/raid1/www/Hosts/bankrupt/TCRAP_Public/230522.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, May 22, 2023, Vol. 26, No. 102
Headlines
A U S T R A L I A
ADVANCED HOLDINGS: Second Creditors' Meeting Set for May 23
ALLEGIANCE COAL: $5MM in New Money Loan Has Final OK
ALLEN AND POWER: First Creditors' Meeting Set for May 23
AUSGROUP LIMITED: Unable to Pay Debts, Applies to Wind Up Firm
EARTHPRO EARTHMOVING: Second Creditors' Meeting Set for May 23
KHC GROUP: First Creditors' Meeting Set for May 23
MME PL 2022-1: Moody's Reviews B2 Rating on F Notes for Downgrade
PEPPER SPARKZ 6: Fitch Assigns 'Bsf' Final Rating on Class F Notes
SEAFARMS GROUP: Faces Court as Contractors Fight For Payout
WAVE PROJECTS: First Creditors' Meeting Set for May 24
I N D I A
BOL BUM: CRISIL Keeps B Debt Ratings in Not Cooperating Category
BOMBAY EDUCATION: CRISIL Keeps B Debt Rating in Not Cooperating
CHENNAI WATER: Ind-Ra Withdraws D Bank Loan Rating
ESSEL GROUP: Court Scraps Insolvency Plea on DISH TV Promoter Group
GIS CONSORTIUM: CRISIL Lowers Rating on INR0.87cr Loan to B
GOLDEN ALLIANCE: CRISIL Keeps B Debt Ratings in Not Cooperating
GOUTHAM RESIDENCY: CRISIL Cuts Rating on INR7cr Term Loan to B
GSR AND KKR: CRISIL Keeps D Debt Ratings in Not Cooperating
HOLIDAY VILLAGE: CRISIL Keeps D Debt Ratings in Not Cooperating
INCODA: CRISIL Keeps B Debt Ratings in Not Cooperating
MEDICARE HEALTH: CRISIL Assigns B Rating to INR43.23cr Loan
MUMBAI INTERNATIONAL: Fitch Affirms 'BB+' Rating on $750MM Notes
NEERAJ SALES: CRISIL Keeps B Debt Ratings in Not Cooperating
NET CHECK: CRISIL Keeps B+ Debt Rating in Not Cooperating
SAKHI FOOD: CRISIL Keeps B Debt Ratings in Not Cooperating
SALORAA FABS: CRISIL Lowers Rating on INR1cr LT Loan to B+
SANGAL INDUSTRIES: CRISIL Withdraws B+ Rating on INR35cr LT Loan
SATNAM GLOBAL: CRISIL Withdraws D Rating on INR50cr Loan
SHYAM GUWAR: CRISIL Keeps B Debt Ratings in Not Cooperating
SILICA HEALTHCARE: CRISIL Assigns B+ Rating to INR68cr LT Loan
SPICEJET LTD: NCLT to Hear Insolvency Plea on May 25
STAR INDUSTRIES: CRISIL Keeps B Debt Rating in Not Cooperating
UDYOG MANDIR: CRISIL Keeps B+ Debt Ratings in Not Cooperating
UNITED MANUFACTURING: CRISIL Keeps B+ Ratings in Not Cooperating
ZEE ENTERTAINMENT: NCLT Dismisses IDBI Bank's Insolvency Plea
J A P A N
UNIVERSAL ENTERTAINMENT: Fitch Affirms IDR at 'B-', Outlook Stable
N E W Z E A L A N D
BRANT HOMES: Creditors' Proofs of Debt Due on June 14
CONSTRUCT CIVIL: Placed Into Liquidation
DJ HOTELS: Court to Hear Wind-Up Petition on June 1
EAGLE PLUMBING: Creditors' Proofs of Debt Due on June 1
FORTRESS INFORMATION: Ticket Company Owes Millions to Creditors
RAPID RESPONSE: Court to Hear Wind-Up Petition on June 20
SOUTH COAST: Court to Hear Wind-Up Petition on June 1
P H I L I P P I N E S
CHELSEA LOGISTICS: Posts PHP324MM Loss in Q1 Ended March 31
S I N G A P O R E
EYE-BIZ PTE: Court to Hear Wind-Up Petition on May 26
HYPERFORMANCE PTE: Court Enters Wind-Up Order
HZ CONSTRUCTION: Court Enters Wind-Up Order
SING HOE: Creditors' Proofs of Debt Due on June 19
SKYSPORT RETAIL: Commences Wind-Up Proceedings
S R I L A N K A
UB FINANCE: Fitch Gives BB(lka) FirstTime National LongTerm Rating
- - - - -
=================
A U S T R A L I A
=================
ADVANCED HOLDINGS: Second Creditors' Meeting Set for May 23
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Advanced
Holdings Pty Ltd has been set for May 23, 2023 at 2:00 p.m. at the
offices of 110 Harris Street, Harris Park, NSW 2150 and via zoom
videoconference.
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 May 22, 2023 at 4:00 p.m.
Suelen McCallum of dVT Group was appointed as administrator of the
company on Nov. 11, 2023.
ALLEGIANCE COAL: $5MM in New Money Loan Has Final OK
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Allegiance Coal USA Ltd and its debtor-affiliates to use cash
collateral and obtain postpetition financing on a final basis
following a hearing on May 16.
Pursuant to the DIP Facility, the Debtor was authorized to borrow
an aggregate principal amount not to exceed $2.5 million on an
interim basis and the maximum principal amount not to exceed $5
million in new money advances, on a final basis. Specifically, the
DIP Facility consisted of:
(a) $1.3 million in new money to be made available in a single
draw in accordance with the Approved Budget on the Interim Closing
Date;
(b) $700,000 in new money to be made available in a single
draw at the end of the week ending April 28, 2023, in the Approved
Budget, subject to compliance with the Approved Budget and case
milestones;
(c) $3 million in new money to be made available on and after
the Final Closing Date as follows: (i) $500,000 at the end of the
week ending June 2, 2023, (ii) $1.5 million at the end of the week
ending June 9, 2023, and (iii) $1 million at the end of the week
ending June 16, 2023, in the Approved Budget, subject to compliance
with the Approved Budget and the Case Milestones; and
(d) Subject to entry of the Final Order, a roll-up of up to $5
million on a dollar-for-dollar basis with any new money actually
advanced by the DIP Lender to the Debtors under the DIP Facility.
Collins St Convertible Notes Pty Ltd, as trustee for The Collins St
Convertible Notes Fund, serves as DIP Agent.
Collins, also as Prepetition Noteholder, Cline Mining Corporation
and Warrior Met Coal Land, LLC, each hold an interest in the cash
collateral.
The Debtors are required to comply with these milestones:
(a) No later than five business days after entry of the
Interim Order, the Debtors will have filed a motion with the
Bankruptcy Court seeking approval of the procedures for the
Transaction on terms acceptable to the DIP Lender.
(b) No later than 21 days after entry of the Interim Order,
the Bankruptcy Court will enter the Final Order.
(c) No later than 21 days after the Debtors file the motion,
the Bankruptcy Court will have entered an order approving the
proposed Transaction procedures.
(d) No later than 60 days after entry of the Interim Order
will be the deadline for initial indications of interest.
(e) No later than 65 days after entry of the Interim Order
will be the deadline for the submission of Qualified Bids. For the
avoidance of doubt, a Qualified Bid may include a proposal for a
sale of substantially all of the Debtors' assets or a refinancing
or recapitalization transaction sufficient to satisfy the
obligations under the DIP Facility and the Prepetition Note
Agreement in full and in cash.
(f) No later than 70 days after entry of the Interim Order, an
auction will be conducted if there is more than one Qualified Bid.
(g) No later than 80 days after entry of the Interim Order,
the Bankruptcy Court will have entered an order approving the
Transaction.
(h) No later than 90 days after entry of the Interim Order,
the consummation of (i) the Transaction, or (ii) more than one
Transaction will have occurred.
Debtor Allegiance Coal USA Limited and non-debtor Allegiance Coal
Limited are parties to the Deed of Variation, dated August 12,
2022, that amends and restates a Convertible Note Agreement, dated
May 24, 2022, by and between Allegiance USA and AHQ, on the one
hand, and Collins St Convertible Notes Pty Ltd, as trustee for The
Collins St Convertible Notes Fund, on the other hand.
The Debtors and AHQ are parties to the Guaranty and Security
Agreement dated May 24, 2022, as amended, in favor of the
Prepetition Noteholder, on account of the Debtors' use of cash
collateral and any diminution in value of the Prepetition
Noteholder's interests in the Prepetition Collateral.
As of the Petition Date, the Debtors are indebted to the
Prepetition Noteholder in the aggregate principal amount of
A$42.857 million under the Prepetition Note Agreement, plus accrued
and unpaid interest, fees, and expenses.
As adequate protection, the Prepetition Noteholder is granted the
following adequate protection for, and equal in amount to, the
diminution in the value of the prepetition security interests of
the Prepetition Noteholder securing the Prepetition Note
Obligations:
(a) Adequate Protection Liens. Effective and perfected as of
the date of entry of the Interim Order, replacement security
interests in and liens on the collateral securing the Prepetition
Note Obligations. The adequate protection liens will be
subordinated only to the Carve-Out, the DIP Liens and Permitted
Liens;
(b) Super-Priority Claim. To the extent of any diminution in
value of the Prepetition Note Security Interests, a superpriority
administrative expense claim, which will be immediately junior to
the Carve-Out, the DIP Superpriority Claim, and senior to all other
administrative expense claims; and
(c) The Prepetition Noteholder may pay interest at the default
rate using the Interest Funds (to the extent not advanced as DIP
Loans hereunder) in accordance with the terms of the Prepetition
Note Agreement.
Warrior Met Coal Land is granted the following adequate protection
for, and equal in amount to, the diminution in the value of its
interests in the cash collateral:
(a) Adequate Protection Liens. Effective and perfected as of
the date of entry of the Interim Order, replacement liens on the WM
Prepetition Collateral; and
(b) Warrior Land's Super-Priority Claim. To secure the WM
Prepetition Collateral, a superpriority administrative expense
claim.
Cline Mining is granted the following adequate protection for, and
equal in amount to, the diminution in the value of its interests in
the cash collateral:
(a) Adequate Protection Liens. Effective and perfected as of
the date of entry of the Interim Order, replacement liens on the
Cline Prepetition Collateral; and
(b) Cline's Super-Priority Claim. To secure the Cline
Replacement Liens, a superpriority administrative expense claim as
provided for in section 507(b) of the Bankruptcy Code.
About Allegiance Coal USA Limited
Allegiance Coal USA Limited is a listed Australian company focused
on seaborne met coal mine development and operations, with
operating mines in southeast Colorado, central Alabama, as well as
a development project in northwest British Columbia.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10234) on February 21,
2023. In the petition signed by Jonathan Romcke, chief executive
officer, the Debtor disclosed up to $100 million in assets and up
to $50 million in liabilities.
Judge Craig T. Goldblatt oversees the case.
Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
represents the Debtor as legal counsel.
ALLEN AND POWER: First Creditors' Meeting Set for May 23
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Allen and
Power Electrical Communications Pty Ltd and Jason Allen Pty Ltd
will be held on May 23, 2023, at 2:00 p.m. via online meeting
only.
Mathew Gollant of CJG Advisory was appointed as administrator of
the company on May 12, 2023.
