/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/230612.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, June 12, 2023, Vol. 26, No. 117 Headlines A U S T R A L I A CASSEGRAIN WINES: Placed Into Voluntary Administration DRAWBRIDGE PHARMA: First Creditors' Meeting Set for June 16 EASTCOAST ASPHALT: Second Creditors' Meeting Set for June 16 GENESIS SPECIALIST: EUR400M Bank Debt Trades at 86% Discount GLOBAL BUILDERS: Second Creditors' Meeting Set for June 15 HILLS HEALTH: First Creditors' Meeting Set for June 15 HUMM ABS 2022-1: Fitch Hikes Rating on Cl. E-G Notes to 'BB+sf' KUDOS GROUP: Second Creditors' Meeting Set for June 15 LIBERTY FUNDING 2023-3: Moody's Gives (P)B2 Rating to Cl. F Notes VIRAL VENTURES: Karen's Diner Restaurants Close as Owner Goes Bust C H I N A EHI CAR SERVICES: Fitch Hikes LongTerm IDR to 'B', Outlook Stable LEVDEO: Shandong Court Boots Bankruptcy Petition as Immature SHANDONG AIRLINES: To Be Delisted From Shenzhen Bourse on July 7 H O N G K O N G CHANNEL C: Facing Bankruptcy, Calls for Financial Support I N D I A ADVANCE CROPCARE: Ind-Ra Affirms BB- Long Term Issuer Rating ALFA TRANSFORMERS: CRISIL Keeps C Debt Ratings in Not Cooperating AUTOBAHN TRUCKING: Ind-Ra Assigns BB+ Loan Rating, Outlook Stable BIOTECH FUELS: Ind-Ra Moves B LT Issuer Rating to Non-Cooperating BYJU'S ALPHA: $1.20B Bank Debt Trades at 36% Discount DAYAL COTSPIN: CRISIL Lowers Rating on INR26cr Cash Loan to D DBM GEOTECHNICS: CRISIL Keeps D Debt Ratings in Not Cooperating DESAI TEXTILES: CRISIL Keeps D Debt Ratings in Not Cooperating EUPHORIA TECHNOLOGIES: Insolvency Resolution Process Case Summary G KHANNA: ICRA Keeps B+ Debt Ratings in Not Cooperating Category GAURAV EXPORTRADES: CRISIL Keeps D Ratings in Not Cooperating GKC PROJECTS: ICRA Keeps B+ Debt Ratings in Not Cooperating GO FIRST: Creditors' Panel Appoints Shailendra Ajmera as RP GO FIRST: NCLT Sends Notice to IRP Over Delhivery's Plea GODHANI GEMS: CRISIL Keeps D Debt Ratings in Not Cooperating HASIMARA INDUSTRIES: ICRA Lowers Rating on INR10.25cr Loan to B+ HITECH GRAIN: CRISIL Keeps D Debt Ratings in Not Cooperating HYDROBATHS RAMCO: CRISIL Keeps D Debt Ratings in Not Cooperating ICEWEAR CREATION: ICRA Keeps B+ Debt Ratings in Not Cooperating INCHEON MOTORS: Ind-Ra Assigns BB- Loan Rating, Outlook Stable INDUSTRIAL FINANCE: ICRA Reaffirms B+ Rating on INR1,163cr Loan JAI MATA: CRISIL Keeps D Debt Ratings in Not Cooperating Category JAYEM AUTOMOTIVES: CRISIL Lowers Rating on INR20cr Cash Loan to D JUMBO FIREWORKS: CRISIL Keeps D Debt Ratings in Not Cooperating KRISHNAMOHAN ENERGY: Ind-Ra Keeps B+ Rating in Non-Cooperating KSS PETRON: CRISIL Keeps D Debt Ratings in Not Cooperating KUNJ ROLLER: Ind-Ra Affirms BB+ Bank Loan Rating, Outlook Stable NALGONDA MUNICIPALITY: ICRA Keeps B+ Issuer Rating RAUNAQ EPC: CRISIL Keeps C Debt Ratings in Not Cooperating RNGLAB (INDIA): Insolvency Resolution Process Case Summary ROLTAS PAPER: CRISIL Reaffirms D Rating on INR8.1cr Term Loan SHARP MINT: Insolvency Resolution Process Case Summary SIR SHADI: CRISIL Keeps C Debt Ratings in Not Cooperating VICEROY BANGALORE: CRISIL Keeps D Debt Ratings in Not Cooperating WOCKHARDT LIMITED: Ind-Ra Moves BB+ Rating to Non-Cooperating J A P A N FURUKAWA ELECTRIC: Egan-Jones Retains BB+ Senior Unsecured Ratings N E W Z E A L A N D BEEKEEPERS HONEY: Court to Hear Wind-Up Petition on June 22 DOCTOR SWEEP: Creditors' Proofs of Debt Due on July 4 PLIMM BUILT: Court to Hear Wind-Up Petition on June 22 SIGNATURE MARKETING: Creditors' Proofs of Debt Due on Aug. 7 ZARTAJ DESIGN: Grant Bruce Reynolds Appointed as Liquidator P H I L I P P I N E S CEBU AIR: Egan-Jones Retains CCC- Senior Unsecured Ratings S I N G A P O R E ASCENDAS UTILITIES: Creditors' Proofs of Debt Due on July 10 DRINIFINI BEVERAGES: Court Enters Wind-Up Order EYE-BIZ PTE: Court Enters Wind-Up Order KAWAJIMA RE: Creditors' Proofs of Debt Due on July 10 LZ FURNITURE: Court to Hear Wind-Up Petition on June 23 SINGAPORE AIRLINES: Egan-Jones Retains BB- Sr. Unsecured Ratings S O U T H K O R E A KOREA GAS: Egan-Jones Retains BB+ Senior Unsecured Ratings TERRAFORM LABS: Do Kwon Could Face Jail in South Korea and the US T H A I L A N D DAOL SECURITIES: Fitch Rates New THB150M Sub. Debentures 'BB(tha)' V I E T N A M HO CHI MINH CITY DEVELOPMENT: Moody's Confirms B1 Issuer Rating - - - - - ================= A U S T R A L I A ================= CASSEGRAIN WINES: Placed Into Voluntary Administration ------------------------------------------------------ ABC News reports that a prominent regional New South Wales winemaker has fallen into voluntary administration, citing significant financial losses brought about by the COVID-19 pandemic, natural disasters and the Chinese government. Cassegrain Wines, based south of Port Macquarie on the Mid North Coast, has appointed insolvency firm Shaw Gidley as administrators, the report discloses. The business is one of the biggest winemaking operations in the region, employing more than 20 staff on site and supplying numerous hospitality venues. ABC News relates that managing director John Cassegrain, who started the business with his wife Eva in 1980, said in a statement the announcement came with "a heavy heart". He said the events of the past three-and-a-half years have been "challenging in the extreme". Cassegrain Wines does not grow grapes on site, but instead purchases the fruit from other vineyards from across the state and the Australian Capital Territory. According to ABC News, Mr. Cassegrain said the company's woes dated back to the 2019-20 bushfire season when 80 per cent of stock from its main grape suppliers was "unmarketable" from smoke taint. ABC News relates that Mr. Cassegrain said economic fallout from COVID-19 lockdowns had also taken a toll on the business. In years prior, the winemaker was noted for supplying wine to the operator of the Japanese Shinkansen bullet trains. It made up 20 per cent of total sales. The company endured another hit in 2020 when China, which at the time was their fastest growing export market, imposed a 200 per cent tariff on Australian wine, the report says. Mr. Cassegrain said soaring inflation had added pressure to the business with its electricity costs jumping by 30 per cent in the past 12 months. He said the factors had created real concerns about the short-term solvency of the business, leaving him with "no choice" but to appoint administrators, the report relays. The administrators will meet with creditors virtually on June 21. Mr. Cassegrain said the winery would continue to trade as usual in the meantime. ABC News adds that administrator Scott Newton said Cassegrain was "still open and operating and there is no intention, at this time to consider otherwise". The Cassegrain's also confirmed that a federally-funded research project in conjunction with Adelaide University which aimed to retract smoke taint from wine would continue. Two Triple Four restaurant also operates on the Cassegrain's site near Port Macquarie, the report notes. DRAWBRIDGE PHARMA: First Creditors' Meeting Set for June 16 ----------------------------------------------------------- A first meeting of the creditors in the proceedings of Drawbridge Pharmaceuticals Ltd will be held on June 16, 2023, at 10:30 a.m. via virtual meeting only. Adrian Robert Hunter and Robyn Erskine of Robyn Erskine were appointed as administrators of the company on June 6, 2023. EASTCOAST ASPHALT: Second Creditors' Meeting Set for June 16 ------------------------------------------------------------ A second meeting of creditors in the proceedings of Eastcoast Asphalt & Construction Pty Ltd and Fishers Property Group Pty Ltd has been set for June 16, 2023 at 11:00 a.m. via video conferencing. 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 June 15, 2023 at 4:00 p.m. Benjamin Ismay of Shaw Gidley was appointed as administrator of the company on May 11, 2023. GENESIS SPECIALIST: EUR400M Bank Debt Trades at 86% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Genesis Specialist Care Finance UK Ltd is a borrower were trading in the secondary market around 14.4 cents-on-the-dollar during the week ended Friday, June 9, 2023, according to Bloomberg's Evaluated Pricing service data. The EUR400 million facility is a Term loan that is scheduled to mature on October 31, 2025. The amount is fully drawn and outstanding. Genesis Specialist Care Finance UK Limited provides diagnostic and medical treatments. It is a 100%-owned and guaranteed subsidiary of GenesisCare. The Company's country of domicile is the United Kingdom. About GenesisCare GenesisCare is an integrated cancer care provider in the United States, Australia, Spain, and the United Kingdom. One of the world's largest integrated oncology networks, GenesisCare -- http://www.genesiscare.com-- includes 300+ locations in the U.S., the UK, Australia, and Spain. Australia-based Genesis Care Pty Limited and 52 affiliates, including GenesisCare of Texas, LLC, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 23-90614) on June 1, 2023. The Debtors estimated assets and debt of $1 billion to $10 billion as of the bankruptcy filing. The Hon. David R. Jones is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER LLP as co-bankruptcy counsel; PJT PARTNERS LP as investment banker; and ALVAREZ & MARSAL NORTH AMERICA, LLC, as restructuring advisor. KROLL RESTRUCTURING ADMINISTRATION LLC is the claims agent in the Chapter 11 cases. HERBERT SMITH FREEHILLS LLP is the foreign legal counsel. TENEO is the communications advisor. GLOBAL BUILDERS: Second Creditors' Meeting Set for June 15 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Global Builders Warehouse Pty. Ltd. has been set for June 15, 2023 at 12:00 p.m. via virtual meeting technology. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 14, 2023 at 4:00 p.m. Stephen Dixon of Hamilton Murphy Advisory was appointed as administrator of the company on March 31, 2023. HILLS HEALTH: First Creditors' Meeting Set for June 15 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Hills Health Solutions Pty Ltd will be held on June 15, 2023, at 10:00 a.m. via virtual meeting facility. Sule Arnautovic and John Vouris of Hall Chadwick were appointed as administrators of the company on June 2, 2023. HUMM ABS 2022-1: Fitch Hikes Rating on Cl. E-G Notes to 'BB+sf' --------------------------------------------------------------- Fitch Ratings has upgraded seven note classes and affirmed 13 from four Flexi and humm ABS Trusts. The transactions consist of notes backed by a pool of Australian unsecured consumer receivables originated by humm BNPL Pty Ltd (formerly Certegy Ezi-Pay Pty Ltd), a wholly owned subsidiary of Humm Group Limited. The notes were issued by Perpetual Corporate Trust Limited in its capacity as trustee. The upgrade of Flexi ABS Trust 2020-1's C-G, D-G and E-G notes, humm ABS Trust 2021-1's class C-G notes, and humm ABS Trust 2022-1's B-G, C-G and E-G notes reflects asset performance that has been better than Fitch expected at closing and the build-up in credit enhancement. Entity/Debt Rating Prior ----------- ------ ----- humm ABS Trust 2022-1 A1 AU3FN0066551 LT AAAsf Affirmed AAAsf A1-G AU3FN0066569 LT AAAsf Affirmed AAAsf B-G AU3FN0066577 LT AAAsf Upgrade AAsf C-G AU3FN0066585 LT AAsf Upgrade Asf D-G AU3FN0066593 LT BBBsf Affirmed BBBsf E-G AU3FN0066601 LT BB+sf Upgrade BBsf humm ABS Trust 2021-1 A1 AU3FN0060810 LT AAAsf Affirmed AAAsf A1-G AU3FN0060752 LT AAAsf Affirmed AAAsf B-G AU3FN0060760 LT AAAsf Affirmed AAAsf C-G AU3FN0060778 LT AAAsf Upgrade AA+sf D-G AU3FN0060786 LT Asf Affirmed Asf E-G AU3FN0060794 LT BBB+sf Affirmed BBB+sf humm ABS Trust 2022-2 A2 AU3FN0073573 LT AAAsf Affirmed AAAsf A2-G AU3FN0072880 LT AAAsf Affirmed AAAsf Flexi ABS Trust 2020-1 A1 AU3FN0056537 LT AAAsf Affirmed AAAsf A1-G AU3FN0056545 LT AAAsf Affirmed AAAsf B-G AU3FN0056552 LT AAAsf Affirmed AAAsf C-G AU3FN0056560 LT AAAsf Upgrade AA+sf D-G AU3FN0056578 LT AAAsf Upgrade AA-sf E-G AU3FN0056586 LT AAsf Upgrade A-sf KEY RATING DRIVERS Resilient Asset Performance: Obligor default is a key input in its quantitative analysis. The performance of the underlying assets has been better than its base-case expectations. humm ABS Trust 2022-2 closed in December 2022, resulting in limited reporting, but its performance expectations are unchanged from the transaction's closing. Its base-case default assumptions (and 'AAAsf' rating stress multiples) for this analysis are: - Flexi 2020-1: 2.5% (5.4x) - humm 2021-1: 3.4% (5.4x) - humm 2022-1: 3.4% (5.3x) As of end-April 2023, 30+ day arrears were 2.1%, 2.0%, 2.5% and 2.2% for Flexi 2020-1, humm ABS Trust 2021-1, humm ABS Trust 2022-1 and humm ABS Trust 2022-2, respectively. The arrears percentages have increased since the last review as the transactions amortise (bond factors of 11.3% (Flexi 2020-1), 22.3% (humm 2021-1) and 32.7% (humm 2022-1)), but arrears balances for these transactions have remained stable or reduced since the previous review. Cumulative losses to date were 2.9%, 2.8%, 2.5% and 0.7% of the original portfolio balances, respectively, compared with base cases at closing of 7.8%, 5.1%, 4.9% and 5.3%. Losses have been covered by excess spread, which has averaged between 6.8% (humm 2022-1) and 9.7% (Flexi 2020-1) over the last 12 months to April 2023. Net excess spread for humm 2022-2 was nil at end-April 2023 due to higher losses in that month. Credit enhancement has increased to 41.8% for the class A notes since closing. The Stable Outlook 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. Limited Liquidity Risk: Structural features include liquidity facilities that are sufficient to cover liquidity shortfalls and payment interruption risk. The transactions also feature derivative reserve accounts that trap excess spread to cover swap payments to the extent that voluntary prepayments and defaults cause the transactions to be overhedged. Fitch completed full cash-flow modelling for Flexi 2020-1, humm 2021-1 and humm 2022-1 and determined that full and timely payment of principal and interest was made to the notes in all cash-flow modelled scenarios at the respective rating levels. Updated cash flow modelling was not performed for humm 2022-2 because the notes are rated at the highest possible level, credit enhancement has increased and, as the transaction only recently closed, none of the variables affecting transaction performance have changed beyond that expected at closing. Low Servicing Risk: All receivables were originated by humm. Fitch undertook an operational review and found that the operations of Flexirent Capital Pty Limited, the servicer, were comparable with market standards. The key rating drivers listed in the applicable sector criteria, but not mentioned above, are not material to this rating action. 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 higher delinquencies and defaults, which could reduce the credit enhancement that is available to the notes. Downgrade Sensitivity 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 credit enhancement and remaining loss-coverage levels available to the notes. Decreased credit enhancement may make certain note ratings susceptible to negative rating action, depending on the extent of coverage decline. Hence, Fitch conducts sensitivity analysis by stressing a transaction's initial base-case assumptions. The rating sensitivity section provides insight into the model-implied sensitivities the transaction faces when one assumption - the default rate - is modified, while holding others equal. The modelling process uses the modification of default assumptions to reflect asset performance in up and down environments. The results below should only be considered as one potential outcome, as the transaction is exposed to multiple dynamic risk factors. It should not be used as an indicator of possible future performance. Flexi 2020-1 Note classes: A1 / A1-G / B-G / C-G / D-G / E-G Rating: AAAsf / AAAsf / AAAsf / AAAsf / AAAsf / AAsf Increase defaults by 10%: AAAsf / AAAsf / AAAsf / AAAsf / AAAsf / AA-sf Increase defaults by 25%: AAAsf / AAAsf / AAAsf / AAAsf / AA+sf / A+sf Increase defaults by 50%: AAAsf / AAAsf / AAAsf / AA+sf / AA-sf / A-sf humm 2021-1 Note classes: A1 / A1-G / B-G / C-G / D-G / E-G Rating: AAAsf / AAAsf / AAAsf / AAAsf / Asf / BBB+sf Increase defaults by 10%: AAAsf / AAAsf / AAAsf / AA+sf / A-sf / BBB-sf Increase defaults by 25%: AAAsf / AAAsf / AAAsf / AAsf / BBB+sf / BB+sf Increase defaults by 50%: AAAsf / AAAsf / AA+sf / A+sf / BBB-sf / BB-sf humm 2022-1 Note classes: A1 / A1-G / B-G / C-G / D-G / E-G Rating: AAAsf / AAAsf / AAAsf / AAsf / BBBsf / BB+sf Increase defaults by 10%: AAAsf / AAAsf / AAAsf / AAsf / BBBsf / BB+sf Increase defaults by 25%: AAAsf / AAAsf / AA+sf / AA-sf / BBBsf / BB+sf Increase defaults by 50%: AAAsf / AAAsf / AAsf / Asf / BBB-sf / BBsf See Fitch Assigns Final Ratings to humm ABS Trust 2022-2; Outlook Stable, published 19 December 2022, for more information on rating sensitivities for humm 2022-2. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Macroeconomic conditions, loan performance and credit losses that are better than Fitch's expectations or sufficient build-up of credit enhancement that would fully compensate for credit losses and cash flow stresses commensurate with higher rating scenarios, all else being equal. The class A1, A1-G, B-G, C-G and D-G notes for Flexi 2020-1, class A1, A1-G, B-G, C-G notes for humm 2021-1, class A1, A1-G and B-G notes for humm 2022-1 and class A2 and A2-G notes for humm 2022-2 are at the highest level on Fitch's scale and cannot be upgraded. Therefore, upgrade sensitivity stresses are not relevant. Upgrade Sensitivity Flexi 2020-1 Class: E-G Rating: AAsf Decrease defaults by 10%: AA+sf humm 2021-1 Classes: D-G / E-G Rating: Asf / BBB+sf Decrease defaults by 10%: A+sf / BBB+sf humm 2022-1 Classes: C-G / D-G / E-G Rating: AAsf / BBBsf / BB+sf Decrease defaults by 10%: AAAsf / A+sf / BBB+sf DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information as part of its ongoing monitoring. Prior to the transactions closing, Fitch sought to receive a third-party assessment conducted on the asset portfolio information, but none were available. As part of its ongoing monitoring, Fitch reviewed a small targeted sample of humm'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 portfolios. Overall, 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. KUDOS GROUP: Second Creditors' Meeting Set for June 15 ------------------------------------------------------ A second meeting of creditors in the proceedings of Kudos Group Pty Ltd has been set for June 15, 2023 at 10:30 a.m. via virtual meeting. 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 June 14, 2023 at 4:00 p.m. Bruce Gleeson of Jones Partners Insolvency & Restructuring was appointed as administrator of the company on May 10, 2023. LIBERTY FUNDING 2023-3: Moody's Gives (P)B2 Rating to Cl. F Notes ----------------------------------------------------------------- Moody's Investors Service has assigned the following provisional ratings to the notes to be issued by Liberty Funding Pty Ltd in respect of Liberty Series 2023-3. Issuer: Liberty Funding Pty Ltd in respect of Liberty Series 2023-3 AUD704.00 million Class A Notes, Assigned (P)Aaa (sf) AUD56.00 million Class B Notes, Assigned (P)Aa1 (sf) AUD6.40 million Class C Notes, Assigned (P)A2 (sf) AUD12.80 million Class D Notes, Assigned (P)Baa2 (sf) AUD4.80 million Class E Notes, Assigned (P)Ba1 (sf) AUD5.60 million Class F Notes, Assigned (P)B2 (sf) The AUD10.4 million Class G Notes are not rated by Moody's. The transaction is a securitisation of Australian residential mortgage loans originated and serviced by Liberty Financial Pty Ltd (Liberty, unrated). RATINGS RATIONALE The provisional ratings take into account, among other factors: Evaluation of the underlying receivables and their expected performance; The three months pre-funding period, during which a pre-funded amount of AUD225 million can be used to add new loans to the pool, subject to certain criteria being met. Evaluation of the capital structure and credit enhancement provided to the notes; The liquidity facility in the amount of 2.0% of the notes balance subject to a floor of AUD800,000; The experience of Liberty as the servicer; Presence of Perpetual Trustee Company Limited as the back-up servicer. Moody's MILAN credit enhancement (MILAN CE) for the collateral pool is 8.7%, while the expected loss is 1.20%. MILAN CE represents the loss Moody's expect the portfolio to suffer in a severe recessionary scenario, and does not take into account structural features of the transaction. The expected loss represents a stressed, through-the-cycle loss relative to Australian historical data. A key strength of the transaction is the 12% subordination available to Class A Notes, compared with the 8.7% Moody's MILAN CE. Moody's considers the pre-funding period a key challenge. The transaction has a three months pre-funding period, during which up to AUD225 million new loans can be added to the pool. This could lead to a deterioration in the pool quality. While portfolio parameters reduce the risk of the deterioration, among other things, there is no minimum seasoning requirement relating to the pre-funding, and loan-to-value (LTV) ratio limits address only current LTV and not scheduled LTV. Moody's have taken this into account in Moody's asset analysis. The key transactional features are as follows: The notes benefit from a guarantee fee reserve available to cover losses arising from the portfolio and shortfalls in interest payments on the notes. Unfunded at closing, the reserve will build up through the trapping of excess spread up to a maximum of AUD2,400,000, equivalent to 0.30% of the initial invested amount of the notes. The notes will be initially repaid sequentially. On and after the payment date in June 2025, and subject to, among other conditions, no unreimbursed charge-offs, Class B to Class F Notes will start receiving pro-rata share of principal payments. Class G Notes will not receive principal payments until the other notes are repaid, however once step down conditions are met, their pro-rata share of principal will be allocated in a reverse sequential order, starting from the Class F Notes. The principal paydown will switch back to sequential pay once the aggregate invested amount of all notes is less than or equal to 20.0% of the aggregate initial invested amount of all notes on the issue date, or following the payment date in June 2027. The key features of the initial pool as at the cut-off date are as follows: The initial pool has a weighted-average seasoning of 22.8 months. The portfolio has a scheduled LTV ratio of 65.7%, with proportion of loans with a scheduled LTV ratio above 80.0% of 13.7%. Around 64.3% of the loans in the portfolio were extended to self-employed borrowers. Based on Moody's classifications, 24.3% of the loans in the portfolio were extended on an alternative documentation basis, with further 0.02% on low documentation basis. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Approach to Rating RMBS Using the MILAN Framework " published in July 2022. Factors that would lead to an upgrade or downgrade of the ratings: Levels of credit protection that are greater than necessary to protect investors against current expectations of loss could lead to an upgrade of the ratings. Moody's current expectations of loss could be better than its original expectations because of fewer defaults by underlying obligors or higher recoveries on defaulted loans. The Australian job market and the housing market are primary drivers of performance. A factor that could lead to a downgrade of the notes is worse-than-expected collateral performance. Other reasons for performance worse than Moody's expects include poor servicing, error on the part of transaction parties, a deterioration in credit quality of transaction counterparties, fraud and lack of transactional governance. VIRAL VENTURES: Karen's Diner Restaurants Close as Owner Goes Bust ------------------------------------------------------------------ The Sydney Morning Herald reports that the owner of the Karen's Diner restaurants, infamous for its staff being deliberately rude to customers, has gone under two years after the cheeky concept was born in Sydney. Viral Ventures, which owned most but not all the Karen's Diner restaurants, gave notice at a general company meeting on May 30 that it would be wound up with liquidators from Wexted Advisors appointed to the process, SMH relates. According to SMH, multiple Karen's Diners, which were labelled "pop-up" stores, were shut before the liquidation, but at least three other more established diners including those in Melbourne, Perth and the Gold Coast have now been closed. The chain of fast-food restaurants, which marketed itself on its deliberately bad service and rude staff, went viral on social media following the opening of its first store in Sydney's World Square in 2021, with its website listing 18 store locations this year. A source with knowledge of the situation said that the Karen's Diner restaurant in Sydney will remain open, with the ownership of the site transferred from Viral Ventures to another entity earlier this year, the report notes. According to SMH, the liquidation process is still in its early stages but a combination of tougher macroeconomic conditions, uncertainty in a post-COVID environment and increased labour costs and lower turnover led the company to have insufficient funds to cover its debts. In an Instagram post on May 30, Karen's Diner confirmed it would be closing some of its pop-up stores but hinted at a return. "Unfortunately, all good things come to an end and Karen can't stay forever," it said, adding that "if your local pop-up store has closed, there will be a Karen's Diner On Tour coming to your city this September, SMH relays. Karen can't stay away and needs to give you a piece of her mind." "Viral Ventures Australia operated a few pop-up stores for Karen's that we've closed, and we've subsequently liquidated that entity," the report quotes Viral Ventures co-founder Aden Levin as saying in a statement. "The other venues and tours will remain." ========= C H I N A ========= EHI CAR SERVICES: Fitch Hikes LongTerm IDR to 'B', Outlook Stable ----------------------------------------------------------------- Fitch Ratings has upgraded China-based eHi Car Services Limited's Long-Term Issuer Default Rating (IDR) to 'B' from 'B-'. The Outlook is Stable. The senior unsecured rating has also been upgraded to 'B' from 'B-' with a Recovery Rating of 'RR4'. The upgrade reflects Fitch's expectation that eHi's cash generation will improve and leverage will moderate as operations normalise following Covid-19-related disruptions. Fitch expects its liquidity to stabilise as operating cash flow resumes and receivables collection risk eases, but meaningful deleveraging is unlikely. The ratings are constrained by high leverage and concentration in capital-market debt maturity, particularly a US dollar bond maturing in November 2024. KEY RATING DRIVERS Recovery After Restrictions Removed: Fitch expects a recovery in domestic travel after three years of mobility restrictions in China and normalised operations in 2023 to improve cash generation. eHi reported a yoy drop in revenue and weaker profitability in 2022 due to the pandemic-related disruptions in China. However, revenue rebounded in 1Q23 to yoy growth of 25% and the EBIT margin widened to above 14%. Revenue per available car jumped to CNY187 from less than CNY160 in 2022 and the fleet expanded to over 79,000 vehicles to meet strong pent-up travel demand. Fitch expects the company's EBITDA growth to normalise in 2024 and beyond from an exceptionally high base in 2023 from the pent-up demand, but remain at a high level with travelers preferring private transportation such as car rental for the added flexibility and health safety. Refinancing Risk Alleviated: Fitch expects the risks related to eHi's negotiations with banks and leasing companies on the extension of debt and provision of additional credit facilities to ease as its business recovers. Fitch believes banks and leasing companies will remain supportive on funding in the near term, as improving operating cash flow should support debt repayment and down payments for vehicle purchases. Loans from leasing companies are often secured by the vehicles purchased, which can reduce the cash required. Used-vehicle sales offer some flexibility in debt reduction. High Leverage: Fitch expects eHi's medium-term deleveraging prospects to hinge on the recovery pace. EBITDA net leverage was exceptionally high at 7.8x in 2022 due to demand that was weaker than Fitch expected, but should moderate to below 5x as business recovers in 2023. However, more material deleveraging would be difficult as it will take a longer time for liquidity to accumulate and balance against fleet expansion needs. eHi slowed vehicle purchases in 2022, but its cash was further eroded in 1Q23 as it resumed vehicle purchases to meet strong travel demand. Concentrated Maturity: eHi's debt concentration constrains the rating, particularly the US dollar bond maturing in November 2024. Fitch thinks eHi's financial position will improve but would need to reassess its refinancing options closer to the maturity date, as its liquidity buffer weakened in 2022 due to its stagnant operations and prolonged receivable collection. eHi resolved a VAT self-review and covenant issue in 2H22 by paying CNY261 million in VAT and making a CNY80 million early loan repayment, offset by a cash tax refund of CNY156 million. Receivable Collection Risk Eases: Fitch assumes risks from prolonged receivables will ease as used-car transactions should resume after the lockdown disruptions in 2022 and the company is switching to dealers with faster cash conversion cycles. eHi recognised a CNY450 million impairment loss on sales of used rental vehicles in 2022, which significantly reduced the outstanding amount of trade receivables at end-2022. However, the pace of used-car sales and collection of proceeds may still be affected by market conditions. DERIVATION SUMMARY eHi's ratings are supported by its leading market position as China's second-largest car rental company. However, it has a smaller operating scale and weaker financial profile than other Fitch-rated car rental operators, such as Localiza Rent a Car S.A. (BB/Stable), the leading rental car operator in Brazil. eHi also has smaller operating scale and higher capex requirements, but better financial flexibility, than China Grand Automotive Services Group Co., Ltd. (CCC+), one of the largest auto dealers in China. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue to rebound in 2023 and growth to stabilise over 2024-2026 (2022: -12.7%) - EBITDA margin to improve and average at 44% over 2023-2026 (2022: 29.9%) - Net capex to resume in 2023 and moderate starting 2024 with average net spending of CNY1.6 billion over 2024-2026 (2022: net capex of CNY185 million) RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch does not expect positive rating action in the medium term until eHi address its US dollar bond maturity in November 2024 Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA net leverage, including accounts payable for vehicle purchases, sustained above 6.0x - Evidence of prolonged trade receivables collection having a negative impact on cash flow - Lack of progress in refinancing capital-market debt LIQUIDITY AND DEBT STRUCTURE Tight Liquidity: eHi had readily available cash of CNY611 million at end-December 2022, against short-term debt of CNY2.25 billion (or CNY2.47 billion if payables for vehicles purchased are included). In December 2021, eHi repurchased USD398 million of senior notes due in 2022, which left the next maturity of US dollar senior notes to November 2024. The company said it has completed a CNY261 million cash VAT payment and received a CNY156 million tax refund in 2022. Fitch believes eHi's liquidity is supported by its solid bank relationships and its vehicle fleet, which can be liquidated to fund any shortfalls. ISSUER PROFILE eHi is a leading car rental and chauffeur operator in China. It had a total fleet of more than 79,000 vehicles and covered more than 500 cities in China by end-March 2023. The company was listed on the New York Stock Exchange before it was privatised in April 2019. SUMMARY OF FINANCIAL ADJUSTMENTS Payables for vehicles purchased are included as debt in Fitch's leverage calculations as these are interest-bearing in nature. Capex is calculated as gross capex for car purchases net of proceeds from used-car sales. ESG CONSIDERATIONS eHi has an ESG Relevance Score of '4' for Financial Transparency due to its status as a private company with less stringent timing requirements for financial disclosures, compared with publicly listed companies, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- eHi Car Services Limited LT IDR B Upgrade B- senior unsecured LT B Upgrade RR4 B- LEVDEO: Shandong Court Boots Bankruptcy Petition as Immature ------------------------------------------------------------ Caixin Global reports that a court in Shandong province dismissed a bankruptcy reorganization petition filed a month ago by Chinese electric vehicle manufacturer Levdeo, Caixin learned from the court. The Weifang Changle People's Court concluded that the conditions for Levdeo's bankruptcy reorganization were not perfect and were immature, "mainly because there is no specified investor," a Levdeo dealership in Hunan province told Caixin. Levdeo Auto Group is engaged in the research, development and manufacturing of electric vehicles and its key components. Levdeo's main products are low-speed three-wheeled or four-wheeled electric vehicles. Levdeo Auto Group, also known as Letin, filed for bankruptcy reorganization with a court in Shandong province in May 2023. According to Caixin, the 11-year-old company has been engulfed in a growing list of debt disputes since late 2022. Caixin, citing business database Tianyancha, relates that 93 civil cases were filed against Levdeo since October 2022 involving disputes on procurement contracts, payments, loans and bidding deals. The plaintiffs include Levdeo's suppliers, dealers and financial institutions. SHANDONG AIRLINES: To Be Delisted From Shenzhen Bourse on July 7 ---------------------------------------------------------------- Yicai Global reports that Shandong Airlines is set to enter the Shenzhen Stock Exchange's delisting procedure after having had negative net assets for two years in a row. Yicai Global relates that Shandong Airlines on June 7 received notice from the bourse informing the Jinan-based carrier that the delisting procedure will start on June 15 and its stock will be removed from the exchange on July 7. The airline's shares halted trading on April 28, when they closed down 3 percent to CNY2.94 (38 US cents) each. Shandong Airlines had negative net assets of CNY7.8 billion (USD1.1 billion) last year and CNY917.7 million (USD128.7 million) in 2021, Yicai Global discloses. Moreover, the company lost money over the three years of the Covid-19 pandemic, with its net losses reaching CNY6.9 billion, CNY1.8 billion, and CNY2.4 billion, respectively, between last year and 2020. In the first quarter of this year, the firm narrowed its net loss nearly 64 percent to CNY470 million from a year earlier, as China's airline industry has been getting back on its feet since the country lifted Covid-19 restrictions, Yicai Global relates. According to the report, Shandong Airlines' investors have tried to pull it out of insolvency. The major backer of Air China, the biggest Chinese stated-owned carrier, raised its stake and injected CNY10 billion into Shandong Airlines' parent company, Shandong Aviation Group, along with the second-biggest shareholder Shandong Hi-Speed. Last December, Air China bought CNY33 million shares of Shandong Aviation from other investors to hike its ownership of Shandong Aviation to 51.7 percent from 49.4 percent, recalls Yicai Global. More importantly, Air China and Shandong Hi-Speed stumped up CNY66 billion and CNY34 billion, respectively, to boost Shandong Aviation's registered capital. The two big shareholders aim to help the local airline maintain normal operations. Shandong Airlines owns 134 Boeing 737 aircraft and operates over 290 passenger and freight routes. Apart from domestic destinations, it also flies to South Korea, Japan, Thailand, India and Cambodia. ================= H O N G K O N G ================= CHANNEL C: Facing Bankruptcy, Calls for Financial Support --------------------------------------------------------- Radio Free Asia reports that a social media news channel set up by former journalists from shuttered pro-democracy media outlets in Hong Kong has put out an emergency call for new subscribers, citing the imminent threat of bankruptcy. Channel C, which was founded by former journalists from the Apple Daily and other pro-democracy news outlets forced to close amid aggressive "national security" investigations, used its Thursday night [June 8] broadcast to announce a financial emergency, citing monthly running costs of around HK$600,000 (US$76,500), according to Radio Free Asia. If supporters are unable to raise enough money in the next month, the channel -- which currently boasts an audience of some two million people across Facebook, Instagram and YouTube -- expects to shut down on July 12, two years after it was founded, it told viewers in an announcement, Radio Free Asia relays. Radio Free Asia notes that at least eight pro-democracy news organizations have folded since Beijing imposed a draconian national security law on Hong Kong in 2020, banning public criticism of the authorities as "subversive." Police and prosecutors have also used colonial-era sedition laws to target some journalists and publications. While Channel C commands the biggest audience among the handful of Cantonese pro-democracy news outlets still operating outside Hong Kong, its viewing figures have struggled to take off since its launch to a degree that would keep it solvent, multimedia production director Ronson Chan told Radio Free Asia. ========= I N D I A ========= ADVANCE CROPCARE: Ind-Ra Affirms BB- Long Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Advance Cropcare (India) Private Limited's (ACPL) Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR150 mil. Fund-based limits affirmed with IND BB-/Stable rating; -- INR40 mil. Non-fund-based limits affirmed with IND A4+ rating; -- INR40 mil. Term loans due on March 2024 affirmed with IND BB-/ Stable rating. Key Rating Drivers The affirmation reflects ACPL's continued small scale of operations despite a marginal improvement in the revenue to INR550.44 million in FY23 (FY22: INR541.88 million), driven by repeated contracts with customers. The company has a portfolio of 400-450 products. It derives 80% of the revenue from sales to government departments and the remaining from wholesales/private dealers. Management expects the company to achieve revenue of INR750 million in FY24 as it is venturing into new markets in Jharkhand, Assam and Uttar Pradesh. However, Ind-Ra expects the revenue to remain at similar level in FY24. FY23 numbers are provisional. The ratings continue to reflect ACPL's modest EBITDA margin of 8.34% in FY23 (FY22: 7.55%) with a return on capital employed of 9.1% (7.8%). The increase in margin was due to a decline in outward freight charges and administration expenses. Ind-Ra expects the EBITDA margin to remain at similar levels in the medium term due to the similar nature of work. Liquidity Indicator – Poor: The company's average maximum utilization of the fund-based and non-fund-based facilities was around 99.19% and 73.4%, respectively, over the 12 months ended April 2023. ACPL has repayment obligations of INR22.73 million and INR22.30 million for FY24 and FY25, respectively. The cash flow from operations turned positive to INR28.17 million in FY23 (FY22: negative INR20.11 million) owing to an increase in EBITDA and favorable changes in working capital. Consequently, the free cash flow turned positive to INR26.06 million in FY23 (FY22: negative INR21.02 million). The net working capital cycle elongated to 82 days in FY23 (FY22: 70 days) majorly due to an increase in the inventory holding period to 73 days (37 days) as the management has planned to hold higher inventory. ACPL had cash and cash equivalents of INR3.55 million at FYE23 (FYE22: INR1.36 million). Furthermore, the company does not have any capital market exposure and relies on banks and financial institutions to meet its funding requirements. The ratings also factor in ACPL's continued weak credit metrics despite an improvement in the interest coverage (operating EBITDA/gross interest expenses) to 1.64x in FY23 (FY22: 1.57x, FY21: 1.51x) and net leverage (total adjusted net debt/operating EBITDAR) to 5.78x (7.17x, 5.73x). The improvement in credit metrics was on account of the increase in absolute EBITDA to INR45.91 million in FY23 (FY22: INR40.71 million), along with the scheduled repayment of long-term debt. Ind-Ra expects the credit metrics to improve further in FY24 due to a decline in interest cost owing to further repayment of long-term loans. The ratings remain constrained by the highly regulated nature of the fertilizer industry with profitability largely dependent on government policies with regard to subsidy and pricing. However, the ratings remain supported by the promoters' over a decade of experience in the fertilizers and chemical business, leading to established relationships with its customers and suppliers. Rating Sensitivities Positive: An improvement in the scale of operations, leading to an improvement in the credit metrics with the gross interest coverage remaining above 1.5x and an improvement in the liquidity position, all on a sustained basis, will be positive for the ratings. Negative: Any decline in the scale of operations, leading to deterioration in the credit metrics or the liquidity position, will be negative for the ratings. Company Profile Incorporated in 2007, Indore-based ACPL manufactures of bio fertilizers, micro nutrients, herbicides, weedicides, insecticides, pesticides & bio pesticides and zinc sulphate. ALFA TRANSFORMERS: CRISIL Keeps C Debt Ratings in Not Cooperating ----------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Alfa Transformers Limited (ATL) continue to be 'CRISIL C/CRISIL A4 Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 4 CRISIL A4 (Issuer Not Cooperating) Bank Guarantee 4.46 CRISIL A4 (Issuer Not Cooperating) Cash Credit 3.54 CRISIL C (Issuer Not Cooperating) Cash Credit 6.5 CRISIL C (Issuer Not Cooperating) Foreign Exchange 0.13 CRISIL A4 (Issuer Not Forward Cooperating) Letter of Credit 4.25 CRISIL A4 (Issuer Not Cooperating) Letter of Credit 1 CRISIL A4 (Issuer Not Cooperating) Proposed Long Term 0.62 CRISIL C (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with ATL 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 ATL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on ATL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of ATL continues to be 'CRISIL C/CRISIL A4 Issuer Not Cooperating'. Set up by Mr D K Das in 1982, ATL manufactures small distribution transformers and offers related technical assistance and services, including repair work. Units are in Bhubaneswar and Vadodara. AUTOBAHN TRUCKING: Ind-Ra Assigns BB+ Loan Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Autobahn Trucking Corporation Private Limited's (ATPL) bank loans 'IND BB+'. The Outlook is Stable. The detailed rating actions are: -- INR290 mil. Term loans due on FY27 assigned with IND BB+/ Stable rating; and -- INR1.49 bil. Fund-based limits assigned with IND BB+/ Stable/ IND A4+ rating. Key Rating Drivers ATPL is likely to have recorded a revenue of INR9 billion-10 billion in FY23 (11MFY23: INR9.3 billion; FY22: INR5.8 billion, FY21: INR4.6 billion) and is likely to earn INR10 billion-11 billion in FY24. The significant increase in the company's revenue in 11 months was primarily driven by the new units being set up in Maharashtra and Goa during FY23, along with growth recorded in the commercial vehicle industry. However, the scale of operations remains small. Given the dealership nature of business, margins are likely to be low between 1.5% and 3% over FY23-FY24. The company's EBITDA margin reduced to 1.4% in FY22 (FY21: 2.2%), due to higher discounts being offered to customers in newer regions. The absolute EBITDA was INR46 million in 1HFY23 (FY22: INR81 million; FY21: INR99 million). ATPL's credit metrics are weak as indicated by its net leverage and interest coverage ratio which stood at 14.0x and 1.1x, respectively, for 1HFY23 (FY22: 13.2x, 1.2x; FY21: 7.3x, 2.0x). The higher leverage was on account of the reduced EBITDA, coupled with the debt taken for the expansion of facilities in Pune and Goa. However, the promoters have extended interest-free unsecured loans to ATPL where the company enjoys flexibility with regard to repayment. At end-1HFY23, the total promoters' loans stood at INR157.6 million out of the total debt of INR1,409 million. Excluding promoters' loan, the net leverage was around 12.3x in 1HFY23 and 11.2x in FY22 (FY21: 5.8x). Ind-Ra believes the leverage is likely to have improved yoy in FY23 and is likely to continue to do so in FY24 as EBITDA levels would increase owing to higher yoy revenue; however, the same is likely to be offset by the capex planned by the company. The interest coverage ratio is likely to have remained between 1.1x and 1.6x in FY23 and is likely to continue to do so in FY24, and the net leverage is likely to be at 5x-9x (excluding promoters' loan) during the same period. Over 60% of the company's revenue is generated from Kerala. Although the company is expanding its business in Maharashtra and Goa, the major revenue will still be generated out of Kerala due to the highest number of facilities being set up there. Also, it would remain exposed to the geographical concentration risk in case any new dealer enters into the market in the same geographies. Apart from that, ATPL's revenue is entirely dependent on the demand for the vehicles of Daimler India Commercial Vehicles. Hence, the company is also exposed to the risk of original equipment manufacturers inducting other dealers to scale up their operations in India. Liquidity Indicator - Stretched: The company's unencumbered cash balance stood at INR1.67 million at FYE23. The average month-end utilization of ATPL's fund-based limits of INR1,490 million was 58% for the 12 months ended March 2023. ATPL generated positive free cash flows (FCF) of INR37 million in FY22 (FY21: INR9 million). The working capital cycle elongated to 43 days in FY22 (FY21: 37 days) due to an increase in inventory holdings due to the operations expansion in Maharashtra. The management expects the company's working capital cycle to shorten to around 25 to 30 days over the medium term, on account of the normalization of payable days which had reduced in FY22. The company had incurred capex of INR313 million in FY23 mainly on the expansion facilities in Maharashtra and plans to incur INR220 million-250 million in FY24. The planned capex is partly tied up (INR146 million). Ind-Ra believes the FCF would have been negative in FY23, owing to the high capex the company is undertaking for facilities in Maharashtra. However, the FCF is likely to turn positive FY24 onwards once the facilities become operational. The company has external debt repayment obligations of INR159 million in FY24 and INR111 million in FY25. The debt service coverage ratio is likely to remain below 1.0x over the near-to-medium term, driven by higher debt and low margins. However, the deficit will be covered by the promoter funding. ATPL is directly managed by its promoters Sehla Moopan, Mohd. Farzad Kalayam, Babu Moopan and Seba Moopan, who are also the directors in the company. Babu Moopan has over 25 years of experience in the same line of business. Furthermore, although the company operates as a separate entity, the promoters extends support to ATPL in the form of interest-free unsecured loans as and when required. Any deficit in the debt service coverage ratio will be covered by the fund infusion by the promoters. The business benefits from the expertise and experience of all the directors. Rating Sensitivities Positive: Successful execution of the planned capex along with an improvement in the operating profitability, leading to an improvement in the overall credit metrics with the interest coverage increasing above 2.0x while maintaining adequate liquidity, all on a sustained basis, could lead to a positive rating action. Negative: A delay in the commissioning of the planned capex, lower-than-Ind-Ra-expected profitability, leading to a weakening of the credit and liquidity profile, will be negative for the ratings. Company Profile ATPL is a privately-owned company in Kerala. The company was established in 2011, and is the authorized dealer of Daimler India Commercial Vehicles. Overall, with the company's joint ventures and associations, ATPL employs over 1,000 people. BIOTECH FUELS: Ind-Ra Moves B LT Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Biotech Fuels Private Limited's Long-Term Issuer Rating to the non-cooperating category and has simultaneously withdrawn it. The instrument wise rating action are: -- INR470 mil. Proposed term loan# migrated to non-cooperating category and withdrawn; -- INR30 mil. Proposed fund-based working capital limit* migrated to non-cooperating category and withdrawn. *Migrated to 'IND B (ISSUER NOT COOPERATING)'/'IND A4 (ISSUER NOT COOPERATING)' before being withdrawn #Migrated to 'IND B (ISSUER NOT COOPERATING)' before being withdrawn Key Rating Drivers Ind-Ra has migrated the ratings to the non-cooperating category because the issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency and has not provided information pertaining to the full-year financial performance for FY22, sanctioned bank facilities and utilization levels, business plans and projections for the next three years, information on corporate governance, and management certificate. This is in accordance with Ind-Ra's policy of 'Guidelines on What Constitutes Non-cooperation'. Ind-Ra has withdrawn the ratings on the issuer's request and also because BFPL did not proceed with the instruments as envisaged. This is consistent with Ind-Ra's Policy on Withdrawal of Ratings. Company Profile Incorporated on December 22, 2021, BFPL is setting up an ethanol manufacturing plant. Its registered office is in Raipur (Chhattisgarh). Rohit Sachdev and Charanjiv Singh Bhutani are the promoters. BYJU'S ALPHA: $1.20B Bank Debt Trades at 36% Discount ----------------------------------------------------- Participations in a syndicated loan under which BYJU's Alpha Inc is a borrower were trading in the secondary market around 64 cents-on-the-dollar during the week ended Friday, June 9, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.20 billion facility is a Term loan that is scheduled to mature on November 24, 2026. About $1.19 billion of the loan is withdrawn and outstanding. Bengaluru, India-based Byju's provides online educational services and study materials for state boards and government exams. DAYAL COTSPIN: CRISIL Lowers Rating on INR26cr Cash Loan to D ------------------------------------------------------------- CRISIL