/raid1/www/Hosts/bankrupt/TCRAP_Public/230714.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, July 14, 2023, Vol. 26, No. 141
Headlines
A U S T R A L I A
COMO HOMES: Spared From Going Into Liquidation
CQ RESOURCES: First Creditors' Meeting Set for July 19
FLEXICOMMERCIAL ABS 2022-1: Moody's Ups Rating on F Notes to Ba3
HORE & DAVIES: Second Creditors' Meeting Set for July 18
LPS VIC: Second Creditors' Meeting Set for July 17
NORTH QUEENSLAND EXPORT: S&P Affirms 'BB-' Long-Term ICR
PORTER DAVIS: Traders Fuming as Customers Get Bailout Packages
S & K GROUP: Second Creditors' Meeting Set for July 17
THORN ABS 1: Fitch Affirms 'BB-sf' Rating on Class E Notes
C H I N A
CENTRAL CHINA REAL: Fitch Withdraws 'RD' LT Issuer Default Rating
DALIAN WANDA: Sells $307 Million Shares in Cinema Unit
I N D I A
AGRASIA IMPEX: ICRA Lowers Rating on INR5.0cr LT Loan to D
AKP FERROCAST: ICRA Withdraws B+ Rating on INR11.50cr Cash Loan
ASHOKA MANUFACTURING: CARE Moves B+ Rating to Not Cooperating
BEND JOINTS: CARE Lowers Rating on INR13.75cr LT Loan to D
BRAHMAPUTRA METALLICS: CARE Cuts Rating on INR71.62cr Loan to B+
BRIJ ENGINEERING: CARE Keeps C/A4 Debt Ratings in Not Cooperating
BVS DISTILLERIES: CARE Reaffirms B+ Rating on INR21.7cr LT Loan
CAMERICH PAPERS: CARE Keeps D Debt Ratings in Not Cooperating
EMMENNAR PHARMA: ICRA Keeps B+ Debt Ratings in Not Cooperating
FUTURE LIFESTYLE: Claims Worth INR3,477cr Admitted from Creditors
GRAND PRIX: ICRA Lowers Issuer Rating to BB+
HINDUSTHAN NATIONAL: CARE Keeps D Debt Ratings in Not Cooperating
K. P. INDUSTRIES: CARE Keeps D Debt Rating in Not Cooperating
KAMALA GINNING: ICRA Keeps B+ Debt Rating in Not Cooperating
MIRAJ RECYCLERS: CARE Keeps D Debt Ratings in Not Cooperating
MOHIJULI TEA: CARE Keeps D Debt Rating in Not Cooperating
NUPOWER WIND: CARE Lowers Rating on INR76.33cr LT Loan to D
RELIGARE ENTERPRISES: NCLT Dismisses Ligare's Insolvency Bid
SH TECH: CARE Keeps C Debt Rating in Not Cooperating Category
SHIKHAR CONSTRUCTIONS: CARE Keeps D Debt Rating in Not Cooperating
SHIV SHAKTI: CARE Assigns B+ Rating to INR25cr LT Loan
SUBADRA TEXTILE: ICRA Keeps D Debt Ratings in Not Cooperating
M A L A Y S I A
1MDB: Loo's Priority is to Cooperate in Probes, Lawyers Say
N E W Z E A L A N D
AUTOPRO DIGITAL: Creditors' Proofs of Debt Due on Aug. 7
BITCACHE: Kim Dotcom-Promoted Crypto Firm Goes Into Liquidation
HOWDYOUBE HAULAGE: Court to Hear Wind-Up Petition on July 20
LVO'S PROPERTY: Creditors' Proofs of Debt Due on Aug. 7
SKT SALONS: Court to Hear Wind-Up Petition on July 20
SOUTHRIM INTERNATIONAL: Creditors' Proofs of Debt Due on Aug. 18
S I N G A P O R E
8S CAPITAL: Creditors' Proofs of Debt Due on Aug. 7
FJH HOLDING: Creditors' Proofs of Debt Due on Aug. 7
LIGHTSTONE SINGAPORE: Creditors' Proofs of Debt Due on Aug. 7
NTD RIG: Commences Wind-Up Proceedings
SANGUINE HOLDINGS: Court to Hear Wind-Up Petition on July 21
S R I L A N K A
CEYLON ELECTRICITY: Fitch Affirms 'B(lka)' Rating, Outlook Now Pos.
T H A I L A N D
STARK CORP: SEC Confiscates Assets, Bars Execs from Travelling
- - - - -
=================
A U S T R A L I A
=================
COMO HOMES: Spared From Going Into Liquidation
----------------------------------------------
News.com.au reports that a court has spared an embattled building
company from going into liquidation despite mounting debts, a "long
line of creditors", and the landlord repossessing the office
space.
On July 12, Melbourne-based Como Homes Pty Ltd was called in the
Victorian Supreme Court after disgruntled creditors initiated
winding up proceedings against the business in January, according
to news.com.au.
News.com.au relates that Judicial Registrar Gitsham ordered an
adjournment on the case for three months to give the company
director time to sell a property to settle the debts, which total
nearly AUD1 million.
"The family home that is being sold by the defendant is listed for
settlement in September," Como Homes' solicitor, James Shannon,
told the court.
According to the report, Mr. Shannon said the company's director
was seeking to sell the property to pay back the debts, but said
only some of them were "legitimate ones". "Not all (debts) are
acknowledged," he added.
The solicitor also said his client, Como Homes, had reached an
agreement with the main plaintiff in the case, Flooring Xtra, who
claimed they were owed AUD141,000, according to court documents.
However, 12 other supporting creditors had joined the case,
including the Commissioner of State Revenue, which is now seeking
to be substituted as the plaintiff, news.com.au says.
The purpose of the company director selling his home is in order to
meet his obligations to both his creditors and his clients, a
spokesperson said, news.com.au relays. Many other builders had
taken the "easy option" of going into external administration but
he is doing right by his clients, they added.
Two days earlier, news.com.au revealed Como Homes owed nearly AUD1
million to 13 creditors and that its phone lines had shut down
while its social media accounts had disappeared.
In April, landlords repossessed the builder's office in Dandenong,
in Melbourne's southeast, which was also when its landline stopped
working, recalls news.com.au.
Concerned customers were greeted with the eviction notice when they
visited the firm's offices, news.com.au adds.
CQ RESOURCES: First Creditors' Meeting Set for July 19
------------------------------------------------------
A first meeting of the creditors in the proceedings of CQ Resources
Pty Ltd will be held on July 19, 2023, at 10:00 a.m. at the offices
of RSM Australia at Level 6, 340 Adelaide Street in Brisbane and
via virtual meeting technology.
Mitchell Herrett of RSM Australia Partners was appointed as
administrator of the company on July 7, 2023.
FLEXICOMMERCIAL ABS 2022-1: Moody's Ups Rating on F Notes to Ba3
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on five classes
of notes issued by flexicommercial ABS Trust 2022-1.
The affected ratings are as follows:
Issuer: flexicommercial ABS Trust 2022-1
Class B Notes, Upgraded to Aa1 (sf); previously on Nov 17, 2022
Definitive Rating Assigned Aa2 (sf)
Class C Notes, Upgraded to Aa3 (sf); previously on Nov 17, 2022
Definitive Rating Assigned A2 (sf)
Class D Notes, Upgraded to A3 (sf); previously on Nov 17, 2022
Definitive Rating Assigned Baa2 (sf)
Class E Notes, Upgraded to Baa2 (sf); previously on Nov 17, 2022
Definitive Rating Assigned Ba1 (sf)
Class F Notes, Upgraded to Ba3 (sf); previously on Nov 17, 2022
Definitive Rating Assigned B2 (sf)
RATINGS RATIONALE
The upgrades were prompted by an increase in credit enhancement
available to the affected notes and the good performance of the
collateral pool to date.
Following the June 2023 payment, credit enhancement available for
the Class B, Class C, Class D, Class E and Class F Notes has
increased to 27.0%, 21.3%, 17.6%, 13.2% and 8.0% respectively, from
21.5%, 17.0%, 14.0%, 10.5% and 6.2% at closing for these notes in
November 2022.
As of May 2023, 0.6% of the outstanding pool was 30-plus day
delinquent and 0.1% was 90-plus day delinquent. The deal has
incurred 0.5% of loss to date, which have been covered by excess
spread.
Based on the observed performance to date and loan attributes,
Moody's has lowered its expected loss assumption to 5.4% of the
original portfolio balance, compared with 7.0% of the original
portfolio balance at the time of closing in November 2022. Moody's
has also lowered the Aaa portfolio credit enhancement to 31% from
35% at closing.
The principal methodology used in these ratings was "Equipment
Lease and Loan Securitizations Methodology" published in September
2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations, and (2) an increase in credit enhancement
available for the notes.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in credit enhancement available for
the notes, and (3) a deterioration in the credit quality of the
transaction counterparties.
HORE & DAVIES: Second Creditors' Meeting Set for July 18
--------------------------------------------------------
A second meeting of creditors in the proceedings of Hore & Davies
Real Estate Pty Ltd has been set for July 18, 2023 at 10:00 a.m. at
the offices of Smith Hancock Chartered Accountant at Suite 47.04,
Level 47, 8 Parramatta Square, 10 Darcy Street in Parramatta and
via virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by July 17, 2023 at 4:00 p.m.
Peter Hillig and Erwin Rommel Alfonso of Smith Hancock Chartered
Accountant were appointed as administrators of the company on June
13, 2023.
LPS VIC: Second Creditors' Meeting Set for July 17
--------------------------------------------------
A second meeting of creditors in the proceedings of LPS Vic Pty Ltd
has been set for July 17, 2023 at 11:00 a.m. via virtual meeting by
Zoom.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by July 14, 2023 at 4:00 p.m.
Chad Rapsey and Mitchell Griffiths of Rapsey Griffiths Turnaround +
Advisory were appointed as administrators of the company on June 9,
2023.
NORTH QUEENSLAND EXPORT: S&P Affirms 'BB-' Long-Term ICR
--------------------------------------------------------
S&P Global Ratings affirmed the long-term issue credit rating on
North Queensland Export Terminal Pty Ltd.'s (NQXT) debt at 'BB-'.
The recovery rating is unchanged.
The stable rating outlook reflects the predictability of project
cash flow, based on take-or-pay arrangements and S&P's expectation
that NQXT will prudently manage its contract renewals, tariff
negotiations, and future refinancing.
Located 25 kilometers northwest of Bowen in the Australian state of
Queensland, NQXT is Australia's northernmost coal port. The
multiuser port has a design capacity of 50 million tons per annum
(mtpa). It has contracted about 76% of this capacity under medium-
to long-term take-or-pay agreements. NQXT holds the port under a
99-year lease from the Queensland government, starting early 2011.
-- Stable revenue under the take-or-pay contracts and
socialization arrangements based on a five-year tariff path, for
eight out of nine shippers.
-- Contracted capacity from multiple shippers until 2028.
-- Good quality and competitiveness of export coal from the
Queensland Bowen basin and absence of viable alternative ports.
-- Increasing contributions from one miner, Adani Mining Pte.
Ltd., to 25%-30% of total contracted capacity.
-- Periodic exposure to contract renewals and/or spot contracts
that dilutes the socialization mechanism.
-- Exposed to refinancing risk and dependent on cash sweeps.
-- Some headline environmental, social, and governance risk, given
that the Carmichael coal mine is one of the port's users.
S&P's rating affirmation factors in higher market risk due to
increasing miner concentration. Under a take-or-pay user agreement,
Adani Mining rails about 9.3 mtpa. Given a potential reduction in
volumes from Glencore, this means Adani Mining could contribute to
about 25% of NQXT's total contract volumes.
Previously, the largest miners contributed no more than 15%-18%.
NQXT has indicated that volumes from Adani Mining could increase to
about 12.5 mtpa within the next two to three years, constituting
about 30% to its total contracted capacity.
The nature of contracts will also continue to evolve, adding to
market risk. NQXT is renewing its contract with Glencore outside
the existing tariff structure based on five-year building block.
Although this could translate into a higher-than-current market
tariff, as well as inflation-linked escalations, and the
continuation of full passthrough of operations and maintenance
costs, the socialization mechanism will no longer apply for this
miner.
S&P said, "We believe this loss of socialization weakens the
socialization mechanism relative to other coal export terminals,
although the loss of socialization is applicable to only about 6%
of total contracted capacity currently. We will continue to monitor
how the contract structure for the remaining shippers evolves as
contracts come up for renewal, given that this can further add to
market risk.
"We believe the above factors reflect medium market risk, up from
low previously. This is because a hypothetical loss of one large
miner, or two to three small miners, could result in a 20%-25% drop
in revenues. This had led to an increase in our assessment of the
project's operating-phase business risk to '7' (from '5'). Also, as
is already the case for the remaining miners (excluding Glencore),
NQXT can only socialize any lost miner at the start of the next
five-year tariff-setting period. This means NQXT will carry that
loss in the intervening time.
"The rating is not currently constrained by any revenue
counterparty. This is due to: 1) the socialization mechanism for
most of the miners; and 2) our assumption of lower-than-contracted
tariffs for Glencore, which is not covered by socialization.
"We also view the current pool of miners as replaceable. Given the
prospects of the Australian coal industry over the medium term and
presence of a number of skilled players in the market, we believe
other operators may be able to step in to operate the mines.
"Furthermore, we assume a lower tariff rate than contracted rates
for contracts without socialization. Having said that, an
increasing shift by other miners to contracts without socialization
or a significant increase in contributions from a few miners could
change our view on the level of market risk or counterparty
dependencies over time.
