/raid1/www/Hosts/bankrupt/TCRAP_Public/230915.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, September 15, 2023, Vol. 26, No. 186
Headlines
A U S T R A L I A
BRAGU PTY: First Creditors' Meeting Set for Sept. 18
GREGORY INVESTMENT: Second Creditors' Meeting Set for Sept. 20
MERINO CORP: First Creditors' Meeting Set for Sept. 18
PBS BUILDING: Hutchinson Builders Takes on Beachside Apartment
SANS PAREIL: Faces Liquidation Hearing, Allegedly Owes ATO AUD32MM
TANNER PLUMBING: Second Creditors' Meeting Set for Sept. 18
VAMOS MELBOURNE: First Creditors' Meeting Set for Sept. 18
XING TECHNOLOGIES: Offices Now Sit Empty; Shareholders in Limbo
C H I N A
GOME RETAIL: Splits Key Home Appliance Business in Two Regions
SHANGRAO CITY CONSTRUCTION: Fitch Affirms 'BB+' LongTerm IDR
WEIFANG URBAN: Moody's Assigns 'Ba1' CFR, Outlook Negative
I N D I A
ANAND IMPEX: CARE Keeps D Debt Ratings in Not Cooperating
COFFEE DAY: Settles with IndusInd Bank, Insolvency Withdrawn
COMMERCIAL AUTO: ICRA Reaffirms B+ Rating on INR23.32cr Loan
GEM GRANITES: CARE Keeps D Debt Ratings in Not Cooperating
GENESYS BIOLOGICS: CARE Lowers Rating on INR70cr LT Loan to C
GMR AMBALA: ICRA Reaffirms D Rating on INR185.01cr Term Loan
GUPTA STEEL: CRISIL Moves B+ Debt Rating to Not Cooperating
HANSRAJ MEMORIAL: CARE Keeps D Debt Ratings in Not Cooperating
HEMA ENGINEERING: CARE Keeps D Debt Ratings in Not Cooperating
KPR INDUSTRIES: ICRA Lowers Rating on INR9.0cr LT Loan to C+
KRISHNAGANGA SPINNING: CARE Keeps C Debt Rating in Not Cooperating
KRISHNANAND INFRA: CARE Keeps D Debt Ratings in Not Cooperating
LOTUS INFRATECH: CRISIL Lowers Rating on INR2cr Loan to B+
MAHESH EDIBLE: CRISIL Withdraws B Rating on INR275cr New Loan
MATESHWARI CONSTRUCTION: CRISIL Withdraws B+ Long Term Rating
MOHANA COTTON: Insolvency Resolution Process Case Summary
MP AGRO: ICRA Lowers Rating on INR5cr LT Cash Loan to D
MRB PATIALA: CRISIL Moves D Debt Rating to Not Cooperating
NATHJI COTTON: CARE Keeps D Debt Rating in Not Cooperating
NEW PASHCHIM: CRISIL Withdraws B Rating on INR14cr Cash Credit
NOOR INDIA: CRISIL Lowers Rating on INR7cr Cash Loan to D
PANKAJ STEEL: CARE Keeps C/A4 Debt Ratings in Not Cooperating
PUSH ENGINEERING: CRISIL Assigns B+ Rating to INR16cr Term Loan
RELIANCE CAPITAL: NCLT to Hear Hinduja's Plan Approval on Sept. 26
RITIKA SYSTEMS: CRISIL Cuts Rating on INR6.5cr Cash Loan to B+
SHARDABHUMI TEXTILES: CRISIL Moves B+ Rating from Not Cooperating
SHARMA CARS: ICRA Reaffirms B+ Rating on INR19.20cr Dropline Debt
SIS MOHAN: Insolvency Resolution Process Case Summary
SIX SIGMA: CARE Lowers Rating on INR12.21cr LT Loan to D
SREEKANTH PIPES: CARE Keeps D Debt Ratings in Not Cooperating
STERLING OIL: CARE Keeps D Debt Rating in Not Cooperating
SWASTI TRADERS: CRISIL Assigns D Rating to INR15cr Loans
SWASTIK ENTERPRISES: CARE Keeps B- Debt Rating in Not Cooperating
SWASTIK LUMBERS: CRISIL Moves B+ Ratings from Not Cooperating
N E W Z E A L A N D
APIFORCE LIMITED: Court to Hear Wind-Up Petition on Sept. 29
DRAINENG NZ: Court to Hear Wind-Up Petition on Sept. 28
OSA LIMITED: Creditors' Proofs of Debt Due on Oct. 8
PGA INSTALLATION: Waterstone Insolvency Appointed as Receiver
UROMARAKI LIMITED: Creditors' Proofs of Debt Due on Oct. 12
S I N G A P O R E
ARCHWEY HOUSE: Commences Wind-Up Proceedings
BLOCKFI INC: Federal Counsel Wants Alleged Scammers' Full Deposits
CH INVESTMENT: Court to Hear Wind-Up Petition on Sept. 29
DOUBLE-TRANS PTE: Court Enters Wind-Up Order
HSI DENTAL: Creditors' Meetings Set for September 29
MMTC TRANSNATIONAL: Court to Hear Wind-Up Petition on Sept. 29
THREE ARROWS: Singapore Bank Bars Founders From Market Activity
S R I L A N K A
AMANA BANK: Fitch Keeps 'BB+(lka)' Bank on Watch Negative
HOUSING DEVELOPMENT: Fitch Keeps BB+(lka) Rating on Watch Neg.
SANASA DEVELOPMENT: Fitch Keeps 'BB+(lka)' Rating on Watch Neg.
V I E T N A M
[*] Moody's Takes Rating Actions on 4 Vietnamese Banks
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A U S T R A L I A
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BRAGU PTY: First Creditors' Meeting Set for Sept. 18
----------------------------------------------------
A first meeting of the creditors in the proceedings of Bragu Pty
Ltd will be held on Sept. 18, 2023, at 10:30 a.m. at the offices of
WA Insolvency Solutions, a division of Jirsch Sutherland at Level
6, 109 St George's Terrace in Perth and via teleconference
facilities.
Greg Prout and Jimmy Trpcevski of WA Insolvency Solutions were
appointed as administrators of the company on Sept. 6, 2023.
GREGORY INVESTMENT: Second Creditors' Meeting Set for Sept. 20
--------------------------------------------------------------
A second meeting of creditors in the proceedings of The Gregory
Investment Group Pty Limited has been set for Sept. 20, 2023 at
10:00 a.m. at the offices of Mcleods Accounting at Level 9, 300
Adelaide Street in Brisbane.
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. 19, 2023 at 4:00 p.m.
Bill Karageozis of Mcleods Accounting was appointed as
administrator of the company on Aug. 18, 2023.
MERINO CORP: First Creditors' Meeting Set for Sept. 18
------------------------------------------------------
A first meeting of the creditors in the proceedings of Merino Corp
Pty Ltd will be held on Sept. 18, 2023, at 3:30 p.m. via electronic
means.
Philip Newman of PCI Partners was appointed as administrator of the
company on Sept. 6, 2023.
PBS BUILDING: Hutchinson Builders Takes on Beachside Apartment
--------------------------------------------------------------
Sunshine Coast News reports that Australia's largest privately
owned builder has "come to the rescue" of a luxury beachside
apartments development after two previous construction companies
associated with the project went into liquidation.
According to the report, Hutchinson Builders, which celebrated its
centenary in 2022, has taken over work on The Curl, on the corner
of Barrel Street and Bokarina Boulevard in Bokarina Beach.
The site, at the gateway to the new masterplanned, oceanside
community off Nicklin Way, has been deserted since March this
year.
A spokesperson for developer Stockland said Hutchinson Builders had
been appointed to complete early works ahead of recommencement at
The Curl, SCN relates.
"We are in the final stages of planning for full recommencement of
works, including formally engaging the builder, and are continuing
to keep our customers updated," the report quotes the Stockland
spokesperson as saying.
Early works include the removal of the existing tower crane,
scaffolding reconfiguration, concrete formwork removal and other
general site safety and maintenance work.
A contributor to the Bokarina Beach Community Connection on
Facebook this week said a letter to neighbouring residents had
confirmed Hutchinson was completing the project.
Passers-by could see tradesmen on site this week, working around
scaffolding. The on-site crane has now been dismantled.
According to SCN, the Hutchinson website reports that the company,
with offices right down the east coast from Cairns to Hobart, has
built more than 7,500 projects nationwide at a total value in
excess of AUD35 billion.
Among them have been Birtinya's Wishlist Centre and Brisbane's
Howard Smith Wharves dining and entertainment precinct. The
7000-seat Ernest Baynes Grandstand, built by Hutchinson in 1923,
remains part of the Ekka history at the RNA Showgrounds today.
Sunshine Coast News meanwhile reports that about 50 PBS creditors
attended a September 6 meeting in Canberra in person or virtually
to receive an update from the voluntary administrators - RSM
Australia partners Jonathon Colbran, Richard Stone and Mitchell
Herrett - and to vote on the future of the five companies
involved.
In an update on its website on September 8, RSM reported that
creditors of five PBS Building companies in the hands of
administrators had voted to wind up four companies – including
two construction arms in the ACT and Queensland, SCN relays.
The creditors opted to give the NSW building company a lifeline to
enable payments owed to be pursued through the courts.
SCN relates that RSM said the majority of creditors accepted the
administrators' recommendations as outlined in the supplementary
report lodged with the Australian Securities and Investments
Commission (ASIC) on September 1 this year.
Creditors voted to put PBS Building Pty Ltd, PBS Building (ACT)
Pty, PBS Building (QLD) Pty Ltd and PBS Management Company Pty Ltd
into immediate liquidation and to enter a Deed of Company
Arrangement (DoCA) with litigation funder Clover Risk Funding for
PBS Building (NSW) Pty Ltd (PBSB NSW).
SCN relates that Mr. Colbran said the DoCA with Clover would give
administrators additional time and funding to continue legal action
to recover progress claims worth more than AUD3 million owed to
PBSB NSW through the Security of Payments Act.
"While there are no guarantees, the DoCA provides creditors of PBSB
NSW with the best possible chance of maximising the return they may
receive," the report quotes Mr. Colbran as saying after the
meeting.
"What was made clear to creditors is that today's meeting does not
represent the end of developments and updates, but rather is a
further step in what remains a complex and lengthy process to
determine the final value of creditor claims and the value of PBS
assets available to creditors.
"It is expected that a number of matters, including resolving
competing creditor claims and rights to assets, finalising existing
and anticipated litigation, and considering the value of final
creditor claims, will take at least 12 months.
"Each legal process needs to run its course before we reach a final
outcome. Litigation takes time and there are a number of complex
and contested matters that we are dealing with across the five PBS
companies."
PBS Building took over construction of The Curl following the
collapse of original project builder BA Murphy in late 2021,
reportedly leaving almost AUD11 million owing to contractors and
employees, SCN notes.
SANS PAREIL: Faces Liquidation Hearing, Allegedly Owes ATO AUD32MM
------------------------------------------------------------------
Region Riverina reports that a Griffith winery that went into
administration last year and could owe the Australian Taxation
Office (ATO) more than AUD32 million is facing a Supreme Court
hearing on matters relating to its liquidation later this month.
Hanwood farmer Aaron Salvestrin launched Sans Pareil Estate Pty Ltd
in 2018 when he was just 24 years old. After what seemed like a
promising first few years, the company suddenly went into
liquidation in October 2022 and Sydney-based insolvency firm
Chifley Advisory took over its administration, Region recalls.
Region relates that rumours about the company's demise swirled
around town, but little was known publicly until the liquidator
filed a report for creditors with the federal government regulator,
the Australian Securities and Investment Commission (ASIC), in
March 2023.
The report, obtained by Region, lists the ATO as being owed a
projected amount of AUD32,604,461. Several prominent Griffith
entities are also listed as creditors, including accountant Roy
Spagnolo & Associates, agricultural supplier Hutcheon & Pearce, as
well as Aaron's parents, Dennis and Annette Maree.
An ASIC notice shows that nine different registered companies
associated with the winery are in liquidation: Sans Pareil Estate
Pty Ltd, Sans Pareil Estate Exports Pty Ltd, Sans Pareil Estate
Vineyards Pty Ltd, Salvestrin Family Brands Pty Ltd, Sans Pareil
Estate Employment Services Pty Ltd, Salvestrin Enterprises Pty Ltd,
Salvestrin Viticulture Pty Ltd, Sans Pareil Estate Logistics Pty
Ltd and Sans Pareil Estate Holdings Pty Ltd.
On September 18, the NSW Supreme Court in Sydney will hear an
application from the liquidator to recover money from the winery.
Aaron Salvestrin, Annette Maree Salvestrin, Salvestrin Viticulture
Pty Ltd, Salvestrin Enterprises Pty Ltd, Dennis Salvestrin and
Salvestrin Family Brands Pty Ltd are all listed as parties to the
court matter, Region says.
The hearing is in the civil jurisdiction, meaning it relates to
money or property and is not a criminal matter. No further details
on the upcoming court case have been made public.
A further ASIC document obtained by Region revealed the liquidator
filed an application with the federal regulator that sought to
disclaim a 2019 Volkswagen Amarok in June 2023, which may indicate
it viewed the vehicle as an unsaleable asset in the administration
process.
The liquidation represents a rapid fall from grace for a company
that was lauded for its "extraordinary growth" over its first three
years.
Destination NSW, the state government's lead tourism agency,
praised Mr. Salvestrin's "rule-breaking wine" in early 2022, which
it said used "grapes from his family vineyards made with
untraditional methods," according to Region.
The young Griffith entrepreneur was also described as a "rising
star of the Riverina wine scene". The name of his company is a
French phrase which means "without equal".
For now, though, the liquidation continues, Region states.
Chifley Advisory's report outlined its own costs of winding up the
Hanwood winery. According to Region, the insolvency firm sought
approval from creditors for its partner and staff to be paid
AUD404,690 plus GST for services undertaken between Oct. 27, 2022
and Feb. 12, 2023 on the liquidation of Sans Pareil Estate Pty
Ltd.
Some 16 staff are listed as working on the matter, Region notes.
Region asked Chifley Advisory for an update on the liquidation and
when it would be finalised but did not receive a response.
The ATO also refused to answer whether it had thus far recovered
any of the taxpayers' money it claims it is owed and if it was
investigating the winery.
"The ATO cannot comment on the tax affairs of any individual or
entity due to our obligations of confidentiality under the law," a
spokesperson said.
TANNER PLUMBING: Second Creditors' Meeting Set for Sept. 18
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Tanner Plumbing
Pty Ltd has been set for Sept. 18, 2023 at 10:30 a.m. at the
offices of O'Brien Palmer at Level 9, 66 Clarence Street in Sydney
and via virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Sept. 15, 2023 at 12:00 p.m.
Liam Bailey of O'Brien Palmer was appointed as administrator of the
company on Aug. 14, 2023.
VAMOS MELBOURNE: First Creditors' Meeting Set for Sept. 18
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Vamos
Melbourne Pty Ltd will be held on Sept. 19, 2023, at 2:30 p.m. via
electronic means.
Stephen John Michell of PCI Partners was appointed as administrator
of the company on Sept. 7, 2023.
XING TECHNOLOGIES: Offices Now Sit Empty; Shareholders in Limbo
---------------------------------------------------------------
ABC News reports that Xing Technologies gleaming two-storey offices
at Seventeen Mile Rocks in Brisbane's west sit empty, stripped of
the expensive laboratory equipment and a liquidator is poring over
the parent company's books raising concerns in reports filed with
the Australian Securities and Investment Commission (ASIC) about
whether it had traded insolvent for more than a year.
According to the ABC, questions are also being asked about what
government funding can be recovered and what happened to the cancer
testing services which were provided through the Xing Technologies
business.
The ABC says the company's founder Dr Paul Mainwaring has faded
from public view after being found to have engaged in professional
misconduct over his treatment of an elderly cancer patient who died
in 2018.
And millions of dollars from investors may have been lost in the
collapse which has divided those involved.
Business identities invested, including the founder of Herron
Pharmaceutical Euan Murdoch, Mancorp Homes building company owner
Mark Forster and retired pharmacist and former federal minister
John Hodges, the ABC discloses.
Some have claimed the failure confirms the difficulties of trying
to establish a biotech company in Australia while others raised
concerns about the management of the venture, the ABC notes.
"We don't seem like we are going to get anything back," the ABC
qoutes Mr. Hodges as saying.
The Xing Group was founded by Dr Mainwaring in late 2017 to
specialise in the "transformative diagnosis and monitoring
technologies for cancer and disease", according to the report
compiled by Brisbane-based administrator Bill Karageozis.
Services offered included cancer care, rapid nucleic acid
extraction, protein detection diagnostics and "nanoparticle capture
agents to identify and prevent the spread of infectious diseases,"
Mr Karageozis's report stated.
