Dinesh Patel and his wife
Mrs. Kalpana Patel. The company is engaged in trading of timber,
majorly teak wood. The company is based of Pondicherry.
LUXUS HOSPITALITY: Ind-Ra Assigns BB- Long Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Luxus Hospitality
Private Limited (LHPL) a Long-Term Issuer Rating of 'IND BB-'. The
Outlook is Stable.
The instrument-wise rating action is:
-- INR1.150* bil. Term loans due on June 2035 assigned with IND
BB-/Stable rating.
*INR40 million was disbursed as of March 31, 2022.
Key Rating Drivers
The rating reflects the time and cost overrun and funding risks
associated with LHPL's under-construction five-star hotel at
Vibhuti Khand, Gomti Nagar, Lucknow (Uttar Pradesh). All the
structural work and 65% of mechanical, electrical and plumbing work
were completed till December,2022. The building approval, the
provisional fire and safety approval have been received, while the
consent to establish from the Pollution Control Board and
environmental clearance among others are yet to be obtained. The
company has entered into a hotel operating agreement with M/s The
Indian Hotels Company Ltd for 20 years. As the promoters are new
into this space, they could face higher competition.
The management stated that the commercial operations would commence
from April 2024, with a capacity of 189 rooms. Ind-Ra expects the
scale of operations to remain small over the medium term, owing to
the initial risk associated with the occupancy level.
Liquidity Indicator –Poor: Out of the total investment for the
project of INR2,583.10 million, INR1,150 million would be funded
through term loans (44.50%) and the remaining through promoters'
contribution of INR1,433.10 million (55.50%). The promoters are
contributing in the form of equity of INR251.2 million and
unsecured loans of INR1,181.8 million. LHPL has already incurred
around INR1,101 million (42.60%) for the project using capital
funding of INR251.2 million, loan from directors and associates of
INR551.2 million, and term loans of INR50.6 million, while the
remaining INR248 million are liabilities related to capex. In the
event of a delay in the capex completion, the expenses will be
funded by the promoters. LHPL does not have any capital market
exposure and relies on banks and financial institutions to meet its
funding requirements.
Rating Sensitivities
Negative: Any delay in the commencement of operations, any instance
of cost overrun of the project and/or inability to achieve
stability in operations thereby affecting the company's debt
serviceability could be negative for the ratings.
Positive: The timely commencement of operations and the subsequent
achievement of stable operations will be a positive for the
ratings.
Company Profile
Lucknow-based LHPL was incorporated in 2014. It is setting up a
five-star hotel under the franchise of brand TAJ. The hotel is
likely to commence operations from April 2024.
MAGTORQ PRIVATE: Ind-Ra Assigns BB+ Long Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Magtorq Private
Limited (MPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR140 mil. Fund-based working capital limits assigned with
IND BB+/Stable/IND A4+ rating; and
-- INR60 mil. Non-fund based working capital limits assigned with
IND A4+ rating.
Key Rating Drivers
The ratings reflect MPL's small scale of operations as indicated by
revenue of INR485 million in FY22 (FY21: INR343 million). The
revenue had increased in FY22 owing to an increase in the inflow
and execution of orders. Ind-Ra expects the revenue to have
increased in FY23 as well in view of the 10MFY23 revenue of INR450
million. It has orders in hand worth INR550 million to be executed
by FY25. Ind-Ra thus expects the revenue to improve in FY24-FY25 as
well.
Liquidity Indicator – Stretched: MPL has an elongated working
capital cycle (FY22: 365 days; FY21: 367days). Also, it does not
have any capital market exposure and relies on banks and financial
institutions to meet its funding requirements. MPL's average
maximum utilization of the fund-based limits was 99.40% and that of
the non-fund based was 39.62% during the 12 months ended 31 January
2023. The cash flow from operations stood at INR23.18 million in
FY22 (FY21: INR7 million), the free cash flow were INR26.73 million
(INR4.66 million) and the cash and cash equivalents were INR10.59
million. Against this, the company has repayments of INR14.3
million each in FY24 and in FY25.
The ratings also reflect MPL's moderate credit metrics as reflected
by the interest coverage (operating EBITDA/gross interest expenses)
of 2.28x in FY22 (FY21: 1.25x) and the net leverage (total adjusted
net debt/operating EBITDAR) of 3.96x (7.42x). The credit metrics
had improved in FY22 due to an improvement in the EBITDA. Ind-Ra
expects the credit metrics to improve in FY23 in line with the
improvement in EBITDA.
The ratings also factor in MPL's modest EBITDA margin of 10.18% in
FY22 (FY21: 7.69%) with a return on capital employed of 13.7% (7%).
In FY22, the EBITDA margin increased due to the high-margin nature
of orders received. Ind-Ra expects the EBITDA margin to have
remained at a similar level in FY23 and will continue to be so in
FY24 because of a likely similar nature of operations.
However, the ratings are supported by the promoters' nearly 33
years of experience in the manufacturing industry. This has
facilitated the company to establish strong relationships with
customers as well as suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations, along
with improvement in the overall credit metrics with interest
coverage above 2.5x and an improvement in liquidity profile, all on
a sustained basis, could lead to a positive rating action.
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit and liquidity profile, could
lead to a negative rating action.
Company Profile
Incorporated in 1989, MPL is into the designing, development and
manufacturing of customized gear boxes at its facility at SIPCOT,
Tamil Nadu. It mostly supplies the end-products to the defense
sector. It also caters to industries such as sugar and material
handling.
N. S. ENGINEERING: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of N. S.
Engineering Projects Private Limited (NSEPPL) continue to be
'CRISIL D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (ISSUER NOT
COOPERATING)
Short Term Rating - CRISIL D (ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with NSEPPL 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 NSEPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
NSEPPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of NSEPPL continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Incorporated in 2007, NSEPPL, promoted by Mr Manoj Kumar Kedia and
Mr Anil Kumar Goel, has a steel fabrication and galvanizing plant
located at Domjur (West Bengal) with a total installed capacity of
72000 metric tonne per annum (MTPA) for fabrication unit and 36000
MTPA for galvanization unit.
NMC TOOLS: Ind-Ra Affirms BB+ Long Term Issuer Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed NMC Tools Private
Limited's (erstwhile Dutch Tech Tools Private Limited) Long-Term
Issuer Rating at 'IND BB+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR92.5 mil. Fund-based facilities affirmed with IND A4+
rating; and
-- INR2 mil. Non-fund-based working capital limit affirmed with
IND A4+ rating.
Key Rating Drivers
The affirmation reflects NMC's continued small scale of operations,
even as its revenue grew 45.89% yoy to INR204.14 million in FY22 as
the impact of COVID-19 normalized, resulting in improved
operational efficiencies. During 11MFY23, NMC achieved a revenue of
INR222 million. For FY23 and FY24, Ind-Ra expects the revenue to
remain at similar levels due to the stable nature of order.
The ratings reflect NMC's modest EBITDA margins due to the intense
competition in the industry. The margins are susceptible to forex
fluctuations but the company hedges the risk through forward
contracts. The margin increased slightly to 14.98% in FY22 (FY21:
12.75%), mainly on account of a decrease in personnel and other
expenses with a return on capital employed of 8.4% in FY22 (FY21:
1.9%). In FY23 and FY24, Ind-Ra expects the EBITDA margin to remain
largely unchanged year-on-year.
Liquidity Indicator – Adequate: NMC's debt obligation for FY23
and FY24 is INR4.2 million and INR1.3 million, respectively. In
FY22, the net working capital cycle remained elongated despite
improving to 161 days (FY21: 290 days) due to a decrease in the
debtor days to 67 (96). NMC does not have any capital market
exposure and relies on single banks and financial institutions to
meet its funding requirements. NMC's average peak use of its
fund-based working capital limits was 28.15% for the 12 months
ended February 2023. The cash flow from operations remained at
INR32.83 million in FY22 (FY21: INR32.69 million). The company had
a cash balance of INR25.31 million at end-FY22 (end-FY21: INR25.27
million).
The ratings continue to be supported by NMC's comfortable credit
metrics owing to the absence of any significant external
borrowings. In FY22, the net leverage ratio (adjusted net
debt/operating EBITDAR) improved to 0.12x (FY21:1.95x) and cash and
cash equivalents to INR25.31 million towards the year-end (INR25.27
million). However, the interest coverage (operating EBITDA/gross
interest expense) improved to 9.58x in FY22 (FY21: 7x) because of
an increase in absolute EBITDA to INR30.57 million in FY22 (FY21:
INR17.84 million). In FY23 and FY24, Ind-Ra expects the credit
metrics to remain comfortable due to the absence of any debt-led
capex plans.
The ratings are also supported by the promoters' experience of over
10 years in the manufacturing of solid carbide metal cutting
tools.
Rating Sensitivities
Negative: A decline in scale of operations, leading to
deterioration in the credit metrics with the interest coverage
falling below 2x and/or deterioration in the liquidity could lead
to a negative rating action.
Positive: A substantial increase in the scale of operations, while
maintaining the overall credit metrics and maintaining the
liquidity, will be positive for the ratings.
Company Profile
Incorporated in 2007, NMC manufactures solid carbide rotary metal
cutting tools, majorly used in industries such as automotive and
aeronautical industries, at its site in the Falta special economic
zone (West Bengal).
OPTECH ENGINEERING: Ind-Ra Moves BB+ Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Optech Engineering
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR2.2 mil. Term loan due on August 2024 migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)
rating;
-- INR50 mil. Fund-based facilities migrated to non-cooperating
Category with IND BB+ (ISSUER NOT COOPERATING)/IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR47.8 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 25, 2022. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Company Profile
Optech Engineering is a Thane, Maharashtra-based public limited
company incorporated in 2005 by Siddhartha Desai and Trisit
Bhuiyan. The company provides oil and liquid petroleum gas
engineering services. It operates through four divisions:
fabrication, project and construction, onsite service, and
non-destructive testing and certifications.
R D ENGINEERS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of R D Engineers
India Private Limited (RDEPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
Letter Of Guarantee 12.5 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 0.08 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RDEPL 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 RDEPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RDEPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RDEPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
RDEPL, incorporated in 1984 and promoted by Mr S R Dua, designs and
fabricates critical process equipment such as pressure vessels,
heat exchangers, columns, and towers for the refinery,
petrochemical, and fertiliser industries. The manufacturing
facilities are in Mumbai and Nashik.
RAJ INFRASTRUCTURE: Ind-Ra Moves BB+ Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Raj Infrastructure
Development (India) Pvt. Ltd.'s Long-Term Issuer Rating of 'IND
BB+' to the non-cooperating category and has simultaneously
withdrawn it. The Outlook was Positive.
The instrument-wise rating actions are:
-- INR800 mil. Non-fund-based working capital limits** migrated
to non-cooperating category and withdrawn;
-- INR200 mil. Fund-based working capital limits* migrated to
non-cooperating category and withdrawn; and
-- INR51.96 mil. Term loans* due on FY27-FY28 migrated to non-
cooperating category and withdrawn.
* Migrated to IND BB+ (ISSUER NOT COOPERATING) before being
withdrawn
** Migrated to IND BB+ (ISSUER NOT COOPERATING)/ IND A4+ (ISSUER
NOT COOPERATING) before being withdrawn
Key Rating Drivers
Ind-Ra has migrated the ratings in the non-cooperating category as
the issuer did not participate in the rating exercise, despite
requests by the agency and has not provided information pertaining
to full-year financial performance for FY23, sanctioned bank
facilities and utilization, business plan and projections for the
next three years, information on corporate governance, and
management certificate.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificate from the lender. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017 for credit rating agencies. Ind-Ra
will no longer provide analytical and rating coverage.
Company Profile
Raj Infrastructure Development (India) was incorporated in 1996 and
is promoted by Ram Udaysing Nimbalkar, who is a civil engineering
graduate and has more than three decades of experience in
construction of earthen dams, construction and strengthening of
canals, construction of roads and other infrastructure projects.
The company majorly executes road construction projects. It is a
class 1 contractor with Public Works Department of Maharashtra
where the bidding limit is up to INR7,000 million.
