/raid1/www/Hosts/bankrupt/TCRAP_Public/230706.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
Thursday, July 6, 2023, Vol. 26, No. 135
Headlines
A U S T R A L I A
CALIA AUSTRALIA: First Creditors' Meeting Set for July 10
CAPITAL JET: Second Creditors' Meeting Set for July 10
HARDY MINING: First Creditors' Meeting Set for July 11
MURRAY & ROBERTS: Parent Fails in Bid to Regain Control of RUC
NAVIGATE GLOBAL: First Creditors' Meeting Set for July 12
REDZED TRUST 2023-2: Fitch Assigns BB-(EXP) Rating to Class F Bonds
REX AIRLINES: Expects AUD35MM Loss Due to Pilot, Engineer Shortage
WELLS SURGICAL: First Creditors' Meeting Set for July 11
C H I N A
BANK OF BEIJING: Fitch Affirms 'BB+' LT Foreign Currency IDR
CHINA GUANGFA: Fitch Affirms 'BB+' LT Foreign Currency IDR
CHINA MINSHENG: Fitch Affirms 'BB+' LT Foreign Currency IDR
HUA XIA: Fitch Affirms 'BB+' LT Foreign Currency IDR
JINKE PROPERTY: May Get Restructuring Aid From Bad Debt Manager
PING AN BANK: Fitch Affirms 'BB+' LT Foreign Currency IDR
H O N G K O N G
DANTAI CAPITAL: To Liquidate Flagship Fund
I N D I A
AISWARYA INFRA: CRISIL Keeps C Debt Ratings in Not Cooperating
EVERSHINE WOOD: CRISIL Lowers Long and Short Term Ratings to D
HILLCREST FOODS: CRISIL Keeps D Debt Rating in Not Cooperating
HYDERABAD WINE: CRISIL Keeps D Debt Ratings in Not Cooperating
ICON CABLES: CRISIL Keeps D Debt Ratings in Not Cooperating
KAILASANADHA TEXTILES: CRISIL Keeps D Ratings in Not Cooperating
KRISHNA ABODES: CRISIL Keeps D Debt Rating in Not Cooperating
OMTEE STEEL: CRISIL Keeps D Debt Ratings in Not Cooperating
RADHIKA INFRA: CRISIL Keeps D Debt Rating in Not Cooperating
RAMESHWAR SAHAKARI: CRISIL Keeps D Ratings in Not Cooperating
REDHU FARMS: CRISIL Keeps D Debt Ratings in Not Cooperating
RELIABLE CASHEW: CRISIL Lowers Rating on INR15cr Loan to D
SAJ ROOFING: CRISIL Keeps D Debt Ratings in Not Cooperating
SATYAM SOLUTIONS: CRISIL Keeps D Debt Ratings in Not Cooperating
SHANTDEEP METALS: CRISIL Keeps D Debt Ratings in Not Cooperating
SHARAYU AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
SIYARAM EXPORTS: CRISIL Keeps D Debt Ratings in Not Cooperating
SOWBHAGYALAKSHMI PADDY: CRISIL Keeps D Ratings in Not Cooperating
SOWBHAGYALAKSHMI RAW: CRISIL Keeps D Ratings in Not Cooperating
SPICEJET LTD: Hearing on Willis Insolvency Plea Moved to July 21
SURYA POULTRY: CRISIL Keeps D Debt Ratings in Not Cooperating
SUVEERA AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
TARA SALES: CRISIL Keeps D Debt Rating in Not Cooperating
THOUSU PERIYAKKAL: CRISIL Keeps D Debt Ratings in Not Cooperating
TORNADO MOTORS: CRISIL Keeps D Debt Ratings in Not Cooperating
TORRID MOTORS: CRISIL Keeps D Debt Ratings in Not Cooperating
TRISTAR GLOBAL: CRISIL Keeps D Debt Ratings in Not Cooperating
UJALA PUMPS: CRISIL Keeps D Debt Ratings in Not Cooperating
VEGA JEWELDIAM: CARE Keeps D Debt Rating in Not Cooperating
VINOD TEXWORLD: CRISIL Keeps D Debt Ratings in Not Cooperating
WOOGA CERAMIC: CRISIL Keeps D Debt Ratings in Not Cooperating
J A P A N
TOSHIBA CORP: S&P Keeps 'BB+' Long-Term ICR on CreditWatch Negative
N E W Z E A L A N D
BED SHED: Court to Hear Wind-Up Petition on July 21
BENNETT BUILDING: Creditors' Proofs of Debt Due on Aug. 5
COTTER BUILDERS: Creditors' Proofs of Debt Due on Aug. 2
FISHER INVESTMENTS: Creditors' Proofs of Debt Due on Aug. 11
LUXURY NAILS: Court to Hear Wind-Up Petition on July 10
WAIPARA WINDS: Receivers Investigate Jailed US Fraudster
S I N G A P O R E
DIGITAL ALPHA: Court Enters Wind-Up Order
FASTFREIGHT PTE: Court Enters Wind-Up Order
QGC TRADE: Court to Hear Wind-Up Petition on July 14
SELENE INVESTMENTS: Creditors' Proofs of Debt Due on Aug. 4
TRI-VIEW SHIPPING: Creditors' Proofs of Debt Due on Aug. 2
WIRECARD AG: Singapore Sends Businessman to Jail for Role in Fraud
S O U T H K O R E A
CJ CGV: Struggles to Secure Cash Amid Sluggish Ticket Sales
- - - - -
=================
A U S T R A L I A
=================
CALIA AUSTRALIA: First Creditors' Meeting Set for July 10
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Calia
Australia Pty Ltd will be held on July 10, 2023, at 11:00 a.m. at
the offices of Jirsch Sutherland, Level 30, 140 William Street at
Melbourne and via Zoom.
Glenn Anthony Crisp and Andrew Mattinson of Jirsch Sutherland were
appointed as administrators of the company on June 28, 2023.
CAPITAL JET: Second Creditors' Meeting Set for July 10
------------------------------------------------------
A second meeting of creditors in the proceedings of Capital Jet
Resources Pty Ltd has been set for July 10, 2023 at 2:00 p.m. via
Microsoft Teams 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 July 9, 2023 at 5:00 p.m.
Lee Crosthwaite of Worrells was appointed as administrator of the
company on Dec. 22, 2022.
HARDY MINING: First Creditors' Meeting Set for July 11
------------------------------------------------------
A first meeting of the creditors in the proceedings of Hardy Mining
Pty Ltd will be held on July 11, 2023, at 11:00 a.m. at the offices
of Setter Shepard at Level 2, 117 Clarence Street in Sydney and via
virtual meeting technology.
Adam Shepard of Setter Shepard was appointed as administrator of
the company on June 29, 2023.
MURRAY & ROBERTS: Parent Fails in Bid to Regain Control of RUC
--------------------------------------------------------------
Engineering News reports that JSE-listed engineering and
construction group Murray & Roberts (M&R) has failed in its initial
bid to regain control of RUC Cementation Mining Contractors (RUC),
which was lost to the group when its Australian holding company
entered administration in December, together with Clough.
According to the report, M&R told shareholders on July 4 that it
had received notice from the administrators on July 3 that certain
conditions precedent related to a Deed of Company Arrangement
(DOCA) proposal term sheet prepared as part of an effort to regain
control of RUC had not been satisfied and had, thus, been
terminated.
Group investor and media executive Ed Jardim told Engineering News
that M&R would continue to explore a way forward to regain control
of RUC.
"We just won't be in an exclusive process through the DOCA
anymore," he said, notes the report.
Engineering News relates that Mr. Jardim confirmed that a receiver
had been appointed to run RUC in the interim and RUC could either
be sold or the creditors might decide to take over the running of
the business.
M&R also recently established Cementation APAC as a possible
alternative vehicle to provide engineering and contracting services
to mining clients in the Asia Pacific region, but had viewed
regaining control of RUC as its preferred option, the report
notes.
Cementation APAC is based in Perth and is overseen by the group's
mining platform CEO, Mike da Costa.
"The Cementation brand is well known in the global mining space and
the group will continue to target Australian mining opportunities
in joint venture with our businesses in North America, Cementation
Americas, and Murray & Roberts Cementation in sub-Saharan Africa,"
the report quotes Mr. Jardim as saying.
RUC previously contributed about one-third to M&R's mining platform
and its loss meant that the group's mining platform currently
comprised two regional businesses in Africa and the Americas.
The remaining mining platform had combined orders worth
ZAR14-billion at the end of December.
With the loss of Clough, the mining platform formed the core of the
downscaled M&R, which had also retained a unit in sub-Saharan
Africa, which is focusing on power, industrial and water projects,
the report states.
About Clough Group
Perth-based Clough Group builds industrial projects in the energy,
resources and infrastructure sector.
On Dec. 5, 2022, Clough's South African owners, Murray & Roberts,
appointed Sal Algeri, Jason Tracy, Glen Kanevsky and David Orr of
of Deloitte as voluntary administrators of Clough Limited and
related entities on Dec. 5, 2022. The related entities are: Murray
& Roberts Pty Ltd, Clough Projects Australia Pty Ltd, Clough
Projects International Pty Ltd, Clough Engineering Pty Ltd, Clough
Projects Pty Ltd, Clough Operations Pty Ltd, Clough Overseas Pty
Ltd, Clough Seam Gas Pty Ltd, Clough Engineering & Integrated
Solutions (CEIS) Pty Ltd, E2o Pty Ltd, and Sharp Resources Pty
Ltd.
On Feb. 3, 2023, Webuild signed the contract with the Deloitte
Administrators of Clough Limited in Australia to acquire Clough
assets.
NAVIGATE GLOBAL: First Creditors' Meeting Set for July 12
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Navigate
Global Payments Pty Ltd will be held on July 12, 2023, at 10:00
a.m. at the offices of Vincents at Level 34, 32 Turbot Street in
Brisbane and via virtual meeting technology.
Nick Combis of Vincents Chartered Accountants was appointed as
administrator of the company on June 30, 2023.
REDZED TRUST 2023-2: Fitch Assigns BB-(EXP) Rating to Class F Bonds
-------------------------------------------------------------------
Fitch Ratings has assigned expected ratings to RedZed Trust Series
2023-2's mortgage-backed pass-through floating-rate bonds. The
issuance consists of notes backed by a pool of first-ranking
Australian conforming and non-conforming residential full- and
low-documentation mortgage loans originated by RedZed Lending
Solutions Pty Limited.
The notes will be issued by Perpetual Trustee Company Limited in
its capacity as trustee of RedZed 2023-2. This is a separate and
distinct series created under a master trust deed.
RedZed Trust Series 2023-2
A LT AAA(EXP)sf Expected Rating
B LT AA(EXP)sf Expected Rating
C LT A(EXP)sf Expected Rating
D LT BBB(EXP)sf Expected Rating
E LT BB(EXP)sf Expected Rating
F LT BB-(EXP)sf Expected Rating
G1 LT NR(EXP)sf Expected Rating
G2 LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
The collateral pool totaled AUD500 million and consisted of 697
obligors with a weighted-average (WA) unindexed and indexed current
loan/value ratio (LVR) of 66.1% at the 31 May 2023 cut-off date.
KEY RATING DRIVERS
Sufficient Credit Enhancement: The 'AAAsf' weighted-average
foreclosure frequency (WAFF) of 17.9% is driven by the
weighted-average (WA) unindexed current loan/value ratio (LVR) of
66.1%, low-documentation loans making up 89.3% of the pool,
self-employed borrowers accounting for 95.7% and, under Fitch's
methodology, non-conforming and investment loans forming 16.8% and
43.3%, respectively.
The portfolio loss at each rating level has increased marginally
from the previous RedZed residential mortgage transaction, RedZed
Trust Series 2022-3, due to a higher proportion of investment,
low-documentation, non-conforming and high current LVR loans. For
example, the 'AAAsf' portfolio loss has increased to 7.3%, from
6.9% for the previous RedZed RMBS. The class A, B, C, D, E and F
notes benefit from subordination of 7.2%, 5.0%, 3.2%, 1.5%, 0.8%
and 0.3%, respectively. The notes also benefit from excess spread,
which forms an integral part of the credit enhancement available to
each note. The transaction has structural features that include
retention and amortisation amounts that redirect available excess
income not used to reimburse losses to repay notes principal
balances.
Limited Liquidity Risk: The transaction benefits from a liquidity
facility sized at 1.5% of the invested note balance (excluding
class G), with a floor of AUD750,000; this is sufficient to
mitigate payment interruption risk.
Low Operational and Servicing Risk: RedZed was established in 2006
and is an experienced specialist lender for self-employed
borrowers. Fitch undertook an operational review and found that the
operations of the originator and servicer were comparable with
market standards.