AUSGROUP LIMITED: Unable to Pay Debts, Applies to Wind Up Firm
--------------------------------------------------------------
The Business Times reports that Ausgroup Limited has applied to the
Singapore High Court to wind up the company, saying that it is
unable to pay its debts and that the "purpose of judicial
management cannot be achieved".
In a bourse filing on May 19, the company said it has applied to
the court pursuant to the Insolvency, Restructuring and Dissolution
Act 2018, for the discharge of the company from judicial management
and to release the joint and several judicial managers from
liability, BT relays.
The date of hearing for the applications will be fixed by the
court, the company said.
According to BT, AusGroup said Tan Wei Cheong, Matthew Stuart
Becker and Lim Loo Khoon of Deloitte & Touche are proposed to be
appointed as joint and several liquidators of the company in
relation to the winding up applications.
The group said it would release further announcements when there
are material developments in relation to the applications.
Shares of AusGroup have been suspended since Nov. 10, 2022,
following a trading halt called on Nov 7. The stock last traded at
SGD0.009, the report notes.
Headquartered in West Perth, Australia, AusGroup Limited (SGX:5GJ)
-- https://www.ausgroupltd.com/ -- provides construction and
maintenance services. The Company offers mechanical, welding,
surface protection, industrial insulation, and refractory services.
AusGroup serves customers in Asia.
EARTHPRO EARTHMOVING: Second Creditors' Meeting Set for May 23
--------------------------------------------------------------
A second meeting of creditors in the proceedings of Earthpro
Earthmoving Pty Ltd has been set for May 23, 2023 at 11:00 a.m. via
virtual meeting only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 22, 2023 at 5:00 p.m.
Rajiv Ghedia of Westburn Advisory was appointed as administrator of
the company on April 17, 2023.
KHC GROUP: First Creditors' Meeting Set for May 23
--------------------------------------------------
A first meeting of the creditors in the proceedings of KHC Group
Pty Limited will be held on May 23, 2023, at 2:30 p.m. via virtual
meeting only.
Vincent Pirina and Andrew McEvoy of Aston Chace Group were
appointed as administrators of the company on May 11, 2023.
MME PL 2022-1: Moody's Reviews B2 Rating on F Notes for Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
ratings of Class C, Class D, Class E and Class F notes issued by
MME PL Trust 2022-1.
The affected ratings are as follows:
Issuer: MME PL Trust 2022-1
Class C Notes, A2 (sf) Placed Under Review for Downgrade;
previously on Jun 30, 2022 Definitive Rating Assigned A2 (sf)
Class D Notes, Baa2 (sf) Placed Under Review for Downgrade;
previously on Jun 30, 2022 Definitive Rating Assigned Baa2 (sf)
Class E Notes, Ba2 (sf) Placed Under Review for Downgrade;
previously on Jun 30, 2022 Definitive Rating Assigned Ba2 (sf)
Class F Notes, B2 (sf) Placed Under Review for Downgrade;
previously on Jun 30, 2022 Definitive Rating Assigned B2 (sf)
RATINGS RATIONALE
The rating action is driven by a deterioration in performance of
the underlying portfolio of unsecured personal loan receivables,
which saw a sharp increase in default since November 2022.
As of April 2023, 9.2% of the outstanding pool was 30-plus day
delinquent and 4.7% was 90-plus day delinquent. Since closing in
June 2022, the deal has incurred 4.6% (as a percentage of the
original note balance) of principal losses.
On the April 2023 payment date, the amount of income collections
was insufficient to cover the principal losses incurred during the
month. As a result, 0.13% of the unrated Class G2 Notes was charged
off on the April payment date. This charge-off amount was
re-instated on the May payment date.
Following the May 2023 payment date, note subordination for the
Class C, Class D, Class E and Class F Notes has increased to 33.9%,
26.5%, 18.7% and 14.4% respectively, from 24.8%, 18.3%, 11.5% and
7.7% at deal close.
Considering the steep increase in cumulative principal losses over
the past several months, Moody's analysis considered various
increases in default rates (up to 14.2% of the original portfolio
balance), lower recovery rates and prepayment rates. Moody's also
stressed the Aaa portfolio credit enhancement (PCE). At closing,
Moody's portfolio assumptions were 10% default rate, 15% recovery
rate and 38% PCE.
The seller informed Moody's recently that it had sold written-off
receivables through debt sales since closing. For the May 2023
payment date, AUD0.8 million of debt sales proceeds were
transferred to the trust.
During the review period, Moody's will evaluate the evolution of
portfolio principal losses and the servicer's success in collecting
on the delinquent loans. Moody's will also take into consideration
any updates the issuer and deal counsel provide on debt sale
procedures and proceeds.
The transaction is a cash securitisation of unsecured personal
loans originated by MoneyMe Financial Group Pty Ltd.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was "Moody's
Approach to Rating Consumer Loan-Backed ABS" published in December
2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations, and (2) an increase in credit enhancement
available for the notes.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in credit enhancement available for
the notes, and (3) a deterioration in the credit quality of the
transaction counterparties.
PEPPER SPARKZ 6: Fitch Assigns 'Bsf' Final Rating on Class F Notes
------------------------------------------------------------------
Fitch Ratings has assigned final ratings to Pepper SPARKZ Trust
No.6's pass-through floating-rate notes. The notes are backed by a
pool of first-ranking Australian automotive and equipment lease and
loan receivables originated by Pepper Asset Finance Pty Limited, a
subsidiary of Pepper Money Limited (Pepper). The notes are issued
by BNY Trust Company of Australia Limited as trustee for Pepper
SPARKZ Trust No.6.
Entity/Debt Rating Prior
----------- ------ -----
Pepper SPARKZ
Trust No.6
A1-a AU3FN0077558 LT AAAsf New Rating AAA(EXP)sf
A1-x AU3FN0077541 LT AAAsf New Rating AAA(EXP)sf
B AU3FN0077533 LT AAsf New Rating AA(EXP)sf
C AU3FN0077525 LT Asf New Rating A(EXP)sf
D AU3FN0077517 LT BBBsf New Rating BBB(EXP)sf
E AU3FN0077509 LT BBsf New Rating BB(EXP)sf
F AU3FN0077491 LT Bsf New Rating B(EXP)sf
G LT NRsf New Rating NR(EXP)sf
TRANSACTION SUMMARY
The total collateral pool at the 31 March 2023 pool cut date was
sized at AUD700 million, an increase from AUD600 million at the
time of expected rating on 19 April 2023, and consisted of 17,803
receivables with a weighted-average (WA) remaining maturity of 57.8
months.
KEY RATING DRIVERS
Stress Commensurate with Ratings: Fitch has assigned base-case
default expectations and 'AAAsf' default multiples for each risk
tier classification of A, B and C.
Its base-case gross-loss expectations and 'AAAsf' default multiples
are as follows:
Risk Tier A: 2.25% (6.0x)
Risk Tier B: 6.00% (5.3x)
Risk Tier C: 12.00% (4.5x)
The recovery base case is 30.0%, with a 'AAAsf' recovery haircut of
50.0% across all risk grades. The WA base-case default assumption
was 4.3% and the 'AAAsf' default multiple was 5.3x.
Performance is supported by Australia's continued economic growth
and tight labour market, despite increasing interest rates. GDP
growth in 2022 was 2.7% and unemployment was 3.7% in April 2023.
Fitch expects GDP growth to slow to 1.5% in 2023, with unemployment
reaching 4.2%, reflecting high inflation combined with a slowdown
in consumer spending.
Excess Spread Supports A1-x Note Repayment: The transaction
includes a class A1-x note to fund the purchase-price component
related to the unamortised commission paid to introducers for the
origination of the receivables. The note will not be
collateralised, but will amortise in line with an amortisation
schedule. The note's repayment limits the availability of excess
spread to cover losses, as it ranks senior in the interest
waterfall, above the class B to F notes. However, the rated notes
still pass the cash flow analysis at their respective rating
levels.
Class A to F notes will receive principal repayments pro rata upon
satisfaction of pro rata conditions. The percentage of credit
enhancement (CE) provided from the G note will thus increase as the
A to F notes amortise.
Fitch's cash flow analysis incorporates the transaction's
structural features and tests each note's robustness by stressing
default and recovery rates, prepayments, interest-rate movements
and default timing.
Counterparty Risks Addressed: Counterparty risk is mitigated by
documented structural mechanisms that ensure remedial action takes
place should the ratings of the swap providers or transaction
account bank fall below a certain level. The transaction includes
interest-rate swaps with a fixed schedule, which allows for future
over- or under-hedging, depending on the level of prepayments and
defaults. Fitch conducted additional sensitivity analysis for these
hedging scenarios.
Low Operational and Servicing Risk: All receivables were originated
by Pepper Asset Finance, which demonstrated adequate capability as
originator, underwriter and servicer. Pepper is not rated by Fitch.
Servicer disruption risk is mitigated by back-up servicing
arrangements. The nominated back-up servicer is BNY. Fitch
undertook an operational and file review and found that the
operations of the originator and servicer were comparable with
those of other auto and equipment lenders.
No Residual Value Risk: There is no residual value exposure in this
transaction. However, 19.3% of the portfolio by loan count has
balloon amounts payable at maturity. Balloon risk has been factored
into the multiples.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Transaction performance may be affected by changes in market
conditions and the economic environment. Weakening asset
performance is strongly correlated with increasing levels of
delinquencies and defaults that could reduce CE available to the
notes.
Unanticipated increases in the frequency of defaults could produce
loss levels higher than Fitch's base case and are likely to result
in a decline in CE and remaining loss-coverage levels available to
the notes. Decreased CE may make certain note ratings susceptible
to negative rating action, depending on the extent of coverage
decline. Hence, Fitch conducts sensitivity analysis by stressing a
transaction's initial base-case assumptions. Fitch stresses the
recovery rate to isolate the effect of a change in recovery
proceeds at the borrower level.
Downgrade Sensitivity
Note: A1-a / A1-x / B / C / D / E / F
Rating: AAAsf / AAAsf / AAsf / Asf / BBBsf / BBsf / Bsf
Rating Sensitivity to Increased Default Rates
Defaults increase 10%: AAAsf / AAAsf / AA-sf / A-sf / BBB-sf / BBsf
/ Bsf
Defaults increase 25%: AA+sf / AAsf / A+sf / BBB+sf / BB+sf / B+sf
/ less than Bsf
Defaults increase 50%: AAsf / AA+sf / A-sf / BBBsf / BBsf / less
than Bsf / less than Bsf
Rating Sensitivity to Decreased Recovery Rates
Recoveries decrease 10%: AAAsf / AAAsf / AAsf / Asf / BBBsf / BBsf
/ Bsf
Recoveries decrease 25%: AAAsf / AAAsf / AA-sf / Asf / BBBsf / BBsf
/ Bsf
Recoveries decrease 50%: AAAsf / AAAsf / AA-sf / A-sf / BBB-sf /
BB-sf / less than Bsf
Rating Sensitivity to Combined Stresses
Defaults increase 10% and recoveries decrease 10%: AAAsf / AAAsf /
AA-sf / A-sf / BBB-sf / BB-sf / less than Bsf
Defaults increase 25% and recoveries decrease 25%: AA+sf / AAAsf /
Asf / BBBsf / BB+sf / Bsf / less than Bsf
Defaults increase 50% and recoveries decrease 50%: AA-sf / AA+sf /
BBB+sf / BB+f / BB-sf / less than Bsf / less than Bsf
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Macroeconomic conditions, collateral performance and credit losses
that are better than Fitch's baseline scenario or sufficient
build-up of CE that would fully compensate for the credit losses
and cash flow stresses commensurate with higher rating scenarios,
all else being equal
The class A notes are at 'AAAsf', which is the highest level on
Fitch's scale cannot be upgraded. For these notes that are at
'AAAsf', upgrade sensitivity stresses are not relevant. However,
results for the remaining rated notes are as follows:
Upgrade Sensitivity
Note: B / C / D / E / F
Rating: AAsf / Asf / BBBsf / BBsf / Bsf
Rating Sensitivity to Reduced Defaults and Increased Recoveries
Defaults decrease 10%/recoveries increase 10%: AA+sf / A+sf /
BBB+sf / BB+sf / BB-sf
DATA ADEQUACY
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available to Fitch
for this transaction.
