/raid1/www/Hosts/bankrupt/TCRAP_Public/230831.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, August 31, 2023, Vol. 26, No. 175
Headlines
A U S T R A L I A
AERISON GROUP: Administrators Threaten AUD60MM Suit vs. Roy Hill
AUSTRALASIAN CAPITAL: ASIC Suspends AFS Licence
CUT-TO-SIZE PLASTICS: Second Creditors' Meeting Set for Sept. 4
GREENLEAF (TAS): First Creditors' Meeting Set for Sept. 5
IONMY PTY: First Creditors' Meeting Set for Sept. 4
OZ PROPERTY: Second Creditors' Meeting Set for Sept. 5
VERSATILE SERVICES: Second Creditors' Meeting Set for Sept. 4
ZIP CO: Reports AUD413MM Statutory Net Loss for Year Ended June 20
C H I N A
CHINA EVERGRANDE: Unit Reports Vehicle Deliveries, Narrower Loss
COUNTRY GARDEN: Raises Capital in Scramble to Pay Debts
COUNTRY GARDEN: Some Offshore Creditors Mull Forming Group
GEMDALE CORP: Moody's Lowers CFR to Ba3, Placed on Further Review
R&F PROPERTIES: Posts CNY5.10 Billion Net Loss in H1 Ended June 30
YUEXIU REAL: Moody's Affirms 'Ba1' CFR & Alters Outlook to Negative
ZHONGRONG INT'L: Top Shareholder Plans to Delist
H O N G K O N G
HEALTH AND HAPPINESS: S&P Alters Outlook on 'BB+' ICR to Stable
I N D I A
ABHILASH CHEMICALS: Ind-Ra Cuts LongTerm Issuer Rating to BB
AKAL PIPE: ICRA Keeps D Debt Ratings in Not Cooperating Category
AKAL SPRING: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable
ANAND RICE: ICRA Keeps D Debt Rating in Not Cooperating Category
ANDHRA PRADESH: CRISIL Reaffirms D Rating on INR1,011.3cr Bond
AVEENA MILK: ICRA Lowers Rating on INR5cr LT Loan to D
BAFNA MOTORS: ICRA Keeps D Debt Ratings in Not Cooperating
BYRNIHAT COAL: CARE Keeps D Debt Ratings in Not Cooperating
CAIRO INTERNATIONAL: ICRA Lowers Rating on INR12cr LT Loan to D
DIVINE CHEM: CARE Keeps C Debt Rating in Not Cooperating Category
FRIENDS AGRO: ICRA Keeps D Debt Rating in Not Cooperating
GANGES FORD: ICRA Keeps D Debt Ratings in Not Cooperating
HYDERABAD STEELS: ICRA Keeps C Debt Rating in Not Cooperating
JALARAM INDUSTRIES: CARE Keeps C Debt Rating in Not Cooperating
JAYALAKSHMI SPINTEX: CRISIL Moves B+ Ratings from Not Cooperating
LINGAYA'S SOCIETY: CRISIL Keeps D Debt Ratings in Not Cooperating
M.G. INDUSTRIES: CRISIL Cuts Rating on INR4.75cr Cash Loan to D
MANIPAL ENERGY: Ind-Ra Affirms BB+ Issuer Rating, Outlook Positive
MANIPAL MEDIA: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
NEHA EXPORTS: CARE Keeps D Debt Ratings in Not Cooperating
NEXUS FEEDS: CARE Keeps D Debt Ratings in Not Cooperating
NHC FOODS: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
OVERSEAS TRADERS: ICRA Keeps D Debt Ratings in Not Cooperating
PATNA SAHIB: CARE Keeps D Debt Rating in Not Cooperating Category
RADHE COTTON: CARE Keeps D Debt Rating in Not Cooperating
SANTOSH W/O: CRISIL Keeps D Debt Rating in Not Cooperating
SMRUTI SPINTEX: CRISIL Moves B+ Debt Rating from Not Cooperating
SPECIALITY POLYMERS: ICRA Keeps D Debt Ratings in Not Cooperating
SRIAVANTIKA CONTRACTORS: Ind-Ra Assigns BB Term Loan Rating
SUNNY ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating
URMILA RCP: CRISIL Moves B Debt Rating from Not Cooperating
V.J. CONSTRUCTIONS: CRISIL Lowers Rating on LT/ST Debts to D
VENTO POWER: CARE Keeps D Debt Rating in Not Cooperating
WADHAWAN GLOBAL: CARE Keeps D Debt Rating in Not Cooperating
J A P A N
MITSUI OSK: Moody's Upgrades CFR to Ba2 & Alters Outlook to Stable
NIPPON YUSEN: Moody's Affirms Ba1 CFR & Alters Outlook to Positive
M O N G O L I A
MONGOLIAN MINING: Moody's Rates New Sr. Notes B3, Placed on Review
N E W Z E A L A N D
AKOTEU FAKAILIMOUI: Court to Hear Wind-Up Petition on Sept. 15
CHOICE INDIAN: Creditors' Proofs of Debt Due on Sept. 27
INFINITY MAINTENANCE: Creditors' Proofs of Debt Due on Oct. 4
MICROGEM NZ: Creditors' Proofs of Debt Due on Oct. 2
PARKLANE INFRASTRUCT: Court to Hear Wind-Up Petition on Sept. 29
S I N G A P O R E
BRCKHSE SUPPS: Placed in Provisional Liquidation
KARLAVE GENERAL: Court Enters Wind-Up Order
KLOUD SPACE: Creditors' Proofs of Debt Due on Oct. 2
MKY CAPITAL: Court to Hear Wind-Up Petition on Sept. 8
TESSA THERAPEUTICS: Commences Wind-Up Proceedings
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A U S T R A L I A
=================
AERISON GROUP: Administrators Threaten AUD60MM Suit vs. Roy Hill
----------------------------------------------------------------
The West Australian reports that Aerison's administrators are
preparing to pursue Gina Rinehart's Roy Hill Holdings through the
courts for AUD60 million in disputed claims related to the failed
engineering and construction group's work on the namesake Pilbara
iron ore mine.
If successful, the action would dramatically improve recoveries for
Aerison's creditors, who were owed more than AUD90 million when the
company called in insolvency experts from KordaMentha in June,
barely two years after it listed on the stock market, the report
says.
Richard Tucker, John Bumbak and Craig Shepard of KordaMentha were
appointed as administrators of Aerison Group Ltd on June 6, 2023.
AUSTRALASIAN CAPITAL: ASIC Suspends AFS Licence
-----------------------------------------------
The Australian Securities and Investments Commission (ASIC) has
suspended the Australian financial services (AFS) licence of
Australasian Capital Pty Ltd for one year, until August 25, 2024.
The licence authorised Australasian to provide financial services
to wholesale clients.
ASIC suspended the license because Australasian has ceased to carry
on a financial services business. Australasian has also failed to
meet its financial reporting obligations for the financial years
ending June 30, 2021 and June 30, 2022.
The suspension will provide Australasian Capital with an
opportunity to attend to its outstanding lodgement obligations.
ASIC may consider further action if Australasian has not complied
with its obligations at the end of the suspension period.
Australasian may apply to the Administrative Appeals Tribunal for a
review of ASIC's decision.
Australasian has held AFS licence no. 384 503 since January 21,
2011.
CUT-TO-SIZE PLASTICS: Second Creditors' Meeting Set for Sept. 4
---------------------------------------------------------------
A second meeting of creditors in the proceedings of Cut-To-Size
Plastics Pty Ltd has been set for Sept. 4, 2023 at 11:00 a.m. via
teleconference only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Sept. 1, 2023 at 5:00 p.m.
Steven Arthur Gladman of Hall Chadwick Chartered Accountants was
appointed as administrator of the company on July 31, 2023.
GREENLEAF (TAS): First Creditors' Meeting Set for Sept. 5
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Greenleaf
(TAS) Pty Ltd will be held on Sept. 5, 2023, at 3:00 p.m. via Zoom
meeting only.
Kiara Calvert and Barry Hamilton of Barry Hamilton & Associates
were appointed as administrators of the company on Aug. 24, 2023.
IONMY PTY: First Creditors' Meeting Set for Sept. 4
---------------------------------------------------
A first meeting of the creditors in the proceedings of Ionmy Pty
Ltd will be held on Sept. 4, 2023, at 10:30 a.m. at the offices of
Jirsch Sutherland at Suite 2, Level 14, 383 Kent Street in Sydney
and via teleconference facilities.
Andrew John Spring and Trent Andrew Devine of Jirsch Sutherland
were appointed as administrators of the company on Aug. 23, 2023.
OZ PROPERTY: Second Creditors' Meeting Set for Sept. 5
------------------------------------------------------
A second meeting of creditors in the proceedings of OZ Property
Investment Centre Pty Ltd has been set for Sept. 5, 2023 at 10:00
a.m. at the offices of Mcleods Accounting at Level 4, 89
Scarborough Street in Southport and 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 Sept. 4, 2023 at 5:00 p.m.
Nick Keramos and Bill Karageozis of Mcleods Accounting were
appointed as administrators of the company on July 31, 2023.
VERSATILE SERVICES: Second Creditors' Meeting Set for Sept. 4
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Versatile
Services Australia Pty Ltd has been set for Sept. 4, 2023 at 4:00
p.m. via Zoom meeting only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Sept. 1, 2023 at 4:00 p.m.
Richard Rohrt of Kennedy Ryan Advisory was appointed as
administrators of the company on July 31, 2023.
ZIP CO: Reports AUD413MM Statutory Net Loss for Year Ended June 20
------------------------------------------------------------------
News.com.au reports that buy now pay later (BNPL) provider Zip Co
has cut its statutory net loss to AUD413 million for the year to
June 30, down from an eye-watering AUD1.1 billion last year.
In June, Zip hit monthly profitability in Australia, the US and NZ
for the first time, amid a cost of living crisis that is seeing
consumers cut back on spending.
This comes as tech giant Apple confirmed it has no immediate plans
to launch its Apple Pay Later BNPL offering in Australia.
According to news.com.au, Kyle Andeer, Apple vice president of
products and regulatory law, spoke at an inquiry into promoting
economic dynamism, competition and business formation in Australia
on Aug. 29. He said while the company was "really excited" about
the BNPL service it launched in the US in March, the "challenging
regulatory structure" in Australia meant a local launch was not in
the works.
Tighter regulation of the BNPL sector, which may see the sector
brought under the Credit Act, is in the works.
The upcoming regulation is not a deterrent to Zip, which said it
already exercises "responsible lending practices and full ID,
credit and affordability checks on its customers".
But it has already forced one player out of the market, with
LatitudePay pulling out of Australia in April.
Announcing the decision it said: "We have decided to stop offering
LatitudePay services in Australia as a consequence of the
uncertainty surrounding the future regulatory environment for the
BNPL (by now, pay later) sector."
LatitudePay is not the only BNPL casualty this year; in February
ASX-listed OpenPay went into receivership.
Buy now pay later services have fallen out of favour as consumers
tighten their belts.
The Sydney Morning Herald revealed that fellow BNPL operator
Afterpay has opted not to renew its naming rights sponsorship of
Australian Fashion Week, news.com.au relays.
The decision was reflective of Afterpay's desire to somewhat divest
from being a "fashion brand", as consumer spending patterns changed
in a tighter economy, an insider told the publication.
News.com.au says the latest results for Zip come after payments
consulting firm McLean Roche's chief executive Grant Halverson
described the company as being in a "cycle of death".
Earlier this year, he said the company would need to make profits
as soon as possible given the company had not been profitable since
2013, news.com.au recalls.
"They need to cut credit losses, which means stopping customers'
spending, which means they leave or get cancelled by Zip - but they
have plenty of other options," he told the Australian Financial
Review.
"PayPal is saying they are No 1. You can see this in ANZ where
spending was already slow - now it's in decline."
Despite this, Zip co-founder and CEO Larry Diamond said the company
was accelerating its path toward profitability with a "strategy to
increase revenue margins and reduce credit losses," relays
news.com.au.
"In an environment of rising interest rates and high inflation our
results demonstrate the increasing relevance of our products to
customers and merchants. In Australia, the strength of our brand
and product offering continues to resonate and is attracting new
merchants such as eBay AU, Qantas, Jetstar and Uber which all
launched during the period," he said.
"The expected consolidation of our sector has begun and there are
significant opportunities for Zip as this dynamic continues to play
out. We have already experienced an increase in inbound merchant
inquiries following recent developments in the market."
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C H I N A
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CHINA EVERGRANDE: Unit Reports Vehicle Deliveries, Narrower Loss
----------------------------------------------------------------
Caixin Global reports that the electric-vehicle unit of defaulted
property developer China Evergrande Group reported that in the
first half of 2023 it delivered 760 cars and its net loss narrowed
by almost half from a year earlier to 6.87 billion yuan (US$942
million).
According to Caixin, China Evergrande New Energy Vehicle Group
Ltd.'s revenue jumped more than fivefold to CNY155 million, mainly
from mass production and delivery of its flagship model, the
Hengchi 5, starting last October.
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
As reported in the Troubled Company Reporter-Asia Pacific on Aug.
18, 2023, China Evergrande Group, the second largest real estate
developer in China, and certain of its affiliates sought creditor
protection in the United States under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 23-11332) on Aug. 17.
Evergrande, widely known as the most leveraged company in the
world, and its affiliates are asking the U.S. Bankruptcy Court for
the Southern District of New York for recognition of foreign
proceedings as "foreign main" proceeding under Chapter 15.
Evergrande is in the midst of a highly complex restructuring of
around $20 billion in offshore debt. In total, the Company has
more than $300 billion in liabilities.
Evergrande is incorporated in the Cayman Islands as an exempted
company with limited liability, with its principal place of
business located at 15th Floor, YF Life Centre, 38 Gloucester Road,
Wanchai, Hong Kong. It is subject to a restructuring proceeding
entitled In the Matter of China Evergrande Group, concerning a
scheme of arrangement between Evergrande and certain Scheme
Creditors pursuant to the relevant provisions of the Hong Kong
Companies Ordinance (Chapter 622 of the Laws of Hong Kong),
currently pending before the High Court of Hong Kong (Case Number
HCMP 1091/2023.
Affiliate Tianji Holding Limited is incorporated in Hong Kong as a
limited liability company, with its principal place of business
located at 17th Floor, One Island East, Taikoo Place, 18 Westlands
Road, Quarry Bay, Hong Kong. Tianji is subject to a restructuring
proceeding entitled In the Matter of Tianji Holding Limited,
concerning a scheme of arrangement between Tianji and certain
Scheme Creditors, pursuant to the relevant provisions of the Hong
Kong Companies Ordinance and currently pending before the Hong Kong
Court (Case Number HCMP 1090/2023).
Affiliate Scenery Journey Limited is incorporated in the British
Virgin Islands as a limited liability company, with its principal
place of business located at 2nd Floor Water's Edge Building,
Wickham's Cay II, Road Town, Tortola, BVI. Scenery Journey is
subject to a restructuring proceeding entitled In the Matter of
Scenery Journey Limited, concerning a scheme of arrangement between
Scenery Journey and certain Scheme Creditors, pursuant to section
179A of the BVI Business Companies Act, 2004, and currently pending
before the High Court of the Eastern Caribbean Supreme Court (Case
Number BVIHCOM 2023/0076).
U.S. Bankruptcy Judge Michael E Wiles presides over the Chapter 15
proceedings.
Sidley Austin is the Hong Kong Counsel to Evergrande and Tianji.
Maples BVI is the British Virgin Island Counsel to Scenery
Journey.
COUNTRY GARDEN: Raises Capital in Scramble to Pay Debts
-------------------------------------------------------
Daisuke Wakabayashi at The New York Times reports that Country
Garden said on Aug. 30 it planned to raise $34 million by issuing
new shares, its latest effort to get a handle on its debt problems
and contain a deepening property crisis that is weighing on China's
economy.