But less than a year after the company launched, one of Dr
Mainwaring's patients died in controversial circumstances.
The 76-year-old cancer patient was alleged to have suffered fatal
side effects from immunotherapy treatment prescribed to him by Dr
Mainwaring.
An investigation was undertaken by the Health Ombudsman and late
last year the Queensland Civil and Administrative Tribunal (QCAT)
found Dr Mainwaring's actions to have constituted "professional
misconduct" in relation to the treatment of the patient, according
to the ABC.
Within four months an administrator was appointed to Xing Holdings
Group by a secured party - a company that had Mr. Forster as a
director.
Shortly afterwards the company was put into liquidation, the ABC
notes.
Smaller shareholders were baffled. Many contacted by the ABC said
they had no warning Xing was in trouble and have been left asking
how a AUD200 million company could fail so quickly.
The administrator, now liquidator, Mr. Karageozis raised questions
about the company's management in his reports submitted to ASIC.
According to the ABC, Mr. Karageozis attributed the company's
failings to "poor strategic management of the business, trading
losses and cashflow issues" in a report he compiled as
administrator in late 2022.
The report stated that from reviewing questionnaires completed by
company officers, he believed the major reason for failure was due
to an inability to generate sufficient cash flow.
He estimated that the company's total liabilities were more than
AUD6 million, the ABC relays.
He alleged the company may have traded insolvent since June 30,
2021.
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C H I N A
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GOME RETAIL: Splits Key Home Appliance Business in Two Regions
--------------------------------------------------------------
Yicai Global reports that Gome Retail Holdings has carried out
major adjustments to its organizational structure, dividing its
home appliance business into two geographical regions.
According to Yicai, Gome Electrical Appliances will be split into
Area A and Area B. The former will be in charge of branches in
northern and southern China, while the latter will control the
branches in northeastern, western, and eastern China, Yicai learned
from an internal document obtained on Sept. 13 from a source at the
Beijing-based parent company's public relations department.
According to the internal document Gome Retail issued on July 31,
the company will have several business units after the
restructuring, including Gome Electric, Gome App, Anxun Logistics,
Commercial Real Estate, and International Business Department,
Yicai relays.
Li Juntao, vice president of Gome Electrical, and Song Linlin,
former vice president of Gome Electric and now in charge of Gome
App and Anxun Logistics, will be appointed new presidents of Area A
and Area B, respectively, Yicai relates citing the internal
document.
"Gome Electric Appliance's division into Area A and Area B is
because the two business units can compete with each other," a
former employee told Yicai. "The company's main asset is the brand,
so it has to develop its joint venture and cooperation
businesses."
Gome Electric Appliances has lost its offline momentum with the
closing of flagship stores in many cities, including Guangzhou and
Suzhou. Meanwhile, e-commerce platforms such as JD.Com have
accelerated their expansion offline.
Gome Retail's net loss widened 19 percent to CNY3.5 billion (USD487
million) in the first half from a year earlier, according to the
firm's semiannual financial report, Yicai discloses. Revenue
plunged nearly 97 percent to CNY415 million (USD57 million).
In its semiannual report, Gome Retail said it would continue to
focus on its main business of home appliance retail, vertical
retail of household appliances, and consumer electronic products
and strengthen new operation methods like livestreaming e-commerce
to seize new growth opportunities.
Gome Retail's offline business in many areas is stagnated, an
industry insider told Yicai. Whether the company can transform
successfully with the help of new joint ventures and livestreaming
e-commerce is yet to be seen, the insider noted.
Gome Retail is a traditional company, so some of its executives may
not have adapted to doing e-commerce, new media, and internet
businesses yet, according to the former employee.
About GOME Retail
Headquartered in Hong Kong, GOME Retail Holdings Limited (HK:0493)
-- https://www.gome.com.hk/-- together with its subsidiaries,
engages in the retail of electrical appliances, consumer electronic
products, and general merchandise in the People's Republic of
China. The company also sells its products online through
self-operated and platform models. In addition, it is involved in
the provision of logistics and procurement, storage and delivery,
IT development, and business management services; retailing of
mobile phones and accessories; and property holding activities. As
of Dec. 31, 2021, it operated 4,195 stores in 1,439 cities. The
company was formerly known as GOME Electrical Appliances Holding
Limited and changed its name to GOME Retail Holdings Limited in
2017.
SHANGRAO CITY CONSTRUCTION: Fitch Affirms 'BB+' LongTerm IDR
------------------------------------------------------------
Fitch Ratings has affirmed China-based Shangrao City Construction
Investment Development Group Co., Ltd.'s (SCID) Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDRs) at 'BB+'. The
Outlook is Stable. Concurrently, Fitch has affirmed SCID's senior
unsecured notes at 'BB+'.
Fitch regards SCID as a government-related entity (GRE) and its
rating approach is based on its expectation of a high likelihood of
exceptional government support for the entity, if needed. Fitch has
not adopted the Parent and Subsidiary Linkage Rating Criteria as
Fitch believes the entity has a strong linkage with the local
government, due to its public-service mission, despite the indirect
shareholding structure.
KEY RATING DRIVERS
Status, Ownership and Control: 'Strong'
Shangrao Urban Operation (Holding) Group Co.,Ltd. (SUOG) owned
96.67% of SCID at end-August 2023. Its 'Strong' assessment reflects
the local government's indirect shareholding despite its control
over the company. The Shangrao municipal government directly
appoints the board and senior management team. SCID reports its
annual financing, investment plans and project status to the local
government via Shangrao Investment Holding Group Co.,Ltd., the GRE
that fully owns SUOG.
Support Track Record: 'Strong'
SCID's financial stability is partly reliant on local government
support, including subsidies of CNY447 million in 2022. The
government injected additional paid-in capital of CNY600 million
and CNY900 million in 2021 and 2022, respectively, to decrease
SCID's high leverage. It also made revenue-generating asset
injections and channelled special government bonds totalling CNY1.3
billion in 2022. Part of SCID's debt associated with legacy
projects will be repaid by the government.
Socio-Political Implications of Default: 'Moderate'
Fitch expects SCID, as the largest infrastructure developer in
Shangrao, to continue to undertake such projects, a sign of its
economic importance. The city's urbanisation rate of 55.94% in 2022
was lower than China's overall rate of 65.22%, suggesting that
investment in urban development projects will continue.
Nevertheless, a default by SCID would not necessarily cause
material disruptions, as its subsidiaries may continue providing
the services and potential substitutes may step in to ensure the
projects can continue.
Financial Implications of Default: 'Very Strong'
SCID carries out an important role in financing urban development
projects in Shangrao in compliance with the local government's
development plan. It borrows from various financial institutions,
including policy banks, and raises funds in the market directly. It
had outstanding borrowings of CNY64 billion in 2022, equivalent to
57% of the local government's debt. Fitch believes a default could
diminish confidence in lending to GREs, as most of SCID's debt is
associated with urban development projects. A default may also
significantly hurt the financing options and borrowing capacity of
other projects.
Standalone Credit Profile
SCID's 'b' Standalone Credit Profile (SCP) takes into consideration
the company's 'Midrange' revenue defensibility and operating risk,
as well as its high net leverage. The SCP also takes into account
peers that operate similar businesses in comparable regions.
Revenue Defensibility 'Midrange'
SCID's core business of agent construction, including
infrastructure, land development and resettlement housing,
accounted for 25% of its revenue in 2022, down from 64% in 2020.
The fall was due to the increase in aluminium business,
representing 46% of revenue, after it acquired 29.99% of Fujian
Minfa Aluminium Inc. Fitch expects core business demand to
fluctuate with economic performance, as it is driven largely by
general economic development within Shangrao municipality.
Shangrao's steady economic growth and SCID's diversified project
portfolio partially offset the customer concentration.
Operating Risk 'Midrange'
Fitch does not expect high volatility in costs for the
agent-construction segment. Potential cost fluctuations are
mitigated by a cost-plus contractual framework, which results in a
gross profit margin of around 8%. Fitch expects the contractual
framework that secures its gross margin to continue as part of the
local government's favourable policy. A gradual recovery from the
Covid-19 pandemic may also provide some upside on its margin. Fitch
expects supply-cost increases to be recoverable under the
framework, but there may be delays on collections from the local
government.
Financial Profile 'Weaker'
SCID relies on the government's capital injections and debt funding
for urban development. Fitch projects that net leverage will be at
above 60x in 2027 under its rating case, leading to the 'Weaker'
assessment. The high leverage is due to the ongoing capex demands
of SCID's public mandates and its stressed profitability due to the
nature of its urban-development business. However, SCID has solid
market access and ample liquidity cushion to absorb any short-term
economic shocks.
Derivation Summary
The entity's ratings reflect the four factors assessed under its
Government-Related Entities Rating Criteria, combined with the 'b'
SCP assessed under Fitch's Public Sector, Revenue-Supported
Entities Rating Criteria.
Liquidity and Debt Structure
Continuous investment in projects and long collection periods are
likely to weigh on the entity's liquidity, and it will continue to
rely heavily on refinancing debt. It had total unrestricted cash of
CNY2.2 billion in 2022. Pledged assets were a moderate 7% of total
assets, or 21% of net assets in 2022. Issued debt accounted for 54%
of the debt, including US dollar notes and perpetual bonds of
CNY500 million.
Issuer Profile
SCID finances and manages public works, including infrastructure,
land development and resettlement housing in Shangrao city, Jiangxi
province. The projects are mandated by the local government and
policy changes could affect the entity's core business.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A lowering of Fitch's credit view of the sponsor's ability to
provide subsidies, grants or other legitimate resources allowed
under China's policies and regulations;
- Deterioration in the strength of linkage to the government or
incentive to support by the government may lead to a rating
downgrade.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upward revision of the sponsor's ability to provide subsidies,
grants or other legitimate resources allowed under China's policies
and regulations;
- Enhanced strength of linkage to the government or incentive to
support by the government may lead to a rating upgrade.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Shangrao City
Construction
Investment
Development
Group Co., Ltd. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior
unsecured LT BB+ Affirmed BB+
WEIFANG URBAN: Moody's Assigns 'Ba1' CFR, Outlook Negative
----------------------------------------------------------
Moody's Investors Service has assigned a Ba1 corporate family
rating to Weifang Urban Construction and Development Investment
Group Co., Ltd. with a negative outlook, and withdrawn the
company's Baa3 issuer rating.
Moody's has also downgraded to Ba1 from Baa3 the senior unsecured
rating on the bonds issued by Weifang Urban Construction.
Previously, the ratings were on review for downgrade.
"The downgrade reflects the deterioration of Weifang government's
capacity to support (GCS) its local government financing vehicles
(LGFVs) due to continued weakening of liquidity and funding
conditions for its state-owned enterprises (SOEs) and LGFVs," says
Stephen Tang, a Moody's Assistant Vice President, who is also
Moody's lead analyst for Weifang Urban Construction.
The negative outlook reflects Moody's concern that regional
liquidity challenges could spill over to Weifang Urban
Construction, weakening its access to funding or increasing its
contingent risks given it would have to support weaker SOEs and
LGFVs in the region. The negative outlook also considers the
uncertainty over the timeliness and effectiveness of government
support measures.
RATINGS RATIONALE
Moody's has lowered Weifang city government's GCS to baa3 from
baa2, mainly reflecting the agency's view that Weifang city's
overall liquidity conditions associated with its SOEs' and LGFVs'
liabilities have deteriorated and will remain under pressure, as
reflected by continued credit events and deteriorated market
funding conditions for LGFVs. The city's relatively high level of
contingent liabilities are largely concentrated at the lower tier
districts and counties level, with an increased amount of
short-term SOE debts, including shadow banking debts. These
refinancing pressures will test its capacity to provide support at
a time when LGFVs face tough financing difficulties.
Weifang Urban Construction's Ba1 CFR incorporates Weifang city's
GCS score of baa3, and Moody's assessment of how the company's
characteristics affect the government's propensity to provide
support, resulting in a one-notch downward adjustment from the GCS
score.
Weifang city government's GCS score reflects its status as a
prefectural-level city in Shandong, a lower-risk province on the
east coast of China (A1 stable); its fiscal strength relative to
its peer cities with, in particular, low reliance on net transfers;
its weaker standalone economic fundamentals relative to its peer
cities, including volatile GDP growth and muted population growth;
and its high local SOE liabilities relative to its fiscal revenue,
with rising refinancing risks that could weigh on the city's
ability to provide timely support. In addition, Weifang city
government's GCS score reflects its debt management challenges,
which the city-level government is seeking to resolve through
better coordination with lower tier districts and counties.
Weifang Urban Construction's Ba1 rating reflects the city
government's propensity to support the company, given the company's
status as the dominant LGFV in the city; the city government's
effective and direct control of the company; and its important role
in undertaking major public infrastructure and urban upgrade
projects. The rating also reflects the company's track record of
receiving timely government cash payments, and its ability to
maintain access to funding from banks and the domestic bond
market.
However, the one-notch downward adjustment from the Weifang city
government's GCS score reflects the company's moderate debt
management with large capital spending requirements relative to
government payments; and its medium exposure to contingent risks
arising from external guarantees and other receivables.
The rating also considers the following environmental, social and
governance (ESG) factors.
Weifang Urban Construction bears high social risks as it implements
public policy initiatives by building public infrastructure in
Weifang city. Demographic changes, public awareness and social
priorities shape the company's development targets and ultimately
affect Weifang government's propensity to support the company.
Governance risks are also material to the ratings, as Weifang Urban
Construction is subject to oversight by and has to meet the
reporting requirements of its owner local government. It recorded
moderate debt growth to support its public policy investments and
is supported by a fair mechanism of government payments with a good
payment track record. The company also has a concentrated ownership
and board structure, and close cash flow linkage and related-party
transactions with the government.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of the ratings is unlikely, given the negative outlook.
However, Moody's could revise the outlook to stable if liquidity
conditions for Weifang's SOEs and LGFVs were to improve materially,
while the government's propensity to provide support to the company
remains unchanged. For example, the provision of sufficient
provincial government support, combined with the effective
implementation of sustainable debt management actions that will
strengthen its SOE and LGFV liability structure, could reduce
refinancing risks. This would address the uncertainties around the
city's ability to coordinate timely support for SOEs and LGFVs that
are under liquidity pressure.
Moody's could downgrade the ratings if the Weifang government's
capacity to support further deteriorates due to weakening of
regional funding conditions and increasing contagion risks. A
downgrade of Weifang Urban Construction's ratings could also occur
if China's sovereign rating is downgraded.
The rating could also be downgraded if Weifang Urban Construction's
characteristics change in a way that lowers the city government's
propensity to support, for example:
-- a weakening in its position as the major platform undertaking
infrastructure and urban-related projects in Weifang city;
-- its core businesses undergo significant changes, including a
substantial expansion into commercial activities that results in
substantial losses or comes at the cost of public services;
-- its debt and leverage rapidly increase without a corresponding
rise in government payments, leaving the company reliant on
high-cost financing, including through non-standard channels;
-- its contingent liabilities crystalize or it is required to
provide additional liquidity support to other entities, which will
weigh on its own financial profile; or
-- its access to funding significantly weakens.
The principal methodology used in these ratings was Local
Government Financing Vehicles in China Methodology published in
April 2022.
Established in September 2016, Weifang Urban Construction and
Development Investment Group Co., Ltd. is 90% owned by the Weifang
State-owned Assets Supervision and Administration Commission and
10% owned by Shandong Provincial Department of Finance through
Shandong Caixin Assets Operation Co., Ltd. As of the end of 2022,
the company reported total assets of RMB137.6 billion and a total
revenue of RMB16.8 billion.
Weifang Urban Construction is responsible for the city's major
public infrastructure and urban upgrade projects, including the
transfer of land, the construction of major infrastructure
facilities including key inter-regional water conservation
projects; the provision of water and heat supply; and the
development of tourism, leisure and cultural recreation industries.
It also has some commercial operations in chemicals, trading and
financial investment.
=========
I N D I A
=========
ANAND IMPEX: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Anand
Impex (AI) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1.75 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 4.25 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 2, 2022,
placed the rating(s) of AI under the 'issuer non-cooperating'
category as AI 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. AI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 18, 2023, June 28, 2023, July 8, 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).
Surat (Gujarat) based, Anand Impex was established as a partnership
firm in the year 2006 by Mr. Dilip Kheni and Mr. Vinod Kheni along
with Dilip Godhani. Anand Impex is engaged in the business of
processing of rough diamonds into finished polished diamonds of
various sizes, shapes, purity and colour. The firm has its sales
office in Mumbai and its processing plant is located in Surat. The
firm imports rough diamonds from Belgium and sells CPD largely in
the domestic market.