"The higher risk assessment sits well in comparison with peers. For
example, Newcastle Coal Infrastructure Group has a stronger 10-year
evergreening take-or-pay contract structure, with full cost
passthrough, no volume risk, and full socialization that can be
applied annually. Similarly, Dalrymple Bay Finance Pty Ltd.
benefits from stronger competitive pricing and an ability to
socialize immediately. We reflect this in our lower risk
assessments (operations phase business assessment) for these
peers.
"DSCR for NQXT benefits from higher tariffs than we previously
expected, leading to a minimum DSCR ratio of 1.60x in our base
case. We base our assessment on our estimates for per-ton rates for
the current and next rest periods. Drivers for the improvement are
a higher base rate currently, higher forecasts for capital
expenditure (capex), and an already-negotiated rate for one miner.
"In addition, NQXT has minimal refinancing requirements over the
next 18 months, of about US$10 million due in September 2024. We
expect the project to proactively manage a subsequent maturity of
A$329 million in June 2025.
"We continue to assess all past shareholder loans as debt. This is
because current senior debt documentation allows NQXT to refinance
or raise external debt up to its original A$1.3 billion.
"The stable rating outlook on NQXT's senior debt reflects the
predictability of the project's cash flow, based on take-or-pay
contracts and cost passthrough mechanisms. We also expect NQXT to
prudently manage its contract renewals and tariff negotiations to
ensure long-term cash flow adequately covers debt servicing and
liquidity. The project's minimum DSCR will likely remain at about
1.60x, based on our assumptions.
"We may lower the rating if our base-case minimum DSCR dips below
1.5x or if we believe business risks associated with the project
have increased."
In S&P's view, this could occur if:
-- There is uncertainty surrounding contracted tariffs or volume;
-- The nature of contracts materially changes;
-- A shipper or some shippers can't be replaced;
-- NQXT fails to refinance its bullet maturities well ahead of
time;
-- Borrowing costs increase.
S&P said, "We could raise the rating if NQXT's capital structure
changes permanently, with no ability to subsequently draw down a
corresponding amount as senior debt. Clarity around contracted
tariffs, and an improvement in our forecast minimum DSCR to above
2.0x or in downside resiliency assessment could also lead to a
higher rating."
PORTER DAVIS: Traders Fuming as Customers Get Bailout Packages
--------------------------------------------------------------
News.com.au reports that a tradie who is AUD40,000 in the hole
after the collapse of a major building company has been left fuming
as customers have received government handouts while he has been
left with nothing.
In March, Australia's 13th largest home builder Porter Davis Homes
went into liquidation, placing 1700 projects and another 779 empty
blocks of land in jeopardy across Victoria and Queensland.
The firm's 470 staff members were left without jobs while more than
1000 unsecured creditors are cumulatively owed AUD71 million.
According to news.com.au, Catherine Haddo's husband is one of those
unsecured creditors, after doing contracting painting jobs for
Porter Davis for 18 years.
Unfortunately, the "bulk" of his projects came from Porter Davis.
That means not only is he AUD40,000 out of pocket after the
company's demise, but all his work has also dried up in the month
since.
"He put all his eggs in one basket and got screwed," Ms Haddo, 48,
told news.com.au.
Last month, news.com.au revealed that none of the unsecured
creditors - who are mostly tradies like Ms. Haddo's husband - are
expected to receive a cent from the Porter Davis liquidation
process.
Meanwhile, customers have been fully reimbursed from two state
government bailout packages, with a new compensation scheme rolled
out on July 9 infuriating tradies but providing welcome relief to
impacted homeowners, news.com.au reports.
According to news.com.au, liquidators discovered that 560 customers
had paid tens of thousands in deposit money but Porter Davis had
never taken out building insurance, leaving them with no automatic
payout from the insurer after the company went under.
Yet in an unprecedented step, Victorian Premier Daniel Andrews
agreed to refund them their lost money in a AUD15 million
government bailout announced a month later, in April.
Then, on the weekend, the Andrews government announced another
round of help totalling AUD13 million, news.com.au relates.
Around 400 customers had missed out on the bailout as they had paid
tenders, not deposits, which was three per cent of the total price
of the build, but wasn't part of the original scheme.
Said Jahani, Matt Byrnes and Cameron Crichton of Grant Thornton
Australia were appointed liquidators of Porter Davis Homes (PDH) on
March 31, 2023.
S & K GROUP: Second Creditors' Meeting Set for July 17
------------------------------------------------------
A second meeting of creditors in the proceedings of S & K Group Pty
Ltd has been set for July 17, 2023 at 2:30 p.m. virtually via
electronic facilities.
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 14, 2023 at 5:00 p.m.
Sam Kaso and Daniel P Juratowitch of Cor Cordis were appointed as
administrators of the company on June 9, 2023.
THORN ABS 1: Fitch Affirms 'BB-sf' Rating on Class E Notes
----------------------------------------------------------
Fitch Ratings has affirmed five classes of notes issued by Thorn
ABS Warehouse Trust No. 1. The transaction is backed by a pool of
first-ranking Australian automotive and commercial-finance
receivables originated by Thorn Australia Pty Limited and
Thornmoney Pty Ltd (Thorn). The notes were issued by Perpetual
Corporate Trust Limited as trustee for Thorn ABS Warehouse Trust
No. 1. The transaction is a revolving transaction with the current
substitution period ending in August 2023.
It was announced on June 20, 2023 that Thorn has entered into an
agreement with Resimac Asset Finance Pty Ltd for the sale of
Thorn's asset finance portfolio. The sale would include AUD150
million of asset receivables and Resimac acquiring the warehouse's
class G notes. The sale is expected to go through in end-August
2023 but is contingent on approval from Thorn's shareholders.
Fitch's affirmation takes into account the potential change of
ownership. However, Fitch has yet to receive full information on
servicing transition plans. The warehouse documentation currently
includes amortisation triggers that, if not waived or considered
met, will result in the amortisation of the warehouse trust. In the
event that the sale is approved and an amortisation trigger is not
waived or considered met, the transaction will start amortising,
increasing credit enhancement for the rated notes.
ENTITY/DEBT RATING PRIOR
----------- ------ -----
Thorn ABS Warehouse
Trust No. 1
A LT AAAsf Affirmed AAAsf
B AU3FN0043949 LT A+sf Affirmed A+sf
C AU3FN0043956 LT BBB+sf Affirmed BBB+sf
D AU3FN0043964 LT BB+sf Affirmed BB+sf
E AU3FN0043972 LT BB-sf Affirmed BB-sf
KEY RATING DRIVERS
Economic Growth Supports Outlook: Portfolio performance is
supported by Australia's continued economic growth and tight labour
market, despite increasing interest rates. GDP growth for the year
to March 2023 was 2.3% and unemployment was 3.7% in April 2023. We
expect GDP growth to slow to 1.5% in 2023, with unemployment
reaching 4.2%, reflecting high inflation combined with a slowdown
in consumer spending.
Performance Within Modelled Defaults: The portfolio's 30+ day
arrears were 0.80% at end-June 2023 and 60+ day arrears were 0.28%,
below Fitch's 1Q23 ABS Dinkum Index of 1.25% and 0.62%,
respectively. In the absence of an equipment-specific index, the
auto ABS index has been used as a comparison due to the
similarities between the asset classes.
The Portfolio Credit Model (PCM) and cash flow model were not rerun
in this review as the transaction remains within its revolving
period, observed default rates have been within Fitch's base case
expectations and the pool remains within its portfolio parameters.
Fitch's previous analysis used a proxy portfolio reflecting the
assumption that the portfolio's characteristics may migrate towards
the limits during the revolving period, including limits on
borrower type, industry type and asset type.
Recovery Rates Unchanged: Fitch maintained recovery rates of 0% to
reflect the lack of recent recovery data received from Thorn, which
details funds received from the sale of assets.
Portfolio Concentration Risk Mitigated: The transaction
documentation includes pool parameters during the revolving period
that limit the portfolio's largest obligor and largest five
obligors, as well as limiting the largest industry group and
aggregate exposure of the largest three industry groups. The proxy
portfolio's composition was stressed close to the parameter limits
for each of these characteristics and incorporated in Fitch's
previous PCM analysis.
The revolving period will end in the event that Thorn's sale is
approved and certain triggers detailed in the transaction's
amortisation events are not waived, leading to amortisation that
increases credit enhancement for the rated notes.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
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 the credit enhancement
available to the notes.
Downgrade Sensitivities
Unanticipated increases in the frequency of defaults and loss
severity on defaulted receivables 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 the coverage decline.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Macroeconomic conditions, loan performance and credit losses that
are better than Fitch's expectations, or sufficient build-up of
credit enhancement that would fully compensate for the credit
losses and cash flow stresses commensurate with higher rating
scenarios, all else being equal, would affect the transaction's
performance.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available to Fitch.
Fitch conducted a review of a small targeted sample of the
originator's origination files and found the information contained
in the reviewed files to be adequately consistent with the
originator's policies and practices and the other information
provided to the agency about the asset portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis, according to its applicable rating methodologies,
indicates that it is adequately reliable.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
The issuer has informed Fitch that not all relevant underlying
information used in the analysis of the rated notes is public.
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.
=========
C H I N A
=========
CENTRAL CHINA REAL: Fitch Withdraws 'RD' LT Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has withdrawn China-based property developer Central
China Real Estate Limited's (CCRE) Long-Term Issuer Default Rating
of 'RD' (Restricted Default) and senior unsecured rating of 'C'
with a Recovery Rating of 'RR6'.
Fitch is withdrawing the ratings as CCRE has chosen to stop
participating in the rating process. Therefore, Fitch will no
longer have sufficient information to maintain the ratings.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for CCRE.
KEY RATING DRIVERS
No longer relevant, as the ratings have been withdrawn.
RATING SENSITIVITIES
No longer relevant, as the ratings have been withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
ISSUER PROFILE
CCRE, established in 1992, is a leading property developer in Henan
province, focusing on developing residential properties.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
CCRE has an ESG Relevance Score of '4' for Management Strategy,
reflecting persistently weak contracted sales and an unsustainable
capital structure, which has a negative impact on the credit
profile, and is relevant to the ratings in conjunction with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DALIAN WANDA: Sells $307 Million Shares in Cinema Unit
------------------------------------------------------
Caixin Global reports that Dalian Wanda Group Co. is selling an
8.26% stake in its cinema unit to raise nearly CNY2.2 billion
(US$307 million) as the conglomerate faces liquidity pressure.
Wanda Film Holding Co. Ltd.'s controlling shareholder Beijing Wanda
Investment Co. Ltd. is selling 180 million shares to Lu Lili, the
wife of financial information provider East Money Information Co.
Ltd.'s owner Qishi, Wanda announced on July 11, Caixin relates.
About Dalian Wanda
Dalian Wanda Commercial Management Group Co., Ltd. operates as a
commercial property developer, owner, and operator. The Company
develops and manages mixed-use property projects including retail,
office, hotel, residential, restaurant, entertainment, and other
projects. Dalian Wanda Commercial Management Group conducts
businesses in China.
As reported in the Troubled Company Reporter-Asia Pacific on July
10, 2023, Moody's Investors Service has downgraded Dalian Wanda
Commercial Management Group Co., Ltd.'s (DWCM) corporate family
rating to B1 from Ba2.
Moody's has also downgraded the following ratings:
Wanda Commercial Properties (HK) Co. Limited's (Wanda HK) CFR to
B3 from B1
The senior unsecured ratings on the bonds issued by Wanda
Properties Global Co. Limited, Wanda Properties Overseas Limited
and Wanda Properties International Co. Limited to B3 from B1.
Wanda Properties Global, Wanda Properties Overseas and Wanda
Properties International are wholly owned subsidiaries of Wanda HK.
The rated bonds are guaranteed by Wanda HK and supported by deeds
of equity interest, purchase undertakings and keepwell deeds
between DWCM, Wanda HK and the bond trustee.
Moody's has also changed the rating outlook on DWCM and its
subsidiaries to negative from ratings under review. This concludes
the rating review initiated on May 5, 2023.
=========
I N D I A
=========
AGRASIA IMPEX: ICRA Lowers Rating on INR5.0cr LT Loan to D
----------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of
Agrasia Impex (AI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating downgraded from
Cash Credit [ICRA]B(Stable) and continues to
remain under 'Issuer Not
Cooperating' category
Long-term– 1.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating downgraded from
Term Loan [ICRA]B(Stable) and continues to
remain under 'Issuer Not
Cooperating' category
Long Term– 1.00 [ICRA]D; ISSUER NOT
COOPERATING;
Unallocated Rating downgraded from
[ICRA]B(Stable) and continues to
remain under 'Issuer Not
Cooperating' Category
Rationale
Material event
The rating downgrade reflects Delay in Debt Repayment as mentioned
in the publicly available sources.
Impact of material event
The rating is based on limited information on the entity's
performance since the time it was last rated in September 2022.
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity, despite the downgrade.
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Founded in 2007, as a proprietorship concern Agrasia Impex (AI) is
engaged in the trading of chilly and turmeric. Firm was earlier
involved in trading of chili powder, based on the orders received
from customers. However, since past 4 years the firm has
discontinued the sale of chili powder. AI is managed by Mr.
Nallamothu Sri Ramanjaneyulu who has more than a decade long
experience in trading of chilly and turmeric.