In a filing with the Hong Kong Stock Exchange, Country Garden said
it planned to issue 350.6 million shares of the company at 77 Hong
Kong cents apiece next Wednesday [Sept. 6], the report relates. The
proceeds will not go to the company. Instead, they will go to a
subsidiary of Hong Kong-based Kingboard Holdings Limited, a
materials and chemicals manufacturers with a property division to
which Country Garden owes millions of dollars.
Country Garden, China's biggest property developer, is selling the
shares at a 15 percent discount to Aug. 29's closing price. It is
teetering on the brink of default after missing two interest
payments earlier this month. The company has until next week to
repay the offshore bondholders or it will be in default to
creditors.
The New York Times says the financial trouble facing Country Garden
is the latest fallout from a rapidly spreading real estate crisis
in China.
As of 2022, Country Garden had roughly $190 billion in liabilities,
the report notes. Over the last few years, several dozen Chinese
property developers, including some of the sector's biggest names,
have defaulted under the weight of debt built up over years of
excessive borrowing.
According to The New York Times, Country Garden had managed to
avoid that fate, but a sharp downturn in sales starting a few
months ago exacerbated its financial problems. In addition to the
missed interest payments, the company is negotiating with creditors
to delay repayment of a Chinese bond, due later this week, until
2026.
It said it still owed the Kingboard Holdings subsidiary around $200
million, to be paid in installments, with the final payment due in
December. The new shares in Country Garden represent 1.27 percent
of the company's existing shares.
Later on Aug. 30, the company is expected to post results for the
first six months of 2023. It warned earlier this month that it
expected to post a loss of between $6.2 billion and $7.5 billion
for those months, citing an "unprecedented difficult period" for
China's property industry, The New York Times notes.
Shares in the company have fallen 67 percent this year.
About Country Garden
Country Garden Holdings Company Limited is an investment holding
company principally engaged in the sales of properties. The Company
operates its business through five segments: Property Development
segment, Construction Fitting and Decoration segment, Property
Investment segment, Property Management segment and Hotel Operation
segment. The Company's subsidiaries include Wuhan Country Garden
Lianfa Investment Co., Ltd, Jurong Country Garden Property
Development Co., Ltd and Chuzhou Country Garden Property
Development Co., Ltd.
As recently reported in the Troubled Company Reporter-Asia Pacific,
Moody's Investors Service has downgraded Country Garden Holdings
Company Limited's corporate family rating to Caa1 from B1 and its
senior unsecured rating to Caa2 from B1. The rating outlook
remains negative.
The TCR-AP also reported that Fitch Ratings has downgraded Country
Garden Services Holdings Company Limited's (CGS) Long-Term Issuer
Default Rating (IDR) to 'BB+' from 'BBB-' and placed the rating on
Rating Watch Negative (RWN).
COUNTRY GARDEN: Some Offshore Creditors Mull Forming Group
----------------------------------------------------------
Reuters reports that some offshore creditors of embattled Chinese
developer Country Garden are in talks with a New York-based law
firm and are considering options including legal ones, by forming a
group if the company seeks to restructure its debt, a
representative for the law firm said.
While Country Garden is one of the few leading private developers
in China that has not defaulted on its offshore debt obligation
yet, its liquidity stress became public earlier this month after it
missed two dollar coupon payments, Reuters says.
Offshore creditors are closely watching to see if Country Garden
would be able to meet the grace period for the two missed bond
coupon payments, which ends on Sept. 5, John Han, a Hong Kong-based
attorney at Kobre & Kim LLP, said on Aug. 30, Reuters relays.
According to Reuters, the missed debt payments worth a total of
$22.5 million by China's largest developer by sales value until
this year raised fears that the country's deepening property debt
crisis will spillover to its financial sector, heaping more
pressure on the sputtering economy.
Kobre hosted a call with some of Country Garden's offshore
creditors on Tuesday night [Aug. 29], during which the law firm
laid out Country Garden's primary business units, core assets which
include its onshore and offshore property projects.
"We're in discussions with offshore creditors about potentially
forming a group and options in case they're ignored by the company,
or they hold discussions that are not productive," Han told
Reuters.
Country Garden had total liabilities of CNY1.4 trillion (US$194
billion) at the end of 2022, while Kobre said its offshore bond
debt is three times its onshore bond debt, Reuters relates.
The developer has not made any public comments about its engagement
with offshore creditors since missing coupon payments.
A spokesperson for Country Garden on Aug. 30 declined to comment
when asked by Reuters about the possibility of some offshore
bondholders forming a group for debt restructuring talks.
Han said they had been in discussions with creditors interested in
forming a group and weighing options, including some specialized in
distressed credit and experienced in using strategies to improve
value in debt restructuring cases, Reuters relays.
He also said the number of creditors interested in joining the
group grew "considerably" after Tuesday's call.
According to Reuters, Country Garden has been talking with its
onshore creditors to extend a CNY3.9 billion private bond due on
Aug. 25. Creditors will have until Thursday to approve a proposal
to extend the full repayment by three years.
Some offshore Country Garden bondholders separately told Reuters
they expect the developer to prioritize negotiations with onshore
creditors, and they were concerned whether their interests could be
addressed in a timely manner by the firm.
About Country Garden
Country Garden Holdings Company Limited is an investment holding
company principally engaged in the sales of properties. The Company
operates its business through five segments: Property Development
segment, Construction Fitting and Decoration segment, Property
Investment segment, Property Management segment and Hotel Operation
segment. The Company's subsidiaries include Wuhan Country Garden
Lianfa Investment Co., Ltd, Jurong Country Garden Property
Development Co., Ltd and Chuzhou Country Garden Property
Development Co., Ltd.
As recently reported in the Troubled Company Reporter-Asia Pacific,
Moody's Investors Service has downgraded Country Garden Holdings
Company Limited's corporate family rating to Caa1 from B1 and its
senior unsecured rating to Caa2 from B1. The rating outlook
remains negative.
The TCR-AP also reported that Fitch Ratings has downgraded Country
Garden Services Holdings Company Limited's (CGS) Long-Term Issuer
Default Rating (IDR) to 'BB+' from 'BBB-' and placed the rating on
Rating Watch Negative (RWN).
GEMDALE CORP: Moody's Lowers CFR to Ba3, Placed on Further Review
-----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Gemdale Corporation to Ba3 from Ba2 and the CFR of Famous
Commercial Limited, Gemdale's wholly-owned subsidiary, to B1 from
Ba3.
Moody's has also downgraded the senior unsecured rating on the
bonds to B1 from Ba3 and the senior unsecured rating to (P)B1 from
(P)Ba3 on the medium-term note (MTN) program issued by Gemdale Ever
Prosperity Investment Limited (Gemdale Ever Prosperity) and
guaranteed by Famous. Gemdale Ever Prosperity's offshore bonds are
supported by Gemdale through keepwell deeds and deeds of equity
interest purchase undertaking.
At the same time, Moody's has put the ratings on review for further
downgrade. Previously, the outlook was negative.
"The downgrade of Gemdale's ratings reflects Moody's expectation
that the company's liquidity buffer and credit metrics will worsen
amid weakening contracted sales and its still-constrained funding
access to debt capital markets," says Kelly Chen, a Moody's Vice
President and Senior Analyst.
"The review for downgrade reflects high uncertainty over the
company's ability to improve its funding access and operations,
which could increase the company's refinancing pressure given its
sizable amount of debt maturities over the next 6-12 months," adds
Chen.
RATINGS RATIONALE
Moody's expects Gemdale's operating performance to weaken over the
next 12-18 months amid rising uncertainty over the recovery
prospects of China's property market. Recent credit distress of
certain Chinese developers could further dampen homebuyers'
confidence over the sector, which could in turn pressure Gemdale's
sales and cash flow over the next 6-12 months.
Specifically, Moody's estimates Gemdale's contracted sales will
decline to RMB160 billion – RMB170 billion in 2023 and 2024, from
RMB210 billion in 2022. In the first seven months of 2023, the
company's contracted sales fell 19% from last year's, weaker than
the national sales of 0.7% annual growth during the same period.
Gemdale's governance risk exposure is reflected in its weakened
liquidity and risk management. The company has a large amount of
bonds due or becoming puttable through the end of 2024. However,
the company's slow progress in raising new funds will expose it to
high refinancing uncertainty given the volatile funding
environment.
Although Gemdale has not issued any bonds in the year to date,
Moody's notes that it has issued long-term bank loans by securing
its investment properties to address part of its refinancing needs
over the past 6-12 months.
While Moody's expects Gemdale's liquidity to remain adequate, its
liquidity buffer will reduce over the next 12-18 months if it is
unable to regain access to capital market funding and continues to
use its internal resources to repay its maturing bonds. Moody's
estimates the company had unrestricted cash of RMB42 billion as of
the end of March 2023, which together with projected operating cash
flow, will be sufficient to cover its maturing debt, including
around RMB26 billion of onshore and offshore bonds becoming mature
or puttable before the end of 2024.
In addition, Moody's projects Gemdale's credit metrics will
deteriorate over the next 12-18 months, as weakening operations
will further pressure the company's revenue recognition and its
operating cash flow over the next 12-18 months. The company would
also have to offer discounts to accelerate sales, lowering the
profit margins for its property development businesses.
As a result, the company's adjusted debt/EBITDA would weaken to
around 6.5x over the next 12-18 months from 5.0x in 2022 and its
EBIT/interest coverage would drop to 2.7x from 3.7x over the same
period. These credit metrics no longer support the company's
previous Ba2 rating.
Gemdale's CFR continues to reflect its established brand name and
long operating track record in China's property market, against its
declining contracted sales and financial metrics; and significant
exposure to its joint venture (JV) projects, which lowers the
transparency of its credit metrics.
Meanwhile, the downgrade of Famous' CFR reflects Gemdale's weakened
ability to provide financial support to Famous in times of stress.
Moody's support assumption considers (1) Gemdale's full ownership
of Famous; (2) Famous' status as Gemdale's primary platform to
raise funds from offshore debt capital markets; and (3) Gemdale's
track record of providing financial support to Famous.
Famous' standalone credit profile is constrained by the small scale
of its operations, its weak financial metrics and potential
volatility in its sales performance. However, the standalone credit
profile also factors in operational benefits arising from the
company's status as a core subsidiary of Gemdale, such as cost
efficiencies and a strong brand name.
Famous' liquidity is weak. Nonetheless, Moody's expects the company
will continue to receive funding support from Gemdale, given its
close linkage with Gemdale.
The B1 senior unsecured ratings on the bonds and the (P)B1 senior
unsecured rating on the MTN program guaranteed by Famous are not
affected by subordination to claims at the operating companies.
This is because Moody's expects support from Gemdale will flow
through the holding company rather than directly to its main
operating companies, thereby mitigating any differences in expected
loss that could result from structural subordination.
In terms of environmental, social and governance (ESG) factors,
Gemdale's Credit Impact Scores of CIS-4 reflects the impact of ESG
attributes, especially governance risk, on its ratings.
For Famous, Moody's has also taken into account its private company
status and low corporate transparency. However, Gemdale's 100%
ownership of the company, established governance structure and
history of providing support to its subsidiary mitigate these
risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's will review Gemdale's ability (1) to recover its funding
access to debt capital markets; (2) to strengthen its contracted
sales and financial metrics; and (3) to maintain sufficient
liquidity amid volatile operating and funding conditions.
The ratings are unlikely to be upgraded given the ratings are on
review for downgrade.
However, Moody's could confirm the ratings if the company
strengthens its contracted sales, financial metrics and access to
various types of funding at stable costs, all on a sustained
basis.
On the other hand, the ratings could be downgraded if the company
is unable to improve its contracted sales or recover its access to
funding, such that its liquidity profile deteriorates more than the
agency expected.
Key metrics indicative of a downgrade include EBIT/interest
coverage falling below 2.5x and adjusted debt/EBITDA rising above
6.5x, all on a sustained basis.
Famous' rating is also unlikely to be upgraded given the ratings
are on review for downgrade.
However, Moody's could confirm Famous' rating if Gemdale's rating
is confirmed, and its standalone credit quality, as well as the
support from Gemdale remain unchanged.
On the other hand, Famous' rating could come under pressure if (1)
Gemdale's rating is downgraded; or (2) Gemdale reduces its
ownership of, or lowers its support for, Famous.
Moody's could also downgrade Famous' rating if the company's credit
profile or liquidity deteriorates materially.
The principal methodology used in these ratings was Homebuilding
and Property Development published in October 2022.
Incorporated in China and listed on the Shanghai Stock Exchange,
Gemdale Corporation is a leading developer in China's residential
property sector. As of the end of 2022, the company's land bank
totaled around 52 million square meters (sqm) in saleable gross
floor area (GFA) across about 78 cities in China.
Incorporated in Hong Kong SAR, China in 1995, Famous Commercial
Limited is a wholly-owned subsidiary of Gemdale Corporation. The
company also serves as Gemdale's funding vehicle in overseas
markets.
R&F PROPERTIES: Posts CNY5.10 Billion Net Loss in H1 Ended June 30
------------------------------------------------------------------
MarketScreener reports that Guangzhou R&F Properties Co., Ltd.
reported earnings results for the half year ended June 30, 2023.
For the half year, the company reported sales was CNY16,416.16
million compared to CNY17,782.07 million a year ago. Net loss was
CNY5,108.64 million compared to CNY6,919.6 million a year ago.
MarketScreener relates that basic loss per share from continuing
operations was CNY1.361 compared to CNY1.844 a year ago. Diluted
loss per share from continuing operations was CNY1.361 compared to
CNY1.844 a year ago.
Meanwhile, Caixin Global reports that Guangzhou R&F Properties has
CNY48.1 billion ($6.6 billion) of debt due within a year with less
than CNY10 billion on hand as of the end of June, the southern
China property developer disclosed.
Even though R&F extended some debt last year, its first-half
financial report showed that it is still mired in a liquidity
crisis, Caixin says. R&F Properties delayed payment of CNY46.7
billion of domestic and offshore bonds in 2022 for three to four
years.
About Guangzhou R&F
Guangzhou R&F Properties Co., Ltd. operates real estate businesses.
The Company provides housing renovation, housing loans, real estate
brokerage, property management, and other services. Guangzhou R&F
Properties also operates hotel management.
As recently reported in the Troubled Company Reporter-Asia Pacific,
Fitch Ratings has affirmed the Long-Term Foreign-Currency Issuer
Default Ratings (IDR) on Guangzhou R&F Properties Co. Ltd. and its
subsidiary, R&F Properties (HK) Company Limited (RFHK), at 'RD'
(Restricted Default). It has also affirmed RFHK's senior unsecured
rating and the rating on the RFHK-guaranteed notes issued by Easy
Tactic Limited at 'C', with the Recovery Ratings of 'RR5'.
At the same time, Fitch has chosen to withdraw the ratings on
Guangzhou R&F and RFHK for commercial reasons.
YUEXIU REAL: Moody's Affirms 'Ba1' CFR & Alters Outlook to Negative
-------------------------------------------------------------------
Moody's Investors Service has revised the outlooks of Yuexiu Real
Estate Investment Trust (Yuexiu REIT) and Yuexiu REIT MTN Company
Limited to negative from stable.
At the same time, Moody's has affirmed the Ba1 corporate family
rating of Yuexiu REIT and the provisional (P)Ba1 backed senior
unsecured rating on Yuexiu REIT MTN Company Limited's backed
medium-term note (MTN) program, and Ba1 backed senior unsecured
rating on the backed notes issued under the MTN program.
"The negative outlook reflects increased uncertainties over Yuexiu
REIT's ability to strengthen its operations and credit metrics to
levels commensurate with its current Ba1 CFR amid challenging
business conditions in China (A1 stable)," says Alfred Hui, a
Moody's Analyst.