COFFEE DAY: Settles with IndusInd Bank, Insolvency Withdrawn
------------------------------------------------------------
Moneycontrol reports that Coffee Day Global and IndusInd bank told
the Chennai bench of National Company Law Appellate Tribunal
(NCLAT) on September 13 that they have reached a settlement and
that the two parties have withdrawn insolvency litigations. NCLAT
took their submissions on record and set aside the order admitting
Coffee Day Global to insolvency.
Moneycontrol relates that Senior Advocate Arvind Pandian and lawyer
Pawan Jhabak informed the appellate tribunal that Coffee Day
Global's loan has been assigned to a company called ASREC (India)
Limited in September 2023. Lawyer Chitra Nirmala, appearing for
IndusInd Bank, agreed with Pandian's submissions and asked the
appellate tribunal to set aside the insolvency order.
On August 11, NCLAT stayed the order allowing Coffee Day Global,
which runs the Cafe Coffee Day chain in India, to be admitted to
the insolvency process, the report recalls. It is to be noted that
the stay is only an interim order. While issuing the stay order,
the NCLAT noted that it has found certain arguable points that need
clarification and asked IndusInd Bank to file its response in two
weeks. The matter is likely to come up for hearing on September 25,
Moneycontrol says.
On July 20, the Bengaluru bench of the National Company Law
Tribunal (NCLT) admitted Coffee Day Global to insolvency after
IndusInd Bank moved a petition alleging that the former defaulted
on INR94 crore.
Coffee Day Enterprises Limited is an India-based company, which is
engaged in the trading of coffee beans. The Company is engaged in
business in multiple sectors, such as coffee-retail and exports,
leasing of commercial office space, financial services, integrated
multimodal logistics, hospitality and information technology
(IT)/information technology enabled services (ITeS). The Company's
segments include Coffee and related businesses, Integrated
multimodal logistics, Hospitality services and Investment and other
corporate operations. The Company retails coffee and other products
through its chain of outlets under the Cafe and Xpress kiosks
formats, under the brand name Coffee Day. The Company's flagship
cafe chain brand Cafe Coffee Day (CCD) owns approximately 495 cafes
in 158 cities and 285 CCD Value Express kiosks. There are 38,810
vending machines that dispense coffee in corporate workplaces and
hotels under the brand.
COMMERCIAL AUTO: ICRA Reaffirms B+ Rating on INR23.32cr Loan
------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of
Commercial Automobiles Private Limited (CAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term–
Fund-based–
Term Loans 23.32 [ICRA]B+ (Stable); Reaffirmed
Long-term–
Fund-based–
Cash Credit 9.00 [ICRA]B+ (Stable); Reaffirmed
Short-term–
Fund-based 21.20 [ICRA]A4; Reaffirmed
Rationale
The rating reaffirmation takes into account ICRA's opinion that
CAPL's credit metrics will continue to be modest. CAPL's operating
performance is likely to remain stable in FY2024 with growth in
economic activity; although moderated by inflationary pressures and
competition from other dealerships in its catchment area. In
FY2023, CAPL witnessed a marginal growth of 1% led by volume growth
in its passenger vehicle (PV)segment. The ratings draw comfort from
CAPL's position as one of the largest dealers of Tata Motors
Limited (TML) in eastern Madhya Pradesh, with presence in multiple
districts of the state. The ratings also factor in the established
relationship of CAPL with TML, given the vintage dealership of more
than five decades.
The margins in the dealership business typically remain low due to
limited bargaining power with original equipment manufacturers
(OEMs), as also witnessed in FY2023, with pressure on operating
margins; although CAPL's rental income and ad-hoc incomes from real
estate support its funding position. The ratings further continue
to take into consideration the inherent cyclicality in the
commercial vehicle (CV) dealership business and the fact that the
company generates most of its revenues from this segment, while the
balance comes from the PV segment.
The Stable outlook on the long-term rating reflects ICRA's opinion
that CAPL's operational profile is likely to remain stable
supported by TML's steady market position.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters in auto-dealership business:
The company has a track record of more than five decades in the
auto-dealership business. The key promoter, Mr. Kailash Chand
Gupta, has been involved in the business since 1971.
* Growing volumes of PVs: CAPL posted revenues of INR280.08 crore
in FY2023, registering a marginal growth of 1% from INR271.93 crore
in FY2022, owing to growth in PV volumes. The company witnessed a
slump in CV volumes. The revenues are expected to remain stable
given the positive demand outlook for TML's PVs and higher off-take
of electric vehicles (EVs), which are expected to continue in the
medium-term. Moreover, the company's earnings are also expected to
be supported by its
rental incomes.
Credit challenges
* Thin margins in auto dealership business: The dealership business
is characterised by thin margins and low bargaining power of
incumbent dealers as margins on vehicles are determined by OEMs. In
FY2023, CAPL's operating margins declined amid
competitive pressures and lower CV volumes.
* Weak financial risk profile characterised by high gearing and
modest coverage indicators: The financial risk profile of the
company continues to remain weak with moderation in interest
coverage in FY2023 vis-à-vis FY2022, following the decline in
operating margins. Even though the company reduced its bank limits
in FY2023, its DSCR remains weak given its high repayment
obligations. Consequently, the company continues to depend on
funding support from its promoters or other nonoperating income.
CAPL's working capital limits remain highly utilised, indicating
its stretched liquidity profile. Going forward, the financial risk
profile of the company is expected to remain modest due to the
inherent nature of its operations.
* Increasing competition from other PV dealerships in the region:
CAPL is facing strong competition from the existing dealers of TML
and its competitors in its catchment area.
Liquidity position: Stretched
CAPL's liquidity position is stretched due to limited cushion in
cash credit limits and high repayment liabilities. The company has
utilised more than 90% of its sanctioned working capital limits in
the last six months. CAPL also has substantial repayment
liabilities of ~INR6.4 crore in FY2024 and ~INR7.5 crore in FY2025.
Cash accruals from the business are likely to be insufficient for
its term-loan repayment. Hence, the promoters are expected to
infuse funds into the business, as and when required.
Rating sensitivities
Positive factors – ICRA could revise the ratings upwards in case
there is a sustained improvement in revenues and profitability.
Specific credit metric that could lead to a rating upgrade is if
the DSCR is more than 1.1 times, on a sustained basis.
Negative factors – ICRA could downgrade the ratings in case there
is a further weakening of credit metrics and coverage indicators of
the company.
Incorporated in 1971 as a partnership firm and later converted to a
private limited company in 1997, Commercial Automobiles Private
Limited is an authorised dealer of Tata Motors Limited's commercial
and passenger vehicles. The CV dealership operates in eastern
Madhya Pradesh with presence in Jabalpur and adjoining districts
that are serviced by the company's five Sales-Spares-Service (3S)
outlets and three sales (1S) outlets. PVs are sold by the company
in Madhya Pradesh that are serviced by two 3S outlets at Jabalpur
and Katni. The company began as a partnership firm in 1972, before
being converted into a Limited company in 1997. Mr. Kailash Chand
Gupta holds a majority equity stake in the company. The remaining
shares are held by his family and other group companies.
GEM GRANITES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Gem
Granites (GG) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 58.02 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/ 19.33 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Short Term Bank 77.16 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 25,
2022, placed the rating(s) of GG under the 'issuer non-cooperating'
category as GG 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. GG continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
July 11, 2023, July 21, 2023, July 31, 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).
GG is a partnership firm established in the year 1972 by Mr
Veeramani to carry on the business of mining/quarrying and
processing of various varieties of granites. The firm has two
quarrying units one in Ilkal, Karnataka and other in Dharmapuri
district. It also has a granite processing unit in Injambakkam,
Chennai.
GENESYS BIOLOGICS: CARE Lowers Rating on INR70cr LT Loan to C
-------------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Genesys Biologics Private Limited (GBPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 70.00 CARE C; Stable; Revised from
Facilities CARE BB-; Stable
Rationale and key rating drivers
The revision in the rating assigned to the bank facilities of GBPL
is driven by significant delay in the commencement of the
commercial production, with short track record and liquidity issues
in the past, inherent implementation and stabilisation risk
associated with its ongoing greenfield project and exposure to
regulatory risk. The rating, however, derive comfort from
resourceful and experienced promoters, agreement with CIVICA and
stable industry outlook.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Completion of ongoing capex without any further cost and time
overrun.
* Ability of the company to generate revenue as envisaged post
commercialisation of operations.
* Achieving profits at the net level and generating sufficient cash
accruals to meet its debt obligations.
Negative factors
* Delay/ Default in meeting the obligations.
Analytical approach: Standalone
Outlook: Stable
Care Ratings believes that the entity will continue to benefit from
the extensive experience and resourcefulness of promoters and
management in the industry and the agreement signed with CIVICA.
Detailed description of the key rating drivers:
Key weaknesses
* Short track record and significant delay in completion of
project: The company has short track record although established in
2014, commercial operations yet to be started. The company has
faced liquidity issues in the past due to delay in project
execution on account of delay in receipt of statutory approvals
from various authorities resulted in mismatch in cash flows leads
to delays in meeting debt obligation. The commencement of the
operations at the company's bio-similar plant has been delayed, the
operations were expected to begin from December 2022, which however
got delayed due to delay in the approvals from the various
authorities.
* Inherent implementation and stabilisation risks associated with
its planned greenfield project: Currently, the company has
undertaken project for setting up the facility with total project
cost of INR450 crore funded partly from CIVICA milestone-based
payments/capital assistance, unsecured loans from promoters and
loans from DFC (U.S. International Development Finance
Corporation). Nevertheless, CIVICA will incur all regulatory cost
and approvals required from various authorities. The company
expecting the completion of project by in next two years. However
timely infusion of funds various sources and completion of the
project will remain critical from credit perspective.
* Exposure to regulatory risk: The company is exposed to regulatory
risk as the pharmaceutical industry is highly regulated in many
other countries and requires various approvals, licenses,
registrations and permissions for business activities. The approval
process for a new product registration is complex, lengthy and
expensive. Apart from above the ability of the company to continue
to observe the regulatory and CGMP standards without receiving any
critical observations from regulatory authorities are viewed
critically from business and credit risk point of view.
Key strengths
* Resourceful and Experienced promoters: GBPL has been promoted by
Mr. Rajender Rao Juvvadi (Chairman) is a Mechanical Engineering
from Osmania University 1988 Postgraduate from Indian Institute of
Foreign Trade (IIFT) New Delhi 1992. He ventured into this new
entity Aurore Life Sciences Pvt Ltd with an aggressive growth plan,
which is now merged with India's second largest API Manufacturer
Solara Active Pharma Limited. He was also, executive director for
Solara Active Pharma Sciences Limited Mr. Venkat Reddy Yelma
(Managing Director), MS in Regulatory Affairs (Drugs, Biologics &
Devices) from Northeastern University, USA has over 20+ years of
experience in various companies. He is a value-driven biopharma
executive with proven expertise in drug development, organizational
leadership & successful in developing and implementing global
regulatory affairs in US and Singapore based firms – ImClone,
Bayer & Merck (Formerly Schering-Plough). The operations are
further supported by other directors Dr. Venkata Krishna Rao holds
more than 20 years of experience in Biopharma with Wockhardt, Natco
and Krebs. Mr. Tulasi Ramu has 20+ years of experience in Biopharma
industry having previously worked with large-scale companies
including Wockhardt, SciGen and Dr. Reddy's Laboratories Limited.
* CO-Development and Commercialization Agreement with CIVICA:
Civica has entered into co-development and commercial agreement
with GBPL for these three (glargine, lispro and aspart) insulin
biosimilars on February 3, 2022. Civica will use drug substance
produced in partnership with GBPL and will have exclusive rights in
the U.S. to market and sell these insulins at costs that are
substantially lower than what is currently available in the U.S.
The company receives the payment from CIVICA in form of capital
assistance/milestones for commissioning the proposed facility. As
on March 31, 2023 the company had received INR90.59 crore, the
milestone income of INR17 crore was not received in FY23 due to
delay in the completion of Phase -1 trials.
* Stable Industry outlook: Increasing prevalence of Type I
diabetes, higher cost of existing insulin drugs are expected to
drive growth of insulin biosimilars market. Government authorities
are also focusing on the approval of insulin biosimilars owing to
substantial financial burden in terms of reimbursements. Recently,
the U.S. FDA has approved new insulin glargine Basaglar, for type 1
and type 2 diabetes which is Biosimilar version of Sanofi's basal
insulin Lantus (insulin glargine). Additionally, Lilly and
Boehringer Ingelheim's biosimilar insulin glargine has got approval
through European Medicines Agency's (EMA's) Biosimilar pathway.
Such ongoing approvals by the respective authorities are expected
to drive the growth of insulin Biosimilar market.
Liquidity: Stretched
Liquidity is marked by tightly matched accruals to repayment
obligations since operations yet to be commercialised resulted in
negative cash accruals. Nevertheless, the company has cash and bank
balance of INR68 crore as on March 31, 2023 on account of receipt
of milestone funds from CIVICA. The average utilisation of bank
limits remained around 80% for the last 12 months ended July 31,
2023.
Genesys Biologics Private Limited (GBPL) incorporated in the year
2014 is a privately held biotechnology company with dedicated focus
on Research and Development of Insulin Biosimilars derived from
indigenously developed process & customized manufacturing platform
which is capable for yielding all Insulin variants such as Glargine
(Long Acting), Aspart (Rapid Acting), Lispro (Short Acting) at its
pilot facility in Hyderabad. GBPL has well-equipped R&D and pilot
scale facility at Genome Valley, Biotech Park, Shameerpet Hyderabad
with the built-up area of 5 acres and secured additional 5 acres of
land for manufacturing facility for commercial production.
GMR AMBALA: ICRA Reaffirms D Rating on INR185.01cr Term Loan
------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of GMR
Ambala - Chandigarh Expressways Private Limited (GACEPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term
Fund-based–
Term loan 185.01 [ICRA]D; reaffirmed
Rationale
The rating reaffirmation reflects the continued irregularities in
servicing term loan obligations by GACEPL due to its inadequate
cash flows to meet the negative grant and debt servicing
obligations. In FY2021, the arbitration case between GACEPL and the
National Highway Authority of India (NHAI) was awarded in favour of
the NHAI. The pending negative grant liability payable to the NHAI
has impacted the company's liquidity position.
As per the escrow agreement and cash flow waterfall mechanism, the
negative grant payments have priority over debt servicing. Hence,
its cash flows have remained inadequate for debt servicing. The
collections from the project stretch were also affected by toll
suspension because of the farmers' protests in the past when
tolling was suspended for approx. 14 months (from October 12, 2020,
to December 14, 2021). However, the toll collection recovered to
INR71.5 crore in FY2023 from INR18.9 crore in FY2022. The rating is
also constrained by the traffic-related risks inherent in a toll
road project, including the risk of traffic diversion, development
of alternative routes running parallel to this project route, along
with resistance of users to pay toll and growth in toll-paying
traffic. This apart, GACEPL is exposed to the operations and
maintenance (O&M) risk associated with the project, and its ability
to undertake routine and periodic maintenance within the budgeted
cost and time will be monitorable.
Key rating drivers and their description
Credit strengths
Not Applicable
Credit challenges
* Delays in debt servicing due to lower-than-expected traffic;
adverse arbitration outcome: There have been continued
irregularities in servicing of term loan obligations by GACEPL
because of its inadequate toll collections leading to poor
liquidity position. The company reported significantly lower toll
collections of INR18.9 crore and INR22.3 crore in FY2022 and
FY2021, respectively, against INR59.6 crore in FY2020 primarily due
to the toll suspension on account of the Covid-19 pandemic (partial
and complete lockdown) and farmers' protests. The toll collection
improved in FY2023 with the commencement of tolling activity from
December 2021 onwards. However, sizeable o/s negative grant
liability to the NHAI (which has a priority over debt servicing as
per the escrow agreement and cash flow waterfall mechanism)
constrained its liquidity position. The project had a debt
servicing reserve (DSR), which has already been exhausted.
* Exposure to risks inherent in BOT road projects: Like any toll
road project, the company remains exposed to risks inherent in BOT
road projects such as political acceptability of rate hikes linked
to WPI year after year over the concession period, challenges
arising from non-completion of adjacent/contiguous routes and risks
related to traffic leakage, traffic diversion, user resistance to
pay toll, etc. It also faces O&M risk associated with the project,
and its ability to undertake the routine and periodic maintenance
within the budgeted cost and time will be the key monitorable.
GACEPL's cash flows are also exposed to interest rate risk, given
the floating nature of interest rates for the term loans.
Liquidity position: Poor
The company's liquidity position is expected to remain poor with
cash flow from operations net of negative grant payments to the
NHAI being insufficient to meet its near-term debt servicing
obligation.
Rating sensitivities
Positive factors – The rating could be upgraded if the company
demonstrates a sustained track record of regular debt servicing.