RAJA KAIMOOR: CRISIL Lowers Rating on INR22cr Term Loan to D
------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Raja Kaimoor Breweries Private Limited (RKBPL) to 'CRISIL D Issuer
Not Cooperating' from 'CRISIL BB-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Term Loan 18 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
Rupee Term Loan 22 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
CRISIL Ratings has been consistently following up with RKBPL for
obtaining information through letters and emails dated December 28,
2021, November 29, 2021, 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 RKBPL, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RKBPL
is consistent with 'Assessing Information Adequacy Risk'.
The rating action is based on delay in servicing debt obligations
in past by RKBPL which came to CRISIL ratings' notice through
public information.
Incorporated in 2005, RKBPL leases and rents plant and machineries.
It is based in Nagpur, Maharashtra, and is promoted by Mr Ghanshyam
Jaiswal. The company has manufacturing capacity of 3 lakh ha which
is leased out to B9 beverages.
RARE SS: Ind-Ra Cuts Term Loan Rating to BB, Outlook Stable
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Rare SS
Properties India Private Limited's (RSSPIPL) term loan rating to
'IND BB' from 'IND BB+'. The Outlook is Stable.
The detailed instrument-wise rating action is:
-- INR2.2 mil. Term loan due on FY32 downgraded with IND
BB/Stable rating.
ANALYTICAL APPROACH: Ind-Ra continues to take a consolidated view
of RSSPIPL, and its group companies Saravana Stores Tex (SST) and
Saravana Stores Jewel (SSJ) to arrive at the ratings, as they are
owned by the same promoters and cross-guarantees exist within the
group.
The downgrade reflects the consolidated leverage deteriorating to
7x in FY22 (FY21: 5x), which is a breach of the negative rating
sensitivity.
Key Rating Drivers
Deteriorated and Modest Credit Metrics; Fall in Margins, despite
Increase in Revenue: The consolidated credit metrics deteriorated
in FY22 due to an increase in the debt levels. The net leverage
(net debt/EBITDA) was about 7x in FY22 (FY21: 5.3x) and the
interest coverage (EBITDA/interest expense) was 2.2x (2.8x). The
total cash and cash equivalents at FY22 was INR86 million (FY21:
INR129 million) and debt was INR5,226 million (INR4,058 million).
The EBITDA margins fell to 5% in FY22 (FY21: 7%) due to a decrease
in revenue at SSJ.
The consolidated revenue however increased 11.5% yoy to INR13.1
billion in FY22, as the companies reported reasonable business post
easing of lockdown restrictions. Ind-Ra expects the revenue to
increase on a yoy basis in FY23, as this would be the first full
operational year of business post COVID-19. Furthermore, Ind-Ra
expects the margins to remain at the FY22 level for FY23 and FY24.
On a standalone basis, the company's EBITDA margins remained stable
above 83% in FY22 (FY21: 84%). The standalone revenue was INR180
million in FY22 (FY21: INR90 million). RSSPIPL has an internal
promoter loan of INR1.0 billion on its book.
Key Man Risk: Although there exists a proper management structure
for day-to-day operations, the promoters remain the primary
decision-makers, exposing the firm to key man risk.
Tenant Concentration Risk: SST and SSJ, which are owned by the same
promoter group, are the only two tenants of the company.
Deterioration in the performance of either or both of the tenants
would expose the company to major risks and could have a
significant impact on its revenue streams.
Established Brand, Experienced Promoter: The Super Saravana Stores
is an established brand name in Chennai and has considerable brand
recall among customers. The promoters have decades of experience
in operating a retail chain. Through RSSPIPL, the promoters own
about 150,000 square feet (sf) of real estate retail space in
Chromepet, Chennai. The retail space is housed under SST.
Successful Completion of Madurai Project: The company had completed
the construction of a retail mall in Madurai before time. The mall
started operations in December 2021. The total construction cost of
the project was INR2.85 billion, of which INR0.89 billion was
funded by the promoter and the rest was debt funded. The mall
consists of a basement, ground plus nine floors, and has a fully
automated multi-level car parking space that can accommodate 485
vehicles.. The mall houses SSJ and SST as tenants. SSJ and SST are
required to pay a monthly rent of INR2.2 million and INR23 million,
respectively.
Liquidity Indicator - Adequate: The company had consolidated cash
and cash equivalents of INR86 million at FYE22 (FYE21: INR129
million). Ind-Ra expects the company to generate a total cash flow
from operations of more than INR900 million over FY23-FY24. Most of
these gains would be driven by the scheduled opening of the Madurai
project in FY23 and conditions returning to normalcy post COVID-19.
Ind-Ra estimates that the company would generate adequate free cash
flows to service debt repayment in FY24 and FY25. The company's
repayment obligations amount to INR264 million in FY24 and INR232
million in FY25. Ind-Ra believes if the company is unable to
generate sufficient free cash flows, the promoter would step in to
support debt repayment obligations. The promoters have provided
personal guarantees to RSSPIPL's external debt.
Update on Income Tax Raid Carried in December 2021: The Income Tax
department carried out raids in December 2021 related to certain
unaccounted income. The IT department had assessed an unaccounted
income of INR420 million for the same. The company is contesting
the case in front of authorities.
Rating Sensitivities
Positive: Favorable resolution of the income tax case and the
consolidated net leverage declining below to about 5x, on a
sustained basis, could result in an upgrade.
Negative: Any large unforeseen liability arising out of the income
tax case or the consolidated net leverage remaining above 7.5x on a
sustained basis could result in a downgrade.
Company Profile
RSSPIPL is a real estate holding company that owns 150,000 sf of
retail space in Chrompet, Chennai and about 603,000 sf retail mall
in Madurai. The promoters of the company are Sabapathy Rajaratnam
(owns 59.58% stake) and Revathy Rajaratnam (39.7%). The Chennai
property houses SSJ and the Madurai property houses both SSJ and
SST. Both SST and SSJ are owned by the same promoters.
REGENCY LINX: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Regency Linx
Exports Private Limited (RLEPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Foreign Documentary 12.6 CRISIL D (Issuer Not
Bills Purchase Cooperating)
Packing Credit 11 CRISIL D (Issuer Not
Cooperating)
Term Loan 0.4 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RLEPL for
obtaining information through letters and emails dated December 30,
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 RLEPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RLEPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RLEPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
RLEPL, set up in 2013 and based in Chennai, processes and exports
marine products. Operations are managed by Mr. Alagumuthu Raja.
ROYAL MUDHOL: Ind-Ra Assigns BB+ Long Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Royal Mudhol
Hospital and Research Centre LLP (RMHRC) a Long-Term Issuer Rating
of 'IND BB+' and has simultaneously placed it on Rating Watch with
Developing Implications.
The instrument-wise rating action is:
-- INR1,647.5 bil. Term loans due on March 2032 assigned and
placed on rating watch with developing implications with IND
BB+/Rating Watch with Developing Implications.
Ind-Ra has placed the ratings on Rating Watch with Developing
Implications on the back of a likely equity infusion from a
strategic investor by acquiring a controlling stake in RMHRC. While
the ratings derive comfort from the investor's security deposit
maintained with RMHRC, the impact of the equity infusion and other
factors such as changes in the corporate structure, business and
financial performance, liquidity position and shareholding pattern
remain to be seen. Ind-Ra will closely monitor the completion of
the due diligence process and its impact. Ind-Ra will resolve the
rating watch post the availability of respective documents and
information pertaining to the transaction.
Key Rating Drivers
The ratings reflect RMHRC's nascent stage of operations as the
hospital commenced operations at end-December 2022 with 196 beds.
During January-February 2023, it booked revenue of INR1.88 million.
The management expects the firm to attain breakeven in FY24 as the
hospital has achieved an occupancy of around 35% during
January-February 2023. FY24 will be the first full year of
operations. Furthermore, the management expects the firm to achieve
a positive EBITDA margin in FY25, due to better absorption of fixed
cost. Ind-Ra expects the equity infusion, which will result in a
controlling stake of the strategic investor, could improve RMHRC's
liquidity position and boost operating performance.
The investor has commenced its due diligence, which is likely to
complete in the next three months. It has also maintained a
security deposit of INR150 million and is likely to infuse equity
for a controlling stake in RMHRC.
Liquidity Indicator - Stretched: Of the total project cost of
INR2,476.7 million, 66% was funded through bank debt and the
remaining through promoters' equity. The total sanctioned term
loans amounting to INR1,647.5 million is to be repaid in 10 years.
As of February 2023, INR1,518.6 million worth of loans have been
disbursed and the equity capital from promoters has been fully
infused. The debt repayment will commence from January 2024
amounting to INR10.4 million and INR49.4 million in FY25. The
day-to-day activities will be funded through promoters'
contribution and the proposed equity infusion. As per the
management, RMHRC does not have any plan to avail working capital
limits, as the security deposit from the strategic investor is
utilized for working capital purposes.
The ratings are constrained by intense competition from several
large hospitals in Pune. The firm is also exposed to regulatory
risks inherent to the healthcare industry, mainly in the form of
price capping for medical procedures and devices.
However, the ratings derive comfort from the creation of a debt
service reserve account equivalent to three months of principal and
interest payments.
Rating Sensitivities
The Rating Watch with Developing Implications indicates that the
ratings may be affirmed, downgraded or upgraded upon resolution.
Ind-Ra is likely to resolve the rating watch once the agency
receives clarity on the impact of the transaction upon the
shareholding pattern, corporate structure and liquidity position.
Company Profile
Incorporated in 2015, RMHRC operates a 250-bed multi-specialty
quaternary hospital in Pune. Vijaysinh Maurya and Menkaraje Maurya
are the promoters. As on March 2023, the hospital is operational
with a capacity of 196 beds. The hospital provides healthcare
services for various departments such as cardiology &
cardiovascular and thoracic surgery, orthopedics, trauma with joint
replacement, nephrology, urology, neurology & neuro surgery,
oncology including robotic surgery, hepatology, plastic surgery,
gynaecology and in vitro fertilization, among others.
RRK COTTON: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned RRK Cotton's India
Private Limited (RRKCIPL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable.
The instrument-wise rating action is:
-- INR420 mil. Fund-based working capital limits assigned with
IND BB/Stable/IND A4+ rating.
Key Rating Drivers
The ratings reflect RRKCIPL's modest credit metrics with a gross
interest coverage (operating EBITDA/gross interest expense) of
4.08x in FY22 (FY21: 3.7x) and a net leverage (adjusted net
debt/operating EBITDAR) of 11.56x (7.48x). The interest coverage
improved year-on-year in FY22 due to a rise in the absolute EBITDA
to INR84.15 million (FY21: INR29.17 million); however, the net
leverage deteriorated in FY22 as RK Cotton's, the sole
proprietorship of the promoter, was merged with RRKCIPL in March
2022; RK Cotton's had high bank loans of INR530 million at
end-FY21. RRKCIPL has unsecured loans of INR236 million from the
promoters on which no interest has been charged till FY22; hence,
the interest coverage remains moderate. However, Ind-Ra expects the
interest coverage to reduce in FY23 due to interest cost incurred
on the loans from the merged entity, RK Cotton's and net leverage
to improve due to a likely increase in the absolute EBITDA post the
merger.
The ratings further reflect RRKCIPL's small scale of operations as
indicated by a revenue of INR629.69 million in FY22 (FY21:
INR305.32 million). The company was incorporated in July 2020 so
FY22 was the first full year of operations. The company booked a
revenue of INR1243 million in 9MFY23. Ind-Ra expects the revenue to
improve further in FY23 due to the merger. The company is operating
at 60% capacity utilization.
The ratings also factor in RRKCIPL's modest EBITDA margins of
13.36% in FY22 (FY21: 9.55%) with a return on capital employed of
10.3% (17.5%). The margins improved in FY22 due to the higher value
addition in the garment manufacturing process such as dyeing
executed during the year and an improvement in the efficiency of
operations as FY22 was the first full operational year for RRKCIPL.
Ind-Ra expects the EBITDA margins to remain at a similar level in
FY23.
Liquidity Indicator - Stretched: The net working capital cycle
lengthened to 1,236 days in FY22 (FY21: 159 days) due to an
increase in the inventory holding days to 1,382 (150). The company
had finished goods for an order of INR120 million the delivery of
which was deferred into FY23 and hence the inventory holding was
elongated in FY22. The company has an order of INR1,121 million to
be exported to Jordan April 2023 onwards and hence the inventory of
finished goods is likely to remain elevated. The average maximum
utilization of the fund-based limits was 65.2% during the 12 months
ended January 2023. The unencumbered cash and cash equivalents were
INR52.99 million at FYE22 (FYE21: INR63.51 million). Furthermore,
the company does not have any capital market exposure and relies on
banks and financial institutions to meet its funding requirements.