Tight Labour Market to Support Outlook: Portfolio performance is
supported by Australia's continued economic growth and tight labour
market, despite increasing interest rates. GDP growth year to March
2023 was 2.3% and unemployment was 3.6% in May 2023. We expect GDP
growth to slow to 1.5% in 2023, with unemployment reaching 4.0%,
reflecting high inflation combined with a slowdown in consumer
spending.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
An upgrade could result from macroeconomic conditions, loan
performance and credit losses that are better than Fitch's baseline
scenario 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.
Upgrade Sensitivities
The class A note is at 'AAAsf', which is the highest level on
Fitch's scale. The ratings cannot be upgraded and upgrade
sensitivity scenarios are not relevant. Sensitivity stress results
for the remaining rated notes are as follows:
Note: B / C / D / E / F
Rating: AAsf/ Asf / BBBsf / BBsf / BB-sf
Reduce defaults by 15% and increase recoveries by 15%: AA+sf / AAsf
/ Asf / BBB+sf / BBBsf
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The transaction's performance may be affected by changes in market
conditions and the economic environment. Weakening asset
performance is strongly correlated with increasing levels of
delinquencies and defaults that could reduce CE available to the
notes.
Downgrade Sensitivities:
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. Fitch applies the recovery rate stress to the recovery
rate to isolate the effect of a change in recovery proceeds at the
borrower level.
Note: A / B / C / D / E / F
Rating: AAAsf / AAsf / Asf / BBBsf / BBsf / BB-sf
Increase defaults by 15%: AA+sf / AA-sf / A-sf / BBB-sf / B+sf /
B+sf
Increase defaults by 30%: AAsf / A+sf / A-sf / BBB-sf / B+sf / Bsf
Reduce recoveries by 15%: AAsf / A+sf / A-sf / BB+sf / B+sf / below
Bsf
Reduce recoveries by 30%: AA-sf / Asf / BBBsf / BB-sf / below Bsf /
below Bsf
Increase defaults by 15% and reduce recoveries by 15%: AA-sf / Asf
/ BBB+sf / BBsf / Bsf / below Bsf
Increase defaults by 30% and reduce recoveries by 30%: Asf / BBB+sf
/ BB+sf / Bsf / below Bsf / below Bsf
DATA ADEQUACY
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available to Fitch
for this transaction.
As part of its ongoing monitoring, Fitch reviewed a small targeted
sample of RedZed's origination files and found the information
contained in the reviewed files to be adequately consistent with
the originator's policies and practices and the other information
provided to the agency about the asset portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
REX AIRLINES: Expects AUD35MM Loss Due to Pilot, Engineer Shortage
------------------------------------------------------------------
News.com.au reports that Rex Airlines has forecast a AUD35 million
loss for the financial year, with the regional airline citing a
lack of pilots and engineers, as well as a drop in business travel,
for their reduced flight schedules.
Rex made the grim announcement in a company statement to the ASX on
July 4, new.com.au says.
"The global shortage of pilots and engineers, along with supply
chain shocks post-Covid have disrupted Rex's network, forcing Rex
to make significant reductions to its flight schedules over the
last couple of months to match the need for aircraft, pilots and
engineers to what is available," the airline said in the
statement.
"Furthermore, business travel in the months of May and June have
significantly reduced due largely to corporate travel budgets being
exhausted following exponential increases of international fares."
Rex describes itself as Australia's biggest independent regional
airline, operating a fleet of 59 Saab 340s and seven Boeing 737s to
58 locations around the country.
According to the report, the airline said it remained "optimistic"
on its outlook on a group operational profit before tax for the
2024 financial year and said unaudited revenue from regional Saab
operations had been above pre-Covid levels.
Rex entered a trading halt on July 3 pending July 4's
announcement.
The Australian reported on July 3 that a third of the airline's
fleet of Saab 340s was not running due to a lack of skilled
workers, news.com.au relays.
About Rex Airlines
Regional Express Pty. Ltd., trading as Rex Airlines (and as
Regional Express Airlines on regional routes), is an Australian
airline based in Mascot, New South Wales. It operates scheduled
regional and domestic services. It is Australia's largest regional
airline outside the Qantas group of companies and serves all 6
states across Australia. It is the primary subsidiary of Regional
Express Holdings.
Rex Airlines reported three consecutive annual net losses of
AUD19.40 million, AUD3.86 million, and AUD46.14 million for the
years ended June 30, 2020, 2021 and 2022, respectively.
WELLS SURGICAL: First Creditors' Meeting Set for July 11
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Wells
Surgical Pty Ltd will be held on July 11, 2023, at 10:30 a.m. at
the offices of SV Partners at 22 Market Street in Brisbane.
Terry Grant Van der Velde of SV Partners was appointed as
administrator of the company on June 29, 2023.
=========
C H I N A
=========
BANK OF BEIJING: Fitch Affirms 'BB+' LT Foreign Currency IDR
------------------------------------------------------------
Fitch Ratings has upgraded Bank of Beijing Co., Ltd.'s (BOB)
Viability Rating (VR) to 'bb-' from 'b+'. At the same time, Fitch
has affirmed BOB's Long-Term Foreign-Currency Issuer Default Rating
(IDR) at 'BB+', Government Support Rating (GSR) at 'bb+', and
Short-Term IDR at 'B'. The Outlook is Stable. The assigned VR is in
line with the implied VR but does not drive its IDRs.
The upgrade of BOB's VR is driven by Fitch's assessment that, like
other similarly sized banks in China, its intrinsic credit profile
has benefitted from regulatory developments in recent years. This
has resulted in a reduction in its off-balance-sheet activities as
well as a moderating risk appetite. These were factors Fitch had
identified as potential outcomes when Fitch upgraded the operating
environment (OE) assessment to 'bbb-' from 'bb+' in 2021.
KEY RATING DRIVERS
Government Support-Driven IDR: The Long-Term IDR is driven by
Fitch's assessment of a moderate probability of government support,
as indicated by the assigned GSR of 'bb+'. Fitch's view considers
the bank's limited size and modest domestic systemic importance. It
also recognises BOB's entrenched franchise within Beijing,
including its business relationships with state-owned enterprises.
BOB's Short-Term IDR of 'B' is mapped to its Long-Term IDR.
Differentiation in D-SIB Status: China's regulators designated BOB
as a domestic systemically important bank (D-SIB) in October 2021.
Still, Fitch believes the D-SIB designation alone may not
materially affect the state's propensity to support BOB relative to
peers with higher systemic importance or closer government
linkages. This is because the government is likely to prioritise
its support for larger D-SIBs if China's banking system experiences
systemic stress.
Stable OE: Fitch expects China's economic growth to recover in 2023
as Covid-19 restrictions are lifted, which will support
consumption. The OE score of 'bbb-'/stable is above the 'bb'
category implied score, as we believe China's robust external
finances and a record of stable economic performance, which are
incorporated in the Chinese sovereign rating (A+/Stable), will
provide greater financial and economic stability than the implied
OE score indicates.
High Concentration Supports Business Profile: BOB has close
relationships with large state-owned enterprises in the capital
city. Around half of its loans and two-thirds of its revenue come
from the Beijing area, which has one of the most resilient local
economies in China, and the contribution has remained stable over
the years.
However, BOB's business profile score of 'bb' is lower than the
'bbb' implied category score due to issues over management and
governance. Such issues are not uncommon in China due to pressure
from the authorities to support certain borrower segments during
challenging times. The score also reflects the bank's above-peer
exposure to entrusted investment, which was reported at 12% at
end-2022.
Reduction in Shadow Banking: Fitch revised upwards both BOB's
risk-profile and asset-quality scores to 'bb-', from 'b+', to
reflect the reduction in its shadow-banking activity, in line with
the regulatory tightening by China's authorities. BOB's
off-balance-sheet wealth-management products (WMPs) declined to
around 16% of deposits by end-2022, from 21% at end-2021.
Fitch expects BOB to maintain a largely stable reported
impaired-loan ratio (1.4% at end-2022) in light of its continued
non-performing loan resolution. The 'bb-' asset-quality score is
below the 'bbb' category implied score to reflect the bank's higher
growth appetite and exposure to shadow-banking activity relative to
higher rated peers.
Stable Profitability: BOB's earnings and profitability score of
'b+' is below the 'bb' category implied score, reflecting the
understatement of risk-weight calculations from non-loan exposures.
Fitch expects its operating profit/risk-weighted assets ratio,
reported at around 1.2% in 2022, to benefit from its focus in
Beijing and remain largely stable, despite continued pressure on
the net interest margin.
Entrusted Investments Weigh on Capitalisation: The capitalisation
and leverage score of 'b+' is below the 'bb' category implied
score, reflecting Fitch's belief of understatement of risk-weight
calculations from non-loan exposures. Fitch expects BOB's high
entrusted investment exposure (12% of total assets at end-2022) to
continue to weigh on its capitalisation. Its reported common equity
Tier 1 (CET1) ratio declined to 9.5% by end-1Q23, from 9.9% at
end-2021.
Reliance on Non-Deposit Funding: Fitch expects the loan-to-deposit
ratio (LDR) to remain stable in the next two years. The upward
revision also reflects its improving retail deposit franchise that
increased to 28% of total deposits by end-2022, from 23% at
end-2019. That said, the score is still below the 'bbb' category
implied score in light of the bank's reliance on non-deposit
funding, similar to most other Chinese banks, which may result in
an understatement of the LDR and strain BOB's on-balance-sheet
funding.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
BOB's Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity and/or ability
to provide timely extraordinary support to the bank is diminished.
A sovereign rating downgrade could indicate diminished ability to
support, and the lower propensity may be reflected in an enhanced
resolution framework and the authorities' strong intention to
permit losses on senior debt obligations as a means of resolving
banks. However, Fitch does not expect either scenario to occur in
the near term.
A reduction in the Beijing government's ownership or influence over
BOB may also lower the state's propensity to support the bank if
the reduction were to be significant, or if the bank's systemic
importance were to reduce materially.
BOB's Short-Term IDR will be downgraded if its Long-Term IDR is
downgraded to or below 'CCC+', which Fitch considers highly
unlikely in the short-to-medium term.
BOB's VR could be downgraded if the OE score is downgraded or if
the bank returns to growing its entrusted investments or WMPs
excessively, and significantly erodes asset quality and capital
buffers. A sustained deterioration in the bank's financial metrics
without having largely addressed perceived risks around
transparency of exposures (such as off-balance sheet and non-loan),
could lead to a VR downgrade. This includes a combination of the
following reported core metrics:
- The four-year average of impaired loans/gross loans increasing
to and being sustained at around 6% (2019-2022 reported four-
year average: 1.5%), although Fitch's assessment of asset
quality will also consider other indicators, such as "special-
mention" loans, loan-loss provisioning, and whether and to what
extent Fitch believes reported metrics understate any
deterioration in asset quality; and
- CET1 ratio falling below 8.5% without a credible path to return
to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of China's sovereign ratings could lead to positive
rating action on the bank's GSR and its support-driven IDRs if that
were to indicate greater ability to support BOB, with no less
propensity to support.
BOB's Short-Term IDR would be upgraded if its Long-Term IDR is
upgraded.
An improvement in BOB's capitalisation such that its CET1 ratio
will be sustained above 10%, in conjunction with a further
reduction in risk appetite and greater transparency in its
financial statements - particularly around risks relating to
shadow-banking activity, affecting Fitch's assessment of
asset-quality metrics - would be positive for its VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
BOB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) has
been upgraded to 'BB-(xgs)' from 'B+(xgs)' following the upgrade of
the VR, while the Short-Term IDR (xgs) has been affirmed at
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The Short-Term IDR (xgs) could be downgraded if the VR
is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The Short-Term IDR (xgs) could be upgraded if the VR is
upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score due to the following adjustment reason: sovereign
rating (positive).
The business profile score of 'bb' has been assigned below the
'bbb' category implied score due to the following adjustment
reason: management and governance (negative) and business model
(negative).
The asset-quality score of 'bb-' has been assigned below the 'bbb'
category implied score due to the following adjustment reason:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b+' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: risk-weight calculations (negative).
The capitalisation and leverage score of 'b+' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: leverage and risk-weight calculation
(negative).
The funding and liquidity score of 'bb-' has been assigned below
the 'bbb' category implied score due to the following adjustment
reason: non-deposit funding (negative) and deposit structure
(negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
BOB's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
BOB has an ESG Relevance Score of '4' for Financial Transparency as
there are still structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect our assessment of the OE and the financial
profile. BOB, like other mid-tier banks, is more exposed to this
risk relative to state banks, due to its larger exposure to WMPs
and entrusted investments stemming from the use of
off-balance-sheet transactions. This 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.