"The rating affirmation reflects Yuexiu REIT's maintenance of
quality assets in major cities that could support the REIT to
gradually recover its operations and credit metrics from the
currently weak levels. Additionally, Moody's expect the REIT to
maintain its good access to funding to address refinancing needs at
a reasonable cost," adds Hui.
RATINGS RATIONALE
Yuexiu REIT's Ba1 CFR reflects the trust's portfolio of
good-quality assets in key tier 1 and tier 2 cities in China,
including Guangzhou, the capital city of the economically strong
Guangdong province; Shanghai; Wuhan; and Hangzhou. The Ba1 rating
also reflects Yuexiu REIT's good funding access given its close
linkage to a state-owned sponsor. Guangzhou Yue Xiu Holdings
Limited, which is owned by the Guangzhou municipal government, is
the ultimate controlling unit holder of Yuexiu REIT. However,
these strengths are offset by the REIT's weak credit metrics and
geographic concentration in Guangzhou, China.
Moody's expects Yuexiu REIT's revenue and EBITDA recovery over the
next 12-18 months to be slower than the agency previously expected,
as uncertainties over China's economic recovery will likely weigh
on business and consumer sentiment. This in turn will dampen the
occupancy rate and delay positive rental reversion of Yuexiu REIT's
properties. As of end of June 2023, Yuexiu REIT's overall occupancy
rate fell to 84.0% from 85.5% as of end of 2022 and 88.8% as of end
of June 2022, mainly driven by lower occupancy rates in the office
buildings.
In the absence of asset disposals and other debt reduction plans,
Moody's forecasts Yuexiu REIT's debt leverage, as measured by net
debt/EBITDA, will remain high at 13.2x-13.7x over the next 12-18
months, although lower than 15.6x for the twelve months ended June
2023. Similarly, Yuexiu REIT's interest servicing ability, as
measured by EBITDA interest coverage, will remain weak at 1.7x-2.0x
over the next 12-18 months, versus 1.6x for the twelve months ended
June 2023. Moody's considers these projected credit metrics to be
weak for its Ba1 CFR, despite their recovery trajectory.
In addition, Yuexiu REIT has a high exposure to offshore borrowing,
which will expose the REIT to elevated interest rates in offshore
markets. As of the end of June 2023, unhedged non-RMB floating-rate
borrowings accounted for 51% of Yuexiu REIT's total reported debt.
Moody's notes that Yuexiu REIT has been replacing its offshore debt
with RMB-denominated borrowing to reduce its exposure. In the first
half (1H) of 2023, Yuexiu REIT obtained a RMB4 billion 3-year
secured bank loan facility at 3.2% and issued a RMB1.5 billion
3-year bond at 4.15% for refinancing.
Moody's also expects that Yuexiu REIT could use more secured
funding to lower interest costs. However, an increased use of
secured borrowing will reduce Yuexiu REIT's financial flexibility
and increase the legal and structural risks of senior unsecured
creditors. As of end of June 2023, secured debt accounted for 12%
of Yuexiu REIT's reported debt, up from 6% as of the end of 2022.
The fact that the trust has to pay out most of its distributable
income as dividends limits its ability to achieve a strong cash
buffer on its balance sheet. Moreover, Yuexiu REIT will need to
have continued access to funding to address refinancing needs.
Although the trust has refinanced most of the maturing debt coming
due in 2H 2023, the trust's cash balance of RMB2.8 billion as of
the end of June 2023, together with its undrawn bank loan facility
and operating cash flow, is not sufficient to cover all of its
maturing debt and dividend payments over the next 12-18 months. The
risk associated with its weak liquidity is mitigated by Yuexiu
REIT's good track record of refinancing maturing debt over the past
few years and strong banking relationships, considering its
government-owned background.
In terms of environmental, social and governance (ESG) factors,
Moody's has considered Yuexiu REIT's financial policy that favors
debt-funded acquisitions to support its growth over the past few
years, as reflected by its high debt leverage. Moody's also
considers Yuexiu REIT's concentrated ownership and related party
transactions with its state-owned sponsor, as well as the
regulatory oversight provided by the Securities and Futures
Commission of Hong Kong SAR, China.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade of Yuexiu REIT's ratings is
unlikely.
However, Moody's could revise Yuexiu REIT's outlooks to stable if
it (1) achieves high occupancy levels and profitability for its
portfolio of assets, (2) improves its credit metrics and (3)
maintains good access to funding with low borrowing costs.
The rating outlooks could return to stable if Yuexiu REIT improves
its debt leverage, such that adjusted net debt/EBITDA trends
towards 12x and EBITDA/interest coverage rises above 2.0x.
On the other hand, Moody's could downgrade the ratings if (1)
Yuexiu REIT's operating and financial performances do not recover
as the agency expected; (2) the trust is unable to reduce its debt
leverage or conducts debt-funded business expansion, or (3) its
access to funding weakens. A reduction in financial flexibility
because of significantly higher secured debt would also pressure
the ratings.
Credit metrics that could lead to a rating downgrade include net
debt/EBITDA staying above 12.5x-13.0x, or EBITDA/interest coverage
falling below 2.0x, both on a sustained basis.
Moody's could also downgrade the senior unsecured ratings if Yuexiu
REIT substantially increases secured borrowing to refinance
unsecured offshore debt, and significantly weakens the recovery
rates of senior unsecured creditors.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
Yuexiu Real Estate Investment Trust (Yuexiu REIT) is the first Hong
Kong-listed REIT with a property portfolio located entirely in
China (A1 stable). Yuexiu REIT is also the first Hong Kong-listed
REIT sponsored by a Chinese property developer.
As of the end of June 2023, the trust's portfolio comprised ten
properties, with six located in Guangzhou, one in Shanghai, one in
Wuhan, one in Hangzhou and one in Hong Kong SAR, China. These
properties include a wholesale mall, Grade A offices, retail malls,
a premium international five-star hotel and a service apartment.
ZHONGRONG INT'L: Top Shareholder Plans to Delist
------------------------------------------------
Reuters reports that China's Jingwei Textile Machinery Co - the
biggest shareholder of troubled Zhongrong International Trust Co -
saw its stock surge on Aug. 30 after offering to buy out investors
who object to the firm's plan to switch bourses.
Reuters relates that the price of Jingwei stock, which resumed
trade following a two-day halt, jumped the maximum 10% to CNY8.86
($1.22) after the firm said it would buy shares for CNY9.24 each
from holders who did not wish to carry them over to another
exchange.
Jingwei owns 37.5% of Zhongrong International Trust which has
missed payments on dozens of investment products since the end of
July, investor sources said, triggering contagion fear in an
economy suffering from huge debt in the real estate sector,
according to Reuters.
Delisting from the Shenzhen Stock Exchange could shield public
market investors from liquidity woes at Zhongrong, a major shadow
bank with heavy exposure to real estate.
"Due to changes in market conditions, the company's operations face
huge uncertainty that could have a major impact," Jingwei said in
an exchange filing on Aug. 29, Reuters relays.
Under a proposal from parent China Hi-tech Group intended to
"protect the interest of small shareholders", Jingwei will withdraw
its Shenzhen listing and seek to float on the New Third Board, a
smaller equity trading venue in Beijing that has a high threshold
for investor participation.
The proposal requires shareholder approval, Reuters notes.
Asset manager Zhongzhi Enterprise Group, the second-biggest
shareholder of Zhongrong International Trust, told investors at a
videoed meeting this month that it is facing a liquidity crisis and
will restructure debt, Reuters says.
About Zhongrong International
Zhongrong International Trust Co Ltd provides financial services.
The Company offers financial investment products screening, asset
allocation, domestic and overseas investment, and other services.
Zhongrong International Trust offers services in China.
As reported in the Troubled Company Reporter-Asia Pacific in early
June 2023, S&P Global Ratings withdrew its 'BB+/B' issuer credit
rating on Zhongrong International Trust Co. Ltd. (Zhongrong Trust)
and 'BB-/B' issuer credit rating on Zhongrong Trust's subsidiary,
Zhongrong International Holdings Ltd. (ZRH), at the company's
request.
At the time of withdrawal, the outlook on the long-term issuer
credit rating on Zhongrong Trust was stable. This reflected S&P's
expectation that the China-based trust company will maintain its
good market position and low leverage over the next 12-24 months.
The ratings further reflect its contingent liabilities from
implicit support of trust products.
The outlook on the long-term issuer credit rating on ZRH was
negative at the time of withdrawal. This reflected S&P's
expectation of heightened investment risk and persistently weak
liquidity for the company, and the possibility that its strategic
link with its parent could weaken further.
=================
H O N G K O N G
=================
HEALTH AND HAPPINESS: S&P Alters Outlook on 'BB+' ICR to Stable
---------------------------------------------------------------
S&P Global Ratings, on Aug. 28, 2023, revised the outlook on Health
and Happiness (H&H) International Holdings Ltd. to stable from
negative.
S&P affirmed its long-term issuer credit rating on H&H at 'BB+'.
S&P also affirmed the 'BB' issue rating on its second-ranking
senior secured notes due in 2024 as well as 'BB+' issue rating on
its first-ranking senior secured notes due in 2026.
S&P said, "The stable outlook reflects our expectation that strong
growth in H&H's adult nutrition segment will more than offset the
declining baby nutrition segment. Our base case assumes the
company's adjusted debt-to-EBITDA leverage will decrease to 3.0x by
the end of 2023 and 2.4x in 2024, from 4.2x in 2022.
"H&H's strong first half results solidify its deleverage trajectory
towards 3x. The company's topline growth of 17% in the first six
months of 2023 exceeded our prior full-year forecast of 8% thanks
to strong demand for the company's probiotics and supplement
products. Adjusted EBITDA margin stood at 18.3%. This was higher
than our previous forecast of 15.1% for 2023, driven by a better
product mix and operating leverage due to higher sales. We now
project H&H revenue will grow 10% annually, as solid revenue growth
in the company's adult nutrition and pet businesses offsets a
decline in its infant formula segment.
"We believe revenue growth could taper slightly into the second
half of 2023 but better margin profile will remain. As such, we
have raised our EBITDA forecast for 2023 to RMB2.3 billion, from
RMB2.1 billion. This will bring H&H's debt to EBITDA ratio down to
3x by year end, from our previous forecast of 3.4x.
"Adult nutrition will overtake the baby segment as a key credit
driver. We anticipate adult nutrition and care (ANC) will
contribute about half of the company's revenue and EBITDA in the
next few years. EBITDA contribution from baby nutrition should
decline to 30%-40% whereas pet nutrition remains small as the
company continues to build up the new business. We are forecasting
20%-30% sales growth in 2023 and 10%-15% sales growth in 2024 for
ANC, thanks to higher demand for health supplements, new product
roll-out and premiumization. H&H has been increasing market shares
in China as it introduced more innovative and localized series,
seeing online vitamin and health supplement share gain to 7.5% in
2022 from 5.9% a year ago.
"We project H&H will continue gain share in key China and Australia
markets and uphold its leading position with innovative product
rollout, more localized product line-up and targeted marketing
campaign. Better margins in the segment, thanks to operating
leverage and mix improvement, will also compensate for the decline
in baby nutrition segment and low margins due to heavy investments
in pet nutrition.
"Baby formula remains challenging. We project H&H's reported EBITDA
margin in the overall baby nutrition segment will stay flat or
slightly decline to 16%-17% in 2023-2024. Baby formula sales in
China are suffering from the declining birth rate, intense
competition and stricter regulation. These factors will shrink the
infant milk formula (IMF) market by 10%-15% in 2023. The new
national standard for IMF took effect in 2023 and severe
competition has driven out several players. Given this,, it will be
challenging for H&H to keep its market share, as bigger local
players such as Inner Mongolia Yili Industrial Group Co. Ltd. and
China Feihe Ltd. invest more in IMF. The company's strategy is to
lift margins through selling premium products and expand into
products for toddlers and young children. However, competition will
intensify in this segment, and reduce margins. We forecast the
EBITDA contribution from IMF will continue to decline to a third or
lower, from 40%-50% over the last five years.
"H&H's positive discretionary cash flow should continue to support
gradual deleveraging. We anticipate minimal capital expenditure and
acquisition suspension as the company preserves cash. Operating
cash flow will rise to RMB1.3 billion–RMB1.5 billion from RMB863
million in 2022 thanks to good EBITDA growth and less working
capital outflow. Inventory levels will normalize post COVID with
lower material prices. We also anticipate that IMF will reduce
inventory following the recently introduced national standard. We
assume no further acquisition spending over the next two years as
the company focuses on growing the pet nutrition business and
deleveraging. Despite the dividend payout ratio increase to 50%
(from 30% in 2021), we project discretionary cash flow to recover
to RMB900 million–RMB1 billion in 2023 and 2024 from RMB465
million in 2022. This will reduce leverage."
H&H should maintain ample liquidity by actively extending its
maturity profile. The company now has sizable debt maturities of
about RMB 7.4 billion in 2024 and 2025 combined. This includes
RMB2.9 billion and RMB 3.1 billion for amortization of its
syndicated loan due in December 2024 and June 2025 respectively.
Despite the difficult market for Chinese high-yield bonds, the
company has successfully extended its maturity profile to 2026 by
issuing US$200 million senior unsecured notes this June. It also
expanded its funding channels by obtaining new Chinese
renminbi-denominated term loans from onshore banks during the first
half of 2023. S&P believes the company will continue to manage its
maturity profile, based on its track record of refinancing at least
12 months ahead of bond maturities in 2018 and 2019.
S&P said, "Our base case assumes H&H will continue to expand
funding channels and obtain new funds in the next six to twelve
months. It is actively exploring lower-cost funding channels, such
as Chinese renminbi bonds, onshore loans and sukuk loans to manage
funding costs. This will reduce refinancing needs to about RMB5
billion by the first half of 2024. Despite H&H's improving
discretionary cash flow and clearer refinancing plans, the shorter
tenure of its newly attained funds (average three years) versus
five-year offshore bonds will require more frequent refinancing to
maintain an extended maturity profile.
"The stable outlook reflects our view that growth in H&H's adult
nutrition segment will more than offset the declining baby
nutrition segment. The improvement in EBITDA and discretionary cash
flow will bring the debt-to-EBITDA ratio down to 3.0x by year end
2023 and 2.4x in 2024. We expect the company will address the
maturity wall due in the second half of 2024 ahead of time.
"We could lower the ratings if H&H's debt-to-EBITDA ratio stays
above 3x beyond 2023. This could happen if operating performance
weakens meaningfully due to higher-than-expected competition or
poor consumer demand for baby and nutrition products in China. We
could also lower the ratings if H&H undertakes further debt-funded
acquisitions, more aggressive capital investments, or if its
shareholder returns are more generous than we expect.
"We could also consider a downgrade if there is a delay in the
company's refinancing plan such that its capital structure weakens
in the next 12 months."
An upgrade would require H&H to significantly increase its share of
the fragmented milk formula and health supplements markets, or grow
the pet nutrition segment such that it becomes larger in scale.
This will need to be done in conjunction with stable overall margin
generation and debt-to-EBITDA ratio staying below 2x. S&P thinks
this possibility is remote for the next 12-18 months.
=========
I N D I A
=========
ABHILASH CHEMICALS: Ind-Ra Cuts LongTerm Issuer Rating to BB
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Abhilash
Chemicals and Pharmaceuticals Pvt. Ltd.'s (ACPPL) Long-Term Rating
to 'IND BB' from 'IND BB+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR160 mil. Fund-based limits Long-term rating downgraded;
Short-term rating affirmed with IND BB/Stable/ IND A4+
rating;
-- INR25 mil. Term loan due on May 2024 downgraded with IND BB/
Stable rating; and
-- INR160 mil. Non-fund-based limits affirmed with IND A4+
rating.