The cash flow from operations declined further to negative
INR490.25 million in FY22 (FY21: negative INR98.3 million) due to
unfavorable working capital changes.
RRKCIPL faces significant customer concentration risk as a single
customer accounts for around 64% of the revenue in FY23.
The ratings are, however, supported by the promoters' nearly three
decades of experience in the garments industry, leading to the
company's established relationships with customers and suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations
resulting in comfortable credit metrics, an improvement in the
liquidity and a shortening of the working capital cycle, all on a
sustained basis, will be positive for the ratings.
Negative: A decline in the scale of operations, leading to
deterioration in the liquidity and credit metrics and/or a further
lengthening of the working capital cycle, on a sustained basis will
be negative for the ratings.
Company Profile
Incorporated in July 2020, RRKCIPL is a garment (inner wear and
t-shirts) manufacturer located in Tamil Nadu with a production
capacity of 20 million garments. The garments are 100% exported to
the US, the UK, Germany and Jordan.
SATELLITE CABLES: CRISIL Lowers LT/ST Debt Ratings to D
-------------------------------------------------------
CRISIL Ratings has downgraded the ratings of Satellite Cables
Private Limited (Satellite) to 'CRISIL D/CRISIL D Issuer Not
Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
Short Term Rating - CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with Satellite
for obtaining information through letters and emails dated December
14, 2021, January 12, 2022 and January 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 SCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SCPL
is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, CRISIL Ratings has
downgraded the ratings to 'CRISIL D/CRISIL D Issuer Not
Cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'. As per information available in the public domain,
there remains delinquency in company account and clarity about the
same from the management and bankers is continuing to remain
awaited.
SCPL is a private limited company engaged in the manufacturing of
low as well as high tension power cables comprising polyvinyl
chloride (PVC) cables and cross-linked polyethylene (XLPE) cables.
The company was established in 1986 and was taken over by the
current management in 2007. The company is managed by Mr. Vinay
Gupta and his brother, Mr. Vikas Goel and has its manufacturing
unit in Bhiwadi (Rajasthan).
SENTINI FLOPIPES: CARE Withdraws BB+ Rating on LT Bank Debts
------------------------------------------------------------
CARE Ratings has withdrawn the ratings on certain bank facilities
of Sentini Flopipes India Private Limited (SFIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank - Reaffirmed at CARE BB+; Stable
Facilities and Withdrawn
Short Term Bank - Reaffirmed at CARE A4+ and
Facilities Withdrawn
Rationale and key rating drivers
CARE Ratings Ltd. has reaffirmed and withdrawn the outstanding
ratings of CARE BB+; Stable/CARE A4+ assigned to the bank
facilities of SFIPL with immediate effect. The above action has
been taken at the request of Sentini Flopipes India Private Limited
and 'No Objection Certificate' received from the bank that has
extended the facilities rated by CARE Ratings Ltd.
Rationale and key rating drivers
The reaffirmation in the ratings assigned to the bank facilities of
Sentini Flopipes India Private Limited (SFIPL) is constrained by
limit track record of the company, continued losses in FY22 (FY
refers to the period April 1 to March 31) and 10MFY23, elongated
operating cycle, fragmented industry with presence of few dominant
players and several unorganized players resulting in intense
competition. The ratings, however, derive strength from strong
promoter team, company being a part of bigger group (viz Sentini
group) and synergies derived therefrom, improved total operating
income and operating profit in FY22 and 10MFY23, moderate capital
structure, strategic location of the plant, distributor network in
place, and adequate liquidity. The ratings also factor in infusion
of funds by promoters to support the growing scale of operations
and debt repayment obligations.
Analytical approach: Standalone
Outlook: Not applicable
Key weaknesses
* Limited track record: SFIPL is incorporated in FY2018 but
commenced operations during FY2021 on account of delay in the
project by one year due to Covid induced lockdown and other
disruptions. Company has operational vintage of less than 3 years.
However, the financial and operational performance of the company
is improving Y-o-Y.
* Continued losses in FY22 and 10MFY23: In FY22, SFIPL has recorded
net loss of INR5.93 crores (FY 21: INR5.66 crores) on account of
increased raw material costs and high interest cost on term debt.
Further, during 10MFY23, company reported continued losses
amounting INR11.60 crores primarily on account of steep rise in raw
material prices and company's inability to pass on entire input
cost to its customers.
* Fragmented industry with low entry barriers and low product
differentiation: PVC pipes Industry is a highly fragmented Industry
with low entry barriers and low product differentiation. The
industry has few organized who together have a major share in the
PVC product segments. And numerous unorganized small players
resulting in intense competition.
* Volatile raw material prices: The company is susceptible to
volatility in the prices of key raw materials, polyvinyl chloride,
high-density polyethylene, and polypropylene, which are affected by
change in crude oil prices and foreign exchange rates. The company
imports its key raw material from Japan leaving it susceptible to
forex fluctuation. PVC resin, the key input for PVC
Pipes, is a derivative of crude oil which is linked directly to
crude oil and move in line with the global oil prices.
Key strengths
* Qualified and resourceful promoters: Sentini Flopipes India
Private Limited (SFIPL) is promoted by Mr. Tipirneni Seshagiri Rao
and Ms. K Jaya. Mr. Tipirneni Seshagiri Rao is an MBA and has more
than three decades of experience in various Public Sector
Undertakings (PSUs) namely; the Food Corporation of India,
Rashtriya Chemicals & Fertilizers Ltd., Paradeep Phosphates Ltd and
Godavari Fertilizers and Chemicals Ltd. Currently, he serves on the
board of other group companies. Mrs. Jaya Kommaraju, is the other
promoter and she is one of the core members of sentini group and
has rich expertise of scaling up of operations. The promoters have
successfully established many companies engaged in various business
activities. The promoters have long presence and established
contacts in the industry. The promoters have been supporting the
company by infusing funds in SFIPL whenever required. In FY22,
promoters have infused additional equity of about INR23 crore to
support the increasing scale of operations and debt repayment
obligations.
* Improved total operating income and operating profits in FY22 and
10MFY23: In FY22, total operating income of the company increased
by 151% i.e., to INR144 crore in FY22 from INR57.58 crores in FY21
as FY22 is the first full year of operations. During FY22, SFIPL
has achieved capacity utilization of 38.42% against 18.51% in FY21
on account of growing demand for PVC
pipes. With increase in TOI, PBILDT level of the company improved
significantly to INR9.07 crores in FY22 (FY21: INR1.04 crores).
Despite increase in revenue and PBILDT levels, SFIPL has incurred
net loss on account of high interest cost of external term debt.
During 10MFY23, SFIPL has recorded total operating income of
INR102.47 crores with PBILDT levels remained at INR8.18 crores.
* Moderate capital structure: The capital structure of the company
marked by overall gearing ratio deteriorated to 1.69 as on March
31, 2022 against INR1.59x as on March 31, 2021 on account of
additional working capital limits availed during FY22 to meet
working capital requirements. Total debt of the company consists of
capex term loans, working capital borrowings and unsecured loans
received from the promoters. Despite increased in debt, overall
gearing ratio is comfortable on account of strong net worth base as
the promoters infused equity amounting to INR23 crores in FY22.
* Strategic location of the project: The manufacturing unit is
strategically located in Nellore District of Andhra Pradesh to meet
the vast potential demand from the southern part of the country.
The site area also has rich underground water which is readily
accessed through Alluru reservoir along with installed 4 bore
wells.
* Marketing and selling arrangements in place coupled with
synergies from group: Sentini Ceramic Private Limited one of the
group companies is co-promoted by the Sentini group and H & R
Johnson (A division of Prism Cements Limited) and is also located
in Andhra Pradesh (Krishna Dist.). SFIPL stands to benefit from the
wide existing distributor/dealer network and significant market
presence of the group given the similar end-user industry.
Furthermore, SFIPL has its own distribution network spread across
south Indian market.
* Industry outlook: Pipes find application in
residential/commercial real estate construction, irrigation, and
WSS infra development. The industry was pegged at INR410 bn-420 bn
in FY21 and a ~10% CAGR over FY16-FY21 amid rising demand from
irrigation and WSS sectors, and metal pipe replacement demand from
residential real estate. As per various estimates, the industry is
expected to grow at 11-12% CAGR over FY21-FY25E. Govt. initiatives
such as Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Accelerated
Irrigation Benefits Programme (AIBP), and Command Area Development
and Water Management Programme have supported irrigation sector
growth. The industry also received a boost from Nal-se-Jal, Atal
Mission for Rejuvenation and Urban Transformation (AMRUT) scheme.
As a result, demand for PVC pipes will be remained robust.
Liquidity: Stretched
Liquidity is stretched marked by cash losses incurred against gross
loan repayment of INR6.76 crores for next one year. As on march 31,
2022, Free cash and bank balance available is INR0.03 crores. The
average utilisation for last 12 months ended Dec 2022 is high at
93% as it operates in working capital intensive industry with high
inventory holding period. In FY22, Inventory holding period and
operating cycle stood at 168 days and 164 days. The operating cycle
is likely to remain elongated because of high RM inventory holding
to avoid significant impact of price fluctuations and to ensure
uninterrupted production. However, comfort derived from infusion of
funds in the form of equity/unsecured loans by promoters y-o-y to
meet short term liquidity mismatches. Further, liquidity is
supported by current ratio of 1.97x as on March 31, 2022.
Sentini Flopipes India Private Limited (SFIPL) is a part of Sentini
Group which has diversified interests across ceramic tiles, IT/IT
enabled services, automobile parts, ENA manufacturing and hospitals
among others. SFIPL, incorporated in March 2018 is promoted by Mr.
T. Seshagiri Rao. The company has set up a manufacturing unit of
Polyvinyl Chloride (PVC) Pipes with an installed capacity of 20,000
MTs per annum. The project was completed by incurring total cost of
INR194.41 crore, 60% debt funded. The company commenced operations
from March 2021 and FY22 will be its first full year of commercial
operations.
SEW BELLARY: Ind-Ra Affirms BB+ Term Loan Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed SEW Bellary
Highways Limited's (SBHL) term loans as follows:
-- INR225.9* mil. (reduced from INR402.7 mil.) Rupee term loan
(RTL) due on September 2025 affirmed with IND BB+/Stable
rating.
*Outstanding as of March 15, 2023
The rating continues to be constrained by the project's stretched
liquidity position, weak sponsor profile and moderate operation and
maintenance (O&M) risks. However, the rating derives strength from
the timely receipt of the last three annuities with minimal delays
and nil performance-related deductions from counterparty, Karnataka
Road Development Corporation Limited (KRDCL), and satisfactory road
quality. Ind-Ra has analyzed SBHL's standalone credit profile for
the rating.
Key Rating Drivers
Liquidity Indicator - Stretched: Ind-Ra expects the available
liquidity to be sufficient to address only the delay in annuities
and could be stretched when a major maintenance (MM) activity would
be undertaken during FY24. SBHL had a debt service reserve (DSR) of
INR118.3 million and cash balance of INR62.7 million as on March
22, 2023. The DSR is equivalent to 11 months of debt servicing in
FY24, while the stipulated DSR (one quarter interest and one
half-yearly principal repayment) is INR62.70 million.
Also, the project's debt service coverage ratio (DSCR) comes out to
be around unity for FY24 and 1.22x for FY25, after considering MM
expense of INR120 million to be expended during the two years and
O&M cost as envisaged by the management. The company delayed its
repayments in the past due to the delayed receipt of annuities.
Although the current liquidity build-up provides cushion for any
such future annuity delays, there are limited buffer for any other
adverse event such as withholding of annuities or increased
expenses. In the event of withholding of annuities due to any event
(historically observed with the 12th annuity), the cashflows could
be stretched, especially at the time of incurring second MM
expenses. Nearly 42% of the 12th annuity was withheld and released
subsequently.