Ratings has downgraded the rating on the long-term bank facilities of Dayal Cotspin Limited (DCL) to 'CRISIL D' from 'CRISIL BB/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 26 CRISIL D (Downgraded from 'CRISIL BB/Stable') Proposed Long Term 2 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL BB/Stable') The rating downgrade reflects delay in servicing of term loans on account of weak liquidity. The rating continues to reflect delays in servicing debt, large working capital requirement. These Weakness are partially offset by extensive experience of the promoter. Key Rating Drivers & Detailed Description Weaknesses: * Delays in Servicing of Debt: Stretched liquidity has resulted in delays in servicing of debt. * Large Working capital requirement: Operations are working capital intensive, with gross current assets estimated around 170 days as on March 31, 2023, driven by inventory and high receivables of 153 days and 13 days, respectively. Receivables have increased from 61 days to 153 days as on March 31, 2023, with dip in revenue to INR98 crore in fiscal 2023 from INR163 crore in fiscal 2022. Strength: * Extensive experience of the promoters in the cotton industry: The two decade-long experience of the promoters, their strong understanding of the local market dynamics and their established relationships with farmers and customers, will continue to support the business risk profile. Liquidity: Poor Liquidity is poor reflected in delay in servicing of debt. Company had modest accruals of INR1.03 crore in fiscal 2023. Current ratio was 1.66 times as on March 31, 2023. Company had modest cash and bank balance of INR0.06 crore as on March 31, 2023. Rating Sensitivity factors Upward factors: * Track record of timely debt servicing for 90 days or more. * Sustained improvement in scale of operation and sustenance of operating margin, leading to higher cash accruals DCL was set up by Mr Pavan Kumar Bachhuka and his family in 2006. The company, based in Akola (Maharashtra), is engaged in cotton ginning. DBM GEOTECHNICS: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of DBM Geotechnics and Constructions Private Limited (DBM) continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Rating - CRISIL D (ISSUER NOT COOPERATING) Short Term Rating - CRISIL D (ISSUER NOT COOPERATING) CRISIL Ratings has been consistently following up with DBM 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 DBM, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on DBM is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of DBM continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. DBM, incorporated in 1990, specialises in offering geotechnical services, foundation engineering services, and marine construction activities. It is promoted by Mr. DB Mahajan, a geotechnical engineer. DBM offers services such as geotechnical investigation (land and marine), piling and micro piling, construction of diaphragm wall, construction of berth/jetties, pre-stressed rock anchoring, and topographic/hydrographic survey. DESAI TEXTILES: CRISIL Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Desai Textiles (DT) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3 CRISIL D (Issuer Not Cooperating) Proposed Long Term 0.88 CRISIL D (Issuer Not Bank Loan Facility Cooperating) Term Loan 0.65 CRISIL D (Issuer Not Cooperating) Term Loan 0.07 CRISIL D (Issuer Not Cooperating) Term Loan 3.42 CRISIL D (Issuer Not Cooperating) Term Loan 0.48 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with DT 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 DT, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on DT is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of DT continues to be 'CRISIL D Issuer Not Cooperating'. Set up in 1991, DT is a partnership firm based in Surat (Gujarat), promoted by Mr. Pankajbhai Arvindlal Desai and Mr. Chetankumar Arvindlal Desai. The firm manufactures and markets yarn and grey fabric and undertakes sizing of beam. EUPHORIA TECHNOLOGIES: Insolvency Resolution Process Case Summary ----------------------------------------------------------------- Debtor: Euphoria Technologies Private Limited Registered Office: Office No. 403, 4th Floor, Nishal Arcade Shopping, Nr Vaishali Row House, Green City Road, Pal Surat, Surat, Gujarat 395009 Other Office: 3rd Floor, Office No-302, Technocity, Next to Sarovar Portico, Mahape Navi Mumbai, Thane, Maharashtra, 400701 Insolvency Commencement Date: May 17, 2023 Estimated date of closure of insolvency resolution process: November 13, 2023 Court: National Company Law Tribunal, Ahmedabad Bench Insolvency Professional: Mr. Mahendra Prasad Jindal B-810, Fairdeal House Nr Swastik Char Rasta Navrangpura, Ahmedabad 380009 Email: mpjindal@reddiffmail.com B-501, Safal Pegasus, 100 ft Road, Opp. Gwalia Prahaladnagar, Ahmedabad 380015 Email: cirp.etpl@gmail.com Last date for submission of claims: May 31, 2023 G KHANNA: ICRA Keeps B+ Debt Ratings in Not Cooperating Category ---------------------------------------------------------------- ICRA has retained the Long-Term and Short-Term rating of G Khanna & Co. in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 3.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Short Term- 19.50 [ICRA]A4 ISSUER NOT Non Fund Based COOPERATING; Rating continues Others to remain under 'Issuer Not Cooperating' category Long Term/ 0.50 [ICRA]B+(Stable)/[ICRA]A4; Short Term- ISSUER NOT COOPERATING; Unallocated Rating Continues to remain under issuer not cooperating category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in 1998, GKC is engaged in the trading of engineering plastic products like various grades of PC, ABS and nylon. GKC is the proprietorship firm of Mr. Gagan Khanna, who has an extensive experience of close to two decades in the trading business. The products traded by the firm find applications in automobiles, consumer durables, electrical appliances and accessories, etc. In FY2020, GKC reported a profit before tax of INR1.86 crore on an OI of INR74.86 crore compared to profit before tax of INR2.93 crore on an OI of INR79.38 crore in the previous year. GAURAV EXPORTRADES: CRISIL Keeps D Ratings in Not Cooperating ------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Gaurav Exportrades Private Limited (GEPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2 CRISIL D (Issuer Not Cooperating) Foreign Letter 2 CRISIL D (Issuer Not of Credit Cooperating) Packing Credit 15 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with GEPL for obtaining information through letters 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 GEPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on GEPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of GEPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. GEPL was set up by Mr Mahesh Kumar Gupta in 1991.The company manufactures and exports knitted garments, and has a facility at Tirupur, Tamil Nadu. GKC PROJECTS: ICRA Keeps B+ Debt Ratings in Not Cooperating ----------------------------------------------------------- ICRA has reaffirmed the ratings on certain bank facilities of GKC Projects Limited (GKC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Issuer rating 0.00 [ICRA]B+ (Stable); reaffirmed Working capital 334.08 [ICRA]B+ (Stable) ISSUER NOT Facilities COOPERATING; rating continues to remain under ISSUER NOT COOPERATING Term loans 546.57 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; rating continues to remain under ISSUER NOT COOPERATING Bank guarantee 1,116.83 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; rating continues to remain under ISSUER NOT COOPERATING Letter of credit 195.00 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; rating continues to remain under ISSUER NOT COOPERATING Unallocated 7.52 [ICRA]B+ (Stable) ISSUER NOT limits COOPERATING; rating continues to remain under ISSUER NOT COOPERATING Rationale The rating is constrained by the expected weak operating performance of GKC and absence of adequate working capital facilities, which limits its ability to improve order execution. It has an order book of INR334.4 crore as on March 31, 2023 resulting in limited medium-term revenue visibility. Therefore, the company's ability to improve its order book remains a key rating monitorable. Its order book is also exposed to high sector and project concentration risks. ICRA notes that GKC is timely in debt servicing since April 2021, post the company's takeover by SMC Infrastructures Private Limited (SMC) as per the National Company Law Tribunal's (NCLT) order dated March 30, 2021. The resolution applicant (SMC) proposed a resolution amount of INR428.3 crore for secured financial creditors, which includes: (i) upfront payment of INR20 crore, (ii) issue of non-convertible debentures (NCDs) of INR62 crore and (iii) bank guarantees (BGs) worth INR346.3 being protected from invocation thereof by the respective beneficiaries of these BGs and to be returned within 48 months from the NCLT approval date. GKC has made an upfront payment of INR20 crore as per the resolution plan and has repaid the entire NCDs to the secured financial creditors through fund infusion from the resolution applicant and realisation of old receivables. Further, out of INR346.3-crore protected BGs, the company has got back BGs worth INR272.3 crore as on March 31, 2023. The rating factors in GKC's established track record of over two decades in executing various projects under highways, irrigation and water supply segments. ICRA has considered GKC's established track record of over two decades in executing projects under highway, irrigation and water supply segments. The Stable outlook reflects ICRA's opinion that GKC will benefit from its technical capabilities in execution of highway and water supply works. Key rating drivers and their description Credit strengths * Established track record in execution of highway, irrigation and water supply works: The company has over two decades experience and successfully executed projects in highway, irrigation and water supply works. Credit challenges * Limited revenue visibility: GKC has an order book of INR334.4 crore (OB/OI of 1.2 times) as on March 31, 2023, thereby providing near-term revenue visibility. Although the company has not won any orders in the past five financial years, it emerged as an L1 bidder for projects worth INR297.0 crore in Q1FY2024. Its ability to secure and execute new orders remains a key rating monitorable in the near term. * Delay in enhancement of working capital limits to constrain its operations: The company does not have sanctioned working capital facilities from the lenders, which constrains its ability to execute projects in a timely manner. Also, a majority of the ongoing projects are sub-contracted due to lack of working capital limits. Given this, enhancement in working capital limits remains critical to support its growth prospects. * Continued operating losses: The company's project execution was hampered due to delays in securing necessary approvals. Further, GKC is reporting operating losses with sizeable cost escalations and limited pass-through of these escalations. With GKC expecting to derive large portion of FY2024 revenues from old orders, the extent of improvement in profitability margins remains to be seen despite approval of cost escalations for few projects. * High order book concentration: GKC's current order book is concentrated towards highways (constituting 70% of orders) and water supply segments, which accounted for 30% of its order book as on March 31, 2023. Further, the top three projects contributed to 80% of the outstanding order book, thereby exposing it to project concentration risk. Liquidity position: Stretched GKC's liquidity position is stretched, in absence of any sanctioned working capital facilities and limited liquidity available with the company. Timely sanction of working capital limits remains important for securing new orders. Rating sensitivities Positive factors – ICRA could upgrade the rating if the company demonstrates healthy growth in operating profitability and improvement in liquidity position, on a sustained basis, supported by order book addition and securing working capital limits. Negative factors – Pressure on the rating could arise if the operating losses continue or elongation in the working capital cycle adversely impacts its liquidity position. GKC was originally set up as a proprietorship firm, Gokul Krishna Constructions, in 1996, in Hyderabad. The firm was reconstituted as a private limited company and renamed Gokul Krishna Constructions Pvt Ltd (GKCPL) in 2004, following an increase in its scale of operations and then reconstituted as a public limited company in 2008 as GKC Projects Limited. The company has ongoing projects in two verticals: highways and urban water supply. Based on NCLT's order dated March 30, 2021, GKC was acquired by SMC Infrastructure Pvt Ltd. GO FIRST: Creditors' Panel Appoints Shailendra Ajmera as RP ----------------------------------------------------------- Ritu Singh at CNBC-TV18 reports that Go First Airlines, currently undergoing insolvency proceedings, has made a key appointment in its effort to navigate the challenging situation. The airline's Committee of Creditors (CoC) has selected Shailendra Ajmera, a Partner in Transaction Advisory Services at Ernst & Young (EY), as the resolution professional for the company. Earlier, the National Company Law Tribunal (NCLT) had named Abhilash Lal as the interim resolution professional at the time of admission. Now, the lenders involved in the case will seek approval from the NCLT to officially appoint Ajmera as the resolution professional, CNBC-TV18 relates. A critical matter currently under discussion is the interim financing for Go First, the report notes. The airline has requested around INR200 crore in interim financing to resume its operations during the insolvency process. However, a decision regarding the interim financing is yet to be reached. GoFirst faces substantial liabilities, with a total of INR11,463 crore, including INR6,521 crore in bank dues, the report discloses. Notable financial creditors to the company include Central Bank of India, Deutsche Bank, Bank of Baroda, and IDBI Bank. About Go First Go First, formerly known as GoAir, was an Indian ultra-low-cost airline based in Mumbai, Maharashtra. Go First was incorporated in April 2004 as GoAir and commenced flight operations in November the following year. Its inaugural flight was from Mumbai to Ahmedabad. The airline is owned by the Wadia Group. As reported the Troubled Company Reporter-Asia Pacific on May 3, 2023, Go First filed an application for voluntary insolvency resolution proceedings before National Company Law Tribunal (NCLT) on May 2. The company said the filing with the NCLT comes after Pratt & Whitney, the exclusive engine supplier for the airline's Airbus A320neo aircraft fleet, refused to comply with an order to release engines to the airline that would have allowed it return to full operations. Go First owes INR6,521 crore to its financial creditors, Bank of Baroda, IDBI Bank, and Deutsche Bank. The airline has a total liability of about INR11,463 crore to banks, other creditors, vendors, and others. On May 10, the NCLT accepted Go First's voluntary insolvency petition. The NCLT bench appointed Abhilash Lal as the interim resolution professional to look after the affairs of Go First and also suspended its board as part of the insolvency resolution process. GO FIRST: NCLT Sends Notice to IRP Over Delhivery's Plea -------------------------------------------------------- Business Today Desk reports that the National Company Law Tribunal (NCLT) has issued a notice to the Insolvency Resolution Professional (IRP) of crisis-hit Go First over a plea filed by supply chain operator Delhivery. According to the report, the Delhivery had moved the tribunal on June 8 and said the debt-ridden airline intentionally took payments from them despite knowing that it was filing for voluntary insolvency. Business Today Desk relates that the tribunal admitted Delhivery's notice and gave Go First's interim resolution professional of the Wadia-group airline, Abhilash Lal, two weeks to reply. In its application, the logistics company said that the airline received over INR1.58 crore from them for delivering domestic cargo consignment but never acted on it. "Go First received INR57 lakh on May 2 from Delhivery as advance for future services, knowing fully well they were filing for insolvency," the report quotes the counsel for Delhivery as saying. On May 2, the airline had filed for insolvency with the tribunal. Under Section 65 of the Insolvency and Bankruptcy Code (IBC), 2016, fraudulent and malicious initiation of insolvency proceedings can invite a penalty of INR1 lakh to INR1 crore. A two-member bench of the NCLT directed the IRP to file a reply within two weeks and listed the matter on July 24 for the next hearing, Business Today Desk notes. Earlier last week, the tribunal directed Lal to file a reply within one week over the petitions filed by three lessors -- BOC Aviation (Ireland), Jackson Square Aviation Ireland and Engine