Analytical Approach: Ind-Ra continues to take a consolidated view
of ACPPL and its 74% subsidiary Abhilash Life Sciences LLP (ALS) to
arrive at the ratings owing to the strong legal, operational and
strategic linkages between them. Since ALS has been into losses
since 2020, ACPPL provides funds to ALS for meeting its working
capital requirements and debt repayments, while the former's
finished products are raw materials for ALS.
The downgrade reflects a delay in ramping up of ALS' operations due
to delayed inspection, a sustained deterioration in the
consolidated net leverage in FY23, and a continued stretched
liquidity position.
Key Rating Drivers
The downgrade reflects a delay in ramping up of operations at ALS,
which were scheduled to commence in May 2022, owing to delayed
inspection by the Agency for Medical Products and Medical Devices
of Croatia. The inspection, which was scheduled to take place in
February 2022, took place on 13 April 2023.
Liquidity Indicator - Poor: ACPPL does not have capital market
exposure and relies on a single bank to meet its working capital
requirement. The average maximum utilization of the fund-based and
non-fund-based limits was 63.81% and 12.81%, respectively, during
the 12 months ended 31 July 2023. The cash flow from operations
remained negative at INR327.22 million in FY23 (FY22: negative
INR55.45 million) and free cash flow at negative INR201.43 million
(negative INR109.16 million). The net working capital cycle
improved to 107 days in FY23 (FY22: 137 days), although remained
elongated, majorly due to a decrease in the receivable period to
137 days (159 days). The cash and cash equivalents were INR64.89
million at FYE23 (FYE22: INR6.34 million). It has scheduled
repayments of INR39.8 million and INR32.4 million in FY24 and FY25,
respectively. FY23 consolidated financials are provisional.
The downgrade also reflects a continued deterioration in the
consolidated net financial leverage (adjusted net debt/operating
EBITDA) to 17.14x (FY22; 15.23x; FY21 5.08x) owing to an increase
in debt. However, the gross interest coverage (operating
EBITDA/gross interest expense) slightly improved to 1.87x in FY23
(FY22: 1.34x, FY21: 4.13x) owing to an improvement in the EBITDA to
INR46.73 million in FY23 (INR35.55 million, INR84.83 million).
Ind-Ra expects the credit metrics to remain modest in FY24 due to
the absence of any debt-led capex in near term. On a standalone
basis, the interest coverage was 5.16x in FY23 (FY22: 7.72x) and
net leverage was 3.07x (1.89x).
The ratings continue to factor in ACCPL's medium scale of
operations. On a consolidated basis, the revenue improved to
INR1,313.85 million in FY23 (FY22: INR1,130.02.02 million, FY21:
INR933.72 million) due to execution of a higher number of orders.
The management expects the revenue to increase further in the
medium term owing to the completion of the inspection by the Agency
For Medical Products and Medical Devices of Croatia on 13 April
2023. The physical certification for manufacturing active
pharmaceutical ingredients will be received by end-August 2023,
post which ACCPL will receive regular export orders from European
Countries. Thus, Ind-Ra expects the revenue to improve in FY24. On
a standalone basis, the revenue was INR1,257.62 million in FY23
(FY22: INR1,092.30 million) and INR280 million in 3MFY24.
On a consolidated basis, the margins remained modest at 3.56% in
FY23 (FY22: 3.15% with a return on capital employed of 0.5%. In
FY24, Ind-Ra expects the margins to improve, due to increased
high-margin export sales to regulated markets. On a standalone
basis, the EBITDA margins were 9.59% in FY23 (FY22: 10.15%) with a
return on capital employed of 8.3% (9.8%).
The ratings, however, continue to be supported by ACPPL's
promoters' over three decades of experience in the pharmaceuticals
industry. This has facilitated the company to establish strong
relationships with customers as well as suppliers.
Rating Sensitivities
Positive: Timely ramp-up of operations at the subsidiary, along
with an improvement in the credit metrics with the net leverage
reducing below 4.5x on a sustained and consolidated basis, could
lead to a positive rating action.
Negative: A decline in the revenue or EBITDA margins, leading to
deterioration in the credit metrics, all on a sustained and
consolidated basis, could lead to a negative rating action.
Company Profile
Incorporated in 1994, ACPPL is a Madurai-based specialty chemicals
manufacturer. The company manufactures active pharmaceutical
ingredients - metformin hydrochloride, which is used as an oral
antidiabetic agent. It derives 85% of its revenue from the
pharmaceutical division and the remaining from the manufacturing of
leather chemicals and textile chemicals. ACPPL generates 90% of its
revenue from exports to Brazil, Thailand, the UAE, Sri Lanka,
Pakistan, Egypt, Syria and Vietnam.
AKAL PIPE: ICRA Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
ICRA has kept the long-term rating of Akal Pipe Industries in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 6.90 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 2.50 [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.
API was established in March 2012 as a partnership firm of Mr.
Harbant Singh, Mr. Gurnam Singh, Mr. Harpreet Singh, Mr. Yadvinder
Singh and Mr. Nazam Singh sharing profits and losses in the ratio
of 51%, 14%, 13%, 13% and 9%, respectively. The entity is engaged
in the manufacturing of RCC (Reinforced cement concrete) pipes and
manholes.
AKAL SPRING: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Akal Spring
Limited's (ASL) Long-Term Issuer Rating at 'IND BB. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR110 mil. Fund-based working capital limits affirmed with
IND BB/Stable/ IND A4+ rating; and
-- INR23.72 mil. (reduced from INR46 mil.) Term loan due on
February 2026 affirmed with IND BB/Stable rating.
Key Rating Drivers
The affirmation reflects ASL's continued small scale of operations,
with revenue of INR1,047.69 million in FY23 (FY22: INR821.70
million). The revenue increased by 27.5% yoy due to an overall
increase in demand in the auto sector and higher realizations. The
sales volumes increased to 10,224 metric tons (MT) in FY23 (FY22:
7,966MT), with capacity utilization rising to 71% (54%). Revenue
from domestic sales increased to INR832.33 million in FY23 (FY22:
INR547.53 million), while the revenue from exports dipped to
INR215.36 million (INRR274.17 million). In FY23, the revenue
contribution from exports declined due to a decline in orders from
the US, led by recessionary trends in US markets. ASL plans to
start a new plant near its existing plant in Ludhiana, which will
start operating from September 2024. Ind-Ra expects the revenue to
improve in FY24, led by the receipt of orders from newly added
customers coupled with repeat orders from existing customers.
The ratings reflect the moderate credit metrics due to the modest
EBTIDA margin. The credit metrics improved in FY23 on account of an
increase in EBITDA to INR24.72 million (FY22: INR20.51 million).
The gross interest coverage (operating EBITDA/gross interest
expense) increased slightly to 2.57x (FY22: 2.36x) and net
financial leverage (adjusted net debt/operating EBITDAR) fell to
3.66x (4.45x). ASL plans to undertake capex of INR150 million over
FY24-FY25 for setting up the new plant, which will be funded by
term loan of INR90 million and promoters' contribution of INR50
million. Given the likely increase in debt, Ind-Ra believes the
company's metrics will deteriorate in the near term.
The ratings also factor in ASL's modest EBITDA margins due to the
nature of the business. The margin dipped slightly to 2.4% in FY23
(FY22: 2.5%) due to an increase in direct expenses. The ROCE was
4.7% in FY23 (FY22: 3.5%). Ind-Ra expects the EBITDA margin to be
stable in FY24.
Liquidity Indicator - Stretched: ASL does not have any capital
market exposure and relies on the promoters, banks and financial
institutions to meet its funding requirements. ASL's average
maximum utilization of the fund-based limits was 83.06% during the
12 months ended July 2023 and there was nil utilization of the
non-fund-based limits over the same period. The cash flow from
operations turned positive at INR21.81 million in FY23 (FY22:
INR6.29 million), due to favorable changes in working capital.
Furthermore, the free cash flow also turned positive at INR24.79
million in FY23 (FY22: negative INR3.93 million). The net working
capital cycle improved to 31 days in FY23 (FY22: 57 days) due to a
decrease in inventory days to 33 days (41 days) and a fall in
debtor days to 31 days (41 days). The unrestricted cash and cash
equivalents stood at INR1.97 million in FY23 (FY22: INR1.67
million), against repayment obligations of INR8.81 million in FY24
and INR18.49 million in FY25.
The ratings, however, are supported by the promoters' experience of
nearly three decades in the leaf spring manufacturing industry,
which has helped the company establish strong relationships with
customers as well as suppliers.
Rating Sensitivities
Negative: A significant decline in the scale of operations, leading
to deterioration in the credit metrics, or further weakening of the
liquidity position, could lead to a negative rating action.
Positive: A significant improvement in the scale of operations,
leading to an improvement in the overall credit metrics, with the
net leverage ratio remaining below 4x, along with an improvement in
the liquidity position, all on a sustained basis, will be positive
for ratings.
Company Profile
ASL is a deemed limited family owned company, situated at Focal
Point, Ludhiana. ASL manufactures suspension parts, such as leaf
springs, for automobiles. It was incorporated in 1974 and commenced
commercial production in 1980. The company is managed by directors,
Jaspal Kaur, Sandeep Riat, Amrit Pal Singh and Harpreet Kaur Riat.
ANAND RICE: ICRA Keeps D Debt Rating in Not Cooperating Category
----------------------------------------------------------------
ICRA has kept the Long-Term rating of Anand Rice Mills in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 39.00 [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. 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.
Anand Rice Mill (ARM) is engaged in the business of milling of
Basmati Rice. The company has processing unit with capacity of 8
tons per hour which is in Nissing (Distt. Karnal)- Haryana. The
Company caters to both domestic as well as export markets. Out of
total sales in FY17 ~95% is contributed by domestic sales and rest
by export market sales. The partners in the firm are Mr. Sunil
Kumar, Mr. Pankaj Singla and Mr. Surinder Kumar.
ANDHRA PRADESH: CRISIL Reaffirms D Rating on INR1,011.3cr Bond
--------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL D' rating on the bonds of
Andhra Pradesh Power Finance Corporation Limited (APPFC).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bond 249.4 CRISIL D (Reaffirmed)
Bond 1,011.3 CRISIL D (Reaffirmed)
Bond 736.1 CRISIL D (Reaffirmed)
Bond 1000.0 CRISIL D (Reaffirmed)
Bond 597.2 CRISIL D (Withdrawn)
The reaffirmation factors in instances of delay in interest payment
on the rated bonds with a recent occurrence in July 2023.
Timeliness of meeting obligations remains uncertain until there is
a final resolution on distribution of assets and liabilities
between the states of Andhra Pradesh (AP) and Telangana.
Post bifurcation of the erstwhile state of AP, the obligation on
each of the rated bonds are met jointly by APPFC and Telangana
State Power Finance Corporation (TSPFC). While APPFC has been
making timely payments to investors, there have been delays in
payments from TSPFC. Furthermore, the T-structure (T-10) of
crediting the bond servicing account before the due date has not
been followed.
Consequent to redemption, CRISIL Ratings has withdrawn its rating
on bonds of INR866.1 crore in line with its withdrawal policy (See
Annexure 'Details of rating withdrawn' for details). CRISIL Ratings
has received independent confirmation that these instruments are
fully redeemed.
Analytical Approach
The rating reflects the delays in servicing the bond obligation
earlier and non-invocation of the guarantee by the trustee.
Key Rating Drivers & Detailed Description
* Continued lack of clarity on division of liabilities and delays
in meeting obligations: The rated bonds were guaranteed by the
erstwhile GoAP. However, post bifurcation of AP, there have been
disputes over division of assets and liabilities between AP and
Telangana, which led to delays in meeting obligations on the rated
bonds. While APPFC has met its liabilities on time, there have been
repeated instances of delays by TSPFC.
The track record of timely servicing of interest and principal
obligations will be monitored. Also, until there is a final
resolution between the two states, there will be uncertainty over
timeliness in meeting the interest and principal obligations on the
rated bonds.
* Failure of the designated payment structure: The rating on the
Bonds factors in failure of the payment structure due to
non-adherence to the T-structure and non-invocation of guarantee by
the trustee, as the guarantee was provided by the erstwhile GoAP.
Liquidity: Poor
Existing bonds of APPFC face funding constraints because of delay
in receipt of funds from the Telangana government. The servicing of
the bonds depends on receipt of funds from the AP and Telangana
governments, which are meeting their share of payments through the
budgetary allocation
Rating Sensitivity factors
Upward factors
* Resolution of the dispute between the governments of AP and
Telangana over servicing of the debt obligation
* Adherence to the T-10 structure for existing bonds
Unsupported ratings - CRISIL D
Disclosure of unsupported rating for credit ratings without 'CE'
suffix, where the instruments are backed by specified support
considerations, is in compliance with SEBI's Operational Circular
dated January 6, 2023.
APPFCL reported a profit after tax (PAT) of INR201 crore on a total
income of INR1,582 crore for fiscal 2023 (provisional) against PAT
of INR150 crore on a total income of INR1,578 crore for fiscal
2022.
AVEENA MILK: ICRA Lowers Rating on INR5cr LT Loan to D
------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of Aveena
Milk Products (AMP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.00 [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- 5.00 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating downgraded from
[ICRA]B+ (Stable) and continues
to remain under 'Issuer Not
Cooperating' category
Rationale
The rating downgrade reflects Delay in Debt Repayment recognized
from publicly available information. The rating is based on limited
information on the entity's performance since the time it was last
rated in July 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. 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.
Aveena Milk Products (AMP) is partnership firm registered on 6th of
January 2014 which deals in Milk and Milk products with all allied
and necessary activities in relation to production of Milk and its
consumption.
BAFNA MOTORS: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has kept the Long-Term rating of Bafna Motors (Mumbai) Private
Limited in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 59.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 150.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
BMMPL is an authorized dealer of Tata Motors Limited (TML; rated
[ICRA]AA-(Negative)/[ICRA]A1+), dealing in commercial vehicles as
well as in their spare parts and servicing. The company serves the
three regions of Mumbai, Thane, and Raigad district in Maharashtra.
The company was established on November 5, 2001. Its registered
office is at World Trade Centre, Cuffe Parade, Mumbai. The Bafna
Group was promoted by Mr. M. C. Bafna, with its first dealership in
Nanded (Maharashtra). mily managed company is also engaged in the
production of table eggs and trading in wheat, rice, paddy, animal
and poultry feed. Based out of Nagpur, the company is operating 16
sheds on a 28-acre land.
BYRNIHAT COAL: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Byrnihat
Coal Private Limited (BCPL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.50 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 2.50 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 July 21, 2022,
placed the rating(s) of BCPL under the 'issuer non-cooperating'
category as BCPL 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. BCPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 6, 2023, June 16, 2023, June 26, 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).
Assam based Byrnihat Coal Private Ltd (BCPL) was incorporated in
March 2005 by Mrs. Babita Harlalka and Mr. Suresh Kumar Agarwala.
After remaining dormant for about eight years, BCPL has started
trading of different size of coal from August 2013. The company
procures coal from local players and sells it to clients across
Assam and Meghalaya.
CAIRO INTERNATIONAL: ICRA Lowers Rating on INR12cr LT Loan to D
---------------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of Cairo
International, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 12.00 [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– 0.61 [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/ 15.00 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term- COOPERATING; Rating downgraded
Unallocated from [ICRA]B (Stable)/[ICRA]A4
and continues to remain under
'Issuer Not Cooperating'
Category
Short-term– 0.75 [ICRA]D; ISSUER NOT
COOPERATING;
Non Fund based Rating downgraded from
Others [ICRA]A4 and continues to remain
under 'Issuer Not Cooperating'
category
Rationale
The rating of Cairo International is downgraded as the accounts of
the entity have been declared as NPA (Non-Performing Asset)
mentioned by the Director of the company. The rating is based on
limited information on the entity's performance since the time it
was last rated in July 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. 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.