AKP FERROCAST: ICRA Withdraws B+ Rating on INR11.50cr Cash Loan
---------------------------------------------------------------
ICRA has withdrawn the ratings assigned to the bank facilities of
AKP Ferrocast Pvt Ltd at the request of the company and based on
the No Due Certificate (NDC) received from its banker. The Key
Rating Drivers, Liquidity Position, Rating Sensitivities, Key
financial indicators have not been captured as the rated
instruments are being withdrawn.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 11.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Cash Credit
Long Term- 5.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Withdrawn
Term Loan
Short Term- 2.00 [ICRA]A4; ISSUER NOT
Non Fund Based- COOPERATING; Withdrawn
Others
Incorporated in 2008, AKP Ferrocast Pvt Ltd is an ISO/TS 16949:2002
certified company which manufactures gray and ductile iron
castings. The promoters have experience of over four decades in the
metal-casting business. AKP's manufacturing plant is located in
Belgaum, Karnataka with an installed capacity to produce 24,000
tonne per annum of iron castings of weight 40 kg to 350 kg per
piece. The manufacturing facility is spread over an area of 14
acres and houses a corporate office, a foundry and a machine shop
and engages over 400 employees on permanent and contractual basis.
The product portfolio majorly consists of swing post/carriage,
mainfolds, valve bodies and bearing caps among others.
ASHOKA MANUFACTURING: CARE Moves B+ Rating to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Ashoka
Manufacturing Private Limited (AMPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.85 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Rating moved to
ISSUER NOT COOPERATING category
Short Term Bank 3.50 CARE A4; ISSUER NOT
Facilities COOPERATING; Rating moved to
ISSUER NOT COOPERATING category
Rationale and key rating drivers
CARE Ratings Ltd. has been seeking monthly 'No Default Statement
(NDS)' from AMPL to monitor the rating(s) vide e-mail
communications/letters dated May 9, 2023, July 5, 2023, among
others and numerous phone calls. However, despite repeated
requests, the company has not provided the NDS and information for
monitoring the ratings.
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. The rating on AMPL's bank facilities will
now be denoted as CARE B+; Stable; ISSUER NOT COOPERATING/CARE A4;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders, and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings continue to be constrained by AMPL's small scale of
operation, moderate financial risk profile & debt coverage
indicators, volatility in raw material prices, stretched operating
cycle and intense competition in the industry. However, these risks
are partially mitigated through its experienced management, long
track record of operations and reputed clientele and improvement in
financial performance in 9MFY23.
Analytical approach: Standalone
Detailed description of the key rating drivers: At the time of last
rating on February 23, 2023, the following were the rating
strengths and weaknesses.
Key weaknesses
* Small scale of operations: The overall scale of operation of the
company remained small and witnessed a substantial year on year
decline marked by total operating income of INR19.03 crore during
FY22 as against INR27.93 crore during FY21 due to weak export order
(export turnover being INR0.91 crore during FY22 as against
INR17.08 crores during FY21). Export has started picking up in
current year. During 9MFY23, company has achieved total operating
income of INR20.09 crores (Rs. 11.52 domestic sales and INR8.57
crores from Export orders).
* Deterioration in financial performance in FY22 albeit improvement
in 9MFY23: The company incurred operating loss of INR2.17 crore
during FY22 on account of substantial increase in cost of raw
materials (like Brass and Aluminium). Since the company mainly
executes government orders which are fixed value contract with no
escalation clause, it could not pass on the increase in raw
material cost. Nevertheless, the Company is expected to achieve
revenue of INR31 crore during FY23 given turnover of INR20.06
crores achieved till December 31, 2022, and orders in hand worth
INR10 crore to be executed by March 31, 2023.
* Volatility in raw material prices: The company does not have
backward integration for its basic raw-materials (Brass, Aluminium,
Copper, Steel etc.) and it procures the same majorly from Malaysia,
Taiwan and rest from Indian market. Since the raw-material is the
major cost driver and the prices of which are volatile in nature,
the profitability of the company is susceptible to fluctuation in
raw-material prices.
* Moderate financial risk profile and debt coverage indicators: The
leverage ratio deteriorated marked by overall gearing ratio of
1.44x as on March 31, 2022 as against 0.80 time as on Marc h 31,
2021 on account of higher availment of unsecured loans from
directors (to fund the losses and term debt repayment) and
relatively higher utilization of working capital limits as on
account closing date. The TOL/TNW deteriorated to 3.12x as on March
31, 2022 (PY: 2.11x). Further, the debt coverage indicators also
substantially deteriorated in FY22 due to operating loss and cash
loss incurred.
* Stretched operating cycle: The inventory holding period increased
substantially to 211 days during FY22 as against 154 days during
FY21 on account of poor export sales performance. Furthermore, the
company allows credit of around a month to its customers due to its
low bargaining power which also resulted into working
capital-intensive nature of its operations. However, it receives
high credit period from its suppliers due to its long presence in
the industry which mitigates its work ing capital intensity to a
certain extent. Nonetheless, the average utilization of fund -based
limits remained on the higher side at about 81% during last 12
months ended December 2022.
Key strengths
* Experienced promoters with long track record of operation: AMPL
is into manufacturing of spare parts for the defense sector since
1995 and thus has around more than two decades of track record of
operations. Being in the same line of business since long period,
the promoters have built up established relationship with its
clients and the company is deriving benefits out of this. Mr. Anil
Patodia has more than four decades of experience in the same line
of business, looks after the day -to-day operations of the company
supported by other directors who also have more than a decade of
experience in the same industry.
* Reputed clientele: AMPL has been associated with a number of
reputed customers since its inception and has marked a remarkable
presence in arms and ammunition industry. Some of the reputed
clienteles of the company are Bharat Dynamics Limited, Ministry of
Defence, Ordinance Factory at Khamaria, Maharashtra, Odisha,
Ammunition Factory at Kirkee, Pune, Gun & Shell Factory (Kashipur)
etc. for supplying ammunitions mechanical assemblies.
Ashoka Manufacturing Private Limited (AMPL) was initially
incorporated as 'Ashoka Manufacturing Limited' on November 8, 1995.
The status of the company has changed from Public Limited Company
to Private Limited Company vide certificate of Incorporation dated
July 31, 2020, issued by Registrar of Companies, West Bengal. The
company was promoted by Mr. Anil Kumar Patodia and his family
members. Since its inception, AMPL has been engaged in
manufacturing of base metal parts made up of brass, aluminium,
copper, steel, zinc etc. which are mainly used for ammunitions
mechanical assemblies. The manufacturing facilities of the company
are located at industrial area, Hempal Lane, Howrah and Beleghata,
Kolkata (both in the state of West Bengal). The manufacturing
facilities of the company have ISO 9001:2015 certified. The company
sells its products under its name ASHOKA both in domestic as well
as international market. Mr. Anil Kumar Patodia, having more than
four decades of experience in same line of business, looks after
the day-to-day operations of the company supported by a team of
experienced personnel.
BEND JOINTS: CARE Lowers Rating on INR13.75cr LT Loan to D
----------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Bend Joints Private Limited (BJPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 13.75 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category and Revised from
CARE B+; Stable
Short Term Bank 4.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE A4
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 20, 2022,
placed the rating(s) of BJPL under the 'issuer non-cooperating'
category as BJPL 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. BJPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 6, 2023, May 16, 2023, May 26, 2023, July 3, 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).
The rating revision also considers ongoing delays in debt servicing
recognised from publicly available information. i. e. CIBIL check.
Bend Joints Private Limited (BJPL), located at Bhopal, commenced
its operations as a partnership firm in 1972 and subsequently was
converted into Private Limited company in 2004. BJPL is an ISO
9001: 2008 certified company and is primary involved in fabrication
and supply of pressure parts for high pressure and temperature
applications primarily for the power sector over a period of four
decades.
BRAHMAPUTRA METALLICS: CARE Cuts Rating on INR71.62cr Loan to B+
----------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Brahmaputra Metallics Limited (BML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 71.62 CARE B+; Stable Rating removed
Facilities from ISSUER NOT COOPERATING
category and Revised from
CARE C; Stable
Short Term Bank 44.86 CARE A4 Rating removed from
Facilities ISSUER NOT COOPERATING category
and reaffirmed
Rationale and key rating drivers
In the absence of minimum information required for the purpose of
rating, CARE was unable to express an opinion on the rating of BML
and in line with the extant SEBI guidelines, CARE revised the
rating of bank facilities of the company to 'CARE C; Stable; ISSUER
NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING'. However, the
company has now submitted the requisite information to CARE.
Accordingly, CARE has carried out a full review of the rating and
the rating is revised to 'CARE B+; Stable/CARE A4.
The revision in the ratings assigned to the bank facilities of BML
is on account of improving financial performance in FY23 (UA)
coupled with repayment of CRPS loan through equity infusion. The
ratings are constrained by moderate scale of operations and
cyclical nature of the steel industry which are partially offset by
strength from strategic location of the plant with proximity to raw
materials sources along with supply linkage of raw materials,
experienced promoters, established relationship with customers and
suppliers, leveraged capital structure and moderate debt coverage
indicators albeit improvement witnessed in FY23.
Rating sensitivities: Factors likely to lead to rating actions.
Positive factors
* Increase scale of operations from present level (Total Operating
Income above INR500 crore) of the entity while maintaining
operating margins at current levels on a sustainable basis.
* Further improvement in capital structure post redemption of
CRPS.
Negative factors
* Any sizeable de-growth in scale of operations from present level
(total operating income below INR300.00 crore) on a sustained
basis.
* Elongation of operating cycle to above 60 days of the entity on
a sustainable basis.
Analytical approach: Standalone.
Outlook: Stable
Stable outlook reflects the ability of the company to sustain its
performance on the back of healthy demand coupled with expected
equity infusion from promoters for paying off the last tranche of
CRPS payment due on Mar 31, 2024, as demonstrated in the past.
Detailed description of the key rating drivers
Key weaknesses
* Moderate scale of operations: BML is a moderate sized player in
the iron and steel industry. Thus, it suffers from lack of
economies of scale in an industry marked by presence of
large-organized players. Furthermore, the moderate size restricts
the financial flexibility of the company in times of stress.
* Cyclical nature of the steel industry: Prospects of steel
industry are strongly co-related to economic cycles. Demand for
steel is sensitive to trends of industries, viz. automotive,
construction, infrastructure, and consumer durables, which are the
key consumers of steel products. These key user industries in turn
depend on various macroeconomic factors, such as consumer
confidence, employment rates, interest rates and inflation rates,
etc. in the economies in which they sell their products. When
downturns occur in these economies or sectors, steel industry may
witness decline in demand.
Key strengths
* Experienced promoters: The promoters of the company have more
than two decades of experience in the steel manufacturing industry.
Besides, the promoters are involved in other businesses including
coking coal, retail, cement & paper. The promoters have
demonstrated support by equity infusion of INR28.77 crore and
unsecured loan of INR6.65 crore for making scheduled repayment of
CRPS amounting to INR28.68 crore in FY23. As articulated by
management, the promoters are expected to infuse additional equity
for meeting the next repayment of CRPS amounting to INR32.04 crore
due on Mar 31, 2024.
* Improvement in financial performance in FY23: Total operating
income declined from INR508.82 crore in FY22 to INR463.38 crore
during FY23 on account of lower production of billets. Lower
production of billets is on account of lower efficiency emanating
from lower utilization of higher quality imported coal due to
higher prices of the same. With imported coal prices falling, the
management expects production/sale of billets to improve in current
fiscal.
However, PBILDT margins have improved from 5.55% in FY22 to 6.21%
in FY23. In line with improvement in PBIDT margin and lower
interest cost, the company reported PAT and GCA of INR9.41 crore
and INR20.51 crore respectively in FY23 as compared to profit of
INR6.76 crores and GCA of INR19.49 crore respectively in FY22.
* Strategic location of the plant with proximity to raw materials
sources: BML's manufacturing facility is located at Gola, Ramgarh
District, Jharkhand, which is near coal mines from where the entity
procures coal. BML has a linkage with Central Coalfields Limited
(CCL) for supply of 45,800 tonnes of coal every year (which
constitute about 55-60% of the company's requirement). The
agreement was renewed in Oct 2021 and has a validity of 5 year.
Remaining of the coal is purchased from coal traders. Moreover, the
plant is well connected through road and rail transport which
facilitates easy transportation of raw materials and finished
goods. Hence, the plant enjoys competitive advantages in terms of
containment of transportation costs and ready market. The
manufacturing facility has a 350 TPD kiln as on March 31, 2023.
Further, the company has captive power plant of 20 MW (8 MW WHRS
based, and 12 MW coal based). The company is planning for 5MW power
through underground line from Damodar Valley Corporation at a cost
of INR5 crore. This would take care of the company's power
requirement for its manufacturing facility.
* Leveraged capital structure and moderate debt coverage indicators
albeit improvement witnessed in FY23: Although overall gearing has
improved from 4.96x as on Mar 31, 2022, to 2.06x as on Mar 31,
2023, post redemption of CRPS amounting to INR28.68 crore on March
31, 2023, by infusion of equity capital amounting to INR28.77 crore
and unsecured loan of INR6.65 crore, it continues to remain
leveraged. The next repayment of CRPS amounting to INR32.04 crores
is due on March 31, 2024, for which promoters have planned an
equity infusion of INR30 crores in March 2024. The interest
coverage and TD/GCA ratio has improved from 2.86x and 10.23x in
FY22 to 3.49x and 7.47x in FY23.