The lender has confirmed that cash surplus will be retained in SBHL
and will be used for maintenance and project expenses. Ind-Ra will
review the rating in case of any fall in the internal liquidity,
including dues to the repatriation of surplus to the sponsor in any
form.
Weak Sponsor: SEW Infrastructure Limited (SIL), the sponsor,
undertakes turnkey projects in diverse fields such as irrigation,
power, roads, tunnels and pipelines. SIL continues to have a weak
credit profile and thus would be unable to support the company in
case of any shortfall in debt servicing.
Moderate Operating Risk; Minimum Technology Risk: SBHL had signed
an O&M contract with a third-party contractor valid for
July-December 2022. The management stated that it has renewed the
O&M contract subsequently. Ind-Ra believes the maintenance
requirement is straightforward, given the project corridor has low
complexity. The last MM cycle was completed in July 2019.
As per the management and the authority, the road quality is good;
however, the roughness index survey report for October 2022
indicated that the road quality is satisfactory. According to the
concession agreement, an MM cycle is required to be carried out in
FY23 and the road thickness would be at least 50mm. SBHL, however,
expects the MM to be incurred during FY24, depending upon the road
quality. Ind-Ra expects the second MM expenses could be a total of
around INR120 million to be incurred during FY24-FY25, assuming
nominal escalation on the actual expenses incurred during the last
MM. A substantial increase in the actual operating or MM expenses,
beyond Ind-Ra's base case estimates, could impact the rating.
Moderate Debt Structure: The RTL is repayable in 23 half-yearly
repayments in September and March of every year. The tail period is
around six months. The principal repayment dates fall on the first
of March and September while annuities fall due on eight of March
and September. The project has standard project finance features,
including a cash flow waterfall and restricted payment conditions.
Predictable Revenue Albeit with Delays: SBHL has received 18th,
19th and 20th annuity from the counterparty KRDCL on a timely
basis, i.e. within seven days from the due date with nil
performance related deductions. SBHL has received 20 annuities till
March 2023 out of the total 26 annuities, as per the concession
agreement. In the past, there was delays of seven-to-92 days in
receiving annuities during March 2016 to January 2022. The
receivables elongated during 1HFY21 to 141 days due to COVID-19.
Although SBHL has a debt service reserve account (DSRA) covering
six months of debt service requirements, regular receipts of the
full annuity are a crucial rating factor and any adverse changes
will result in a negative rating action.
Rating Sensitivities
Negative: Delays beyond three months in the receipt of annuities,
any material withholding or deductions in the annuity payments and
an increase in the maintenance expenses could result in a negative
rating action.
Positive: The timely receipt of annuities for a continued period of
two years and improved internal liquidity leading to visibility on
funding on the second MM expenses, could result in a positive
rating action.
Company Profile
SBHL is a special purpose vehicle promoted by SIL. It has been
incorporated to widen the existing state highways no 132 from
Bellary to Andhra Pradesh border to a four-lane divided carriageway
from a two-lane carriageway on the design, build, finance, operate
and transfer basis under the annuity frame work. The 17-year
concession (including two years of construction) was awarded by
KRDCL. SBHL achieved the final completion on 8 October 2021 as the
right of ways issues hampered project completion.
SIDDHI VINYAK: Ind-Ra Assigns BB Bank Loan Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shri Siddhi Vinyak
Trust's (SSVT) bank facilities a rating of 'IND BB'. The Outlook is
Stable.
The detailed rating action is:
-- INR970 mil. Proposed bank loans assigned with IND BB/Stable
rating.
Key Rating Drivers
Continued Decline in Headcount: A continuous decline in the student
headcount was witnessed during FY18-FY22, due to the general
decline in the interest of students towards engineering or
polytechnic courses. The student headcount fell to 2,606 in FY22
from 3,208 students in FY18. However, SSVT has realigned itself by
shifting the focus to management courses and computer science and
information technology streams under the engineering domain. The
student headcount increased to 2,945 in FY23 till December 2022.
Ind-Ra expects the student headcount to witness marginal growth in
the near term.
Debt-funded Capex: SSVT along with the government of Uttar Pradesh
is incurring a major capex amounting to INR1,560 million to set up
a medical college and an attached hospital by FY25 under the
private public partnership model. The capex will be funded 67% by
debt and remaining through internal accruals and unsecured loans
from managing trustees. The government of Uttar Pradesh has signed
a concession agreement with SSVT to provide support in the form of
interest subsidy (5% subject to a maximum of INR10 million per
year), assistance of INR0.5 million per seat per year for the first
and second batches of students joining the medical college and
other support.
Liquidity Indicator – Stretched: The average working capital
utilization stood at 60% for the 12 months ended December 2022. The
receivable period was long at 170 days in FY22 (FY21: 188 days),
mainly on account of a delay in fee collections during the COVID-19
pandemic. The trust's available funds (cash and unrestricted
investments) reduced marginally to INR91.65 million in FY22 (FY21:
INR95.59 million) and remained strong to cover total debt and
operating expenditure at 45.13% (43.25%) and 56.28% (66.40%),
respectively. With higher leverage expected on account of the
debt-funded capex, Ind-Ra expects the liquidity position to remain
stretched as SSVT has limited banking relationships.
Stable Profitability: SSVT reported strong EBITDA margins of above
35% during FY18-FY22. In FY22, the EBITDA margins increased to
34.98% (FY21: 34.54%), due to a 13.9% yoy increase in the operating
income and slower growth of 6.8% in the staff cost. With the fall
in requirement for engineering courses, the trust has reduced the
staff count to 248 in 9MFY23 (FY22: 370). SSVT reported a net
surplus of INR25.53 million and net cash accruals of INR61.92
million for FY22. Ind-Ra expects the EBITDA margin to remain
comfortable at above 35% in the near term.
Comfortable Debt Service Capability: SSVT's debt service coverage
ratio and interest service coverage ratio remained comfortable
during FY18-FY22, despite deterioration in FY22. Debt service
coverage ratio fell to 2.27x in FY22 (FY21: 2.75x) and interest
service coverage ratio (EBITDAR/interest expenses) declined to
3.41x (4.06x), due to an increase in debt service obligations to
INR38.67 million (INR27.64 million).
Rating Sensitivities
Positive: Events that may collectively lead to a positive rating
action are:
- a sustained increase in the student headcount, and
- a sustained improvement in the scale of operations.
Negative: Events that may, individually or collectively, lead to a
negative rating action are:
- a 10% yoy fall in the student strength for two consecutive
years,
- the EBITDAR margin reducing below 30%,
- significant stress in the liquidity position, and
- significant delays in capex completion.
Company Profile
SSVT is a not-for-profit trust registered under The Indian Trust
Act, 1872. The trust was registered in December 2007. It is
promoted by Shri Siddhi Vinayak group of companies, which is a
large diversified business house based out of Bareilly. SSVT has
established several institutes in Bareilly area which include Shri
Siddhi Vinayak Institute of Technology, Shri Siddhi Vinayak
Institute of Management, Shri Siddhi Vinayak Polytechnic, Shri
Siddhi Vinayak School of Nursing, and Shri Siddhi Vinayak Institute
of Paramedical Studies. SSVT also manages a hospital called Vinayak
hospital since 2019. SSVT has been selected by the Uttar Pradesh
government for the establishment of a medical college along with a
330-bed hospital (initial phase) in Sambhal district.
SKL EXPORTS: Ind-Ra Assigns BB+ LT Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned S.K.L. Exports
(SKLE) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR1.070 bil. Fund-based working capital limits assigned with
IND BB+/Stable/IND A4+ rating; and
-- INR102.2 mil. Term loan due on March 2026 assigned with IND
BB+/Stable rating.
Key Rating Drivers
The ratings reflects SKLE's modest credit metrics. The net leverage
(total adjusted net debt/operating EBITDAR) deteriorated to 7.06x
in FY22 (FY21: 5.59x) on account of an increase in the total debt
to INR1,109.31million (INR712.59 million). The interest coverage
(operating EBITDA/gross interest expenses) deteriorated to 2.60x in
FY22 (FY21: 3.22x) due to an increase in the interest expenses to
INR59.98 million (INR37.46 million). Ind-Ra expects the credit
metrics to remain stable in FY23, and deteriorate in FY24 as SKLE
is planning to incur capex of INR350 million for a solar power
plant, which will be funded through capital contribution of INR88
million and a term loan of INR262 million.
The ratings further reflect SKLE's medium scale of operations, as
indicated by revenue of INR2,749.19 million in FY22 (FY21:
INR1,457.45 million). SKLE achieved revenue of INR2,526 million in
9MFY23. As of January 2023, the company had an order book worth
INR895 million to be executed in the short term. Ind-Ra expects the
revenue to increase in FY23 and FY24 on the back of an increase in
capacity utilization and incremental orders from existing and new
customers.
The ratings also factor in SKLE's modest EBITDA margins. The margin
had declined to 5.67% in FY22 (FY21: 8.26%), due to increased
manufacturing costs and fluctuations in raw material prices. The
ROCE was 9.1% in FY22 (FY21: 8.8%). SKLE derives its 90% revenue
from exports, with its customers being spread across the US and
Europe. Therefore, the company's revenue and profitability are
vulnerable to currency fluctuations. Till 7MFY23, it achieved
EBITDA margins of 5.5% (INR125 million). Furthermore, Ind-Ra
expects the margins in FY23 to remain in line with the 7MFY23
levels, and fluctuate in line with movements in cotton prices in
FY24. Any significant volatility in cotton yarn prices and foreign
exchange can impact the operating margins of SKLE.
Liquidity Indicator - Stretched: The ratings reflect the company's
modest ability to service its debt obligations due to high
principal repayments. The company has to repay around INR85.50
million and INR58.10 million, along with an estimated interest cost
of around INR84.90million and INR91.80 million, respectively, in
FY23 and FY24. In FY22, the company's absolute EBITDA was INR155.85
million. Therefore, in case of only marginal growth in EBITDA
during FY23 and FY24, the debt servicing coverage ratio is likely
to be weak. SKLE's average maximum utilization of the fund-based
facilities and non-fund-based facilities was at around 65% and
14.31% over the 12 months ended January 2023. The firm does not
have any capital market exposure and relies on a single bank to
meet its funding requirements. In FYE22, its cash and cash
equivalents stood at INR18.41million (FYE21: INR52.64 million), as
against the total outstanding debt of INR1,109.31 million. Its cash
flow from operations turned negative INR160.95 million in FY22
(FY21: INR90.94 million), mainly on account of an increase in the
working capital requirements. The fund flow from operations stood
at INR161.66 million in FY22 (FY21: INR119.42 million). The net
working capital cycle stood at 87 days in FY22 (FY21: 90 days).
The ratings however are supported by the promoter's experience of
five decades in the manufacturing and exporting ready-made
garments.
Rating Sensitivities
Negative: Any substantial deterioration in the scale of operations
and profitability, along with any deterioration in the liquidity
position, resulting in deterioration in the credit metrics with
interest coverage below 2x, all on a sustained basis, will be
negative for the ratings.
Positive: A sustained improvement in the scale of operations and
profitability, along with an improvement in the financial
reporting, while improving overall credit metrics and interest
coverage above 3x will be positive for the ratings.
Company Profile
Established in 1995, SKLE is a Tamil Nadu-based partnership firm.
It manufactures hosiery garments for men, women and kids. The
company has three manufacturing units for knitting, sewing,
embroidery, compacting and printing, all located in Tirupur. The
firm derives 90% of its revenue from the export market.
SLB ETHANOL: CARE Assigns BB+ Rating to INR229cr LT Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of SLB
Ethanol Private Limited (SLB), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 229.00 CARE BB+; Stable Assigned
Rationale and key rating drivers
The rating assigned to the bank facility of SLB is constrained by
the nascent stage of project execution and leveraged financial
profile. The ratings also take note of the fact that the company is
yet to enter into any firm agreements for supply of raw materials
and offtake for ethanol. However, strong Government initiatives
towards use of ethanol for blending and location of the plant in
proximity to Oil Marketing Companies (OMCs) depots are factored in
positively.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Completion of the project on time and within cost estimates
* Achieving capacity utilization levels of 70% in the first year of
operations
Negative factors
* Any delay in project implementation or cost overrun
* Any changes in Govt. policies negatively impacting the company
Analytical approach: Standalone
Outlook: Stable
CARE Ratings Limited (CARE Ratings) believes that in the medium
term, SLB will benefit from completion of financial closure and
from tie-ups with reputed vendors for project implementation.