As a part of its ongoing monitoring, Fitch conducted a review of a
small targeted sample of the originator's origination files and
found the information contained in the reviewed files to be
adequately consistent with the originator's policies and practices
and the other information provided to the agency about the asset
portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
SEAFARMS GROUP: Faces Court as Contractors Fight For Payout
-----------------------------------------------------------
ABC News reports that reignited plans to build one of the world's
largest prawn farms on a remote Northern Territory cattle station
has been disrupted by a federal court case.
A payment dispute between Seafarms, the embattled parent company of
the ambitious AUD2 billion prawn farming project Project Sea
Dragon, and Canstruct, the contractor that managed works on the
prawn grow-out facility has become the latest stumbling block for
the ASX-listed company.
Project Sea Dragon entered voluntary administration in February
following an order from the Royal Institution of Chartered
Surveyors to pay the contractor AUD13.9 million of unpaid fees,
according to ABC News.
A month later, Seafarms announced a move that would limit the
amount it would pay Canstruct to about 10 per cent of what it
believes it is owed.
The Federal Court has since granted an injunction on the move until
it can make a ruling on the case.
According to ABC News, the proposed Project Sea Dragon, which would
have resulted in 100,000 tonnes of black tiger prawns being
produced, is due to face court next month following the federal
court order to halt the company from distributing funds.
Millions of dollars of government money has been put into
supporting Project Sea Dragon, particularly on surrounding roads.
ABC News relates that the federal government contributed AUD63
million on nearby road infrastructure, while the NT government
spent AUD56 million and the WA government allocated AUD15 million.
Canstruct chief executive Damien Cavanagh said project Sea Dragon
entered administration, saying that Seafarms had withdrawn funding
for the prawn project at Legune Station, which is at odds with the
company's latest push to forge ahead.
A month later, Seafarms director Harley Whitcombe said in a
statement to the ASX that a deed fund contribution of AUD3.5
million was to be made by the PSD's parent, Seafarms Group, to pay
out creditors in a Deed of Company Agreement (DOCA).
"[Seafarms] has been advised that the DOCA discharges the claims
against Project Sea Dragon by Canstruct," the report quotes
Seafarms director Harley Whitcombe as saying in the ASX
announcement.
"[Under that DOCA] Canstruct would only receive about 10 per cent
of the amount it is owed," Mr. Cavanagh said.
On March 24, in an ASX letter, Seafarms announced that, "as a
result of entry into the DOCA, control of Project Sea Dragon has
now returned to the directors."
"The directors expect that [Seafarm] operations will now return to
normal and they will continue to assess advancing Project Sea
Dragon including interim funding."
On March 27, Seafarms Group Limited (SFG) recommenced trading on
the ASX.
But the expectation of returning to normal was short lived, less
than two weeks later Project Sea Dragon was served with federal
court proceedings by Canstruct, seeking a termination of the DOCA
and a liquidator to be appointed to the company, the report notes.
The report adds that the following week saw the first Project Sea
Dragon director resignations since the announcement of voluntary
administration in February, as Hisami Saka and Terutaka Kuraishi
stepped down.
WAVE PROJECTS: First Creditors' Meeting Set for May 24
------------------------------------------------------
A first meeting of the creditors in the proceedings of Wave
Projects Pty Ltd and Wave Pty Ltd will be held on May 24, 2023, at
2:30 p.m. and 4:00 p.m., respectively, at the offices of Chartered
Accountants ANZ, Level 11, 2 Mill Street, in Perth, WA, and via
telephone or video conferencing.
Nicole Allmark, Paula Smith, and Jack James of Rodgers Reidy were
appointed as administrators of the company on May 12, 2023.
=========
I N D I A
=========
BOL BUM: CRISIL Keeps B Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Bol Bum
Constructions (BBC) continue to be 'CRISIL B/Stable/CRISIL A4
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 4 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 1 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Bank 4 CRISIL B/Stable (Issuer Not
Guarantee Cooperating)
Proposed Cash 1 CRISIL B/Stable (Issuer Not
Credit Limit Cooperating)
CRISIL Ratings has been consistently following up with BBC for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 BBC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BBC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BBC continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Set up in 2004 as partnership firm, BBC is engaged in civil
construction work mainly related to roads. Apart from this, the
firm also executes construction work related to buildings, bridges,
and canals. The firm is located in Patna and executes work for
different state and central government bodies. The partners are Mr.
Rajesh Roshan Kumar, Mr. Jai Shankar Prasad, Mr. Rajeev Ranjan, and
Mr. Satender Singh, who manage the operations.
BOMBAY EDUCATION: CRISIL Keeps B Debt Rating in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Bombay
Education Society (BES) continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 12 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with BES for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 BES, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BES
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BES continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
BES was established in 1815, by Arch Deacon George Barnes; Sir Evan
Nepean, governor of Mumbai, was its first president. The society
operates two schools: Christ Church School at Byculla in Mumbai and
Barnes School at Deolali, Maharashtra.
CHENNAI WATER: Ind-Ra Withdraws D Bank Loan Rating
--------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Chennai Water
Desalination Limited's (CWDL) bank guarantee rating of 'IND D
(ISSUER NOT COOPERATING)' in the non-cooperating category and has
simultaneously withdrawn it.
The detailed rating action is:
-- INR50 mil. Performance guarantee (executed in the form of bank
guarantee) (long term)* maintained in non-cooperating
category and withdrawn.
*Maintained at 'D (ISSUER NOT COOPERATING)' before being withdrawn
Key Rating Drivers
The rating has been maintained in the non-cooperating category as
CWDL did not participate in the rating exercise despite requests
from Ind-Ra to provide surveillance information and no default
statement.
Ind-Ra is no longer required to maintain the rating as the agency
has received a no-objection certificate from the rated facility's
lender. 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
CWDL is a special purpose vehicle that was incorporated to design,
construct, operate and maintain a 100-million-litre-per-day
seawater desalination plant in Minjur, about 35km north of
Chennai.
ESSEL GROUP: Court Scraps Insolvency Plea on DISH TV Promoter Group
-------------------------------------------------------------------
The Economic Times reports that the bankruptcy court has dismissed
an application filed by IDBI Trusteeship Services Ltd to initiate
the corporate insolvency resolution process (CIRP) against Dish
TV's promoter group company Direct Media Distribution Ventures Pvt
Ltd.
Former Dish TV chairman and MD Jawahar Goel, along with his family,
is a promoter of Dish TV. Goel is Essel Group chairman Subhash
Chandra's younger brother.
According to the report, the plea was filed by the debenture
trustee on behalf of Franklin Templeton Asset Management (India)
Pvt Ltd, which had acquired non-convertible debentures of nominal
value of INR425 crore issued by Essel Infraprojects Ltd in 2015.
Direct Media had issued a corporate guarantee for Essel's
obligations, the report notes.
On the basis of the guarantee last year in July, the debenture
trustee approached the Mumbai bench of the NCLT to admit Direct
Media Distribution Ventures after it allegedly defaulted on its
dues of over INR599 crore, which includes interests.
Countering the petition, counsel Nausher Kohli argued that since
the debentures matured on May 22, 2020, and since Direct Media's
guarantee was invoked on June 12, 2020, the date of default
occurred during the suspension period, which bars the admission of
any insolvency petition, the ET adds.
Dish TV India Limited -- http://www.dishtvindia.in/-- is engaged
in the distribution of multiple television channels and allied
video/audio services to subscribers on a monthly subscription
basis.
GIS CONSORTIUM: CRISIL Lowers Rating on INR0.87cr Loan to B
-----------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of GIS
Consortium India Private Limited (GIS) to 'CRISIL B/Stable/CRISIL
A4 Issuer Not Cooperating' from 'CRISIL BB-/Stable/CRISIL A4+
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 7 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Overdraft Facility 3.75 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Proposed Fund- 0.87 CRISIL B/Stable (ISSUER NOT
Based Bank Limits COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
Working Capital 0.38 CRISIL B/Stable (ISSUER NOT
Demand Loan COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
CRISIL Ratings has been consistently following up with GIS for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 GIS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GIS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GIS revised to 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'
from 'CRISIL BB-/Stable/CRISIL A4+ Issuer Not Cooperating'.
Incorporated in 2002, GIS conducts surveys, makes maps or GISs and
is a spatial data provider for creative solutions in the areas of
natural resources management, land information systems, urban
development and planning and geographical information systems
applications. It is based in Noida, Uttar Pradesh, and promoted by
Mr Dheeraj Sharma and Mr Neeraj Sharma.
GOLDEN ALLIANCE: CRISIL Keeps B Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Golden
Alliance Hospitalities Private Limited (GAHPL) continue to be
'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL B/Stable (Issuer Not
Cooperating)
Long Term Loan 8 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GAHPL for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 GAHPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GAHPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GAHPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Incorporated in 2012 and promoted by Mr. Kapil Chopra, Mr. Rajan
Chopra, Mr. Shyam Soni, and Mr. Raghav Soni, GAHPL is setting up a
3-star hotel with more than 50 rooms, banquet, restaurant and bar
facilities in Amritsar. Operations are expected to commence from
September 2017.
GOUTHAM RESIDENCY: CRISIL Cuts Rating on INR7cr Term Loan to B
--------------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of
Goutham Residency Private Limited (GRPL) to 'CRISIL B/Stable/CRISIL
A4 Issuer Not Cooperating' from 'CRISIL BB-/Stable/CRISIL A4+
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft Facility 3 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Proposed Fund- 5 CRISIL B/Stable (ISSUER NOT
Based Bank Limits COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
Term Loan 7 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER
NOT COOPERATING')
CRISIL Ratings has been consistently following up with GRPL for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 GRPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GRPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GRPL revised to 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'
from 'CRISIL BB-/Stable/CRISIL A4+ Issuer Not Cooperating'.
GRPL was incorporated in 2011. It is engaged in hotel & hospitality
business. It currently operates 3 star hotel under the brand
Goutham Grand at Tenali, Guntur district of Andhra Pradesh. Other
facilities include restaurant, bar & lounge, banquet halls, It is
promoted by Mr. Pratap Nannapaneni and family.
GSR AND KKR: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of GSR and KKR
Educational Society (GSR) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 6 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GSR for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 GSR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GSR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GSR continues to be 'CRISIL D Issuer Not Cooperating'.
GSR was established in 2007 under the Society's Registration Act,
1861.The society operates an education institute, KKR & KSR
Institute of Technology & Sciences, in Vinjanampadu, near Guntur in
Andhra Pradesh. The college offers undergraduate and post graduate
courses in engineering and business management.