CHINA GUANGFA: Fitch Affirms 'BB+' LT Foreign Currency IDR
----------------------------------------------------------
Fitch Ratings has upgraded China Guangfa Bank Co., Ltd.'s (CGB)
Viability Rating (VR) to 'b+' from 'b'. At the same time, Fitch has
affirmed CGB's Long-Term Foreign-Currency Issuer Default Rating
(IDR) at 'BB+', Short-Term IDR at 'B' and Government Support Rating
(GSR) at 'bb+'. The Outlook on the Long-Term IDR is Stable. The
assigned VR is in line with the implied VR but does not drive its
IDRs.
The upgrade of CGB's VR is driven by Fitch's assessment that, like
other similarly sized banks in China, its intrinsic credit profile
has benefitted from regulatory developments in recent years,
resulting in a reduction in its off-balance-sheet activity as well
as a moderating risk appetite. These were factors Fitch had
identified as potential outcomes at the time Fitch raised its
operating environment (OE) assessment to 'bbb-' from 'bb+' in
2021.
KEY RATING DRIVERS
Government Support-Driven IDR: CGB's Long-Term IDR reflects Fitch's
assessment of a moderate likelihood of government support in the
event of stress, as expressed by the GSR. Fitch said, "Our view
considers the bank's limited market share nationally and modest
domestic systemic importance. CGB's 'B' Short-Term IDR is mapped to
its Long-Term IDR."
Differentiation in D-SIB Status: "Chinese authorities designated
CGB a domestic systemically important bank (D-SIB) in 2021.
However, we believe the formal D-SIB designation alone may not
significantly affect the state's propensity to support CGB to the
same extent as peers with higher systemic importance or closer
government linkages. This is because the government's ability to
support a large number of D-SIBs may be constrained by the size of
China's banking system under stress," Fitch said.
Stable OE: Fitch said, "We expect China's economic growth to
recover in 2023 as Covid-19 restrictions have been lifted, which
will support consumption. Our OE score of 'bbb-'/stable is above
the 'bb' category implied score, as we believe China's robust
external finances and a record of stable economic performance,
which are incorporated in the Chinese sovereign rating, will
provide greater financial and economic stability than the implied
OE score indicates."
Improvement in Retail Franchise: The revision of CGB's business
profile score to 'bb' from 'bb-' reflects an improvement in its
retail franchise that has resulted in a higher proportion of retail
deposits in its mix. That said, the 'bb' business profile score is
below the 'bbb' implied category score to reflect management and
governance limitations and exposure to shadow-banking activity,
similar to most Chinese banks rated by Fitch.
Management and governance limitations are not uncommon in China
because of pressure from the authorities to support segments of
borrowers during challenging times. High exposure to riskier types
of unsecured loans also renders CGB's business model susceptible to
market volatility and economic challenges.
Reduction in Shadow-Banking Activity: Fitch revised both CGB's risk
appetite and asset-quality score to 'b+' from 'b' to reflect the
reduction in its shadow-banking activity, in line with the
regulatory tightening enforced by China's authorities, and its
non-performing loan (NPL) resolution in recent years. This is
balanced against CGB's large lending exposure to sectors that Fitch
regards as riskier, such as credit card receivables, and its high
growth appetite relative to its capitalisation.
Still, CGB's asset-quality score of 'b+' is below the implied 'bbb'
category score due to its relatively large high-risk exposures and
growth appetite compared with larger mid-tier banks, and Fitch's
perception of underwriting standards relative to state banks and
large mid-tier banks. CGB has a large exposure to riskier loan
types and its loan-loss allowance ratio is modest compared with
that of other mid-tier banks. CGB's reported NPL ratio under local
regulatory standards was 1.6% at end-2022, compared with its
impaired-loan ratio of 2.1%.
Profitability Lags Peers: CGB's earnings and profitability score
has been revised to 'b' from 'b-' as Fitch expects its underlying
profitability to become less volatile, supported by regulatory
changes and reduction in its off-balance-sheet activity. However,
Fitch expects CGB's profitability to remain below the peer average.
The earnings and profitability score of 'b' is still below the 'bb'
category implied score to reflect potential risk-weighted asset
understatement due to its high non-loan exposure.
Limited Capital Buffers: CGB, as a D-SIB, is subject to a minimum
common equity Tier 1 (CET1) requirement of 7.75%. Its CET1 ratio
rose to 8.8% by end-2022 from 7.9% at end-2021 after a private
placement of CNY18.4 billion in 2022. Still, the bank's weak
profitability and large growth appetite may continue to suppress
its CET1 capital. As such, its capitalisation and leverage score of
'b' is unchanged and below the 'bb' category implied score to
reflect understatement in its risk-weight calculations due to its
high non-loan exposures.
Improving Funding Profile: The revision of CGB's funding profile
score to 'bb-' from 'b+' reflects the rising contribution of retail
deposits to total funding due to the bank's efforts to improve its
retail contribution to total deposit funding. The revised funding
and liquidity score of 'bb-' is below the 'bbb' category implied
score, given the bank's greater reliance on non-deposit funding
(similar to most other Chinese banks) relative to higher-rated
banks, which makes it more vulnerable to market volatility in
funding.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity or ability to
provide timely extraordinary support has diminished. For example, a
sovereign rating downgrade could reflect diminished ability to
provide support, while lower propensity may be reflected through an
enhanced resolution framework and strong intention by the
authorities to permit losses on senior debt obligations as a means
of resolving banks, although we do not expect either scenario to
occur in the near term.
A significant reduction in state ownership or indirect influence
over CGB through its largest shareholder, China Life Insurance
Company Limited (A/Stable), or if the bank's systemic importance
were to deteriorate, may also lower the propensity of the state to
support the bank.
The Short-Term IDR will not be downgraded unless the Long-Term IDR
is downgraded to 'CCC+' or below, which we view as highly unlikely
in the short-to-medium term.
The VR could be downgraded if the OE score is lowered or if we
assess the bank to have materially increased its risk appetite,
especially in credit-card lending, or aggressively increases
exposure to entrusted investments or wealth-management products,
eroding its modest capital buffer. A sustained deterioration in
financial metrics could lead to a VR downgrade, including a
combination of the following reported core metrics without having
largely addressed perceived risks around the transparency of its
exposures, including off-balance sheet and non-loan exposures:
- The four-year average of the impaired loan/gross loan ratio
increasing to and remaining at around 8%, although Fitch's
assessment of asset quality will also consider other
indicators, such as "special-mention" loans, loan-loss
provisioning and whether (and to what extent) Fitch believes
reported metrics understate any deterioration in asset quality;
and
- The CET1 ratio falling below 8.0% without a credible path to
return to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of the sovereign ratings could lead to positive rating
action on the GSR and the support-driven IDRs if that were to
indicate greater ability to support the bank with no less
propensity to provide support.
The Short-Term IDR will be upgraded if CGB's Long-Term IDR is
upgraded.
An improvement in CGB's capitalisation such that its CET1 ratio is
maintained at around 10% in conjunction with a further reduction in
risk appetite and greater transparency in asset-quality metrics
would be positive for its VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
CGB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) has
been upgraded to 'B+(xgs)' from 'B(xgs)' following the upgrade of
the VR, while the Short-Term IDR (xgs) has been affirmed at
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The Short-Term IDR (xgs) could be downgraded if the VR
is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The Short-Term IDR (xgs) could be upgraded if the VR is
upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score for the following adjustment reason: sovereign rating
(positive).
The business profile score of 'bb' has been assigned below the
'bbb' category implied score for the following adjustment reason:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score for the following adjustment reason:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b' has been assigned below
the 'bb' category implied score for the following adjustment
reason: risk-weight calculation (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score for the following adjustment
reason: leverage and risk-weight calculation (negative).
The funding and liquidity score of 'bb-' has been assigned below
the 'bbb' category implied score for the following adjustment
reason: non-deposit funding (negative), and deposit structure
(negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
CGB's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
CGB has an ESG Relevance Score of '4' for Financial Transparency
due to structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect Fitch's assessment of the OE and the bank's
financial profile. CGB, like other mid-tier banks, is more exposed
to this risk relative to state banks because of its larger exposure
to WMPs and entrusted investments. This stems from the use of
off-balance-sheet transactions. This 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.
RATING ACTIONS
ENTITY / DEBT RATING PRIOR
------------- ------ -----
China Guangfa Bank Co., Ltd.
LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Upgrade b
Government Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs) Upgrade B(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
CHINA MINSHENG: Fitch Affirms 'BB+' LT Foreign Currency IDR
-----------------------------------------------------------
Fitch Ratings has upgraded China Minsheng Banking Corp., Ltd.'s
(CMBC) Viability Rating (VR) to 'b+', from 'b'. At the same time,
Fitch has affirmed CMBC's Long-Term Foreign-Currency Issuer Default
Rating (IDR) at 'BB+', Short-Term IDR at 'B' and Government Support
Rating (GSR) at 'bb+'. The Outlook on the Long-Term IDR is Stable.
The assigned VR is in line with the implied VR, but does not drive
the IDRs.
The upgrade of CMBC's VR is driven by Fitch's assessment that, like
other similarly sized banks in China, its intrinsic credit profile
has benefited from regulatory developments in recent years that
have reduced its off-balance-sheet activities and moderated risk
appetite at the bank. These were factors Fitch had identified as
potential outcomes when Fitch upgraded the operating environment
(OE) assessment for Chinese banks to 'bbb-' in 2021.
KEY RATING DRIVERS
Government Support-Driven IDR: CMBC's Long-Term IDR is driven by
Fitch's assessment of a 'Moderate' likelihood of government support
in the event of stress. This takes into consideration the bank's
limited market share nationally, especially in terms of retail
deposits, lack of parental support, as well as limited regional
significance and government linkages. That said, CMBC is one of the
largest among the mid-tier banks rated by Fitch. CMBC's 'B'
Short-Term IDR is mapped to its Long-Term IDR.
D-SIB Status Differentiated from Larger Banks: The Chinese
authorities designated CMBC as a domestic systemically important
bank (D-SIB) in 2021. However, Fitch does not believe the
designation alone will influence the China sovereign's (A+/Stable)
propensity to extend support to CMBC to the same extent as peers
with higher systemic importance or closer government linkages. This
is because the government is likely to prioritise its support for
larger D-SIBs in the event the banking system experiences systemic
stress.
No Explicit Shareholder Support: Fitch does not factor in
shareholder support from state-owned Dajia Insurance Group Co.,
Ltd, because its ability and propensity to support CMBC during
times of stress is unclear. Dajia Insurance held a 17.8% stake in
CMBC at end-2022.
Stable OE: Fitch expects China's economic growth to recover in 2023
as Covid-19 restrictions are lifted, which will support consumption
and consumer activities. Our OE score is at 'bbb-'/stable, above
the 'bb' category implied score, as Fitch believes China's robust
external finances and record of stable economic performance, which
are incorporated in the sovereign rating, will provide greater
financial and economic stability than the implied OE score
indicates.
Modest Improvement in Retail Franchise: The revision of CMBC's
business profile score to 'bb+', from 'bb', reflects its improving
retail franchise, one of the bank's areas of focus in recent years.
However, the score remains below the 'a' implied category score due
to our views on management and governance limitations as well as
the bank's exposure to shadow-banking and non-loan activities -
similar to most Chinese banks rated by Fitch.
Management and governance limitations are not uncommon in China due
to pressure from the authorities to support segments of borrowers
during challenging times. Exposure to riskier sectors and
shadow-banking activity also renders CMBC's business model
susceptible to regulatory changes, more than for the state banks.
Reducing Shadow-Banking Activities: The revision of CMBC's risk
profile score to 'b+', from 'b', takes into consideration the
reduction in its shadow-banking activities amid tightening
regulations over the past five years. Its entrusted investments
declined to 7% of assets by end-2022, from 10% at end-2018, while
its off-balance-sheet wealth management products (WMPs) fell to
around 22% of deposits and 12% of assets, from 27% and 14%,
respectively, over the same period.
Continuous NPL resolution: The revision of CMBC's asset quality
score to 'b+', from 'b', considers its non-performing loan (NPL)
resolution in recent years, which should reduce the negative impact
from economic volatility and property weakness on its asset
quality. The asset quality score remains below the 'bbb' category
implied score to reflect its large non-loan and riskier loan
exposures and Fitch's perception of its weaker underwriting
standards relative to state banks and large mid-tier banks.
Modest Improvement in Underlying Profitability: The revision of
CMBC's earnings and profitability score to 'b', from 'b-',
considers the improvement in its underlying profitability as
shrinking shadow-banking activity lowers the risk of delayed asset
impairment and potential understatement of risk-weighted assets
(RWA).