Negative factors – Not applicable.
GACEPL is a special purpose vehicle (SPV) set up by the GMR Group
for executing a build operate transfer (BOT) toll-based project on
a 20-year concession agreement (initially ending on May 2026, now
extended till July 2027 owing to suspension of toll in past due to
pandemic and farmer protest) with the NHAI. The project scope
entails improvement and O&M including strengthening, widening of
the existing two-lane road to a four-lane dual carriageway for 35
km stretch on the AmbalaChandigarh (NH-21/NH-22) highway. The
project was completed on schedule and achieved commercial operation
date (COD) on November 14, 2008. The toll collection on the project
highway started from December 10, 2008.
GUPTA STEEL: CRISIL Moves B+ Debt Rating to Not Cooperating
-----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Gupta
Steel and Strips Private Limited (GSSPL) to 'CRISIL B+/Stable
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit/ 5 CRISIL B+/Stable (ISSUER NOT
Overdraft facility COOPERATING; Rating Migrated)
Proposed Fund- 2 CRISIL B+/Stable (ISSUER NOT
Based Bank Limits COOPERATING; Rating Migrated)
Working Capital 3 CRISIL B+/Stable (ISSUER NOT
Term Loan COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with GSSPL for
obtaining information through letter and email dated August 7, 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 GSSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GSSPL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of GSSPL to 'CRISIL B+/Stable Issuer not
cooperating'.
GSSPL, incorporated in 2011, trades in iron and steel products such
as hot-rolled (HR) and cold-rolled coils, HR sheets, and strips.
The company is promoted and managed by Mr Ashish Gupta.
HANSRAJ MEMORIAL: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Hansraj
Memorial Educational Society (HMES) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 19.90 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 13.00 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 03,
2022, placed the rating(s) of HMES under the 'issuer
non-cooperating' category as HMES 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. HMES
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated June 19, 2023, June 29, 2023, July 9, 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).
Hansraj Memorial Educational Society (HMES) is a part of Jalandhar
(Punjab) based Airwings Services group which is engaged in the
business of tours & travels and HR management. HMES was founded by
Late Mr. Hans Raj Bhatia under the Societies Registration Act of
India on February 1, 2000. Mr. Ajay Bhatia is the President of the
society and his brother, Mr. Deepak Bhatia, is the General
Secretary. HMES is currently operating three schools in the
Jalandhar city- Cambridge International school for girls (CISFG;
established in 2005), Cambridge International School Co-ed (CISC;
established in 2008) and Cambridge International (CISFG;
established in 2005), Cambridge International School Co-ed (CISC;
established in 2008) and Cambridge International Foundation School
(CIFS; established in 2012) and is setting up a new school in
Mohali (Punjab). The schools are affiliated to CBSE (Central Board
of Secondary Education) and are ISO-9001:2008 accredited.
HEMA ENGINEERING: CARE Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Hema
Engineering Industries Limited (HEIL) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 296.91 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 93.50 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 HEIL under the
'issuer non-cooperating' category as HEIL 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. HEIL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated May 10, 2023, May 20, 2023,
May 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).
HEIL was established by Mr. Krishan Kumar Jajoo (Chairman) in 1984.
The company was rechristened into its present name in 1987. Mr K.
K. Jajoo, an Engineer from BITS Pilani, has over 35 years of
experience and is supported by Mr Chandresh Jajoo (Managing
Director), having more than two decades of experience. The company
is engaged in manufacturing of chassis parts, frames, sheet metal
parts, silencers, etc for 2-wheelers and has 13 operational plants.
KPR INDUSTRIES: ICRA Lowers Rating on INR9.0cr LT Loan to C+
------------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of Sri
KPR Industries Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 1.40 [ICRA]C+; ISSUER NOT
COOPERATING;
Fund based Rating downgraded from
Term Loan [ICRA]B- (Stable) and continues
to remain under 'Issuer Not
Cooperating' category
Long-term– 9.00 [ICRA]C+; ISSUER NOT
COOPERATING;
Fund based Rating downgraded from
Cash Credit [ICRA]B- (Stable) and continues
to remain under 'Issuer Not
Cooperating' category
Short-term– 6.00 [ICRA]D; ISSUER NOT COOPERATING;
Non Fund based Rating downgraded from
Others [ICRA]A4 and continues to remain
under 'Issuer Not Cooperating'
category
Short Term- 4.37 [ICRA]A4 ISSUER NOT
Unallocated COOPERATING; Rating continues
Limits to remain under 'Issuer Not
Cooperating' category
Rationale
The rating downgraded on account of Net Loss registered in Q1FY24
due to sharp decline in operating revenue. The rating is based on
limited information on the entity's performance since the time it
was last rated on February 23, 2023. The lenders, investors and
other market participants are thus advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity, despite the
downgrade.
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Sri KPR Industries Limited was incorporated in 1988 as Bhagyanagar
Engineering Industries Limited and had been involved in
manufacturing of PVC pipes in the past. Sri Venkateswara Pipes
Limited (SVPL) has been merged with KPR Industries Limited w.e.f.
April 1, 2012. Incorporated in 1995, SVPL had been engaged in the
manufacturing and selling of Asbestos Cement Pressure Pipes (A.C).
These pipes are mainly used for drinking water supply in rural and
urban areas, in lift irrigation schemes and for disposal of
industrial effluent in various factories. SVPL started
manufacturing A.C. Pressure Pipes, with an installed capacity of
20,000 TPA, at Gundla Pochampalli Village, Medchal Mandal in
Rangreddy district of Andhra Pradesh. Further in 2005-06, SVPL
expanded its facility and commissioned its second plant to reach
the present capacity of 50,000 MTPA. As a step towards forward
integration, SVPL floated its 100% subsidiary Sri KPR Infra &
Projects Ltd. in 2007-08, which is a construction company engaged
in execution of drinking water supply and lift irrigation projects
of various government departments.
KRISHNAGANGA SPINNING: CARE Keeps C Debt Rating in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of
Krishnaganga Spinning Mills Private Limited (KSMPL) continue to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 18.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Short Term 3.35 CARE A4; ISSUER NOT
Bank 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 3, 2022,
placed the rating(s) of KSMPL under the 'issuer non-cooperating'
category as KSMPL 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. KSMPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 19, 2023, June 29, 2023, July 09, 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).
Krishnaganga Spinning Mills Private Limited (KSMPL) was
incorporated on September 06, 1983 and was promoted by Mr. G
Punnaiah Choudary as a public limited company, 'Krishnaganga
Spinning Mills Limited' near Guntur, Andhra Pradesh. It was
converted into a private limited company on March 10, 2003. The
company is engaged into manufacturing of synthetic blended yarns.
KRISHNANAND INFRA: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Shree
Krishnanand Infrastructure and Developers Private Limited (SKIDPL)
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 8.00 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 29, 2022,
placed the rating(s) of KIDPL under the 'issuer non-cooperating'
category as SKIDPL 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.
SKIDPL continues to be non-cooperative despite repeated requests
for submission of information through e-mails, phone calls and a
letter/email dated June 14, 2023, June 24, 2023, July 4, 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).
Vapi-based (Gujarat) SKIDPL was incorporated in 2011, by Mr Anand
Tripathi and Mr Kapil Tiwari. SKIDPL belongs to Shree Krishnanand
Group which comprises of various other entities. SKIDPL is engaged
into the business of undertaking turnkey projects involving civil
works, erection, commissioning and electrical works of industrial
buildings. SKIDPL also undertake projects from Government of
Gujarat. SKIDPL is executing the contract works for public and
private companies.
LOTUS INFRATECH: CRISIL Lowers Rating on INR2cr Loan to B+
----------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Lotus Infratech (Lotus) to 'CRISIL B+/Stable/CRISIL A4' from
'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 15.5 CRISIL A4 (Downgraded from
'CRISIL A4+')
Overdraft Facility 2.0 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 0.5 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects significant drop in revenue levels to INR21
crore in fiscal 23crore as against INR45 crore in fiscal 22 due to
delay in approvals from the AP government along with a stretched
receivables of around 450 days in fiscal 23 on account of slow
release of funds by the government. Muted growth is expected in
FY24. Moving forward, significant improvement in the scale of
operation and sustenance operating margin will remain key rating
sensitivity factor.
The rating continues to reflect partners' extensive experience and
its established relationships with key customers and suppliers. The
rating also factors in its average financial risk profile. These
rating strengths are partially offset by its modest scale of
operations, working capital intensive operations and exposure to
intense competition in the civil construction industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations: Lotus's scale of operations remains
modest as indicated by operating income of INR21.11 crores in
fiscal 2023. However, it has a healthy order book of INR285 crore
as on May 2023, which provides revenue visibility over the medium
term. Sustained improvement in scale of operations remain a key
rating sensitivity factor over the medium term.
* Moderate working capital intensive operations: The firm has
moderate working capital intensive operation with gross asset days
at above 6-00 days in fiscal 2022 driven by debtors of around 454
days. The firm has generally maintained minimal inventory. Working
capital intensive nature of operations to continue in the medium
term.
* Exposure to intense competition in the construction industry:
Construction and civil works sector is highly fragmented with the
presence of very large companies as well as smaller local players.
While large players operate in several sectors including roads,
hydel projects, thermal plants and urban infrastructure, smaller
players specialize in one or two business segments. Similarly,
Lotus specializes in civil construction projects mainly in roads &
over bridges and irrigation.
Strengths:
* Partners' extensive experience and its established relationships
with key customers and suppliers: Lotus is promoted and managed by
Mr.N Srinivasa Rao who is engaged in civil construction work since
1994 which reflects large experience in the business and its
established relationships with key customers and suppliers.
* Average financial risk profile: Lotus has an average financial
profile marked by net worth of INR20.97 crore, gearing of 0.15
times and total outside liabilities to adjusted tangible net worth
(TOL/ANW) of 1.03 times for year ending on 31st March 2023. Lotus's
debt protection metrics is adequate with interest coverage and
NCATD of 6.64 times and 0.57 times in FY22. Debt protection metrics
are expected to stay at satisfactory levels in the medium term.
Liquidity: Stretched
Bank limit utilization is low at around 13 percent for the past ten
months ended May 2023. Cash accruals are expected to be in the
range of INR1.5-2.50 crore which are sufficient against term debt
obligation of INR0.95-1 crore over the medium term. Current ratios
are healthy at 1.85 times on March 31, 2022
Outlook: Stable
CRISIL Ratings believes that Lotus will benefit over the medium
term from the long-standing experience of its partners and its
established relationship with its key customers and suppliers.
Rating Sensitivity Factors
Upward factors
* Sustained improvement in scale of operation above INR60 crores
while the operating profitability is maintained.
* Improvement in working capital cycle by reduction in GCA days.
Downward factors
* Decline in revenue and operating margins leading to accruals less
than INR1 crore.
* Further stretch in working capital cycle
Established in November, 2015 as a partnership firm, Lotus is
engaged in civil construction mainly in activities like irrigation
and roads & bridges. Based in Vijayawada (Andhra Pradesh), the firm
is promoted and managed by Mr.N Srinivasa Rao. Lotus started its
commercial operations in April, 2016.
MAHESH EDIBLE: CRISIL Withdraws B Rating on INR275cr New Loan
-------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Mahesh Edible Oil Industries
Limited (MEOIL) to 'CRISIL B/Stable/Issuer not cooperating'. CRISIL
Ratings has withdrawn its rating on bank facility of MEOIL
following a request from the company. Consequently,CRISIL Ratings
is migrating the ratings on bank facilities of MEOIL to 'CRISIL
B/Stable' from 'CRISIL B/Stable/Issuer Not Cooperating'. The rating
action is in line with CRISIL Ratings' policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Working 275 CRISIL B/Stable (Migrated
Capital Facility from 'CRISIL B/Stable ISSUER
NOT COOPERATING'; Rating
Withdrawn)
Analytical Approach
CRISIL Ratings has combined the business and financial risk
profiles of Mahesh Edible Oil Marketing Ltd (MEOML; a subsidiary)
and MEOIL. The entities, together referred to as the Mahesh Edible
group, have the same management and financial and operational
linkages. MEOML acts as MEOIL's marketing arm in a few states.
Mahesh Edible manufactures mustard oil and soya oil under the
brands, Saloni and Stay Fit, respectively, at its two units at Agra
(Uttar Pradesh) and Kota (Rajasthan), and has current seed crushing
capacities of 2000 tonnes per day (tpd) of mustard seed and 400 tpd
of soya seed.
MEOIL was set up as a partnership firm in 1990 by Mr Shiv Kumar
Rathore and Mr Braj Mohan Rathore, and was reconstituted as a
limited company in 2000. The company manufactures mustard and soya
oils under the brands Saloni and Stay Fit, respectively. The units
are in Agra, Uttar Pradesh; and Kota, Rajasthan. The company is
owned and managed through the RR Family trust, with Mr Shiv Kumar
Rathore, Mr Braj Mohan Rathore, Mr Dinesh Kumar Rathore and Mr
Mahesh Kumar Rathore as equal beneficiaries. Operations are managed
by Mr Shiv Kumar Rathore and his brothers.
MEOML was incorporated in 2009 as a wholly owned subsidiary of
MEOIL, and is the marketing arm of the parent company.
MATESHWARI CONSTRUCTION: CRISIL Withdraws B+ Long Term Rating
-------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Mateshwari Construction
(Mateshwari) to 'CRISIL B+/Stable/CRISIL A4/Issuer Not
Cooperating'. CRISIL Ratings has withdrawn its rating on bank
facility of Mateshwari following a request from the company and on
receipt of a 'no dues certificate' from the banker. Consequently,
CRISIL Ratings is migrating the ratings on bank facilities of
Mateshwari to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL
B+/Stable/CRISIL A4/Issuer Not Cooperating. The rating action is in
line with CRISIL Ratings' policy on withdrawal of bank loan
ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Rating - CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable ISSUER NOT
COOPERATING; Rating Withdrawn)
Short Term Rating - CRISIL A4 (Migrated from
'CRISIL A4 ISSUER NOT
COOPERATING; Rating Withdrawn)
Established in 2007 as a partnership firm, Mateshwari undertakes
civil construction works, mainly construction of roads, bridges,
and earthwork for government departments. The firm is promoted by
Bihar-based Mr. Vikash Singh and Mr. Dilip Kumar Singh, who have
over a decade's experience in the construction business.
MOHANA COTTON: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Mohana Cotton Ginning Private Limited
D.No.3-153, Garpadu (Post) Vatticherukuru
(Mandal) Guntur Dist Krishna AP 522017 India
Insolvency Commencement Date: September 1, 2023
Estimated date of closure of
insolvency resolution process: February 28, 2024
Court: National Company Law Tribunal, Hyderabad Bench
Insolvency
Professional: CA Immaneni Chaitanya Kiran
#40-26-22, Opp Telephone Exchange, Mohiddin St,
Chandramoulipuram, Vijayawada,
Andhra Pradesh - 520010
Email: cirp.mohana2023@gmail.com
Last date for
submission of claims: September 19, 2023
MP AGRO: ICRA Lowers Rating on INR5cr LT Cash Loan to D
-------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of MP
Agro BRK Energy Foods Limited (MPBRK), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 4.00 [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;
Fund based Rating downgraded from
Cash Credit [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 2023. 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.
Incorporated in 2007, MPBRK is engaged in the processing of wheat
and other agro products at its manufacturing facility located in
Dewas (Madhya Pradesh) which has an installed production capacity
of 43,200 metric tons per annum. The company is managed by Mr.
Rahul Kumawat and his family. The operations of the company were
started in 1991 under a proprietorship concern and the entity was
initially engaged in trading and grading of food grains. The
manufacturing operations were set up in 2002. The company sells its
products under its own brand name - "Malwa Crown" and also supplies
to retail brands like "Pillsbury", and "More".
MRB PATIALA: CRISIL Moves D Debt Rating to Not Cooperating
----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of MRB
Patiala Storage Private Limited (MRBPSPL) to 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 30 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with MRBPSPL for
obtaining information through letter and email dated August 22,
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 MRBPSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
MRBPSPL is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of MRBPSPL to 'CRISIL D Issuer not cooperating'.
Incorporated in 2017, MRBPSPL has set up silos for storage of food
grains, and leased them to FCI. The silo, at Alipur village dist.
Patiala, has a storage capacity of 50,000 tonne per annum. Mr Pawan
Bansal, Ms Manisha Goyal, and Ms Ratan Bala are the promoters.
NATHJI COTTON: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Shree
Nathji Cotton & Oil Industries (SNCOI) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.66 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 3, 2022,
placed the rating(s) of SNCOI under the 'issuer non-cooperating'
category as SNCOI 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. SNCOI continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 19, 2023, June 29, 2023, July 9, 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).