Detailed description of the key rating drivers:
Key Weaknesses
* Project implementation risk: The company is setting up green
field project to manufacture ethanol from grain-based distillery.
The project is in nascent stage of project implementation. The
construction of the project commenced during October 2022 and the
commercial date of commencement of operation is estimated on April
1, 2024. The company has incurred 21% of the overall project cost
as on January 25, 2023. The project is the first venture of the
promoters in the biofuel space and hence the company has tied up
with M/s. Praj Industries Limited for the implementation of Ethanol
project. The company is yet to enter into any agreement for supply
of raw material and tie up with OMCs for offtake of ethanol.
Availability of the requisite quantity and quality of raw material
would be important to achieve the operating parameters and scale up
operations efficiently.
* Leveraged financial profile: The overall project cost for setting
up the plant is estimated at INR269 Cr and will be funded by debt
component of INR229 Cr and the promoter contribution of INR40 Cr,
making the debt-to-equity ratio at 5.73:1. The leverage for the
project is on the higher side. However financial closure has been
obtained from the bank for the debt component. Out of the promoter
component of INR40 Cr; INR28 Cr has been brought in as on January
25, 2023. Considering that the project may take time to stabilize
in the in initial years of operations, the leverage levels are
expected to be even higher.
Key Strengths
* Rising demand for fuel grade ethanol augmented by GOI
initiatives: There have been various measure announced but the
Government of India for achieving 20% ethanol blending with petrol
by 2025 to reduce India's import dependence on energy
security/forex spending and to cut down on fossil fuel emissions.
Incentives include interest subvention etc.
* Project location advantage: Project is located at SIPCOT,
Thiruvallur (location bordering Tamil Nadu and Andhra Pradesh)
which is close to many OMC depots of the said states and rice
growing areas.
Liquidity: Stretched
The project is a highly leveraged project. Timely completion of the
project with the cost estimates and timelines would be critical.
Any delay in completion or stabilization of operations will have a
significant bearing on the liquidity profile given the significant
repayments and interest outflow.
SLB Ethanol Private Limited was incorporated in June 2019 and is
setting up grain-based ethanol distillery to produce 200 KLPD of
ethanol along with 5.3 MW captive power generation plant. SLB is
floated as a new venture by the promoters of Dinamalar Publication
House. Day to day operations of SLB is being overseen by Mr.
Lakshmipathy (Adarsh) Ramasubbu, a third-generation entrepreneur
from the Dinamalar Group. He is supported by other third
generations entrepreneurs of the group such as Mr. Adimoolam
Lakshmipathy, Mr. Ramasubbu Krishnamurthy and Mr. Venkataraman
Krishnamurthy.
SOLOGRES GRANITO: CARE Reaffirms BB+ Rating INR27.47cr LT Loan
--------------------------------------------------------------
CARE Ratings has reaffirmed the ratings on certain bank facilities
of Sologres Granito Private Limited (SGPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 27.47 CARE BB+; Stable Reaffirmed
Facilities
Long Term/ 5.25 CARE BB+; Stable/CARE A4+
Short Term Reaffirmed
Bank Facilities
Rationale and key rating drivers
The ratings assigned to bank facilities of SGPL continues to remain
constrained on account its moderate scale of operations and
profitability, leveraged capital structure and debt coverage
indicators, and stretched liquidity.
The ratings continue to factor in high customer concentration risk
and its presence in a highly competitive and fragmented industry,
strong linkages of the industry with the cyclical real estate
sector and susceptibility of its profitability to volatility in raw
material prices & fuel cost considering its ability to pass on the
same to customers is limited.
The ratings, however, favourably factor in resourcefulness of
promoters with their vast experience in the ceramic industry and
location advantage in terms of proximity to end users.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Increase in scale of operations to over INR140 crore while along
with PBILDT margin at 13%. and PAT margin at 3% on a sustained
basis.
* Improvement in capital structure resulting in below unity overall
gearing on a sustained basis.
Negative factors
* Increase in working capital intensity resulting in elongation of
the working capital by over 150 days on a sustained basis.
Analytical approach: Standalone
Outlook: Stable
CARE Ratings believes that the SGPL will continue to derive benefit
from its experience promoters having long-track record of
operations in ceramic industry.
Detailed description of the key rating drivers
Key weaknesses
* Moderate scale of operations and profitability: The total
operating income of SGPL largely remained stable with a marginal
growth of ~5% in its TOI at INR77.22 crore in FY22 (PY: INR73.74
crore), The PBILDT margin improved 153 bps to 12.20% during FY22
(PY:10.67%). on account of decline in prices of raw material
prices, which is partially off-set by higher power and fuel cost.
However, owing to higher interest costs and depreciation charges,
the PAT margin deteriorated by 86 bps to 1.87% in FY22 (PY: 2.72%).
The company has reported gross cash accruals of INR5.43 crore (PY:
INR4.93 crore). During 10MFY23 (refers to the period April 1 to
January 31), the company has registered TOI of INR88.79 crore along
with PBILDT margin of INR9.56%.
* High Customer Concentration Risk: SGPL's clientele base remains
concentrated marked by top 5 customers accounting around 52%
(FY21:26%) and 45% FY22 and 10MFY23 resulting into higher customer
concentration risk.
* Leveraged capital structure and modest debt coverage indicators:
The capital structure of the SGPL improved and remained stable
marked by overall gearing improved to 1.43x as on March 31,2022
(1.54x as on March 31,2021) on account of increase in equity share
capital by INR6.00 crore in FY22 along with accretion of profits to
reserves and scheduled repayment of term debt. The debt coverage
indicators remained moderate marked by interest coverage and total
debt to GCA of 2.47 times (PY: 31.2 times) and 6.19x (PY: 4.75x)
during FY22.
* Presence in a highly competitive tile industry along with its
linkages with the cyclical real estate industry: The ceramic
industry is highly competitive and fragmented with the presence of
numerous organized as well as unorganized players operating in the
domestic market. Moreover, the ceramic tile industry has strong
linkages with the real estate industry, which, in India is highly
fragmented and cyclical.
* Exposure to volatile natural gas and key raw material prices: The
prices of major raw material i.e. clay and fuel (natural gas and
Propane) constitute a major part of the cost structure of an
entity in the ceramic tile industry. Considering prices of both
(clay ,natural gas and propane) are market driven, inability of the
company to pass it on to its customers may exert pressure on
profitability of the company. Furthermore, adverse macroeconomic
developments has resulted in steep rise in fuel prices in the
beginning of the year. However, the company has started the use of
propane which is expected to reduce the fuel cost to a certain
extent and also provide the company with alternative source of
fuel.
Key strengths
* Experienced promoters with established track record in the
ceramic industry: The promoters of Sunshine Tiles Company Private
Limited (STCPL; rated CARE A-; Stable/ CARE A2+), the flagship
entity of Sunshine group, holds 22.48% equity in SGPL in their
personal capacity, while the balance is held by other promoters,
including Mr. Satish Bopaliya and Mr. Mukesh Bopaliya, who have
more than a decade of experience in the ceramic tiles industry.
* Location advantage in terms of proximity to end user: SGPL has
its manufacturing unit in Morbi district in Rajkot city of Gujarat
which is the largest ceramic cluster in India & second largest in
the world. It provides advantage in terms of raw material sourcing
and availability of skilled manpower. Moreover, proximity of major
ports (such as Kandla and Mundra) also lowers the transportation
cost and facilitates timely export.
Liquidity: Stretched
SGPL's liquidity remains stretched marked by moderate cash flow
from operations (CFO) and GCA, vis-à-vis the loan repayments. As
against PAT of INR1.44 crore during FY22 (PY: INR2.01 crore) and
cash flow from operations and GCA for FY22 at INR5.11 crore
(Rs.6.97 crore during FY21) and INR5.43 crore (Rs.4.93 crore during
FY21) the company has a debt repayment obligation of around 6.75 to
7.20 crores during FY23-FY25. Average utilization of its fund-based
working capital limits during the trailing 12 months ended on
January 2023, remained moderate at 89%. The current ratio and quick
ratio of SGPL as on March 31,2022 remained moderate at 1.11x (1.39x
as on FY21 end) and 0.63x (1.11x as on FY21 end). Free cash and
bank balance as on March 31, 2022 stood at INR0.70 crore.
Incorporated in May 2016, Morbi, Gujarat based SGPL is engaged in
the manufacturing of ceramic nano vitrified tiles (size –
600*600mm). The company commenced its operations in January 2017
and has an installed manufacturing capacity of 1,20,730 metric
tonnes per annum (MTPA). SGPL sells its products under the
'Sologres' brand.
SRIPATHI PAPER: Ind-Ra Keeps B+ Issuer Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Sripathi Paper &
Boards Private Limited's Long-Term Issuer Rating at non-cooperating
category and has simultaneously withdrawn it.
The instrument-wise rating actions are:
-- INR1.80 bil. Fund-based facilities* maintained at the non-
cooperating category and withdrawn;
-- INR685 mil. Non-Fund based facilities** maintained to the non-
cooperating category and withdrawn; and
-- INR775 mil. Term loan# due on March 2025 maintained to the
non-cooperating category and withdrawn.
*Maintained at 'IND B+ (ISSUER NOT COOPERATING)'/'IND A4 (ISSUER
NOT COOPERATING)' before being withdrawn
**Maintained at 'IND A4 (ISSUER NOT COOPERATING)' before being
withdrawn
#Maintained at 'IND B+ (ISSUER NOT COOPERATING)' before being
withdrawn
Key Rating Drivers
Ind-Ra has maintained the ratings at the non-cooperating category
because the issuer did not participate in the rating exercise,
despite requests by the agency and has not provided information
pertaining to the latest full-year financial performance,
sanctioned bank facilities and utilization, business plans and
projections for the next three years, and information on corporate
governance.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-objection certificate from the rated facilities'
lender. This is consistent with the Securities and Exchange Board
of India's circular dated March 31, 2017 for credit rating
agencies. Ind-Ra will no longer provide analytical and rating
coverage for Sripathi Paper & Boards.
Company Profile
Sripathi Paper & Boards manufactures kraft paper, duplex board,
writing and printing paper, and newsprint at its manufacturing
units in Sivakasi and Sathyamangalam, Tamil Nadu. The company is
wholly-owned by the founders and their families.
STEEL AND METAL: Ind-Ra Moves BB+ Issuer Rating to NonCooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Steel and Metal
Tube (India) Private Limited's Long-Term Issuer Rating of 'IND BB+'
to the non-cooperating category and has simultaneously withdrawn
it.
The instrument-wise rating actions are:
-- INR160 mil. Fund-based working capital limits* migrated to
non-cooperating category and withdrawn; and
-- INR180 mil. Non-fund-based working capital limits** migrated
to non-cooperating category and withdrawn.
*Migrated to 'IND BB+ (ISSUER NOT COOPERATING)/IND A4+ (ISSUER NOT
COOPERATING)' before being withdrawn
**Migrated to 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn
Key Rating Drivers
Ind-Ra has migrated the rating to non-cooperating category before
being withdrawn as the issuer did not participate in the rating
exercise, despite repeated requests by the agency, and has not
provided information about interim, sanctioned bank facilities and
utilization, business plan, and projections for next three years,
information on corporate governance, and management certificate.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-objection certificate from the lenders. This is
consistent with Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra
will no longer provide analytical and rating coverage for the
company.
Company Profile
Incorporated in 1971 as a private limited company, Steel and Metal
Tube (India) was reconstituted as a deemed limited company in July
1984. The company manufactures electric resistance welded pipes and
tubes. It has a 50,000-ton per annum manufacturing plant in
Ghaziabad, Uttar Pradesh.