The revision also reflects Fitch's view that its underlying
earnings will be less volatile due to risk reduction efforts over
the past few years. However, its earnings and profitability score
is below the 'bb' category implied score to reflect its higher
non-loan exposures relative to state banks and large mid-tier
banks.
Limited Capital Buffers: CMBC's common equity Tier 1 (CET1) ratio
remained modest at 9.0% by end-1Q23. Fitch expects the bank's CET1
ratio to remain lower than that of higher-rated banks due to its
more modest profitability. As such, its capitalisation and leverage
score of 'b' is unchanged, and below the 'bb' category implied
score to also reflect its high non-loan exposure relative to state
banks and large mid-tier banks, which is not adequately captured in
the RWA calculations.
Modest improvement in Funding Profile: The revision of CMBC's
funding and liquidity score to 'b+', from 'b', reflects the
increasing share of retail deposits in total deposit funding.
However, the score is below the 'bbb' category implied score
because of the bank's higher reliance on non-deposit funding
(similar to most other Chinese banks) and modest retail deposit
franchise relative to higher-rated peers.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity or ability to
provide timely extraordinary support has diminished. This could be
implied by a sovereign rating downgrade or a lower support
propensity, as reflected in an enhanced resolution framework (and
strong intention by the authorities to permit losses on senior debt
obligations as a means of resolving banks), although we do not
expect either scenario to occur in the near term.
The Short-Term IDR will not be downgraded unless the Long-Term IDR
is downgraded to or below 'CCC+', which Fitch views as highly
unlikely in the short to medium term.
The VR could be downgraded if the OE score is downgraded or if we
assess the bank to have materially increased its risk appetite,
especially in micro and small enterprise loans and credit-card
receivables, or if it aggressively increases its exposure to
entrusted investments or WMPs and erodes its modest capital buffer.
A sustained deterioration in financial metrics could also lead to a
VR downgrade, including a combination of the following reported
core metrics without having addressed a large part of the perceived
risks around transparency of exposures, including off-balance sheet
and non-loan:
- the four-year average impaired loan/gross loan ratio increasing
to and remaining at around 8% (2019-2022 average: 1.8%),
although Fitch's assessment of asset quality will also consider
other indicators, such as "special-mention" loans, loan loss
provisioning, and whether (and to what extent) Fitch believes
reported metrics understate any deterioration in asset quality;
and
- the CET1 ratio falling below 8% without a credible path to
return to existing levels
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of China's sovereign ratings could lead to positive
rating action on the bank's GSR and support-driven IDRs, if that
was to indicate greater ability to support CMBC with no less
propensity to provide support.
The Short-Term IDR will be upgraded if the Long-Term IDR is
upgraded.
An improvement in CMBC's capitalisation, such that its CET1 ratio
will be sustained around 10%, in conjunction with a further
reduction in risk appetite and greater transparency in its
financial statements- particularly around risks relating to
shadow-banking activity (e.g. Fitch's assessment of asset quality
metrics) - would be positive for its VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
CMBC's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) has
been upgraded to 'B+(xgs)', from 'B(xgs)', following the upgrade of
the VR, while the Short-Term IDR (xgs) has been affirmed at
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The bank's Short-Term IDR (xgs) could be downgraded if
the VR is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The bank's Short-Term IDR (xgs) could be upgraded if the
VR is upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score for the following adjustment reason: sovereign rating
(positive).
The business profile score of 'bb+' has been assigned below the 'a'
category implied score for the following adjustment reasons:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score for the following adjustment reasons:
non-loan exposure (negative) and underwriting standard and growth
(negative).
The earnings and profitability score of 'b' has been assigned below
the 'bb' category implied score for the following adjustment
reason: risk-weight calculation (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score for the following adjustment
reason: leverage and risk-weight calculation (negative).
The funding and liquidity score of 'b+' has been assigned below the
'bbb' category implied score for the following adjustment reasons:
non-deposit funding (negative) and deposit structure (negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
CMBC's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
CMBC has an ESG Relevance Score of '4' for Financial Transparency
due to structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect our assessment of the OE and the bank's
financial profile. CMBC, like other mid-tier banks, is more exposed
to this risk relative to state banks because of its larger exposure
to WMPs and entrusted investments. This stems from the use of
off-balance-sheet transactions. This 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 Rating Prior
------ ------ -----
China Minsheng
Banking Corp., Ltd.
LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Upgrade b
Gov't. Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs) Upgrade B(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
HUA XIA: Fitch Affirms 'BB+' LT Foreign Currency IDR
----------------------------------------------------
Fitch Ratings has upgraded Hua Xia Bank Co., Limited's (HXB)
Viability Rating (VR) to 'b+' from 'b'. At the same time, Fitch has
affirmed HXB's Long-Term Foreign-Currency Issuer Default Rating
(IDR) at 'BB+', Short-Term IDR at 'B' and Government Support Rating
(GSR) at 'bb+'. The Outlook on the Long-Term IDR is Stable. The
assigned VR is in line with the implied VR but does not drive its
IDRs.
The upgrade of HXB's VR is driven by Fitch's assessment that, like
other similarly sized banks in China, its intrinsic credit profile
has benefitted from regulatory developments in recent years,
resulting in a reduction in its off-balance-sheet activity as well
as a moderating risk appetite. These were factors Fitch had
identified as potential outcomes at the time Fitch upgraded its
operating environment (OE) assessment to 'bbb-' from 'bb+' in
2021.
KEY RATING DRIVERS
Government Support-Driven IDR: HXB's Long-Term IDR is driven by
Fitch's assessment of a 'Moderate' likelihood of government support
in the event of stress. This considers its limited market share and
regional significance. There is no direct state ownership or
history of government support for HXB. HXB's 'B' Short-Term IDR is
mapped to its Long-Term IDR.
Differentiated in D-SIB Status: Chinese authorities designated HXB
a domestic systemically important bank (D-SIB) in 2021. However,
Fitch does not think formal D-SIB designation alone will influence
support propensity for HXB to the same extent as peers with a
higher systemic importance or closer government linkages. This is
because the government is likely to prioritise its support for
larger D-SIBs in the event China's banking system experiences
systemic stress.
Stable OE: Fitch expects China's economic growth to recover in 2023
as Covid-19 restrictions have been lifted, which will support
consumption. Fitch's 'bbb-'/stable OE score is above the 'bb'
category implied score, as we believe China's robust external
finances and a record of stable economic performance, which are
incorporated in the Chinese sovereign rating, will provide greater
financial and economic stability than the implied OE score
indicates.
Modest Improvement in Retail Franchise: The revision of HXB's
business profile score to 'bb' from 'bb-' reflects its improving
retail franchise as it has increased its focus on the retail
business in recent years. That said, HXB's business profile score
of 'bb' is below the 'bbb' implied category score to reflect
management and governance limitations, similar to most Chinese
banks rated by Fitch. Management and governance limitations are not
uncommon in China due to pressure from the authorities to support
segments of borrowers during challenging times.
In addition, HXB's reliance on interest income and exposure to
shadow-banking activity also make its business model susceptible to
market volatility and regulatory changes.
Reduction in Shadow-Banking Activity: The revision of HXB's risk
profile score to 'b+' from 'b' takes into consideration the
reduction in its shadow-banking activity amid the tightening in
regulations over the past five years. Its off-balance-sheet
wealth-management products declined to around 25% of deposits and
13% of assets by end-2022 from 31% of deposits and 18% of assets at
end-2018.
Continuous NPL resolution: The revision of HXB's asset-quality
score to 'b+' from 'b' considers its non-performing loan (NPL)
resolution in recent years, which should reduce the negative impact
from economic volatility and property weakness on its asset
quality. However, its asset-quality score is still below the 'bbb'
category implied score to reflect HXB's large non-loan exposure and
our perception of weak underwriting standards relative to state
banks and large mid-tier banks.
Modest Profitability: The earnings and profitability score of 'b'
is still below the 'bb' category implied score to reflect the
potential understatement of risk-weighted assets (RWAs) due to
HXB's high non-loan exposure. Its operating profit/RWA ratio
remained modest at 1.2% in 2022, and Fitch expects its earnings and
profitability will remain constrained by its modest funding profile
and the high operating cost associated with its limited scale.
Limited Capital Buffer: The capitalisation and leverage score of
'b' is unchanged and below the 'bb' category implied score to
reflect the bank's high non-loan exposure. Fitch expects HXB's
modest profitability will continue to pressure its core
capitalisation. Its common equity Tier 1 (CET1) ratio declined to
8.9% by end-1Q23 from 9.2% at end-2022, although still higher than
the minimum requirement of 7.75%.
Modest Improvement in Funding Profile: The revision of HXB's
funding and liquidity score to 'b+' from 'b' reflects its improving
retail deposit contributions to total deposit funding. However, its
funding profile remains weaker than peers', as reflected in its
loan/deposit ratio, which was the highest among Fitch-rated Chinese
banks at 108% by end-1Q23. The funding and liquidity score has been
assigned below the 'bbb' category implied score because of the
bank's reliance on non-deposit funding, similar to most other
Chinese banks, and modest retail deposit franchise relative to
higher-rated peers.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The Long-Term IDR and GSR will come under pressure if Fitch
believes the central government's propensity or ability to provide
timely extraordinary support to HXB has diminished. This could be
indicated by a sovereign rating downgrade or through an enhanced
resolution framework and strong intention by the authorities to
permit losses on senior debt obligations as a means of resolving
banks, but Fitch does not expect either scenario to occur in the
near term.
The Short-Term IDR will not be downgraded unless the Long-Term IDR
is downgraded to or below 'CCC+'. Fitch thinks this is highly
unlikely in the short-to-medium term.
The VR could be downgraded if the OE score is downgraded or if
Fitch assesses the bank to have materially increased its risk
appetite, especially in manufacturing, wholesale and retail trade
loans, as well as rising exposure to shadow-banking activity, which
would be a further drag on asset quality and capital buffers.
A sustained deterioration in the bank's financial metrics could
also lead to a VR downgrade, including a combination of the
following reported core metrics without having largely addressed
perceived risks around transparency of exposures, including
off-balance-sheet and non-loan exposures:
- The four-year average impaired loan/gross loan ratio increasing
to and remaining at around 8% (2019-2022 average: 1.8%). Fitch's
assessment of asset quality also takes into consideration other
indicators, such as "special-mention" loans, loan-loss
provisioning and whether (and to what extent) believes reported
metrics understate any deterioration in asset quality; and
- The CET1 ratio falling to below 8% (1Q23: 8.9%) without a
credible path to return to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of China's sovereign ratings could lead to positive
rating action on HXB's GSR and support-driven IDRs if that were to
indicate greater ability to support the bank, with no less
propensity to provide support.
The Short-Term IDR will be upgraded if the Long-Term IDR is
upgraded.
An improvement in HXB's capitalisation such that its CET1 ratio is
sustained at around 10% in conjunction with a further reduction in
risk appetite and greater transparency in its financial statements
- particularly on risks from shadow-banking activity, including our
assessment of its asset-quality metrics - would be positive for its
VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
HXB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) has
been upgraded to 'B+(xgs)' from 'B(xgs)' following the upgrade of
the VR, while the Short-Term IDR (xgs) has been affirmed at
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The bank's Short-Term IDR (xgs) could be downgraded if
the VR is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The bank's Short-Term IDR (xgs) could be upgraded if the
VR is upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score for the following adjustment reason: sovereign rating
(positive).
The business profile score of 'bb' has been assigned below the
'bbb' category implied score for the following adjustment reason:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score for the following adjustment reason:
non-loan exposure (negative) and underwriting standard and growth
(negative).
The earnings and profitability score of 'b' has been assigned below
the 'bb' category implied score for the following adjustment
reason: risk-weight calculation (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score for the following adjustment
reason: leverage and risk-weight calculation (negative).
The funding and liquidity score of 'b+' has been assigned below the
'bbb' category implied score for the following adjustment reason:
non-deposit funding (negative) and deposit structure (negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
HXB's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
HXB has an ESG Relevance Score of '4' for Financial Transparency
due to structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect our OE and financial profile assessment. HXB,
like other mid-tier banks, is more exposed to such risks relative
to state banks due to a greater exposure to WMPs and entrusted
investments. This stems from the use of off-balance-sheet
transactions. This 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 Rating Prior
------ ------ -----
Hua Xia Bank Co., Limited
LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Upgrade b
Gov't. Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs) Upgrade B(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
JINKE PROPERTY: May Get Restructuring Aid From Bad Debt Manager
---------------------------------------------------------------
Caixin Global reports that a unit of one of China's four biggest
bad debt managers is considering an investment in Jinke Property
Group Co. Ltd., the cash-strapped Chongqing-based developer said.