Morbi-based (Gujarat) SNCOI is a partnership firm and was
established in July, 2015 by Mr Kamleshbhai Likhiya Mr Girishbhai
Likhiya and Mr Bharatbhai Charola. SNCOI is engaged into cotton
ginning, cleaning and bailing process. The firm procures raw cotton
from farmers and sells its products in domestic market to the
states like Maharshtra, Tamilnadu etc.
NEW PASHCHIM: CRISIL Withdraws B Rating on INR14cr Cash Credit
--------------------------------------------------------------
CRISIL Ratings has withdrawn its ratings on the bank facilities of
New Pashchim Maharashtra Patra Depot (NPMPD) on the request of the
company and receipt of a no objection certificate from its bank.
The rating action is in line with CRISIL Ratings' policy on
withdrawal of its ratings on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12.49 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
Cash Credit 14.00 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Withdrawn)
CRISIL Ratings has been consistently following up with NPMPD for
obtaining information through letters and email dated June 15,
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 NPMPD. This restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NPMPD
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the rating on bank facilities of
NPMPD continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Established in 1994, NPMPD is a proprietorship firm of Mr Prashant
Bedmutha. The firm primarily manufactures steel roofs at its plant
in Sangli, Maharashtra, which has a capacity of 2,500 tonnes per
month. These are marketed under its own brand, Duratuff. The firm
has recently diversified into mild steel and electric resistance
welded pipes the manufacturing plant for these is at Pune,
Maharashtra.
NOOR INDIA: CRISIL Lowers Rating on INR7cr Cash Loan to D
---------------------------------------------------------
CRISIL Ratings has downgraded the rating on the bank facilities of
Noor India Buildcon Private Limited (NIBPL) to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating' as there
have been delay in repayments of interest and debt obligations.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit/ 7 CRISIL D (ISSUER NOT
Overdraft facility COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING)
CRISIL Ratings has been consistently following up with NIBPL for
obtaining information through letters and emails dated August 24,
2022 and October 15, 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 NIBPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on NIBPL
is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, CRISIL Ratings has
downgraded the rating on the bank facilities of NIBPL to 'CRISIL D
Issuer Not Cooperating' from 'CRISIL B/Stable Issuer Not
Cooperating' as there have been delay in repayments of interest and
debt obligations.
NIBPL was incorporated in 2006, promoted by Mr Mohamadali Saiyed
and his family members. The company undertakes civil construction
work (mainly buildings) in Gujarat. The company specialises in
setting up paper mills. It is undertaking a residential real estate
project in Vapi, Gujarat.
PANKAJ STEEL: CARE Keeps C/A4 Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Pankaj
Steel Corporation (PSC) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 8.00 CARE C; Stable/CARE A4;
Short Term ISSUER NOT COOPERATING;
Bank Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 9,
2022, placed the rating(s) of PSC under the 'issuer
non-cooperating' category as PSC 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. PSC
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated July 26, 2023, August 5, 2023, August 15, 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).
Pankaj Steel Corporation (PSC) was established in the year 1978 as
proprietorship entity by Mrs. Usha Agarwal. The entity is into
trading of iron and steel, mainly of alloy steel having application
in heavy engineering. It also does processing jobs like heat
treatment, bending, etc. or gets it done on job work basis as per
customer requirements. The entity is also involved in
demolition activities of PSU discarded assets, prior it was into
ship breaking.
PUSH ENGINEERING: CRISIL Assigns B+ Rating to INR16cr Term Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
bank facilities of Push Engineering Private Limited (PEPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (Assigned)
Term Loan 16 CRISIL B+/Stable (Assigned)
The rating reflects PEPL's modest scale of operations, and
susceptibility to volatility in commodity prices. These weaknesses
are partially offset by its extensive industry experience of the
promoters, and sustainability and moderate financial profile.
Key rating drivers & detailed description
Weaknesses:
* Modest scale of operations: PEPL's operating income has been
modest in the range INR18-22 crore in past three fiscals ended
March 31, 2022. In fiscal 2023 it posted a revenue of INR14 crore,
its operations were impacted due to management being tied up in
process construction and shifting of plant to new location. Due to
the same it posted negative PAT in the fiscal 2023. In Q1FY24,
revenue is estimated to be ~Rs 4 crore. Sustained improvement in
scale with healthy profitability remains monitorable.
* Susceptibility of the operating margin to volatility in commodity
prices: Operating margins are exposed to volatility in raw material
prices, moreover raw material cost accounts for 60-65% of the
operating revenue. Any major adverse movement in the price of raw
materials can negatively impact the company's margins. However, the
company's raw material (mainly steel) purchases are order-backed
which mitigates the raw material risk to some extent. Short tenor
of contracts further mitigates the risk.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an experience of over around three decades in Engineering &
Capital Goods industry. This has given them an understanding of the
dynamics of the market and enabled them to establish relationships
with suppliers and customers.
* Moderate financial profile: PEPL's capital structure has been at
moderate healthy level with a networth of INR21 crore and due to
limited reliance on external funds it yields gearing of 1.07 and
total outside liabilities to adj tangible net worth (TOL/ANW) of
1.3 for year ending on 31st March 2023.
Liquidity: Stretched
Bank limit utilisation is low at around 46.4 percent for the past
twelve months ended May-23.
Cash accruals are expected to be over INR2.7-5 crore which are
insufficient against term debt obligation of INR3-3.6 crore over
the medium term. In addition, it will act as cushion to the
liquidity of the company.
Current ratio is low at 0.72 times on March 31, 2023.
Outlook: Stable
CRISIL Ratings believe PEPL will continue to benefit from the
extensive experience of its promoter, and established relationships
with clients.
Rating Sensitivity factors
Upward factors:
* Sustained improvement in scale and margin, leading to higher cash
accruals of over INR5.5 crore.
* Improvement in working capital cycle.
Downward factors:
* Decline in scale of operations leading to fall in revenue and/or
profitability margin below, hence leading to net cash accrual lower
than INR2 crore.
* Large debt-funded capital expenditure any substantial increase in
its working capital requirements thus weakening its liquidity &
financial profile.
PEPL was established as a partnership firm 'PEPL' in 1997 by Mr.
Bhagwat Chaudhari, the partnership firm was taken over in 2009 by a
company viz EU Industrial Equipment Private Limited (EUIPL), formed
by Mr B. Chaudhari in 1999. EUIPL later changed its name to PEPL.
PEPL is in the business of manufacturing various refrigeration
equipment like flake ice makers/plant, tube ice makers/plant,
chilled water plants, automatic ice handling systems, pneumatic
conveying systems, low-pressure vessels, etc. Further in year 2023,
it started manufacturing drip irrigation equipment i.e., dripper
and pipe (12 mm, 16 mm, and 20 mm). PEPL is owned & managed by Mr
B. Chaudhari and Mrs Usha Chaudhari.
RELIANCE CAPITAL: NCLT to Hear Hinduja's Plan Approval on Sept. 26
------------------------------------------------------------------
The Economic Times reports that the National Company Law Tribunal
(NCLT) will hear on September 26 the resolution plan for
debt-ridden Reliance Capital submitted by Hinduja Group firm
Indusind International Holdings Ltd (IIHL) as Torrent Investments'
plea to keep the decision in abeyance has been rejected. The Mumbai
bench of the insolvency tribunal has rejected the Torrent's plea to
keep the application for approving IIHL's resolution plan in
abeyance till a final order is passed by the Supreme Court in the
matter.
According to ET, the matter was listed for hearing on Sept. 19
before the insolvency tribunal, however, it has now been adjourned
to Sept. 26.
ET relates that the NCLT said the Supreme Court on the plea filed
by Torrent has 'abundantly' made it clear that it would be kept in
abeyance until the parties have had an opportunity to obtain
circulation and interim orders of stay in the proceedings.
However, so far "Supreme Court did not stay the proceedings before
us," said a two-member NCLT bench on September 1, 2023.
Besides, it was also submitted that the pendency of the plan is
resulting in a loss amounting to INR42 crore weekly to lenders of
Reliance Capital.
"Considering, the aforesaid backdrop of facts and circumstances, it
is appropriate that the resolution plan application be heard," NCLT
had said while rejecting the Torrent Investments' plea.
The tribunal also said that the apex court had on March 20, 2023,
reserved the rights of the parties to participate in the Swiss
challenge process, ET relays.
"However, it is an undisputed fact that the Applicant (Torrent) has
not participated in the extended challenge mechanism nor has the
Applicant submitted the Resolution Plan," it said.
Earlier, the National Company Law Appellate Tribunal (NCLAT) had on
March 2 allowed the plea of lenders of Reliance Capital to hold an
extended challenge mechanism or second round of auction for the
sale of the debt-ridden financial services company, ET recalls.
It had said lenders of Anil Ambani-promoted Reliance Capital had
the power to negotiate and call for a higher bid. It overturned an
order of the Mumbai bench of National Company Law Tribunal (NCLT)
which had declared the extended challenge round illegal.
NCLAT ruled that the Committee of Creditors (CoC) can renegotiate
the bid amount or call for another round of auction in its
"commercial wisdom".
This order of NCLAT was challenged by Torrent before the Supreme
Court, ET notes.
About Reliance Capital
Headquartered in Mumbai, India, Reliance Capital Limited --
https://www.reliancecapital.co.in/ -- a non-banking financial
company, primarily engages in lending and investing activities in
India, Singapore, and Mauritius. The company operates through
Finance & Investment, General Insurance, Life Insurance, Commercial
Finance, Home Finance, and Others segments. It offers life, health,
and general insurance products; brokerage and distribution
services, including stock broking, wealth management, and third
party distribution; and commercial and home finance services, such
SME, retail, microfinance, renewable, affordable housing, and home
loans, as well as loans against property and construction finance.
The company also provides asset reconstruction, institutional
broking, and proprietary investments services, as well as other
financial and allied services. The company was formerly known as
Reliance Capital & Finance Trust Limited and changed its name to
Reliance Capital Limited in January 1995.
On Nov. 29, 2021, the Reserve Bank of India superseded Reliance
Capital's board following payment defaults and governance issues,
and appointed Nageswara Rao Y as the administrator for the
bankruptcy process, Financial Express said. The regulator also
filed an application for initiation of Corporate Insolvency
Resolution Process (CIRP) against the company before the National
Company Law Tribunal's (NCLT) Mumbai bench.
In an order dated Dec. 6, 2021 of the National Company Law
Tribunal, Mumbai (NCLT), corporate insolvency resolution process
has been initiated against Reliance Capital as per the provisions
of the Insolvency and Bankruptcy Code (IBC), 2016.
Reliance Capital owes its creditors over INR19,805 crore, majority
of the amount through bonds under the trustee Vistra ITCL India,
The Economic Times of India said.
In February 2022, RBI appointed administrator invited EoIs for sale
of Reliance Capital assets and subsidiaries.
RITIKA SYSTEMS: CRISIL Cuts Rating on INR6.5cr Cash Loan to B+
--------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities of
Ritika Systems Private Limited (RSPL) to 'CRISIL B+/Stable/CRISIL
A4' from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 10 CRISIL A4 (Downgraded from
'CRISIL A4+')
Cash Credit 6.5 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The ratings downgrade reflects modest debt protection metrics of
the company resulting from constrained operating margin of 1.8% in
fiscal 2023. Interest coverage ratio was 0.8 time and negative 1.42
times in fiscals 2023 and 2022, respectively. The debt protection
metrics are likely to remain constrained going forward.
Furthermore, the company's liquidity profile is poor with high bank
limit utilisation of 99.7% on average in the 12 months through
April 2023.
The ratings reflect RSPL's presence in a highly fragmented
industry, susceptibility to tender-based nature of operations and
below-average debt protection metrics. These weaknesses are
partially offset by the extensive industry experience of RSPL's
promoters and the company's moderate capital structure.
Analytical Approach
Unsecured loans of INR6.4 crore from the promoters, as on March 31,
2023, have been treated as 75% equity and 25% debt as the loans are
likely to stay in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses:
* Presence in a highly fragmented industry: The industry is highly
fragmented and competitive, which limits the pricing flexibility
and bargaining power of the players. Fragmentation and competition
in the solar power and engineering, procurement and construction
(EPC) segments prevents any pass-through mechanism, leading to
volatile operating margin. The operating margin was 1.8% in fiscal
2023 compared to negative 3.5% in fiscal 2022.
* Below-average debt protection metrics: The company's debt
protection metrics are impacted by constrained operating margin.
Interest coverage and net cash accrual to total debt ratios were
0.81 time and 0.09 time, respectively, in fiscal 2023. The debt
protection metrics are expected to remain below average over the
medium term.
* Modest scale of operations amidst susceptibility to tender-based
operations: Subdued scale is reflected in revenue of INR48.5 crore
estimated for fiscal 2023. Although revenue improved in fiscal
2023, operating performance is entirely dependent on the ability to
win tenders. Also, entities in this segment face intense
competition which restricts the operating margin to a moderate
level.
Strengths:
* Extensive industry experience of the promoters: The promoters
have many decades of experience in the solar industry. This has
given them a strong understanding of the market dynamics and
enabled them to establish healthy relationships with suppliers and
customers. RSPL's turnover increased to INR48.5 crore in fiscal
2023 from INR36.6 crore in fiscal 2022.
* Moderate capital structure: The company's capital structure is
supported by gearing and total outside liabilities to tangible
networth ratio of 1.06 times and 2.32 times, respectively, as on
March 31, 2023. CRISIL Ratings believes the capital structure will
remain moderate, over the medium term, in the absence of any major
debt-funded capital expenditure (capex).
Liquidity: Poor
Bank limit utilisation was high at 99.7% on average for the 12
months through April 2023. Cash accrual is likely to be
insufficient against term debt obligation over the medium term.
Current ratio was healthy at 1.42 times as on March 31, 2023. The
promoters are likely to extend support in the form of unsecured
loans to meet the working capital requirement and debt obligation,
if required.
Outlook: Stable
CRISIL Ratings believes RSPL will continue to benefit from the
extensive experience of its promoters and established relationships
with clients.
Rating Sensitivity Factors
Upward factors
* Reduction in bank limit utilisation to below 90%
* Improvement in the financial risk profile with increase in
interest coverage ratio
Downward factors
* Decline in scale of operations or operating margin, leading to
cash accrual below INR0.5 crore
* Large debt-funded capex impacting the financial risk profile or
liquidity
Incorporated in 1985, RSPL undertakes designing, manufacturing,
installation and maintenance of solar photovoltaic systems. The
company is promoted by the Wadhwa family and has manufacturing
facilities in Noida, Uttar Pradesh, and Neemrana, Rajasthan.
SHARDABHUMI TEXTILES: CRISIL Moves B+ Rating from Not Cooperating
-----------------------------------------------------------------
Due to non-receipt of No Default Statements (NDS) for three
consecutive months, CRISIL Ratings, in line with SEBI guidelines,
had migrated the ratings for bank loan facilities of Shardabhumi
Textiles (ST) to 'CRISIL B+/Stable' Issuer Not Cooperating'.
However, the rated entity has now shared NDS with CRISIL Ratings.
Consequently, CRISIL Ratings is migrating the rating on bank
facilities of ST to 'CRISIL B+/Stable' from 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B+/Stable (Migrated
from CRISIL B+/Stable ISSUER
NOT COOPERATING)
Term Loan 4 CRISIL B+/Stable (Migrated
from CRISIL B+/Stable ISSUER
NOT COOPERATING)
The Rating Rationale dated April 13, 2023 is placed below with
necessary updates.
Analytical Approach
CRISIL Ratings has considered the standalone business and financial
risk profiles of ST.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: Although, revenue increased to
INR50.34 crore during fiscal 2022, from INR20.02 crore in fiscal
2021, continues to remain modest. Further, it remains subdued
because of intensely competitive textile industry. The modest scale
of operations will continue to limit operating flexibility.
* Highly leveraged capital structure: Financial risk profile
remains average marked by modest networth of INR3.83 crore as on
March 31, 2022. Gearing and total outside liabilities to tangible
networth ratios were high at 2.25 times and 5.99 times,
respectively, as on the same date.
* Working capital-intensive operations: The operations of the firm
were working capital intensive in nature as indicated by the Gross
Current Assets (GCA) of around 130 days during the period under
review. The firm generally maintains an inventory levels of around
60-70 days and provides a credit period of around 60-90 days to its
customer, given the business requirements.
Strengths:
* Extensive experience of the promoters: The decade-long experience
of the partners in the textile industry, their strong understanding
of market dynamics and established relationships with suppliers and
customers will continue to support the business risk profile.
* Above-average debt protection metrics: Debt protection metrics
have been moderate despite leverage due to healthy profitability.
Interest coverage and net cash accrual to total debt ratios stood
at 2.2 times and 0.19 time, respectively, for fiscal 2022. The
metrics are expected to remain steady over the medium term.