SUDALAGUNTA SUGARS: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sudalagunta
Sugars Limited (SSL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.05 CRISIL D (Issuer Not
Cooperating)
Bank Guarantee 15 CRISIL D (Issuer Not
Cooperating)
Bill Discounting 10 CRISIL D (Issuer Not
Cooperating)
Cash Credit 21.04 CRISIL D (Issuer Not
Cooperating)
Cash Credit 11.84 CRISIL D (Issuer Not
Cooperating)
Cash Credit 19.62 CRISIL D (Issuer Not
Cooperating)
Cash Credit 40 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 41.74 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 1.35 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 3.08 CRISIL D (Issuer Not
Cooperating)
SEFASU Loan 4.16 CRISIL D (Issuer Not
Cooperating)
SEFASU Loan 8.21 CRISIL D (Issuer Not
Cooperating)
Warehouse Financing 24.85 CRISIL D (Issuer Not
Cooperating)
Working Capital 3.34 CRISIL D (Issuer Not
Demand Loan Cooperating)
CRISIL Ratings has been consistently following up with SSL 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 SSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
SSL was incorporated in 1994 by Mr S Jayaram Chowdary. The company
manufactures white sugar, which it sells to dealers in the domestic
market. It also exports to the Gulf countries and Singapore.
SWOSTI PREMIUM: Ind-Ra Assigns BB Long Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Swosti Premium Ltd (SPL):
-- Long-Term Issuer Rating affirmed with IND BB/Positive rating;
-- INR10 mil. Fund-based facilities affirmed with IND BB/Positive
rating; and
-- INR2,152.4 bil. (increased from INR2,017.98 bil.) Term loan
due on December 2037 affirmed with IND BB/Positive rating.
Rating Sensitivities
Negative: Cost and/or time overruns of the beach resort project or
higher-than-expected debt funded capex plan or weaker-than-expected
operating performance at the current operational hotel, leading to
deterioration in the overall credit metrics and/or pressure on the
liquidity position, affecting the debt servicing ability of the
company, could lead to a negative rating action.
Positive: Better-than-expected credit profile and an improvement in
the liquidity profile, all on a sustained basis, could lead to a
positive rating action.
Company Profile
SPL was incorporated as a public limited company in 1997 and
commenced operations in 2000. The company operates a five-star
hotel named Swosti Premium, which has with 147 rooms, in
Bhubaneswar. It also operates a resort by the name of Swosti
Chilika Resort by the Chilika lake in Odisha. SPL is also venturing
into a new project to build a five-star rated beach resort at Mauja
Sipasurubuli, Puri, with a total capacity of 125 guest rooms and
other leisure facilities. The project will consist of 116 luxury
suites, five premium executive rooms and three presidential suites,
lobby and lounge, restaurant, bar, coffee shop, banquet halls and
conference halls, three lawns designed for large gatherings, health
club/spa, shops, and a rooftop swimming pool.
UNIJULES LIFE: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Unijules Life
Sciences Limited (Unijules) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 43.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 25 CRISIL D (Issuer Not
Cooperating)
Cash Credit 16 CRISIL D (Issuer Not
Cooperating)
Cash Credit 20 CRISIL D (Issuer Not
Cooperating)
Cash Credit 20 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 5.75 CRISIL D (Issuer Not
Cooperating)
Letter of credit 10 CRISIL D (Issuer Not
& Bank Guarantee Cooperating)
Letter of credit 2.75 CRISIL D (Issuer Not
& Bank Guarantee Cooperating)
Term Loan 14 CRISIL D (Issuer Not
Cooperating)
Term Loan 18 CRISIL D (Issuer Not
Cooperating)
Term Loan 11.5 CRISIL D (Issuer Not
Cooperating)
Term Loan 18 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with Unijules for
obtaining information through letters and emails dated December 31,
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 Unijules, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Unijules is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Unijules continues to be 'CRISIL D/CRISIL D Issuer
Not Cooperating'.
Unijules was established in 2006, when the business of H Jules &
Company Ltd was transferred to it and when Unijules had also
acquired all the assets of Universal Medicaments Pvt Ltd. Unijules,
promoted by Mr Faiz Vali, manufactures and markets herbal and
allopathic drugs.
VAJRATEJA RICE: Ind-Ra Assigns B+ LT Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Vajrateja Rice
Cluster Private Limited (VRCPL) a Long-Term Issuer Rating of 'IND
B+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR450 mil. Fund-based working capital limits assigned with
IND B+/Stable/IND A4 rating; and
-- INR494.40 mil. Term loans due on September 2031 assigned with
IND B+/Stable rating.
Key Rating Drivers
The ratings reflect VRCPL's nascent stage of operations as the
company commenced operations only in November 2022. The scale of
operations is small. In 4MFY23, VRCPL booked revenue of INR177.65
million. Ind-Ra expects considerable growth in the revenue in FY24
as it would be the first full year of operations. The management
expects to achieve revenue of around INR500 million and INR3,500
million in FY23 and FY24, respectively.
The ratings reflect VRCPL's likely modest EBITDA margins. The
management expects EBITDA margin of around 4% in FY24. Ind-Ra
expects EBITDA margin to be around 3% in FY23 and believes it would
improve in FY24 on account of increased absorption of fixed costs,
led by the growth in revenue.
The ratings also reflect VRCPL's likely modest credit metrics.
VRCPL has taken a term loan of INR344.4 million, for which the
principal repayments started from February 2023. The term loan has
been used for funding VRCPL's capex of INR735.43 million. The
balance cost is being funded by equity of INR317.36 million and
unsecured loans of INR73.68 million from the promoters.
Liquidity Indicator - Poor: The company has scheduled debt
repayments of INR86.83 million in FY24 and INR80.5 million in FY25,
which are likely to be met through internal accruals. VRCPL has
been sanctioned fund-based limits of INR450 million; of this, it
availed fund-based limits of INR150 million in February 2023, and
the average maximum utilization of the same was 66%. Furthermore,
VRCPL does not have any capital market exposure and relies on a
single bank to meet its funding requirements. Ind-Ra expects the
net working capital cycle to be moderate.
The ratings draw comfort from the promoter's experience of more
than two decades in the rice industry, leading to established
relationships with customers and suppliers.
Rating Sensitivities
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics and/or pressure on the
liquidity position, on a sustained basis, could lead to a negative
rating action.
Positive: Substantial increase in the scale of operations, along
with an improvement in the overall credit metrics, with the net
leverage being below 5x, and an improvement in the liquidity
profile, on a sustained basis, could lead to a positive rating
action.
Company Profile
VRCPL was incorporated on 4 August 2020 and it commenced operations
from 11 November 2022. The company is engaged in the manufacturing,
trading and exports of paddy, rice, husk, broken rice, rice bran
and its by-products. VRCPL's plant, which is located in Nalgonda
District, Telangana, has the capacity of processing 32 tons per
hour.
VANILLA CLEAN: Ind-Ra Hikes Bank Loan Rating to 'BB+'
-----------------------------------------------------
India Ratings and Research (Ind-Ra) upgraded Vanilla Clean Power
Private Limited's (VCPPL) debt facilities to 'IND BB+' from 'IND
BB-' as follows:
-- INR1,822.71 bil. (reduced from INR1,989.12 bil.) Term loan due
on June 30, 2030 upgraded with IND BB+/Stable rating; and
-- INR210 mil. Overdraft upgraded with IND BB+/Stable rating.
The upgrade reflects an improvement in VCPPL's operational and
financial performance in FY22 and trailing 12 months (TTM) ended
January 2023, along with a reduction in receivable period.
Key Rating Drivers
Improved Operational Performance: The project's performance has
improved with a plant load factor (PLF) of 16.94% for TTM January
2023 and 18.74% in FY22, higher than the P90 levels (16.6%), owing
to an improvement in machine availability. During FY17-FY20, the
PLF was low due to weak machine availability and wind resource
volatility. However, a change in its operations and maintenance
contractor to Renom Energy Services LLP on 16 May 2019 augured well
for VCPPL, and its machine availability increased to 96.6% in TTM
January 2023 and 96.5% in FY22, against 94.4% in FY21.
In January 2022, VCPPL created a debt service reserve account
(DSRA) worth INR212 million, equivalent to two quarters' principal
and interest payments. The project also received lumpsum payments
of about INR345.5 million from Jodhpur Vidyut Vitran Nigam Limited
(JVVNL) and Ajmer Vidyut Vitran Nigam Limited (AVVNL), thereby
reducing utilization of its overdraft facility.
Reduced Payment Cycle: VCPPL's reliance on the working capital
limits of INR210 million has reduced with nil utilization during
the six months ended January 2023. The company received payments
lumpsum payments from both the counterparties for six-to-seven
months of billing until December 2021 in March 2022, and has been
receiving regular payments in around 80 days from the date of
invoice thereafter. During FY22 and TTM January 2023, the
receivable days for JVVNL reduced to about 80 days (FY21: 266 days)
and AVVNL to 130 days (144 days).
Liquidity Indicator –Adequate: As of January 31, 2023, VCPPL's
had liquidity of INR368.40 million, including free cash, unutilized
working capital limits and a DSRA equivalent to about 10 months of
debt servicing. A DSRA equivalent to six months of debt servicing
is available to manage volatility in payment receipts from the
counterparties. Moreover, Ind-Ra has taken comfort from the support
provided by its sponsor Leap Green Energy Pvt. Ltd. (LGEPL) to
VCPPL in FY22 and its improved liquidity position. LGEPL has also
stated that it will continue to support VCPPL before accessing the
DSRA. The company has a cross-default clause with respect to Ivy
Ecoenergy India Private Limited's loan (another special purpose
vehicle company owned by the sponsor). Thus, any deterioration in
the liquidity or financial profile of Ivy Ecoenergy India could
impact VCPPL's ratings.
Presence of Long-term Power Purchase Agreements: VCPPL has 25-year
power purchase agreements with JVVNL for 56MW capacity and AVVNL
for the balance 8MW capacity at a fixed tariff of INR5.18/kWh. The
company is also entitled to receive income from annual
generation-based incentives of INR0.50/unit from Indian Renewable
Energy Development Agency Limited ('IND AA+'/Stable) till FY23. As
of February 2023, the company had received the generation-based
incentives for the bills raised until January 2022.
Moderate Debt Structure: The project debt has structured repayments
with higher payments till FY26 and also a high rate of interest
compared to general market trend in the sector, leading to a lower
debt service coverage ratio of about 1.0x till FY26 constraining
the ratings. The project debt has standard project finance
features, including a cashflow waterfall, a debt service reserve
equivalent to two quarter's principal and interest obligations for
the term loan.
Rating Sensitivities
Negative: A depletion of DSRA, an increase in the receivable days
beyond 90 days for a sustained period, and PLF levels reducing
below 16.5% on a sustained basis, may result in a rating
downgrade.
Positive: An improvement in operating and financial performance,
leading to an improvement in the minimum debt service coverage
ratio to above 1.1x and receivable days remaining below 90 days,
all on a sustained basis, may result in a rating upgrade.
Company Profile
VCPPL is a special purpose vehicle formed by LGEPL to operate two
wind farms in Jaisalmer, Rajasthan. These plants were acquired from
Inox Renewables (Jaisalmer) Limited on a slump sale basis in August
2017.
VENKATA LAKSHMI: CRISIL Moves D Debt Ratings to Not Cooperating
---------------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of
Venkata Lakshmi Narasimha Rice Industries (VLNRI) to 'CRISIL
D/CRISIL D Issuer not cooperating' from 'CRISIL D /CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft Facility 7.5 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D')
Term Loan 2.5 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D')
CRISIL Ratings has been consistently following up with VLNRI for
obtaining information through letters and emails dated March 14,
2023 and March 18, 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 VLNRI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on VLNRI
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of VLNRI to 'CRISIL D/CRISIL D Issuer not
cooperating' from 'CRISIL D /CRISIL D'.
VLNRI, set-up in 2016 as a partnership firm by Mr. P Bhaskar and
Ms. P Vashundhara, mills paddy into processed rice. It has an
installed paddy milling and sorting capacity of 8 tons per hour.
=================
I N D O N E S I A
=================
SAKA ENERGI: Fitch Alters Outlook on 'B+' LongTerm IDR to Stable
----------------------------------------------------------------
Fitch Ratings has revised PT Saka Energi Indonesia's Outlook to
Stable from Negative and affirmed the Long-Term Issuer Default
Rating at 'B+'. The agency has also affirmed Saka's senior
unsecured US dollar bonds at 'B+' with a Recovery Rating of 'RR4'.
The Outlook revision reflects Saka's improved business profile as
its reserves increased in 2022 beyond its previous expectations.