HOLIDAY VILLAGE: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Holiday
Village Resorts Private Limited (HVRPL) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (Issuer Not
Cooperating)
Term Loan 15.12 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HVRPL for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 HVRPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HVRPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HVRPL continues to be 'CRISIL D Issuer Not Cooperating'.
HVRPL, based in Gandhidham (Gujarat), was incorporated in 2001. It
operates a three-star ethnic resort, Holiday Village Resorts, and a
club, Holiday Club.
INCODA: CRISIL Keeps B Debt Ratings in Not Cooperating
------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of The Incoda
(Incoda) continue to be 'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B/Stable (Issuer Not
Cooperating)
Long Term Loan 4.5 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term 0.5 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with Incoda for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 Incoda, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Incoda is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Incoda continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Established as a proprietorship firm by Mr. Samirendra Dutta in
1986, and reconstituted as a partnership firm in 2009, when his
wife, Ms. Sibani Dutta, joined as a partner, Incoda provides
outdoor advertising services and also manufactures clay and ceramic
artefacts.
MEDICARE HEALTH: CRISIL Assigns B Rating to INR43.23cr Loan
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
bank facilities of Medicare Health Services Private Limited
(MHSPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.77 CRISIL B/Stable (Assigned)
Term Loan 43.23 CRISIL B/Stable (Assigned)
The rating reflects modest scale of operations, exposure to intense
competition and highly leveraged capital structure. These
weaknesses are partially offset by its MHSPL's extensive industry
experience of the promoters
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: Medicare started its operations with
ultrasound tests in year 1999 and is currently running two
diagnostic centers with new hospital set up started in fiscal 2022.
However, the scale of operations marked by revenue level is modest
at INR20 crore in fiscal 2022. Although this is expected to grow to
remain around INR30 crore in fiscal 2023 however remains modest and
further improvement shall remain monitorable.
* Highly leveraged capital structure: MHSPL has average financial
profile marked by high total outside liabilities to adj tangible
networth (TOL/ANW) for last three year ending on 31st March 2022.
The total outside liabilities to adjusted tangible networth remains
at 5.57 times as on 31st March 2022. This is expected to remain
moderately high as the company is planning for opening another
diagnostic center for which capex of INR16-17 crore is expected.
This will be mostly debt funded capex against which company has
plans to infuse unsecured loan of only INR1.5 crore thus leading to
aggressive financial risk profile.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an extensive experience in Health Care – Auxiliary industry.
This has given them an understanding of the dynamics of the market
and enabled them to establish relationships with suppliers and
customers.
Liquidity: Poor
Bank limit utilization is low at around 37.81 percent for the past
twelve months ended January -2023. Cash accruals are expected to
be over INR8-9 crore which are tight against term debt obligation
of INR10-11 crore over the medium term. Current ratios are moderate
at 0.39 times on March31, 2022.
Outlook Stable
CRISIL Ratings believe MHSPL will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity factors
Upward factor
* Sustained improvement in scale of operation by 20% and sustenance
of operating margin, leading to higher cash accruals above INR11
crore.
* Improvement in total outside liabilities to adjusted tangible
networth to remain below 2 times leading to better financial risk
profile.
Downward factor
* Decline in profitability or scale of operations leading to lower
cash accruals below INR8 crore.
* Large debt-funded capital expenditure weakens capital structure
* Witnesses a substantial increase in its working capital
requirements thus weakening its liquidity & financial profile.
Initially established as Medicare Diagnostic & Imaging Centre and
was later reconstituted as private limited in 2019 under the name
MHSPL. It is operating a diagnostics center at Karan Nagar and has
recently set a new unit with maternity centre along-with other
diagnostics facilities at Kaka Sarai, both are in Srinagar,
Kashmir. Its owned and managed by Syed Mustafa Shah & Syed Sajad.
MUMBAI INTERNATIONAL: Fitch Affirms 'BB+' Rating on $750MM Notes
----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on Mumbai International
Airport Limited's (MIAL) USD750 million senior secured notes due
2029. The Outlook is Stable.
RATING RATIONALE
The rating reflects MIAL's regulated asset base, Mumbai's strong
passenger growth potential in the medium-to-long term, the higher
contribution of domestic traffic than international traffic and the
issuer's adequate financial profile. MIAL is considered ring-fenced
from Navi Mumbai International Airport Limited (NMIAL), the city's
second airport, in its credit analysis.
Fitch has revised its rating-case forecast of a full recovery in
passenger traffic to the levels of the financial year ended March
2020 (FY20) by end-2023, instead of end-2024. Therefore, Fitch
expects average leverage to improve to 5.5x over FY24-FY26 from its
previous forecast of 6.0x over the same period. The Stable Outlook
reflects MIAL's headroom against its negative rating action trigger
of 8.0x for leverage.
The regulatory framework allows the airport concessionaire in
Mumbai, the industrial and financial hub of India, to earn a return
on its regulatory asset base. The aeronautical tariffs are
determined under a hybrid till with 30% of non-aeronautical revenue
for cross-subsidisation and the concession fee is based on a
revenue share of 38.7% to Airports Authority of India (AAI). The
fairly stable domestic traffic accounts for about 70% of MIAL's
total passenger base.
MIAL's capex is mainly for improving runway efficiency and
maintenance. The rating also considers likely capacity constraints
at the airport in the medium term and the start of NMIAL's
operations from FY25 to cater to additional traffic growth in
Mumbai.
KEY RATING DRIVERS
Faster-than-Expected Recovery: Volume Risk - High Stronger
MIAL manages the Chhatrapati Shivaji Maharaj International Airport
(CSMIA), which serves as an origin-and-destination airport to
metropolitan Mumbai's 22 million population. Passenger traffic rose
by over 9% in the five years before the Covid-19 pandemic. The
pandemic cut traffic in FY21 and FY22, but recovery has been
promising as total traffic in FY23 was already 95.6% of FY20
levels. The enplanement base was 43.9 million in FY23 (FY20: 45.8
million) with a mix of business and leisure travel. The 4.2 million
traffic in March 2023 already surpassed the 3.5 million in March
2019 before the pandemic.
Fitch forecasts CSMIA will reach its full capacity of 60 million
passengers by FY29, one year earlier than expected in the previous
rating case, after maintenance capex to meet efficiency levels.
NMIAL, the city's second airport, is set to start operating by FY25
to cater to traffic growth and will have a capacity of 20 million
passengers by FY27, expandable to up to 60 million passengers.
CSMIA, the second-largest airport in India, will remain Mumbai's
primary integrated airport, while NMIAL will absorb domestic demand
due to the constraints at CSMIA and take on spillover international
demand.
Passing Revenue Baton to Non-Aeronautical: Price Risk - Midrange
The Airports Economic Regulatory Authority (AERA) of India has
confirmed the hybrid till regulatory framework with 30% of
non-aeronautical revenue to be used for cross-subsidisation. The
regulatory regime for airport operators is evolving, evident from
the delay in control-period tariff orders, but there are no major
disputes before the regulator. The control period 3 (FY20-FY24)
tariffs were delayed by two years to April 2021 due to the
pandemic. The aeronautical tariffs charged by MIAL will be no less
than the base airport charges stipulated in the state support
agreement, according to AERA.
Fitch expects MIAL's revenue composition to change such that the
company will derive the bulk of its revenue from non-aeronautical
services. The company has more flexibility in determining tariffs
for the non-aeronautical services offered.
Capacity Constrained, Mainly Maintenance Capex: Infrastructure
Development/Renewal - Midrange
Fitch expects CSMIA to reach maximum capacity by FY29. CSMIA is the
busiest single-runway airport in the world, with capacity to handle
up to 53 air traffic movements per hour and on peak days handling
up to 1,004 movements a day. MIAL aims to improve the efficiency of
its runway operations to increase runway utilisation and cater to
the larger passenger base.
Fitch estimates MIAL to incur only maintenance capex in the next
few years under the rating case. Fitch believes the Adani Group,
which manages projects across various sectors and is MIAL's
sponsor, has the capability to carry out MIAL's capex plan even
though the contracts have yet to be finalised.
Ring-Fenced Structure, Manageable Refinancing Risk: Debt Structure
- Midrange
The US dollar notes benefit from seniority, security and a
protective debt structure, including ring-fencing of all cash flow
and a set of covenants limiting leverage, defined as net
debt/EBITDA, to 5x and funds from operations/net debt to not less
than 10%, with a 40% margin above both the covenants for a period
of 24 months after issuance or a shorter period at the company's
sole discretion.
Refinancing risk is mitigated by a sweep sinking fund mechanism and
the long concession life, which is extendable till 2066. The
noteholders will benefit from an escrow account for the notes,
which have a cash waterfall mechanism in place, excluding the
airport development fee (ADF) receipts and funds received from
NMIAL or for investment in NMIAL, thereby insulating MIAL from the
obligations of NMIAL. The noteholders will also benefit from a
six-month reserve for interest.
Group Governance Risks
Governance weaknesses at the sponsor level and other group
entities, including a highly concentrated shareholding structure
across group entities and aggressive debt-funded investments at
some entities, can expose all Adani group-related companies to
higher contagion risks than previously considered, which can affect
their financial flexibility. Fitch believes these group-related
risks to be lower for MIAL due to legal ring-fencing as per a
strict cash flow waterfall mechanism in the US dollar notes.
The group is re-evaluating its investment plans, especially in
non-infrastructure businesses. The family recently sold USD1.9
billion in shares across various group entities to a US-based fund.
Two of the boards at Adani group companies - Adani Transmission
Limited (BBB-/Stable) and Adani Enterprise - approved a plan to
raise a total of about USD2.5 billion from the stock market. The
additional funding will support financial flexibility across Adani
group entities, mitigating the risks.
Financial Profile
Under the base case, the three-year average leverage from FY24 is
4.3x. The base case assumes traffic will reach FY20 levels before
end-2023 and MIAL will reach its maximum capacity of 60 million
passengers by FY28. Only contracted revenue from commercial
property development has been considered and tariffs from the
fourth control period have been assumed based on the projected
revenue and spending. Fitch has assumed any discretionary capex to
be either funded by internal accruals or the spending to be
postponed to the next year. Therefore, Fitch has assumed no
reliance on any additional sponsor support.
Under the rating case, Fitch expect leverage to average 5.5x over
the three years from FY24. The rating case assumes traffic will
reach pre-pandemic levels by end-2023 and MIAL will reach its
maximum capacity by FY29. Only contracted revenue from commercial
property development has been considered and tariffs from the
fourth control period have been assumed based on the projected
revenue and spending. Fitch has assumed only maintenance capex to
be incurred and funded by internal accruals. Therefore, Fitch has
assumed no reliance on sponsor support.
Fitch has also run an alternative rating case, assuming basic
airport charges from the fourth control period to remove any
downside risk to aeronautical tariffs. Under this scenario, Fitch
expects leverage to average 5.7x over the three years from FY24.
PEER GROUP
Delhi International Airport Limited (DIAL, BB-/Stable) is MIAL's
closest peer. Both airport operators benefit from a 'Higher
Stronger' volume risk assessment, with DIAL and CSMIA being the
largest and second-largest airports in India, respectively. DIAL
caters to the national capital region and CSMIA to India's
financial and industrial hub. Fitch has assessed the price risk at
both airports as 'Midrange' because there is some regulatory
uncertainty with tariff implementation, but the base airport
charges mitigate any downside risk to aeronautical tariff
determination.