T-shirts and trades in fabric. The readymade garments are retailed
in the domestic as well as the export markets, mostly under the
in-house brand names Dash and Cairo. The firm has an installed
capacity of manufacturing 7.50 lakh pieces per annum. The partners,
Mr. Lalit Agarwal and his wife Mrs. Rekha Agarwal, have more than
two decades of experience in the readymade garments industry.
DIVINE CHEM: CARE Keeps C Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Divine
Chem Food (DCF) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.95 CARE C; 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 August 18,
2022, placed the rating(s) of DCF under the 'issuer
non-cooperating' category as DCF 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. DCF
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 4, 2023, July 14, 2023, July 24, 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).
Nawa-based (Rajasthan) Divine Chem Food (DCF) was formed as a
partnership concern in December, 2014 by Mr. Saroj Kumar Chhabra,
Mr. Mahabir Prasad Kachwal, Mr. Dilip Agarwal, Mr. Ashok Kumar
Chotia and Mr. Lalit Kumar Sharma. The firm was formed with an
objective to set up a green-field plant for manufacturing of
refined iodised as well as non-iodised salt and dust salt in
district-Nagaur.
FRIENDS AGRO: ICRA Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------
ICRA has kept the Long-Term rating of Friends Agro Industries in
the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 9.60 [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. 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.
Friends Agro Industries (FAI) is a partnership firm established in
January 2010. The firm is primarily engaged in milling of basmati
rice and non-basmati rice. FAI's milling unit is based out of
Jalalabad, Punjab. The firm purchases paddy from the local mandis
and markets in and around Jalalabad. The partners purchased the
mill in January 2010 and installed a Sortex machine. Now the firm
sells value added sorted rice instead of raw rice which the earlier
entity sold. The distribution is done through a network of brokers
situated across Delhi, Rajasthan, Punjab, and Haryana. The product
is sold under an unregistered brand named "Aneja Gold".
GANGES FORD: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
ICRA has kept the long-term rating of Ganges Ford (Proprietor:
Lexicon Commercial Enterprises Limited) in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 22.30 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term- 0.43 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due 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 2004, Ganges Ford (Proprietor: Lexicon Commercial
Enterprises Limited) (GF) is an authorised dealer of Ford India
Private Limited (FIPL). The company sells and services vehicles
along with spare parts and accessories. GF has a showroom and two
workshops in Kolkata, and a showroom with an exclusive sales and
service outlet (ESSO) in Berhampore, West Bengal. The company is
promoted by the Kolkata-based Mr. Harish Himatsingka, who has long
experience in the automotive dealership industry.
HYDERABAD STEELS: ICRA Keeps C Debt Rating in Not Cooperating
-------------------------------------------------------------
ICRA has kept the long-term and short-term ratings for the bank
facilities of Hyderabad Steels in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]C /[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 4.00 [ICRA]C; ISSUER NOT
COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short Term- 3.50 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due 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 2008 as a proprietorship, Hyderabad Steels (HS) is
involved in the trading of steel and allied products such as Mild
Steel (MS) Ingots, Billets, MS Bars, MS Angles, MS Flats, Scrap,
Sponge Iron etc. In 2015, the firm was reconstituted as a
partnership firm.The partners of the firm Ms. J. Raghavi Reddy and
Mr. M. Pavan Kumar have more than four decades of experience in
iron and steel trading business. The firm procures traded products
from steel rolling mills located in and around Hyderabad. The firm
has its warehouse facility at Nacharam, Hyderabad. The firm caters
to the demands of the customers based out of Hyderabad.
JALARAM INDUSTRIES: CARE Keeps C Debt Rating in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Jalaram
Industries (JI) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.90 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated August 19,
2022, placed the rating(s) of JI under the 'issuer non-cooperating'
category as JI 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. JI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
July 5, 2023, July 15, 2023, July 25, 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).
JI based out of Wardha, Maharashtra is a partnership concern was
established in January 2001. The entity is engaged in the business
of processing of pulses at its processing facility located at
Wardha, Maharashtra.
JAYALAKSHMI SPINTEX: CRISIL Moves B+ Ratings from Not Cooperating
-----------------------------------------------------------------
Due to inadequate information (non-receipt of No Default Statements
(NDS) for three consecutive months), CRISIL Ratings, in line with
SEBI guidelines, had migrated the rating of Jayalakshmi Spintex
(India) Private Limited (JSPL) to 'CRISIL B+/Stable Issuer Not
Cooperating'. However, the management has subsequently provided a
No default statement, necessary for carrying out comprehensive
review of the rating. Consequently, CRISIL Ratings is migrating
the rating on bank facilities of JASIPL to 'CRISIL B+/Stable' from
'CRISIL B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 15.63 CRISIL B+/Stable (Migrated
Bank Loan Facility from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
Term Loan 5.2 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
Term Loan 4.17 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
The rating reflects JSPL's susceptibility to volatility in raw
material (Cotton) prices, working capital intensive operations and
weak financial profile. These weaknesses are partially offset by
its extensive industry experience of the promoters.
Analytical Approach
Unsecured loans are treated as debt.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to volatility in raw material (Cotton) prices: The
textile spinning industry has several unorganized players with
small capacities. The entry barriers to the industry are low due to
limited capital and technology requirements and little
differentiation in end products. These factors will continue to
exert pricing pressure over the medium term. Moreover, revenue and
profitability will remain susceptible to volatility in the price of
raw materials and cotton.
* Working capital intensive operations: Gross current assets were
at 161.1-207 days over the three fiscal periods ended March 31,
2022. Its intensive working capital management is reflected in its
gross current assets (GCA) of 207 days as on March 31, 2022. Its
large working capital requirements arise from its inventory levels
of 145 days. It is required to extend the long credit period. GCA
days are expected to be 160-180 days on the inventory level of
90-120 days over the medium term.
* Weak financial profile: JSPL has an average financial profile
marked by gearing of 3.73 times and total outside liabilities to
adj tangible net worth (TOL/ANW) of 5.20 times for year ending on
31st March 2023. Additionally, INR3.5 crore of capital is expected
to infuse in FY2024, capital structure is expected to be similar
level on the high level of debt portion, however gearing and
TOL/TNW are expected to be 2-3 times and 3-4 times over the medium
term. JSPL's debt protection measures are modest with the interest
coverage ratio at 1.62 times for fiscal 2023. JSPL debt protection
measures are expected to remain at a similar level with high debt
levels.
Strength:
* Extensive industry experience of the promoters: The promoters
have an experience of over two decades in Textile industry. This
has given them an understanding of the dynamics of the market and
enabled them to establish relationships with suppliers and
customers.
Liquidity: Stretched
Bank limit utilization is at around 64 percent for the past twelve
months ending June 2023. Cash accruals are expected to be over
INR2-3 crores, which are tightly matched against term debt
obligation of INR1-2.5 crores over the medium term. In addition,
Company having Unsecured loan of INR55lakh, it will be act as
cushion to the liquidity of the company.
Current ratios are healthy at 1.66 times as on March 31, 2023.
Outlook: Stable
CRISIL Ratings believe JSPL will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity Factors
Upward factors:
* Improvement and sustenance in scale of operation at 20% and
profitability at 7.5 to 8.5% leading to higher cash accrual.
* Improvement in financial risk profile
* Improvement in Gross current asset days
Downward factors:
* Decline in scale of operation at 20% and profitability less than
6% leading to lower cash accrual.
* Further deterioration in financial risk profile and working
capital cycle.
JSPL was incorporated in 1995. JSPL is engaged in manufacturing
cotton yarn. JSPL manufacturing facility is in Coimbatore, Tamil
Nadu with an installed capacity of 25,000 spindles. JSPL's day to
day operations are run by N. Sivakumar.
LINGAYA'S SOCIETY: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Lingaya's
Society (LIS) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 17.53 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 8.70 CRISIL D (Issuer Not
Cooperating)
Term Loan 13.77 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with LIS for
obtaining information through letter and email dated July 19, 2023
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of LIS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on LIS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
LIS continues to be 'CRISIL D Issuer Not Cooperating'.
LIS was set up in 2010 as Lingaya Jankalyan Shikshan Sansthan
(LJSS); the name was changed in 1998. The society conducts courses
through various educational institutes set up in the National
Capital Region. It is promoted by Mr. V K Sinha.
M.G. INDUSTRIES: CRISIL Cuts Rating on INR4.75cr Cash Loan to D
---------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
M.G. Industries - Nashik (MGINNA) to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B+/Stable Issuer Not Cooperating'. The
rating action is on the account of delays in debt servicing which
came to CRISIL's ratings from external, public information.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.75 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
Term Loan 1.25 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with MGINNA for
obtaining information through letters and emails dated October 31,
2022 and December 30, 2022 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of MGINNA, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
MGINNA is consistent with 'Assessing Information Adequacy Risk'.
MGINNA was set up in 1980 in Nashik as a proprietorship firm by Mr
K N Changrani. It manufactures machined precision components for
automobile and electrical tools, and also pneumatic tools
components.
Status of non cooperation with previous CRA:
MGINNA has not cooperated with Acuite Ratings And Research Limited,
and India Ratings And Research Private Limited which have
classified the firm as non-cooperative via RR dated 06-Feb-2019 and
18-May-2017 respectively, due to non-furnishing of information by
MGINNA.
MANIPAL ENERGY: Ind-Ra Affirms BB+ Issuer Rating, Outlook Positive
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Manipal Energy and
Infratech Limited's (MEIL) Long-Term Issuer Rating at 'IND BB+' and
simultaneously withdrawn it. The Outlook was Positive.
The instrument-wise rating actions are:
-- INR39 mil. Term loan* due on FY26 affirmed and withdrawn;
-- INR150 mil. Fund-based working capital facilities# affirmed
and withdrawn; and
-- INR250 mil. Non-fund-based working capital facilities#
affirmed and withdrawn.
*Affirmed at 'IND BB+'/Positive before being withdrawn
#Affirmed at 'IND BB+'/Positive/'IND A4+' before being withdrawn
Ind-Ra is no longer required to maintain the ratings, as it has
received a no-objection certificate from the rated facilities'
lender. This is consistent with Ind-Ra's Policy on Withdrawal of
Ratings. Ind-Ra will no longer provide analytical and rating
coverage for MEIL.
Analytical Approach: Ind-Ra continues to take a consolidated view
of Manipal Media Network Limited (MMNL) and its wholly-owned
subsidiaries - MEIL, Manipal Digital Network Limited, and Manipal
Ace Event Management Company Private Limited – to arrive at the
ratings owing to cash flow fungibility among them and a common
management.
Ind-Ra has taken the rating action as MMNL has submitted the
pending no-default statement for May 2023, June 2023 and July 2023
to the agency. The affirmation and Positive Outlook reflect an
improvement in MMNL's consolidated profitability, leading to an
improvement in the credit metrics in FY23.
Key Rating Drivers
Strong Operating Performance: On a consolidated basis, the revenue
grew about 7% yoy to about INR2,250 million in FY23, primarily due
to a 26% yoy increase in MMNL's revenue to INR1,140 million,
partially offset by a 7% yoy decline in MEIL's revenue to INR1,112
million. The growth in MMNL's revenue in FY23 was driven by an
increase in advertising and circulation revenue. However, MEIL's
revenue declined due to a slight delay in execution of projects,
partially offset by entry into new geographies and healthy order
book. MMNL contributed about 51% to the consolidated revenue while
MEIL and other subsidiaries contributed the remainder.
The consolidated EBITDA margins increased to 15%-16% in FY23 (FY22:
13%) attributable to various cost-cutting initiatives undertaken by
the company. Ind-Ra believes a recovery in the consolidated
operational and financial profile will continue over the medium
term.
Improvement in Credit Metrics in FY23: On a consolidated basis, the
net adjusted leverage (net debt/EBITDA) improved to about 4.3x in
FY23 (FY22: 5.3x) and the gross interest coverage (EBITDA/gross
interest) to around 1.8x (1.6x). This was due to an increase in the
EBITDA to about INR350 million in FY23 (FY22: INR274 million),
partially offset by a marginal increase in the consolidated
adjusted gross debt (including 50% equity credit for preference
shares) to about INR1,500 million (INR1,493 million). The external
bank borrowings accounted for about 35% of the overall debt at
FYE23 and the remaining was inter-corporate loans likely to have
been extended to MVP Group International Inc., which have not
increased in FY23 as confirmed by the management.
Weak Counterparties Despite Healthy Order Book: Despite MEIL having
a healthy order book of about INR2,000 million to INR 2,500 million
as of March 2023, providing a revenue visibility of almost 2x of
FY23 revenue, the counterparty profile of a majority of its
customers remained weak. Majority of MEIL's customers are regional
electricity boards that have weak financial profiles. The
receivable days (FY23: 311 days; FY22: 329 days; FY21: 432 days)
were on a higher side. However, the increase in payable days and a
fall in receivable days led to a reduction in the working capital
cycle, although slightly elongated.
Liquidity Indicator - Stretched: MEIL's free cash flows have been
negative since FY20, except in FY21 when it turned slightly
positive. The company needed continuous financial support from the
parent, either in the form of equity or inter-corporate loans over
FY18-FY23 as its operations remained susceptible to the high
working capital requirements. Ind-Ra, thus, believes that any cash
shortfall to meet the working capital requirements will be met by
the support from the parent. Cash and cash equivalents stood at
INR0.4 million at FYE23 (FY22: 0.008 million). The company's
average utilization of the fund-based limits remained high at about
91% over the 12 months ended June 2023. Liquidity of MEIL's parent
MMNL is also stretched, although is backed by the continuous
support from other Manipal group entities.
Strong Parent Support: Ind-Ra believes the overall linkages between
MEIL and MMNL are strong and MEIL will continue to receive such
support (if required) from MMNL and other group entities. The
strategic linkages between the entities are strong, given the
history of continuous tangible support from MMNL to MEIL and also
MEIL contributed around 51% to the total consolidated revenue in
FY23. At FYE23, MMNL provided an unsecured borrowing of INR247
million (FY22: INR 205 million; FYE21: INR186 million) to MEIL, and
other group entities infused INR55 million in MEIL (INR26 million).
The unsecured loans from the group entities stood at INR327 million
at FYE23, as additional support of INR96 million was extended
during FY23. Moreover, MEIL has the repayment flexibility for the
extended loans. The legal linkages are strong as MMNL has provided
a post-default irrevocable and unconditional corporate guarantee
for MEIL's entire external debt, which was about 34% of the total
debt outstanding at FY23 (FY22: 47%; FY21: 45%). Despite being in
unrelated businesses, the operational linkages between these two
entities are moderate, owing to the strong supervision of
operations by the parent and common treasury functions between
these two entities. MEIL executes civil construction and rural
electrification works for various state electricity boards, while
MMNL has a newspaper publishing business.
Standalone Performance: On a standalone basis, the revenue was
INR1,112 million in FY23 (FY22:INR1,191 million, FY21:INR 376
million), EBITDA was INR95 million (INR93 million, INR46 million),
net leverage was 5.3x 4.7x, 8.3x) and interest coverage
(EBITDA/gross interest cost) was 1.6x (1.7x, 1.1x) . Majority of
the debt (around 66%) continues to be from the parent entity.
Excluding the inter-corporate loans of MMNL, the net leverage was
1.8x in FY23 (FY22: 2.2x, FY21: 3.8x).
Company Profile
MEIL, a 100% subsidiary of Manipal Media Network Limited, is an
engineering, procurement and construction contractor executing
civil construction and rural electrification work for various state
electricity boards.
MANIPAL MEDIA: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Manipal Media
Network Limited's (MMNL) Long-Term Issuer Rating at 'IND BB+' and
has simultaneously withdrawn it. The Outlook was Positive.
The instrument-wise rating actions are:
-- INR207 mil. Term loan* due on FY29 affirmed and withdrawn;
-- INR150 mil. Fund-based working capital facilities# affirmed
and withdrawn; and
-- INR100 mil. Non-fund-based working capital facilities#
affirmed and withdrawn.