Saka's proved reserve life rose to 6.2 years by end-2022 from 4.8
years in 2021. Fitch believes the risks of a decline in Saka's
operating profile in the near-to-medium term has been reduced with
the adequate reserves. Fitch expects parent PT Perusahaan Gas
Negara Tbk (PGN, BBB-/Stable) to help Saka repay or refinance its
US dollar notes due 2024.
Saka's ratings benefit from a two-notch uplift from its Standalone
Credit Profile (SCP) of 'b-', based on its assessment of PGN's
'Medium' incentive to provide support, in line with its Parent and
Subsidiary Linkage Rating Criteria. The 'b-' SCP reflects the
constraints of the small size of its operations.
KEY RATING DRIVERS
Small Scale Despite Improvement: Saka's operating profile has
improved with higher proved reserves of 75.6 million barrels of oil
equivalent (mmboe) as of December 2022 (2021: 50.6mmboe) and proven
and probable reserves of 114mmboe (2021: 87.2mmboe). Saka added
37.2mmboe to its proved reserves against production of 12.2mmboe
during 2022 (2021 production: 10.6mmboe).
However, reserves and production are still at the lower end of 'B'
rated peers. Fitch estimates proved reserve life remained at 6.2
years at end-2022, based on production volume of 12.2mmboe in 2022.
Fitch expects production to range between 11mmboe and 13mmboe per
year over the next three years. In the absence of inorganic growth,
Saka is likely to face challenges in maintaining its reserve
profile on a sustained basis over the medium term.
Low Leverage: Fitch expects Saka's leverage, defined by net
debt/EBITDA, will improve to 0.5x in 2023, from an estimated 0.7x
in 2022 (2021: 2.7x), due to high oil prices and lower debt. Fitch
expects net leverage to remain low at 0.6x by 2024 even as Fitch
forecasts lower oil prices, as Saka's strong cash flows during 2022
and 2023 will help reduce debt materially. Fitch forecasts Saka's
net debt to decline to USD172 million by 2024 (2022: USD328
million; 2021: USD698 million).
Parental Support for Bond Repayment: Fitch expects Saka to require
PGN's support to repay its US dollar notes when they mature in
2024. Fitch estimates Saka's EBITDA will fall to USD330 million in
2023 (2022: USD456 million) based on its oil price assumptions.
Fitch forecasts Saka will need around USD100 million to repay its
US dollar notes in 2024, considering its capex plans. Fitch expects
PGN to support Saka's funding requirements although the exact
nature of the support is currently uncertain.
PGN has included Saka as a co-borrower in a debt facility for up to
USD50 million in 2023, reflecting its support commitment. Saka's
earnings derive some stability from its large share of earnings
from long-term fixed-price gas contracts. Fitch includes USD283
million in shareholder loans in Saka's debt.
'Medium' Legal, Operational Incentive: Fitch believes Saka is a
material subsidiary, as defined in the bond documentation of PGN's
USD950 million notes. A default by Saka would trigger a
cross-default provision in PGN's bonds, which mature after Saka's
USD376 million notes due 2024. However, Fitch believes PGN has only
'Medium' legal incentive to support Saka, as its bond documents are
vague in the definition of a material subsidiary, giving PGN some
discretion. PGN's control over Saka's board and management drive
its 'Medium' operational incentive assessment.
Saka Misalinged in Group Structure: PGN has explicitly expressed
its intention to provide liquidity support to Saka, but the
subsidiary's position in PGN's structure remains uncertain after a
restructuring of state-owned oil and gas companies that transferred
the state's 57% ownership of PGN to PT Pertamina (Persero)
(BBB/Stable). There has been no clarity from PGN or Pertamina on
Saka's position to date, resulting in its 'Weak' assessment of the
strategic support incentive.
DERIVATION SUMMARY
Saka's 'b-' SCP is comparable with that of other small independent
rated oil and gas companies globally. The ratings of Gran Tierra
Energy International Holdings Ltd. (GTE, B/Stable) and Frontera
Energy Corporation (B/Stable) are constrained to the 'B' category
due to the inherent operational risks from their small scale and
the low diversification of their oil and gas production profiles.
Saka's low production of 33 million of barrels of oil equivalent
per day (mboepd) is similar to that of 'B' rated peers. Fitch
expects Saka's production to average around 33mboepd, which is on a
par with GTE's forecast production of 32mboepd and lower than
Frontera's production of 42mboepd. GTE and Frontera have proved
reserve lives of 6.8 years and 8.6 years, respectively, higher than
Saka's 6.2 years. Saka is likely to face greater challenges in
maintaining its reserve profile on a sustained basis, which
explains the difference in their standalone assessments.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Oil (Brent) price of USD85/barrel (bbl) in 2023, USD75/bbl in
2024, USD65/bbl in 2025 and USD53/bbl thereafter in line with
Fitch's oil and gas price assumptions.
- Natural gas sales prices based on contracted Indonesian
production prices for the next three years; Henry hub price of
USD3.5/thousand cubic feet (mcf) in 2023 and 2024, USD3.0/mcf in
2025 and USD2.75/mcf thereafter.
- Oil and gas production of 31mboepd in 2023, 33mboepd in 2024,
37mboepd in 2025 and 40mboepd in 2026 (2021: 29mboepd, 2022
estimate: 33mboepd)
- Capex of around USD150 million in 2023, USD250 million in 2024,
USD165 million in 2025 and USD220 million in 2026 (2021: USD106
million, 2022 estimate: USD67 million)
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Strengthening of linkages with PGN upon clarity of Saka's
position within the group structure;
- Sustained improvement in reserve life while maintaining
production levels.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Weakening of linkages with PGN in the absence of significant
additional support and a deterioration in Saka's position within
the group structure;
- Weakening of Saka's SCP, including, but not limited to, declining
reserves or production in the absence of reserve acquisitions, or a
weakening of its liquidity position.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Support from Parent Required: Saka will require support
from PGN to repay its USD376 million in bonds due May 2024 and also
roll over shareholder loans of USD142 million due December 2024.
Saka has another shareholder loan of USD142 million due December
2025, which Fitch expects to be rolled over.
ISSUER PROFILE
Saka, a wholly owned subsidiary of PGN, engages in oil and gas
exploration and production and acts as PGN's upstream arm.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Saka's ratings benefit from a two-notch uplift from its SCP based
on its assessment of moderate linkages with the parent.
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 Saka Energi
Indonesia LT IDR B+ Affirmed B+
senior
unsecured LT B+ Affirmed RR4 B+
=====================
N E W Z E A L A N D
=====================
COASTAL NZ: Court to Hear Wind-Up Petition on May 5
---------------------------------------------------
A petition to wind up the operations of Coastal NZ Builders Limited
will be heard before the High Court at Auckland on May 5, 2023, at
10:00 a.m.
Carters Building Supplies Limited filed the petition against the
company on March 8, 2023.
The Petitioner's solicitor is:
Philip John Morris
Stace Hammond Lawyers
KPMG Building, Level 7
85 Alexandra Street
Hamilton 3240
CRANBERRY HOLDINGS: Creditors' Proofs of Debt Due on April 28
-------------------------------------------------------------
Creditors of Cranberry Holdings Limited are required to file their
proofs of debt by April 28, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on March 28, 2023.
The company's liquidators are:
Adam Botterill
Damien Grant
Waterstone Insolvency
PO Box 352
Auckland 1140
EZIBUY OPERATIONS: Olvera Advisors Appointed as Administrators
--------------------------------------------------------------
Katherine Elizabeth Barnet and Damien Mark Hodgkinson of Olvera
Advisors on April 14, 2023, were appointed as administrators of:
- Ezibuy Operations Limited
- Ezibuy Limited
- Ezibuy Holdings Limited
- Ezibuy Custodian Limited
- New Ezibuy Limited
- Last Stop Shop Limited
- Sara Apparel Limited
The administrators may be reached at:
17B Farnham Street
Parnell
Auckland 1052
PRYME NEW ZEALAND: Creditors' Proofs of Debt Due on April 19
------------------------------------------------------------
Creditors of Pryme New Zealand Limited are required to file their
proofs of debt by April 19, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on April 3, 2023.
The company's liquidator is:
Richard Anthony Johnston
Level 1, One Jervois Road
PO Box 91842
Victoria Street West
Auckland 1142
RELIANCE CAPITAL: Resolution May Get Delayed Further
----------------------------------------------------
The New Indian Express reports that the resolution process for
debt-ridden Reliance Capital (RCap) could see more delays as the
lenders are considering to extend the deadline for completing the
resolution process till May 30 from the current deadline of April
16.
It is not possible to conclude the resolution process within the
current deadline as the second round of auction is yet to take
place, the report says. The auction was scheduled for April 11 but
it likely to be be postponed by another week, said a source. The
deadline to complete the resolution process has been extended
multiple times in the past.
All the three bidders - IndusInd International Holdings (IIHL) of
Hinduja Group; Torrent Investment and Singapore-based Oaktree - who
will participate in the second round of auction - are still engaged
with the committee of creditors (CoC) on certain issues, according
to the report. Their major concern is compliance of resolution
plans as per the Insolvency and Bankruptcy Code (IBC) and Request
for Resolution Plan (RFRP) guidelines, as in the first round of
auction, bid by the Hinduja Group firm was submitted post auction.
About Reliance Capital
Headquartered in Mumbai, India, Reliance Capital Limited --
https://www.reliancecapital.co.in/ -- a non-banking financial
company, primarily engages in lending and investing activities in
India, Singapore, and Mauritius. The company operates through
Finance & Investment, General Insurance, Life Insurance, Commercial
Finance, Home Finance, and Others segments. It offers life, health,
and general insurance products; brokerage and distribution
services, including stock broking, wealth management, and third
party distribution; and commercial and home finance services, such
SME, retail, microfinance, renewable, affordable housing, and home
loans, as well as loans against property and construction finance.
The company also provides asset reconstruction, institutional
broking, and proprietary investments services, as well as other
financial and allied services. The company was formerly known as
Reliance Capital & Finance Trust Limited and changed its name to
Reliance Capital Limited in January 1995.
On Nov. 29, 2021, the Reserve Bank of India superseded Reliance
Capital's board following payment defaults and governance issues,
and appointed Nageswara Rao Y as the administrator for the
bankruptcy process, Financial Express said. The regulator also
filed an application for initiation of Corporate Insolvency
Resolution Process (CIRP) against the company before the National
Company Law Tribunal's (NCLT) Mumbai bench.
In an order dated Dec. 6, 2021 of the National Company Law
Tribunal, Mumbai (NCLT), corporate insolvency resolution process
has been initiated against Reliance Capital as per the provisions
of the Insolvency and Bankruptcy Code (IBC), 2016.
Reliance Capital owes its creditors over INR19,805 crore, majority
of the amount through bonds under the trustee Vistra ITCL India,
The Economic Times of India said.
In February 2022, RBI appointed administrator invited EoIs for sale
of Reliance Capital assets and subsidiaries.
RICHMOND PONSONBY: Court to Hear Wind-Up Petition on April 21
-------------------------------------------------------------
A petition to wind up the operations of Richmond Ponsonby Limited
will be heard before the High Court at Auckland on April 21, 2023,
at 10:00 a.m.
Body Corporate 206481 filed the petition against the company on
Jan. 25, 2023.
The Petitioner's solicitor is:
Rhonda Margot Graham
c/o Morgan Coakle, Solicitors
Level 9
41 Shortland Street
Auckland
SCARBRO CONSTRUCTION: Calls In Liquidators
------------------------------------------
Newstalk ZB reports that Auckland-based Scarbro Construction on
April 6 declared insolvency and called in liquidators.
According to the report, the building company has stopped work on
five active construction sites and experts warn this won't be the
only construction business in trouble this year.
Newstalk ZB relates that AUT Construction Management professor John
Tookey wasn't expecting Scarbro to dissolve, but said that any
construction company can go belly-up.
John Tookey said Scarbro's liquidation has likely come down to a
cash flow crisis generated by a contract or sub-contract going
wrong.
=================
S I N G A P O R E
=================
ED&F MAN: Creditors' Proofs of Debt Due on May 8
------------------------------------------------
Creditors of ED&F Man Capital Markets (Singapore) Pte. Ltd. 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 31, 2023.