Fitch estimates MIAL's leverage for FY24-FY26 at 5.5x, much lower
than that of DIAL, which has a large capex expansion plan over the
next few years, resulting in leverage reaching 9x by FY27. MIAL's
lower leverage supports its two-notch higher credit assessment.
Both airport operators have similar debt structures.
MIAL can also be compared with GMR Hyderabad International Airport
Limited (GHIAL, BB+/Stable). MIAL has a stronger catchment area
than GHIAL. GHIAL serves Hyderabad, which is a vibrant but smaller
city than Mumbai. GHIAL's passenger traffic reached 96.7% of the
FY20 level in FY23. Fitch assesses the price risk for both airport
operators as 'Midrange'. GHIAL's recovery from the pandemic has
been quicker, as it is a regional mid-sized airport with a larger
domestic passenger base, but its leverage is higher than that of
MIAL. Nevertheless, its higher deleveraging estimates for GHIAL
beyond its capex expansion term justify a similar credit
assessment.
The planned strategy of dual airports catering to different routes
and segments in Mumbai is similar to London, where Heathrow
Airport, financed via Heathrow Funding Limited (senior secured
class A bonds: A-/Stable), is the primary international gateway
with Gatwick Airport, financed via Gatwick Funding Limited (senior
secured debt: BBB+/Negative), catering to the domestic market and
low-cost carriers.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Forecast net debt/EBITDA above 8.0 x for a sustained period
- Forecast EBITDA/net interest materially below 2.0x
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Forecast net debt/EBITDA below 5.5x for a sustained period
- Forecast EBITDA/net interest sustained above 2.0x
TRANSACTION SUMMARY
MIAL is an SPV that was incorporated in March 2006 to design,
develop, construct, upgrade, operate, maintain and manage CSMIA in
Mumbai. It has a 30-year concession from May 2006 with a provision
for a 30-year extension.
The note proceeds were used to repay part of the company's bridge
financing, with the remainder from a USD228 million equity
injection by sponsors. The bridge financing was used to take over
MIAL's existing loans. All the debt is raised by MIAL and there is
no guarantee from Adani Airport Holdings Limited on the notes. The
notes will rank senior and will be secured by a charge over all
accounts, MIAL's movable properties and operating cash flow, except
amounts and accounts pertaining to the ADF.
CREDIT UPDATE
MIAL's domestic passenger traffic reached 97.4% of the pre-Covid-19
level by March 2023, while international passenger traffic reached
about 90.3% of the pre-Covid-19 level. MIAL's total passenger
traffic has reached 95.6% of the pre-Covid-19 level.
The strong passenger recovery helped revenue from operations to
increase by 63% yoy to INR32.3 billion in FY23. MIAL's EBITDA,
adjusted for full-year annual fee payments, amounted to about
INR11.0 billion in FY23.
MIAL invoked the force majeure provision under the concession
agreement during the pandemic, allowing the company to claim relief
from suspending the payment of annual fees to the authorities. This
is currently being contested and under arbitration before a
tribunal. Following a December 2021 interim order from the
tribunal, MIAL has continued to make annual fee payments to the
authorities. MIAL had already transferred INR22.9 billion to the
authorities as of March 2023 against INR25.6 billion in annual fee
liabilities due for April 2020 to March 2023. Management expects
the matter to be resolved within FY24. The rating case assumes
staggered payments of the unpaid annual fee of INR2.7 billion
between FY25 and FY30.
The Enforcement Directorate of India is investigating GVK Group,
the previous owner of MIAL, and MIAL over alleged irregularities in
maintaining the Mumbai airport. Investigators in February 2023
alleged that over the years INR8.46 billion were siphoned off or
diverted from MIAL through fake contracts. Fitch would consider any
unfavourable outcome against MIAL as an event risk.
SECURITY
The security package includes:
- First-ranking charge project assets and project documents with
carve-outs for the ADF over all the accounts, excluding all
accounts related to ADF
- First-ranking pari passu charge on all the company's accounts
(excluding accounts being maintained in relation to the airport
development fees and for the lenders of the ADF refinancing
facility) and the monies lying therein/receivables (excluding dues
owed to AAI and airport development fees)
- Right to substitute the borrower under operations, management and
development agreement (OMDA) and other project documents (as
defined in the OMDA), as per the terms of the substitution
agreement (and to the extent allowed under OMDA)
- First-ranking charge over all the book debt, operating cash
flows, receivables, all other current assets, commissions, revenues
of the borrower, both present and future, excluding amount
pertaining to the ADF and the investments made in NMIAL
- Pledge over 74% of shares issued by MIAL
ESG CONSIDERATIONS
MIAL has an ESG Relevance Score of '4' for Governance Structure due
to the concentration of ownership, with a large majority stake
indirectly held by Adani Group, which has a negative impact on the
credit profile, and is relevant to the rating in conjunction with
other factors.
MIAL has an ESG Relevance Score of '4' for Group Structure due to
the complexity of its group structure at the shareholder level,
which has a negative impact on the credit profile, and is relevant
to the rating 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
----------- ------ -----
Mumbai International
Airport Limited
Mumbai
International
Airport Limited/
Senior Secured
Debt/1 LT LT BB+ Affirmed BB+
NEERAJ SALES: CRISIL Keeps B Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Neeraj Sales
Private Limited (NSPL) continue to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.5 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term 5.5 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with NSPL for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 NSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NSPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
NSPL was incorporated in 2009, its engaged in trading of edible
oil. NSPL is managed by Mr Pankaj Anand and Ms Poonam Anand.
NET CHECK: CRISIL Keeps B+ Debt Rating in Not Cooperating
---------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Net Check
Solutions India Private Limited (NCSPL) continue to be 'CRISIL
B+/Stable/CRISIL A4 Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Bank 1 CRISIL A4 (Issuer Not
Guarantee Cooperating)
CRISIL Ratings has been consistently following up with NCSPL for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 NCSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NCSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
NCSPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
Incorporated in 2003 and based in Pune, NCSPL, is engaged in cable
networking services for creating communication and intranet
networks. It is promoted Mr. Mohan Pasalkar, Arvind Pasalkar, Mr.
Vaishali Pasalkar, Mr. Laxmanrao Pasalkar and Mr. Subhadra
Pasalkar.
SAKHI FOOD: CRISIL Keeps B Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sakhi Food
Products (SFP) continue to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.45 CRISIL B/Stable (Issuer Not
Cooperating)
Letter of Credit 0.68 CRISIL A4 (Issuer Not
Cooperating)
Proposed Long Term 1.60 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 5.27 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SFP for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 SFP, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SFP
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SFP continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Set up in 2010, SFP processes different varieties of paddy into
parboiled rice. The firm's manufacturing facility is in Birbhum
(West Bengal) has installed capacity of 8 tonnes per hour. Mr.
Sanjay Kumar and his wife Mrs. Disha Ahlani are the promoters.
SALORAA FABS: CRISIL Lowers Rating on INR1cr LT Loan to B+
----------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Saloraa Fabs (SF) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL
BB-/Stable/CRISIL A4+'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Foreign Bill 4 CRISIL A4 (Downgraded from
Discounting 'CRISIL A4+')
Long Term Loan 1 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Packing Credit 5 CRISIL A4 (Downgraded from
'CRISIL A4+')
The downgrade in ratings reflects the tight liquidity position of
the firm. The net cash accruals have not improved and are expected
to continue to be insufficient against the repayment obligation
over the medium term and the cash balances have depleted from over
INR2.7 crore as on March 31, 2021 to about INR1.4 crore as on March
31, 2022. The business risk profile continues to remain modest,
with modest growth, lower EBITDA margins and weaker order flow,
owing to the impact of slowdown in Europe. The financial risk
profile also continues to remain modest with an estimated small net
worth of about INR3.5 crore and gearing of 2.97 times as on March
31, 2023. The debt protection metrics are moderate as reflected by
the estimated interest coverage of 1.2 times and 0.03 times in
fiscal 2023.
The rating continues to reflect SFs presence in a highly fragmented
industry with limited size, modest scale of operation, working
capital intensive operations, vulnerability of operating margin to
fluctuations in forex rates and below average financial profile.
These weaknesses are partially offset by its extensive industry
experience of the promoters and geographical diversification in
revenues.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations and vulnerability of operating margin
to fluctuations in forex rates and raw material prices: SF's
business profile is constrained by its scale of operations in the
intensely competitive industry. This is reflected by the revenues
of INR18.56 crore in fiscal 2022 and about INR19 crore in fiscal
2023. SF's scale of operations will continue limit its operating
flexibility. Since majority of revenue comes from the international
market, any sharp fluctuation in forex rates affects realizations
and accruals. The margins are also vulnerable to the fluctuating
raw material prices, which the firm is unable to pass on to its
customers. This exposes the operating margin to fluctuations in
forex rates and raw material prices.
* Working capital intensive operations: Gross current assets was at
377 days as on March 31, 2022, and is estimated at 308 days as on
March 31, 2023. Its large working capital requirements arise from
its high debtor and inventory levels. It is required to extend long
credit period. Furthermore, due to its business need, it holds
large work in process & finished good inventory.
* Below average financial profile: SF has an average financial
profile marked by gearing of 3.90 times and total outside
liabilities to adj tangible networth (TOL/ANW) of 5.45 times for
year ending on 31st March 2022. The same are estimated at 2.97
times and 4.84 times as on March 31, 2023. The debt protection
measures have also been weak in past due to high gearing and low
accruals from the operations. The interest coverage and net cash
accrual to total debt (NCATD) ratio are at 1.76 times and 0.04
times for fiscal 2022 and are estimated at 1.3 times and 0.03 times
in fiscal 2023.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an experience of over 20 years in readymade garment industry.
This has given them an understanding of the dynamics of the market
and enabled them to establish relationships with suppliers and
customers.
* Geographical diversification in revenues: SF caters to a wide
number of clients, both in India and overseas. It consistently
derives over 90% of its revenue from exports. Diversity in
geographic reach and clientele should continue to support the
business risk profile.
Liquidity: Stretched
The bank limit utilisation are around 78.87 percent for the past
twelve months, ended March 2023. The cash accruals are expected to
be over INR0.33-0.8 crore which are insufficient against term debt
obligation of INR0.9-1 crores over the medium term. Current ratio
is moderate at 1.19 times on March 31, 2022. Moderate cash and bank
balance of around Rs. 1.40 crores as on March 31, 2022, supports
liquidity cushion. An improvement in the liquidity profile will
remain a key monitorable.
Outlook: Stable
CRISIL Ratings believe SF will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity Factors
Upward factors
* Sustained improvement in scale of operation by 20% and sustenance
of operating margin, leading to higher cash accruals
* Improvement in working capital cycle
* Improvement in the liquidity profile, through enough cash
generation to meet debt repayment obligations
Downward factors
* Decline in scale of operations by over 30% or substantial dip in
margins, leading to leading to lower cash accruals
* Large debt-funded capital expenditure or substantial increase in
its working capital requirements thus weakening its liquidity &
financial profile
SF was established as proprietorship firm in 2003. It is engaged in
manufacturing and exporting of Hosiery Ready Made Garments. Firm
has two manufacturing facility located in Tirupur- Tamilnadu and
owned by Mr. S Ramesh.