*Affirmed at 'IND BB+'/Positive before being withdrawn
#Affirmed at 'IND BB+'/Positive/'IND A4+' before being withdrawn
Ind-Ra is no longer required to maintain the ratings, as it has
received a no-objection certificate from the rated facilities'
lender. This is consistent with Ind-Ra's Policy on Withdrawal of
Ratings. Ind-Ra will no longer provide analytical and rating
coverage for MMNL.
Analytical Approach: Ind-Ra continues to take a consolidated view
of MMNL and its wholly-owned subsidiaries - Manipal Energy &
Infratech Limited (MEIL); Manipal Digital Network Limited and
Manipal Ace Event Management Company Private Limited - to arrive at
the ratings owing to cash flow fungibility among them and a common
management.
For the current review, while Ind-Ra does not have the consolidated
FY23 financials of MMNL, the agency has added MMNL's and MEIL's
financials for FY23 to arrive at the consolidated numbers, as these
two companies contribute more than 95% to total consolidated
revenue, EBITDA, debt and cash equivalents as per historical
financials and as confirmed by management.
Ind-Ra has taken the rating action as MMNL has submitted the
pending no-default statement for May 2023, June 2023 and July 2023
to the agency. The affirmation and Positive Outlook reflect an
improvement in MMNL's consolidated profitability, leading to an
improvement in the credit metrics in FY23.
Key Rating Drivers
Strong Operating Performance: On a consolidated basis, the revenue
grew about 7% yoy to about INR2,250 million in FY23, primarily due
to a 26% yoy increase in MMNL's revenue to INR1,140 million,
partially offset by a 7% yoy decline in MEIL's revenue to INR1,112
million. The growth in MMNL's revenue in FY23 was driven by an
increase in advertising and circulation revenue. However, MEIL's
revenue declined due to a slight delay in execution of projects,
partially offset by entry into new geographies and healthy order
book. MMNL contributed about 51% to the consolidated revenue while
MEIL and other subsidiaries contributed the remainder.
The consolidated EBITDA margins increased to 15%-16% in FY23 (FY22:
13%) attributable to various cost-cutting initiatives undertaken by
the company. Ind-Ra believes a recovery in the consolidated
operational and financial profile will continue over the medium
term.
Improvement in Credit Metrics in FY23: On a consolidated basis, the
net adjusted leverage (net debt/EBITDA) improved to about 4.3x in
FY23 (FY22: 5.3x) and the gross interest coverage (EBITDA/gross
interest) to around 1.8x (1.6x). This was due to an increase in the
EBITDA to about INR350 million in FY23 (FY22: INR274 million),
partially offset by a marginal increase in the consolidated
adjusted gross debt (including 50% equity credit for preference
shares) to about INR1,500 million (INR1,493 million). The external
bank borrowings accounted for about 35% of the overall debt at
FYE23 and the remaining was inter-corporate loans likely to have
been extended to MVP Group International Inc., which have not
increased in FY23 as confirmed by the management.
Liquidity Indicator - Stretched: Ind-Ra believes MMNL's cash flow
from operations will remain stretched over the medium term to meet
its debt servicing requirements. Ind-Ra expects MMNL will continue
to receive support from the Manipal Group over the next two years
on a timely basis. MMNL's standalone cash and equivalents increased
to INR45 million at FYE23 (FYE22: INR34 million, FYE21: INR15
million). On a consolidated basis, the working capital cycle
remained elongated at about 99 days in FY23 (FY22: 92 days, FY21:
154 days), on account of MEIL's stretched receivables. It has
scheduled repayments of INR34.1 million and INR33.7 million in FY24
and FY25, respectively.
Support from Manipal Group: The ratings continue to be supported by
MMNL's association with the Manipal Group (promoted by Satish Pai);
this includes MMNL, Manipal Technologies Limited ('IND
BBB+'/Stable) and Primacy Industries Limited. With MMNL operating
as a holding company for the Manipal Group, the likelihood of MMNL
receiving support from the promoters and other group companies is
high. Ind-Ra expects the support to continue to flow to MMNL from
the group, if required.
Territorial Market Leadership: MMNL is among the top players in the
coastal Karnataka region. As per the management, the company holds
around 70% of the circulation market share in the coastal region,
with an average daily circulation of about 2,00,000 copies in FY23.
MMNL is also known for its weekly and monthly publications in
Kannada language. The company's regional focus has resulted in a
medium scale of operations, which is unlikely to grow substantially
in the near term.
Improvement in Standalone Credit Profile: MMNL's revenue increased
to INR1,140 million in FY23 (FY22: INR902 million, FY21: INR777
million) and absolute EBITDA to INR258 million (INR172 million,
INR117 million) with EBITDA margins to 23% (14%, 10%). MMNL's gross
debt increased to INR1,324 million at FYE23 (FYE22: INR1,252
million, FYE21: INR1,215 million); a significant portion of the
total debt is from other group companies and directors.
Company Profile
Incorporated in 1948 in Manipal, Udupi, by the Manipal Group, MMNL
is a newspaper publishing house. Its flagship Kannada daily
newspaper - Udayavani - commands 70%-80% of regional language
market share and a reasonable market share in its English edition.
Udayavani publishes editions in Manipal, Bengaluru, Hubli,
Gulbarga, Davanagere and Mumbai.
NEHA EXPORTS: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Neha
Exports (NE) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 14.00 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 August 24,
2022, placed the rating(s) of NE under the 'issuer non-cooperating'
category as NE 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. NE continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
July 10, 2023, July 20, 2023, July 30, 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).
Neha Exports was incorporated on December 20, 2006 by Ms Madhu
Gulati. The firm is involved in the manufacturing, assembling and
export of public address (PA) systems and components, including
loud speakers, amplifiers, microphones, and woofers, and related
electronic and electrical equipment's. The firm commenced operation
in 2008 and its manufacturing facility is located in Dharuhera,
Haryana.
NEXUS FEEDS: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Nexus
Feeds Limited (NFL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 100.86 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 10.00 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 July 22, 2022,
placed the rating(s) of NFL under the 'issuer non-cooperating'
category as NFL 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. NFL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 7, 2023, June 17, 2023, June 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).
Nexus feed Limited (NFL) was incorporated as Gold City Limited
(GCL) on December 21, 2006, with operations in real estate
business. The company was renamed NFL on March 02, 2010, with
change in business profile to manufacturing and sales of Fish feed
(pellet form), Prawns Feeds and Shrimp feeds. The company is
engaged in manufacturing of fish feeds (commenced commercial
production from November 18, 2011) having installed capacity of
158,400 TPA; and prawn feeds (commenced commercial production from
September 13, 2013) having installed capacity of 95,040 TPA. NFL
has in place a 20-year licensing and technology transfer agreement
(signed on December 22, 2011) with Hanaqua Tech Inc., a Taiwan
based Aqua feed manufacturing company which has significant brand
presence in India. The products of NFL are sold under the trademark
and logo "Nexus" and "Hanaqua 4S" as per arrangement with Hanaqua.
NHC FOODS: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed NHC Foods
Limited's (NHC) Long-Term Issuer Rating at 'IND BB+'. The Outlook
is Stable.
The instrument-wise rating action is:
-- INR255 mil. Fund-based working capital limit affirmed with IND
BB+/Stable/IND A4+ rating.
Key Rating Drivers
The affirmation reflects NHC's continued medium scale of
operations, as indicated by revenue of INR1,621.43 million in FY23
(FY22: INR1,501.38 million). In FY23, the revenue improved due to
the addition of new customers to the client base and securing of
repeat orders from existing customers. The share of exports in the
revenue increased to 83.7% in FY23 (FY22: 73.5%), of which 40% was
contributed by rice and maize. NHC's revenue increased on a yoy
basis to INR420.3 million in 1QFY24 (1QFY23: INR389.2 million). The
company plans to open a distribution center in the US by FYE24. NHC
is United States Food and Drug Administration-approved and it has
well established relations with its US partners, which will enable
it to operate efficiently in the US market. It has observed a
substantial demand in the US for its spices and grains under its
brand named SAAZ. In FY24, Ind-Ra expects the revenue to improve on
a yoy basis owing to growth in the customer base and stable
demand.
The ratings factor in NHC's continued modest EBITDA margins due to
the nature of the business. The margin rose to 3.8% in FY23 (FY22:
3.56%) due to a decline in freight charges to 8.5% of the revenue
(10.54%). The ROCE was 9.6% in FY23 (FY22: 8.4%). The margins
improved further to 4.1% in 1QFY24 (1QFY23: 3.5%) owing to a
decline in other expenses. In FY24, Ind-Ra expects the margins to
remain at similar levels.
Liquidity Indicator - Stretched: NHC's average maximum utilization
of the fund-based limits was 88.72% for the last 12 months ended
July 2023. The cash flow from operations turned negative INR42.46
million in FY23 (FY22: INR12.37 million) due to an increase in
working capital requirements. The free cash flow turned negative
INR42.88 million in FY23 (FY22: INR11.57 million). The net working
capital cycle remained elongated and deteriorated to 89 days in
FY23 (FY22: 68 days) due to an increase in inventory days to 76
days (65 days) and debtor days to 45 days (36 days). The cash and
cash equivalents stood at INR23.16 million at FYE23 (FYE22: INR7.97
million), against scheduled debt repayments of INR18 million in
FY24 and INR8.3 million in FY25. The company had availed a
temporary ad-hoc facility of INR50 million in April 2023 for
working capital requirements. NHC has capital market exposure and
it also relies on banks and financial institutions to meet its
funding requirements.
The ratings reflect NHC's continued average credit metrics due to
the modest margins. The interest coverage (operating EBITDA/gross
interest expenses) deteriorated to 2.19x in FY23 (FY22: 2.66x)
owing to an increase in interest expenses because of the additional
debt undertaken to meet working capital requirements. The net
leverage (total adjusted net debt/operating EBITDAR), however,
improved to 5.77x in FY23 (FY22: 7.05x) due to a reduction in the
off-balance sheet debt (bill discounting facility). In FY24, Ind-Ra
expects the credit metrics to improve due to the scheduled
repayment of loans and the absence of debt-led capex plans.
The ratings, however, are supported by the promoters' experience of
nearly four decades in the fast-moving consumer goods industry,
which has helped the company establish strong relationships with
customers as well as suppliers.
Rating Sensitivities
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics and/or pressure on the
liquidity position, all on a sustained basis, could lead to a
negative rating action.
Positive: A significant increase in the scale of operations along
with an improvement in the credit metrics and liquidity, with the
net leverage falling below 4x, all on a sustained basis, could lead
to a positive rating action.
Company Profile
NHC was incorporated in 1960 by Himatlal Shah. The company
processes and trades spices, food grains and ready-to-eat snacks.
The company's processing unit has an installed capacity of 18,900
million tons per annum.
OVERSEAS TRADERS: ICRA Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has kept the long-term and Short-term ratings of Overseas
Traders in the 'Issuer Not Cooperating' category. The ratings are
denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 12.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term- (18.00) [ICRA]D; ISSUER NOT COOPERATING;
Interchangeable Rating Continues to remain under
'Issuer Not Cooperating'
Category
Short-term 2.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Continues to remain under the
Other 'Issuer Not Cooperating'
Category
Long-term/ 5.00 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Unallocated 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.
Overseas Traders is a partnership firm established in 1977 and is
involved in exporting agricultural commodities like onions,
potatoes, tendu (beedi) leaves, fresh fruits and vegetables, with
onion constituting majority of the sales. The commodities are
procured from the domestic market and exported majorly to Sri
Lanka, Malaysia, Pakistan and the UAE. OT has its registered office
in Mumbai and is managed by the Katharani family.
PATNA SAHIB: CARE Keeps D Debt Rating in Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Patna
Sahib Charitable Educational Trust (PSCET) continue to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 21.75 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 August 23,
2022, placed the rating(s) of PSCET under the 'issuer
non-cooperating' category as PSCET 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. PSCET continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated July 9, 2023, July 19, 2023,
July 29, 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 December-2010 under the Societies Registration Act
XXI 1860, PSCET is engaged in the imparting of higher education. It
is operating from a single campus in Vaishali, Bihar under the name
'Patna Sahib Group of Colleges'. These include two colleges: Patna
Sahib Institute of Engineering and Technology offering bachelor's
in engineering and Patna Sahib Polytechnic College offering diploma
courses in engineering.
RADHE COTTON: CARE Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Radhe
Cotton Company (RCC) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.58 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 August 4, 2022,
placed the rating(s) of RCC under the 'issuer non-cooperating'
category as RCC 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. RCC continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 20, 2023, June 30, 2023, July 10, 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).
Analytical approach: Standalone
Outlook: Not Applicable
Gokhalana, Jasdan (Rajkot) – based RCC was incorporated as a
partnership firm in 2012 by six partners. The partners of RCC
include mainly Mr Rameshbhai Khakhriya, Manubhai Khakhriya and
Dhirajbhai Jivabhai Khakhriya. The firm is engaged into the
activity of cotton ginning, bailing and cleaning of cotton. The
products of RCC include cotton seeds, cottonseeds oil cake and
cotton wash oil.
SANTOSH W/O: CRISIL Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Santosh W/O
Sh. Vinod Kumar Warehouse (SVKW) continues to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 7.85 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SVKW for
obtaining information through letter and email dated July 19, 2023
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SVKW, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SVKW
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SVKW continues to be 'CRISIL D Issuer Not Cooperating'.
SVKW was set up in 2014 by the proprietor, Mr Santosh Jhajhria. The
firm has constructed a 35,000-tonne warehouse in Fatehabad,
Haryana. SVKW has signed a 10-year lease agreement with HAFED to
store agricultural products in the warehouse. The firm is promoted
by Ms Santosh Jhajhria, while the day-to-day operations are managed
by their son, Mr Udayvir Jhajhria.
SMRUTI SPINTEX: CRISIL Moves B+ Debt Rating from Not Cooperating
----------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Smruti Spintex Private
Limited (SSPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'. However, the management has subsequently started
sharing requisite information, necessary for carrying out
comprehensive review of the rating. Consequently, CRISIL Ratings is
migrating the rating on bank facilities of SSPL from 'CRISIL
B+/Stable/CRISIL A4 Issuer Not Cooperating' to 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL A4 (Migrated from
'CRISIL A4 ISSUER NOT
COOPERATING')
Cash Credit 6 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
Term Loan 33.5 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
The rating continues to reflect the exposure of the company to
risks related to ongoing projects and expected leveraged capital
structure. These weaknesses are partially offset by the extensive
experience of the promoters in the cotton industry.
Analytical Approach
Unsecured loans of INR7.82 crore as on March 2023 to remain in the
business over the medium loan and has been treated as debt as these
are need based funds.
Key Rating Drivers & Detailed Description
Weakness:
* Exposure to risks related to ongoing project: The company is
scheduled to commence its project in August 2023. Due to the delay
in the delivery of machinery production did not start production in
September 2022. Demand risk is expected to be moderate as the
industry is highly fragmented with small capital and technological
requirements.
* Expected leveraged capital structure: Gearing is likely to be
weak as the project is aggressively funded through a debt-equity
ratio of 2.57 times. With gearing above 2.5 times and net worth of
INR13.54 crore and any delay in the commencement of production can
increase the project cost.
Strengths:
* Extensive experience of the promoters: Presence of more than a
decade in the cotton industry has enabled them to develop a strong
understanding of market dynamics and establish healthy
relationships with suppliers and customers.
Liquidity: Stretched
Cash accrual is expected to be over INR2 crores, which are
sufficient against term debt obligation of INR70 lakhs over the
medium term. In addition, it will act as a cushion to the liquidity
of the company. Current ratio is low at 0.26 times on March 31,
2023. Moderate cash and bank balance of around INR 2.03 crore as on
March 31, 2023.