Lease Finance BV -- seeking possession of their aircraft and engines, the report notes. The lessors contended that they had terminated their lease before the airline's insolvency plea was admitted. About Go First Go First, formerly known as GoAir, was an Indian ultra-low-cost airline based in Mumbai, Maharashtra. Go First was incorporated in April 2004 as GoAir and commenced flight operations in November the following year. Its inaugural flight was from Mumbai to Ahmedabad. The airline is owned by the Wadia Group. As reported the Troubled Company Reporter-Asia Pacific on May 3, 2023, Go First filed an application for voluntary insolvency resolution proceedings before National Company Law Tribunal (NCLT) on May 2. The company said the filing with the NCLT comes after Pratt & Whitney, the exclusive engine supplier for the airline's Airbus A320neo aircraft fleet, refused to comply with an order to release engines to the airline that would have allowed it return to full operations. Go First owes INR6,521 crore to its financial creditors, Bank of Baroda, IDBI Bank, and Deutsche Bank. The airline has a total liability of about INR11,463 crore to banks, other creditors, vendors, and others. On May 10, the NCLT accepted Go First's voluntary insolvency petition. The NCLT bench appointed Abhilash Lal as the interim resolution professional to look after the affairs of Go First and also suspended its board as part of the insolvency resolution process. GODHANI GEMS: CRISIL Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of Godhani Gems Private Limited (GGPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Rating - CRISIL D (ISSUER NOT COOPERATING) Short Term Rating - CRISIL D (ISSUER NOT COOPERATING) CRISIL Ratings has been consistently following up with GGPL for obtaining information through letters 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 GGPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on GGPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of GGPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. GGPL, set up in 1995 as a partnership firm by Mr. Ramesh V Godhani, Mr. Vinod V Godhani, and their family members, was reconstituted as a private limited company in 2011. The company cuts and polishes diamonds. HASIMARA INDUSTRIES: ICRA Lowers Rating on INR10.25cr Loan to B+ ---------------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Hasimara Industries Limited (HIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 10.25 [ICRA]B+ (Stable) ISSUER NOT Fund-based- COOPERATING; Rating downgraded Cash Credit from [ICRA]BB- (Stable) Long Term- 2.35 [ICRA]B+ (Stable) ISSUER NOT Fund-based- COOPERATING; Rating downgraded Term loans from [ICRA]BB- (Stable) Short-term 1.50 [ICRA]A4; reaffirmed Non-fund- based Bank Guarantee Rationale The downgrade in the long-term rating takes into consideration the losses incurred by HIL in FY2023, driven by the crop losssuffered and a substantial increase in the wage cost. Although ICRA expects some improvement in HIL's revenue in FY2024 owing to a likely increase in sales volume and realisation, the credit profile may not witness a substantial improvement. The ratings also continue to remain constrained by the modest scale of its current operations. The ratings are also impacted by the risks associated with tea for being an agricultural commodity as production and quality of tea depend on agro-climatic conditions. Such risks are accentuated by the geographical concentration of HIL's operations as the company has a single garden in West Bengal. HIL also remains vulnerable to adverse regulatory changes, wage rate hike etc., which can impact its cost structure and profitability. Further, domestic tea prices are impacted by the demand-supply situation and prices in the international market, which would continue to have a bearing on the profitability of Indian tea players, including HIL. The ratings, however, continue to consider the experience of the promoters in the tea business and the good quality of its produce, as evident from the premium commanded over the average market prices. The ratings also factor in the favourable age profile of HIL's tea bushes, which supports its productivity. The Stable outlook on the [ICRA]B+ rating reflects ICRA's opinion that HIL is expected to maintain its business position while sustaining its profitability. Key rating drivers and their description Credit strengths * Experience of the management in the tea industry: HIL, incorporated in 1904, is a relatively smaller but an established player in the tea business, producing the crush, tear, curl (CTC) variety of tea, and is not involved in bought-leaf operations. It has a total area of ~1,062 hectares, of which, around 894 hectares is under tea cultivation. The long experience of the management in the tea industry has aided the production and sales of the company over the years. HIL's tea production remained at ~1.71 million Kg (Mkg) and ~2.05 MKg in FY2021 and FY2022. However, the company suffered crop loss of around 0.21 Mkg in FY2023 on a YoY basis. * Good quality of tea produced; favourable age profile of bushes supports productivity: The high quality of HIL's produce is reflected by the premium it fetches over the industry average. The average realisation of tea produced by the company stood at ~Rs. 214 /Kg in FY2023 compared to the North Indian auction average of INR190 /kg for the same period. The company's tea bushes have a favourable age profile with around 75% of the bushes falling in the age group of 5-50 years as of 9M FY2023. This supports the productivity of the company, mitigating the risks associated with the fixed-cost-intensive nature of the industry to an extent. HIL's yield per area of cultivation and the outturn ratio in 9M FY2023 stood at ~2,097 kg/hectare (~2,295 kg/hectare in FY2022) and 23.7% (22.9% in FY2022), respectively. Credit challenges * Small scale of current operations and exposure to high geographical concentration risk: HIL's scale of operations have remained relatively smaller with production in the range of ~1.7 Mkg to ~2.05 Mkg between FY2017 and FY2023. HIL's current scale of operation remains small compared to the established players in the tea manufacturing industry, constraining the company's operational profile to some extent. Moreover, the company has a single tea garden in Alipurduar, West Bengal, which makes it vulnerable to high geographical concentration risks. * Crop loss suffered and increase in wage cost resulted in losses in FY2023: The company's operating income declined by ~7% to INR39.5 crore in FY2023 on a YoY basis due to lower volume of sales. After reporting profits in FY2021 and FY2022, HIL posted a net loss of INR1.79 crore in FY2023 owing to a crop loss of ~0.21 MKg and an increase in the wage cost, adversely impacting the overall financial risk profile of the company. * Exposed to agro-climatic risks, regulatory changes, wage rate hike etc as tea is an agricultural commodity: The quality and production volume of tea depend on agro-climatic conditions, pest attacks etc. The sector also remains vulnerable to other factors like regulatory changes, wage rate hike by the Government etc. The Government of West Bengal, in June 2022, declared an interim wage hike of INR30, which led to an increase in HIL's production cost in FY2023. Any further increase in the wage rate would have a negative impact on the company's profit if the realisations don't increase in tandem. * Prices of Indian tea, despite its better quality, remain vulnerable to price fluctuation in the international market: Exports play a vital role in maintaining the overall demand-supply balance in the domestic tea market despite the large domestic consumption base. Healthy export realisation is also crucial for maintaining domestic realisations as unremunerative prices in the export market may lead to exporters dumping the produce in the domestic market, which in turn would exert pressure on domestic prices, despite the better quality of Indian tea. Hence, the demand-supply situation in the global tea market, in ICRA's opinion, would continue to have a bearing on the realisations and profitability of Indian players, including HIL. Environmental and social risks * Environmental considerations: Tea, being an agricultural commodity, is susceptible to agro-climatic risks, with the production and quality of tea primarily dependent on rainfall, temperature and humidity. Among the different climatic factors, rainfall plays the most important role. Though these environmental factors pose supply-side risks, the demand side risks are largely protected as tea is one of the most popular, widely consumed and low-cost beverages. Adverse environmental conditions may potentially affect tea productivity, and the extent of irrigation and pest control activities required among others, leading to revenue loss and/or an increase in the cost of production, resulting in margin contraction. ICRA considers such risks to be inherent in the tea production business. * Social considerations: Tea production is highly manpower intensive. A large proportion of the population, particularly women, in the major tea producing regions in the country, is involved as workforce for tea production. The stakeholders of a tea production business include, inter alia, local communities and Government authorities, which influence the operating environment of the business. The wage rates for tea estate workers are regulated by the Government and are revised regularly as the level of wages and welfare costs for tea estate workers have significant socio-economic implications. Teaestate costs are primarily fixed, with labour-related expenses accounting for a significant portion of the production cost. Hence, any significant increase in wage rates may adversely impact the cost structure of tea producers, impacting the margins. Shortage of workers, due to diminishing interest in the garden-based field work on the back of sociological changes remains a concern. Liquidity position: Stretched The liquidity profile of the company is stretched. After generating positive cash from operation in FY2021 and FY2022, HIL is expected to report negative cash flow from operations in FY2023. Although the average utilisation of fund-based working capital limits remained at around 73% during January 2022 to December 2022 in some of the months, the limit utilisation remained at a very high level. Nevertheless, the recent enhancement in the working capital facility is expected to provide some liquidity. The company's repayment obligations (excluding unsecured loans) stand at ~Rs. 1.22 crore in FY2024 and ~Rs. 0.87 crore in FY2025. Rating sensitivities Positive factors – ICRA may upgrade HIL's ratings if its revenues and profitability improve on a sustained basis. Negative factors – ICRA may downgrade HIL's ratings if there is any further increase in wages or any unfavourable regulatory development, negatively impacting the company's credit profile and the liquidity position. Hasimara Industries Limited (HIL), incorporated in 1904, owns a tea garden in the Alipurduar district of West Bengal. The tea estate is spread over an area of around 1,061 hectares, of which around 894 hectares is under tea cultivation. The company produces CTC variety of black tea, which it sells in the domestic market through auction and private sales. It is not involved in bought leaf operations. HITECH GRAIN: CRISIL Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of Hitech Grain Processing Private Limited (HGPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Rating - CRISIL D (ISSUER NOT COOPERATING) Short Term Rating - CRISIL D (ISSUER NOT COOPERATING) CRISIL Ratings has been consistently following up with HGPL for obtaining information through letters and emails dated February 28, 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 HGPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on HGPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of HGPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. The Hitech group is managed by Mr Naresh Mittal, and his two sons Mr Vipul Mittal and Mr Kapil Mittal, with the support of a team of professionals, who have experience of over 35 years in processing and trading in pulses and other food products. The group sells a majority of its products under the Hitech Pulses brand. HGPL, incorporated in 2001, processes pulses at its plant at Lawrence Road, New Delhi. ARPL, incorporated in 2004, also processes pulses, at its facility in Haryana. HAPL and AI (a proprietorship firm) were set up in 2004. These entities trade in food grain and pulses in New Delhi. HYDROBATHS RAMCO: CRISIL Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Hydrobaths Ramco Marketing Private Limited (HRMPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 9.25 CRISIL D (Issuer Not Cooperating) Import Letter of Credit Limit 2.5 CRISIL D (Issuer Not Cooperating) Term Loan 1.25 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with HRMPL for obtaining information through letters 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 HRMPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on HRMPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of HRMPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Set up in 2000 as a proprietorship firm by Mr Vineet Bhutani and reconstituted as a private limited company in 2009, HRMPL trades in tiles and sanitary ware products. The company owns a showroom in Gurugram. ICEWEAR CREATION: ICRA Keeps B+ Debt Ratings in Not Cooperating --------------------------------------------------------------- ICRA has retained the Long-Term and Short-Term rating of Icewear Creation in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 1.32 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Short Term- 26.50 [ICRA]A4 ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term/ 1.85 [ICRA]B+(Stable)/[ICRA]A4; Short Term- ISSUER NOT COOPERATING; Unallocated Rating Continues to remain under issuer not cooperating category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Icewear Creation was established in 2004 as a partnership firm and is involved in manufacturing of knitted garments, primarily kids wear and ladies wear. The promoter, Mr Chandrasamy and his wife Mrs. C. Periyanayaki are the partners in the firm. It has three manufacturing units in Tirupur and has a combined production capacity of 100 lakh pieces annually. It has been designated as a one star export house by the Ministry of Commerce and Industry. As per the provisional financials, the firm reported a net profit of INR4.4 crore on an operating income (OI) of INR112.4 crore in FY2019, as compared to a net profit of INR4.7 crore on an OI of INR138.2 crore in FY2018. INCHEON MOTORS: Ind-Ra Assigns BB- Loan Rating, Outlook Stable -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Incheon Motors Private Limited's (IMPL) bank loans 'IND BB-'. The Outlook is Stable. The detailed rating actions are: -- INR159.9 mil. Term loans due on FY25 assigned with IND BB-/ Stable rating; and -- INR572.5 mil. Fund-based limits assigned with IND BB-/Stable/ IND A4+ rating. Key Rating Drivers IMPL has a moderate scale of operations with its revenue growing 22% to INR4,982 million in FY22 (FY21: INR4,074 billion), driven by higher volumes than the COVID-19-hit previous year. The company achieved revenue of INR5,457 million in 9MFY23, driven by the opening of its new units in Kerala. However, the EBITDA margins remained at 1%-3% over FY20-FY22, primarily on the account of the dealership model and the revenue being concentrated in the sales of vehicles. The EBITDA margins likely to have remained at 1%-3% in FY23 and to remain on the same trend in the near- to medium term. The EBITDA for 9MFY23 dropped to INR18 million (FY22: INR75 million; FY21: INR72 million; FY20: INR49 million), despite the increase in its sales, due to higher inventory costs. The company had eight facilities at FYE23 and is further planning to set up eight more facilities in Kerala by FY24-FY25. Ind-Ra expects the company's revenue to have remained at INR7,000 million-7,5005 million in FY23 and INR7,500 million-8,000 million in FY24. Ind-Ra believes that the company's revenue trajectory would remain on the higher side in the near- to medium term. As a result of its lower operating profitability along with debt-led capex incurred in Kerala, IMPL's net leverage (net debt/EBITDA) remained higher at 43.0x for 9MFY23 (FY22: 10.6x; FY21: 8.4x) and the gross interest coverage ratio (EBITDA/gross interest expenses) stood at 0.5x (1.4x; 1.2x). The promoters have also extended loans to IMPL which are interest free and are not due for repayment. As of 1HFY23, the promoter's loan stood at INR100 million out of the total debt of INR1,140 million. While the credit metrics are expected to have remained stretched for FY23, Ind-Ra expects the net leverage to ease a bit from FY24 on account of a slight improvement in its EBITDA, and the interest coverage ratio to remain at 1.0x-1.5x. As the company operates only in Kerala, it would remain exposed to the geographical concentration risk in case any new dealer enters the market. The management has