Liquidity: Stretched
Liquidity is marked by sufficient cash accrual and moderate bank
limit utilisation. Expected cash accrual of INR2.30-3 crore should
comfortably cover the term debt obligation of INR1.40-1.50 crore
over the medium term. Bank limit utilisation averaged around 84.36%
for the 12 months ended December 31, 2022. Current ratio was low at
0.86 time as on March 31, 2022.
Outlook: Stable
CRISIL Ratings believes ST will continue to benefit from the
extensive experience of its promoters in the textile industry.
Rating Sensitivity factors
Upward factors
* Growth in revenue by 25% and sustenance of operating margin,
leading to higher cash accrual
* Better working capital management, with GCAs improving to less
than 100 days
Downward factors
* Decline in revenue by 20% and operating margin below 4%,
resulting in lower cash accrual
* Any large debt-funded capital expenditure weakening the capital
structure
* Substantial increase in working capital requirement exerting
pressure on financial risk profile and liquidity
ST was set up in 2014 as a partnership firm by the promoters, Mr
Mayank Patel and Ms Bhumika Patel. The firm is engaged in weaving,
dyeing and processing of fabrics at its facility in Gujarat.
SHARMA CARS: ICRA Reaffirms B+ Rating on INR19.20cr Dropline Debt
-----------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Sharma
Cars Private Limited (SCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Dropline overdraft 19.20 [ICRA]B+(Stable); reaffirmed
Unallocated limits 16.49 [ICRA]B+(Stable)/[ICRA]A4;
Reaffirmed
Rationale
The ratings reaffirmation takes into consideration SCP
long-standing relationship with its principal, Hyundai Motors India
Limited (HMIL), of being an authorised signature dealer for its
passenger vehicle (PV) segment in Gujarat. The ratings also factor
in the extensive experience of its promoters in the auto dealership
business, its presence through multiple showrooms and aligned
servicing facilities in Ahmedabad.
The ratings, however, remain constrained by the company's modest
financial risk profile, evident from its leveraged capital
structure and stressed debt coverage indicators because of low
profitability and high level of borrowings. The ratings also factor
in SCPL's stretched liquidity on account of the working
capital-intensive nature of the business and high debt repayments
in the near to medium term. The ratings continue to consider the
intense competition faced by SCPL from other dealerships in its
operating region and the susceptibility of the company's operations
to any slowdown in the automobile industry.
The Stable outlook on the [ICRA]B+ rating reflects ICRA's opinion
that SCPL will continue to benefit from the established
relationship with HMIL, and the extensive experience of its
promoters in the auto dealership business.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters in auto dealership business:
SCPL's promoters have more than two decades of experience in the
automobile dealership business. SCPL is one of the leading and
oldest dealers of HMIL in Ahmedabad, dealing in the entire range of
passenger vehicles. It operates three sales showrooms, including
one where service and spares facilities are given, one full-fledged
workshop and one stockyard.
* Established market position of principal HMIL in domestic PV
segment: HMIL is the second-largest player in the domestic market
and had around 15% share in the PV segment in FY2023. Hence, HMIL's
long-standing presence and its brand recall in the domestic auto
market benefits SCPL for pushing its sales.
Credit challenges
* Modest financial risk profile with leveraged capital structure
and coverage indicators: The company's capital structure continues
to be leveraged, reflected in its gearing of 6.5 times (basis
provisional numbers) as on March 31, 2023. Further, the debt
coverage indicators remained weak due to high finance costs and
thin margins, marked by interest coverage of 1.2 times, TD/OPBDITA
of 9.7 times and NCA/TD of 2% as on March 31, 2023. Additionally,
on account of high repayments in the near or medium term, the DSCR
remained below 1 times, with repayments being supported by its free
cash balances and working capital limits other than the receivables
from commission income.
* Inherently thin margins to auto dealership business: The margins
of the company remained low, inherent in the auto dealership
business. SCPL's operating margin was 3.4% and the net margin was
0.3% in FY2023.
* Intense competition among dealers of HMIL and other OEMs: SCPL is
one among six HMIL dealers in Ahmedabad. Besides this, it faces
stiff competition from dealers of other OEMs. The company's
operations are also susceptible to any prolonged slowdown in the
automobile industry.
Liquidity position: Stretched
SCPL's liquidity position is expected to remain stretched, with
high debt repayment obligations and working capital-intensive
operations due to high inventory holding.
Rating sensitivities
Positive factors – ICRA could upgrade SCPL's ratings, if there is
any substantial growth in its revenue and profitability, which
leads to notable improvement in cash accruals and debt protection
metrics. Additionally, an improvement in the working capital cycle
that supports the overall liquidity will be a positive trigger.
Negative factors – Pressure on the company's ratings could arise,
if revenue or profitability declines substantially, leading to
material decline in cash accruals. Moreover, any
higher-than-expected debt-funded capex or stretch in the working
capital cycle that leads to deterioration in the capital structure
and liquidity could trigger a downgrade.
SCPL, incorporated in 1998, is the automobile dealer of Hyundai
Motors India Limited's (HMIL) passenger vehicles. The company is
promoted by Mr. Narendra Sharma, Mr. Surendra Sharma and Mr.
Subashchandra Sharma, who have around two decades of experience in
the automobile dealership business. SCPL is present in Ahmedabad
(Gujarat) through three sales showrooms, including one which
provides service and spares facilities, one workshop and one
stockyard.
SIS MOHAN: Insolvency Resolution Process Case Summary
-----------------------------------------------------
Debtor: Sis Mohan Real Estate Private Limited
Vill Chackraju Mollapo Pailan PS
Bishnupur Dist 24 Pgs(S)
Kolkata Parganas South WB 700104
Insolvency Commencement Date: August 31, 2023
Estimated date of closure of
insolvency resolution process: February 27, 2024 (180 Days)
Court: National Company Law Tribunal, Kolkata Bench
Insolvency
Professional: Mr. Abhisekh Khemka
33/2, 1st Floor, Bangur Avenue, Block-D,
Opposite Super Market Lane
Kolkata - 7000055
67/24 Stand Road, Cross Road No. 14,
Kolkata 700006
Email: sismohan.rp@gmail.com
Last date for
submission of claims: September 14, 2023
SIX SIGMA: CARE Lowers Rating on INR12.21cr LT Loan to D
--------------------------------------------------------
CARE Ratings has revised the ratings on certain bank facilities of
Six Sigma Readymix Concrete Private Limited (SSRC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.21 CARE D; Revised from
Facilities CARE B+; Stable
Rationale and key rating drivers
The revision in the rating assigned to the bank facilities of SRC
factors in delays in servicing debt obligations due to stressed
liquidity position. The rating continues to be constrained by short
track record and small scale of operations, leveraged capital
structure and weak debt coverage indicators, highly fragmented and
competitive industry and vulnerability of profits to volatility in
input costs.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Improvement in liquidity position with satisfactory track record
of timely servicing of debt obligations.
Analytical approach: Standalone
Detailed description of the key rating drivers:
Key weaknesses
* On-going delays in debt servicing: The company is unable to
generate sufficient cash flows with elongated collection leading to
stretched liquidity position resulting in on-going delays in
meeting its term loan debt obligations.
* Short track record and small scale of operations: The company was
incorporated on March 14, 2016 and started operations in April
2016. The scale of operations of the company remained small marked
by a total operating income (TOI) of INR13.37 crore in FY23 (PY:
INR33.26 crore).
* Leveraged capital structure and weak debt coverage indicators:
Capital structure of SSRC continues to be leveraged. The overall
gearing stood moderate at 4.34x as on March 31, 2023 (PY: 3.90x)
due to high working capital utilizations coupled with low net worth
base of INR4.12 crore as on March 31, 2023. The debt protection
metrics marked by Total debt/GCA continued to be weak at 15.16x as
on March 31, 2023.
* Highly fragmented and competitive business segment due to
presence of numerous players and association of profits to the real
estate industry: The company is engaged into a fragmented business
segment and competitive industry. The market consists of several
small to medium-sized firms that compete with each other along with
several large enterprises. There are several small sized companies
in and around Chennai, Coimbatore and areas in Karnataka, which
compete with SSRC. The end product of SSRC finds its application in
the construction industry. And hence the business risk profile of
SSRC is directly linked to that of the construction and real estate
sector.
* Vulnerability of profits to volatility in input costs: The major
cost drivers for SSRC are power costs and fuel costs for freight
and raw materials viz cement, blue metals which accounted for
nearly 61% of the total cost of sales during FY23 (77% in FY21 &
76% in FY20). Fuel costs also remain highly volatile due to impact
of international crude oil prices. The PBILDT margin of the company
has been volatile in the range of 13.0% to 19.0% over the past
three years ended FY23.
Liquidity: Poor
Liquidity is poor marked by ongoing delays and lower accruals to
tune of INR1.18 crore in FY23 to repay its term debt obligation of
INR1.48 crore in FY23 with modest cash balance of INR0.42 crore as
of March 31, 2023.
Six Sigma Readymix Concreate (SSRC) was incorporated on March 14,
2016 as a Private Limited company and promoted by Mr.C. Sekhara
Srinivasan, Mr. P. Nagendran Rajkumar along with other promoters.
The Company is engaged into manufacturing of Ready-Mix Concrete
(RMC) and trading of cement. The company has five plants located in
Coimbatore, Chennai, Trichy, Kaaramadai and Gobichettipalayam.
SREEKANTH PIPES: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Sreekanth
Pipes Private Limited (SPPL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 2.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 8.00 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 4, 2022,
placed the rating(s) of SPPL under the 'issuer non-cooperating'
category as SPPL 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. SPPL 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).
Sreekanth Pipes Private Limited (SPPL), incorporated in 2002, is
part of Nandyal (Andhra Pradesh) based Nandi Group of companies.
Promoted by Mr. Sajjala Sreedhar Reddy, SPPL is engaged in the
business of manufacturing of rigid Polyvinyl Chloride (PVC) pipes
and fittings at its facility located at Medak District, Telangana.
The products are widely used in irrigation, telecommunication,
potable water supplies, electrical industry, construction industry,
sewerage, and drainage etc.
STERLING OIL: CARE Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Sterling
Oil Resources Limited (SORL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 299.72 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 7, 2022,
placed the rating(s) of SORL under the 'issuer non-cooperating'
category as SORL 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. SORL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
May 23, 2023, June 2, 2023, June 12, 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).
Sterling Oil Resources Limited (SORL), incorporated in March 2007,
a Sandesara Group company, was incorporated in India for
undertaking oil exploration and production activities in oil
prolific areas across the globe. SORL through its 100% subsidiaries
in Mauritius and British Virgin Island (BVI) holds 90% stake in
Sterling Oil Exploration & Energy Production Company Limited
(SEEPCO, the operator of the oil block), a company incorporated in
Nigeria to acquire and operate Oil Exploration and Production
businesses in Nigeria.
SWASTI TRADERS: CRISIL Assigns D Rating to INR15cr Loans
--------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D/CRISIL D' ratings to the
bank facilities of Swasti Traders.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 13 CRISIL D (Assigned)
Cash Credit 5 CRISIL D (Assigned)
The rating reflects delay of more than 30-40 days by the firm in
servicing its bill discounting obligation.
The ratings reflect the modest financial risk profile and stretched
working capital cycle, low profitability of Swasti Traders. These
weaknesses are partially offset by the extensive experience of the
promoter in the trading business.
Analytical Approach
CRISIL Ratings has considered the standalone business and financial
risk profiles of Swasti Traders.
Key Rating Drivers & Detailed Description
Weakness:
* Stretched working capital cycle: Gross current assets (GCAs) have
been 185 days in fiscal ended March 31, 2022, because of the need
to extend long credit to customers, as per industry standards.
* Low profitability: Intense competition and low value addition in
the trading business constrain scalability, pricing power and
profitability. The operating margin of the firm was 2.64% in fiscal
2022 and is likely to remain subdued over the medium term.
Strengths:
* Extensive experience of the promoter: Experience of around a
decade in the ceramic industry has given the promoter an
understanding of market dynamics and helped establish strong
relationships with suppliers and customers.
Liquidity: Poor
Cash accrual was INR0.03 crore in fiscal 2022 against no debt
obligation. Bank limit utilization was high at 99% on average for
the 12 months through March 2023. Current ratio was low at 1.00
time as on March 31, 2022.
Rating Sensitivity Factors
Upward factors:
* Timely servicing of debt obligations continuously for at least 90
days.
* Substantial improvement in the financial risk profile, especially
debt protection metrics
Swasti Traders trades in tiles such as glazed and polished
vitrified tiles. The firm started operations on April 1, 2021, and
it is owned and managed by Ashvinbhai S Patel from Sabarkanta,
Gujarat.
SWASTIK ENTERPRISES: CARE Keeps B- Debt Rating in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Swastik
Enterprises (M.P.) (SE) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.95 CARE B-; 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 July 29, 2022,
placed the rating(s) of SE under the 'issuer non-cooperating'
category as SE 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. SE continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
June 14, 2023, June 24, 2023, July 4, 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).
Indore (Madhya Pradesh) based Swastik Enterprises (SE) was formed
in 2002 as a proprietorship concern by Mr. Manohar Jindal. The firm
is engaged in the business of trading and export of agro
commodities viz. soya floor, soybean seeds, masoor dal, wheat,
rice, maize etc.
SWASTIK LUMBERS: CRISIL Moves B+ Ratings from Not Cooperating
-------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Swastik Lumbers Private
Limited (SLPL) to 'CRISIL B+/Stable 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 SLPL from 'CRISIL B+/Stable Issuer Not
Cooperating' to 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
Foreign Letter 10 CRISIL B+/Stable (Migrated
of Credit from 'CRISIL B+/Stable ISSUER
NOT COOPERATING')
The rating continues to reflect the modest scale of operations and
susceptibility to changes in government policies on forest
products, large working capital requirement. These weaknesses are
partially offset by the extensive experience of the promoters in
the forest products industry and the favourable location of the
manufacturing plant.
Analytical Approach
Unsecured Loans of INR3.27 crore as on 31st March 2023 to remain
over the medium term and the same has been treated as debt as these
are need based funds.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations and susceptibility to changes in
government policies: Revenue has grown from INR20.05 crore in
fiscal 2022 to INR33.54 crore in fiscals 2023. Intense competition
restricts the operating margin of players in the forest products
business. Furthermore, commercial use of these products depends on
government norms and regulations, which are susceptible to change
as a result of initiatives for conservation of forests.
* Large working capital requirement: Gross current assets were high
at 235 days as on March 31, 2023, driven by large receivables of
104 days and low inventory of 26 days. However, a part of the
working capital requirement is met through credit of 84 days
extended by the suppliers
Strengths:
* Extensive experience of the partners: The three-decade-long
experience of the promoters in the forest products industry, their
strong understanding of local market dynamics, and established
relationships with suppliers and customers, will continue to
support the business risk profile of SLPL.
* Favorable location of plant: The manufacturing plant is located
in the Special Imported Timber Conversion Zone (SITCZ) in
Gandhidham, Gujarat, and thus, has easy access to all facilities
provided by the government in the area.
Liquidity: Stretched
Bank limit utilisation is low at around 9.95 percent for the past
thirteen months ended July 2023. Cash accrual are expected to be
over INR38 lakhs which are sufficient against term debt obligation
of INR0 over the medium term. In addition, it will be act as
cushion to the liquidity of the company.
Current ratio are healthy at 1.83 times on March 31, 2023. Moderate
cash and bank balance of around INR5.38 crores as on March 31,
2023. Low gearing and moderate net worth support its financial
flexibility and provides the financial cushion available in case of
any adverse conditions or downturn in the business
Outlook: Stable
CRISIL Ratings believes SLPL will continue to benefit from the
extensive experience of its promoters in the forest products
business.
Rating Sensitivity Factors
Upward factors
* Significant growth in revenue and steady operating margin of over
3%.
* Controlled working capital management reducing reliance on bank
debt.
Downward factors
* Weakening of total outside liabilities to adjusted networth ratio
of 3.50-4 times.
* Stretch in the working capital cycle.
SLPL was incorporated in 2007, by the promoters, Mr Ravinder Jain
and Mr Suresh Kumar. The company is an importer, trader and
processor of timber. It has a saw mill at Gandhidham, Gujarat, for
processing imported logs.
=====================
N E W Z E A L A N D
=====================
APIFORCE LIMITED: Court to Hear Wind-Up Petition on Sept. 29
------------------------------------------------------------
A petition to wind up the operations of Apiforce Limited will be
heard before the High Court at Auckland on Sept. 29, 2023, at 10:00
a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Aug. 14, 2023.