Caixin relates that Shenzhen-traded Jinke, which faces a bankruptcy
reorganization petition, said in a filing that it entered a
framework agreement with Great Wall Guofu Real Estate (Beijing) Co.
Ltd., a wholly owned subsidiary of Great Wall Asset Management.
A creditor sought to force Jinke Propertyinto bankruptcy
reorganization after the real estate developer failed to repay
CNY27.9 million of construction costs, Caixin previously reported.
Chongqing Hengrui Constructional Engineering Co. Ltd., a Jinke
supplier, filed with a Chongqing court demanding a bankruptcy
reorganization of Jinke, Caixin said. The developer is struggling
to pay down billions of dollars of debt. The court filing added to
risks that the company will be kicked off the Shenzhen exchange.
Jinke Property Group Co., Ltd. principally engages in the
development and distribution of real estates. The Company mainly
operates through three segments. Real Estate segment is primarily
engaged in the development of residential and commercial
properties, as well as the development and operation of industrial
estates. Community Integrated Services segment mainly provides
property management services. New Energy segment consists of wind
power and photovoltaic power generation. The Company is also
involved in hotel management, gardening and architecture decoration
businesses. The Company operates its business in domestic market,
mainly in Chongqing and Jiangsu Province, China.
PING AN BANK: Fitch Affirms 'BB+' LT Foreign Currency IDR
---------------------------------------------------------
Fitch Ratings has upgraded Ping An Bank Co., Ltd.'s (PAB) Viability
Rating (VR) to 'b+' from 'b'. At the same time, Fitch has affirmed
PAB's Long-Term Foreign-Currency Issuer Default Rating (IDR) at
'BB+', Government Support Rating (GSR) at 'bb+' and Short-Term IDR
at 'B'. The Outlook is Stable. The assigned VR is in line with the
implied VR but does not drive its IDRs.
The upgrade of PAB's VR is driven by Fitch's assessment that, like
other similarly sized banks in China, its intrinsic credit profile
has benefitted from regulatory developments in recent years,
resulting in a reduction in its off-balance-sheet activity as well
as a moderating risk appetite. "These were factors we had
identified as potential outcomes at the time we raised our
operating environment (OE) assessment to 'bbb-' in 2021 from
'bb+'," Fitch said.
KEY RATING DRIVERS
Government Support-Driven IDR: The bank's Long-Term IDR is driven
by Fitch's assessment of a moderate probability of government
support, as expressed by the assigned GSR at 'bb+'. This takes into
consideration the bank's size and modest domestic systemic
importance. The bank does not have direct state ownership or a
history of direct government support. PAB's 'B' Short-Term IDR is
mapped to its Long-Term IDR.
Differentiation in D-SIB Status: China's regulators designated PAB
a domestic systemically important bank (D-SIB) in October 2021, but
Fitch believes D-SIB designation alone may not materially affect
the government's propensity to support PAB to the same extent as
peers with higher systemic importance or closer government
linkages. This is because the government is likely to prioritise
support for larger D-SIBs in the event China's banking system
experiences systemic stress.
Stable OE: Fitch said, "We expect China's economic growth to
recover in 2023 as Covid-19 restrictions have been lifted, which
will support consumption. Our 'bbb-'/stable OE score is above the
'bb' category implied score, as we believe China's robust external
finances and a record of stable economic performance, which are
incorporated in the Chinese sovereign rating, will provide greater
financial and economic stability than the implied OE score
indicates."
Improving Franchise: The upward revision of PAB's business profile
score to 'bb+' from 'bb' reflects the improvement in its franchise
for retail deposits, which rose to 31% of total deposits by
end-2022 from 24% at end-2019. Still, the score is still lower than
the 'a' implied category score. This reflects issues over
management and governance that are not uncommon in China, given
pressure from the authorities to support segments of borrowers
during challenging times, similar to most Chinese banks rated by
Fitch, as well as its large exposure to shadow-banking activity and
unsecured consumer lending.
Reduction in Shadow-Banking Activity: Fitch revised both PAB's risk
profile and asset-quality scores to 'b+' from 'b' to reflect the
reduction in its shadow-banking activity, in line with the
regulatory tightening enforced by China's authorities, and its
non-performing loan (NPL) resolution in recent years. PAB's
off-balance-sheet wealth-management products (WMPs) declined to
around 26% of deposits by end-2022 from 29% at end-2021. Its
entrusted investments, at around 6% of total assets, remained below
the mid-tier average of 9% at end-2022.
That said, PAB's 'b+' asset-quality score is below the 'bbb'
category implied score due to its higher loan growth appetite than
peers and large exposure to unsecured consumer lending (36% of
total loans), which could leave its asset quality more susceptible
to deterioration in an economic downturn. Still, its reported
impaired-loan ratio was largely stable at 1.6% in 2022 due to its
active NPL resolution.
Consumer Focus Supports NIMs: PAB's earnings and profitability
score of 'b+' is below the 'bb' category implied score to reflect
understatement in its risk-weight calculations due to its high
non-loan exposures. The bank's reported net interest margin (NIM)
of 2.8% was higher than the mid-tier average of 2.0% in 2022 in
light of its unsecured consumer lending focus, but this was partly
offset by its high impairment charges. Fitch expects the bank to
report a stable operating profit/risk-weighted asset ratio (1.5% in
2022) over the next two years.
Growth Appetite Pressures Capitalisation: PAB's capitalisation and
leverage score of 'b' is below the 'bb' category implied score to
also reflect the understatement of the bank's risk-weight
calculations from its high non-loan exposures. Its reported common
equity Tier 1 (CET1) ratio was 8.9% at end-1Q23, below the mid-tier
bank average. Fitch expects the bank's growth appetite will
continue to pressure its capitalisation.
Non-Deposit Funding: The upward revision of PAB's funding and
liquidity score to 'bb-' from 'b+' considers its improving retail
deposit contribution to total deposit funding, which takes
advantage of its online capability and cooperation with its parent,
Ping An Insurance Group. However, the score is still below the
'bbb' category implied score, given PAB's reliance on non-deposit
funding, similar to most other Chinese banks.
Its high off-balance-sheet exposure may understate its reported
loan/deposit ratio (LDR) and strain its on-balance-sheet funding,
despite a relatively stable Fitch-calculated LDR of 100% at
end-2022. Fitch expects the ratio to increase modestly in the next
few years.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The bank's Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity and/or ability
to provide timely extraordinary support to the bank has diminished.
For example, a sovereign rating downgrade could reflect diminished
ability to support. Lower propensity may also be reflected through
an enhanced resolution framework and strong intention by the
authorities to permit losses on senior debt obligations as a means
of resolving banks, though we do not expect either scenario to
occur in the near term.
PAB's Short-Term IDR will be downgraded if its Long-Term IDR is
downgraded to or below 'CCC+', which we think is highly unlikely in
the short-to-medium term.
PAB's VR could be downgraded if the OE score is downgraded or if
the bank resumes aggressive growth in its off-balance-sheet WMPs or
entrusted investments, or there is excessive growth in credit-card
receivables, especially if accompanied by lower underwriting
standards or significant deterioration in household affordability,
which would lead to a sustained deterioration in the bank's
financial metrics, including a combination of the following
reported core metrics without having largely addressed perceived
risks around transparency of exposures, including off-balance-sheet
and non-loan transactions:
- The four-year average of the impaired loan/gross loan ratio
increasing to and sustained at around 8% (2019-2022 four-year
average of 1.4% on a reported basis), although Fitch's
assessment of asset quality will also consider other
indicators, such as "special-mention" loans, loan loss
provisioning, and whether (and to what extent) Fitch believes
reported metrics understate any deterioration in asset quality;
and
- The CET1 ratio falling below 8% without a credible path to
return to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of China's sovereign ratings could lead to positive
rating action on the bank's GSR and its support-driven IDRs if that
were to indicate greater ability to support PAB, with no less
propensity to support.
PAB's Short-Term IDR would be upgraded if its Long-Term IDR is
upgraded.
An improvement in PAB's capitalisation such that its CET1 ratio is
maintained at around 10% or above in conjunction with a further
reduction in risk appetite and greater transparency in
asset-quality metrics would be positive for its VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
PAB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) has
been upgraded to 'B+(xgs)' from 'B(xgs)' following the upgrade of
the VR, while the Short-Term IDR (xgs) has been affirmed at
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The Short-Term IDR (xgs) could be downgraded if the VR
is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The Short-Term IDR (xgs) could be upgraded if the VR is
upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score due to the following adjustment reason: sovereign
rating (positive).
The business profile score of 'bb+' has been assigned below the 'a'
category implied score due to the following adjustment reason:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score due to the following adjustment reason:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b+' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: risk-weight calculations (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: leverage and risk-weight calculation
(negative).
The funding and liquidity score of 'bb-' has been assigned below
the 'bbb' category implied score due to the following adjustment
reason: non-deposit funding (negative) and deposit structure
(negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
PAB's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
PAB has an ESG Relevance Score of '4' for Financial Transparency as
there are still structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect our assessment on the OE as well as the
financial profile. PAB, like other mid-tier banks, is more exposed
to this risk relative to state banks, due to its larger exposure to
WMPs and entrusted investments stemming from the use of
off-balance-sheet transactions. This 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 Rating Prior
------ ------ -----
Ping An Bank Co., Ltd.
LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Upgrade b
Gov't. Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs) Upgrade B(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
=================
H O N G K O N G
=================
DANTAI CAPITAL: To Liquidate Flagship Fund
------------------------------------------
Reuters reports that Hong Kong-based hedge fund Dantai Capital is
closing its main fund, saying its investment style no longer fits
with current conditions in Chinese markets, according to a letter
sent to investors last week.
More than 90% of the fund would be liquidated over the next three
months, Dantai told investors in a June 27 letter reviewed by
Reuters.
In a statement responding to Reuters' queries, Dantai said the
company would still be managing Dantai Partnership Fund and Dantai
Alpha Fund after its Master Fund's liquidation. Dantai also said
the letter was not intended to be public.
Reuters says the closure highlights how challenging the year has
been for China asset managers, as a hoped-for reopening rally
following the lifting of strict COVID restrictions has faded.
Months of disappointing economic data in China has MSCI's China
index down 6% on the year, against a 13% gain for world stocks.
Dantai had said in the June investor letter that China markets were
"no longer favourable for the investment philosophy and style of
the funds to succeed in the long term," Reuters relays.
"Over the longer horizon, China markets may likely see persistently
waning liquidity, weak domestic confidence and significant
geopolitical risks," the fund manager said.
Dantai's main Master Fund lost 46% last year and is down 26% for
the first five months of 2023, according to screenshots of investor
letters from earlier in June, which were reviewed by Reuters.
Data firm Eurekahedge's gauge tracking funds with China-focused
long-short equity strategies recorded a loss of around 3.7% for the
same period.
Reuters adds that Dantai's more recent June letter said market
conditions in China were likely to stabilise over the third
quarter, with potential for government stimulus, "which should aid
the portfolio wind-down".
Dantai last reported $838 million of gross assets in a February
2023 regulatory filing, of which $774 million was in the Master
Fund which had 114 beneficiary owners, Reuters discloses.
Overseen by veteran investor Jason Xiang Jisong, Dantai launched in
2017 and made double-digit returns each year until 2022, investor
letters showed, adds Reuters.
=========
I N D I A
=========
AISWARYA INFRA: CRISIL Keeps C Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Aiswarya
Infrastructure and Services (AIS) continue to be 'CRISIL C Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 6 CRISIL C (Issuer Not
Cooperating)
Proposed Long Term 2 CRISIL C (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with AIS for
obtaining information through letter and email dated March 25, 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 AIS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AIS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AIS continues to be 'CRISIL C Issuer Not Cooperating'.
Set up in 2007, AIS leases warehouses and commercial spaces in and
around the industrial hub of Kakinada (Andhra Pradesh). Mr. M
Venkata Sasidhar, Mr. M Gowtham, and Mr. M Naveen Krishna are
partners in the firm.
EVERSHINE WOOD: CRISIL Lowers Long and Short Term Ratings to D
--------------------------------------------------------------
CRISIL Ratings has revised the ratings on certain bank facilities
of Evershine wood packaging Private Limited (EWPPL), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Short Term Rating - CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with EWPPL,
through letters and emails, dated October 21, 2022 and December 15,
2022, among others, apart from telephonic communication, for
obtaining information. 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 company's management,
CRISIL Ratings did not receive any information on the financial
performance or strategic intent of EWPPL, thereby restricting
CRISIL Ratings' ability to take a forward-looking view on the
entity's credit quality. The rating action on EWPPL is consistent
with Assessing Information Adequacy Risk. Based on the
last-available information, CRISIL Ratings is downgrading its
ratings on the bank facilities of EWPPL to 'CRISIL D/CRISIL D
Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating' as EWPPL has not met its debt obligation on time.