* Established relationship with customers and suppliers: The
company has a long track record of operations in steel business
since 2006. The company has an established relationship with
leading suppliers and customers. The company purchases iron ore
pellets primarily from Amalgam Steel Pvt Ltd, Rashmi Metaliks Ltd
and Rungta Mines Limited and coal from Adani Enterprises Ltd. The
company enjoys healthy relationship with its suppliers.
Liquidity: Stretched
The liquidity position of the company is stretched marked by lower
accruals when compared to repayment obligations. However, the same
is expected to be met through infusion of equity or from infusion
of unsecured loan from promoters/directors. The company reported
cash accruals of INR20.59 crores in FY23 and infused equity of
INR28.77 crore along with unsecured loan of Rs.6.65 crore to make
debt repayment obligation of INR28.68 crore (pertaining to CRPS
repayment). The company's fund based working capital limits
remained almost fully utilized for Bank of Baroda & Punjab National
bank and 70-75% utilized for SBI. The next repayment of CRPS
amounting to INR32.04 crore is due on March 31, 2024, for which the
management has articulated that promoters will infuse unsecured
loans/equity in current fiscal year.
Brahmaputra Metallics Limited (BML) is promoted by Guwahati based
Lohia Group and Jaiswal Group. The Company was initially
incorporated as Brahmaputra Breweries and Distilleries Pvt. Ltd. on
29th October 1999. Subsequently the Company decided to enter the
steel plant and consequently the name of the Company was changed to
Brahmaputra Metallics (P) Limited on 4th December 2006. The Company
was converted into a public limited company and rechristened as
Brahmaputra Metallics Limited on 4th July 2007. In May 2009, BML
envisaged setting up an integrated steel plant at Gola, Ramgarh
District, Jharkhand. The installed capacity stands at 1,05,000 tons
per annum for sponge iron, 210,000 tons per annum for billets and a
20 MW captive power plant. The directors of the company include Mr.
Bajrang Lohia, Mr. Kaushik Agarwal and Mr. Santosh Kumar Jaiswal.
BRIJ ENGINEERING: CARE Keeps C/A4 Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Brij
Engineering Works -Kanpur (BEW) continue to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 7.00 CARE C; Stable/CARE A4;
Short Term ISSUER NOT COOPERATING;
Bank Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 22, 2022,
placed the rating(s) of BEW under the 'issuer non-cooperating'
category as BEW 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. BEW continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 8, 2023, May 18, 2023, May 28, 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).
Kanpur (Uttar Pradesh) based Brij Engineering Work (BEW) was formed
as partnership concern by Mr. Brij Kishore Gupta, Mar. Swapnil
Gupta, Mrs. Sheela Gupta and Mrs. Shweta Gupta in September 1,
1978. The firm is engaged in the construction of overhead tank,
sewage pipelines and sewage treatment plants, installation and
commissioning of water supply lines. The firm takes the contracts
from government departments through participating in tenders.
BVS DISTILLERIES: CARE Reaffirms B+ Rating on INR21.7cr LT Loan
---------------------------------------------------------------
CARE Ratings has reaffirmed the ratings on certain bank facilities
of BVS Distilleries Private Limited (BVS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 21.70 CARE B+; Stable Reaffirmed
Rationale and key rating drivers
The reaffirmation of rating assigned to the bank facilities of BVS
is constrained by small scale of operations, fluctuating profit
margins, leveraged capital structure and weak debt service coverage
indicators. The rating is further constrained by presence of
business exposed to regulatory risk due to regulated nature of
liquor industry. The rating however derives comfort from
resourceful and experienced promoters with proven track record of
operation, satisfactory financial risk profile of the counter
party, comfortable operating cycle and stable industry outlook.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Consistent improvement in revenue and strengthening of its
overall financial risk profile
* Ability of the company to improve the net worth base
Negative factors
* Any delay or disruption in renewal of contract with Pernod Ricord
India Private Limited (Pernod) or SNJ Sugars and
Products (SNJ)
* Any further deterioration of profits at net level
Analytical approach: Standalone
Outlook: Stable
Vintage of management in the industry and operational licenced
bottling capacity is expected to aid business operations in longer
term.
Detailed description of the key rating drivers:
Key weaknesses
* Small and restricted scale of operations: BVS's scale of
operations stood small as marked by total operating income of
INR9.23 crore and gross cash accruals of INR1.82 crore during FY23
(FY refers to the period April 1 to March 31; based on provisional
results) as against total operating income of Rs12.16 crore and
gross cash accruals of INR3.30 crore during FY22 on account of
decline in the orders from Pernod Ricord India Private Limited.
Small scale limits the company's financial flexibility in times of
stress and deprives it of scale benefits. As, the its manufacturing
facility for job work and collects rent from Pernod and SNJ. The
only expenses for the company are repairs/maintenance,
administration cost and interest expense. Therefore, the operating
margin remains healthy and ranges between 45-55%. Company began the
operation in FY18 and with gradual and better absorption of
overheads , it reported profits from FY20 onwards. For FY23, the
company reported PAT of INR0.15 crore and PAT margin stood at 1.67%
because of higher interest and depreciation.
* Leveraged capital structure and coverage indicators: The capital
structure of the company remained leveraged at 5.47x as on March
31, 2023 on account of huge amount of term loan availed and brought
in interest free unsecured loans for setting up of the unit and to
support the business operations. The total debt of the company
comprises of term loan (52%), GECL (12%) and USL (36%). The
coverage indicators of the company remained weak marked by total
debt/GCA and PBILDT interest coverage stood at 22.18x and 1.06x in
FY23 on account of increased promoters loans coupled with decrease
in cash accruals.
* Highly regulated business with high duties and taxes albeit high
entry barriers benefitting the incumbents: The liquor industry is
highly regulated in India with each State government formulating
its own policy for production, distribution, retailing and duty
structure independently. As a result, there are difficulties in
transfer of production from one state to another, along with huge
burden of duties and taxes. Moreover, the organized alcohol
industry is dominated by very few large players. Further, high
taxation and heavy regulation also make the industry dynamics
complex. Moreover, the complexity of the industry further lies in
the different types of distribution models followed in various
states like government-controlled agencies, private distribution
system and auction. The regulations at State levels are prone to
frequent changes and be sudden and uncertain. The direction or
timing of any regulatory changes being difficult to predict,
industry is vulnerable to such unanticipated changes. Also, the
Government has been running anti-alcohol campaigns to increase
social awareness amongst people on hazards of consumption of
alcohol and also increased duty on alcohol in order to refrain
people from consuming it.
Key strengths
* Resourceful and experienced promoters with satisfactory track
record: The company has a track record of around five years. BVS is
promoted by Mr B V Subba Rao along with his spouse. The promoter
has experience of more than three decades in fleet industry and
beverages. The promoters also have other entities Laxmi & Co., Sri
Laxmi & Co., BVS Cargo and Movers Private Limited engaged in
transportation business i.e., (tankers of IMFL) to various states
like Telangana, Karnataka and Tamil Nadu. The promoters are
resourceful and have infused need based funds for smooth flow of
business operations. As on March 31, 2023 the company has interest
free unsecured loans of INR14.67 crore.
* Moderate counter party risk, presence of escrow mechanism: Pernod
Ricord India Private Limited is a fully owned subsidiary of Pernod
Ricard SA (Fitch BBB+ dated Nov 2, 2022). Pernod is a multinational
alcohol beverage company that delivers quality products to its
customers across the country. It is home to a number of renowned
brands, including Royal Stag and Blenders Pride, which are produced
locally at its two distilleries in Nashik (Maharashtra) and Behror
(Rajasthan) and bottled at 29 sites across the country. The company
has agreement with Pernod from past five years and same is expected
to be renewed for another year, however regular renewal of
agreement is critical from credit perspective.
Furthermore, the lease rental amount of INR50,000 every month is
credited to escrow account maintained with bank and the same amount
is utilized to meet the debt servicing obligation and after meeting
debt obligation the balance is transferred to BVS current account
to meet their administrative and operating expenses.
In March 2023, BVS has signed an agreement with SNJ Sugars Private
Limited whereby, SNJ will be leasing its 5 lines for the bottling
for SNJ's brands like Royal Palace & Royal Right for the 2.25 lacs
cases (at INR60 per case) per month till 2026. However, BVS has not
signed minimum guarantee quantity agreement with SNJ, which is
expected to be signed in Q2-FY24.
* Favorable prospects for alcoholic beverage market in India: India
is amongst the largest alcoholic beverage's producers and the third
largest liquor market in the world. Key demand drivers of the
industry have been growing disposable income, favorable
demographics in the country wherein India is expected to add ~17
million people to the legal drinking age each year, changing
lifestyle & societal norms with increasing acceptability of alcohol
on social occasions, urbanization along with increasing number of
pubs and bars in the country.
Liquidity: Stretched
Press Release
Liquidity is stretched marked with tightly matched accruals to
repay its term debt obligations and low cash balance of
INR0.15crore as on March 31, 2023. Any delay in receipt of payment
from customers remain critical for BVS to meet the debt
obligation.
B.V.S Distilleries Private Limited (BVS) was established in the
year 2011. However, the commercial operations of the company
started from Feb 6, 2017. Since 2017, the company has given their
facility premises for lease to Pernod Ricard India Private Limited
(Pernod) for one year, yearly renewable based upon the mutual
consent. Perno d is billed based on quantity produced on
monthly basis with a minimum production clause.
CAMERICH PAPERS: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Camerich
Papers Private Limited (CPPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 122.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 5.00 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 15, 2022,
placed the rating(s) of CPPL under the 'issuer non-cooperating'
category as CPPL 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. CPPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 1, 2023, May 11, 2023, May 21, 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 2014, CPPL (CIN: U21000GJ2014PTC080492) had setup a
green field project of manufacturing of duplex and triplex paper
board with specialty packaging boards like Folding Box Board (FBB)
and white top Craft Liners (WTLs) which commenced commercial
operation in June, 2018. The Plant is located at Morbi, Gujarat
with installed capacity of manufacturing 90,000 Metric Tonne Per
Annum (MTPA) of different type of paper from waste/recycled papers.
CPPL is promoted by Mr. Kamlesh Sitapara, Mr. Arjun Sitapara
(Sitapara family), Mr. Gunvant Surani (Surani family), Mr.
Yogeshkumar Patel and Mr. Mohanbhai Donga.
EMMENNAR PHARMA: ICRA Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has retained the long-term and Short-Term ratings of Emmennar
Pharma Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term- 5.30 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
Long Term/ 23.95 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain
under issuer not cooperating
category
Long Term- 40.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Emmennar Pharma Private Limited, formerly known as Emmennar
Bio-tech Private Limited, manufactures active pharmaceutical
ingredients (APIs) and intermediates at its two production
facilities in Hyderabad and Vishakhapatnam. EPPL belongs to
Hyderabad-based Virchow Group, promoted by Dr. N Venkata Reddy, Mr.
M Narayana Reddy, Mr. L V Subba Reddy, Mr. Ravindra Reddy and their
families.
FUTURE LIFESTYLE: Claims Worth INR3,477cr Admitted from Creditors
-----------------------------------------------------------------
The Economic Times reports that Future Lifestyle Fashions Ltd
(FLFL) has said that claims worth INR3,477.28 crore from as many as
17 financial creditors have been admitted in the ongoing Corporate
Insolvency Resolution Process (CIRP). Catalyst Trusteeship Ltd has
emerged as the lead financial creditor with INR600.40 crore, having
a 17.4 per cent voting share in the Committee of Creditors (CoC),
formed for the debt-ridden Future Group firm.
This is followed by the State Bank of India and Centbank Financial
Services Limited (Debenture Trustee) with a loan amount of
INR476.59 crore and INR444.76 crore respectively.
State Bank of India has a voting share of 13.86 per cent and
Centbank Financial has a voting share of 12.93 per cent in the CoC,
FLFL said in a regulatory filing, ET relays.
Besides, Centbank Financial Services (Debenture Trustee) also has a
loan of INR38.50 crore.
Moreover, FLFL has received claims of INR803.48 crore from the
operational creditors, which are "under verification" now by the
resolution professional, according to ET.
RP has also received claims worth INR38.66 crore from the
employees/workmen of FLFL which are also under verification.
"The claims received are under verification and will be verified
once we receive access to the accounting system of the Corporate
Debtor (FLFL)," said the RP.
Earlier, on May 4, the Mumbai bench of the National Company Law
Tribunal (NCLT) had directed to initiate CIRP against FLFL,
admitting a petition from the Bank of India.
Future Lifestyle Fashions Ltd (FLFL) is the apparel retail venture
of the Future group. It was established by combining apparel retail
formats and fashion brands that were demerged from Pantaloon Retail
India Ltd and Future Ventures India Ltd, respectively. The company
has a portfolio of brands that cover a range of fashion categories,
including apparel and footwear. It has Central and Brand Factory
stores, along with exclusive Brand Factory outlets. Central
operates primarily in the premium apparel, footwear, watches and
fashion accessories segment, while Brand Factory operates mainly in
the off-price apparel retailing (discount-based) segment.
GRAND PRIX: ICRA Lowers Issuer Rating to BB+
--------------------------------------------
ICRA has kept the Long-Term and Short-Term ratings of Grand Prix
Engineering (P) Ltd. in the 'Issuer Not Cooperating' category. The
ratings are denoted as [ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT
COOPERATING.