The Petitioner's solicitor is:
Cloete Van Der Merwe
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
DRAINENG NZ: Court to Hear Wind-Up Petition on Sept. 28
-------------------------------------------------------
A petition to wind up the operations of Draineng NZ Limited will be
heard before the High Court at Christchurch on Sept. 28, 2023, at
10:00 a.m.
Harrison Bloy Plumbing & Bathrooms Limited filed the petition
against the company on Aug. 17, 2023.
The Petitioner's solicitor is:
c/- Evolution Lawyers
Suite 8, Floor 1
72 Dominion Road
Mount Eden
Auckland 1024
OSA LIMITED: Creditors' Proofs of Debt Due on Oct. 8
----------------------------------------------------
Creditors of OSA Limited are required to file their proofs of debt
by Oct. 8, 2023, to be included in the company's dividend
distribution.
The High Court at Auckland appointed Janet Sprosen and Leon Francis
Bowker of KPMG as liquidators on Sept. 8, 2023.
PGA INSTALLATION: Waterstone Insolvency Appointed as Receiver
-------------------------------------------------------------
Damien Grant and Adam Botterill of Waterstone Insolvency on Sept.
12, 2023, were appointed as receivers and managers of Janice Lorca
Ponce, Joselito Ponce and PGA Installation Limited.
The receivers and managers may be reached at:
Waterstone Insolvency
PO Box 352
Auckland 1140
UROMARAKI LIMITED: Creditors' Proofs of Debt Due on Oct. 12
-----------------------------------------------------------
Creditors of Uromaraki Limited are required to file their proofs of
debt by Oct. 12, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Sept. 11, 2023.
The company's liquidators are:
Adam Botterill
Damien Grant
Waterstone Insolvency
PO Box 352
Auckland 1140
=================
S I N G A P O R E
=================
ARCHWEY HOUSE: Commences Wind-Up Proceedings
--------------------------------------------
Members of Archwey House Of Brands Pte Ltd, on Sept. 6, 2023,
passed a resolution to voluntarily wind up the company's
operations.
The company's liquidator is:
Mr. Chan Yee Hong
CLA Global TS Risk Advisory
80 Robinson Road, #25-00
Singapore 068898
BLOCKFI INC: Federal Counsel Wants Alleged Scammers' Full Deposits
------------------------------------------------------------------
Rick Archer of Law360 reports that counsel for the federal
government told a New Jersey bankruptcy judge federal prosecutors
should be allowed to seize the full amount a pair of alleged
scammers deposited with BlockFi, even if other depositors will be
receiving less in the crypto platform's Chapter 11 case.
About BlockFi Inc.
BlockFi is building a bridge between digital assets and traditional
financial and wealth management products to advance the overall
digital asset ecosystem for individual and institutional
investors.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in
its early days had backing from influential Wall Street investors
like Mike Novogratz and, later on, Valar Ventures, a Peter
Thiel-backed venture fund as well as Winklevoss Capital, among
others. BlockFi made waves in 2019 when it began providing
interest-bearing accounts with returns paid in Bitcoin and Ether,
with its program attracting millions of dollars in deposits right
away.
BlockFi grew during the pandemic years and had offices in New York,
New Jersey, Singapore, Poland and Argentina.
BlockFi worked with FTX US after it took an $80 million hit from
the bad debt of crypto hedge fund Three Arrows Capital, which
imploded after the TerraUSD stablecoin wipeout in May 2022.
BlockFi had significant exposure to the companies founded by former
FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a
$400 million credit line from FTX US in an agreement that also gave
FTX the option to acquire BlockFi through a bailout orchestrated by
Bankman-Fried over the summer. BlockFi also had collateralized
loans to Alameda Research, the trading firm co-founded by
Bankman-Fried.
BlockFi is the latest crypto firm to seek bankruptcy amid a
prolonged slump in digital asset prices. Lenders Celsius Network
LLC and Voyager Digital Holdings Inc. also filed for court
protection this year. Kirkland & Ellis is also advising Celsius
and Voyager in their separate Chapter 11 cases.
BlockFi Inc. and eight affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on
Nov. 28, 2022. In the petitions signed by their chief executive
officer, Zachary Prince, the Debtors reported $1 billion to $10
billion in both assets and liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as
general bankruptcy counsels; Walkers (Bermuda) Limited as special
Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley
Research Group, LLC as financial advisor; Moelis & Company as
investment banker; and Street Advisory Group, LLC, as strategic and
communications advisor. Kroll Restructuring Administration, LLC,
is the notice and claims agent.
CH INVESTMENT: Court to Hear Wind-Up Petition on Sept. 29
---------------------------------------------------------
A petition to wind up the operations of CH Investment & Trading Pte
Ltd will be heard before the High Court of Singapore on Sept. 29,
2023, at 10:00 a.m.
Soh Lay Cheng and Yee Khee Tong filed the petition against the
company on Sept. 6, 2023.
The Petitioner's solicitors are:
HOH Law Corporation
712A Ang Mo Kio
Avenue 6 #03-4058
Singapore 561712
DOUBLE-TRANS PTE: Court Enters Wind-Up Order
--------------------------------------------
The High Court of Singapore entered an order on Sept. 8, 2023, to
wind up the operations of Double-Trans Pte. Ltd.
DBS Bank Ltd filed the petition against the company.
The company's liquidators are:
Mr. Lim Loo Khoon
Mr. Tan Wei Cheong
c/o Deloitte & Touche LLP
6 Shenton Way
#33-00 OUE Downtown Two
Singapore 068809
HSI DENTAL: Creditors' Meetings Set for September 29
----------------------------------------------------
HSI Dental Pte Ltd will hold a meeting for its creditors on Sept.
29, 2023, at 2:00 p.m., via electronic means.
Agenda of the meeting includes:
a. to receive a statement of the Company's affairs together
with a list of creditors and the estimated amounts of their
claims;
b. to appoint Cameron Lindsay Duncan and David Dong-Won
Kim of KordaMentha as Liquidators of the Company for the
purpose of such winding up and that their remuneration be
based on the normal scale rates and be paid out of the
Company assets;
c. to appoint a Committee of Inspection;
d. to resolve that the Liquidators be at liberty to open,
maintain and operate any bank account or an account for
monies received by them as Liquidators of the Company, with
such bank as the Liquidators deem fit;
e. to resolve that the Liquidators be authorised to exercise
any of the powers provided by Section 144(1)(b), (c), (d),
(e) and (f) of the Insolvency, Restructuring and Dissolution
Act 2018; and
f. Any other business.
MMTC TRANSNATIONAL: Court to Hear Wind-Up Petition on Sept. 29
--------------------------------------------------------------
A petition to wind up the operations of MMTC Transnational Pte Ltd
will be heard before the High Court of Singapore on Sept. 29, 2023,
at 10:00 a.m.
UCO Bank filed the petition against the company on Sept. 7, 2023.
The Petitioner's solicitors are:
Rajah & Tann Singapore LLP
9 Straits View
#06-07 Marina One West Tower
Singapore 018937
THREE ARROWS: Singapore Bank Bars Founders From Market Activity
---------------------------------------------------------------
Reuters reports that Singapore's central bank said on Sept. 14 it
has barred the founders of bankrupt cryptocurrency hedge fund Three
Arrows Capital (3AC) from market activity in the city-state for
nine years.
Three Arrows was the first major crypto firm to go bankrupt in
2022, brought down by the collapse of cryptocurrencies Luna and
TerraUSD in May. It filed for bankruptcy in the British Virgin
Islands in late June.
According to Reuters, the Monetary Authority of Singapore (MAS)
said in a statement it had issued orders, which, effective from
Sept. 13, prohibit 3AC founder Zhu Su and Kyle Livingston Davies
from performing any regulated activity and from managing any
capital market services firms in Singapore.
"Senior management of fund managers are required to implement
robust risk management measures to protect the interest of
investors," Reuters quotes Loo Siew Yee, MAS Assistant Managing
Director, as saying.
Zhu and Davies' whereabouts are unknown, Reuters notes.
About Three Arrows Capital
Three Arrows Capital Ltd. was an investment firm engaged in
short-term opportunities trading, and is heavily invested in
cryptocurrency, funded through borrowings. As of April 2022, the
Debtor was reported to have over $3 billion of assets under its
management.
Three Arrows Capital Ltd. was incorporated as a business company
under the laws of the British Virgin Islands. Its sole shareholder
owning all of its "management shares" is Three Arrows Capital Pte.
Ltd., which previously operated as a regulated fund manager in
Singapore until 2021, when it shifted its domicile to the BVI, as
part of a global corporate plan to relocate operations to Dubai.
The Debtor borrowed digital and fiat currency from multiple lenders
to fund its cryptocurrency investments. After cryptocurrency lost
99% of its value, and then prices of other cryptocurrencies had
rapid declines, the Debtor reportedly defaulted on its
obligations.
On June 24, 2022, one of the Debtor's many creditors -- DRB Panama
Inc. -- filed an application to appoint joint provisional
liquidators -- and thereafter, full Liquidators -- in the Eastern
Caribbean Supreme Court in the High Court of Justice (Commercial
Division) located in BVI. The application was assigned claim number
VIHCOM2022/0117.
Subsequently, on June 27, 2022, the Debtor filed its own
application for the appointment of joint liquidators before the BVI
Commercial Court.
On June 29, 2022, the Honorable Mr. Justice Jack of the BVI
Commercial Court appointed Russell Crumpler and Christopher Farmer
of Teneo (BVI) Limited as joint liquidators of Three Arrows Capital
Ltd.
=================
S R I L A N K A
=================
AMANA BANK: Fitch Keeps 'BB+(lka)' Bank on Watch Negative
---------------------------------------------------------
Fitch Ratings has maintained the Rating Watch Negative (RWN) on
Amana Bank PLC's National Long-Term Rating of 'BB+(lka)'.
KEY RATING DRIVERS
RWN Maintained: The RWN on Amana's National-Long Term Rating
reflects the potential for the bank's creditworthiness relative to
other entities on its Sri Lankan National Ratings scale to
deteriorate. This reflects heightened near-term downside risks to
Amana's credit profile from potential capital and funding stress
from the restructuring of the sovereign's debt obligations while
access to foreign-currency funding remains constrained.
The resolution of the RWN with an affirmation of the ratings could
result when there is further clarity around the sovereign debt
restructuring process, pointing to a reduction in stresses that
have affected the banking sector in the past several quarters.
Debt Restructuring Weighs on OE: Fitch believes risks to Sri Lankan
banks' operating environment (OE) remains high despite the
exclusion of the banks' holdings in Sri Lankan rupee-denominated
government securities from the sovereign domestic debt
restructuring. This is due to the banks' predominant exposure to
the very weak domestic economy and the debilitated sovereign credit
profile (Long-Term Issuer Default Rating (IDR): RD; Long-Term
Local-Currency IDR: C), which continue to hinder banks' operational
flexibility.
Risks to the banking sector persist from the impending
restructuring of the Sri Lankan sovereign's
foreign-currency-denominated debt although smaller and mid-sized
banks have limited exposure to these defaulted instruments.
OE Pressures Business Model: Persistent OE weaknesses continue to
limit Amana's ability to generate and defend business volume while
controlling risks. Amana's concentration of its business model on
the weak and unstable Sri Lankan economy makes its business profile
highly vulnerable to the intensifying risks in the domestic market,
similar to peers. This is evident in the decrease in the share of
net loans in total assets to 56% by end-1H23 (end-2021: 62%), while
liquidity preservation remains the key focus, with bank placements
and cash balances accounting for 31% of assets (end-2021:30%).
High Risk Profile: Amana's high-risk profile stems from its
exposure to the weak domestic OE and its still-sizeable exposure to
retail and SME segments, which are sensitive to economic cycles.
The bank, unlike peers, is not directly exposed to the state's
debilitated credit profile given its business model. Nevertheless,
Amana is still exposed to the spillover effects of a systemic event
given its substantial interbank transactions and exposure.
Asset Quality Under Pressure: Fitch expects Amana's asset-quality
metrics to remain under pressure from rising stage 3 loans amid a
challenging OE as well as the bank's exposure to customer segments
that are vulnerable to deteriorating economic conditions. Fitch
estimates the bank's stage 3 loan ratio rose to nearly 5% in 1H23
from 3.7% at end-2022, although still the lowest among Fitch-rated
Sri Lankan banks on a reported basis.
Profitability to Remain Subdued: Fitch expects Amana's medium-term
earnings and profitability to continue to face pressures due to
weakening asset quality, muted loan growth and the sharp downward
adjustment of interest rates. Amana's core profitability metric -
operating profit/risk-weighted assets improved to 2.5% in 1H23 from
1.8% in 2022, supported by wider net interest margins and
considerable gains from foreign-exchange trading (51% of operating
profit).
Planned Capital Infusion: Amana's regulatory common equity Tier 1
(CET1) ratio deteriorated to 12.5% by end-1H23 from 13.0% at
end-2022, but Fitch estimates the ratio would have been broadly
unchanged had 1H23 profit been included. Still, the bank's end-2022
CET1 ratio was one of the lowest among Sri Lanka's small and
mid-sized banks. However, the bank's planned rights issue to raise
LKR6.7 billion should help bolster its capital position, if
successfully executed, providing a buffer against low capital
ratios and rising risks to asset quality.
Funding and Liquidity Risks Persist: Fitch believes Amana's funding
and liquidity position is prone to sudden changes amid already-weak
creditor sentiment, similar to peers. Stress on foreign-currency
liquidity has somewhat eased, but the bank's ability to seek
foreign-currency wholesale funding remains constrained by the
sovereign's weak credit profile. The bank's local-currency funding
and liquidity position is also susceptible to any setbacks in the
domestic debt restructuring exercise.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Amana's National Rating is sensitive to a change in the bank's
creditworthiness relative to other Sri Lankan issuers.
The RWN reflects downside risks to the bank's rating from capital
and funding stresses, which could lead to a multiple-notch
downgrade. Fitch expects to resolve the RWN when the impact on the
issuer's credit profile becomes more apparent, which may take more
than six months. Developments that could lead to a multiple-notch
downgrade include:
- funding stress that impedes the bank's repayment ability;
- significant intervention in the banking sector by authorities
that constrains the bank's ability to service its obligations;
- a temporary negotiated waiver or standstill agreement following a
payment default on a large financial obligation;
- Fitch's belief that the bank has entered into a grace or cure
period following non-payment of a large financial obligation.
A deterioration in Amana's key credit metrics beyond its base-case
expectations relative to peers would also lead to increased
downward pressure on the bank's rating, which is driven by its
intrinsic financial strength.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
There is limited scope for upward rating action given the RWN.
Resolution of the Rating Watch with an affirmation could be driven
by its view that risks from funding and capital stresses have
abated, at both the individual bank and the sector level, to the
extent that Fitch believes the bank's ability to service its
obligations in local and foreign currency is not hindered and/or
banks are able to continue as a going-concern and avoid failure.
Entity/Debt Rating Prior
----------- ------ -----
Amana Bank
PLC Natl LT BB+(lka)Rating Watch Maintained BB+(lka)
HOUSING DEVELOPMENT: Fitch Keeps BB+(lka) Rating on Watch Neg.
--------------------------------------------------------------
Fitch Ratings has maintained the Rating Watch Negative (RWN) on
Housing Development Finance Corporation Bank of Sri Lanka's (HDFC)
National Long-Term Rating of 'BB+(lka)'. Fitch has also maintained
the bank's senior debt ratings of 'BB+(lka)' on RWN.
KEY RATING DRIVERS
RWN Maintained: The RWN on HDFC's National-Long Term Rating
reflects the potential for the bank's creditworthiness relative to
other entities on its Sri Lankan National Ratings scale to
deteriorate. This reflects heightened near-term downside risks to
HDFC's credit profile from potential capital and funding stress
from the restructuring of the sovereign's debt obligations.
The resolution of the RWN with an affirmation of the ratings could
result if there is further clarity around the sovereign debt
restructuring process pointing to a reduction in stresses that have
affected the banking sector in the past several quarters.
Debt Restructuring Weighs on OE: Fitch believes risks to Sri Lankan
banks' operating environment (OE) remain high despite the exclusion
of the banks' holdings in Sri Lankan rupee-denominated government
securities from the sovereign domestic debt restructuring. This is
due to the banks' extensive exposure to the very weak domestic
economy and the sovereign's weak credit profile (Long-Term
Foreign-Currency Issuer Default Rating (IDR): RD; Long-Term
Local-Currency IDR: C), which continue to hinder banks' operational
flexibility.
Risks to the banking sector persist from the impending
restructuring of the Sri Lankan sovereign's
foreign-currency-denominated debt, although smaller and mid-sized
banks have limited exposure to these defaulted instruments.
Weak OE Pressures Business Profile: HDFC's business profile,
similar to domestic peers, is highly vulnerable to the heightened
domestic market risks, which affects the bank's ability to generate
and defend business volume. Muted lending prospects saw the share
of net loans in total loans decreasing to 58% (end-2021: 66%) while
the bank profited from the high interest rate environment through
investment in high yielding treasury securities.