EWPPL has defaulted on debt repayment because of weak liquidity and
has been marked as non-performing asset.
EWPPL was incorporated in 2005, promoted by the Chennai-based Patel
family. Overall operations are managed by Mr Dharamshi Patel. The
company manufactures wood packaging products, including packing
crates, boxes, pallets, planks, and finger-jointed boards made from
soft pine wood. These are used to package various consumer and
industrial products in different industries. The manufacturing
facility is in Sriperumbudur, Tamil Nadu. The registered office is
in Chennai.
HILLCREST FOODS: CRISIL Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Hillcrest
Foods (HF) continues to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HF for
obtaining information through letter and email dated March 31, 2023
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HF, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HF is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of HF
continues to be 'CRISIL D Issuer Not Cooperating'.
Set up as a partnership firm in 2005 by the Diwan family, HF
processes and packages frozen peas, fruit pulp and vegetables. It
also trades in fruits, primarily apple. HF's 2500 tonne per annum
processing plant and cold storage is in Nalagarh, Himachal
Pradesh.
HYDERABAD WINE: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Hyderabad
Wine Mart (HWM) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2 CRISIL D (Issuer Not
Cooperating)
Cash Credit 3 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HWM for
obtaining information through letter and email dated March 25, 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 HWM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HWM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HWM continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Established in Oct 2017, HWM is engaged in the retailing of
alcohol. It has 4 stores in Hyderabad.
ICON CABLES: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Icon Cables
Limited (ICL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 2.9 CRISIL D (Issuer Not
Cooperating)
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 0.4 CRISIL D (Issuer Not
Cooperating)
Proposed Fund- 1.21 CRISIL D (Issuer Not
Based Bank Limits Cooperating)
SME Credit 0.25 CRISIL D (Issuer Not
Cooperating)
Term Loan 0.24 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ICL for
obtaining information through letter and email dated March 31, 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 ICL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ICL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ICL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Established in 1986, ICL manufactures various types of control and
instrumentation cables. It was taken over by Mr. N K Rathi in 2004
and since then has been managed by him and is based out of Delhi.
Its plant based in Neemrana, Rajasthan.
KAILASANADHA TEXTILES: CRISIL Keeps D Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri
Kailasanadha Textiles Private Limited (SKT) continue to be 'CRISIL
D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 9.04 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SKT for
obtaining information through letter and email dated March 25, 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 SKT, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SKT
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SKT continues to be 'CRISIL D Issuer Not Cooperating'.
SKT was set up in 2013 Mr. Tulabandula Paripurna Krishna Rao, Mr.
T. Ram Kalyan, and their family members. The company is engaged in
ginning and pressing of raw cotton. The firm's ginning unit is
located in Guntur district in Andhra Pradesh.
KRISHNA ABODES: CRISIL Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Shree Krishna
Abodes Private Limited (SKAPL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SKAPL for
obtaining information through letter and email dated March 25, 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 SKAPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SKAPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SKAPL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2005 and promoted by Mr Jitendra Singh Shekhawat
and Mr Rajendra Singh Shekhawat, SKAPL undertakes residential and
commercial real estate projects.
OMTEE STEEL: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shri Omtee
Steel Private Limited (SOSPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
Proposed Term Loan 2.11 CRISIL D (Issuer Not
Cooperating)
Term Loan 10.39 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SOSPL for
obtaining information through letter and email dated March 25, 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 SOSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SOSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SOSPL continues to be 'CRISIL D Issuer Not Cooperating'.
SOSPL, incorporated in 2009 and promoted by the Jain family,
manufactures thermo-mechanically treated (TMT) bars. The company
has recently backward integrated into manufacturing billets from
sponge iron. Operations are managed by Mr. Deepak Jain and his
brother, Mr. Anil Jain.
RADHIKA INFRA: CRISIL Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Radhika Infra
Estate Private Limited (RIPL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 13.54 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RIPL for
obtaining information through letter and email dated March 25, 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 RIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RIPL continues to be 'CRISIL D Issuer Not Cooperating'.
RIPL was incorporated in 2009 by Mr. Manoj Kumar Jain, Mr. Arvind
Agarwal, and Mr. Prashant Kumar Saxena. It is currently undertaking
a real estate project, Maple Tree, at the airport bypass road, near
RGPV University, Bhopal.
RAMESHWAR SAHAKARI: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shri
Rameshwar Sahakari Sakhar Karkhana Limited (SRSSKL) continue to be
'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 28 CRISIL D (Issuer Not
Cooperating)
Cash Credit 2 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SRSSKL for
obtaining information through letter and email dated March 25, 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 SRSSKL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
SRSSKL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of SRSSKL continues to be 'CRISIL D Issuer Not
Cooperating'.
Established in 2001 by a group of agriculturists in Jalna,
Maharashtra, SRSSKL is promoted by Mr. Raosaheb Patil Danve (member
of Parliament) and manufactures sugar. Mr. Santosh Patil Danve is
its chairman, and operations are managed by Mr. Dharmaraj Shewale
(managing director) with support from other functional personnel.
REDHU FARMS: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Redhu Farms
Private Limited (RFPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.32 CRISIL D (Issuer Not
Cooperating)
Funded Interest 1.01 CRISIL D (Issuer Not
Term Loan Cooperating)
Working Capital 16.67 CRISIL D (Issuer Not
Term Loan Cooperating)
CRISIL Ratings has been consistently following up with RFPL for
obtaining information through letter and email dated March 25, 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 RFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RFPL continues to be 'CRISIL D Issuer Not Cooperating'.
RFPL, which was set up in 2002, is engaged in the poultry and
hatchery business, and sells day-old chicks and eggs. The hatchery
units and broiler farms are located at Jind (Haryana) and Chirawa
(Rajasthan). RFPL is owned and managed by Mr Mohinder Singh &
family.
RELIABLE CASHEW: CRISIL Lowers Rating on INR15cr Loan to D
----------------------------------------------------------
CRISIL Ratings has downgraded the ratings on the bank facilities of
Reliable Cashew Company Private Limited (RCCPL) to 'CRISIL D Issuer
Not Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 15 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Cash Credit 10 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Cash Credit 12 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Export Packing 10 CRISIL D (ISSUER NOT
Credit COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Export Packing 5 CRISIL D (ISSUER NOT
Credit COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Export Packing 5 CRISIL D (ISSUER NOT
Credit COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 8 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Warehouse Financing 15 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Working Capital 20 CRISIL D (ISSUER NOT
Demand Loan COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with RCCPL for
obtaining information through letters and emails dated January 28,
2023 and March 13, 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 RCCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RCCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on the bank facilities
of RCCPL downgraded to 'CRISIL D Issuer Not Cooperating' from
'CRISIL B/Stable Issuer Not Cooperating'
The downgrade factors the National company Law Tribunal (NCLT) vide
order dated June 22, 2023 indicating that the company has defaulted
its debt obligations and the account has turned NPA as on October
7,2021. Subsequently, the application from lenders has been
admitted by the NCLT.
Set up in 1996, RCCPL processes raw cashew nuts and cashew kernels.
The company caters to both the domestic and overseas markets.
Status of noncooperation with previous CRA
RCCPL has not cooperated with Infomerics Ratings which has
classified it as non-cooperative vide release dated January 04,
2023. The reason provided by Infomerics Ratings is non-furnishing
of information for monitoring of ratings.
SAJ ROOFING: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Saj Roofing
Solutions Private Limited (SRS) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.2 CRISIL D (Issuer Not
Cooperating)
Cash Term Loan 4.0 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SRS for
obtaining information through letter and email dated March 25, 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 SRS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SRS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SRS continues to be 'CRISIL D Issuer Not Cooperating'.
SRS was established in 2016 by Mr Sebastien Cletus in Coimbatore,
Tamil Nadu. The company manufactures roofing sheets for industrial
use.
SATYAM SOLUTIONS: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Satyam
Solutions Limited (SSL) continue to be 'CRISIL D/CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Electronic Dealer 10 CRISIL D (Issuer Not
Financing Scheme Cooperating)
(e-DFS)
Overdraft Facility 2.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SSL for
obtaining information through letter and email dated March 25, 2023
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Incorporated in 1986 and promoted by Garg family, SSL is an
authorised dealer of Ashok Leyland.
SHANTDEEP METALS: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shantdeep
Metals Private Limited (SMPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 1 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 10 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SMPL for
obtaining information through letter and email dated March 25, 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 SMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SMPL continues to be 'CRISIL D Issuer Not Cooperating'.
SMPL, incorporated in 2009, is promoted by Mr Pradeep Chaudhary, Ms
Sanjot Chaudhary, and Mr Prashant Rahane. The company provides heat
treatment services for automotive components on a job-work basis.
In 2013, it started manufacturing gears for two-wheelers at its
facility in Aurangabad, Maharashtra.
SHARAYU AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sharayu Agro
Industries Limited (SAI) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Cash 20 CRISIL D (Issuer Not
Credit Limit Cooperating)
Term Loan 170 CRISIL D (Issuer Not
Cooperating)
Term Loan 30 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SAI for
obtaining information through letter and email dated March 25, 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 SAI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SAI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SAI continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated on February 21, 2011 as Lokmanya Sahakar Udyog Limited
was renamed as SAI in fiscal 2015. Promoted by Mr. Srinivas Pawar,
company is based out of Phaltan, Satara District (Maharashtra) and
is engaged in manufacturing of sugar.
SIYARAM EXPORTS: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Siyaram
Exports India Private Limited (SEIPL) continue to be 'CRISIL
D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
Foreign Exchange 0.02 CRISIL D (Issuer Not
Forward Cooperating)
Working Capital 1.25 CRISIL D (Issuer Not
Demand Loan Cooperating)
Working Capital 0.54 CRISIL D (Issuer Not
Demand Loan Cooperating)
CRISIL Ratings has been consistently following up with SEIPL for
obtaining information through letter and email dated March 25, 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 SEIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SEIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SEIPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
SEIPL, incorporated in 1986, manufactures and exports bed linen,
table linen, mattress, cushion cover, and pillow cover. It is
located in Durgapura (Jaipur). The daily operations of the company
are managed by Mr. Satish Chandra Katta.
SOWBHAGYALAKSHMI PADDY: CRISIL Keeps D Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri
Sowbhagyalakshmi Paddy Boiling Industries (SLPB; part of the
Sowbhagya group) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 17 CRISIL D (Issuer Not
Cooperating)
Cash Credit 3 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 1 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SLPB for
obtaining information through letter and email dated March 25, 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 SLPB, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SLPB
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SLPB continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at the rating, CRISIL Ratings has combined the
business and financial risk profiles of SLPB, Sri Bhagavan Venkaiah
Swamy Rice Mill (SBV), and Sowbhagyalakshmi Raw & Boiled Rice Mill
(SRB). That's because these entities, together referred to as the
Sowbhagya group, have common promoters, are in the same line of
business, and have operational linkages and fungible cash flows.
The Sowbhagya group's first firm, SRB, was set up in 1988 by Mr V
Gopal Naidu and his family. In 1997, SLPB was set up and in 2000,
SBV. All these entities mill and process paddy into rice; they also
generate by-products such as broken rice, bran, and husk. Their
rice mills are in Nellore, Andhra Pradesh.
SOWBHAGYALAKSHMI RAW: CRISIL Keeps D Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of
Sowbhagyalakshmi Raw and Boiled Rice Mill (SRBRM) continue to be
'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 23 CRISIL D (Issuer Not
Cooperating)
Cash Credit 3 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 1 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with SRBRM for
obtaining information through letter and email dated March 25, 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 SRBRM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SRBRM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SRBRM continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at the rating, CRISIL Ratings has combined the
business and financial risk profiles of SRB, Sri Bhagavan Venkaiah
Swamy Rice Mill (SBV), and Sri Sowbhagya Lakshmi Paddy Boiling
Industries (SLPB). That's because these entities, together referred
to as the Sowbhagya group, have common promoters, are in the same
line of business, and have operational linkages and fungible cash
flows.
The Sowbhagya group's first firm, SRB, was set up in 1988 by Mr V
Gopal Naidu and his family. In 1997, SLPB was set up and in 2000,
SBV. All these entities mill and process paddy into rice; they also
generate by-products such as broken rice, bran, and husk. Their
rice mills are in Nellore, Andhra Pradesh.
SPICEJET LTD: Hearing on Willis Insolvency Plea Moved to July 21
----------------------------------------------------------------
Livemint.com reports that the Delhi bench of National Company Law
Tribunal (NCLT) on July 4 adjourned the ongoing case involving
aircraft engine lessor Willis Lease Finance Corporation's petition
to initiate the corporate insolvency resolution process against
SpiceJet. The matter is now scheduled to be taken up by the
tribunal on July 21.