SANGAL INDUSTRIES: CRISIL Withdraws B+ Rating on INR35cr LT Loan
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities of
Sangal Industries Private Limited (SIPL) and subsequently withdrawn
the ratings at the company's request and on receipt of a
no-objection certificate from the bankers. This is in line with the
policy of CRISIL Ratings for withdrawal of ratings on bank
facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 8 CRISIL A4 (Rating Reaffirmed
and Withdrawn)
Cash Credit 11 CRISIL B+/Stable (Rating
Reaffirmed and Withdrawn)
Long Term Loan 35 CRISIL B+/Stable (Rating
Reaffirmed and Withdrawn)
The ratings continue to reflect the company's exposure to risks
related to ramp-up of operations in the highly competitive textiles
industry and its leveraged capital structure. These weaknesses are
partially offset by the extensive experience of the promoters in
the kraft paper industry, and adoption of the latest machinery to
export high-quality compact yarn.
Analytical Approach
CRISIL Ratings has treated the unsecured loan of around INR10.45
crore from the promoters as neither debt nor equity as the loans
has a low interest rate, has no fixed repayment schedule, is
subordinated to external debt and is expected to remain in the
business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to risks related to ramp-up of operations: SIPL began
operations in October 2022 and booked revenue of around INR45 crore
in fiscal 2023. It will face demand risk as the textile industry is
highly fragmented due to low entry barriers (small capital and
technological requirements). Successful ramp-up of operations will
remain a key monitorable.
* Leveraged capital structure: Due to term loan of INR43 crore for
setting up the plant, gearing was weak estimated at 3 times as on
March 31, 2023, and will remain at 2.0-2.5 times over the medium
term. Interest coverage is estimated at 1.7 times in fiscal 2023
and expected at 2.0-2.5 times over the medium term.
Strengths:
* Extensive experience of the promoters: Presence of over 30 years
in the kraft paper industry through group entities has enabled the
promoters to develop a strong understanding of market dynamics and
establish healthy relationships with suppliers and customers.
* Adoption of the latest machinery: The unit is equipped with the
latest equipment, which would support the business risk profile
over the medium term.
Liquidity: Stretched
SIPL started utilising the cash credit facility of INR15 crore from
July 2022, and the utilisation was moderate at 43.2% on average for
the nine months through March 2023. Cash accrual is expected at
INR4-5 crore per annum term against yearly debt obligation of
INR4.47 crore over the medium term. The promoters are likely to
extend equity and unsecured loans to bridge the gap and help fund
working capital requirement
Outlook: Stable
SIPL will benefit from the extensive experience of its promoters.
Rating Sensitivity Factors
Upward factors
* Stabilisation of operations with revenue more than INR80 crore
and operating profitability of 8%, leading to net cash accrual
above INR5 crore
* Negligible dependence on external debt with gearing below 2.5
times and moderate working capital cycle
Downward factors
* Revenue less than INR50 crore or operating loss in initial phase
of operations resulting in cash accrual of less than INR2 crore
* Debt-funded capital expenditure or high dependence on working
capital borrowing leading to gearing of more than 3 times
SIPL was incorporated in May 2021, promoted by Mr Shishir Sangal
and Mr Vineet Kumar Sangal. Its manufacturing unit for cotton
combed compact yarn/polyester cotton yarn of different varieties in
Muzaffarnagar, Uttar Pradesh, has capacity of 6,000 tonne per annum
and commenced operations in October 2022.
SATNAM GLOBAL: CRISIL Withdraws D Rating on INR50cr Loan
--------------------------------------------------------
CRISIL Ratings has withdrawn its ratings on the bank facilities of
Satnam Global Infraprojects Limited (SGIL) on the request of the
company and receipt of a no objection certificate from its bank.
The rating action is in line with CRISIL Ratings' policy on
withdrawal of its ratings on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 50 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Cash Credit 6.4 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Letter of Credit 5 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Proposed Long Term 1 CRISIL D/Issuer Not
Bank Loan Facility Cooperating (Withdrawn)
Working Capital 9.6 CRISIL D/Issuer Not
Demand Loan Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with SGIL for
obtaining information through letters and emails dated January 22,
2022 and March 12, 2022, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SGIL. This restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SGIL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the rating on bank facilities of
SGIL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
SGIL executes mechanical engineering contracts involving erection,
commissioning and installation services. The company undertakes
various kinds of projects, such as installation of machinery,
pipes, heavy equipment erection, oil tanks, power distribution
systems, poles, chimneys, silos, roof tanks, bin hoppers and
stacks. The company also undertakes erection and commissioning of
high capacity diesel generator sets involving electrical and civil
work.
Status of non cooperation with previous CRA
SGIL has not cooperated with INFOMERICS and Brickwork Ratings India
Private Limited which has classified it as issuer not cooperative
vide release dated Feb 28th,2023 and July 29th,2021 respectively.
The reason provided by INFOMERICS and Brickwork is non-furnishing
of information for monitoring of ratings.
SHYAM GUWAR: CRISIL Keeps B Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shree Shyam
Guwar Gum Industries (SSGGI) continue to be 'CRISIL B/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL B/Stable (Issuer Not
Cooperating)
Rupee Term Loan 1 CRISIL B/Stable (Issuer Not
Cooperating)
Warehouse Receipts 15 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SSGGI for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 SSGGI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSGGI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSGGI continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
SSGGI, set up in 2015 at Sri Ganganagar-Rajasthan, by Mr Naveen
Kumar and Mr Nitin Kumar, processes guar gum seed. The firm also
trades in agricultural commodities such as coriander and cotton.
SILICA HEALTHCARE: CRISIL Assigns B+ Rating to INR68cr LT Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facilities of Silica Healthcare Private Limited
(SHPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 68 CRISIL B+/Stable (Assigned)
Long Term Loan 0.32 CRISIL B+/Stable (Assigned)
The rating continues to reflect SHPL's exposure to risks related to
ongoing project and susceptibility of profitability to fluctuations
in raw material prices and expected leveraged capital structure.
These weaknesses are partially offset by its longstanding presence
of the promoters and funding support from them and adoption of
latest technology.
Key Rating Drivers & Detailed Description
Weakness:
* Exposure to risks related to ongoing project: SHPL is scheduled
to commence its project in May, 2014. Demand risk is also expected
to be moderate as the industry is highly fragmented marked by low
entry barriers with small capital and technological requirements.
Also, will be exposed to intense competition from other players in
the segment. Timely completion and successful stabilization of its
operations at the new unit will remain a key rating sensitivity
factor.
* Expected leveraged capital structure: SHPL is expected to have an
average financial risk profile with high gearing and moderate debt
protection metrics. The project is aggressively funded through a
debt-equity ratio 1.87 times.
Strengths:
* Longstanding presence of the promoters and funding support from
them: The long diversified entrepreneurial experience of the
promoters across businesses has helped them develop healthy
business relationships in the region. This is expected to support
the company in quickly ramping up the operations going forward.
* Adoption of latest machinery: The unit is being equipped with
state-of-the-art machinery and technology, which would support
business risk profile.
Liquidity: Stretched
Cash accruals are expected to be over INR11.20-13.20 crore which
are sufficient against yearly term debt obligation of INR8.00
-11.40 crore over the medium term. In addition, it will be act as
cushion to the liquidity of the company. The partners will continue
to extend timely support via equity and unsecured loans.
Outlook: Stable
CRISIL Ratings believes that SHPL will benefit over the medium term
from its promoter extensive industry experience.
Rating Sensitivity factors
Upward factor
* Timely commencement of commercial operations and no cost overrun
* Quick ramp-up of capacity and stabilized operations, leading to
net cash accrual above INR15 crore.
Downward factor
* Faces a considerable delay in the commencement of its operations,
* Generates significantly low cash accruals of less than Rs.8 crore
during its initial year of operations, or
* Witnesses a substantial increase in its working capital
requirements thus weakening its liquidity & financial profile.
SHPL was incorporated in year 2020. SHPL is currently setting up a
plant to manufacture Intravenous (IV) Fluids in District -
Vaishali, Bihar with installed capacity of IV Fluids by ISBM Line
of 600 Lakh Bottles per annum and IV Fluids by FFS Line of 240 Lakh
Bottles per annum.
The plant is expected to be commissioned in May 2024.
SHPL is owned & managed by Mr. Abhinav Mayank and Mr. Amrendra
Kumar.
SPICEJET LTD: NCLT to Hear Insolvency Plea on May 25
----------------------------------------------------
Business Standard reports that National Company Law Tribunal
(NCLT), Delhi on May 17 has given Spicejet a week to file a reply
on a plea by airline's lessor Aircastle over unpaid dues of
INR49-odd crore.
According to Business Standard, the tribunal told both parties to
'be prepared with a resolution or be prepared for arguments on
insolvency' in the next hearing on May 25.
Business Standard relates that the bench has also told them to work
towards resolving the issue.
Aircastle said the settlement talks with the airline had not
yielded any results as the offer by the airline was unacceptable.
Business Standard says Dublin-based Aircastle moved the NCLT
seeking the initiation of insolvency proceedings against the
airline under Section 9 (application for initiation of corporate
insolvency resolution process by the operational creditor) of the
Insolvency and Bankruptcy Code.
A two-member Principal bench of President Ramalingam Sudhakar and
Member Avinash K Srivastava had issued a notice to Spicejet on May
8 to file their reply.
Commenting on the case, a Spicejet spokesperson had said, "In the
Aircastle issue, notice was issued in the normal course. There was
no adverse ruling against SpiceJet. The court has recognised the
fact that parties are under settlement discussions and they can
continue to pursue the same," Business Standard relays.
According to the NCLT website, two more petitions for insolvency
resolution proceedings against SpiceJet are pending. The plea by
Willis Lease Finance Corporation was filed on April 12 and the one
by Acres Buildwell Private Ltd was filed on February 4.
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights between
major cities in India. The carrier is India's second-biggest budget
airline, after IndiGo.
On April 28, 2023, Ireland-based Aircastle moved the National
Company Law Tribunal (NCLT) seeking the initiation of insolvency
proceedings against the airline under Section 9(application for
initiation of corporate insolvency resolution process by the
operational creditor) of the Insolvency and Bankruptcy Code.
STAR INDUSTRIES: CRISIL Keeps B Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Star
Industries (SI) continue to be 'CRISIL B/Stable/CRISIL A4 Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B/Stable (Issuer Not
Cooperating)
Letter of Credit 9.5 CRISIL A4 (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SI for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 SI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SI is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of SI
continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
SI was established in 2007 by Mr. Babu Khandelwal and Mrs. Sangeeta
Khandelwal as a partnership firm. It manufactures ferroalloys such
as ferromolybdenum, ferrovanadium, and ferrotitanium, which find
application in steel making. The firm's manufacturing facility in
Samba, Jammu and Kashmir.
UDYOG MANDIR: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Udyog Mandir
(UDM) continue to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 14 CRISIL B+/Stable (Issuer Not
Cooperating)
Working Capital 0.17 CRISIL B+/Stable (Issuer Not
Term Loan Cooperating)
CRISIL Ratings has been consistently following up with UDM for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 UDM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on UDM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
UDM continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
UDM, established in 1987, is a partnership firm that manufactures
edible oil, mainly refined groundnut oil and refined cottonseed
oil, and mustard oil. The firm has been selling its products under
the Natural brand since 1997. It is managed by Mr. Vijay Naulakha
and Mr. Basant Kumar Naulakha. It sells to exporters and local
dealers.