High Sovereign Risk: HDFC's risk profile remains constrained by its
exposure to the weak OE and sovereign credit profile via
investments in rupee-denominated government securities (over a
third of HDFC's assets at end-1H23). While the exclusion of
treasury bills and bonds from the domestic debt restructuring eases
risks to HDFC's risk profile, it remains vulnerable to the
sovereign's weak repayment capacity and liquidity position.
Asset Quality Risks Persist: Fitch expects HDFC's loan quality to
remain under pressure from the bank's exposure to more vulnerable
low-to-middle income earners amid a weakened OE, while its sizeable
exposure to sovereign securities raises asset quality risks. The
bank's impaired-loan ratio rose to 40% by end-2022 (end-2021: 34%)
but Fitch estimates the stage 3 loans ratio, excluding those backed
by provident fund balances, to be lower by at least 15pp.
Weak Profitability: The high interest rates that prevailed prior to
the sovereign's domestic debt restructuring announcement
significantly reduced HDFC's core profitability. The bank's
operating profit/risk-weighted asset ratio fell to just 0.3% in
1H23 from 2.5% at end-2022. Fitch expects the recent disposal of
treasury bonds to have generated significant profits for the bank,
but its underlying profitability remains very weak.
Capital Shortfalls Bridged: Fitch expects the bank to have met the
regulatory minimum capital requirement of LKR7.5 billion applicable
for licensed specialised banks after June 2023, through earnings
retention. The exclusion of bank holdings of rupee-denominated
treasury securities alleviates some stress on local banks' capital,
but Fitch believes significantly weak loan quality, high
concentration in housing finance and sovereign risk, and a small
capital base continue to weigh on HDFC's capitalisation.
Funding and Liquidity Risks Remain: Fitch believes HDFC's overall
funding and liquidity position is prone to sudden changes amid
already weak creditor sentiment, similar to its peers. This risk is
exacerbated by HDFC's high asset and liability mismatches,
reflecting its longer-tenor loan book and short-tenor deposit base.
The bank's local-currency funding and liquidity position is
currently manageable, but any setbacks to the domestic debt
restructuring exercise could weigh on this, similar to peers.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
HDFC's National Rating is sensitive to a change in the bank's
creditworthiness relative to other Sri Lankan issuers rated on the
same scale.
The RWN reflects downside risks to the bank's rating from capital
and funding stresses, which could lead to a multiple-notch
downgrade. Fitch expects to resolve the RWN when the impact on the
issuers' credit profiles becomes more apparent, which may take more
than six months. Developments that could lead to a multiple-notch
downgrade include:
- funding stress that impedes the bank's repayment ability;
- significant intervention in the banking sector by authorities
that constrains the bank's ability to service its obligations;
- a temporary negotiated waiver or standstill agreement following a
payment default on a large financial obligation;
- Fitch's belief that the bank has entered into a grace or cure
period following non-payment of a large financial obligation.
A deterioration in HDFC's key credit metrics beyond its base-case
expectations relative to peers would also lead to increased
downward pressure on the bank's rating, which is driven by its
intrinsic financial strength.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
There is limited scope for upward rating action given the RWN.
Resolution of the Rating Watch with an affirmation could be driven
by its view that risks from funding and capital stresses have
abated, at both the individual bank and the sector level, to the
extent that Fitch believes the bank's ability to service its
obligations in local and foreign currency is not hindered and/or
the bank is able to continue as a going concern and avoid failure.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
HDFC's outstanding senior unsecured debentures are rated at the
same level as its National Long-Term Rating in accordance with
Fitch's criteria. This is because these debentures rank equally
with the claims of the bank's other senior unsecured creditors. The
RWN on the senior unsecured debt rating stems from the RWN on the
National Long-Term Rating.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
The senior debt rating will move in tandem with the bank's National
Long-Term Rating.
Entity/Debt Rating Prior
----------- ------ -----
Housing
Development
Finance
Corporation
Bank of
Sri Lanka Natl LT BB+(lka)Rating Watch Maintained BB+(lka)
senior
unsecured Natl LT BB+(lka)Rating Watch Maintained BB+(lka)
SANASA DEVELOPMENT: Fitch Keeps 'BB+(lka)' Rating on Watch Neg.
---------------------------------------------------------------
Fitch Ratings has maintained the Rating Watch Negative (RWN) on
SANASA Development Bank PLC's (SDB) National Long-Term Rating of
'BB+(lka)'.
KEY RATING DRIVERS
RWN Maintained: The RWN on SDB's National-Long Term Rating reflects
the potential for the bank's creditworthiness relative to other
entities on its Sri Lankan National Ratings scale to deteriorate.
There are heightened near-term downside risks to SDB's credit
profile from potential capital and funding stress from the
restructuring of the sovereign's (Long-Term Foreign-Currency Issuer
Default Rating (IDR): RD; Long-Term Local-Currency IDR: C) debt
obligations while access to foreign-currency funding remains
constrained.
The resolution of the RWN with an affirmation of the ratings could
occur when there is further clarity around the sovereign debt
restructuring process pointing to a reduction in stresses that have
affected the banking sector in the past several quarters.
Debt Restructuring Weighs on OE: Fitch believes risks to Sri Lankan
banks' operating environment (OE) remain high despite the exclusion
of the banks' holdings in Sri Lankan rupee-denominated government
securities from the sovereign domestic debt restructuring. This is
due to the banks' predominant exposure to the very weak domestic
economy and debilitated sovereign's credit profile, which continues
to hinder banks' operational flexibility.
Risks to the banking sector persist from the impending
restructuring of the Sri Lankan sovereign's
foreign-currency-denominated debt, although smaller and mid-sized
banks have limited exposure to these defaulted instruments.
OE Weighs on Business Model: Prolonged OE weaknesses continue to
limit SDB's ability to generate and defend business volumes while
controlling risks, similar to peers. Fitch believes that SDB's
business profile, akin to most peers, is highly vulnerable to the
elevated risks in the domestic market because of the high
concentration on weak, unstable economic segments. This is evident
in the decrease in share of net loans in total assets to 66% by
end-1H23 (end-2021: 76%) and the increase in the securities
portfolio to 18% of assets (end-2021: 8%).
Risk Profile Remains High: SDB's elevated risk profile stems from
its exposure to high-risk customer segments, particularly consumer
and retail, which are highly vulnerable to the weakened domestic
OE. SDB has no exposure to defaulted foreign-currency-denominated
sovereign instruments. However, the bank holds considerable
investments in rupee-denominated treasury instruments - Fitch
estimates 16% of assets at end-1H23 (end-2022: 12%). This makes the
bank vulnerable to the sovereign's repayment capacity and liquidity
position.
Asset Quality Under Pressure: Fitch expects SDB's loan quality to
remain under stress from prolonged economic woes, which have
weakened borrowers' repayment capacity, similar to peers. Risks to
asset quality are exacerbated by the bank's large exposure to
customer segments that are susceptible to economic cycles. Fitch
estimates SDB's gross stage 3 ratio reached 11.1% by end-1H23, from
10.7% at end-2022, due mainly to loan book contraction, while the
stock of stage 3 loans remained broadly unchanged from 2022.
Profitability Challenges: Fitch expects SDB's medium-term earnings
and profitability to face pressures from weakening asset quality,
muted loan growth and the sharp downward adjustment of interest
rates. SDB's operating profit/risk-weighted assets ratio improved
to 1.2% in 1H23, from 0.5% at end-2022, on higher yields on loans
and securities investments, which outpaced high funding costs,
while lower credit costs also contributed to the ratio
improvement.
Rising Capital Pressures: The exclusion of bank holdings of
rupee-denominated treasury securities alleviates some stress on
banks' capital. Even so, Fitch believes capital encumbrance from
weakening loan quality as well as high product and sovereign risk
concentration weigh on SDB's capitalisation. SDB's reported
regulatory common equity Tier 1 (CET1) ratio of 12.9% at end-1H23
was one of the lowest among small and mid-sized peers. Fitch
estimates this ratio would have been higher by around 16bp had the
1H23 profit been included.
Funding and Liquidity Risks Remain: Fitch believes SDB's overall
funding and liquidity position is prone to sudden changes amid
already weak creditor sentiment, similar to peers. This risk is
exacerbated by its high reliance on term, wholesale borrowings,
including from foreign funding agencies, relative to peers. The
bank's local-currency funding and liquidity position is also
susceptible to any setbacks in the sovereign domestic debt
restructuring.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
SDB's National Rating is sensitive to a change in the bank's
creditworthiness relative to other Sri Lankan issuers.
The RWN reflects downside risks to the bank's rating from capital
and funding stresses, which could lead to a multiple-notch
downgrade. Fitch expects to resolve the RWN when the impact on the
issuers' credit profiles becomes more apparent, which may take more
than six months. Developments that could lead to a multiple-notch
downgrade include:
- funding stress that impedes the bank's repayment ability;
- significant intervention in the banking sector by authorities
that constrains the bank's ability to service its obligations;
- a temporary negotiated waiver or standstill agreement following a
payment default on a large financial obligation;
- Fitch's belief that the bank has entered into a grace or cure
period following non-payment of a large financial obligation.
A deterioration in SDB's key credit metrics beyond its base-case
expectations relative to peers would also lead to increased
downward pressure on the bank's rating, which is driven by its
intrinsic financial strength.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
There is limited scope for upward rating action because of the RWN.
Resolution of the Rating Watch with an affirmation could be driven
by its view that risks from funding and capital stresses have
abated, at both the individual bank and the sector level, to the
extent that Fitch believes the bank's ability to service its
obligations in local and foreign currency is not hindered and/or
banks are able to continue as a going concern and avoid failure.
Entity/Debt Rating Prior
----------- ------ -----
SANASA
Development
Bank PLC Natl LT BB+(lka)Rating Watch Maintained BB+(lka)
=============
V I E T N A M
=============
[*] Moody's Takes Rating Actions on 4 Vietnamese Banks
------------------------------------------------------
Moody's Investors Service, on Sept. 13, 2023, affirmed the ratings
and assessments of:
- Vietnam Intl Commercial Joint Stock Bank (VIB),
- Orient Commercial Joint Stock Bank (OCB),
- Tien Phong Commercial Joint Stock Bank (TPBank) and
- Southeast Asia Commercial Joint Stock Bank (SeABank).
Moody's has also affirmed the b1 Baseline Credit Assessments (BCA)
of SeABank, VIB, OCB and TPBank.
At the same time, Moody's has changed the rating outlooks of VIB,
OCB and TPBank to negative from stable. The rating outlook of
SeABank remains stable.
A list of the Affected Ratings is available at
https://urlcurt.com/u?l=QJCK7W
RATINGS RATIONALE
The rating actions reflect Moody's expectations that a moderation
in Vietnam's economic growth will negatively affect the banks. The
liquidity crunch in the country's real estate sector is hurting
asset quality of corporate oriented banks given their high exposure
to the sector, while defaults on mortgage loans by retail owners
has also led to a spike in new non-performing loans for retail
oriented banks. A decrease in lending rates and higher credit costs
will hurt banks' profitability.
VIB, OCB and TPBank:
The affirmation of the three banks' ratings and change in outlook
to negative reflect Moody's concern that a further deterioration in
asset quality will strain their capitalization and profitability.
As of the end of June 2023, VIB's, OCB's and TPBank's nonperforming
loan (NPL) ratios increased to 3.6%, 3.2% and 2.2%, from 2.5%, 2.2%
and 0.8%, respectively, as of the end of 2022, driven by
delinquencies from retail and small and medium enterprise
borrowers. OCB's and TPBank's high exposures to the real estate and
construction companies also pose asset quality risks given the
liquidity issues affecting borrowers in those sectors.
Moody's expects the capitalization of these banks to be strained
over the next 12 to 18 months due to weaker internal capital
generation. VIB's and TPBank's tangible common equity to adjusted
risk weighted assets (TCE) ratios declined to 10.5% and 10.0%,
respectively, as of the end of June 2023 from more than 11% as of
the end of 2022 because of payment of a cash dividend to
shareholders. Meanwhile, OCB's capitalization has improved with a
TCE ratio of 11.6% as of June 2023 compared with 11.2% as of the
end of 2022, supported by its above peer average profitability.
Moody's also expects the three banks' profitability to be strained
over the next 12 to 18 months because of higher credit costs and
lower net interest margins arising from reduced interest rates.
VIB's, OCB's and TPBank's high reliance on market funds and modest
liquidity provide limited buffers in times of need.
SeABank:
The affirmation of SeABank's ratings with a stable outlook reflects
Moody's expectation that the bank's strong and improving
capitalization will help offset asset quality risks.
SeABank's plan to raise new capital from existing shareholders
within the next 12 months and to retain earnings for the 2023 by
paying stock dividends will help improve its capitalization despite
weaker internal capital generation. Its TCE ratio of 12.9% as of
June 2023 is among the highest among Moody's rated Vietnamese
peers.
While the bank's credit concentration to the real estate and
construction-related loans pose asset risks, its above peer average
provision coverage and low single-party concentration reduce the
risk of a spike in nonperforming loans.
SeABank's increased reliance on wholesale funding and modest
liquidity provide a limited buffer in times of need. Its
high-quality liquid assets consist of cash and balances with
central bank and government securities, which account for just 9%
of its total assets as of June 2023.
Government support remains unchanged
The Ba3 ratings of VIB, OCB, SeABank and TPBank continue to benefit
from one notch of government support uplift from the banks' b1 BCAs
based on Moody's assumption of a moderate probability of support
from the Government of Vietnam (Ba2 stable) in times of need.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
SeABank:
An upgrade of the bank's ratings is unlikely in the near term,
given the weaker economic momentum in Vietnam and continued stress
in the real estate sector. Nonetheless, Moody's could upgrade the
BCA if the bank lowers reliance on market funds with its market
funds as a percentage of tangible banking assets ratio declining
below 25% and maintains high-quality liquid assets as a percentage
of tangible banking assets above 15% on a sustained basis. An
improvement in asset quality and profitability will be positive for
the BCA.
Moody's would downgrade SeABank's b1 BCA and ratings if its asset
quality deteriorates, leading to higher costs and a decrease in the
return on tangible assets to below 1%. Given the bank's high
dependence on market funding, a decline in its TCE ratio below
11.5% on a sustained basis or a weakening in its funding and
liquidity will also be negative for the BCA and ratings. Moody's
could also downgrade the bank's ratings if the agency assesses that
government support for the bank has weakened.
OCB and TPBank:
Given the negative outlook, an upgrade of TPBank's and OCB's
ratings is unlikely in the near term. Moody's could revise the
outlook to stable if the bank's asset quality and profitability
improve, while their TCE ratios improve to more than 11% on a
sustained basis. A lower reliance on market funds and a higher
stock of high-quality liquid assets would also support a revision
to a stable outlook for these banks.
Moody's would downgrade TPBank's and OCB's ratings and BCAs if
there is a further deterioration in asset quality, leading to
higher credit costs and a decrease in the return on tangible assets
below 1% or if the banks' TCE ratios decline below 10% on a
sustained basis. A weakening in funding and liquidity levels will
also be negative for the BCAs of these banks.
Moody's would also downgrade TPBank's and OCB's deposit and issuer
ratings if Moody's assesses that government support for the banks
has weakened.
VIB:
Given the negative outlook, an upgrade of VIB's ratings in the near
term is unlikely. However, Moody's could revise the outlook to
stable if the bank's NPL ratio decreases below 2.5% and special
mention loans decline to the historical range of 1% to 2% of gross
loans.
Moody's would downgrade VIB's ratings if its asset quality
continues to deteriorate, leading to higher costs and a decrease in
the return on tangible assets to below 1.8% or if the bank's TCE
ratio declines below 10% on a sustained basis. A weakening in VIB's
funding and liquidity levels will also be negative for the BCA and
ratings.
Moody's would also downgrade VIB's deposit and issuer ratings if
the agency assesses that government support for the bank has
weakened.
The principal methodology used in these ratings was Banks
Methodology published in July 2021.
Southeast Asia Commercial Joint Stock Bank (SeABank), headquartered
in Hanoi, reported total assets of VND245 trillion as of June 30,
2023.
Orient Commercial Joint Stock Bank (OCB), headquartered in Ho Chi
Minh City, reported total assets of VND211 trillion as of June 30,
2023.
Tien Phong Commercial Joint Stock Bank (TPBank), headquartered in
Hanoi, reported total assets of VND343 trillion as of June 30,
2023.
Vietnam Intl Commercial Joint Stock Bank (VIB), headquartered in Ho
Chi Minh City, reported total assets of VND379 trillion as of June
30, 2023.
*********
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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Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
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Editors.
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