ICRA has moved the ratings for the Issuer Rating of Grand Prix
Engineering (P) Ltd. to the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]BB+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 12.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 23.00 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Issuer Rating - [ICRA]BB+(Stable); ISSUER NOT
COOPERATING; Rating downgraded
from [ICRA]BBB- (Stable) and
moved to remain under 'Issuer
Not Cooperating' category
The rating downgrade is because of lack of adequate information
regarding Grand Prix Engineering (P) Ltd.'s performance and hence
the uncertainty around its credit risk. ICRA assesses whether the
information available about the entity is commensurate with its
rating and reviews the same as per its "Policy in respect of
non-cooperation by a rated entity" available at www.icra.in.
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating as
the rating may not adequately reflect the credit risk profile of
the entity.
As part of its process and in accordance with its rating agreement
with Grand Prix Engineering (P) Ltd., ICRA has been trying to seek
information from the entity so as to monitor its performance.
Further, ICRA has been sending repeated reminders to the entity for
payment of surveillance fee that became due but despite repeated
but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. In the absence of
requisite information and in line with the aforesaid policy of
ICRA, a rating view has been taken on the entity based on the best
available information.
Grand Prix Engineering (P) Ltd. is involved in design, engineering,
manufacture, and supply of pressure vessels (inCS/LTCS/SS/LAS/
Clad), process equipment and skid mounted packages/systems
worldwide. Established in 1970, the company has over four decades
of experience. It has in-house process and mechanical design
capabilities, offering customized solutions to various clients in
oil and gas, petrochemicals, refining, chemicals, power, steel,
fertiliser and metallurgical industries.
In FY2019, the company reported a net profit of INR7.1 crore on an
OI of INR54.8 crore compared to a net profit of INR5.5 crore on an
OI of INR41.2 crore in the previous year.
HINDUSTHAN NATIONAL: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Hindusthan
National Glass & Industries Limited (HNG) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 2,063.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/ 600.00 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Rationale and key rating drivers
CARE had, vide its press release dated July 8, 2022, continued the
ratings of HNG under the 'issuer non-cooperating' category as HNG
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. HNG continues to be
non-cooperative despite repeated requests for submission of
information through phone calls and letters/emails dated May 24,
2023, and June 3, 2023, among others.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE'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 ratings.
Detailed description of the key rating drivers:
At the time of last rating on July 8, 2022, the following were the
rating strengths and weaknesses (updated for the information
available from stock exchange fillings):
Key weaknesses
* Ongoing delays in debt servicing: There are continuing delays in
servicing of debt by the company. The Hon'ble National Company Law
Tribunal (NCLT), Kolkata Bench, vide its order dated October 21,
2021, has admitted the company for initiation of Corporate
Insolvency Resolution Process (CIRP) under the Insolvency and
Bankruptcy code, 2016 (IBC).
* Continued losses resulting in stressed liquidity position: The
company reported net loss of INR233.32 crore on total operating
income (TOI) of INR2457.35 crore in FY23 vis-à-vis net loss of
INR348.53 crore on TOI of INR2097 crore in FY22. The liquidity
position of the company continues to remain stressed.
Key strengths
* Long track record of the company with established market
presence: HNG, having market presence of over six decades, is an
established manufacturer of container glass and has a pan India
presence. The promoters have an experience of over two decades in
the container glass industry.
HNG, incorporated in February 1946, was promoted by late MR. C.K.
Somany of the Kolkata -based Somany family. The company
manufactures container glass with seven manufacturing units, spread
across the country having an aggregate installed capacity of
15,69,500 tpa (tonne per annum).
K. P. INDUSTRIES: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of K. P.
Industries (KPI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.69 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 21, 2022,
placed the rating(s) of KPI under the 'issuer non-cooperating'
category as KPI 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. KPI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 7, 2023, May 17, 2023, May 27, 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).
Established in the year 2009, Ahmedabad-based K.P. Industries (KPI)
is a partnership firm engaged in the processing of nonbasmati rice.
Key partners include Mr. Dhaval Prajapati and Mr. Atul Prajapati
who manage the day to day operations. As on
March 31, 2016, it had a total installed capacity of 69,120 Metric
Tonnes per annum and operates through its sole manufacturing unit
at Kheda.
KAMALA GINNING: ICRA Keeps B+ Debt Rating in Not Cooperating
------------------------------------------------------------
ICRA has assigned rating to the bank facilities of Kamala Ginning
and Oil Industries Private Limited (KGOIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 32.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Rationale
The rating assigned to KGOIPL factors in its small scale of current
operations with a top line of ~Rs. 88 crore in FY2023 (provisional)
and a weak financial profile, which is characterised by low
profitability due to low value additive nature of the business, a
leveraged capital structure and subdued coverage indicators. The
rating also factors in the vulnerability of the company's
profitability to fluctuations in raw cotton prices. Additionally,
intense competition from domestic players limits the company's
pricing flexibility and the bargaining power, keeping its margins
under check. KGOIPL is also exposed to the regulatory risks such as
changes in the minimum support price (MSP), which is set by the
Government and availability of cotton as its production depends on
agro-climatic conditions, which subject it to agro-climatic risks.
The rating, however, favourably factors in the long experience of
the promoters in the cotton ginning and oilseed industry and the
proximity of the company's manufacturing unit to raw material
sources.
The Stable outlook on the [ICRA]B+ rating reflects ICRA's opinion
that KGOIPL will continue to maintain its business position and
profitability.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters in cotton ginning and oilseed
industry: The promoters of the company have a long experience of
four decades in the cotton ginning and oilseed industry, resulting
in established relationships with customers.
* Location-specific advantages: KGOIPL's facilities are located in
Telangana, one of the largest cotton producing states in India.
Such proximity to raw material sources results in regular
availability of raw materials at a low landed cost.
Credit challenges
* Small scale of operations: KGOIPL's operating income (OI) has
remained volatile in the range of ~Rs. 85 crore to ~Rs. 178 crore
between FY2019 and FY2023. The OI fell ~50% to INR88.4 crore in
FY2023 (provisional) due to unfavourable market conditions. While
the top-line is expected to increase moderately in the current
fiscal, the scale of operations will continue to remain at a modest
level.
* Financial risk profile characterised by a leveraged capital
structure and subdued coverage indicators: Given the working
capital intensive nature of operations, KGOIPL has been highly
reliant on short-term borrowings over the years. The overall debt
level increased to INR44.3 crore (including promoter loans) as on
March 31, 2023 from INR37.3 crore as on March 31, 2022 owing to an
increase in the inventory holding. Consequently, the gearing
increased to 5.6 times as on March 31, 2023 from 5.0 times as on
March 31, 2022. The adjusted1 gearing stood at 2.7 times as on
March 31, 2023 (2.3 times as on March 31, 2022). The coverage
indicators are subdued owing to low absolute profits as well as
high debt levels. The interest cover and DSCR stood at 1.1 times
and 0.6 times in FY2023, respectively. ICRA notes that the
promoters have been infusing unsecured loans as and when required
to service the principal repayment obligations, given the low
profits generated from the business. The total debt/OPBDITA also
remained elevated at 15.2 times in FY2023.
* Profitability remains vulnerable to fluctuations in raw material
prices and regulatory changes:– KGOIPL's profitability remains
exposed to fluctuations in raw material (raw cotton) prices, which
is driven by various factors such as seasonality, climatic
conditions, international demand and supply situation, and export
policy. The company is also exposed to regulatory risks with
respect to the minimum support price (MSP) for cotton, which is set
by the Government every year.
* Intense competition and fragmented industry structure: Low
value-added nature of the products and intense competition from
other players in the fragmented cotton ginning and oilseed industry
limit KGOIPL's bargaining power and pricing flexibility, thereby
exerting pressure on margins. KGOIPL's OPM has remained low over
the years and stood in the range of 1.9% to 3.3% between FY2019 and
FY2023.
Liquidity position: Stretched
KGOIPL's liquidity is expected to remain stretched. The cash flow
from operations stood negative at INR7.1 crore in FY2023
(provisional). The average working capital limits utilisation stood
high at over 95% in the 12 months ended in May 2023. The repayment
obligations stand at INR3.1 crore, INR2.1 crore and INR1.3 crore in
FY2024, FY2025 and FY2026, respectively. The cash generated from
the business is likely to be lower than the repayment obligations
in the near-to-medium term. However, the demonstrated ability of
the promoters to infuse unsecured loans as and when required, and
the absence of major capex, support the liquidity of the company.
Rating sensitivities
Positive factors – ICRA could upgrade KGOIPL's rating if an
improvement in earnings and reduction in working capital intensity
of operations lead to an overall improvement in the liquidity
position of the company. Specific metrics that could lead to an
upgrade include an interest coverage of more than 2 times on a
sustained basis.
Negative factors – Pressure on KGOIPL's ratings may arise if
there is an increase in the working capital intensity or a decline
in profit margins, affecting liquidity.
Kamala Ginning and Oil Industries Private Limited (KGOIPL), located
at Bhainsha in Adilabad district of Telangana, was incorporated as
a private limited company in April 2012. Earlier, it was operating
as a partnership firm, namely, Kamala Ginning and Oil Industries
(KOGI) since 1983. The company is primarily involved in cotton
ginning, cotton seed oil extraction and trading of commodities.
KGOIPL's facilities include 60 gins, 12 expellers, and one press.
It has the capacity to produce 500 bales of cotton per day. It also
trades in commodities such as maize, channa and soybean etc.
MIRAJ RECYCLERS: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Miraj
Recyclers Private Limited (MRPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/ 12.00 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 15, 2022,
placed the rating(s) of MRPL under the 'issuer non-cooperating'
category as MRPL 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. MRPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 1, 2023, May 11, 2023, May 21, 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 April 2013 by Mr. Hiten Mehta and Mrs. Harita
Mehta, Miraj Recyclers Private Limited (MRPL) is a supplier of
non-ferrous metals scrap of copper, aluminium and iron, and is also
engaged in the manufacturing of aluminium ingots & copper wire
rods. The company has its recycling facility located in Bhavnagar,
Gujarat.
MOHIJULI TEA: CARE Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Mohijuli
Tea Co Private Limited (MTCPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.52 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 1, 2022,
placed the rating(s) of MTCPL under the 'issuer non-cooperating'
category as MTCPL 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. MTCPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 17, 2023, April 27, 2023, May 7, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of t he 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).
Mohijuli Tea Company Private Limited (MTCPL) was established in
1991 by Mrs. Rumena Rehman, Mr. Nilufar Rehman and Mr. Atikur
Rehman. The company is engaged in the processing of black tea and
has installed capacity of 15 lakh kg per annum. The manufacturing
facility is located at Guwahati, Assam.
NUPOWER WIND: CARE Lowers Rating on INR76.33cr LT Loan to D
-----------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
NuPower Wind Farms Limited (NWFL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 76.33 CARE D Revised from CARE BB;
Facilities Stable
Rationale and key rating drivers
The revision in long term ratings of NWFL is on account of
continued delay in servicing of its debt obligations. CARE Ratings
became aware of such delay in principal repayments on July 3, 2023
when the company informed vide No Default Statement (NDS) dated
July 1, 2023 that there are ongoing delays in their term loan
account from June 30, 2023. Care Ratings understands that the delay
has occurred in term debt facilities across the sole lender
(Central Bank of India) after interacting with them. Accordingly,
the ratings are being revised to CARE D.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Timely servicing of debt obligations (i.e., principal and
interest) for minimum continuous 3 months.
* Improvement in operational performance of all operational
capacities on a sustained basis.
* Positive outcome in favor of the parent company with respect to
the pending investigations.
Analytical approach: Standalone
Key weaknesses
* Ongoing Delay in Debt Servicing: NWFL has reported delay in
serving of debt obligations since June 30, 2023 till date (i.e.,
principal instalment) on account of its temporary cash flow
mismatch attributable to the late start of wind season during
FY24.
Liquidity: Poor
The company has defaulted in its repayment obligations as on June
30, 2023 and the delays continue to remain till date.
Incorporated on July 24, 2013 NWFL is promoted by NuPower Renewable
Private Limited (NRPL, holds 70.18% equity share in NWFL on Mar 31,
2021) and balance equity shares are held by group captive consumers
as per Group captive Scheme (GCS).
RELIGARE ENTERPRISES: NCLT Dismisses Ligare's Insolvency Bid
------------------------------------------------------------
The Economic Times of India reports that the National Company Law
Tribunal (NCLT) on July 11 dismissed a plea to initiate insolvency
proceedings against Religare Enterprises Ltd observing that it was
a financial service provider and does not come under the ambit of
the Insolvency & Bankruptcy Code (IBC).
A principal bench headed by NCLT President Justice Ramalingam
Sudhakar and Atul Chaturvedi held that the petition filed by Ligare
Aviation Ltd against Religare Enterprises was "not maintainable"
and does not fall under the definition of "Corporate Debtor", which
means a corporate person who owes a debt to any person, ET relates.
"We are of the considered view that the corporate debtor (Religare
Enterprises) as alleged does not come within the meaning of
corporate person and therefore, we are unable to accept the prayer
of the applicant to initiate the CIRP against the Corporate
Debtor," said NCLT.
According to ET, Ligare Aviation has approached NCLT against
Religare Enterprises, which is a corporate guarantor of the
principal borrower Auriga Marketing Services, which had defaulted
to make a payment of INR35.55 crore.
Along with 14.25 per cent interest, the amount totalled to INR74.20
crore as on January 27, 2023.
However, Religare Enterprises contended before NCLT during the
proceedings that it is a financial service provider and is excluded
from the definition of a corporate person of IBC. Hence insolvency
proceedings cannot be initiated against it, ET relays.