Outlook: Stable
CRISIL Ratings believes that SSPL will benefit from the extensive
experience of its promoters.
Rating Sensitivity Factors
Upward factors
* Net cash accruals of more than INR3.5 crore in FY24
* Improvement in financial risk profile with gearing below 2
times.
Downward factors
* Turnover to remain below INR35 crore in FY24.
* Significantly low cash accrual during initial phase of
operations
SSPL was incorporated in February 2021 and is promoted by Mr.
Trikam Patel, Mr. Sanjay Patel, Mr. Jagdish Patel, Mr. Prakash
Patel, and Mr. Hasmukhlal Satapara. Based in Dhangadhra, Gujarat,
the company is setting up a spinning mill comprising 16,416
spindles with capacity of 5,150 tons per year. The unit is expected
to commence operations from August 2023.
SPECIALITY POLYMERS: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
ICRA has kept the Long-Term and Shot Term rating of Speciality
Polymers 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
---------- ----------- -------
Long-term– 13.50 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 42.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short-term 16.10 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
'Issuer Not Cooperating'
Category
Short Term- (8.50) [ICRA]D; ISSUER NOT COOPERATING;
Interchangeable Rating Continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in October, 1988, Speciality Polymers Private Limited
(SPPL) is engaged in the business of manufacture of various types
of emulsions, adhesives, binders, construction chemicals etc. The
company has its manufacturing unit located at Badlapur, Thane with
an installed capacity of 12,000 metric ton per annum (MTPA) and a
new manufacturing set up with an installed capacity of 63000 MTPA
in Ambernath MIDC, Thane.
SRIAVANTIKA CONTRACTORS: Ind-Ra Assigns BB Term Loan Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Sriavantika
Contractors Highways (Anuskura) Private Limited's (SCHAPL) rupee
term loan (RTL) as follows:
-- INR616 mil. RTL due on April 2033 assigned with IND BB/Stable
rating.
ANALYTICAL APPROACH: Ind-Ra has taken a standalone view of SCHAPL
to arrive at the rating because of the restricted payment
conditions and waterfall arrangement, as per the financing
documents. Any contribution by the sponsor, Sri Avantika
Contractors (I) Limited (SACIL, IND BB(ISSUER NOT COOPERATING)) in
the form of unsecured loans would be subordinated to the senior
debt and any interest/principal payable on the same from the
project cash flows shall be made only after complying with the
restricted payment conditions. Any deviation from the above
understanding will be credit negative.
The rating is constrained by the lack of track record of annuities,
moderate sponsor profile, stretched liquidity and modest debt
structure. However, the rating is supported by the strong
characteristics of hybrid annuity model (HAM)-based road projects,
i.e., at least 80% of the right-of-way to the project stretch,
inflation-linked construction grants and operational annuities,
inflation indexed operations and maintenance (O&M) payments, and
interest payments linked to the bank rate to be received from the
public works department (PWD), the government of Maharashtra (GoM).
The timely receipt of annuities remains crucial, and shall be a key
rating monitorable.
Key Rating Drivers
Moderate Counterparty Risk: The GoM, through the PWD, is engaged in
the development of state highways under the Maharashtra Road
Improvement Programme. The project had witnessed delays in the
receipt of grants during the construction period. Upon the
achievement of provisional completion on January 2, 2023, the first
annuity was scheduled to be received on July 1, 2023. However, the
same is yet to be released by the PWD, thereby indicating
significant delays. The management has represented that the delay
has been caused by procedural reasons and the first annuity is
likely to be received by end-August 2023. Also, the management does
not expect to witness such significant delays in the receipt of
future annuities, based on the regularity in the release of
annuities in other projects with the same counterparty. The gap
available between the scheduled annuity receipt date and repayment
date is about three months, providing adequate cushion for delays
in annuity receipts. However, timely receipt of the annuity
payments from the PWD, as per the agreed terms in the concession
agreement, remains a key rating sensitivity.
Modest Debt Structure: The rupee term loan is structured to be
amortized in 10 years, with repayment commencing from October 2023
and ending in March 2033, leaving no tail period. As per the
management, the last instalment falling due in March 2033 would be
prepaid from the last annuity receipt, which would be due in
January 2033. Ind-Ra believes that the regular cashflows in form of
annuities and available liquidity in form of a debt service reserve
(DSR) and surplus cash would be adequately maintained to avoid any
shortfall for repayment of last instalment of debt. The debt
structure mandates the creation of DSR equivalent to a one quarter
of interest obligations. The management has confirmed it would
create and maintain the DSR once it receives the first annuity from
the authority. The financial covenants stipulate the maintaining of
maximum debt/equity of 2.33:1 throughout the loan tenure.
Liquidity Indicator - Stretched: The project cash accruals are
adequate to service the debt obligations while maintaining an
average debt service coverage ratio DSCR of over 1.58x. As on 22
August 2023, the company had cash and cash equivalents amounting to
INR3 million, against scheduled debt obligations of INR115.2
million and INR132.6 million for FY24 and FY25, respectively. As
per the financing terms, SCHAPL is required to maintain (i) a debt
service reserve equivalent to three months of interest obligations;
and (ii) a major maintenance reserve as per the lender's base case
plan. The management of SCHAPL has represented that the company
would create adequate debt service reserve account and major
maintenance reserve after the receipt of the first annuity. The
creation and maintenance of adequate liquidity remains key rating
sensitivity.
Moderate Sponsor Capabilities: SACIL has extensive industry
experience in the construction of roads and highways, airport
runways and terminals, irrigation and pipeline, and building and
civil works. SACIL, under the joint venture arrangement with Bekem
Infra Projects Private Limited, has been awarded two other HAM
projects by the National Highways Authority of India ('IND
AAA'/Stable) in Andhra Pradesh. SACIL has an equity commitment of
INR420 million for these projects during FY24-FY25, and there is
reasonable visibility regarding the company's ability to meet the
same.
Low Revenue Risk Profile: The rating reflects the visibility of
semi-annual annuities to be received from the PWD, upon the
achievement of provisional commercial operations date. The PWD
provides 60% of the price index multiple (PIM)-adjusted bid project
cost during the construction period as against 40% payment made by
the National Highways Authority of India for HAM projects. SCHAPL
will have three revenue streams adjusted for PIM during its
operational period, namely: (i) 40% of inflation-adjusted bid
project cost of INR 2,632.1 million spread over a period of 10
years from the commercial operations date, ii) interest on annuity
on a reducing balance basis after deducting received annuities at
bank rate plus 300bp, and iii) O&M payments based on the O&M bid
quote of INR70 million. The PIM comprises 70% wholesale price index
and 30% consumer price index.
Limited O&M Risk: Upon the receipt of the first annuity, SCHAPL
plans to enter into a fixed-price O&M contract with its sponsor,
SACIL, for taking up O&M and major maintenance (MM) works for the
likely duration of the entire concession period. SCHAPL plans to
carry out MM work in two cycles. The first cycle of MM, amounting
to INR93.9 million, is likely to be carried out in FY26, and the
second cycle, amounting to INR108 million, would be carried out in
FY30. However, Ind-Ra in its base case has considered three cycles
of MM work - in FY26, FY30 and FY33. As per the financing terms,
the company has to create and maintain an MM reserve; the
management intends to create the same from the annuity cashflows.
The management estimates for routine and major maintenance costs
are broadly in line with Ind-Ra rated peers, and the agency has
considered slightly higher estimates compared to Ind-Ra rated peers
while computing the coverages.
Robust Sponsor Undertaking: The sponsor has undertaken to meet any
project cost/time overruns and shortfall in resources. SACIL has
also undertaken to meet any shortfall in case of termination of the
concession agreement. Also, the sponsor has undertaken to bring in
funds required for incurring O&M and MM expenses and for funding
the debt servicing obligations in case of delay or shortfall in
annuity receipts from the authority. A shortfall in the forthcoming
annuity payments from the authority could arise due to deductions
for the non-conformance to maintenance requirements during the
concession term. However, the satisfactory operating track record
of the O&M contractor, SACIL, and the low complexity of the O&M
required for HAM-based road projects lend strength to the rating.
Rating Sensitivities
Negative: Future developments that could, individually or
collectively, lead to a negative rating action are:
-- non-creation of debt service reserve account as stipulated by
the financing documents
-- significant delays or deductions in annuities, resulting in
weakening of average debt service coverage ratio of 1.20x
-- a weakening of the credit profile of the O&M contractor and/or
PWD, GoM
-- deterioration in the sponsor's credit profile or absence of
required sponsor support
Positive: A positive rating action could result from timely receipt
of the forthcoming annuities without any significant deductions on
a sustained basis.
Company Profile
The GoM, through PWD, has entrusted SCHAPL with the improvement,
maintenance and management of State Highway150 PN-45- improvements
to Vita, Peth, Malkapur, Anuskura, Satavali, Pavas Road. The
project was awarded under the HAM mode by PWD on 4 July 2018 for a
concession period (operational years) of 10 years. The concession
agreement for the project was signed on December 18, 2018 and the
project achieved final completion on March 20, 2023.
SUNNY ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has kept the long-term and Short-term ratings of Sunny
Enterprises in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 6.30 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term/ 5.70 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Unallocated 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.
Formed in 2003 by Mrs. Sheetal Tanna, Sunny Enterprises is
authorised online lottery distributor of M/s Serenity Trades
Private Limited, which is one of the main distributors for state
government lotteries across India. The firm appoints the lottery
retailers in these states, who in turn sell the lottery tickets to
the final customers. It delivers rolls and charts for the lottery
draw and supplies advertisement material. To diversify its
business, SE is involved as an authorised distributor for Bata
Limited in October2018, wherein it supplies Bata footwear to the
multi-brand stores across Mumbai, Navi Mumbai, Palghar and Thane in
Maharashtra. The firm also ventured in trading of agricultural
products, namely dry coriander and jaggery. These two segments
accounted for a minor share of the total operating income in
FY2019. However, the firm is focussed to increase this share in the
near to medium term.
URMILA RCP: CRISIL Moves B Debt Rating from Not Cooperating
-----------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the ratings of Urmila Rcp Projects Private
Limited (URPPL) to 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.However, the management has subsequently started
sharing requisite information, necessary for carrying out
comprehensive review of the ratings. Consequently, CRISIL Ratings
is migrating the ratings on bank facilities of URPPL to 'CRISIL
B/Stable/CRISIL A4' from 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 25 CRISIL A4 (Migrated from
'CRISIL A4 ISSUER NOT
COOPERATING')
Cash Credit 5 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
The ratings reflect the modest scale of operations, large working
capital requirements and risks associated with tender-based
business. These weaknesses are partially offset by the extensive
experience of the promoters in the construction business and the
company's above-average financial risk profile.
Key Rating Drivers & Detailed Description
Weaknesses:
* Large working capital requirement: Operations are extensively
working capital intensive, as reflected in gross current assets of
900 days as on March 31, 2023, mainly on account of receivables
from NBCC India Ltd and other customers whose orders the company
had completed leading to debtor days of 354 days as on March 31,
2023. Since the company has good relationship with its suppliers,
the creditors as against orders have also been extended leading to
creditor days of 972 days as on March 31st 2023. It procures raw
material mostly against advance payment to avail of discounts,
which further increases the working capital requirement. The
inventory is work in progress and has been historically high for
the company leading to inventory days of 228 days as on March 31,
2023. However, the operations shall continue to remain working
capital intensive due to the nature of the business leading to GCA
days of 850 days going forward.
* Exposure to risks inherent in tender-based business: As most of
the revenue is tender-driven, income depends on the ability to bid
successfully. Furthermore, a tender-based business model restricts
pricing power. This is compounded by intense competition from large
and small players.
Strengths:
* Extensive experience of the promoters: Revenue and operating
margin have improved steadily, backed by the promoters' experience
of more than four decades in the construction industry. The
promoters have also augmented equipment to enable timely execution
of large orders.
* Above-average financial profile: Networth was healthy at INR30.47
crore as on March 31, 2023, and is expected to increase over the
medium term. Debt protection metrics shall continue to be
sufficient, indicated by interest coverage and net cash accrual to
total debt ratios of 2.29 times and 0.2 time, respectively, in
fiscal 2023. With expectation of declining debt repayment, gearing
is likely to improve over the medium term.
Liquidity: Stretched
Bank limit utilisation is high at around 96 percent for the past
thirteen months ended June 2023. Cash accruals are expected to in
the range of INR2-3 crores which are sufficient against term debt
obligation of INR1-1.5 crores over the medium term. In addition, it
will be act as cushion to the liquidity of the company.
Current ratios are healthy at 1.48 times on March 31, 2023. The
promoters are likely to extend support in the form of equity and
unsecured loans to meet its working capital requirements and
repayment obligations.
Outlook: Stable
CRISIL Ratings believes URPPL will continue to benefit from the
promoters' extensive experience and healthy relationships with
customers.
Rating Sensitivity factors
Upward factors:
* Sustained increase in revenue by 15-20% and stable operating
margin leading to higher-than-expected cash accrual.
* Efficient working capital management, with GCAs at less than 450
days
Downward factors:
* Further stretch in the working capital cycle leading to GCAs
beyond 1500 days
* Sustained decline in operating profitability leading to
lower-than-expected cash accruals.
URPPL, incorporated in 2002 by Mr Deepak Kumar Bharadwaj and Ms Mou
Rani, constructs roads and bridges and commercial buildings.
V.J. CONSTRUCTIONS: CRISIL Lowers Rating on LT/ST Debts to D
------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
V.J. Constructions (VJC) to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL D (Downgraded from
'CRISIL B+/Stable')
Short Term Rating - CRISIL D (Downgraded from
'CRISIL A4')
The rating is driven by several instances of delays in servicing of
term loan obligations and over utilization of the working capital
limit.
The ratings reflect VJC's large working capital requirement and
modest scale of operations amid intense competition. These
weaknesses are partially offset by the extensive experience of the
partners in the construction business.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: Turnover of INR24.7 crore for fiscal
2023 reflects the company's modest scale of operations, which is
partly constrained by the tender-based business.
* Large working capital requirement: The working capital cycle may
remain stretched over the medium term and hence will be closely
monitored. Gross current assets (GCAs) were sizeable at 254 days as
on March 31, 2022, primarily driven by stretched receivables days
and huge inventory days.
Strengths:
* Extensive experience of the promoters: The partners' experience
of over two decades, their strong understanding of local market
dynamics, and healthy relationships with suppliers and customers
should continue to support the business.
Liquidity: Poor
Liquidity is poor due to the stretched receivables and the OD
limits being fully utilized. There have been delays in servicing
the repayment obligation for term loans and over utilization of the
OD limit. The OD account is however regularized with in 12-15 days
as confirmed by the banker.
Rating Sensitivity factors
Upward factors:
* Track record of timely debt servicing for at least 90 days
* Improvement in the financial and liquidity risk profiles.
VJC was set up in 2008 as a partnership firm by Mr J Mohan Reddy
and Mr V Ramana Reddy. The firm undertakes civil contracts to
construct highways, roads and bridges for the Telangana
government.
VENTO POWER: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Vento
Power Infra Private Limited (VPIPL) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 196.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 20, 2022,
placed the rating(s) of VPIPL under the 'issuer non-cooperating'
category as VPIPL 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. VPIPL continues to
be noncooperative 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.
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).
Vento Power Infra Private Limited is a Special purpose vehicle
(SPV) of Essel Green Energy Private Limited and has developed solar
PV project with total capacity of 40 MW in Balangir District of
Odisha. The project has a long-term power purchase agreement (PPA)
with Solar Energy Corporation of India (SECI).
WADHAWAN GLOBAL: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Wadhawan
Global Capital Limited (WGCL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible 1,900 CARE D: ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Limited has been seeking information from WGCL to
monitor the rating(s) vide e-mail communications/letters dated July
10, 2023, July 20, 2023, July 30, 2023, July 31, 2023, August 2,
2023, and August 7, 2023. However, despite repeated requests, the
company has not provided the requisite information for monitoring
the ratings.