While doing so a bench led by Justice Mahendra Khandelwal
questioned the maintainability of the petition since a similar
petition was already filed by the lessor in May this year,
Livemint.com relates.
Opposing the lessors' plea Krishnendu Dutta, senior counsel
representing SpiceJet argued that it was filed for the same cause
of action.
In response, the petitioner (Willis) explained that their initial
petition, filed on May 1, included 170 invoices, some of which fell
within the period specified under section 10(A) of the IBC
(Insolvency and Bankruptcy Code). However, they withdrew that
petition on technical grounds and subsequently filed a new one,
excluding those particular invoices, according to Livemint.com.
Under Section 10A of the IBC, insolvency proceedings cannot be
initiated if the alleged default occurs before March 25, 2020 to
March 25, 2021, which is termed as the Covid Period.
Livemint.com relates that the counsel for Willis further informed
the tribunal that the previous order, disposed of the section 9
insolvency petition, while granting the petitioner the liberty to
refile it if necessary. The Willis counsel further argued that
SpiceJet had not filed the affidavit until now and therefore did
not have any no locus standi to question the maintainability of the
petition.
Willis Lease Finance Corporation is the third lessor to approach
the NCLT seeking recovery of outstanding dues from SpiceJet, the
report notes. Earlier, similar pleas filed by Wilmington and
Aircastle are currently pending in the tribunal and are set to be
heard on July 17. Among the three petitions, only the one filed by
Aircastle has received a notice from the tribunal.
Similarly, Aircastle's insolvency petition which was filed last
month too was questioned by the tribunal, the report says.
According to the NCLT, a creditor is entitled to file only one
insolvency plea at a time. If the corporate debtor is admitted to
insolvency, the creditor can then file a consolidated claim with
the resolution professional. The tribunal also stated that the
Insolvency and Bankruptcy Code of 2016 aims to reduce the number of
pleas filed, and initiating a second insolvency plea may go against
the underlying rationale of the Insolvency and Bankruptcy Code.
Aircastle (Ireland) and Wilmington had managed to deregister two
aircraft from the Directorate General of Civil Aviation (DGCA) in
March, leveraging the provisions of Irrevocable De-registration and
Export Request Authorisations (IDERA), Livemint.com notes.
About Spicejet
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights between
major cities in India. The carrier is India's second-biggest budget
airline, after IndiGo.
As recently reported in the Troubled Company Reporter-Asia Pacific,
aircraft lessor Wilmington Trust SP Services (Dublin) Ltd has filed
a petition for initiating the corporate insolvency resolution
process against SpiceJet.
This is the third case filed against the airline, according to The
Economic Times. Two other cases under Section 9 of the Insolvency
and Bankruptcy Code, 2016, have been filed by aircraft lessor
Aircastle (Ireland) Ltd and engine lessor Willis Lease Finance
Corporation.
Aircastle (Ireland) filed a CIRP petition against Spicejet on April
28, 2023, while Willis Lease Finance Corporation filed its petition
on April 12, 2023.
SURYA POULTRY: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri Surya
Poultry Farm (SSPF) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL D (Issuer Not
Cooperating)
Cash Credit 4.2 CRISIL D (Issuer Not
Cooperating)
Long Term Bank 7.3 CRISIL D (Issuer Not
Facility Cooperating)
Proposed Working 0.5 CRISIL D (Issuer Not
Capital Facility Cooperating)
CRISIL Ratings has been consistently following up with SSPF for
obtaining information through letter and email dated March 25, 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 SSPF, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSPF
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSPF continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Set up in 2011 as a partnership firm by Mr. Srinivas Reddy and his
family, Andhra Pradesh-based SSPF is engaged in the poultry
business and has installed capacity of 2.24 lakh layer birds.
SUVEERA AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Suveera Agro
Industries (SAR) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D (Issuer Not
Cooperating)
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SAR for
obtaining information through letter and email dated March 31, 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 SAR, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SAR
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SAR continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Set up in 2010, SAR is a partnership firm of Mr NVV Prasada Rao, Mr
Gadde Srinivasa Rao, Mr Gadde Chakradhar and Mr Naga Bhirava
Krishna Phanendra. The mill, located in Hanuman Junction (Andhra
Pradesh), processes paddy into rice, bran, broken rice and husk.
TARA SALES: CRISIL Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Tara Sales
Limited (TSL) continues to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 18 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TSL for
obtaining information through letter and email dated March 25, 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 TSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TSL continues to be 'CRISIL D Issuer Not Cooperating'.
TSL was incorporated in 2010 by Mr. Jaswant Singh and Mr. Balwant
Singh in Ludhiana. It trades in rice bran and mustard DOC, maize,
bajra, and other agricultural products.
THOUSU PERIYAKKAL: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Thousu
Periyakkal Educational Health and Charitable Trust (TPHCT) continue
to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.6 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 5.76 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 13.18 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 2.7 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TPHCT for
obtaining information through letter and email dated March 25, 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 TPHCT, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TPHCT
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TPHCT continues to be 'CRISIL D Issuer Not Cooperating'.
TPHCT, located in Trichy (Tamil Nadu), was set up in 2004 by Mr. B
Selvaraj as a trust registered under the Indian Trust Act, 1881.The
trust offers undergraduate, post-graduate, and diploma courses in
engineering and teacher education courses.
TORNADO MOTORS: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Tornado
Motors Private Limited (Tornado) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 13 CRISIL D (Issuer Not
Cooperating)
Cash Credit 17 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with Tornado for
obtaining information through letter and email dated March 25, 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 Tornado, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Tornado is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Tornado continues to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Tornado, incorporated in September 2010, is promoted by Mr.
Jitendra Pal Singh Chadha, and his wife, Mrs. Amanpreet Chaddha.
The company is an authorised dealer of Volkswagen passenger
vehicles, and has one showroom and workshop in Mumbai
(Maharashtra).
TORRID MOTORS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Torrid Motors
(Torrid) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Term Loan 1 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with Torrid for
obtaining information through letter and email dated March 25, 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 Torrid, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Torrid is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Torrid continues to be 'CRISIL D Issuer Not
Cooperating'.
Torrid, incorporated in September 2013, is the sole proprietorship
of Mr. Jitendra Pal Singh Chadha. The firm is an authorized dealer
of Fiat passenger vehicles, and has one showroom and workshop in
Mumbai (Maharashtra).
TRISTAR GLOBAL: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Tristar
Global Infrastructure Private Limited (TGIPL) continue to be
'CRISIL D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 15.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 2 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 6 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Working Capital 14.5 CRISIL D (Issuer Not
Term Loan Cooperating)
CRISIL Ratings has been consistently following up with TGIPL for
obtaining information through letter and email dated March 25, 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 TGIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TGIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TGIPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
TGIPL, incorporated in 1999, is owned and managed by Mr. Vijay
Vasudeva and his family members. It is in the construction
business, and executes specialised jobs such as waterproofing,
installation of expansion joints, and roofing and related
activities. Its corporate office is in Delhi.
UJALA PUMPS: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Ujala Pumps
Private Limited (UPPL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 21 CRISIL D (Issuer Not
Cooperating)
Cash Credit 9 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 6 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 12 CRISIL D (Issuer Not
Cooperating)
Rupee Term Loan 7 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with UPPL for
obtaining information through letter and email dated March 25, 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 UPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on UPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
UPPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Set up in 1992 by the Gupta family of Rajasthan, UPPL manufactures
water pumps, which it sells under its Ujala brand. The company
primarily manufactures mini mono-bloc pumps and submersible pumps,
along with jet pumps and centrifugal pumps.
VEGA JEWELDIAM: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Vega
Jeweldiam Private Limited (VJPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 27.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 14, 2022,
placed the rating(s) of VJPL under the 'issuer non-cooperating'
category as VJPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. VJPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 30, 2023, May 10, 2023, May 20, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Incorporated in 2008, Vega Jeweldiam Private Limited (VJPL,
erstwhile Amy Diam Creation Pvt. Ltd. (ACPL) which was the holding
company of Amy Diam Vega Jewellery Pvt. Ltd. (AVPL) was merged with
ACPL in Feb 2013) is engaged in business of exporting cut and
polished diamonds (up to 5 carats in size).
VINOD TEXWORLD: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Vinod
Texworld Private Limited (VTPL; previously known as Shree Shiv
Shakti Cot-Fab Private Limited) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 10.32 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 8.18 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with VTPL for
obtaining information through letter and email dated March 25, 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 VTPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on VTPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
VTPL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2012, SSSCF is promoted by Ahmedabad
(Gujarat)-based Sindhav family. It undertakes jobwork for dyeing
grey fabric and has installed capacity of close to 150,000 metres
per annum. It commenced operations in December 2013.
WOOGA CERAMIC: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Wooga Ceramic
Private Limited (WCPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.25 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 2.25 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 4.50 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with WCPL for
obtaining information through letter and email dated March 25, 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 WCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on WCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
WCPL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2017, Gujarat-based WCPL has set up a plant to
manufacture sanitary wares. The company is promoted by Mr Ketan
Patel and Mr Vishal Parecha, and their families. Operations
commenced in February 2019.
=========
J A P A N
=========
TOSHIBA CORP: S&P Keeps 'BB+' Long-Term ICR on CreditWatch Negative
-------------------------------------------------------------------
S&P Global Ratings has kept its 'BB+' long-term issuer credit
rating on Toshiba Corp. on CreditWatch with negative implications.
S&P also affirmed at 'B' its short-term issuer credit rating and
commercial paper program rating.
S&P Said, "We kept the rating on CreditWatch with negative
implications because the tender offer has yet to be initiated. This
means there is not enough information available to resolve the
CreditWatch placement. We placed our long-term issuer credit rating
on Toshiba on CreditWatch with negative implications on March 28,
2023. This followed the company's March 23, 2023, announcement that
it would support a tender offer that a special purpose company
established by Japan Industrial Partners Inc. (JIP) was planning to
make in late July.
"We continue to hold the view that implementation of the tender
offer would lead to a significant deterioration in Toshiba's
financial profile. Toshiba would be obliged to repay a volume of
debt that would account for a significant portion of the funds
raised for share purchases by JIP's special purpose company. Funds
required for the tender offer total nearly JPY2 trillion in common
equity and other instruments. If JIP's special purpose company
raises about JPY1 trillion through debt issuance, as media have
reported, Toshiba's debt-to-EBITDA ratio will likely substantially
deteriorate to above 5x in fiscal 2023 (ends March 31, 2024), in
our view. The ratio was 1.4x at the end of fiscal 2022.
"We assume the company's earnings forecasts for fiscal 2023 remain
uncertain. We expect its energy and infrastructure business, which
is less susceptible to economic downturns, to perform solidly.
Meanwhile, we see downside risk in the company's hard disk drives
(HDDs) business for data centers.
"If the tender offer fails, Toshiba's credit quality may still face
pressure. We would expect its debt to EBITDA ratio to rise to just
above 2x by the end of fiscal 2023, based on our assumption that it
will provide a high level of shareholder returns.
"In addition, if it falls through, we may take a more negative view
of the medium-term impact of governance on Toshiba's
creditworthiness. In such a case, decisions made by the company's
board of directors would have twice been rejected by shareholders.
They rejected a spinoff plan at an extraordinary shareholders
meeting in March 2022. Accordingly, we believe Toshiba will
continue to face difficulty in executing its medium- to long-term
management strategies for an even more prolonged period if the
tender offer is rejected.
"We will consider the impact of the tender offer on our rating on
Toshiba by examining progress of the offer, and the company's
management and financial status once we know the result of the
offer."
If the tender offer succeeds, S&P will examine the following:
-- Toshiba's management policy and the composition of the
management team;
-- Its relationship with parent company JIP;
-- Its relationship with its main banks;
-- Relationships with major customers; and
-- Forecasts of key cash flow indicators and financial covenants
(including values of shares of Kioxia Corp., an equity-method
affiliate of Toshiba's).
S&P sid, "We will likely resolve the CreditWatch placement once we
have clarity on management policy and finances, including Toshiba's
resultant debt, if the tender offer is accepted. We may lower the
current rating more than two notches if the company's debt
increases by more than JPY1 trillion.
"If the tender offer fails, we will likely resolve the CreditWatch
placement after examining the prospects for Toshiba's financial
performance and soundness, its relationship with major
shareholders, and its governance situation. The company's credit
quality may come under strong pressure if we conclude the prospects
for its financial performance is not commensurate with the current
rating. Also, mounting pressure for shareholder returns from major
investors and a decline in governance functions would likely weigh
on creditworthiness."