To support its contention, counsel representing Religare
Enterprises had placed the Certificate of Registration, granted to
it by the Reserve Bank of India the status of "Non-Banking
Financial Institution," according to ET.
ET relates that the counsel further stated that RBI alone is
entitled to initiate CIRP (Corporate Insolvency Resolution
Proceedings) against all NBFCs that have an asset size of more than
INR500 crore and no other entity/company is legally or statutorily
competent to institute any petition against NBFCs.
This was opposed by Ligare Aviation contending that Religare was a
Core Investment Company (CIC), not an NBFC. The annual report of
Religare shows that its status changed in the year 2014 from NBFC
to Core Investment Company.
However, rejecting it NCLT said it was of the considered view that
Religare was not a corporate person and it can not accept the
prayer, ET says.
ET adds that the NCLT also said: "We make it clear that the
dismissal of the petition is not on merit, but only because the
section 7 application is not maintainable against the corporate
debtor. This order shall, therefore, not prejudice the right of the
financial creditor to initiate appropriate steps under any other
law and before the appropriate forum."
Religare Enterprises Ltd is a Core Investment Company (CIC) which
owns and manages RFL (SME lending), Care Health Insurance, Religare
Broking, and Religare Housing Development Finance Corporation
(affordable housing finance).
SH TECH: CARE Keeps C Debt Rating in Not Cooperating Category
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of SH TECH
PARK Developers Private Limited (STP) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 72.59 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Rationale and key rating drivers
CARE Ratings Ltd. has been seeking no default statement from STP to
monitor the ratings vide e-mail communications dated, June 19,2023,
June 22,2023, June 30,2023, and numerous phone calls. However,
despite repeated requests, the company has not provided the no
default statement for monitoring the ratings.
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. The rating on STP's bank facilities will
now be denoted as CARE C; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised on account of non-availability of
requisite information due to non-cooperation by STP with CARE
Ratings Ltd.'s efforts to undertake a review of the rating
outstanding. CARE Ratings Ltd. views information availability risk
as a key factor in its assessment of credit risk. Further, the
ratings are constrained on account of delays in debt servicing,
revenue concentration risk, commercial real estate sector
dependence on the macro-economic outlook and leveraged capital
structure.
The rating, however, will draw comfort from experienced promoters
group and location advantage of the commercial property, high
occupancy rates & reputed clientele concentrated in the IT/ITES
space and presence of structured payment mechanism.
Analytical approach: Standalone
Outlook: Stable
Key weaknesses
* Delays in debt servicing: STP has failed in making full payment
of the loan with Indiabulls Housing Finance which was due on
January 31, 2023. As per the audit report STP has to pay INR110.02
cr & INR7.86 crore with interest @ 11.62% before January 31, 2023,
however, due to tight liquidity position company has made the
partial payment of around 60% to 70% of the due amount before
January 31, 2023, and for the remaining amount they are in
discussion with the lender for extension for next 2 years, but the
extension is under process. Also, documentation for the extension
of repayment is not yet signed by the STP and Indiabulls Housing
Finance and the same is under process.
* Revenue concentration risk: The revenue profile of STP has been
concentrated with top three clients Mckinsey, TCS and Stryker India
contributing ~90% during FY21 and ~89% in FY22 indicating revenue
concentration risk. However, the three tenants are highly reputed
companies and have been in the premises since long time. The
long-term nature of the lease agreements provide visibility for a
major part of the revenue in the medium to long term.
* Leverage capital structure: The capital structure of the company
marked by overall gearing of the company remain leveraged at 11.14x
as on March 31, 2022, and 11.62x as on March 31, 2020, on account
of high reliance on external debt. The Total Debt/PBILDT stands at
138.33x as on March 31,2022 as against 201.73x as on March 31,2020.
Total Debt to GCA stands at 120.64 as on March 31,2021. Apart from
the lease rental discounting loans against the rental of TCS,
Mckinsey and Stryker, the company has taken loans from NBF C,
having high debt repayment, leading to stress on the cash flow.
* Commercial real estate sector dependence on the macro-economic
outlook: Commercial Real Estate is witnessing a structural shift as
many companies are adopting the remote working culture and have
found it cost effective to have employees working from home. In the
case of mall leasing, malls too have been witnessing very limited
footfalls with the resurgence of the virus and the outlook for the
segment thus continues to remain negative especial ly with growing
popularity of e-commerce. On the contrary, despite the emergence of
concepts of work from home and work near home, occupiers with
healthy financial profile in grade A office spaces have continued
to meet their existing leases and commitments on time which will
not impact leasing agreements. For commercial units, the demand
would continue to improve with improving situation of covid 19 and
shared workspace culture.
Key strengths
* Experienced promoters group: STP is a part of Vatika group and
Vatika Gro up is promoted by Delhi based- Bhalla family. Mr. Anil
Bhalla, who is currently the Chairman of the Board and is an active
participant in the company affairs. He is assisted by his two sons
–Mr. Gautam Bhalla who handles the real estate business and Mr.
Gaurav Bhalla who handles other verticals, including hotels,
facility management and business center. The group has completed
several commercial projects comprising total saleable area of 32.34
lakh square feet(lsf) and residential projects with saleable area
of 140.36 lsf. The company had received PE-funding from global
funds like Baer Capital, Goldman Sachs in 2008 and has tied-up with
Government of Singapore's sovereign wealth fund 'GIC' in 2015 for
development of group housing projects 'Sovereign Park', 'Seven
Elements' and 'Urban Expression' in 'Vatika Express City' township
project in Harsaru, Gurgaon.
* Location advantage of the commercial property: The project is
located in Gurgaon which is an established commercial area. Vatika
Business Park consi sts of over 8,70,000 sq ft of office space. The
complex boasts of a one-acre central landscaped courtyard/piazza
– its three building blocks are configured around this. In
addition to this, a specially designed Bean Garden. Corporate
retail, restaurants, food-courts, ATMs, cafeteria, training rooms
and a health club provides a 360-degree experience to the
approximately 11,000 professionals working at Vatika Business Park.
Further this is easily Accessible through the NH 48 and Golf Course
Extension Road.
* High occupancy rates & reputed clientele concentrated in the
IT/ITES space: STPDPL's focus has been on letting out space to
clients, operating mainly in the IT/ITES space. The occupancy rate
has remain ed high at 95-100% as on March 31, 2022. Further, common
space between the properties and miscellaneous space occupied as
food court, ATMs, Banks etc. Hence, the entire space developed has
been fully occupied. The property is located in Gurgaon catering to
IT/ITES companies and are occupied by companies like Mckensey
Digital Capability Centre, TCS & Stryker India. Though, the
concentration on the IT/ITES clientele could adversely affect
STPDPL's operations during recessionary cycles, the risk is partly
mitigated by the fact that all the tenants are reputed players with
relatively stable business models. All the majo r tenants have been
in the premises for around more than five years and have built a
long -standing relationship with Vatika group, resulting in renewal
of lease agreements by most of its tenants.
* Presence of structured payment mechanism: The LRD-facility is
backed by Escrow account. The LRD debt servicing is supported by
the structured escrow mechanism wherein receivables of the
borrowers including all realizations for the designated area shall
be deposited in Escrow account. As per the same, debt servicing
takes priority over other operational expenses of the STP.
Presently all the rental payment from the three tenants are routed
through the escrow account, from where the respective lender has
first right for repayment.
Liquidity: Poor
The liquidity position of the company is poor considering default
in the full payment of loan amount due from Indiabulls HFL and
there is high reliance on group support for operating expenses.
However, the company has Escrow mechanism in place with other loans
which ensures timely repayment of debt obligations after
maintaining DSRA.
SH TECH PARK Developers Private Limited (STP) was incorporated in
2007 and is engaged in real estate activities of leasing out space
primarily to companies on medium to long term commercial leasing
arrangements. STP is a group concern of Vatika Limited. The company
is promoted by Mr. Anil Bhalla, Mr. Gautam Bhalla and Mr. Gaurav
Bhalla, who has rich experience in real estate project development,
hotel division, facility management, business centers and
restaurants. STP has already developed a commercial complex namely,
"Vatika Business Park" which is situated in Gurgaon with total area
of 870000 sq ft.
SHIKHAR CONSTRUCTIONS: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shikhar
Constructions (SC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 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 17, 2022,
placed the rating(s) of SC under the 'issuer non-cooperating'
category as SC 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. SC continues to be
non -cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 3, 2023, May 13, 2023, May 23, 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).
Nainital (Uttarkhand) based, Shikhar Constructions (SC) was
established in the year 1992, as a partnership concern, by Mr.
Manoj Joshi, Mr. Hem Kumar Joshi and Mr. Kamlesh Joshi. The company
is engaged in development of residential projects.
SHIV SHAKTI: CARE Assigns B+ Rating to INR25cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Shiv
Shakti Constructions (SSC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 25.00 CARE B+; Stable Assigned
Long Term/ 20.00 CARE B+; Stable/CARE A4
Short Term Assigned
Bank Facilities
Rationale and key rating drivers
The ratings assigned to the bank facilities of SSC is constrained
by firm's small scale of operations, low profitability margins,
leverage capital structure and weak debt service indicators. The
ratings are further constrained by working capital intensive nature
of operations, presence in a highly competitive industry coupled
with business risk associated with tender-based orders. The ratings
also factors in constitution of the entity being a partnership firm
and raw material price fluctuation risk. The ratings, however,
derives comfort from experienced promoters and comfortable order
book position providing revenue visibility in medium terms.
Rating sensitivities: Factors likely to lead to rating action.
Positive factors
* Increase in scale of operations as marked by total operating
income of above INR120.00 crore on sustained basis.
* Improvement in profitability margins as marked by PBILDT margin
aboveof 6.00%
Negative factors
* Decrease in scale of operations as marked by total operating
income of above INR50.00 crore on sustained basis.
* Moderation in profitability margins as marked by PBILDT margin of
below 3.50%
Analytical approach: Standalone
Outlook: Stable
CARE Ratings believes that the entity shall continue to benefit
from experience of its promoter group as well as comfortable
order book position.
Detailed description of the key rating drivers
Key weaknesses
* Small scale of operations: The firm is a small regional player
involved in executing construction contracts particularly
irrigation projects for government departments in Uttar Pradesh,
Haryana, Uttarakhand and Rajasthan. The ability of the firm, to
scale up to larger-sized contracts having better operating margins
is constrained by its comparatively low capital base of INR28.52
crores as on March 31, 2023, and total operating income of INR70.00
crore in FY23 (refers to April 1 to March 31). The small scale of
operations in a fragmented industry limits the pricing power and
restrict the firm to benefit through economies of scale. SSC is
envisaged to achieve turnover of ~Rs. 130 crores in FY24 based on
execution of few projects out of total work inhand of INR308.48
crores.
* Low Profitability Margins: The firm undertakes government
projects, which are awarded through the tender-based system. The
projects are highly competitive and involve aggressive bidding
leading to low profitability. The firm generated PBILDT margin of
4.28% during FY23 as against 6.01% in FY22. The decline is on
account of increase in raw material prices which the firm was not
unable to pass on to its customers. The PAT margin however are
higher than PBILDT margins on account of nonoperating income which
mainly pertains to interest on fixed deposits and profit from Joint
venture. The PAT margin however also moderated from 6.45% in FY22
to 5.37% in FY23 in tandem with PBILDT margin moderation.
* Leveraged capital structure and weak coverage indicators: As on
March 31, 2023, the debt profile of the firm comprised of vehicles
loan to the tune of INR0.35 crores, working capital borrowings of
INR25.00 crores which were fully utilised, and overdraft against
fixed deposit of INR12.00 crores out of which INR11.82 crores was
utilized as on balance sheet date. The capital structure of the
firm remained leveraged as marked by overall gearing ratio of 1.36x
as on March 31,2023 ( PY:0.81x). The moderation in capital
structure in FY23 is on account of additional working capital
borrowings availed by the firm. Earlier, the firm was meeting the
working capital needs by stretching creditors, however in FY23, the
firm repaid its creditors and supported working capital needs
through additional funding of OD against FD. The debt coverage
indicators marked by interest coverage ratio and total debt to GCA
deteriorated and stood at 1.64x and 6.24x respectively, for FY23
against 41.22x and 3.09x respectively for FY22 on account of
increase in debt in form of working capital borrowings resulting in
higher interest obligation along with moderation in profitability.
* Raw material prices fluctuation risk: In the absence of any
backward integration, SSC procures its primary raw materials which
includes steel, cement, sand, etc. from local vendors and hence, it
is susceptible to volatility in the input prices, and which may
have adverse impact on the profitability of the firm. Thus, the
ability of the firm, to pass on increased price burden to the
customers in a timely manner and maintain profitability margins is
critical from the credit perspective.
* Highly competitive industry with business risk associated with
tender-based orders: SSC operates in a highly competitive
construction industry wherein it faces direct competition from
various organized and unorganized players in the market given the
low barriers to entry. There are number of small and regional
players catering to the same market which has limited the
bargaining power of the firm and has exerted pressure on its
margins. With the increase in order book of SSC, availability and
retention of skilled manpower has also become a major challenge.
SSC receives majority of its work orders from government
department. The risk arises from the fact that any changes in geo
-political environment and policy matters would affect all the
projects at large. Further, any changes in the government policy or
government spending on projects are likely to affect the revenues
of the firm. Furthermore, the government projects are awarded
through the tender-based system. This exposes the firm towards risk
associated with the tender-based business, which is characterized
by intense competition. The growth of the business depends on its
ability to successfully bid for the tenders and emerge as the
lowest bidder.