no plans to expand the business to any other geography apart from Kerala, exposing it to changes in demand within the state. Apart from that, IMPL's revenue is entirely dependent on demand for Kia vehicles. Hence, the company is also exposed to the risk of original equipment manufacturers inducting other dealers to scale up their operations in India. Liquidity Indicator - Stretched: IMPL has fund-based limits of INR1,115 million with the average maximum monthly utilization of 52% for the 12 months ended March 2023. The utilization is likely to have remained at the same level in the past two months also. The company's unencumbered cash balance stood at INR80 million at 9MFYE23 and INR0.16 million at FYE23 (FYE22: INR178 million). IMPL generated negative free cash flows (FCF) in FY22, owing to the negative changes in working capital. The working capital cycle increased to 11 days in FY22 (FY21: 0 days), due to an increase in inventory holdings due to the operations expansion and a reduction in payable days. The management expects the company's working capital cycle to elongate over the medium term, primarily on account of increased inventory requirements as new facilities open. The company incurred capex of INR53 million in FY23 and is planning to incur capex of INR310 million in FY24, mainly to expand its facilities in Kerala. The capex funding has been partly tied up. Ind-Ra believes the FCF to remain negative in FY23 and FY24, owing to the high capex incurred for its facility expansion. However, Ind-Ra expects the FCF to turn positive FY25 onwards when the facilities become operational. IMPL has repayments of INR123 million in FY24 and INR 81 million in FY25. Ind-Ra expects the company's debt service coverage ratio to remain below 1.0x (FY23: 1.2x; FY22: 1.1x) in the near to medium term, driven by higher debt owing to the significant capex planned in FY24. However, the deficit will be covered by the promoter funding. However, the ratings are supported by the experience and expertise of its promoters. IMPL is directly managed by Shada Moopan and Naeem Shahul. Babu Moopan and Seba Moopan are also the directors in the company. Babu Moopan has over 25 years of experience in the same line of business. Although the company operates as a separate entity, the promoters extend support to IMPL in the form of interest-free unsecured loans as and when required. Any deficit in the debt service coverage ratio will be covered by the fund infusion by the promoters. Rating Sensitivities Positive: Successful execution of the planned capex along with an improvement in the operating profitability, leading to an improvement in the overall credit metrics with the interest coverage remaining above 1.5x while maintaining adequate liquidity, all on a sustained basis, could lead to a positive rating action. Negative: A delay in commissioning the planned capex, lower-than-expected profitability, leading to the weakening of the credit metrics and the liquidity profile, on a sustained basis, will be negative for the ratings. Company Profile IMPL was incorporated in 2018 and is an authorized dealer of Kia Motors. The activities of the company comprise purchase and sales of Kia passenger vehicles, spare parts and providing after-sales services to the vehicles. It is directly managed by Shada Moopan and her husband Naeem Shahul. IMPL has eight showrooms and one certified pre-owned car showroom across six districts in Kerala. The company's showrooms span over 2,00,000 square feet to accommodate over 60 cars for display, and over 80 workshop bays. INDUSTRIAL FINANCE: ICRA Reaffirms B+ Rating on INR1,163cr Loan --------------------------------------------------------------- ICRA has reaffirmed the ratings on certain bank facilities of Industrial Finance Corporation of India (IFCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based/ 50.00 [ICRA]B+ (Negative); reaffirmed Non-fund based Bank limits Unallocated 250.00 [ICRA]B+ (Negative); reaffirmed bank limits Long-term bonds 1,163.72 [ICRA]B+ (Negative); reaffirmed (incl. sub debt) Long-term bonds - [ICRA]B+ (Negative); reaffirmed (incl. sub debt) and withdrawn Bonds/NCD 973.35 [ICRA]B+ (Negative); reaffirmed programme Commercial paper 500.00 [ICRA]A4; reaffirmed programme Rationale The ratings reaffirmation factors in IFCI Limited's stretched liquidity position vis-à-vis its forthcoming debt maturities as well as the continued uncertainty regarding its business revival plan, which envisages capital infusion from the Government of India (GoI) to turn around its operations. The capitalisation profile continues to deteriorate due to constant losses and worsened further with a Tier I capital of -70.58% as on December 31, 2022 (against -64.96% as on March 31, 2022). IFCI has managed its debt repayments during the last few years by running down its standard loan book, making recoveries from non-performing advances (NPAs) and divesting its non-core assets. However, with the significant reduction in the standard loan book and given its limited scale in relation to the size of the repayment obligations, the company's ability to incrementally manage debt repayments out of the residual performing book will remain a challenge. Moreover, IFCI will have to rely on timely support from the GoI, apart from recoveries from NPA accounts or divestment of key subsidiaries, to service its upcoming repayment obligations. While the GoI infused capital of INR500 crore in FY2023, INR100 crore in FY2022 and INR200 crore each in FY2021 and FY2020, the quantum of capital remains limited in relation to the company's capital requirements as its Tier I capital remains negative and the stressed assets remain very high. Moreover, its debt levels are much higher in relation to the standard advances and the value of the investments. The Negative outlook continues to reflect ICRA's expectation of increasing liquidity pressure, which will pose challenges for the company's debt-servicing ability. The rating outlook will be changed to Stable if IFCI's strategic importance to the GoI increases significantly along with the infusion of sizeable capital, which would improve its solvency and liquidity position and enable it to resume business growth by securing fresh funds. ICRA has withdrawn the rating assigned to the INR470-crore long-term bonds (including sub debt) as these bonds have been fully redeemed and no amount is outstanding against the same. The rating was withdrawn in accordance with ICRA's policy on withdrawal (click here for the policy). Key rating drivers and their description Credit Strength: Not applicable Credit challenges * Liquidity risk persists: IFCI remains highly dependent on recoveries from its stage 3 assets to service its debt obligations. It recovered INR479 crore from its stage 3 assets in 9M FY2023 (INR1,381 crore in FY2022), which was utilised for the prepayment of debt of INR350 crore. IFCI's standard loan book (net stage 1 and stage 2) declined to INR372 crore as on December 31, 2022 from INR457 crore as on March 31, 2022 (INR2,471 crore as on March 31, 2021) on account of continuing repayments/prepayments and a pause on incremental disbursements. Thus, cash flows from standard assets will be limited. As on May 16, 2023, the company reported on-balance sheet liquidity of INR400 crore, which was primarily supported by the capital infusion of INR500 crore by the GoI in FY2023. As INR400 crore of this amount was infused in Q4 FY2023, it helped alleviate the near-term liquidity position. However, despite this, IFCI has debt repayment obligations (principal and interest) of INR759 crore for the rest of FY2024 and INR1,959 crore for FY2025. The divestment of equity stakes in key subsidiaries (namely 52.9% stake in Stock Holding Corporation of India) has long been delayed and there is limited clarity on capital support from the GoI. These are critical events for IFCI's ability to meet its repayment obligations. * Timely support from GoI continues to remain critical: The GoI has a majority stake in IFCI, holding 70.32% of the equity shares as on April 30, 2023. It has demonstrated regular capital support to the company (INR500 crore in FY2023, INR100 crore in FY2022, INR200 crore each in FY2020 and FY2021), increasing its shareholding to 70.32% as on April 30, 2023 from 56% as of March 31, 2020. The GoI has not budgeted any equity capital infusion for IFCI in FY2024. Moreover, given the sizeable debt levels in relation to the standard advances and the value of the investments, ICRA maintains that IFCI's capital requirements are much higher than the amount infused in the recent past and timely and meaningful GoI support will remain critical in the interim. As a step towards its revival, IFCI has submitted a business plan to the GoI though a response is still awaited amid the stretched liquidity profile. Given the financial risk, capital support from the GoI has remained limited. Further, the company rolled over some of its liabilities in FY2022, which created uncertainty regarding timely support from the GoI. * Weak asset quality and capital position: IFCI's asset quality remains weak with gross stage 3 assets of INR6,4641 crore (94.11% of gross loans) as on December 31, 2022 against INR6,768 crore (92.21% of gross loans) as on March 31, 2022. Furthermore, IFCI's share of net stage 3 assets in the overall net loans and advances stood at 82.52% as on December 31, 2022 (80.84% as on March 31, 2022). The Tier I capital remained negative since the December 2020 quarter and stood at -Rs. 2,819 crore or -70.58% as on December 31, 2022 against -Rs. 2,874 crore or -64.96% as on March 31, 2022. The Tier I capital position remains much lower than the net worth of INR465 crore as on December 31, 2022 as it excludes net deferred tax assets and investments in subsidiaries. Government-owned non-banking financial companies (NBFCs) are required to maintain Tier I of 10% and a capital-to-risk weighted assets ratio (CRAR) of 15%. Going forward, IFCI's weak asset quality and capital position are unlikely to improve unless a substantial quantum of capital is infused to clean up the stressed book. * Earnings profile to remain weak amid declining loan book and high level of stressed assets: With a standard net loan book of INR372 crore and debt of INR6,388 crore (including interest accrued but not due) as on December 31, 2022, IFCI's interest bearing assets are much lower than its interest-bearing liabilities. Hence, the net interest income (NII) is negative on a cash basis. As a result, IFCI reported operating and net losses in 9M FY2023 at INR204.4 crore and INR55.1 crore, respectively (Rs. 330.5 crore and INR1,884.0 crore, respectively, in 9M FY2022). Given its weak funding profile and stretched liquidity position, IFCI's fresh net sanctions and disbursements remained NIL during FY2022-9M FY2023. Hence, the declining standard loan book and funding constraints, which limit fresh business activity, will continue to adversely impact the earnings profile over the longer term. The company's ability to tie up fresh funding and 1Gross stage 3 assets include assets classified under stage 3, reclassified security receipts and income recognized on stage 3 assets raise capital to bridge the gap between the income generated on earning assets and the borrowing costs will drive an improvement in its earnings profile. Liquidity position: Stretched IFCI's liquidity position remains stretched as it has repayment obligations of INR759 crore (including interest) falling due in FY2024 (June 2023 onwards) against which its on-balance sheet liquidity stood at INR400 crore as on May 16, 2023. While IFCI met its borrowings/repayment obligations in recent years by running down its performing loan book, its ability to ensure meaningful recoveries from its sizeable NPA pool will remain critical from a liquidity perspective, as the residual performing book has shrunk considerably in scale. Rating sensitivities Positive factors – Given the significantly weak capital position, liquidity, solvency profile and earnings outlook, the ratings are unlikely to be upgraded in the near term. However, the outlook may be changed to Stable if IFCI's strategic importance to the GoI increases significantly along with the infusion of sizeable capital, which would improve its solvency and liquidity position and enable it to resume business growth by securing fresh funds. Negative factors – The ratings could be downgraded on further weakening of the liquidity position. The GoI established Industrial Finance Corporation of India (IFCI) on July 1, 1948 as a development financial institution (a statutory corporation) to cater to the long-term financial needs of the industrial sector. The constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act, 1956. Its name was subsequently changed to IFCI Limited with effect from October 1999. The company's financing activities covered various kinds of projects such as airports, roads, telecom, power, real estate, manufacturing, services and other such allied industries. However, due to liquidity constraints, IFCI halted its lending operations since FY2022. JAI MATA: CRISIL Keeps D Debt Ratings in Not Cooperating Category ----------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Jai Mata Di Paper Mills Private Limited (JMD) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 1.7 CRISIL D (Issuer Not Cooperating) Cash Credit 0.3 CRISIL D (Issuer Not Cooperating) Cash Credit 3 CRISIL D (Issuer Not Cooperating) Proposed Long Term 2 CRISIL D (Issuer Not Bank Loan Facility Cooperating) Term Loan 5 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with JMD for obtaining information through letters 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 JMD, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on JMD is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of JMD continues to be 'CRISIL D Issuer Not Cooperating'. JMD, set up by Raipur (Chhattisgarh)-based Sharma family in 2008, manufactures kraft paper. Its manufacturing unit started commercial operations in May 2011. JMD's day-to-day operations are looked after by its promoter-director Mr. Aditya Sharma. JAYEM AUTOMOTIVES: CRISIL Lowers Rating on INR20cr Cash Loan to D ----------------------------------------------------------------- CRISIL Ratings has downgraded its rating on the bank facilities of Jayem Automotives Private Limited (JAPL) to 'CRISIL D' from 'CRISIL BB+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 20 CRISIL D (Downgraded from 'CRISIL BB+/ Stable') Cash Credit 5 CRISIL D (Downgraded from 'CRISIL BB+/ Stable') Overdraft Facility 5 CRISIL D (Downgraded from 'CRISIL BB+/ Stable') Proposed Term Loan 2.96 CRISIL D (Downgraded from 'CRISIL BB+/ Stable') Term Loan 11.4 CRISIL D (Downgraded from 'CRISIL BB+/ Stable') Term Loan 10.64 CRISIL D (Downgraded from 'CRISIL BB+/ Stable') Working Capital 5 CRISIL D (Downgraded from Demand Loan 'CRISIL BB+/ Stable') The downgrade in ratings to 'CRISIL D' reflects delay in repayment of term loan principal during last 3 quarters of FY 2023. The ratings reflect susceptibility to cyclicality in automotive industry and government regulation and working capital intensive operations. These weaknesses are partially offset by extensive industry experience of the promoters and repute customer profile and healthy financial profile. Key Rating Drivers & Detailed Description Weakness: * Susceptibility to cyclicality in automotive industry and government regulation: The business risk profile is susceptible to inherent cyclicality in automotive industry, linked to performance of the economy. Also, it is susceptible to change in government policies regarding auto mobiles like pollution norms, electric vehicles etc. * Working capital intensive operations: Gross current assets were at 370-477 days over the three fiscals ended March 31, 2022. Its intensive working capital management is reflected in its gross current assets (GCA) of 370 days as on March 31, 2022. Its's 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 & inventory. Strengths: * Extensive industry experience of the promoters and reputed customer profile: The promoters have an experience of over More than 2 decades in automotive Research and development, design, testing and development. This has given them an understanding of the dynamics of the market and enabled them to establish relationships reputed customer like Tata Motors, Honda, TVS, Ola, M&M. Further, it also benefits from the promoters' experience of over the decades, their strong understanding of market dynamics, and healthy relations with customers and suppliers and will continue to support the business. * Healthy financial profile: JAPL capital structure has been at healthy level due to lower reliance on external funds yielding gearing of 0.78 times and low total outside liabilities to adj tangible networth (TOL/ANW) of 1.03 for year ending on 31st March 2022. JAPL debt protection measures have also been at healthy level due to leverage and healthy profitability. The interest coverage and net cash accrual to total debt (NCATD) ratio are at 2.61 times and 0.73 times for fiscal 2022. JAPL debt protection measures are expected to remain at similar