The company's liquidators are:
Ong Kok Yeong David
c/o Tricor Singapore
80 Robinson Road #02-00
Singapore 068898
GREENSHIP BULK: Creditors' Proofs of Debt Due on May 6
------------------------------------------------------
Creditors of Greenship Bulk Manager Pte. Ltd. are required to file
their proofs of debt by May 6, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on March 31, 2023.
The company's liquidators are:
Farid Khan Bin Kaim Khan
c/o 8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
JIGSAW CAPITAL: Court Enters Wind-Up Order
------------------------------------------
The High Court of Singapore entered an order on March 10, 2023, to
wind up the operations of Jigsaw Capital Pte. Ltd.
Soong Chee Hong filed the petition against the company.
The company's liquidators are:
Ellyn Tan Huixian
Furler Luke Anthony
Quantuma (Singapore)
137 Amoy Street
#02-03, Far East Square
Singapore 049965
LIPPO MALLS: Fitch Lowers LongTerm Issuer Default Rating to 'CCC-'
------------------------------------------------------------------
Fitch Ratings has downgraded Lippo Malls Indonesia Retail Trust's
(LMIRT) Long-Term Issuer Default Rating (IDR) to 'CCC-', from
'CCC'. Fitch has also downgraded the rating on LMIRT's senior
unsecured notes due 2024 and 2026 to 'CCC-', from 'CCC', with a
Recovery Rating of 'RR4'. LMIRT's wholly owned subsidiary, LMIRT
Capital Pte. Ltd., issued the notes, which are guaranteed by
Perpetual (Asia) Limited in its capacity as trustee of LMIRT.
The downgrade reflects material delays in the refinancing of
LMIRT's term loans due in November 2023 and January 2024. This has
increased the risk that arms-length financing may not be available
to repay debt, in Fitch's view. The independent auditor has also
given an unmodified audit opinion with an emphasis of matter on
material uncertainty related to going concern in its audit report
on the audited financial statements for 2022.
KEY RATING DRIVERS
Material Delays in Refinancing: Fitch believes LMIRT faces
heightened liquidity risk on the repayment of its term loans of
SGD135 million due in November 2023 and SGD83 million due in
January 2024, as well as US dollar notes due in 2024 and 2026. This
risk is reflected in material delays in the trust's refinancing
process.
Transition to Secured Debt: Fitch expects LMIRT to use its
portfolio of unpledged shopping malls to raise secured bank debt to
refinance upcoming debt maturities. However, the move to secured
debt is exposed to execution risk, including covenants in the 2024
and 2026 unsecured notes that limit the trust's ability to raise
secured debt. It could pursue a debt restructuring if the trust is
unsuccessful in transitioning to a secured-capital structure. The
debt restructuring may include an extension in the maturity of its
US dollar notes due in June 2024 and February 2026.
Insufficient Liquidity: LMIRT's internal liquidity is insufficient
to meet its debt maturities of around SGD547 million in the next 18
months. The trust had SGD111 million in cash at end-2022. Financial
flexibility can improve marginally by halting distributions, as the
trust did for 1Q23, to holders of perpetual securities and units.
However, it can only conserve up to SGD43 million of cash in 2023
by its estimates. LMIRT plans to sell non-core assets as a
longer-term solution, but Fitch expects disposals to be small and
subject to execution risk.
Thin Fixed-Charge Coverage: Fitch expects rising interest rates to
increase LMIRT's interest payments to SGD75 million in 2023 (2022:
SGD57 million). LMIRT's outstanding borrowings are 60.4% on
floating rates, and Fitch has factored in a benchmark interest rate
of around 550bp in 2023. Fitch also forecasts LMIRT's perpetual
securities' coupon of SGD9.4 million in 2023 and nearly SGD19
million in 2024 (2022: SGD17 million), after the coupon rate on the
SGD120 million perpetual securities was reset. LMIRT has elected to
not pay distributions scheduled for March 2023.
Fitch forecasts funds flow from operations (FFO) fixed-charge
coverage, including the payment of the perpetual securities'
coupons, to remain around 1.1x in 2023-2024, while EBITDA interest
coverage is higher at 1.6x-1.7x. However, EBITDA interest coverage
is below the 2.5x threshold required by the US dollar notes'
indentures for debt incurrence (2022: 2.1x). This further limits
LMIRT's financial flexibility.
Limited Regulatory Leverage Headroom: LMIRT's regulatory leverage
ratio, or debt/total assets, rose to 44.6% by end-2022 (end-2021:
42.5%), leaving little room under the regulatory ceiling of 45%.
Debt/total assets may rise above 45% if the Indonesian rupiah
weakens further, or if the value of malls with land titles under
the build, operate, transfer scheme decline. A breach of the
regulator's guidelines would tighten LMIRT's financial flexibility
significantly.
High Foreign-Exchange Risk: Currency risk is high, as LMIRT's debt
is denominated in US and Singapore dollars, while revenue is
generated solely in rupiah. Further rupiah depreciation will reduce
the value of cash flow and assets in Singapore dollars, putting
pressure on interest coverage and the loan/value ratio. LMIRT has
hedged around 60% of the notional value of its net rupiah cash flow
for 2023 using option contracts, but this only provides partial
protection against a further decline in the exchange rate.
Slow Operational Recovery: Fitch forecasts net property income to
reach SGD136 million in 2023 (2022: SGD131 million), supported by a
gradual improvement in the occupancy rate to 84%, and falling rent
rebates to tenants as footfall and tenant sales rise. Fitch expects
occupancy to stabilise, but remain below pre-pandemic levels of
over 90% for the next two years. This is due to a post-Covid-19
pandemic structural weakening in occupancy at several malls and
redevelopment activities at two malls.
Limited Sponsor Influence: Fitch rates LMIRT on a standalone basis
due to robust regulatory ringfencing from PT Lippo Karawaci TBK
(B-/Stable). Lippo fully owns LMIRT's manager, although the
Singapore Securities and Futures Act prevents Lippo from holding a
majority representation on the manager's board. In addition, the
sponsor does not control LMIRT, because it holds only a 47%
interest. LMIRT, as a Singapore real-estate investment trust, is
also subject to restrictions on gearing ratios and development
activities, and requires minority shareholders to approve
related-party transactions.
Perpetual Securities Treated as Equity: Fitch treats LMIRT's SGD260
million in perpetual securities, issued in 2016 and 2017, as 100%
equity due to strong going-concern and gone-concern loss-absorption
features. This also factors in LMIRT's intention to maintain the
securities as a permanent part of its capital structure. The trust
did not call the SGD140 million securities callable in September
2021 and SGD120 million securities callable in December 2022 amid
weak market sentiment.
DERIVATION SUMMARY
LMIRT is rated one notch below Indonesia-based developer PT Agung
Podomoro Land Tbk (APLN, CCC). The sale of APLN's Central Park Mall
in October 2022 reduced immediate liquidity and refinancing
pressure, but also lowered financing flexibility. APLN and LMIRT
are both exposed to refinancing risk. APLN has limited options to
procure secured borrowing to refinance its USD300 million unsecured
notes maturing in June 2024, while LMIRT has to address its bank
debt maturing as early as November 2023 as well as bond maturing in
June 2024. LMIRT has an entirely unpledged portfolio of shopping
malls that it can use to refinance debt, but is subject to
execution risk including the need for covenant waivers by US dollar
noteholders.
Indonesia-based homebuilder PT Kawasan Industri Jababeka Tbk (KIJA,
CCC+) is rated two notches higher than LMIRT following the
completion of the restructuring of its US dollar notes, which Fitch
viewed as a distressed debt exchange. Fitch believes KIJA can repay
the remainder of debt maturities in 2023, although liquidity
headroom is minimal, with the cash balance most likely to deplete
beyond 12-18 months without access to additional external funds.
Lippo is rated three notches higher than LMIRT, underscoring
Lippo's sufficient liquidity, despite its expectation of negative
free cash flow. Slower presales amid rising inflation and interest
rates will pressure Lippo's cash flow in the next 12 months.
Lippo's recent buyback of US dollar bonds using bank debt
demonstrates healthy access to domestic banks, broadens funding
diversity and improves the liquidity profile.
LMIRT is rated multiple notches below Ronesans Gayrimenkul Yatirim
A.S. (RGY, B/Negative), a Turkish property company with 12
destination shopping centres across seven large cities. RGY has a
less-diversified portfolio than LMIRT, but stronger profitability
with a higher EBITDA margin. RGY's operations have recovered faster
than LMIRT's after the pandemic, with a much higher occupancy of
97% in 1H22. The Negative Outlook on RGY reflects high refinancing
risk for its USD300 million bond maturing in April 2023. However,
the company has positioned itself to manage the refinancing by
purchasing 30% of the bonds, while related parties hold another 50%
and the company has sufficient cash to repay the remaining 20%.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Gradual recovery in the occupancy rate, resulting in 2023 net
property income, including from Lippo Mall Puri, of SGD136
million;
- Capex of SGD17 million in 2023;
- Dividend payout of SGD12 million in 2023.
Key Recovery Rating Assumptions
- Fitch assumes LMIRT will be liquidated in a bankruptcy than
continue as a going concern, as Fitch believes creditors are likely
to maximise recoveries by selling the investment properties.
- Fitch calculates a liquidation value under a distressed scenario
of SGD1.34 billion at end-2022
- Fitch uses stressed capitalisation values to arrive at the
distressed valuation for LMIRT's investment properties. Fitch uses
a 10% capitalisation rate as a reference, being the average of
capitalisation rates from recent divestments and acquisitions, and
apply this to LMIRT's 2022 net property income.
- The estimate also reflects its assessment of the value of trade
receivables under a liquidation scenario, with a 75% advance rate.
Fitch believes a 25% discount is sufficient to cover potential bad
debt. LMIRT's provision for bad debt increased significantly during
the pandemic, although Fitch believes its collection improved as
movement restrictions eased.
- These assumptions result in a recovery corresponding to a
Recovery Rating of 'RR1' for the outstanding senior unsecured
bonds. However, the Recovery Rating is capped at 'RR4', as LMIRT
derives its entire economic value from assets in Indonesia even
though it is incorporated in Singapore. Under its Country-Specific
Treatment of Recovery Ratings Criteria, Indonesia falls into Group
D of creditor friendliness, and the Recovery Rating for instruments
of issuers with assets in this group is subject to a soft cap at
'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- LMIRT successfully refinancing its debt maturities over the next
15 months, including the US dollar notes due June 2024.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Further weakening in liquidity that suggests a default of some
kind appears probable, or that a default-like process has begun,
including if the issuer announces a debt restructuring that Fitch
views as a distressed debt exchange.
LIQUIDITY AND DEBT STRUCTURE
Excessive Refinancing Risk: LMIRT's cash balance of SGD111 million
at end-2022, net of Fitch's negative free cash flow forecast of
SGD28 million in 2023, is insufficient to address upcoming debt
maturities. The trust will have to rely on external funds to meet
SGD547 million of debt maturing over 2023 and 2024. Fitch does not
expect non-core asset disposals in the near term, given high
execution risk.
ISSUER PROFILE
LMIRT is a Singapore-listed real-estate investment trust with a
portfolio of 22 shopping malls and seven retail spaces in
Indonesia. The portfolio was valued at SGD1.7 billion as of
end-2022.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Lippo Malls
Indonesia
Retail Trust LT IDR CCC- Downgrade CCC
LMIRT Capital
Pte. Ltd.
senior
unsecured LT CCC- Downgrade RR4 CCC
SHC GROUP: Court Enters Wind-Up Order
-------------------------------------
The High Court of Singapore entered an order on March 31, 2023, to
wind up the operations of SHC Group Pte. Ltd.
Boardroom Corporate & Advisory Services Pte. Ltd. filed the
petition against the company.
The company's liquidator is:
Farooq Ahmad Mann
c/o Mann & Associates PAC
3 Shenton Way #03-06C
Shenton House
Singapore 06880
SINGLIFE FINANCIAL: Creditors' Proofs of Debt Due on May 8
----------------------------------------------------------
Creditors of Singlife Financial Pte. Ltd. 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 31, 2023.
The company's liquidators are:
Leow Quek Shiong
Gary Loh Weng Fatt
Seah Roh Lin
c/o BDO Advisory
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
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Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9482.
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*** End of Transmission ***