* Constitution of the entity being a partnership firm: SSC
constitution being a partnership firm has the inherent risk of
possibility of withdrawal of the partner's capital at the time of
personal contingency and firm being dissolved upon the
death/retirement/insolvency of partner. Moreover, partnership firms
have restricted access to external borrowing as credit worthiness
of partners would be the key factors affecting credit decision for
the lenders.
* Working capital intensive nature of operations: Construction
industry is characterized as working capital intensive nature of
operations wherein the inventory is in the form of work in progress
at different sites on account of procedural delays involved in the
certifications/validation of the invoices for the contracts
executed. However, SSC through its contacts in various government
departments has a policy of raising bills only when there is
availability of funds with the government entities hence there is
no inventory on balance sheet date. Further, the bills are cleared
within weeks and hence collection period is also 10-20 days. The
firm was not availing any working capital limits till March 2022
and was fulfilling the working capital needs by stretching
creditors. The operating cycle was thus negative.
Key strengths
* Experienced Promoters: Shiv Shakti Constructions (SSC) was formed
in 2004 by Mr. Mukesh Kumar, Managing Partner of the firm. Day to
day operations of the business are managed by Mr. Kumar, who has
pursued Diploma in Engineering and has over three decades of
experience in construction industry. Currently , he is assisted by
other partners in execution of various projects along with team of
qualified and experienced engineers, supervisory staff and
technicians to work on various sites.
* Comfortable order book position though geographically
concentrated: SSC has an unexecuted order book position of
INR308.48 crore as on May 20, 2023 which is equivalent to ~4.41x
the total operating income achieved in FY23. The tenor of the
construction contracts to be executed varies 6 months -3 years
depending upon the type of contract bid and awarded, thereby
reflecting revenue visibility over the medium term. However, the
present unexecuted order book is concentrated towards Uttar
Pradesh. Thus, the firm is exposed to risk of any unfavourable
changes in the policies towards award of new contracts. Further,
effective and timely execution of the orders has a direct bearing
on the total income and margins of the firm.
Liquidity: Stretched
Liquidity profile of the firm is stretched on account of working
capital limits being fully utilized for twelve-month period ending
May 2023 and negative cash flow from operations in FY23. Further,
the current ratio is low at 0.66x as on March 31,2023. The
liquidity of the firm however draws comfort on account of low term
debt obligations. Firm is expected to achieve envisaged Gross Cash
Accruals (GCA) of INR11.24 crores in FY24 against term debt
obligation of INR0.13 crores in same year.
Shiv Shakti Constructions (SSC) is a partnership concern based out
of Greater Noida, Uttar Pradesh. The firm was formed in 2004 and is
engaged in construction projects such as irrigation projects (Mass
Earthwork & canals, concrete lining of canals, hydraulic
structures), highway & roads construction, buildings construction
and railways project (Mass earthwork in embankment and earth
retaining structures). SSC is managed by Mr Mukesh Kumar.
SUBADRA TEXTILE: ICRA Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has retained the Long-term and Short-term ratings of Subadra
Textile Private Limited in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term– 3.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 1.50 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Unallocated 'Issuer Not Cooperating'
Category
Long-term– 4.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this rating
as the rating may not adequately reflect the credit risk profile of
the entity. The rating action has been taken in accordance with
ICRA's policy in respect of non-cooperation by a rated entity
available at www.icra.in.
Incorporated in 1972, Subadra Textile Private Limited (erstwhile
Bhadra Spinning Mills Private Limited (1963-1971)) has been
functioning under the directorship of Mr. V.S. Rajagopal since
1975. It is engaged in the business of manufacturing cotton yarn of
counts ranging from 27s–100s for domestic as well as
international markets. The company operates from Bangalore, with
its manufacturing unit spread over 4.7 acres on Magadi Main Road,
which has an installed capacity of 18,720 spindles with combed and
auto-coned capacity. It also outsources manufacturing of polyester
yarn on job-work basis to its subsidiary, Subadra Spinning Mills
Private Limited, which was taken over by the company in December
2014. It has also diversified into the merchant exports business
during.
===============
M A L A Y S I A
===============
1MDB: Loo's Priority is to Cooperate in Probes, Lawyers Say
-----------------------------------------------------------
The Edge reports that lawyers Amer Hamzah Arshad and Edmund Bon
have stated that they are acting for former 1Malaysia Development
Bhd (1MDB) general counsel Jasmine Loo Ai Swan, who was arrested
last Friday (July 7), and her priority is to cooperate with the
relevant law enforcement agencies in their ongoing investigations
into the now-defunct fund, and facilitate and assist the Malaysian
government in expediting its asset recovery efforts.
In a statement on their law firm AmerBon Advocates' website, they
said Loo is now in custody after her arrest, and that she is
looking forward to reuniting with her family, The Edge relates.
"Our client has always treated Malaysia as her home. When
appropriate, she will reveal the facts and circumstances
surrounding her years away from Malaysia.
"Our client has absolute trust and confidence in the Malaysian
judicial and legal system, and will face all matters accordingly.
She seeks privacy and space to do what is necessary at this time,"
the lawyers said.
At a press conference on July 12, Home Minister Datuk Seri
Saifuddin Nasution Ismail announced that Loo was arrested and held
under remand at the Dang Wangi police headquarters, The Edge
reports.
He said that she is being investigated under Section 409 of the
Penal Code for criminal breach of trust.
The minister, however, did not want to divulge the way Loo was
arrested, and said that the police should answer the question.
"This case (1MDB) is never ending, but whatever it is, the
government would react according to the law if it involves any
individual. What is important is that she has been arrested," The
Edge quotes Saifuddin as saying.
Loo is one of those who had been away from the country since 2018
and was wanted by the authorities, the report says.
Her name cropped up during former prime minister Datuk Seri Najib
Razak's SRC International Sdn Bhd trial, which concluded with his
conviction, and the ongoing 1MDB-Tanore criminal trial.
Loo is said to be one of the accomplices of fugitive Penang-born
businessman Low Taek Jho, also known as Jho Low, The Edge says.
The Edge relates that the government had also pursued forfeiture
proceedings against Loo, whereby her Audi Q5 2.0 TFSI and a
Volkswagen New Beetle 1.6(A) and cash amounting to MYR22,600 were
forfeited by the High Court in January this year. Meanwhile, her
condo in Mukim Batu was handed to OCBC Bank.
She is also one of the defendants in the US$8 billion suit filed by
1MDB against her, Najib and former 1MDB officers, the report
notes.
A few months back, Jho Low's accomplice Kee Kok Thiam also
surrendered to the authorities. However, Kee, 56, died a few weeks
later in May at the Sungai Buloh Hospital due to a massive stroke.
According to The Edge, Najib was found guilty of all seven charges
in relation to SRC, and has been serving his 12-year jail term
since Aug. 23 last year. He was also fined MYR210 million.
Malaysian Anti-Corruption Commissioner chief commissioner Tan Sri
Azam Baki, when contacted by The Edge, also confirmed that Loo is
with the police.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) is an insolvent
Malaysian strategic development company, wholly owned by the
Malaysian Minister of Finance. 1MDB was established in 2009 to
foster long-term economic development for the country by forging
global partnerships, particularly in energy, real estate, tourism,
and agribusiness.
The Company was founded shortly after Dato Sri Najib Razak became
Prime Minister of Malaysia in July 2009. Najib said the
establishment of 1MDB into a federal entity was to benefit a
majority of Malaysians.
1MDB is said to have raised billions of dollars in bonds, for
investment projects and joint ventures, between 2009 and 2013.
Among those projects are the Tun Razak Exchange, Tun Razak
Exchange's sister project Bandar Malaysia, and the acquisition of
three independent power producers.
The Company came into heavy scrutiny in 2015 for suspicious money
transactions and evidence pointing to money laundering, fraud and
theft. The corruption scandal in 1MDB has implicated high-level
officials, including Prime Minister Najib Razak, as wells as banks
and financial institutions around the world.
In 2016, the U.S. Department of Justice filed a lawsuit, alleging
that at least US$3.5 billion has been stolen from 1MDB. In
September 2020, the alleged amount stolen had been raised to US$4.5
billion and a Malaysian government report listed 1MDB's outstanding
debts to be US$7.8 billion.
Malaysia has been filing lawsuits over the years in an effort to
recover the missing billions of dollars. Among others, in May
2021, Malaysia filed 22 civil suits against entities and people
involved in the corruption scandal, including units of Deutsche
Bank and JP Morgan.
Malaysia said in September 2020 it has so far recovered about
US$3.24 billion in assets linked to the 1MDB matter. This amount
includes about US$600 million cash and assets returned by U.S.
authorities; about US$2.5 billion paid by Goldman Sachs as
settlement; as well as US$780 million in settlement amounts from
Malaysian banking group AmBank and audit firm Deloitte.
=====================
N E W Z E A L A N D
=====================
AUTOPRO DIGITAL: Creditors' Proofs of Debt Due on Aug. 7
--------------------------------------------------------
Creditors of Autopro Digital Marketing Limited, Relentless Group
Limited and Relentless Hawkes Bay Limited are required to file
their proofs of debt by Aug. 7, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on July 6, 2023.
The company's liquidators are:
Rachel Mason-Thomas
Jeffrey Philip Meltzer
Meltzer Mason, Chartered Accountants
PO Box 6302
Victoria Street West
Auckland 1141
BITCACHE: Kim Dotcom-Promoted Crypto Firm Goes Into Liquidation
---------------------------------------------------------------
Andrew Bevin at Newsroom reports that a crypto platform promoted by
Kim Dotcom as a revolution in how online content creators and
sharers would be paid has been liquidated after failing to launch.
The Megaupload founder originally came from Germany, but is now a
New Zealand citizen living in Glenorchy. He is still fighting
extradition to the US on fraud charges.
Back in 2016 and 2017, Dotcom talked up the prospects of New
Zealand-registered tech business Bitcache in a series of tweets
and, alongside upload platform K.im, attracted almost US$5 million
from 332 investors through investment platform Bnk To The Future.
The software-as-a-subscription technology would have allowed for
Bitcoin micro-transactions to pay for internet services and
content.
Newsroom relates that Mr. Dotcom said at the time Bitcache would be
the preferred option for online transactions by 2022.
It will instead be broken down over unpaid legal fees, after
liquidator Iain Nellies was appointed in the Auckland High Court on
July 13, Newsroom reports.
Bitcache did not contest the liquidation in court.
According to Newsroom, the company's pitch to investors said
because of his ongoing disputes with the US Government over
Megaupload, Mr. Dotcom would not own or be involved in the
day-to-day running of the company and instead would act as its
"evangelist".
The chief evangelist is, however, listed as a former director of
the business, a role he held between July 28, 2016 and January 19,
2017.
Auckland lawyer Phil Creagh was a Bitcache director until September
2020. He applied to have the company liquidated on May 24, with a
hearing expected to take place in mid-July.
Mr. Creagh would only address the basics of the liquidation when
contacted by Newsroom last month. "It's pretty straightforward,
there are fees owed and not paid. The company has not taken any
steps so far to avoid being placed in liquidation."
"We'll put it in liquidation and see what, if anything, can be
recovered."
He said he and his law firm Anderson Creagh Lai had stopped acting
for Bitcache some time ago.
Newsroom says the business hit its first major speedbump in early
2017. It's original launch date was set for January 21 that year,
the fifth anniversary of the day in 2012 when a heavily-armed
anti-terrorism squad raided Mr. Dotcom's $30 million mansion in
Coatesville, Auckland on behalf of the FBI, which was carrying out
a worldwide operation targeting the hugely-popular file-sharing
website Megaupload.
Less than two hours before the platform was due to launch, Mr.
Dotcom tweeted "Sorry but there has been an expected hiccup. Will
tell you all about it later today. Let this play out and give me
some time to update you.'"
Despite more claims made by Mr. Dotcom, including the prospect of a
beta release in August 2017, and a tweet saying it had found the
right technology on which to operate, as of 2023 the company and
its technology doesn't appear to have progressed much further,
Newsroom states.
It hasn't filed a return to the Companies Office since 2021 and is
facing removal from the Companies Register.
K.im, the filesharing platform being developed to run on the
Bitcache technology, dropped off the internet at some point this
year, Newsroom says.
HOWDYOUBE HAULAGE: Court to Hear Wind-Up Petition on July 20
------------------------------------------------------------
A petition to wind up the operations of Howdyoube Haulage Limited
will be heard before the High Court at Christchurch on July 20,
2023, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on May 19, 2023.
The Petitioner's solicitor is:
Nanette Cunningham
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
LVO'S PROPERTY: Creditors' Proofs of Debt Due on Aug. 7
-------------------------------------------------------
Creditors of LVO'S Property Maintenance Limited are required to
file their proofs of debt by Aug. 7, 2023, to be included in the
company's dividend distribution.
The High Court at Auckland appointed Rhys Cain and Larissa Logan of
Ernst & Young as liquidators on July 7, 2023.
SKT SALONS: Court to Hear Wind-Up Petition on July 20
-----------------------------------------------------
A petition to wind up the operations of SKT Salons Limited will be
heard before the High Court at Christchurch on July 20, 2023, at
10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on May 30, 2023.
The Petitioner's solicitor is:
Nanette Cunningham
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
SOUTHRIM INTERNATIONAL: Creditors' Proofs of Debt Due on Aug. 18
----------------------------------------------------------------
Creditors of Southrim International Limited are required to file
their proofs of debt by Aug. 18, 2023, to be included in the
company's dividend distribution.