UNITED MANUFACTURING: CRISIL Keeps B+ Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of United
Manufacturing Company (UMC) continue to be 'CRISIL B+/Stable/CRISIL
A4 Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Fund- 5.5 CRISIL B+/Stable (Issuer Not
Based Bank Limits Cooperating)
Proposed Non 5.0 CRISIL A4 (Issuer Not
Fund based limits Cooperating)
CRISIL Ratings has been consistently following up with UMC for
obtaining information through letter and emails dated February 25,
2023 and April 29, 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 UMC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on UMC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
UMC continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
UMC was incorporated in 1987 as partnership firm. It manufactures
firefighting vehicles, industrial fire fighting vehicles, emergency
rescue vehicles for fire services (state and central governments),
army, navy, air force, oil refineries, railways; its manufacturing
unit is in Bahadurgarh (Haryana). Mr Gurpreet Singh and Ms
Harpreet Kaur manage the business.
ZEE ENTERTAINMENT: NCLT Dismisses IDBI Bank's Insolvency Plea
-------------------------------------------------------------
The Economic Times reports that the National Company Law Tribunal
(NCLT) on May 19 dismissed IDBI Bank's insolvency plea against
Subhash Chandra promoted Zee Entertainment Enterprises Ltd (ZEEL).
The public sector lender had filed an insolvency resolution
petition against Zee for the default of over INR149 crore, the
report notes. The company said in a filing in December 2022 that
IDBI Bank, claiming to be a financial creditor, filed the petition
before the Mumbai bench of the NCLT.
According to the report, before the tribunal's order, Senior
Counsel Zal Andhyarujina and Bindi Dave of the law firm Wadia
Ghandy & Co., while appearing for the Subhash Chandra promoted Zee
Entertainment argued that since the date of default occurred during
the suspension period, it bars the admission of any insolvency
petition, under Section 10A of the Insolvency & Bankruptcy Code,
2016.
This is a major relief for Zee Entertainment after both its other
creditors IndusInd Bank and Indian Performing Right Society (IPRS)
settled their diesputes and withdrew an insolvency plea against the
company from the tribunal, ET states.
News agency Bloomberg on April 20 reported citing sources that Zee
Entertainment has started settlement talks with its creditors to
repay debts and remove the last hurdle in completing a merger with
the Sony Group that would create a $10 billion media giant, ET
relays.
ET says the Indian television network had reportedly offered IDBI
Bank Ltd to repay a loan of about INR149 crore in tranches.
Based in Mumbai, India, Zee Entertainment Enterprises Limited,
together with its subsidiaries, engages in broadcasting satellite
television channels.
=========
J A P A N
=========
UNIVERSAL ENTERTAINMENT: Fitch Affirms IDR at 'B-', Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Japan-based Universal Entertainment
Corporation's (UE) Long-Term Issuer Default Rating (IDR) at 'B-'
with a Stable Outlook. The agency has also affirmed UE's
outstanding US dollar senior secured notes at 'B-' with a Recovery
Rating of 'RR4'.
The affirmation and Stable Outlook reflect UE's strong revenue and
EBIT recovery to pre-Covid-19 pandemic levels. Fitch expects UE to
continue to generate strong free cash flow (FCF) as operations
stabilise, leading to a steady reduction in leverage. However, UE's
weak financial flexibility, including a concentrated maturity
profile, offsets the benefits of the positive developments.
KEY RATING DRIVERS
Continued Integrated Resort Growth: Fitch expects integrated resort
(IR) revenue to rise by 40% in 2023, to be followed by more modest
growth of around 20% in 2024 and 2025. The growth rates are faster
than its assumptions for comparable global casino markets because
UE's Manila IR facilities only became fully operational in December
2021. In addition, UE has never received a significant volume of
international travellers due to the pandemic, with domestic
customers driving the recent recovery.
UE's IR revenue in 2022 exceeded the pre-pandemic peak in 2019, but
the number of casino visitors in 2022 was still lower than in 2019.
Fitch expects the total number of visitors in 2023 to recover to at
least 2019 levels, with increased spending per visitor, leading to
the robust growth in 2023.
Mature Amusement Equipment Segment: The amusement equipment segment
faces uncertain end-market demand and has previously exhibited
volatile performance. However, the segment is financially
self-sufficient and has paid for the construction and financing
needs of the IR business. Fitch forecasts segment revenue to rise
by 16% in 2023, assuming a continued recovery in sales volume and
average selling prices. However, flat sales volume and only a
slight increase in average selling prices is likely to result in
modest growth of 3% in 2024 and 2025.
Continued FCF Generation: Fitch forecasts that UE will maintain its
FCF margin at 10%-11% through to 2025, given a lack of significant
capex and investment requirements. UE's capex has dropped with the
completion of the IR construction. This, together with the steady
recovery and growth of its revenue and EBIT, has led to robust FCF
generation. UE reported a FCF margin of 11.7% in 2022.
Improving Leverage: UE's leverage is strong for its rating. Higher
EBITDAR and cash have reduced its EBITDAR gross and net leverage,
while debt remains broadly unchanged. EBITDAR gross and net
leverage were 4x and 3x, respectively, at end-2022. Its rating-case
forecast points to cash accumulation and continued leverage
reduction, which will further improve UE's leverage metrics.
Maturity Concentration: Secured notes totalling USD784 million
(JPY105 billion at end-2022) mature on 11 December 2024. The notes
accounted for 90% of UE's total debt as of end-2022, presenting
significant refinancing risk. Fitch expects UE to generate JPY41
billion in FCF in 2023 and 2024, which indicates a need to
refinance all or part of the notes. Failure to address the maturity
issue in the next 12 months could lead to a downgrade.
In addition, UE has various legal disputes that could damage
investor and lender confidence in its corporate governance and
weaken the company's ability to source funding. The negative impact
of UE's governance issues is reflected in its rating and EGS
Relevance Score of '4' for governance structure. Fitch will review
UE's ratings if Fitch observes a significant deterioration in its
governance structure.
Small Size, Weak Market Position: UE has continued to improve its
financial profile, but its business profile remains weak relative
to global gaming peers. UE's small size, single-asset IR operation
and niche amusement equipment manufacturing, among other factors,
have led to its assessment of UE's weak business profile, which is
consistent with UE's rating.
ESG - Governance Structure: UE has concentrated ownership by the
founding family and a dispute with its founder and former chairman.
This has a negative impact on the credit profile and is relevant to
the rating in conjunction with other factors.
DERIVATION SUMMARY
UE operates the largest casino in Manila's Entertainment City, but
this is its only IR asset. The IR is small compared with most rated
peers.
US regional gaming operator, Bally's Corporation (B+/Negative), is
comparable with UE in terms of revenue and profitability. Bally's
owns and operates 14 properties in 10 US states, which supports
better operational stability compared with UE.
Macau-based gaming operator, SJM Holdings Limited (SJMH,
BB-/Negative), and UE are similarly geographically concentrated,
although SJMH is much larger than UE.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenue growth of 28% in 2023 and 13% in 2024
- EBITDA margin to remain at around 22% in 2023 and 2024
- Total capex of JPY9 billion in 2023 and 2024 each
- No dividends or share buy-backs in 2023 and 2025
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Sustained FCF generation;
- Better maturity-profile spread.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Lack of clarity of the refinancing plan by end-2023.
LIQUIDITY AND DEBT STRUCTURE
Concentrated Maturity: UE's debt maturity schedule is highly
concentrated in 2024, with a significant reliance on US
dollar-denominated bonds for funding.
Readily Available Cash: The company says that it requires a minimum
cash balance of JPY7 billion, including a guarantee deposit, for
its IR operation under local gaming regulations, which is not
readily available for debt repayment. The funds are also required
for potential working capital fluctuations in its amusement
equipment segment. Fitch has therefore classified this amount as
restricted cash.
ISSUER PROFILE
UE is a Japanese gaming equipment manufacturer. It operates two key
segments: the amusement equipment segment, which includes the
development, manufacture and sale of pachislot and pachinko
machines in Japan, and the IR segment, which focuses on the
operation of Manila Okada, an integrated casino resort in the
Philippines.
ESG CONSIDERATIONS
UE has an ESG Relevance Score of '4' for Governance Structure due
to the concentrated ownership by the founding family and a dispute
with its founder and former chairman. This has a negative impact on
the credit profile and is relevant to the rating 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 Recovery Prior
----------- ------ -------- -----
Universal
Entertainment
Corporation LT IDR B- Affirmed B-
senior secured LT B- Affirmed RR4 B-
=====================
N E W Z E A L A N D
=====================
BRANT HOMES: Creditors' Proofs of Debt Due on June 14
-----------------------------------------------------
Creditors of Brant Homes Limited are required to file their proofs
of debt by June 14, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on May 16, 2023.
The company's liquidators are:
Steven Khov
Kieran Jones
Khov Jones Limited
PO Box 302261
North Harbour
Auckland 0751
CONSTRUCT CIVIL: Placed Into Liquidation
----------------------------------------
Stuff.co.nz reports that Auckland-based construction firm Construct
Civil has been put into liquidation.
The company's sole director, Barry Brady, said the firm had about
75 staff.
An application was placed to put Construct Civil into liquidation
on March 17, Stuff discloses citing the Government Gazette.
The application was brought by Promains, and on May 5 Christopher
Carey McCullagh and Stephen Mark Lawrence were appointed
liquidators.
According to Stuff, Mr. Lawrence said the first liquidator's report
into the company was due June 12, and he had no further comment
until then.
It is unknown how much might be owed to creditors and tradespeople,
Stuff notes.
A report into Construct Civil's parent company had been completed.
According to Stuff, actions to-date taken by the holdings company
included freezing the company's bank account, receipt of records
from the company's accountant and obtaining access to the company's
Xero account.
Liquidators were also obtaining information in relation to the
assets, owned by the company and Construct Civil, and their
location.
Which company owned the assets was also being established, Stuff
says.
The holding company had loans of NZD973,320 to Construct Civil.
"At this stage it is unknown whether this debt will be
recoverable," the report read.
A total of NZD1,227,395 was also owed to ASB Bank, secured by way
of first ranking general security agreement and specific security
deeds, Stuff discloses.
There was NZD3,029,151 noted as owed to other security holders,
although the validity of the securities and their ranking was yet
to be confirmed.and NZD2895 was owed to unsecured creditors.
The holdings company had no staff, Mr. Lawrence said.
Construct Civil offered various forms of welding, utility service
installations, pipe supply, project management consultancy and
pressure testing.
DJ HOTELS: Court to Hear Wind-Up Petition on June 1
---------------------------------------------------
A petition to wind up the operations of DJ Hotels Limited will be
heard before the High Court at Dunedin on June 1, 2023, at 10:00
a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Oct. 18, 2023.
The Petitioner's solicitor is:
David Tasker
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
EAGLE PLUMBING: Creditors' Proofs of Debt Due on June 1
-------------------------------------------------------
Creditors of Eagle Plumbing Limited are required to file their
proofs of debt by June 1, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on April 28, 2023.
The company's liquidators are:
Adam Botterill
Damien Grant
Waterstone Insolvency
PO Box 352
Auckland 1140
FORTRESS INFORMATION: Ticket Company Owes Millions to Creditors
---------------------------------------------------------------
Stuff.co.nz reports that a collapsed ticketing company owed
millions in debt, and left disgruntled ticket holders out-of-pocket
of hundreds of thousands of dollars.
Stuff relates that Matt Davey was the man behind Fortress
Information Systems, which was more commonly known by its trading
name: Ticket Rocket, which in turn was previously known as Ticket
Direct.
But the company of the high-flying director, who himself was a
former part-owner of the Highlanders, crashed to earth when it was
placed into receivership and liquidated in 2020, along with its
associated companies - Dash Group and Dash Tickets New Zealand.