level over medium term. Liquidity Poor Bank limit utilization is moderate at around 70.39 percent for the past twelve months ended April 2023. Cash accruals are expected to be insufficient against term debt obligation of over the medium term. Current ratio is healthy at 2.5 times on March31, 2022. Low gearing and moderate net worth support its financial flexibility, and provides the financial cushion available in case of any adverse conditions or downturn in the business. Rating Sensitivity factors Upward factor * Track record of timely debt servicing for at least 90 days * Improvement in working capital cycle. JAPL, incorporated in 1999 at Coimbatore, Tamil Nadu. JAPL is engaged in manufacturing of automotive components, systems and prototypes. It has reputed client base such as TATA, Jaguar, Renault Nissan, Bosch, Hero etc. The company and owned and managed by Sri B. Jayachandran and Sri J. Anand, Sri D.N. Rao, Smt. Devika Anand, Sri K. Ganesh. JUMBO FIREWORKS: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Jumbo Fireworks India Private Limited (JFIPL) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 11 CRISIL D (Issuer Not Cooperating) Term Loan 1 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with JFIPL 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 JFIPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on JFIPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of JFIPL continues to be 'CRISIL D Issuer Not Cooperating'. JFIPL, incorporated in 2011, manufactures pyrotechnics. The company is based in Sivakasi, Tamil Nadu, and is managed by Mr Raja Singh and Mr Subash Singh. KRISHNAMOHAN ENERGY: Ind-Ra Keeps B+ Rating in Non-Cooperating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Krishnamohan Energy and Infrastructure Private Limited's (KEIPL) Long-Term Issuer Rating of 'IND B+ (ISSUER NOT COOPERATING)' in the non-cooperating category and has simultaneously withdrawn it. Key Rating Drivers Ind-Ra has maintained the ratings to the non-cooperating category because KEIPL did not participate in the rating exercise despite requests by the agency and has not provided information pertaining to the audited financials, interim financials, management certificate, bank limit utilizations. This is in accordance with Ind-Ra's policy of 'Guidelines on What Constitutes Non-cooperation'. Ind-Ra is no longer required to maintain the ratings as the agency has received a request of withdrawal from the issuer. This is consistent with Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra will no longer provide analytical and rating coverage for the company. Company Profile Incorporated in May 2016, KEIPL is setting up a dedicated ethanol manufacturing plant in Madhya Pradesh. Saiyyad Akhtar Ali, Femina Mughal and Kamruddin Mughal are the promoters. KSS PETRON: CRISIL Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of KSS Petron Private Limited (KSSPPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Rating - CRISIL D (ISSUER NOT COOPERATING) Short Term Rating - CRISIL D (ISSUER NOT COOPERATING) CRISIL Ratings has been consistently following up with KSSPPL for obtaining information through letters 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 KSSPPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on KSSPPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of KSSPPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Incorporated in July 2007, KSSPPL is a wholly owned subsidiary of KSS, one of the largest engineering, procurement, and construction companies in Kazakhstan. KSSPPL undertakes projects to lay pipelines, and also executes turnkey projects. KUNJ ROLLER: Ind-Ra Affirms BB+ Bank Loan Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Kunj Roller Flour Mills Pvt. Ltd.'s (KRFM) bank loan rating at 'IND BB+' with a Stable Outlook as follows: -- INR180 mil. Fund-based working capital limits affirmed with IND BB+/Stable rating; and -- INR10 mil. Proposed fund-based working capital limits affirmed with IND BB+/Stable rating. Key Rating Drivers The affirmation reflects KRFM's continued medium scale of operations, where the revenue grew to INR1,464.22 million in FY22 (FY21: INR1,276.64 million). The growth in revenue was owing to an increase in wheat prices, resulting higher sales realizations. According to the numbers provided by the management, the company recorded a revenue of INR1,980 million in FY23. Ind-Ra however expects the revenue to decline in FY24, owning to fluctuations in wheat prices and capacity utilization remaining at a similar level. The ratings further reflect KRFM's continued modest EBITDA margins of 1.93% in FY22 (FY21: 2.39%), which had declined due to an increase in operational expenses. The return on capital employed was 6.2% in FY22 (FY21: 7.1%). Till 9MFY23, the EBITDA margins remained modest at 1.93% (INR27 million). Ind-Ra expects the margins to have remained at a similar level in FY23, and the trend to continue in FY24 due to fluctuations in wheat prices. The ratings are constrained by the continued weak credit metrics. The gross interest coverage (operating EBITDA/gross interest expense) fell to 1.83x in FY22 (FY21: 1.95x) and the net leverage (adjusted net debt/operating EBITDAR) increased to 7.51x (6.4x), due to an increase in the total debt level to INR214.31 million (INR198.27 million) and a decrease in the absolute EBITDA to INR28.31 million (INR30.55 million). Ind-Ra expects the net leverage to have improved in FY23, basis a higher EBITDA of INR 27.40 million till 9MFY23. The agency further expects the metrics to remain stable in FY24 as well on the back of scheduled debt repayments and no further major capex plan in near term. Liquidity Indicator - Stretched: KRFM's average utilization of the fund-based limits was 94.09% during the 12 months ended April 2023. The net working capital cycle remains stretched at 70 days in FY22 (FY21: 66 days) due to an increase in inventory days to 48 (46) and debtor days to 35 (33). The cash flow from operations turned negative INR12.07 million in FY22 (FY21: INR62.86 million) due to an increase in the working capital requirements. In FY22, KRFM had cash and cash equivalents of INR1.64 million (FY21: INR2.09 million). The company does not have any major debt-led capex plans in the near term, but has scheduled debt obligations of INR13.90 million and INR12 million for FY24 and FY25, respectively. Furthermore, the company does not have any capital market exposure and relies on banks and financial institutions to meet its funding requirements. The ratings are, however, supported by the promoters' experience of more than three decades in the wheat processing business. Furthermore, the promoters have an experience in other agro-based businesses (such as solvent extraction and refining), cables and conductors, power and infrastructure, among others. Rating Sensitivities Negative: Deterioration in the profitability and liquidity, leading to the gross interest coverage reducing and staying below 1.5x will be negative for the ratings. Positive: A substantial increase in the scale of operations, along with an improvement in the liquidity and the gross interest coverage exceeding 2.5x, on a sustained basis, will be positive for the ratings. Company Profile Incorporated on May 7, 1997, KRFM operates a flour mill with an installed capacity of 200MT/day. The company sells flour in the eastern part of India under the Rishta Food brand. The mill is located in Bhubaneswar, Odisha while the registered office is in Kolkata. NALGONDA MUNICIPALITY: ICRA Keeps B+ Issuer Rating -------------------------------------------------- ICRA has retained the Long-Term and Short-Term rating of Nalgonda Municipality (NM) in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Issuer Rating - [ICRA]B+(Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. The NM, was upgraded to a Municipality in 2018 from a selection-grade Municipality. The ULB provides municipal services to the city of Nalgonda, situated in the Nalgonda district of Telangana and is governed by the Telangana Municipalities Act 2019 (Act). It covers an area of 105 square kilometre (sq. km.) and serves a population of 2,07,050 (projected for 2021). The major functions of the NM involve water supply, solid waste management, repair and maintenance of roads and street lighting in its area. The ULB is divided into 45 wards and is governed by an elected body (Council), headed by a Chairperson, while the Commissioner acts as the chief executive, overseeing its everyday functioning. RAUNAQ EPC: CRISIL Keeps C Debt Ratings in Not Cooperating ---------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Raunaq EPC International Limited (REIL; part of the REIL group) continue to be 'CRISIL C/CRISIL A4 Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 2.43 CRISIL A4 (Issuer Not Cooperating) Bank Guarantee 38 CRISIL A4 (Issuer Not Cooperating) Bank Guarantee 1.28 CRISIL A4 (Issuer Not Cooperating) Bank Guarantee 5.02 CRISIL A4 (Issuer Not Cooperating) Cash Credit 2 CRISIL C (Issuer Not Cooperating) Cash Credit 1.67 CRISIL C (Issuer Not Cooperating) Proposed Long Term 86.6 CRISIL C (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with REIL for obtaining information through letters 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 REIL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on REIL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of REIL continues to be 'CRISIL C/CRISIL A4 Issuer Not Cooperating'. For arriving at the ratings, CRISIL Ratings has combined the business and financial risk profiles of REIL and its wholly-owned subsidiary, Xlerate Driveline India Ltd (XDIL). Both the companies, together referred to as the REIL group, are under a common management. REIL was set up, by Mr Raunaq Singh, as part of the SP Kanwar group in 1964. The company undertakes mechanical engineering works, mainly related to laying of pipes on turnkey basis. The company participates in power and water supply projects for the public and private sectors. In fiscal 2013, REIL set up XDIL, which has an assembly line in Faridabad (Haryana). XDIL manufactures automotive clutches for the replacement market in the heavy vehicles segment. RNGLAB (INDIA): Insolvency Resolution Process Case Summary ---------------------------------------------------------- Debtor: RNGLAB (India) Private Limited P N 14/A, S.No. 486, Shop No. 13, Namjoshi Building, L.B.S. Road, Sadashiv Peth Pune Pune MH 411030 India Insolvency Commencement Date: May 16, 2023 Estimated date of closure of insolvency resolution process: November 12, 2023 Court: National Company Law Tribunal, Mumbai Bench Insolvency Professional: Ashok Mittal Banglow No 1, Aai Shree Khodiyar Krupa, Datta Pada Road, Rajendra Nagar, Borivali East, Near Jai Santoshi Maa Tower, Mumbai City, Maharashtra 400066 E-mail: ashokmittal2020@gmail.com cirp.rnglab@gmail.com Last date for submission of claims: June 3, 2023 ROLTAS PAPER: CRISIL Reaffirms D Rating on INR8.1cr Term Loan ------------------------------------------------------------- CRISIL Ratings has reaffirmed its 'CRISIL D/CRISIL D' ratings on the bank facilities of Roltas Paper LLP (RPL) on account of confirmation from the banker that there is no default. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.64 CRISIL D (Reaffirmed) Cash Credit 3 CRISIL D (Reaffirmed) Term Loan 8.1 CRISIL D (Reaffirmed) Working Capital Term Loan 0.26 CRISIL D (Reaffirmed) Working Capital Term Loan 2.99 CRISIL D (Reaffirmed) The ratings reflect the extensive experience of the partners of RPL in the paper packaging business and their funding support, and strategic location of plant ensuring easy access to raw material and labour. These strengths are partially offset by average financial risk profile and working capital-intensive operations. CRISIL Ratings had downgraded its ratings on the bank facilities of RPL to 'CRISIL D/CRISIL D' from 'CRISIL BB-/Stable/CRISIL A4+' on February 02, 2023. Key Rating Drivers & Detailed Description Weaknesses: * Large working capital requirement: Gross current assets were sizeable at 228 days as on March 31, 2023, because of receivables of 142 days and inventory of 60 days. This was supported by payables of 67 days as on March 31, 2023. Operations are expected to remain working capital intensive over the medium term. * Susceptibility of operating margin to fluctuations in raw material prices: Operating profitability was 4.7% as on March 31, 2022. However, with stability in business operations and increase in the prices of key raw material (paper), margin is expected to further moderate due to partial ability to pass on variations in raw material prices to customers. Profitability is expected to remain range-bound over the medium term while also being a key rating sensitivity factor. Strengths: * Extensive experience of the partners: Presence of over a decade in the paper packing and other diversified businesses through group entities has enabled the partners to understand industry dynamics and build good relationships with customers and suppliers, thereby continuously helping the firm in stabilizing its business operations. * Moderate capital structure: Despite initial stage of operations and large, debt-funded capex to set up the business, gearing and total outside liabilities to adjusted net worth ratio were 1.25 times and 1.74 times, respectively, as on March 31, 2022. In the absence of further debt-funded capex or reliance on outside debt, capital structure is expected to remain moderate over the medium term. Liquidity: Poor Bank limit utilization is high at around 92.61 percent for the past twelve months ended March 2023. Cash accrual are expected to be over Rs 2 crores which are sufficient against term debt obligation of Rs 1.1 crores over the medium term. In addition, it will be act as cushion to the liquidity of the company. Current ratio is healthy at 1.82 times on March31, 2023. Rating Sensitivity factors Upward factors: * Track record of timely servicing of debt and absence of any irregularity, for at least 3 months * Significant improvement in liquidity. RPL was set up in March 2020 by members of Dalsaniya, Moradiya and Kanjiya families (Dalsaniya and Moradiya families are major stakeholders) and started commercial operations in December 2020. The firm manufactures kraft paper in Morbi, Gujarat. SHARP MINT: Insolvency Resolution Process Case Summary ------------------------------------------------------ Debtor: Sharp Mint Limited Registered Office: 1st Floor, Sager Center, Plot No. 9, Gujrawalan Town, New Delhi-110009 Unit Address 1: Plot No. C-3, SMA Co-op Industrial Area, Karnal Road, New Delhi Unit Address 2: Plot No. F 73 TO F 75 A, 76, BCD Industrial Area, Bhiwadi, Alwar, Rajasthan Unit Address 3: Plot No. C-2, Industrial Area, Chemical Complex, Barabanki, Uttar Pradesh Insolvency Commencement Date: May 19, 2023 Estimated date of closure of insolvency resolution process: November 10, 2023 Court: National Company Law Tribunal, New Delhi Bench Insolvency Professional: Rajender Kumar Jain House No. 3698/1, First Floor, Sector 46-C, Chandigarh-160047 Email: rkjain.ip@gmail.com SCO-818, 1st Floor, Above Yes Bank, NAC, Manimajra, Sector 13, Chandigarh-160101 Email: sharpmintcirp@gmail.com Mobile No: 9875921490 Last date for submission of claims: June 2, 2023 SIR SHADI: CRISIL Keeps C Debt Ratings in Not Cooperating --------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Sir Shadi Lal Enterprises Limited (SSLEL) continue to be 'CRISIL C Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 41 CRISIL C (Issuer Not Cooperating) Cash Credit 30 CRISIL C (Issuer Not Cooperating) Proposed Long Term 9 CRISIL C (Issuer Not Bank Loan Facility Cooperating) Proposed Long Term 5 CRISIL C (Issuer Not Bank Loan Facility Cooperating) Proposed Long Term 1.45 CRISIL C (Issuer Not Bank Loan Facility Cooperating) Proposed Long Term 25 CRISIL C (Issuer Not Bank Loan Facility Cooperating) SEFASU Loan 3.97 CRISIL C (Issuer Not Cooperating) SEFASU Loan 14.58 CRISIL C (Issuer Not Cooperating) Working Capital 70 CRISIL C (Issuer Not Term Loan Cooperating) CRISIL Ratings has been consistently following up with SSLEL 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 SSLEL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SSLEL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SSLEL continues to be 'CRISIL C Issuer Not Cooperating'. SSLEL was established in 1933 by Mr. Shadi Lal. The company manufactures sugar and alcohol at its facilities in Shamli, Uttar Pradesh. It is listed on the Bombay Stock Exchange. VICEROY BANGALORE: CRISIL Keeps D Debt Ratings in Not Cooperating ----------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Viceroy Bangalore Hotels Private Limited (VBHPL) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 75 CRISIL D (Issuer Not Cooperating) Term Loan 31 CRISIL D (Issuer Not Cooperating) Term Loan 50 CRISIL D (Issuer Not Cooperating) Term Loan 50 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with VBHPL 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 VBHPL, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on VBHPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of VBHPL continues to be 'CRISIL D Issuer Not Cooperating'. VBHPL, incorporated in 2010, is setting up a five-star hotel in Bengaluru (Karnataka). The company has a tie-up with Marriott International for managing operations of the hotel, which will operate under the Renaissance brand and is expected to commence operations by September 2015. Viceroy Hotels Ltd holds 40 per cent stake in VBHPL, and JP Morgan Mauritius India Pvt Ltd holds the balance 60 per cent. WOCKHARDT LIMITED: Ind-Ra Moves BB+ Rating to Non-Cooperating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Wockhardt Limited's Long-Term Issuer Rating to the non-cooperating category based on the best available information. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING*)' on the agency website. The instrument-wise rating actions are: -- INR1.112 bil. Term loans due on March 2024 migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING*) rating; -- INR3.390 bil. Fund-based limits migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING*) rating; -- INR1.712 bil. Non-fund-based limits migrated to non- cooperating category with IND A4+ (ISSUER NOT COOPERATING*) rating; and -- INR1,737.5 bil. Fund-based/ non-fund-based interchangeable limits migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING*)/IND A4+ (ISSUER NOT COOPERATING) rating. *Issuer did not cooperate; based on best available information. The ratings were last reviewed on December 22, 2022. Key Rating Drivers Ind-Ra has migrated the ratings in the non-cooperating category because the issuer did not participate in the rating exercise, despite requests by the agency, and has not provided information pertaining to the liquidity position of the company over the near to medium term. Company Profile Founded in 1960, Wockhardt has operations in India, the US, the UK, Ireland, and France. Apart from finished dosage formulations, the company produces injectables, biopharmaceuticals, orals (tablets and liquids) and topicals (creams and ointments). ========= J A P A N ========= FURUKAWA ELECTRIC: Egan-Jones Retains BB+ Senior Unsecured Ratings ------------------------------------------------------------------ Egan-Jones Ratings Company, on May 22, 2023, maintained its 'BB+' foreign currency and local currency senior unsecured ratings on debt issued by Furukawa Electric Co., Ltd. Headquartered in Chiyoda City, Tokyo, Japan, Furukawa Electric Co., Ltd. manufactures wires, cables, and metal products. ===================== N E W Z E A L A N D ===================== BEEKEEPERS HONEY: Court to Hear Wind-Up Petition on June 22 ----------------------------------------------------------- A petition to wind up the operations of The Beekeepers Honey Limited will be heard before the High Court at Christchurch on June 22, 2023, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition against the company on April 19, 2023. The Petitioner's solicitor is: Nanette Cunningham Inland Revenue, Legal Services PO Box 1782 Christchurch 8140 DOCTOR SWEEP: Creditors' Proofs of Debt Due on July 4 ----------------------------------------------------- Creditors of Doctor Sweep NZ Limited are required to file their proofs of debt by July 4, 2023, to be included in the company's dividend distribution. The High Court at Wellington appointed Steven Khov and Kieran Jones of Khov Jones Limited as liquidators on June 6, 2023. PLIMM BUILT: Court to Hear Wind-Up Petition on June 22 ------------------------------------------------------ A petition to wind up the operations of Plimm Built Limited will be heard before the High Court at Christchurch on June 22, 2023, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition against the company on April 28, 2023. The Petitioner's solicitor is: Nanette Cunningham Inland Revenue, Legal Services PO Box 1782 Christchurch 8140 SIGNATURE MARKETING: Creditors' Proofs of Debt Due on Aug. 7 ------------------------------------------------------------ Creditors of Signature Marketing Limited are required to file their proofs of debt by Aug. 7, 2023, 2023, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 6, 2023. The company's liquidators are: Christopher Carey McCullagh Stephen Mark Lawrence PKF Corporate Recovery & Insolvency (Auckland) Limited PO Box 3678 Auckland 1140 ZARTAJ DESIGN: Grant Bruce Reynolds Appointed as Liquidator ----------------------------------------------------------- Grant Bruce Reynolds of Reynolds & Associates on June 6, 2022, were appointed as liquidators of Zartaj Design And Hosting Limited. The liquidator may be reached at: Reynolds & Associates Limited PO Box 259059 Botany Auckland 2163 ===================== P H I L I P P I N E S ===================== CEBU AIR: Egan-Jones Retains CCC- Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company, on May 22, 2023, maintained its 'CCC-' foreign currency and local currency senior unsecured ratings on debt issued by Cebu Air Inc. EJR also withdrew its 'C' rating on commercial paper issued by the Company. Headquartered in Pasay, Philippines, Cebu Air Inc. operates an airline which provides air transportation services. ================= S I N G A P O R E ================= ASCENDAS UTILITIES: Creditors' Proofs of Debt Due on July 10 ------------------------------------------------------------ Creditors of Ascendas Utilities Pte. Ltd. are required to file their proofs of debt by July 10, 2023, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 1, 2023. The company's liquidators are: Leow Quek Shiong Gary Loh Weng Fatt Seah Roh Lin c/o BDO Advisory 600 North Bridge Road #23-01 Parkview Square Singapore 188778 DRINIFINI BEVERAGES: Court Enters Wind-Up Order ----------------------------------------------- The High Court of Singapore entered an order on May 26, 2023, to wind up the operations of Drinifini Beverages Pte. Ltd. Airwallex (Singapore) Pte. Ltd. filed the petition against the company. The company's liquidators are: Wong Joo Wan Tina Phan Mei Ting 1 Commonwealth Lane One Commonwealth #06-21 Singapore 149544 EYE-BIZ PTE: Court Enters Wind-Up Order --------------------------------------- The High Court of Singapore entered an order on May 26, 2023, to wind up the operations of Eye-Biz Pte. Ltd. Johnson & Johnson Pte Ltd filed the petition against the company. The company's liquidators are: Timothy James Reid Ng Yau Yee Theresa Baker Tilly Reid 600 North Bridge Road #05-01 Parkview Square Singapore 188778 KAWAJIMA RE: Creditors' Proofs of Debt Due on July 10 ----------------------------------------------------- Creditors of Kawajima Re Pte. Ltd. are required to file their proofs of debt by July 10, 2023, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 1, 2023. The company's liquidator is: Ong Kok Yeong David c/o Tricor Singapore 80 Robinson Road #02-00 Singapore 068898 LZ FURNITURE: Court to Hear Wind-Up Petition on June 23 ------------------------------------------------------- A petition to wind up the operations of LZ Furniture & Decoration Pte Ltd will be heard before the High Court of Singapore on June 23, 2023, at 10:00 a.m. United Overseas Bank Limited filed the petition against the company on May 31, 2023. The Petitioner's solicitors are: Messrs. Harry Elias Partnership LLP SGX Centre 2 #17-01, 4 Shenton Way Singapore 068807 SINGAPORE AIRLINES: Egan-Jones Retains BB- Sr. Unsecured Ratings ---------------------------------------------------------------- Egan-Jones Ratings Company, on May 26, 2023, maintained its 'BB-' foreign currency and local currency senior unsecured ratings on debt issued by Singapore Airlines Limited. EJR also withdrew its 'A2' rating on commercial paper issued by the Company. Headquartered in Singapore, Singapore Airlines Limited provides air transportation, engineering, pilot training, air charter, and tour wholesaling services. ===================== S O U T H K O R E A ===================== KOREA GAS: Egan-Jones Retains BB+ Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company, on May 25, 2023, maintained its 'BB+' foreign currency and local currency senior unsecured ratings on debt issued by Korea Gas Corporation. Headquartered IN Daegu, South Korea, Korea Gas Corporation manufactures, wholesales, and distributes liquefied natural gas (LNG) and liquefied petroleum gas (LPG) throughout South Korea. TERRAFORM LABS: Do Kwon Could Face Jail in South Korea and the US ----------------------------------------------------------------- Bloomberg News reports that disgraced former crypto titan Do Kwon, the former CEO of Terraform Labs, may spend most of his life behind bars, first in his native South Korea and then in the United States, according to a scenario laid out by a senior prosecutor in the Asian nation. Both countries are seeking Kwon's extradition on charges linked to the collapse of digital tokens he created, an implosion that blew up at least US$40 billion (SGD54 billion), Bloomberg relates. The 31-year-old was arrested in Montenegro in March, ending a spell as a fugitive. It is possible for a person to be tried and sentenced in both jurisdictions on distinct charges, starting with South Korea, said Mr. Dan Sunghan, who heads the probe into the fallen entrepreneur, according to Bloomberg. Mr. Dan is the director of the financial crime investigation bureau at the Seoul Southern District Prosecution Service. That person could then "be extradited to the US and face trial there, and then have the sentence executed in South Korea and the US after that", Mr. Dan said in an interview with Bloomberg News. He added that he expects Kwon to get a record domestic sentence for a financial fraud case, exceeding four decades, the report relays. Kwon co-founded Terraform Labs, which developed a stablecoin called TerraUSD that was meant to have a constant US$1 value via a mix of algorithms and trader incentives involving a sister token, Luna. The edifice fell apart in May 2022, exacerbating a crypto-market rout and contributing to the downfall of a range of digital-asset outfits, the report says. The US Securities and Exchange Commission in February accused Kwon and Terraform Labs of fraud, Bloomberg recalls. US prosecutors later followed up with an indictment. South Korean charges include breaches of capital markets law. "This is the largest financial fraud or financial securities fraud case that has ever happened in South Korea," Bloomberg quotes Mr. Dan as saying. Kwon should be extradited to the Asian nation first, he added. According to Bloomberg, the SEC's lawsuit said Kwon and Terraform Labs transferred more than 10,000 bitcoin out of their doomed project and turned some of the tokens into cash via a Swiss bank. The tokens were put into a so-called cold wallet that does not sit on any digital-asset exchange, according to the complaint. The agency said Kwon and Terraform Labs periodically tapped the wallet since May 2022. Based in Seoul, Korea, Terraform Labs Pte. Ltd. operates a price-stable cryptocurrency. The Company seeks to power the next-generation payment network and grow the real GDP of the blockchain economy. Terraform labs provides financial infrastructure for the next generation of decentralized application. =============== T H A I L A N D =============== DAOL SECURITIES: Fitch Rates New THB150M Sub. Debentures 'BB(tha)' ------------------------------------------------------------------ Fitch Ratings (Thailand) has assigned DAOL Securities (Thailand) Public Company Limited's (DAOLSEC, BB+(tha)/Stable) upcoming issue of up to THB150 million in subordinated unsecured debentures a national long-term rating of 'BB(tha)'. The debentures will have a maturity of one year. The firm plans to use the proceeds for working capital and liquidity purposes. KEY RATING DRIVERS The rating on the subordinated debentures is one notch below DAOLSEC's National Long-Term Rating to reflect the debentures' higher loss-severity risk relative to senior unsecured instruments arising from their subordinated status. Subordinated noteholders rank after senior creditors in the priority of claims. Additional notching has not been applied, due to the lack of going-concern loss-absorption and equity-conversion features. For detail on DAOLSEC's key rating drivers and sensitivities, please see Fitch Affirms DAOL Securities (Thailand) at 'BB+(tha)'; Removes RWN; Outlook Stable. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The rating on the subordinated debentures is sensitive to any change in DAOLSEC's National Long-Term Rating. The rating would be downgraded if DAOLSEC's National Long-Term Rating is downgraded. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Any upgrade of DAOLSEC's National Long-Term Rating would lead to similar action on the rating of the subordinated debentures. Entity/Debt Rating ----------- ------ DAOL Securities (Thailand) Public Company Limited Subordinated Natl LT BB(tha) New Rating ============= V I E T N A M ============= HO CHI MINH CITY DEVELOPMENT: Moody's Confirms B1 Issuer Rating --------------------------------------------------------------- Moody's Investors Service has confirmed Ho Chi Minh City Development JSC Bank's (HDBank) B1 long-term (LT) foreign (FC) and local (LC) currency bank deposits and issuer ratings and the bank's b2 Baseline Credit Assessment (BCA) and Adjusted BCA. Moody's has also confirmed HDBank's B1 LT FC and LC Counterparty Risk Ratings (CRR) and B1(cr) LT Counterparty Risk Assessment (CR Assessment). At the same time, Moody's has affirmed NP short-term (ST) FC and LC CRR; ST FC and LC bank deposit ratings; ST FC and LC issuer ratings; and NP(cr) ST CR Assessment. Moody's has changed the rating outlooks, where applicable, to negative from ratings under review, reflecting the agency's expectation that persistently high loan growth and HDBank's planned acquisition of a weak bank will strain the bank's credit profile. The rating actions concludes the review for downgrade that was initiated on September 9, 2022. RATINGS RATIONALE The confirmation of HDBank's long-term ratings and BCA reflects the bank's broadly stable credit profile through the cycle, underpinned by its granular loan book, strong profitability and capital retention. The rating confirmation also considers the bank's modest funding and liquidity. However, the change in rating outlook to negative reflects Moody's concerns that the bank's aggressive loan growth poses unseasoned risks to its asset quality and can strain its capital and funding. The negative outlook also considers the uncertainty on the bank's credit profile arising from the planned acquisition of a weak bank if HDBank is required to provide any capital and or liquidity support to the target bank. As of March 2023, the bank's nonperforming loan (NPL) ratio was at 1.9%, lower than the average of 2.3% for Moody's rated peers in Vietnam. The bank's NPL ratio is somewhat masked by rapid loan growth. Loans grew at 30% in 2022 and an annualized rate of 36% in the first three months of 2023, more than double than the industry growth rate of 14% and 10% respectively. Nevertheless, the bank's focus on retail and small-and-medium enterprises borrowers has resulted in low concentration risk and reduces the risk of a spike in nonperforming loans. HDBank has strong profitability. For the first three months of 2023, the bank's annualized return on assets was 2.4%, higher than the average of 1.7% for Moody's rated peers. Moody's expects higher credit losses and increase in funding costs to hurt the bank's profitability over the next 12-18 months. Strong profitability has also helped to mitigate the strain on capital due to high loan growth. As of March 31, 2023, the bank's tangible common equity to risk weighted assets was at 9.2%, broadly stable from 9.1% a year earlier. The bank's high reliance on market funds and modest liquidity also pose risks. As of March 31, 2023, market funds as a percentage of tangible banking assets was elevated at 31% while the share of high-quality liquid assets was a modest 9% of the bank's tangible banking assets, providing limited buffer in times of need. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, an upgrade of HDBank's ratings in the near term is unlikely. However, Moody's could revise the outlook to stable if the bank lowers its loan growth appetite in line with system loan growth and if the bank's tangible common equity to risk weighted assets improves to above 11% on a sustained basis. Moody's could downgrade HDBank's deposit and issuer ratings if the rating agency assesses that government support for the bank has weakened. Moody's could downgrade HDBank's b2 BCA and ratings if the bank's nonperforming loans increased above 3%, leading to higher credit costs and a decrease in return on tangible assets to below 1.5% or if the bank's tangible common equity to risk weighted assets ratio declines below 8%. A weakening in HDBank's funding and liquidity will also be negative for the BCA and ratings. The principal methodology used in these ratings was Banks Methodology published in July 2021. Ho Chi Minh City Development JSC Bank (HDB), headquartered in Ho Chi Minh City, reported total assets of VND416 trillion as of December 31, 2022. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. 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