The High Court at Christchurch appointed Steve Robert Farquhar and
Tony Leonard Maginness of Steve Robert Farquhar and Tony Leonard
Maginness as liquidators on July 6, 2023.
=================
S I N G A P O R E
=================
8S CAPITAL: Creditors' Proofs of Debt Due on Aug. 7
---------------------------------------------------
Creditors of 8S Capital Holdings Pte. Ltd. are required to file
their proofs of debt by Aug. 7, 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:
Gary Loh Weng Fatt
Leow Quek Shiong
Seah Roh Lin
c/o BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
FJH HOLDING: Creditors' Proofs of Debt Due on Aug. 7
----------------------------------------------------
Creditors of FJH Holding Pte. Ltd. are required to file their
proofs of debt by Aug. 7, 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:
Victor Goh
Khor Boon Hong
C/o Baker Tilly
600 North Bridge Road
#05-01 Parkview Square
Singapore 188778
LIGHTSTONE SINGAPORE: Creditors' Proofs of Debt Due on Aug. 7
-------------------------------------------------------------
Creditors of Lightstone Singapore Pte. Ltd. are required to file
their proofs of debt by Aug. 7, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on July 1, 2023.
The company's liquidators are:
Lin Yueh Hung
Goh Wee Teck
c/o 8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
NTD RIG: Commences Wind-Up Proceedings
--------------------------------------
Members of NTD Rig Pte Ltd, NTF Rig Pte Ltd, NTI Rig Pte Ltd, NTL
Rig Pte Ltd and NTP Rig Pte Ltd on June 28, 2023, passed a
resolution to voluntarily wind up the companies' operations.
The liquidators can be reached at:
Bernard Juay
c/o Complete Corporate Services
10 Anson Road
#29-07 International Plaza
Singapore 079903
SANGUINE HOLDINGS: Court to Hear Wind-Up Petition on July 21
------------------------------------------------------------
A petition to wind up the operations of Sanguine Holdings (SG) Pte
Ltd will be heard before the High Court of Singapore on July 21,
2023, at 10:00 a.m.
Clifford Chance Pte. Ltd. filed the petition against the company on
June 27, 2023.
The Petitioner's solicitors are:
Cavenagh Law LLP
12 Marina Boulevard
25th Floor, Marina Bay Financial Centre Tower 3
Singapore 018982
=================
S R I L A N K A
=================
CEYLON ELECTRICITY: Fitch Affirms 'B(lka)' Rating, Outlook Now Pos.
-------------------------------------------------------------------
Fitch Ratings has revised the Outlook on Ceylon Electricity Board's
(CEB) National Long-Term Rating to Positive, from Stable, and has
simultaneously affirmed the rating at 'B(lka)'. Fitch also affirmed
the National Long-Term Rating of CEB's outstanding senior unsecured
debentures at 'B(lka)'.
The Positive Outlook reflects the likely upgrade of the Sri Lankan
sovereign's Long-Term Local-Currency Issuer Default Rating (IDR) to
reflect the sovereign's prospects following the completion of a
domestic debt exchange (DDE). Fitch will equalise CEB's ratings
with that of the sovereign if the sovereign's Long-Term
Local-Currency IDR is upgraded to above 'CC', in line with Fitch
Government-Related Entities (GRE) Rating Criteria, resulting in a
rating upgrade on the national scale. This is based on Fitch
assessment of a strong likelihood of support from the state.
The affirmation follows Fitch de-linking of CEB's rating from that
of the sovereign after Fitch downgraded Sri Lanka's Long-Term
Local-Currency IDR to 'C', from 'CC' on July 5, 2023. This is
because, despite the government's selective default on some of its
local-currency debt, Fitch do not believe CEB has entered a default
or default-like process requiring a similar rating action. In
addition, CEB's current rating already reflects a probable
near-term default, as the company's ability to service debt depends
on the continuity of government support.
KEY RATING DRIVERS
State Support Intact: The government continues to provide financial
support to CEB to sustain its operations, which would have been
otherwise challenging. The government converted a LKR200 billion
project loan, amounting to 35% of CEB's outstanding debt as at
September 30, 2022, to equity late last year, while state banks
continued to provide working capital funding to secure feedstock.
The government has also facilitated uninterrupted fuel supply to
CEB's thermal power plants from state-owned Ceylon Petroleum
Corporation (CPC), despite CEB having large dues to CPC.
Fitch believe state support will be forthcoming, despite the
state's weak financial profile, as CEB fulfils an essential service
for the country. A default of CEB would disrupt this service, as
the company accounts for most of Sri Lanka's power-generation
capacity. It would also make it difficult for CEB to source
imported feedstock for power generation, such as heavy oil and
coal. CEB's independent power producer (IPP) agreements, which
account for around 20% of the power generated, would also be
affected, as they are external arrangements with no clear
alternatives.
Cost Reflective Tariff Mechanism: The government has established a
formula-based tariff mechanism to ensure CEB's operating costs and
interest obligations are recovered going forward. Prior to this,
CEB supplied electricity at significant subsidies, resulting in
large accumulated losses and an unsustainable capital structure.
The consistent application of the cost-reflective tariff mechanism
should allow CEB to breakeven at the cash flow from operations
level, but such implementation has yet to be proven.
Indeterminate Standalone Profile: Fitch don't believe ascertaining
standalone credit profile of CEB is possible in the foreseeable
future, as its ability to operate depends on continued state
support and it cannot be meaningfully delinked from the government.
CEB had LKR284 billion of debt equally spread across working
capital and project loans as at end-April 2023. Fitch expect CEB to
generate negative free cash flow in the medium term, despite the
tariff mechanism, and to depend on the state for expansion and
refinancing.
Fitch may provide a standalone credit view should CEB maintain a
record of profitable operation that improves its access to external
funding with less reliance on the state.
Large Dues to Operating Creditors: CEB owed LKR208 billion to CPC,
IPPs and renewable energy generators as of end-April 2023, up by
20% from November 2022. CEB expects to settle its debt to CPC and
some IPPs with support from the government, while the renewable
producers will be settled incrementally with cash generated from
operations. CEB plans to settle part of the dues owed to renewables
producers through new funding lines, but approvals are taking time.
Consequently, Fitch do not expect a material reduction CEB's trade
payable position in 2023.
CEB Restructure: The government is looking at unbundling CEB's
generation, transmission and distribution process by transferring
CEB's resources to 14 companies established under the Companies Act
as part of the country's energy sector reforms. Fitch expect the
unbundling to provide autonomy and flexibility for CEB operations,
while improving its efficiency and competitiveness, but it is too
early to ascertain how the proposed restructure would affect CEB's
credit profile, as the plan's details are still vague.
DERIVATION SUMMARY
CEB's ratings reflect a probable near-term default, as it relies on
the Sri Lankan government, which has begun a local-currency debt
restructuring process, to continue its operations. However, CEB
itself has not begun a default or default-like process.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Fitch Rating Case for the Issuer
-- Sri Lanka's annual electricity demand growth to average around
6% over 2023-2026
-- Generation mix to remain at 50% thermal, 30% hydro and 20%
other over 2023-2026
-- Tariff to be adjusted every six months to cover CEB's operating
costs and interest obligations
-- Annual capex of LKR90 billion over the next two years for
maintenance and building new generation capacity
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- the Sri Lankan sovereign's Long-Term Local-Currency IDR being
upgraded to above 'CC' after the completion of the DDE could result
in corresponding action on CEB's National Long-Term Rating.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- the Sri Lankan sovereign's Long-Term Local-Currency IDR being
rated at 'CC' after the completion of the DDE would result in the
Outlook on CEB being revised to Stable.
For the sovereign rating of Sri Lanka, the following sensitivities
were outlined by Fitch in the agency's Rating Action Commentary on
July 5, 2023:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Following completion of the DDE, the sovereign LTLC IDR will
likely be lifted out of 'RD' to a rating that appropriately
reflects its prospects.
-- For the LTFC IDR, completion of the foreign-currency commercial
debt restructuring that Fitch judges to have normalised
relationship with private-sector creditors may result in an
upgrade.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The LTLC IDR will be further downgraded once the government
executes its domestic debt restructuring.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Support from Government: CEB had LKR17 billion in
unrestricted cash at end-March 2023, against LKR128 billion in debt
due in the next 12 months. More than 90% of the outstanding debt is
for working capital, which Fitch believe will be rolled over in the
normal course of business. Fitch believe the government will
continue to provide funding support for CEB to meet its contractual
maturities amid the company's weak liquidity.
CEB also has significant payments due to feedstock suppliers,
including CPC and IPPs. CEB plans to settle the debt by using
additional cash flow from the increased electricity tariff and by
securing new funding facilities from banks. CEB received LKR80
billion in funding in 2022 from the Ministry of Finance to settle
its dues to CPC, and Fitch expect similar liquidity support from
the government, given the essential service that CEB provides.
ISSUER PROFILE
CEB is Sri Lanka's sole electricity transmitter and distributor. It
is a fully owned state entity and accounts for 75% of domestic
electricity generation through its network of hydro and thermal
power plants.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
===============
T H A I L A N D
===============
STARK CORP: SEC Confiscates Assets, Bars Execs from Travelling
--------------------------------------------------------------
Bangkok Post reports that the Securities and Exchange Commission
(SEC) has moved to confiscate the assets of Stark Corporation, as
well as those of the company's largest shareholder and some former
executives allegedly involved in falsifying accounts, in addition
to prohibiting them from travelling abroad.
Bangkok Post relates that the regulator said it will freeze the
assets of the scandal-hit wire and cable manufacturer and those of
Vonnarat Tangkaravakoon, the company's largest shareholder and
former acting chief executive, for 180 days.
According to the report, the assets of four former executives,
comprising former chairman Chanin Yensudchai, chief financial
officer Sathar Chantrasettalead, Chinawat Assavapokee and Kittisak
Jitprasertngam, will also be seized, along with those of Stark's
related entities Phelps Dodge International (Thailand), Thai Cable
International, Adisorn Songkhla Co and Asia Pacific Drilling
Engineering.
The SEC recently filed charges of financial misconduct against
those 10 parties with the Department of Special Investigation
(DSI), alleging they were involved or agreed with others to produce
false statements for Stark and its affiliates during 2021 and 2022
to deceive other people, Bangkok Post notes.
"Their misconduct has affected a large number of people with
damages from Stark's debts estimated at more than THB38 billion,"
the SEC said in a statement, notes the report. The order to freeze
the assets was issued as "there are reasonable circumstances to
believe the individuals will transfer or sell those assets", said
the regulator.
Bangkok Post adds that the SEC will also seek a court injunction to
prevent the accused from leaving the country in the next 15 days,
noted the statement.
Mr. Vonnarat resigned from all his positions at Stark, including
acting chief executive and director, the company said in a filing
to the Stock Exchange of Thailand on July 6.
Four others charged by the SEC quit the company in April. Apichart
Tangeakchit is acting chief executive until a new chief can be
appointed.
According to Bangkok Post, Thawatchai Pittayasophon, SEC acting
secretary-general, told a briefing on July 7 the regulator would
continue to investigate other possible irregularities at Stark,
cooperating with the DSI in charging those found culpable for
fraud.
"The SEC will continue to investigate other suspicious cases
related to the company," the report quotes Mr. Thawatchai as
saying. "The investigation is also looking into possible misconduct
by the auditor as well as stock price manipulation. Once we gather
enough evidence, more charges will be filed against those
involved."
Under the SEC's authority, assets can be confiscated for a maximum
of 180 days, while the order to prohibit executives from travelling
abroad can be renewed.
During this period, Stark can continue to operate as normal, the
report says.
"The SEC is confident the evidence we collected and sent to the DSI
is sufficient to bring this case to court," he said.
About Stark Corp
Headquartered in Bangkok, Thailand, Stark Corporation Public
Company Limited -- https://www.starkcorporation.com/ -- together
with its subsidiaries, engages in the electric wire and cable
business in Thailand and internationally. It manufactures,
distributes, trades in, and provides service test for wire products
made from copper and aluminum, which are used in electrical
transition, telecommunications, and construction applications. The
company also offers manpower services; human resource management
and recruitment services for the petroleum industry; warehouses
rental services; transportation services; and consultancy services
related to petroleum business. In addition, it engages in the
manufacture of electric wires, cables and non-ferrous; import and
manufacture copper and aluminuium for cable wire; tolling of copper
rod; sales and distribution of accessories for energy and
telecommunication applications; and develop the infrastructure
relating to energy and digital technology, as well as trading of
other materials. The company was formerly known as Siam Inter
Multimedia Public Company Limited and changed its name to Stark
Corporation Public Company Limited in July 2019.
As reported in the Troubled Company Reporter-Asia Pacific on July
7, 2023, the Securities and Exchange Commission (SEC) has filed
charges against the largest shareholder and others involved in the
management of Stark Corporation Public Company Limited, the
industrial cable maker at the centre of an accounting scandal and
debt default.
The Bangkok-based SEC filed charges of financial misconduct against
10 combined entities and individuals, including Stark's largest
holder Vonnarat Tangkaravakoon, with the Department of Special
Investigation (DSI), according Bangkok Post.
The charges come after Stark faced a criminal investigation and
also a class-action lawsuit following its revelations of
irregularities in past accounting. Restated financial results
showed it made a net loss in the past two years, and that its
liabilities exceeded assets. The company in June defaulted on some
of its THB39 billion in liabilities. The shares were suspended
after sinking 99% this year.
*********
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 ***