A recent liquidation report noted that as of February 27, the Bank
of New Zealand - a secured creditor - was owed either directly or
through cross guarantees against the companies, a total of NZD5.56
million, Stuff discloses.
The collapsed companies held NZD535,000 in a bank account, which
were from ticket sales between 11 June 2020 and 31 August 2020. The
majority of those funds, which should have been held on trust, had
been distributed, the report, as cited by Stuff, noted.
It also noted that employees of the collapsed companies received
about NZD9,700 in pay, but had preferential claims of around
NZD25,000 outstanding.
Another preferential claim, from Inland Revenue totalled
NZD444,000, and comprised of outstanding GST and PAYE deductions.
Stuff adds that the report noted outstanding funds owed to contract
holders and promoters, as well as refunds owed to ticket holders
were generally unsecured claims.
However, those claims would not be unsecured to the extent that
ticket proceeds were held on trust. But the claims from contract
holders/promoters and ticket holders were "substantially more" than
the funds held by the respective companies.
In total, the liquidator had received unsecured creditor claims of
NZD2.29 million from contract holders/promoters, of which NZD1.83
million was owed to ticket holders, Stuff relays.
Some NZD187,000 of chargebacks were processed by the ticket
holders' merchant provider, but NZD1.64 million of refunds
remained, Stuff discloses.
About Ticket Rocket
Fortress Information Systems Ltd, that traded as Ticket Rocket and
Ticket Direct, was placed in receivership in October last year
under the terms of a General Security Agreement (GSA) with Bank of
New Zealand (BNZ) from 2005.
The company was the brainchild of Canadian businessman Matthew
Davey and had been based in Dunedin, where it sold tickets to
events around New Zealand, for about 20 years. It ran into trouble
earlier last year as it failed to refund money for events, leading
promoters to demand money. Ticket-holders were left with tickets
for events that did not go ahead because of Covid-19, and they
could not get refunds.
RAPID RESPONSE: Court to Hear Wind-Up Petition on June 20
---------------------------------------------------------
A petition to wind up the operations of Rapid Response Scaffolding
Limited will be heard before the High Court at Rotorua on June 20,
2023, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on March 21, 2023.
The Petitioner's solicitor is:
T. Saunders
Inland Revenue, Legal Services
21 Home Straight
PO Box 432
Hamilton
SOUTH COAST: Court to Hear Wind-Up Petition on June 1
-----------------------------------------------------
A petition to wind up the operations of South Coast Scaffolding
(2020) Limited will be heard before the High Court at Dunedin on
June 1, 2023, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on April 5, 2023.
The Petitioner's solicitor is:
David Tasker
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
=====================
P H I L I P P I N E S
=====================
CHELSEA LOGISTICS: Posts PHP324MM Loss in Q1 Ended March 31
-----------------------------------------------------------
Bilyonaryo.com reports that Chelsea Logistics and Holdings owned by
Dennis Uy is claiming progress in 2023 despite booking another
nine-digit loss.
Chelsea reported a PHP324 million loss in the first three months
this year, down by 22 percent from PHP415 million during the same
period last year, Bilyonaryo.com discloses. This pushed Chelsea's
accumulated red ink PHP11.4 billion since 2018.
Despite the losses, Chelsea president and CEO Chryss Alfonsus V.
Damuy was encouraged by the company's performance, notably the 31
percent rise in revenue to PHP1.708 billion, its biggest first
quarter turnover since the pandemic broke out in March 2020,
Bilyonaryo.com relates.
"The year has started well for us. We are witnessing significant
positive developments, notably from the passage (up 155 percent to
PHP407 million) which has historically been one of our weaker
segments," the report quotes Mr. Damuy as saying.
Chelsea Logistics & Infrastructure Holdings Corp operates as a
holding company. The Company, through its subsidiaries, provides
marine shipping services. Chelsea Logistics & Infrastructure
Holdings transports passengers, cargos, petroleum, oil, chemicals,
and other bulk products. Chelsea Logistics & Infrastructure
Holdings serves customers in Philippines.
=================
S I N G A P O R E
=================
EYE-BIZ PTE: Court to Hear Wind-Up Petition on May 26
-----------------------------------------------------
A petition to wind up the operations of Eye-Biz Pte Ltd will be
heard before the High Court of Singapore on May 26, 2023, at 10:00
a.m.
Johnson & Johnson Pte Ltd filed the petition against the company on
May 5, 2023.
The Petitioner's solicitors are:
Drew & Napier LLC
10 Collyer Quay
#10-01 Ocean Financial Centre
Singapore 049315
HYPERFORMANCE PTE: Court Enters Wind-Up Order
---------------------------------------------
The High Court of Singapore entered an order on May 5, 2023, to
wind up the operations of Hyperformance Pte. Ltd.
DBS Bank Ltd filed the petition against the company.
The company's liquidator ise:
Gary Loh Weng Fatt
c/o BDO Advisory Pte Ltd
600 North Bridge Road
#23-01, Parkview Square
Singapore 188778
HZ CONSTRUCTION: Court Enters Wind-Up Order
-------------------------------------------
The High Court of Singapore entered an order on May 12, 2023, to
wind up the operations of HZ Construction & Engineering Pte. Ltd.
DBS Bank Ltd filed the petition against the company.
The company's liquidator ise:
Gary Loh Weng Fatt
c/o BDO Advisory Pte Ltd
600 North Bridge Road
#23-01, Parkview Square
Singapore 188778
SING HOE: Creditors' Proofs of Debt Due on June 19
--------------------------------------------------
Creditors of Sing Hoe Hotel Pte Ltd are required to file their
proofs of debt by June 19, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on May 15, 2023.
The company's liquidators are:
Lau Chin Huat
Yeo Boon Keong
Technic Inter-Asia
c/o 50 Havelock Road, #02-767
Singapore 160050
SKYSPORT RETAIL: Commences Wind-Up Proceedings
----------------------------------------------
Members of Skysport Retail Pte Ltd, on May 11, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Ng Hoe Kiat Keith
c/o 7500A Beach Road
#05-303/304 The Plaza
Singapore 199591
=================
S R I L A N K A
=================
UB FINANCE: Fitch Gives BB(lka) FirstTime National LongTerm Rating
------------------------------------------------------------------
Fitch Ratings has assigned UB Finance Company Limited (UBF) a
first-time National Long-Term Rating of 'BB(lka)'. The rating is on
Rating Watch Negative (RWN).
UBF is a 91.8%-owned subsidiary of Sri Lanka-based Union Bank of
Colombo PLC (UB, BBB-(lka)/RWN). It was acquired by UB in 2011 and
mainly provides asset-backed financing to SMEs. UBF is a small
finance and leasing company (FLC) in the country with less than 1%
of the sector's total assets. Another major shareholder of UBF is
ShoreCap II Limited (3.2%), a social impact fund managed out of the
US, although its involvement in UBF is limited relative to that of
UB.
KEY RATING DRIVERS
Support-Driven Rating: UBF's National Long-Term Rating is driven by
its expectation of some likelihood of extraordinary support from UB
to UBF, if required. This is premised on UB's majority ownership of
UBF and record of ordinary support, as well as the branding and
operational integration between the two entities. Counterbalancing
factors are UBF's limited role in the parent's franchise and UB's
moderate capacity to provide any required support compared with
larger FLC-owning banks.
RWN Mirrors Parent's Rating: The RWN on UBF's rating reflects that
on the parent and also its view that, similar to other Sri Lankan
non-bank financial institutions, UBF is not immune to heightened
near-term downside risks due to the weak domestic economy and
volatile funding and liquidity conditions. Further financial-system
stress could compound UBF's already weak financial performance and
constrain the parent's ability or propensity to provide timely
shareholder support.
Parent's Ability to Support: Fitch believes UB has some capacity to
provide support to UBF, due to the parent bank's above-peer capital
ratios and stronger credit profile relative to its subsidiary.
However, any support required may be more of a burden relative to
UB's modest balance-sheet size, compared with Fitch-rated FLCs
owned by larger banks. This is a rating constraint, as reflected in
the two-notch difference between the ratings of UB and UBF.
UB has a modest franchise within the domestic banking sector, with
UBF accounting for 7% and 14% of the parent's consolidated assets
and equity, respectively, as of end-December 2022. This is a larger
proportion than other Fitch-rated FLCs owned by larger banks. UB's
smaller absolute capital base also limits the funding it can lend
to UBF in times of need, given the single-borrower regulatory
limit.
Limited Contribution: UBF's rating also reflects its assessment of
its limited importance to the UB group. UBF is designated to offer
leases and gold-backed lending within the group, but Fitch does not
consider such products as core to UB's overall banking franchise,
as they form less than 10% of UB's total gross loans. The earnings
contribution from UBF has been limited due to its weak and volatile
profitability. UB plans to refer more customers to UBF, but their
synergy remains to be seen in light of their divergent target
customer profiles.
Parental Oversight: UB maintains clear oversight of UBF's strategic
agenda, policies and operations. It has three directors on UBF's
eight-member board and advises UBF's management team on areas such
as risk management, finance and technology. UB also shares its
internal audit team with UBF. Three independent directors on UBF's
board provide additional oversight.
Support History: UB provides regular bank loans to UBF, and has
provided capital support in the form of subordinated debt in 2016
and rights issue subscriptions in 2017 and 2021. The capital
infusion in 2021 came at a substantial delay after UBF fell short
of its regulatory capital requirements in late 2018, as the UB
group hoped to source new capital from a foreign investor. UB
ultimately called off the foreign investment process after the
delay and injected the necessary capital to restore UBF's
compliance with capital requirements.
Weak Standalone Profile: Fitch believes UBF's intrinsic credit
profile is weaker than its support-driven rating. UBF carries
significant borrower and depositor concentration risks due to its
legacy property-backed loan portfolio and small business franchise.
Its non-performing loan ratios have been consistently above the
industry average for the past four years, and its average pretax
return on average assets of 1.3% over the financial years ended
March 2019 to March 2022 (FY19-FY22) underperformed the industry
average of 3.5% due to higher funding and credit costs.
Fitch expects UBF's high-growth appetite to weigh on its leverage
and capitalisation despite its high Tier 1 capital ratio of 27.2%
as of end-1HFY23 (industry average: 20.2%) after the
recapitalisation from UB.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
UBF's rating is sensitive to changes in UB's credit profile, as
reflected in UB's National Long-Term Rating as well as Fitch's
opinion around UB's ability and propensity to extend timely
extraordinary support.
Developments that could lead to a downgrade include:
- insufficient or delayed liquidity support from UB relative to
UBF's needs, which hinders UBF's ability to meet its obligations in
a timely manner
- increased size relative to the parent that makes extraordinary
support more onerous for the parent
- intervention by the authorities that constrains UBF's ability to
service its obligations
- a perceived weakening in the parent's propensity to support its
finance subsidiary due to weakening links.
Such developments could result in Fitch no longer ascribing any
benefit to UBF's ratings from shareholder support, and could lead
to a multi-notch rating downgrade.
The resolution of the RWN is contingent upon developments in the
operating environment, the parent's credit profile, and the
evolution of the finance company's funding and liquidity position,
which may take more than six months.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
There is limited scope for upward rating action, given the RWN.
Entity/Debt Rating
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UB Finance
Company Limited Natl LT BB(lka) New Rating
*********
S U B S C R I P T I O N I N F O R M A T I O N
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