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. Further, WGCL has not paid the fees for the rating exercise
as agreed to in the agreement. The rating on Wadhawan Global
Capital Limited's NCD Issue continues to be denoted as CARE D;
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 rating of WGCL factors the continued delays in servicing of
debt obligations. Further, put option was triggered on NCDs as per
the terms of debenture trust deed and the obligation of repaying
the debenture holders was on Dewan Housing Finance Ltd (DHFL). As
on July 2021, the NCLT has approved the resolution plan in the
Corporate insolvency resolution process of DHFL, which is now part
of the Piramal Group.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Regularization of existing default along with regular debt
servicing track record for at least 3 months.
Analytical approach: Standalone
Outlook: Not applicable
Detailed description of the key rating drivers:
Key weaknesses
* Deteriorating financial performance: No latest financial data or
operational data is available for the company from FY20 to FY23. As
per the last available data, the company had reported a loss of
INR524 crore in FY19 as compared to loss of INR171 crore in FY18,
which was mainly on account of provision for diminution in value of
investments.
Liquidity: Poor
Company continues to be in default.
Wadhawan Global Capital Ltd. (WGCL) is a Core Investment Company
which is jointly promoted by Mr. Kapil and Dheeraj Wadhawan
(promoters of DHFL). As on March 31, 2019, Mr. Kapil Wadhawan, Mr.
Dheeraj Wadhawan and Ms. Aruna Wadhawan together held 85% stake in
the company. Incorporated as Wadhawan Housing Pvt. Ltd., the name
of the company was subsequently changed to WGCL w.e.f. May 31,
2014.
=========
J A P A N
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MITSUI OSK: Moody's Upgrades CFR to Ba2 & Alters Outlook to Stable
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Moody's Japan K.K. has upgraded Mitsui O.S.K. Lines, Ltd.'s (MOL)
corporate family rating to Ba2 from Ba3 and changed the outlook to
stable from positive.
"The upgrade reflects MOL's stronger business profile that supports
more stable earnings and cash flow," says Roman Schorr, a Moody's
Vice President and Senior Analyst.
"Market conditions in container shipping will remain volatile, but
Moody's expects MOL to sustain credit metrics commensurate with a
Ba2 rating because of the growing contribution from other, less
volatile segments," adds Schorr.
RATINGS RATIONALE
The upgrade reflects MOL's progress in strengthening its business
profile. In contrast to many peers, the company has controlled
dividend payouts. Instead it has reinvested the windfall cash from
two exceptionally strong fiscal years into relatively stable
businesses such as liquefied natural gas (LNG) carriers running
under long-term contracts and real estate, as well as purchasing
more energy-efficient vessels.
MOL posted record earnings in the fiscal year ended March 2023
(fiscal 2022), exceeding the previous year's record. The record
earnings were driven by favorable market conditions, especially in
its containership joint venture (JV), Ocean Network Express Pte.
Ltd. (ONE). ONE turned extraordinarily profitable and began paying
dividends in fiscal 2020. MOL received around JPY85.2 billion of
dividends from ONE in June 2023.
Moody's expects that market conditions will remain challenging over
the next 12-18 months for the containership industry as the global
fleet is poised to grow. This increased capacity, combined with the
debottlenecking of supply chains, will keep containership freight
rates below the previous historic highs, reducing ONE's profits and
therefore the dividends that MOL will receive from the JV.
However, MOL posted higher earnings across many of its operating
segments, including logistics and bulk ships. The growing profit
contribution from less volatile segments provides a buffer to limit
an increase in leverage even as earnings in the container shipping
segment normalize.
MOL plans to invest up to JPY1.2 trillion over fiscal 2023-25,
which will drive up its debt. Moody's forecasts that MOL's
debt/EBITDA (including equity income from ONE) will trend towards
5.0x over the next 12-18 months, from 1.7x as of the end of fiscal
2022, but remain significantly below the levels in fiscal 2018-19
of almost 8x.
MOL's Ba2 CFR reflects the company's high debt balance, the
shipping industry's volatile rates and the company's high
investment needs especially in its growth areas. These factors are
mitigated by MOL's well-established presence among Japanese
shipping companies; its large, diversified shipping portfolio; and
the financing flexibility afforded by its mostly unencumbered
balance sheet.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The stable outlook incorporates a degree of decline in
containership earnings over the next 12-18 months while reflecting
Moody's expectation that MOL will continue to expand its
non-containership businesses which will help reduce earnings
volatility.
Moody's could upgrade the rating if the company controls its
capital allocation in order to better position its balance sheet
against earnings volatility. An on-going shift in its business
profile that will improve the company's cash flow predictability,
including dividends from ONE, will be credit positive. Debt
reduction would also be credit positive. Moody's will also consider
an upgrade if the company sustains debt/EBITDA below 5.5x and its
retained cash flow/net debt trends towards the low teens in
percentage terms.
Moody's could downgrade the rating if the company's earnings and
cash flow volatility increase. Downward pressure on the rating
could also emerge from a more aggressive financial policy including
a material increase in shareholder returns or large debt-funded
acquisitions or investments that do not result in a commensurate
increase in stable cash flow. Weakening liquidity will also be
credit negative. Moody's could downgrade the rating if MOL's
debt/EBITDA rises above 7.0x or if its retained cash flow/net debt
falls to single digits.
The principal methodology used in this rating was Shipping
Methodology (Japanese) published in July 2021.
Mitsui O.S.K. Lines, Ltd. is headquartered in Tokyo. It is one of
the world's largest shipping companies in terms of fleet size.
NIPPON YUSEN: Moody's Affirms Ba1 CFR & Alters Outlook to Positive
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Moody's Japan K.K. has affirmed Nippon Yusen Kabushiki Kaisha's
(NYK) Ba1 corporate family rating and changed its outlook to
positive from stable.
"The change in outlook reflects the company's progress in
strengthening its business profile and its balance sheet," says
Roman Schorr, a Moody's Vice President and Senior Analyst.
"NYK will maintain stronger credit metrics than before the pandemic
because of the better diversification of its asset base that it
enhances its ability to control leverage," adds Schorr.
RATINGS RATIONALE
The positive outlook reflects Moody's expectation that NYK will
sustain more stable profit and lower leverage than before the
pandemic due to structural improvements in its business profile.
NYK has reinvested the windfall cash from two exceptionally strong
fiscal years in relatively stable segments such as LNG
transportation and in more energy efficient vessels. It has also
repaid debt ahead of its original plan.
NYK achieved record earnings in the year that ended in March 2023
(fiscal 2022), exceeding the previous year's record. It also
reduced around JPY150 billion of debt, ahead of its publicly stated
target of JPY100 billion.
The strong performance was driven by favorable market conditions,
especially in its containership joint venture (JV), Ocean Network
Express Pte. Ltd. (ONE). ONE turned extraordinarily profitable and
began paying dividends in fiscal 2020. NYK received JPY105.6
billion of dividends from ONE in June 2023.
Moody's expects that market conditions will remain challenging over
the next 12-18 months for the containership industry as the global
fleet grows. This increased capacity, combined with the
debottlenecking of supply chains, will keep containership rates
below previous historic highs, reducing ONE's profits and therefore
the dividends that NYK will receive from the JV.
That said, NYK's earnings visibility has improved from pre-pandemic
levels across most of its segments, reflecting the company's
increasing footprint in businesses with relatively stable earnings,
such as LNG carriers and car carriers. The improved revenue
diversification and the company's debt reduction provide a
significant buffer against market volatility. Moody's expects
growth in more stable segments to remain the focus of NYK's
strategy, which will strengthen its business profile further.
NYK's Ba1 CFR reflects the shipping industry's volatile rates and
the company's high investment needs, which could increase its
leverage. These factors are offset by NYK's well-established market
position among Japanese shipping companies, strong banking
relationships that mitigate refinancing risk, large scale and
diversified shipping portfolio, and unencumbered balance sheet.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade the rating if NYK reduces its debt further. A
track record of more predictable cash flow, including dividends
from ONE, as well as a commitment to lower its debt from current
levels, will be credit positive. Moody's will consider an upgrade
if the company maintains its debt/EBITDA below 3.5x and its
retained cash flow/net debt above 20% through the business cycle.
Conversely, Moody's could downgrade the rating if the company's
earnings and cash flow volatility rises. A more aggressive
financial policy, including a material increase in shareholder
returns or large debt-funded acquisitions or investments that do
not result in a commensurate increase in stable cash flow will be
credit negative. Negative rating pressure could also emerge if
liquidity weakens. Moody's could downgrade the rating if leverage
increases, such that debt/EBITDA exceeds 5.5x or its RCF/net debt
falls toward the low teens.
The principal methodology used in this rating was Shipping
Methodology (Japanese) published in July 2021.
Nippon Yusen Kabushiki Kaisha is headquartered in Tokyo. It is one
of the world's largest shipping companies in terms of fleet size.
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M O N G O L I A
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MONGOLIAN MINING: Moody's Rates New Sr. Notes B3, Placed on Review
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Moody's Investors Service has assigned a B3 senior unsecured rating
to the proposed senior notes to be issued by Mongolian Mining
Corporation (MMC) (B3 ratings under review) and its subsidiary,
Energy Resources LLC, and guaranteed by other key subsidiaries. The
B3 rating on the proposed senior notes is under review for
downgrade.
MMC will use the net proceeds from the proposed issuance to
refinance its US$350 million existing notes maturing in April
2024.
RATINGS RATIONALE
"The review for downgrade of MMC's B3 rating reflects its tight
liquidity and the uncertainty over the proposed note issuance. That
said, Moody's could confirm the rating if the proposed note
issuance is completed on satisfactory terms and conditions so that
MMC's liquidity profile significantly improves, alleviating the
refinancing risk on its maturing debt in April 2024," says Shawn
Xiong, a Moody's Vice President and Senior Analyst.
The proposed senior notes are rated at the same level as the
company's corporate family rating (CFR) since the notes will rank
pari passu with all other senior unsecured obligations of MMC and
its subsidiary, Energy Resources LLC. In addition, the notes will
be guaranteed on a senior unsecured basis by MMC's other key
subsidiaries, which eliminates structural subordination risk.
MMC's B3 CFR, which is under review for downgrade, is underpinned
by the company's integrated coking coal operations with long
reserves, competitive cost position, and improving operations and
debt leverage. These strengths are counterbalanced by its small
scale with high concentration, emerging market risks and exposure
to carbon transition risks.
MMC delivered a solid performance in the first half of 2023, with
the sales volume of coal reaching 4.9 million tonnes, a
year-over-year growth of 419%. Moody's expects the company to
continue its steady production and sales growth. The recent
weakening in met coal prices will likely slow down MMC's previously
strong earnings momentum and free cash flow generation during the
second half of the year.
MMC's liquidity is weak with a limited buffer, excluding the
proposed note issuance. As of the end of June 2023, its total cash
holding of US$208 million and Moody's projected cash flows from
operations are likely insufficient to cover its US$350 million
notes due in April 2024 and projected basic and growth capital
spending during this period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
In its review, the agency will focus on the progress and completion
of MMC's refinancing plan for its $350 million notes due 2024, and
the company's business plan for its mining operations amid ongoing
industry volatility.
An upgrade of MMC's rating is unlikely given the rating is on
review for downgrade. But Moody's could confirm the rating if the
proposed note issuance is completed on satisfactory terms and
conditions and MMC's liquidity profile significantly improves.
Conversely, Moody's could downgrade MMC's rating if the company
fails to complete the refinancing plan on time.
The principal methodology used in this rating was Mining published
in October 2021.
With its operations having commenced in 2009, Mongolian Mining
Corporation is the largest producer and exporter of high-quality
washed hard coking coal in Mongolia (B3 stable). It has fully
integrated coking coal operations, comprising mining, processing,
transportation, and sales and marketing of coking coal and other
coal products. In the first half of 2023, the company's total
run-of-mine coal production was 8.0 million tonnes.
Listed on the Stock Exchange of Hong Kong (HKEX) in 2010, MMC owns
and operates two open-pit coking coal mines in the Gobi Desert –
the main Ukhaa Khudag mine and the Baruun Naran mine. All of the
company's coal operations are located in Mongolia, while most of
its coal products are sold to industrial end-users in China.
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N E W Z E A L A N D
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AKOTEU FAKAILIMOUI: Court to Hear Wind-Up Petition on Sept. 15
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A petition to wind up the operations of Akoteu Fakailimoui Ece
Trust will be heard before the High Court at Auckland on Sept. 15,
2023, at 10:45 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Aug. 1, 2023.
The Petitioner's solicitor is:
Cloete Van Der Merwe
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
CHOICE INDIAN: Creditors' Proofs of Debt Due on Sept. 27
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Creditors of Choice Indian Sweets and Cafe Limited are required to
file their proofs of debt by Sept. 27, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Aug. 23, 2023.
The company's liquidators are:
Pritesh Patel
PO Box 23296
Manukau City
Auckland 2241
INFINITY MAINTENANCE: Creditors' Proofs of Debt Due on Oct. 4
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Creditors of Infinity Maintenance NZ Limited are required to file
their proofs of debt by Oct. 4, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Aug. 23, 2023.
The company's liquidators are:
Laura Robinson
BDO Wellington, Business Restructuring
Level 1, 50 Customhouse Quay
Wellington 6011
MICROGEM NZ: Creditors' Proofs of Debt Due on Oct. 2
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Creditors of Microgem NZ Limited are required to file their proofs
of debt by Oct. 2, 2023, to be included in the company's dividend
distribution.
The High Court at Dunedin appointed Wendy Somerville and Malcolm
Hollis of PwC Christchurch as liquidators on Aug. 24, 2023.
PARKLANE INFRASTRUCT: Court to Hear Wind-Up Petition on Sept. 29
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A petition to wind up the operations of Parklane Infrastruct
Limited will be heard before the High Court at Auckland on Sept.
29, 2023, at 10:00 a.m.
Lu Trustee Limited and Ho No.2 Trustees Limited filed the petition
against the company on July 28, 2023.
The Petitioner's solicitor is:
Kate Cornegé
Level 8, Westpac House
430 Victoria Street
Hamilton 3204
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S I N G A P O R E
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BRCKHSE SUPPS: Placed in Provisional Liquidation
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Mr. Goh Tiong Hong on Aug. 21, 2023, was appointed as provisional
liquidator of Brckhse Supps Pte Ltd.
KARLAVE GENERAL: Court Enters Wind-Up Order
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The High Court of Singapore entered an order on Aug. 25, 2023, to
wind up the operations of Karlave General Contractor Pte. Ltd.
Maybank Singapore Limited filed the petition against the company.
The company's liquidators are:
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
KLOUD SPACE: Creditors' Proofs of Debt Due on Oct. 2
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Creditors of Kloud Space Solutions (Indonesia) Pte. Ltd. are
required to file their proofs of debt by Oct. 2, 2023, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on Aug. 24, 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
MKY CAPITAL: Court to Hear Wind-Up Petition on Sept. 8
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A petition to wind up the operations of MKY Capital Pte Ltd will be
heard before the High Court of Singapore on Sept. 8, 2023, at 10:00
a.m.
MDR Limited filed the petition against the company on Aug. 17,
2023.
The Petitioner's solicitors are:
Justicius Law Corporation
133 New Bridge Road
#08-08 Chinatown Point
Singapore 059413
TESSA THERAPEUTICS: Commences Wind-Up Proceedings
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Members of Tessa Therapeutics Ltd on Aug. 23, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidators are:
Ms. Toh Ai Ling
Mr. Bob Yap Cheng Ghee
Mr. Chan Kwong Shing Adrian
KPMG Services
12 Marina View
#15-01 Asia Square Tower 2
Singapore 018961
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S U B S C R I P T I O N I N F O R M A T I O N
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