ESG Credit Indicators: E-2, S-2, G-5
S&P said, "Governance factors are a very negative consideration in
our credit rating analysis of Toshiba. Environmental and social
factors are an overall neutral consideration in our credit
analysis. During the course of our analysis for this action on the
company, we did not change any of our ESG credit indicators."
=====================
N E W Z E A L A N D
=====================
BED SHED: Court to Hear Wind-Up Petition on July 21
---------------------------------------------------
A petition to wind up the operations of Bed Shed Limited will be
heard before the High Court at Auckland on July 21, 2023, at 10:45
a.m.
Winehouse Limited filed the petition against the company on June 7,
2023.
The Petitioner's solicitors are:
Brent James Norling
Wendy Alexander
Level 3, Building 2
61 Constellation Drive
Rosedale
Auckland
BENNETT BUILDING: Creditors' Proofs of Debt Due on Aug. 5
---------------------------------------------------------
Creditors of Bennett Building Inspections Limited and BNY NZ
Limited are required to file their proofs of debt by Aug. 5, 2023,
to be included in the company's dividend distribution.
Bennett Building Inspections Limited commenced wind-up proceedings
on June 23, 2023.
BNY NZ Limited commenced wind-up proceedings on June 25, 2023.
The company's liquidators are:
Peri m. Finnigan
Colin Sanderson
Iain McLennan
Boris van Delden
McDonald Vague Limited
PO Box 6092
Victoria Street West
Auckland 1142
COTTER BUILDERS: Creditors' Proofs of Debt Due on Aug. 2
--------------------------------------------------------
Creditors of Cotter Builders Limited are required to file their
proofs of debt by Aug. 2, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on June 28, 2023.
The company's liquidator is:
Thomas Lee Rodewald
C/- Rodewald Consulting Limited
Level 1, The Hub
525 Cameron Road
PO Box 15543
Tauranga 3144
FISHER INVESTMENTS: Creditors' Proofs of Debt Due on Aug. 11
------------------------------------------------------------
Creditors of Fisher Investments Limited and Keldawn Consultants
Limited are required to file their proofs of debt by Aug. 11, 2023,
to be included in the company's dividend distribution.
The company commenced wind-up proceedings on June 30, 2023.
The company's liquidators are:
Iain Bruce Shephard
Jessica Jane Kellow
BDO Wellington
Level 1, 50 Customhouse Quay
Wellington 6011
LUXURY NAILS: Court to Hear Wind-Up Petition on July 10
-------------------------------------------------------
A petition to wind up the operations of Luxury Nails (Hamilton)
Limited will be heard before the High Court at Hamilton on July 10,
2023, at 10:45 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on May 12, 2023.
The Petitioner's solicitor is:
C. David Walmsley
Inland Revenue, Legal Services
21 Home Straight
PO Box 432
Hamilton
WAIPARA WINDS: Receivers Investigate Jailed US Fraudster
--------------------------------------------------------
Nadine Roberts at Stuff.co.nz reports that receivers are
investigating why a jailed former New York Property developer
turned vineyard owner spent large sums of money on shipping about
the same time he admitted committing NZD1.3 million of tax fraud.
Colin David Rath, 60, operated Waipara Winds Limited, a vineyard
and restaurant that traded as Fiddler's Green.
Under Mr. Rath, the Canterbury company amassed significant debt of
between NZD2.2 million and NZD4.2 million, Stuff discloses citing
the first receivers' report in May.
All assets at the vineyard have been frozen by a court order since
November 2021, but receivers reported some were sold after that
date, Stuff relates. Some of the cash for those assets went into
the company's account, but others were paid to related parties'
accounts.
There's also no explanation as to why the company paid a large
amount of shipping costs for shipping containers in late 2022.
Receivers are attempting to find out what was inside the containers
but said they could not talk about their investigation, according
to Stuff.
A vehicle was also transferred from Waipara Winds to a relative of
Mr. Rath because he claimed it was never owned by the company. He
then said the vehicle was a gift to the relative. However,
receivers said his claims did not align with information held.
Mortgage company Vulcan Mortgage Ltd issued a public notice this
week stating it has taken possession of the 246 Georges Rd, Waipara
property, including all chattels, buildings and land.
Mr. Rath, his wife Pamela, and their children arrived in Auckland
in 2016 on a luxury NZD950,000 yacht after he was granted an
entrepreneur work visa to set up the North Canterbury winery and
two other companies, Stuff recounts.
To gain the visa, Mr. Rath had to have NZD100,000 to invest, a
business plan, and be able to claim 120 points on the immigration
points scale.
He pleaded guilty to forging at least 14 documents to get his
entrepreneur residency last December – the same time he pleaded
guilty to the tax fraud, according to Stuff.
The Overseas Investment Commission granted Mr. Rath consent to buy
a 28-hectare property in 2018. Stuff has seen a heavily redacted
report from Land Information New Zealand on the decision, which was
released under the Official Information Act.
Much of the section about Mr. Rath's good character was redacted,
although the report said he provided statutory declarations stating
he was of good character, had not committed an offence or
contravened and knew of no matter that reflected adversely on his
fitness to have the vineyard.
"We have also conducted open source background checks on Mr. Rath,"
the report states.
Stuff is appealing to the Chief Ombudsman to see the redacted
passages and has asked the Ministry of Business, Innovation and
Employment for all documentation regarding Mr. Rath's visa
application.
Mr. Rath claimed he was a successful New York property developer
after his involvement with two Manhattan apartment buildings in
2006 and 2007. He self-published a book about his experience.
However, Mr. Rath got into significant debt with several banks
while in New York. It's unclear how much he owed when he left the
United States.
Stuff relates that Mr. Rath would eventually pleaded guilty to 39
counts of dishonestly using GST returns for a financial advantage
and was sentenced to three years and seven months' imprisonment.
An Inland Revenue investigation revealed he claimed NZD1.5 million
using 85 falsified documents from 2017 to 2021. He was given NZD1.3
million.
Elizabeth Helen Keene and Luke Norman of KPMG Christchurch on March
30, 2022, were appointed as receivers and managers of Waipara Winds
Limited.
=================
S I N G A P O R E
=================
DIGITAL ALPHA: Court Enters Wind-Up Order
-----------------------------------------
The High Court of Singapore entered an order on June 30, 2023, to
wind up the operations of Digital Alpha Group Pte. Ltd.
The company's liquidator is:
Yit Chee Wah
c/o FTI Consulting (Singapore)
1 Raffles Quay, #27-10
Singapore 048583
FASTFREIGHT PTE: Court Enters Wind-Up Order
-------------------------------------------
The High Court of Singapore entered an order on June 23, 2023, to
wind up the operations of Fastfreight Pte. Ltd.
Bulk Trident Shipping Ltd filed the petition against the company.
The company's liquidators are:
Jason Aleksander Kardachi
Borrelli Cosimo
c/o Kroll Pte Limited
1 Raffles Place, Tower 2, #10-62
Singapore 048616
QGC TRADE: Court to Hear Wind-Up Petition on July 14
----------------------------------------------------
A petition to wind up the operations of QGC Trade And Services Pte
Ltd will be heard before the High Court of Singapore on July 14,
2023, at 10:00 a.m.
Alstar Asset Management Limited filed the petition against the
company on June 15, 2023.
The Petitioner's solicitors are:
Providence Law Asia LLC
1 Raffles Place, Tower 2
#29-62, One Raffles Place
Singapore 048616
SELENE INVESTMENTS: Creditors' Proofs of Debt Due on Aug. 4
-----------------------------------------------------------
Creditors of Selene Investments Singapore Pte. Ltd. are required to
file their proofs of debt by Aug. 4, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on June 27, 2023.
The company's liquidators are:
Farooq Ahmad Mann
c/o 3 Shenton Way
#03-06C Shenton House
Singapore 068805
TRI-VIEW SHIPPING: Creditors' Proofs of Debt Due on Aug. 2
----------------------------------------------------------
Creditors of Tri-View Shipping Pte. Ltd. are required to file their
proofs of debt by Aug. 2, 2023, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on June 22, 2023.
The company's liquidators are:
Juay Sze Sin
Shirley Lim Guat Hua
c/o Complete Corporate Services
10 Anson Road
#29-07 International Plaza
Singapore 079903
WIRECARD AG: Singapore Sends Businessman to Jail for Role in Fraud
------------------------------------------------------------------
Chanyaporn Chanjaroen at Bloomberg News reports that a Singapore
judge handed a 12-month prison term to a businessman for conspiring
to misappropriate money in the Wirecard AG scandal.
Henry Yeo, a director at Jacobson Fareast Marketing Services Pte,
was convicted after pleading guilty to three charges in a Singapore
state court on June 27, Bloomberg relates.
"Wirecard Asia suffered a total loss of SGD123,070 (US$91,072) as a
result of the accused's participation in the conspiracy to
dishonestly misappropriate money from its account," deputy public
prosecutor Vincent Ong said in court.
Bloomberg relates that two ex-employees of Wirecard Asia Holdings
Pte had jail sentences imposed last month for conspiring to
misappropriate money in the first criminal convictions linked to
the massive fraud at the German payments firm. Singapore's
financial regulator also imposed SGD3.8 million in penalties on
four financial institutions for breaches related to Wirecard.
Wirecard filed for bankruptcy in 2020 after acknowledging that
EUR1.9 billion ($2 billion) it had listed as assets probably didn't
exist, Bloomberg recalls. In April, EY's German business was banned
for two years from accepting major new audit mandates, after it
failed to uncover fraud at Wirecard AG.
=====================
S O U T H K O R E A
=====================
CJ CGV: Struggles to Secure Cash Amid Sluggish Ticket Sales
-----------------------------------------------------------
Lee Kyung-min at The Korea Times reports that local movie theater
chain operators are resorting to liquidity crunch-induced issuance
of short-term bonds, in what market watchers said is a risky
operation of corporate financials brought on by a steady increase
in borrowing that failed to offset a nosedive in ticket sales
during the pandemic years.
According to the report, CJ CGV and Lotte Cultureworks, the
entertainment and movie chain affiliates of CJ Group and Lotte
Group are issuing hybrid bonds or perpetual bonds. Megabox
Joongang, the country's largest multiplex cinema chain, is issuing
short-term commercial papers as well as callable and puttable
bonds.
The back-to-back issuances of bonds by the three theater chains are
to pay off previous debt nearing a maturity or a rollover, the
report notes.
Hybrid bonds are subordinated bonds issued by non-financial
entities. The yields of hybrid bonds are significantly higher than
those of senior bonds from the same issuer. They are hybrid because
they combine the characteristics of bonds - payment of a coupon -
and equities that have no maturity date or a very long maturity.
Rating agencies regard hybrids as half-debt and half-capital, which
tends to improve the issuer's credit figures.
Callable bonds permit the issuer to redeem the debts earlier than
their original maturity date. Puttable bonds are the opposite of
callable bonds, whereby the issuer has the right but not the
obligation to purchase the bonds back from investors prior to their
maturity date.
According to the investment banking industry, Lotte Cultureworks
issued KRW30 billion worth of private hybrid bonds, June 29, with
Samsung Securities as the underwriter, The Korea Times relays.
This followed the issuance of another KRW40 billion ($30 million)
worth of private hybrid bonds in April with Korea Investment &
Securities as the underwriter, the report relates.
The KRW70 billion was used to repay maturing debt, market watchers
said. Lotte Cultureworks' debt-to-equity ratio stands at 3,500
percent, according to market watchers.
Similarly, CJ CGV issued KRW400 billion in convertible bonds last
July. The debt maturing in 30 years was largely considered to be
perpetual bonds.
But the KRW400 billion was not enough to pay off more than KRW2
trillion CJ CGV borrowed over the past three years, the report
notes.
CJ CGV is looking for a breakthrough in debt management with about
KRW1 trillion promised by CJ Group. It will include equity
financing of KRW570 billion and the purchase of of 450 billion
worth of shares in CJ Olive Networks, an entertainment affiliate of
CJ Group.
But shareholders said the plan is an irresponsible and easy way to
solve the problem at their expense, since KRW380 billion, or 66
percent of the KRW570 billion, will be used to pay off debt without
the burden of interest payments, the report relays.
Megabox issued KRW110 billion in commercial paper, up from KRW34.5
billion last September, the report discloses. It secured KRW52.5
billion in June after issuing callable and puttable bonds with
six-month maturities. Its debt-to-equity ratio reached 1,380
percent.
"Poor earnings performance during the pandemic years led to a
liquidity crunch," a CJ official said. "Ticket sales have yet to
see a meaningful turnaround and an overall rise in fixed costs
added to the years of COVID woes," the official added.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***